Family Transport Business Expands in Midwest

By Tom Stone | November 03, 2008
It's not much of a stretch to say that the lifeblood coursing through the Kane family tree is motor fuels. Since its founding by Joseph Kane and his wife, Lucille, in 1949 in Sauk Centre, Minn., about two hours west of Minneapolis-St. Paul, Kane Transport has been a family-owned and -operated business. The third generation of Kanes now works to ensure that it remains one of the top carriers in the Upper Midwest.

Not only is the Kane Transport story one of a close family working together for the greater good, but it is an example of something that was thought to be nearly extinct in American business—the family-owned business that not only survives, but thrives—as corporate mergers and hostile takeovers have thinned the herd of businesses that used to have "& Son" tacked onto the end of their name.

"Kane Transport is very much so a family affair and we all get along together," says Pete Kane, Joe's grandson and the company's current vice president of Twin Cities operations. "We're going on the third generation and we're continuing to improve the business, which the odds say we shouldn't be able to do."
This commitment to the family name and company has deep roots in Kane Transport, providing the foundation for a company that could have called it quits long ago.

From Modest Beginnings
Joe and Lucille Kane, with the help of Joe's brother Louie, founded Kane Brothers in 1949 as a one-truck operation that delivered gasoline and fuel oil to customers in parts of Minnesota and North Dakota. When Joe passed away in 1968, the company had recently added a second truck and the business was still growing, so Lucille decided to keep at it.

To lend a hand, Joe and Lucille's four sons—David, Mike, Tom and Bob—joined their mother in running the business. In those days, the four sons handled all of the deliveries and
a third truck was added to the fleet in 1972. Since then the company's significant growth has met considerable challenges.

Tragedy struck in the 1980s when David, a firefighter by trade, was killed while fighting a fire. Mike then left the business in 1997 before Tom passed away of a heart attack in 1999, leaving Bob to run the business by himself from 1999 to 2006. At that time, he asked his three children—Pete, Angela and Patrick—to join the company, and they all agreed to buy equal shares with Bob still retaining majority control. A cousin, Paul Kane, is also involved as the company's general manager.

During this time, the company emerged as one of the largest petroleum carriers in Minnesota with a fleet of approximately 180 tractor trucks and more than 250 transport trailers that pick up their supply from a network of 11 company-operated terminals spread throughout Minnesota, Wisconsin, Iowa and Illinois. Besides gasoline, diesel and biofuels, Kane
Transport also delivers asphalt, propane and anhydrous ammonia to a customer base that covers Minnesota, Wisconsin, Iowa, Illinois, North Dakota and South Dakota. In an average year, Kane Transport trucks and trailers deliver 70,000 loads. With an average load measuring approximately 7,500 gallons of product, approximately 525 million gallons of fuel are delivered by Kane trucks in a calendar year.

Kane Transport is able to deliver this type of volume and cover its widespread distribution area by employing a truck fleet that isn't dedicated solely to one type of product. "Our company tractors kind of go where we need them to go," Pete Kane says. "One day they'll be hauling fuel, the next day ethanol, the next day asphalt. We like the versatility that we have to use the trucks to haul different products at different times."

Green and Growing
While gasoline and diesel have been the backbone of Kane Transport's distribution business, the company got in on the ground floor of the ethanol-distribution segment of the industry, thanks, in part, to Minnesota's early acceptance of biofuels as an alternative to petroleum products. In fact, as of April 2007, Minnesota had 307 (26.9 percent) of the nation's 1,143 E85 retail fueling stations, a number that was more than twice that of the state with the second-most E85 refueling sites, Illinois' 149.

"We've been transporting ethanol for 20 years," Pete Kane says. "It's been in the Upper Midwest, Minnesota specifically, for a long time. It's just started to have more channels of distribution and with the pressure to find alternatives to foreign oil, it's gained speed. In the past 10 years, we've seen significant growth in the area of alternative fuels transportation."

Growth in Minnesota was boosted by a 1997 state mandate that required all gasoline to contain 10 percent ethanol. A mandate requiring 20 percent ethanol in all regular gasoline will go into effect in 2012. In 2005, the state also passed a mandate requiring all diesel fuel contain 2 percent biodiesel. This increased emphasis on biofuels has resulted in upwards of 15 percent of Kane Transport's deliveries consisting of biofuels, which can range from loads of E10 to E85 and B2 to B100.

Add that to the traditional gasoline and diesel, and the fringe products such as asphalt and propane, and the success of Kane Transport depends on the nimbleness of its fleet, as well as the ability to keep it running consistently as it criss-crosses its seven-state delivery territory.

Another Connection
To keep its large and varied fleet on the road and out of the shop, Kane Transport forged relationships with reliable equipment suppliers. When it came to selecting the brand of transport pumps that would be used on their trailers, Bob Kane turned to longtime family friend Jim Determan.

The Kane and Determan families grew up together in the Sauk Centre area and, while the Kanes got into petroleum distribution, the Determans got into the supply of fuel-handling products, with Jim Determan founding the Determan Brownie Inc. distributorship in the 1960s. So when Bob Kane needed the right transport pump for his growing stable of delivery trailers, he knew where to turn. Determan directed him to sliding vane pumps.

Since the mid-1980s, TX Series sliding vane pumps from Blackmer have been standard equipment on nearly all of Kane Transport's 200-plus transport trailers. On the 25 or so trailers that have been specifically marked for the delivery of biofuels, TXSD3E Series (3-inch) pumps have been standardized.

A truck fleet as large as Kane Transport's must follow a strict maintenance and replacement schedule. In general, Kane replaces its tractors after eight years of service with about 12 needing to be replaced each year.

The company has found, however, that while the tractors and trailers need to be replaced according to this schedule, not all of the replacement tractors and trailers need new transport pumps placed on them.

"We've had [situations] where we've removed trailers from our fleet, took off the old Blackmer pump, used a rebuild kit and put them back in service," Pete Kane says. "After 15 years, we'll throw a rebuild kit on the pump, slap it on another trailer and let it go for life. We abuse these pumps and they take a beating and they keep on going. Like my Dad said, ‘If the pump was run by a robot, you'd never have to touch it.'"

Kane Transport's diverse customer base and product offering also means that it has some unique delivery challenges. While traditional gasoline and diesel deliveries have relied on gravity drops instead of transport pumps, the growth of the ethanol side of the business has required the need for sliding vane pumps.
While every customer might be different, for the past 25 years Kane Transport has ensured that its products and deliveries come with the highest standard of quality, keeping the company at the forefront of the petroleum industry in the Upper Midwest.

Tom Stone is the director of marketing for Blackmer. Reach him at stone@blackmer.com or (616) 248-9252.