Bulk containers and 55-gallon drums continue to duke it out. Bulk containers are the heavyweight favorite, but the venerable drum has not yet gone down for the count.
After making slow progress against the traditional 55-gallon drum for moving small-volume liquid shipments, intermediate bulk containers (IBCs) and intermodal tank containers (ISO tanks) are starting to accelerate their gains.
To be sure, drums are still the prevalent form for chemicals, food ingredients, lubricants, and coatings. But more than two decades after being introduced, IBCs and ISO tanks now account for as much as one third of the market.
Chemical producers say there are gains in safety, efficiency, and cost when they have to fill, move, and load fewer vessels. Distributors are also enthusiastically converting, at least for inbound logistics.
The sticking point seems to be consignees, especially smaller companies that are set up for receiving and handling drums. Many see the logic and potential for operational savings, but are hesitant to spend the time and money to reconfigure their plants and retrain personnel.
The tipping point, say container manufacturers, may be that slow growth has reached the point where their economies of scale in production are starting to reduce costs.
Over the next few years, those lower capital expenses may accelerate the conversion of drum handling systems to IBCs.
“The 55-gallon drum is still our primary method for moving industrial chemicals, accounting for about 80 percent of shipments, but we are making a slow transition to IBCs,” says Tom Meulendyke, purchasing manager for packaging, third party, and transportation at Ashland Inc., Columbus, Ohio.
“Choosing IBCs over drums is an economic, safety, and environmental trend,” he says. “The volume of four or five drums fit into an IBC, which reduces the number of drums moving into the waste stream.”
Container integrity is of paramount importance to both chemical distributors and carriers, even when the contents are not hazardous. A drum leaking a product as benign as corn syrup, for example, can still contaminate other shipments in a warehouse or trailer.
Making the Choice
As both a major producer of industrial chemicals, solvents, and lubricating oils, and one of the largest chemical distributors in North America, Ashland is a large motor freight shipper.
Meulendyke works with his LTL carriers to decide what type of shipping container to use.
“The choice is driven by economy—selecting the container that offers the lowest cost to the shipper, and the most efficient inventory management to the end customer,” he says. “Yes, IBCs and other large containers provide potential cost savings. But often a small customer has been using drums for years and is not set up to handle IBCs.
“The container decision has to balance flexibility and efficiency, and be a win-win for both the shipper and customer.”
Canada Colors and Chemicals, Don Mills, Ontario, is both a manufacturer and distributor of industrial chemicals.
“Chemical producers often assume responsibility for transport of their own materials in tankers, barges, railcars, and trucks; they rarely handle packaged materials,” notes Marty Byron, the company’s manager of western operations.
“Over the years LTL carriers improved two vital parts of their business,” he says. “First, they learned how to safely handle the various containers that distributors use daily. Second, they learned what to do when one is damaged.
“Twenty years ago, LTL carriers didn’t know what to do with a leaking drum. Today they not only know what to do, but have over-pack containers available to mitigate any incidents.”
That said, Byron notes that tote tanks now play a an important role in chemical distribution. “Where the standard-size drum leaves off, the tote tank picks up the slack,” he says.
Tote tanks are available in steel, polymer, stainless steel, aluminum, single trip, and special shapes, sizes, and capacities. They are easily tuned to a customer’s exact requirements for batch sizes.
In commerce they are suitable for re-use without testing for extended periods, and are less susceptible to handling damage. And, it is easy to track a tote tank’s usage history, leading to improved quality control.
IBCs account for approximately 25 to 30 percent of Canada Colors’ business, Byron estimates, and could eventually reach as high as 40 percent of the company’s total container traffic.
Specialized container makers are not shy about promoting their products, especially now that more shippers and carriers are familiar with them.
Another leg up for container manufacturers is that economies of scale are starting to reduce costs. The entire IBC domestic market runs to about $1 billion, says Mike Spurrier, vice president of sales and marketing for Snyder Industries, Lincoln, Neb., one of the country’s largest IBC makers.
Many Happy Returns
“We only make returnable containers, which deliver the best cost ratio over their lifetime. In 20 years, one returnable tote can make hundreds of trips,” says Spurrier.
Returnable containers replace thousands of drums, and save the time and money to test, load, secure, and clean them. And, because IBCs are usually used in orbits—carrying the same commodity from the same manufacturer—they need less cleaning.
One of the most common IBC sizes is the 330-gallon unit. “It is equal to six drums,” explains Spurrier. “It fits on one pallet and can be handled by one forklift. It has a bottom drain, and can be stacked for safe handling and loading.”
Most disposable IBCs are made of polyethylene, but reusable units are made of polymer with walls up to half- an-inch thick.
“Reusable units are approved by the Department of Transportation (DOT) for hazardous materials,” says Spurrier, “and are often used to carry corrosives, acids, and caustics. They are very light compared to steel or composite; that’s important when shipping heavy products.”
Rules covering IBCs have not been revised since the mid-1990s when the DOT harmonized domestic rules with United Nations regulations. The European Union, however, has allowed some limited re-use of disposable IBCs.
“The returnables have been most popular for moving chemicals, petrochemicals, solvents, paints, and electronics chemicals,” Spurrier says. “They have been adopted more slowly for moving non-DOT-regulated materials such as foodstuffs and lubricants.”
Tanks A Lot
Schneider National Bulk Carriers, Green Bay, Wis., runs approximately 1,500 tank trailers that have three or four discrete compartments for LTL bulk liquid shipments. About 5,000 of the carrier’s 84,000 annual loads are compartment-sized shipments.
“We move a variety of materials in those compartment trailers,” says George Grossardt, vice president and general manager of Schneider National Bulk Carriers. “The compartments have a variety of linings, from steel to rubber. We have also experimented with composite tank trailers, but they are very expensive to buy.”
Drums or IBCs offer shippers more flexibility than compartmentalized tank trailers, Grossardt acknowledges. But the trade-off is having a driver certified and trained in handling hazardous materials, and the economies of scale of Schneider’s national, long-haul system.
While LTL carriers are happy moving either IBCs or drums, some note that drums require extra work to pack and load.
For example, “a pallet of drums may be attached to the pallet with just shrink wrap,” says Neil Smith, vice president of operations for Con-way Freight’s western division.
“That is usually not sufficient. Our drivers are trained to surround the sides and top of the load with plywood, and to block and brace it. A lot more work is involved.”
The former custom of loading drums on pallets at the tail of the truck for safety reasons has also been revised.
“The tail of the trailer is susceptible to forces three times that of the nose,” Smith notes. “While the loads are easier to get to in the tail, we now load drums on pallets in the nose to reduce jostling.”
Con-way has seen slow, organic growth in liquid and dry bulk traffic in recent years, from a small shipper base. “We do solicit some of this business, but it depends on the shipper and the region,” says Smith.
ISO Will Grow
One of the more interesting ideas in liquid containers has so far proven to be among the most challenging to implement. The intermodal tank container, or ISO, is a short, fat tank inside a steel frame that allows it to be moved like any 20-foot box container. ISO tanks are common in Europe and Asia, but have yet to make a breakthrough in North America.
Still, growth has accelerated, and later this year the largest operator of ISO tanks, Stolt-Nielsen, will promote its tank-container operations as part of a stand-alone subsidiary rather than its global tankers and terminals operation.
“We estimate the size of the ISO global fleet at approximately 200,000 tanks,” says Michael Kramer, managing director and soon-to-be president of Stolt Tank Containers, Houston. “The fleet has been growing at an annual rate of about five to six percent since 2000.”
Tank containers average an 18- to 20-percent savings over drums.
“The main advantage of a tank container is that it can handle more cargo weight in a 20-foot box, compared to drums,” Kramer says. “On average, a drum shipment weighs about 16 to 18 metric tons, versus a tank container, which ranges from 20 to 24 tons.”
In addition, tank containers “require significantly less handling, are safer to move, and offer more security,” Kramer notes. “Tank containers also eliminate waste in terms of lost product, and help reduce pollution because drums no longer have to be disposed of in land fills.
“Small containers, such as tote bins, are slightly more competitive than drums, but tank containers still represent significant savings,” he adds.
Internationally, tank containers have been operating into and out of North American markets since the early 1970s. Volume is substantial and represented in every geographic region.
Globally, the United States represents approximately one-third of total demand, according to Kramer. That proportion has declined in recent years due to the increase in activity in markets such as Asia, South America, and the Middle East/Indian subcontinent.
A much different picture is painted in North America. It has long been thought that domestic tank containers, moved by truck/rail/truck, could represent a huge market and a means to meet customer requirements for shipments traveling more than 500 miles.
Stolt-Nielsen has tried to grow the U.S. domestic market since the early 1980s, with varying degrees of success.
“We made significant progress prior to the railroad consolidations,” says Kramer. “But we lost ground to trucks as service on the rails eroded because we are competing in a just-in-time market with very high standards.
“Once we managed to regain service levels, rates became the issue, with higher rail costs making intermodal options less desirable.”
Additional obstacles include “the rails dictating strict terms and conditions for moving on intermodal stack trains, access to rail ramps, and a recent move to push chemical cargo into trucks,” he adds.
As with any transport mode, equipment is both generic and specialized. Tank containers are no different. There are small tanks for very heavy cargo; high-pressure or high-heat tanks for difficult cargo; gas and electric tanks for cargo that needs to be heated; and reefer tanks to handle cargo that needs to be cooled.
Another distinction between IBCs and tank containers is that IBCs are bought by the shipper and used or reused by the shipper’s own logistics department.
While some large chemical producers also own or lease a fleet of tank containers, it is most common for the shipper to contract with a global ISO tank operator to buy a turnkey transportation service.
“We own a majority of our tank containers,” says Kramer. “We deliver the empty to the customer, buy all the services—highway, rail, or steamship transport—and deliver to the consignee’s schedule.”
Some industry players are surprised that ISO tanks have not become more popular in North America.
“I think that people will begin to see the benefits for shipments that are not time-sensitive,” says Byron. “Our small branch brings in about 20 or 30 ISO tanks a year, and we save about $5,000 per unit over road transport.”