Frozen Food Express Industries Inc. on Wednesday, Nov. 9, growth plans for bulk tank transportation services for the oil drilling industry. The Dallas-based company, through its FFE Transportation Services Inc. subsidiary, recently began hauling fresh water to drill sites for a major driller in West Texas. FFE says it is expanding this service and has placed orders for 25 specialty tank trailers to support this expansion, bringing the total number of tank trailers in service to 40 by the beginning of January 2012.
“We’ve studied the frac water transportation market for some time and believe new drilling technologies have created opportunities for secular growth in bulk tank transportation services,” says Russell Stubbs, president and chief executive officer of FFE. “Due to the 24/7 nature of drilling operations, equipment utilization rates are very high and present attractive return characteristics. We estimate that these new services could add $30 million to $35 million in incremental annual gross revenue providing a significant margin contribution.”