KAG Announces Rate Increase

Posted on: January 30, 2014

NORTH CANTON, OH, January 7, 2014 – Kenan Advantage Group (“KAG”), has announced that its Fuels Delivery Group will seek a rate increase of 5.4% for all non-contract customers in 2014. KAG’s contractual customers will be addressed on an account by account basis.

KAG is the North America’s largest tank truck transporter and logistics provider, delivering fuel, chemicals, industrial gases and food products in the U.S., Canada and Mexico. The rate increase will allow the company to continue its exceptional level of service while retaining and hiring the best drivers in the industry.

The rate increase will also help offset costs associated with the recently revised Hours of Service (HOS) requirements implemented by the Federal Motor Carrier Safety Administration (FMCSA) and changes in healthcare requirements, which are making it more expensive for the company to do business.

Bruce Blaise, President of KAG said, “With the recent changes to the driver break requirements, we calculated each driver loses between 3% and 5% of their daily productivity. If you have a team of 1,000 drivers, you have to hire another 30 to 50 new drivers just to haul the same number of shipments we do today. Clearly that adds additional costs to our operations.”

Mr. Blaise continued, “We also see several other factors coming together that are going to really hit the transportation industry. We are in the midst of a driver shortage, with older drivers retiring and fewer new drivers entering the business. We also believe the economy is going to continue to pick up in the near future resulting in even more demand for transportation. To proactively prepare for this changing environment and ensure capacity for our valuable customers, we believe it is necessary to implement the rate increase in 2014.”

Kenan Advantage Group operates through its five groups consisting of the Fuels Delivery Group, Specialty Products Group, Merchant Gas Group, Logistics Group and KAG Canadian Group. KAG’s fleet consists of approximately 6,200 power units and 9,700 trailers. KAG also provides specialized supply chain logistics services through KAG Logistics (www.kaglogistics.com).

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