Published September 2007

Sucking Up Profits

By Mary Shafer (page 90)

Pumpers discuss adding industrial vacuum loading services to generate new revenue.

As competition for traditional pumping jobs continues to tighten profit margins, more than a few pumpers are eyeing industrial vacuum loading — the “big brother” of their standard service — as a potential new revenue stream. It’s no wonder: essentially the same skills and knowledge are easily transferred to larger and more powerful equipment, with an equally larger measure of safety consciousness.

There’s also a measure of exclusivity built into such a move. The extra upfront investment for new equipment and training will automatically prohibit some liquid waste haulers from entering the industrial vacuum loading market. For others, a lack of sufficient demand in their service areas will keep such a move from making sense when return-on-investment is considered.

But for pumpers ready to kick their capabilities up a notch, vac loading can be a real boon to business. Manufacturing and processing plants offer any number of vats, tanks and waste bins to be emptied. Numerous pipes, housings, pumps and precipitators await cleaning at mills and utilities. Petrochemical plants and other utilities need service for boilers, towers and emergency spill cleanups.

Pumpers talk here about the part ramping up to industrial vacuum service plays in their futures.

L & T Fabrication & Construction Inc. provides cleaning and jetting along with its construction services, and is beginning to receive a significant amount of inquiries about vacuum loading. The majority of these inquiries are from surface coal mining operations looking for conveyor belt cleanup, sump cleaning, and similar services.

“There’s a definite growth trend for this kind of work,” says L & T technician Jeff Hall, but customer demand isn’t what’s keeping L & T from seriously expanding into the industrial field.

“We could grow right now, as much as 100 percent a year, if we could get the help,” he says. “Gillette is the Campbell County seat, so government positions absorb most of our local job force. We have less than 1 percent unemployment, so it’s tough to find anyone needing a job, much less wanting to do heavy physical labor. So we’ve been recruiting from out of state, just to be able to provide the vac services we do.”

Canada’s Northern Lites Technology has the opposite problem. Owners Mike and Edith Olson recently bought a Vactor rig with a blower so they could service a local pulp mill and an aluminum plant, in addition to the municipal vacuum loading they were already doing.

“Our pulp mill work was overdue,” says Mike Olson. “They’re doing reactionary budgeting, so we’re only getting the work when there’s an emergency. That’s because when we first got that account, we did so well, we worked ourselves right out of a job.”

So now, the couple also does jetting and related services to diversify revenue streams. Staying busy is a particular challenge in their sparsely populated neck of the Great Northwoods. Their territory covers an area twice the size of Texas, but only services about 250,000 people.

Brad and Amanda Sims work a similarly rural, if not quite as remote, area in Central Michigan. They handle the region between Cadillac, Big Rapids and Mt. Pleasant, where industrial vacuum loading is still unheard of.

“No one’s doing it here,” says Brad Sims. “You’ve got to call Grand Rapids to get it done, but we’ve still got small cities here that need this kind of work. They can’t afford to buy a vacuum truck, because they’re so low-budgeted. They can’t justify the cost with enough jobs, so we’ll probably add the service next year.”

Amanda Sims can also see the dollars floating around, just waiting to be scooped up. “We usually have to educate our customers about new services, but this is work just sitting there, waiting to get done. We can only see the trend continuing, so it’ll be a good investment. Whoever has the equipment is going to get that work.”

For Matt Beebe of Southern Sanitation Inc. in Southwest Florida, decision time has arrived, and he’s jumping in. “We already service lift stations, clean pipes and storm drains. I’ve been talking with utility companies and contractors about what else they need done, and there’s plenty of work. All I really need to do is work my existing relationships and call contractors with promotional information.

“I’m looking for which trucks are available. I’ll probably pick one that combines industrial vacuuming with hydro-excavating capabilities. I’ve figured it out, and I expect to see an immediate 15-20 percent increase in billings on startup of this new part of the business. Within time, I think we can realize a 30-35 percent overall gain.”