Back in May of this year, Navistar announced it had reached agreement to purchase EZ-Pack. EZ-Pack, for those that don’t know, is a refuse body manufacturer. They do nothing more, nothing less. But, to date, the company has been able to garner only about 7% of the refuse body market that is dominated by McNeilus and Heil.
Many wondered why Navistar wanted to get itself into the refuse-body building business. Some of those answers came this week at the Navistar Vocational Boot Camp in Tooele, Utah, and they make a strong case for why this could be a good fit for customers of both companies.
“EZ-Pack may be one of the smallest [refuse] body makers in the industry, but the capabilities are there, and what we can do with it are there,” Jim Hebe, executive vice president-North American sales for Navistar said.
Jim Rogers, vice president of sales and marketing and one of the owners of EZ-Pack, sees a perfect fit.
“The best asset Navistar has is the dealer network…yet it appears nowhere on their balance sheet,” he said. “The dealers at Navistar are very good at selling to municipalities. Now we hope when they call on municipalities, they’ll sell them a garbage truck.”
In fact, refuse was a hole in Navistar’s vocational lineup for many years. It took steps to rectify that when it introduced the LoadStar at Mid-America this past spring. Set to launch in July of next year, LoadStar will be available with a Cummins ISL G natural gas engine to start.
According to Rogers, that is a perfect engine for the refuse market. In fact, Rogers said, 1 in 4 garbage trucks sold in North America this year will be sold with alternative power. That number was just 10% three years ago and could be as high as 50% within two years he said.
Perhaps the biggest benefit of the arrangement, Rogers pointed out, is the dealer network – giving EZ-Pack customers not only nearly 800 potential service outlets, but also a “one-stop shop” of a dealer that that is equipped to address all vehicle issues, from chassis to body.
Rogers said the average maintenance cost on a refuse truck is between $20,000 and $25,000 per year, meaning a strong dealer network can be vital to enhancing the productivity of the vehicles, which can run as much as $250,000 apiece.
By integrating the EZ-Pack refuse body with the LoadStar and utilizing Navistar’s Diamond Logic electrical system, maintenance issues can be quickly identified and rectified at one dealer.
The integration of the products is also part of a new business model Rogers hopes will help EZ-Pack cut into the market lead of McNeilus and Heil.
“We’re creating not only a new truck, but a new business model,” he said. “We’re going to build them the best service network this country has ever seen for trash trucks.”
And the best part of the arrangement, perhaps for customers, is that you don’t have to purchase a LoadStar with an EZ-Pack body. Customers who prefer other models will still be able to put different bodies on the LoadStar or put an EZ-Pack body on a Mack, Peterbilt or Autocar if they prefer.
That’s a win-win for everyone, it would seem. And with the reach of International (the company has more than 26% share of the severe service market), gives EZ-Pack access to customers it has never had access to before.