A freeway location is one of the advantages of the new Utility Trailer Interstate. The new facility replaces a 50-year-old shop located in a low-traffic, low-visibility site.

Stand-alone silos hold key to trailer dealer’s survival

Jan. 1, 2011
IT WASN'T exactly ideal timing. Utility Trailer Interstate had just completed construction of a new facility in metropolitan Denver and was about to move

It wasn't exactly ideal timing. Utility Trailer Interstate had just completed construction of a new facility in metropolitan Denver and was about to move into it. It was November 2008, just in time for 2009 — the worst year for trailer sales in a generation.

“Our competitors were saying that we would not even finish construction on the building, much less survive,” says Jeff Martin, president.

But the company has done far more than survive. One of many reasons the dealership made it through the recession was the strength that each of the departments had going into the downturn. Like most trailer dealerships, Interstate has a leasing operation, service department, new and used trailer sales, and parts operation. Martin describes these departments as a series of “silos,” each of which stand on their own.

We are a remarkably well balanced business,” he says, “and we need all of these silos to perform if we are to be a healthy trailer dealership. When new trailer sales dropped like they did, we relied on the other areas of our business to get us through. In tough economic times, you really need to have strong parts, service, rental, and leasing operations. It's not enough to just sell trailers. Our other departments were solid going into the downturn because we nurtured them when new trailers were selling well. During the boom years, we didn't lose sight of the fact that every department must contribute and not be a drag on the business.”

Yes, but how? In Martin's view, each of these operations is a business unto itself. Each one needs to be managed by people who have an entrepreneurial spirit. It's Martin's job to find those people, develop them, and give them the latitude they need to build their business.

“I have people in this company who have a bent for a certain activity,” Martin says. “It's my job to give them what they need and let them go — and that includes giving them the freedom to learn from their mistakes.”

Sometimes it means a change in policy. Martin cites his general manager, Bill Hathorn, as an example.

“Bill has built up our stock of new trailers,” Martin says. “We used to only have one on hand, but now we buy a lot of trailers for stock, including Utility trailers as well as the other brands of trailers that we handle.

“The same holds true for used trailers. We used to be very cautious about our used trailer inventory — so much so that we had the reputation that we did not want to take our customers' trailers in trade. Bill kept saying we need to branch out and take trades. It has been a gradual, controlled journey, but our inventory of rolling stock — new and used — has grown from about $300,000 to $3 million.

A contributor once again

Because the refrigerated trailer market was strong last year, and Utility Trailer has the lion's share of the reefer market, Utility Trailer Interstate fared better than many trailer dealers. But with the overall increase in new trailer sales, the “new trailer silo” is once again making contributions to the company in general.

“We started out in our new location as new trailer sales were heading for the bottom,” Martin says. “Now sales are on the way up.”

Furthermore, all the reasons for moving to a new facility still apply. With the industry is rebounding, Utility Trailer Interstate is now benefitting from the move.

“We needed more space and a better location,” says Bill Hathorn, general manager. “We were in a part of town that had been a center for truck-related business, but many of those companies were relocating elsewhere.

A better location

Utility Trailer Interstate packed its bags and moved to a location on an interstate approximately eight miles away.

“Location is important in this business,” Hathorn says. “We have a lot more traffic here than we ever had at our old location.

The new location fronts Interstate 76, a highway that appears briefly in Colorado to link Interstates 70 and 80, two of America's main east-west truck routes.

The company has benefitted from its increased visibility, and a massive computer-controlled electronic sign is helping Utility Trailer Interstate grab the attention of passing motorists.

“With our freeway exposure, an electronic sign makes sense,” Martin says. “We can change it in a minute and drive traffic almost as quickly.”

The sign can be programmed to flash as many as 20 messages, one after the next. However, Utility Trailer Interstate rarely goes beyond 15. Each message is displayed for three seconds, enabling all 15 messages to be shown once every minute. Each department at Utility Trailer Interstate is included in the slate of messages.

“How many messages can you read going down the freeway at 65 mph?” Martin asks.

While the signs can be programmed to do a wide range of special effects, Utility Trailer Interstate prefers to keep the presentations simple — usually simple amber text on a black background.

“We have stayed away from color,” Martin says. “Think about it. When potential customers are moving past at 65 mph, you want your message to be as readable as possible. Studies have shown that amber and black can be read from the greatest distance, which is why so many warning signs are yellow and black.”

Martin's son Travis manages the messages, quickly uploading the latest special that Utility Trailer Interstate is offering.

“We are a Utility Trailer Manufacturing dealer, but we have plenty of flexibility to run whatever we think will work in our market,” Martin says.

Other promotions

>The sign is but one way that Utility Trailer Interstate reaches out to its customers. Another relatively new approach is via the Internet. The company's website lets customers search for specific trailers that are in inventory and lets the visitor know how many of that type of trailer are in stock. The website also is a good source of information about parts, service hours and capabilities, and leasing information.

But Utility Trailer Interstate by no means has abandoned face-to-face marketing.

“We put on a number of special promotions during the year,” Martin says. “We like to partner with the Colorado Trucking Association, truck manufacturers, and others outside our company to offer customers special informational meetings.”

California Air Resources Board regulations are hot topics, particularly for fleets that operate in the state. Utility Trailer Interstate recently held a tutorial on CARB requirements for trailer skirts and other fuel-saving equipment. The session included a segment explaining how to evaluate the effectiveness of the equipment and how to determine the payback associated with the required equipment.

Built-in advantages

Utility Trailer Interstate built itself a new facility for a variety of reasons.

“We needed more space,” Hathorn says. “Our old shop was built when trailers were 45 feet long. The length of today's trailers made it difficult to effectively utilize our shop space.”

The new building is 140 feet wide, making it possible to have back-to-back 70-ft bays throughout the shop.

“We will be ready when 57-ft trailers become the standard here in Colorado,” Hathorn says. “When we designed the building, we wanted to be ready for the future. We didn't want something that could easily be obsolete in just a few years.”

Utility Trailer Interstate chose to make its bays 16 feet wide to provide technicians ample space to operate. The building houses eight drive-through bays, or total of 16 work stalls. In addition, the company wired and plumbed one side of the building and installed a 60-ft concrete apron so that technicians could work on trailers outside the shop when volume warrants it.

All together now

The new location also brings all operations under one roof. Utility Trailer Interstate had operated in multiple buildings at its old location. At a time when space was tight, the company bought the building behind the shop. Offices and parts were in one building, and the service department was in another.

“That was a crucial element,” Martin says. “We had service on one side and sales on the other. We made it work, but the arrangement did not lend itself to the kind of oversight that we needed.”

The building also improves communication.

“We are still small enough that individual communication makes sense, rather than having group meetings,” Martin says. “I think meeting one-on-one is a better way to encourage people. And since we moved here, we have seen great improvement in how our work groups work together.”

Easy to get around

Many of the decisions Utility Trailer Interstate faced when designing the facility involved how to make the place convenient to truck drivers. That's why the building is not square with the boundaries of the property.

“When truck drivers are pulling a long trailer, they don't like right angles — they want circles,” Martin says. “We kept that in mind as we designed the layout. The way we placed the building really dictates traffic flow and what the driver has to do to get where he wants to go.”

All service lines are at the north end of the building. If the driver needs service work, it is a straight shot to the shop. Ample signage lets drivers quickly learn where all of the key departments are, and a large yellow line in the pavement helps drivers stay on track.

The parts department also is in easy reach, with most of the inventory displayed in the showroom instead of in the warehouse.

“I know how difficult truck driving is,” Martin says. “I wanted our facility to make it possible for drivers to get in and out in a hurry.”

The shop is the second one Martin has built since he acquired the company. The Albuquerque branch moved into a new facility seven years ago.

Background in trucking

Martin can empathize because he has spent most of his career with truck lines — one a refrigerated fleet, another a van and flatbed carrier — before buying the Utility dealership in 1998.

“I know the customers around here,” he says. “They used to be my competitors. But having worked on the other side of the fence, I can identify with the people who are now my customers. I understand how and why fleets make decisions.”

Martin says he was attracted to Utility Trailer Interstate because of the people who worked there.

“The hallmark of this company is employee tenure,” Martin says. “The average employee has been with us 15-18 years. I wanted to keep that going and to provide a place where their talents could flourish. I like to take well tenured people and challenge them.”