What's next: Trailer manufacturers identify key industry issues

Jan. 1, 2008
The National Trailer Dealers Association (NTDA) recently brought together executives from Great Dane Trailers, Wabash National, and Utility Trailer Manufacturing

The National Trailer Dealers Association (NTDA) recently brought together executives from Great Dane Trailers, Wabash National, and Utility Trailer Manufacturing for their thoughts on the factors that will shape the trailer industry over the next few years. They were Bruce Ewald, senior vice president, sales and marketing, Wabash National; Chris Hammond, vice president, general sales administration, Great Dane; and Craig Bennett, senior vice president, sales and marketing, Utility Trailer Manufacturing.

Beginning with some perspective on the current market, Wabash's Ewald noted that beginning in 2004, the trailer industry began seeing major increases in commodity prices. “Some people may not realize that as much as 70 percent of a trailer's content is in materials,” he said. “When the price commodities increase, there is a tremendous amount of pain that is felt by our industry.”

Ewald doesn't expect prices for commodities to become predictable anytime soon. Consequently, he said, the challenge becomes, at what point does a manufacturer decide that it can't afford to absorb costs anymore and begin passing them along to customers.

The driver and technician shortage is continuing, and it will only worsen because of demographic changes occurring throughout North America, Ewald said. Along with providing a better work environment and additional training, companies need to develop effective ways to attract more drivers and mechanics into the trailer industry.

Long term, Ewald is optimistic about the role trailers will continue to play in North America's transportation system. Rail, he said, is trucking's chief rival for freight, but railroads face critical challenges in meeting demand.

Meanwhile, the capacity of America's roadways is being overwhelmed by traffic, he said, and noted that the cost of congestion today is estimated at $8 billion per year, and it is growing.

Regulations

Addressing regulations that affect the industry, Great Dane's Hammond highlighted some of the more significant ones:

  • Foam blowing agents. A US Environmental Protection Agency regulation goes into effect in March to regulate the blowing agents used to produce urethane foam insulation for insulated trailers and truck bodies.

  • Regulations on refrigeration units. The California Air Resources Board is making it illegal for refrigerated trailers to operate in California unless they meet specific performance requirements.

    On the surface, said Hammond, it would be easy to conclude that such a regulation would not affect refrigerated fleets that do not operate in California. However, a number of states tend to follow California's lead in environmental regulations.

  • Canadian underride regulation. A Canadian regulation requiring stronger underride guards for trailers is in effect. The requirements are more stringent than those found in U S standards.

Utility's Bennett said that both trailer manufacturers and their dealers are facing many more business challenges these days. For the good of all, both parties need to keep the relationship strong, “adding value through the good times and the bad times.”

The aftermarket, he noted, is getting more complicated every year as more offshore parts enter the market. He encouraged dealers to sell only genuine authorized parts in order to avoid unnecessary liability exposure.

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