Changing The Box

Cheap is not a word Clifton Parker uses to describe his fleet's 950 trailers. As president of TL carrier G&P Trucking, Parker is spending more to get trailers that will last longer and for tracking systems that will enable him to verify that they're generating maximum revenue. Give us a better tool when it comes to [trailer] utilization, he explains. We expect a trailer to last between 12 and 15 years,

Cheap is not a word Clifton Parker uses to describe his fleet's 950 trailers. As president of TL carrier G&P Trucking, Parker is spending more to get trailers that will last longer and for tracking systems that will enable him to verify that they're generating maximum revenue.

“Give us a better tool when it comes to [trailer] utilization,” he explains. “We expect a trailer to last between 12 and 15 years, [with] a minimum amount of downtime and maintenance cost. We're [also] testing trailer tracking, primarily to hold customers accountable for the [amount of] time they have our equipment. That's our biggest aggravation; we're looking at trailer technology to help us reduce it.”

According to Bob Zirlin, ArvinMeritor's director of worldwide marketing for trailer products, Parker's attitude toward trailers is an example of the sea change taking place in how trailers are used and constructed. Because “trailers are now increasingly viewed as the revenue-generating portion of the tractor-trailer unit,” he explains, “we're seeing a move to more sophisticated trailers.”

By sophisticated he means greater use of air ride suspensions, automatic tire monitoring and inflation systems, tracking systems and sensor arrays, LEDs, wide-base tires, air disc brakes, and even new materials for greater longevity and durability.

Rod Erlich, chief technology officer for Wabash National, points out that as fleets gain a better understanding of maintenance costs, their emphasis shifts from initial price tag to life-cycle value. “A higher purchase price is becoming less important if maintenance costs are reduced, equipment uptime is increased, and the total cost of ownership is lower than equipment with a low initial purchase price,” he says.

SMARTER

The renewed interest in trailer tracking systems is one indication of how better trailer management can translate into increased revenues for fleets. “While there's obviously a security component to tracking, especially in terms of dealing with cargo theft, for most fleets it really comes down to utilization,” says Clem Driscoll, president of consulting firm C.J. Driscoll & Assoc. “Carriers drop a trailer at a customer site and won't get it back for a while as that customer is using it for storage, etc. That time period is revenue lost to the fleet.”

While virtually all fleets want trailers that last a long time, how they define this depends on the application. Research by Hendrickson International reveals a range of expectations when it comes to trailer life expectancy: flatbeds, 8 yr.; liquid and bulk tankers, 20 yr; refrigerated trailers, 7 yr.; dry van trailers, 10-12 yr. (owned) and 3-7 yr. (leased).

LIGHTER

Life span is not the only trailer spec that varies by application. Brian Buckham, marketing director for Hendrickson's trailer division, mentions weight as an example. “Dry van trailer users aren't particularly weight-sensitive. But refrigerated fleets, [who have] trailers with thick, insulated walls, are always looking for ways to take weight out. When you get to flatbeds, even shedding 70 to 80 pounds is a big deal. And tanker fleets are even more sensitive than that. A petroleum fleet that can carry even just two extra gallons of gasoline per tanker is going to see that add up over a year of operations.”

Even the smallest details of trailer design can have a huge impact on a fleet's operating costs. LTL conglomerate Con-Way Transportation Services, for example, specs only LEDs — which may cost upwards of 10 times more than comparable incandescent bulbs — because they last longer and don't burn out, either from age or exposure to the elements.

“Half of our road calls are for trailer lights,” says Bill Fowler, Con-Way's director of maintenance. If your tendency is to make purchasing decisions strictly by price, “you have to think about what it'll really cost you down the road in terms of extra maintenance,” he adds.

According to Erlich, the desire to reduce maintenance costs is one reason Wabash is considering more extensive use of sealed-for-life components, especially in trailer wheel ends. When life-cycle calculations are taken into consideration, they may not even cost more than current systems, he says, since “you're removing the cost and labor needed to lubricate components. There's also an anti-corrosion benefit,” he adds. “If you can't get into the system to lubricate it, neither can road salts or other harmful chemicals.”

However, Craig Bennett, senior vp-sales & marketing for Utility Trailer, says that the industry must also determine whether carriers are willing to pay for these upgrades.

“The technologies are here, but this is still a very competitive industry and, in many cases, a low margin one at that,” he says. “Is the industry ready to pay for it?”

Paul Will, CFO for TL carrier Celadon Group, is one carrier that seems ready to make that step. Will points out that improvements that result in longevity, uptime and minimized maintenance cost for his fleet's 3,700 trailers can outweigh the purchase price in the long run.

“When you look at equipment costs, spec'ing a sturdier trailer on the front end not only helps you keep it up and running, but gives you more residual value when the time comes to sell it,” he says. “The longer it lasts and the less maintenance you have to do, the more time it's available to haul freight. Time is money in this business.”

TRACKING & TIME

Money is also the reason trailer-tracking technology is getting more attention from fleets. “Trailer tracking is a technology proposition we're pursuing for several reasons,” says Celadon's Will. “First, we increase trailer utilization. We know where they are so we don't have to look for them; we keep them moving and thus need fewer trailers overall to haul the same amount of freight. Second, [tracking systems] allow us to charge detention [because] they give us proof of delays. Finally, it gives us a theft prevention and recovery method.”

Will says the key to trailer tracking is that it puts value on the trailer's time, as well as its cargo space. “Ultimately, it's about giving us information so that trailer doesn't sit,” he says. “If it sits, it costs us money. If a driver has to look for it, they're wasting precious driving time and fuel.”

More productivity per trailer can also help a fleet slim down, providing another avenue for cost savings. J.B. Hunt, for example, found that the increase in per-unit productivity created by trailer tracking allowed the carrier to reduce the size of its trailer fleet by 7%-8%.

“The trailer is really a mobile warehouse now — and it becomes a visible freight envelope through tracking,” adds Steve Zaborowski, senior vp-trailer renting and leasing firm XtraLease. “All cargo has value, so tracking gives you a way to know what's going on, especially in a cargo theft situation.”

The challenge for the future, he says, is to determine what types and amounts of information will be of the most use to fleets.

For example, tracking systems can provide information on a number of variables, including trailer position/location, doors open or closed, tire temperature/inflation level and brake lining temperature, Zaborowski says.

“How do you sort through all of that? It's not productive if you have to sort through 8,000 tire temperature readings every day,” he points out. “But it would be if the system only alerted you to those exceptions where the tire temperature exceeds a certain level. That's the future of this technology.”

Con-Way's Fowler agrees. “If the trailer could tell you it's sick and it's starting to have a problem, that could be of huge value down the road,” he says. “Right now, though, the communication cost is very expensive. But if the price comes down, that could open more possibilities for trailer tracking.”

Getting that kind of trailer health data has piqued the interest of refrigerated carrier John Christner Trucking. The fleet is testing a tracking and remote control reefer system developed by Thermo King on five of its 850 trailers, says Steve Dickson, director of maintenance.

“It's pricey, but that tracking data and control capability gives us a marvelous opportunity,” he says. “We're venturing into truck-rail service, where our reefers will sit on a train without anyone nearby to check or control temperature settings. With this tracking system, however, we can do all of that remotely right from my office.”

RIDE, TIRES & FUEL

Shifts in suspension selections, new tire systems and aerodynamic adjustments are also changing the degree to which trailers can have an impact on a fleet's bottom line, particularly in terms of fuel costs and driver retention.

In just a few decades, the use of air ride suspension packages has exploded across the trailer market. Representing just 10% of trailer suspensions in the late 1980s, air ride packages are now the predominant selection, according to Hendrickson's data: representing between 56% (dry vans) and 98% (automotive carriers), depending on application.

“The use of air ride is two pronged — to preserve and protect the cargo in transit and to preserve the trailer itself by reducing vibration damage over time,” says Hendrickson's Buckham.

“There's also an argument to be made that a better ride translates into more even tire wear and fuel savings,” adds Chris Adkins, vp-sales and marketing for Great Dane Trailers. “You're also looking at increased residual value.”

The relationship between air-ride suspensions and driver comfort shouldn't be overlooked. According to ArvinMeritor's Zirlin, “It improves the handling of the overall tractor-trailer combination; that's one more vehicle characteristic that can come into platy in terms of driver retention efforts.”

Another trailer spec that helps keep drivers happy and fuel costs down is wide base or “super single” tires in conjunction with automatic tire pressure monitoring and inflations systems, Zirlin points out. “Now the driver doesn't even have to check the tire pressure and, with two tires instead of four, the fleet gets weight and fuel savings over time.”

Fuel savings can also be achieved via relatively simple aerodynamic alterations. Con-Way, for example, is looking at using special skirts along the bottom of its trailers to reduce drag. “The projection is for a 6% fuel savings, which would be a huge benefit to us,” says Fowler. “But even with a 2% savings, [the alteration] would pay for itself and save us money over time.”

DOWN THE ROAD

Where can we expect trailer design efforts to go from here? According to Utility Trailer's Bennett, it's going to be relatively straightforward: find ways to increase uptime and thus increase a fleet's ability to make money.

“Fleets want to be able to haul more freight with their trailers because the driver shortage is putting a cap on their ability to grow their fleets; they don't want their trailers in the shop any more than necessary,” he says.

The biggest issue for trailer makers, however, is going to be cost, Bennett adds. With raw materials in short supply, costs went through the roof in 2004 — making trailers more expensive and limiting production volumes.

Yet Great Dane's Adkins is still confident that trucking is ready to make the leap to more sophisticated, high-tech trailers, as fleets become more aware of the cost savings they can provide in the long run. “A trailer is just not a box on wheels anymore,” he says. “The next ten years are going to be very exciting in terms of trailer development.”

Second time around

When TL carrier Lakeville Motor Express needed to expand its trailer fleet last year to meet rising freight demand, it didn't try to buy new units or lease them. Instead, it went straight to the used-trailer market.

Lakeville bought 75 dry vans from GE's Trailer Fleet Services business (formerly TIP) in just 60 days. GE applied the Lakeville decals and performed all preventive maintenance, inspections, and federal certification so the units could immediately go to customer sites for loading.

Anthony O'Brien, vp-product sales for the trailer services unit, says used trailers are now much now more attractive to fleets for two reasons. The first is price. Since the price of raw materials is escalating, new trailers are more expensive than ever, causing many fleets to consider used equipment.

The second factor is durability. Trailers are built to last much longer than in the past, so they hold up well in their second or third ownership cycle. According to O'Brien, anything that's five years old or younger is considered a “premium used unit.”

O'Brien also says that spec'ing more robust equipment up-front makes it easier for GE to move the units on the used market.

“Demand is catching up to supply in terms of new trailer orders, so we believe the used trailer market is going to stay strong this year,” he says. “On top of that, fleets are looking for turnkey used models — trailers ready to roll right off the lot without any prep work. That's where the demand will be in 2005.”

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