One-time regional player rides wave of renewed oil and gas development with new terminals and more drivers.
Beemac Trucking started out with “two trucks and a dream” in the post-deregulation era, says Chief Operating Officer Richard Casoli. Thirty-four years later, the dream has gotten bigger and moved well beyond trucks to third-party logistics.
Established in 1984, the Pennsylvania-based Beemac was largely a regional player with a fleet ranging between 100 and 125 trucks, roughly split between company drivers and owner-operators.
But since 2016, the company has added another 325 owner-operators to its fleet. Casoli says it plans to add another 150 owner-operators to the fleet next year. This, in addition to owning thirty terminals across the country, with the latest addition of two terminals in Houston.
Casoli, who joined Beemac in 2017, says the executive team brought on by founder and Chief Executive Officer and Richard Macklin “created strong growth initiatives for the company.” As for the ability to attract owner-operators to Beemac, “it’s about treating drivers with respect, paying them fair wages, and truly delivering on what you promise.”
Compared to peers, Beemac is seeing driver turnover of 40%, below the rate seen among its peers, Casoli says.
“Drivers are not always treated well, especially by some our competitors,” Casoli said. “We deliver upon what we promise and listen to our drivers.”
Naturally, Beemac does have plenty of freight to offer drivers. The company is riding the second wave of investment in U.S. oil and gas drilling in the nation’s major shale basins. That has helped push up demand for steel pipe and other bulk commodities carried on flatbed trailers.
Beemac operates a terminal in Midland, Texas which serves the Permian Basin. After the oil price collapse of 2014, production in the region is growing again with the Permian rig count sitting at 488, the highest level in three years.
The company is further expanding in Texas with the addition of two new terminals in Houston, providing pipe and other commodity storage for drillers in Eagle Ford and Haynesville shale basins, along with serving the region’s booming petrochemical markets.
In Beemac’s home market, it operates multiple terminals in western Pennsylvania and Ohio, which serve the Appalachia shale basins. There, the rig count currently sits at 75, double the level seen in 2016.
The drop in oil prices may challenge further rig count growth. But “rig count does not need to go up” for the company to grow, Casoli says. Rather, it’s being able to offer additional services, such as logistics and staging to the existing drillers, he added.
“We don’t own the majority of share in each basin, so there are more customers we can attract,” Casoli said. “There’s high demand to cut costs, so if we can shift the burden off the customer, it’s a win for us.”
Another key is Beemac’s use of agents to represent Beemac in a geographic market and bring in customers and drivers. Twenty seven of the company’s 30 terminals are operated by agents, including the new terminals in Houston, where it brought in Aaron Smith, Berni Morales, and Jurgen Morales as agents along with their 40 drivers.
“Similar to retaining drivers, we make sure we treat our agents well,” Casoli said.
As for technology, Beemac is a customer for McLeod Software’s TMS package, along with its own maintenance software add-ins. Casoli says the company is also looking at the use of in-cab dashcams to monitor driver alertness.
Looking ahead, Casoli acknowledges that there has been a slowdown in flatbed demand between the third and fourth quarter, which he attributes to mid-term election and tariff anxiety. But he says the move to add capacity in 2019 shows Beemac’s confidence in the market.
“We expect rates to stay strong,” Casoli said. “Once the new year rolls in, there’s going to be a capacity crunch, so we’re continuing to grow the fleet.”