LATE in the summer, Troxell Trailer Manufacturing LLC made two moves almost simultaneously that it hopes will make it a leader in the market for carbon steel vacuum and transport tank trailers.
In July, Troxell started construction of a 6600-sq-ft manufacturing building that ultimately will nearly triple production at the facility in Saginaw, Texas, a northern suburb of Fort Worth.
Less than a month later, Troxell announced that the Jack Olsta Company would begin selling Troxell vacuum and transport trailers as Troxell's “Master Dealer.” That agreement became effective September 1 — just days before the new manufacturing building opened.
Plant manager Tracy Troxell says the aggressive growth strategy will transform the company, which started building trailers in 1979.
“Our goal, now that we've weathered the storm as far as the slower market for the past few years, is to diversify with different niches,” Troxell says. “We'd like to be a good company of substantial size. We still want to be a family-oriented business, but one that's not a mom-and-pop business.”
The new manufacturing building, which was completed in September, is 60'×110' — allowing for five bays — and has 28' sidewalls. The design and the placement on the company's five-acre spread allow for the possibility of extending the building an additional 80' to accommodate the company's growth.
“The initial manufacturing facility here was set up for nothing but rigging trailers and doing pumps and truck repairs,” Troxell says. “As the market demanded, we'd build vacuum trailers. After 9/11, that was sporadic, but it's picking up now. We've really seen the sales volume change, so we knew we had to change, not only there but also to gain efficiencies in manufacturing.”
The old manufacturing facility has no cranes in it, slowing down the process. But the new building has a 10-ton crane and two five-ton hoists.
“The crane has speeded things up considerably,” Troxell says. “The efficiency has automatically increased. We're no longer tied to that old-shop mentality. We're starting new, and it's a great setup.
“The building has increased safety and throughput while decreasing customer lead times. We were averaging two to three trailers a week. We're expecting to double that and nearly triple it. It's the nature of the beast. You have people calling nowadays, wanting a trailer right now. It's our plan to put inventory on the ground for immediate delivery. That'll really spark a good word in the industry as well because they'll know this is the place to go to get it.”
Troxell says he considered purchasing the old Trailmaster plant in Saginaw because it's “an excellent tank-manufacturing facility,” but decided against it because it would be more cost-effective to put up a new building at Troxell's existing facility.
Troxell saved thousands of dollars by subcontracting much of the work. Troxell also built the break room and rest room, using two intermodal containers.
“It's going to help us remain flexible,” Troxell says. “By that I mean that if the market changes even more and we get even busier and we need to produce barrels even faster, this essentially could be nothing but a vessel-manufacturing shop, with trailerization taking place in another building that we lease on adjacent property.
“We can keep expanding this building. But with the high cost of steel and concrete, this is it for now.”
Troxell pauses, then adds with laugh: “Until Olsta gives me that 10-trailer-per-month order!”
The agreement with the Jack Olsta Company, a Huntsville, Texas-based company that specializes in providing tank trailers and bobtails to the trucking industry, came in part because Troxell says his company is one of the few steel vacuum trailer manufacturers that possesses product liability insurance.
“One of the situations we run up against as a dealer is people want us to represent their product, and we're very particular about who we represent,” says Taylor Craigen, Olsta's sales and marketing manager. “It has to be a good product and it has to be produced by someone who will stand behind it — someone who has the wherewithal to take care of things should something catastrophic happen. I continue to be amazed by the number of people in the manufacturing end who don't carry product liability insurance.”
Oil patch market
Discussions began in May, when Olsta was looking for an opportunity to fill a void in its product offerings. Craigen says Troxell was perfect because its steel vacuum units — both in trailers and truck-mounted units — serve the crude-oil-patch market Olsta was looking to serve.
“This has been a product offering we wanted to find a good manufacturer for — one that was willing to stand behind us and be there,” Craigen says. “Up until this point, we hadn't found someone we were comfortable with, to be quite honest.”
From Troxell's vantage point, the deal allows it to concentrate on manufacturing and let Olsta handle the sales and marketing of Troxell's products.
“Being a smaller company, we're forced to wear multiple hats,” Troxell says, “and this frees us up on the sales and marketing end. Our belief is that to be successful, we have to diversify and get into different niches — be it frac tanks or whatever — and pursue other avenues. We need somebody of the caliber of the Olsta Company to take that over and to know that our sales and marketing will be taken care of. It will free us up to concentrate on what's going to continue to help us be profitable and to be able to further efficiencies and concentrate on design improvements and adding value.”
Craigen says the Olsta Company brings synergies to the relationship, including its representation of Heil crude-oil trailers and petroleum trailers, as well as its distribution network.
“The number of sales people we have covering the territory, as well as our infrastructure and support staff, give them duplication of effort without adding to overhead,” he says. “It gives them about 20 additional support staff who are either selling or servicing and maintaining relationships.
“The other thing is that because we're a very large trailer dealer, we have a couple of different options to offer people. If we're selling a new Troxell trailer and the customer has a used trailer he wants to trade in, we have the ability to take in trades. We have the ability to deal with used equipment to customers and put in something temporarily until a new one can be built. We have a lease fleet of over 200 trailers. Not all are related to the crude oil field. Some are crude oil-related and could be used to get a customer by in a bind until a new piece of equipment could be built.”
Says Troxell, “At the end of the day, it's the customer who will reap the benefit, which is our main goal — both Troxell's and Olsta's. In essence, some of the larger companies that may sell crude oil trailers as well as salt-water trailers now have a one-stop shopping option where they can get everything they need from one vendor, as opposed to dealing with so many others.”
Craigen said the Olsta Company saw a huge jump in orders in April and May because companies recognized that the economy was improving.
“This year's increase is significant, compared to the last three years,” he says. “We've had some customers order specific equipment that they are planning to use next year.”
More trailer sales
He says part of the current increase in trailer sales is being driven by customers who previously were allocating capital to tractors rather than trailers in order to purchase power units before new 2007 engine emission requirements become mandatory.
“There just hasn't been a lot of trailer replacement in the last three to four years,” he says.
Virtually all of the trailers The Olsta Company sells are tanks. Within that niche, however, the company offers a complete package of new and used trailer sales, leasing, and financing options.
“We consider tank trailers to be specialized equipment that requires specialized knowledge to sell properly,” Olsta said in a previous interview with Trailer/Body Builders. “When we make a sales call, I don't want an order — I want a customer. That's why we don't really make sales presentations. Instead, we go to consult with our customers. Because of the technology that goes into tank trailers, we do that with new trailers as well as used models.”
Troxell says his 130-barrel vacuum tank trailers distinguish themselves through two main areas:
They use a heavier-duty suspension — Hutch 9700 Series cast steel spring hanger — while most others use a fabricated style.
“For a tanker, it's just a long-lasting suspension,” Troxell says. “Cast hangers are stronger and more effective. They're more expensive, too, but we'll offer what's better for our customers. To me, it's value added, and it doesn't really hurt our bottom line very much. And if it'll prevent any warranty issues, we can be proud of that.”
A full-length walkway down one side of the trailer, with rear access.
“That's one of our bigger selling points,” he says. “There's a hand rail all the way down. Most companies probably use a lighter-duty walkway, so they have to use a crossover bar that hangs to the tank. And when you get to it, you have to open it up to walk on by.”
Troxell says the 2005 season already is looking very promising, with a backlog carrying over from the end of 2004 and new orders already being placed into the production schedule.