Getting across to the other side

AS we watch the history of the truck equipment industry unfold, it seems that distributors are starting a new chapter.

As this is written, “trade-show season” is now in full swing. We at Trailer/Body Builders are meeting more people and attending more presentations than at any other time of the year. Almost everyone we talk to is reporting the same general thing: the toughest downturn in their career is over, and the climb out is under way. New outlook. New direction.

And none too soon. Truck equipment distributors in particular have had a tough couple of years. They have lost customers to other distributors. They have lost customers to their manufacturers. Some of the truck brands that they used to equip don't exist anymore. Some customers don't exist anymore. And most of the remaining customers are buying less.

Yet optimism is returning to the truck equipment business. To summarize the comments we have been hearing lately:

  • The worst seems to be over

    Some distributors are not yet seeing an uptick, but more seem to be experiencing at least modest gains in quoting activity. The latest retail truck sales from Wards Communications seem to back that up. With February sales now in, dealers are running a little ahead of last year's sales for the first two months of 2010. Total sales of Class 3-7 trucks, the heart of the commercial truck business, are up 5% for the year.

    But let's not be deceived by statistics. A single-digit increase pales when compared with last year's double-digit losses. Nevertheless, a small gain is still a gain and a welcome change from the downward drumbeat of the past two years.

  • It's still tough out there

    And if the people we are hearing are correct, it will take a lot of creativity for distributors to return to peak sales levels. The market may be beginning to rebound, but distributors will continue to face other challenges as the channel of distribution changes, truck technology advances exponentially, and personnel shortages — a major concern before the downturn — reemerge as other businesses begin to hire again.

  • It will be better, but it won't be the same

    The new “good old days” will be a lot different than the old “good old days.” Trucks have changed. Customers have changed. You have changed. Irreversibly.

This edition of Trailer/Body Builders, our annual Distributors Issue, profiles three truck equipment distributors and includes the thoughts of several speakers at the recent Heavy Duty Aftermarket Week.

A couple of thoughts based on input from the distributors we feature in this issue:

  • It helps to be diverse. Just about every distributor did whatever it took to make it through the downturn. They sold new products. They offered new services. But it helped significantly that these companies went into the recession knowing customers in different industries and having expertise in a wide range of products. Niche marketing is profitable marketing as long as the niche remains strong.

  • A well staffed, well equipped shop is a lifesaver when you are stretching for new revenue. Yes, distributors were forced to lay off some technicians — the very type of employee that was in tight supply when the recession started. But when new sales dried up, the remaining shop personnel were able to generate vital revenue. And just as it helped to have a variety of products to sell, distributors benefitted from having technicians and equipment to handle the wide-ranging service needs of a diverse group of customers. Dean Phillips, president of Hoosier Trailer & Truck Equipment, said it this way: “Without question, our service business kept us going.”

We are confident that the distributors emerging from this downturn will be stronger and wiser as a result of the lessons they have learned and the changes that they have made. To paraphrase Charles Kettering, the founder of Delco and the inventor of the starter motor, if we were able to get off the ship when the storm came, we never would have crossed the ocean.

Agree or disagree? Make your voice heard by visiting trailer-bodybuilders.com and clicking on “Contact Us.”

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