Trailer maker Wabash National is trying to design and build an almost maintenance-free trailer with an expected life cycle of 10 years— almost twice the expected life of today’s trailers, Rod Erlich, the company’s chief technology officer said.
“Our goal is to build a trailer that, over the course of 10 years, all you will need to do is check the brakes and tires and that’s it,” he explained last week at the Mid-America Trucking Show. “In terms of what we call total cost of ownership, a customer may pay $800 to $1,500 more for this type of trailer, but because it lasts 10 years versus the 5 to 7 life expectancy of today’s trailers, they’ll get more life cycle value from it.”
It’s a heady goal for a company that stood on the brink of bankruptcy two short years ago after sales dropped over 30% resulting in nearly $100 million in losses. Dick Giromini, Wabash’s vp/finance and COO, said the company is in much better shape today.
“Our on-time production rates jumped from 75% in 2002 to 99.2% by the end of last year, productivity is up 48%, capacity is up 23%, and warranty costs for our product line is on track to drop by 34% this year compared to 2002,” he said. “We’ve reduced operating costs by $65 million and cut our inventory from $14 million to $4 million. We’ve done a lot of heavy lifting over the last three years to get to this point.”
Part of Wabash’s revitalization comes from burgeoning demand for new trailers, said CEO Bill Greubel. “Normal market demand for trailers hovers between 200,000 and 225,000 units,” he said. “Industry predictions for 2004 are now around 247,000 units, while we are predicting between 225,000 and 230,000. That demand is because fleets haven’t replaced their trailers in the last two years because of the recession— as a result, there’s a lot of pent-up demand coming out now.”