Trailer Output Drops 46% in 2009

Feb. 1, 2010
It was a disastrous year for truck trailer manufacturers the worst in 32 years. Not since 1978 have the trailer shipment levels sunk to such a low level.

It was a disastrous year for truck trailer manufacturers — the worst in 32 years. Not since 1978 have the trailer shipment levels sunk to such a low level.

Every manufacturer built fewer trailers last year than in 2008, at least among the largest 25 trailer builders. And some were affected less than other companies. Some normally very busy manufacturers were down 69% and 71% in unit volume. The two most fortunate trailer builders declined only 6% and 13%. More usual was a 50% drop in production.

The best market segment in 2009 was refrigerated trailers, which was down only 19% from the 2008 level. Agricultural trailers also did well, or less badly, than other trailer types. The poorest results were with platform trailers. As one manufacturer explained, “Our customers buy platforms to haul building products for the construction industry and steel for the automotive plants. Both construction and autos were hard hit.”

The results of Trailer/Body Builders' annual survey of the largest trailer manufacturers in North America shows that the top 25 builders (plus two) shipped 78,258 trailers in 2009. These same companies reported shipments of 146,182 trailers in 2008, which represents a 46% decline in '09. The Trailer/Body Builders survey includes some Canadian and Mexican factories that sell some of their production in the United States. It does not include the results from smaller manufacturers. As such, the results of the survey will differ slightly from the totals compiled by other sources.

The top three trailer manufacturers built 57% of all the trailers manufactured by this list of 25 (plus two) manufacturers. The top 10 manufacturers (those building at least 2,000 trailers) built 81%.

One of the surprising results of this year's Top 25 survey was the strength of the refrigerated trailer segment compared to the total trailer market. Reefers boosted Utility Trailer Manufacturing to the top spot from its normally third-largest position. For many years the company has been the largest refrigerated trailer manufacturer in the United States — and the world. This year Utility built almost four times as many reefers as dry-freight vans. It built well over half of all the refrigerated trailers manufactured in North America in 2009.

One of the reasons refrigerated trailer production in 2009 was down only 19% compared to the general trailer market being down 46% has to do with government regulations. Specifically, a new regulation by the California Air Resources Board (CARB) requires any mechanically refrigerated trailer unit operating in California that is over seven years old be modified or replaced to reduce particulate matter emissions. Some seven-year-old refrigeration units could be fitted with a particulate filter, while others had to have a new engine or new refrigeration unit. The effective date was July 17, 2009.

Another CARB regulation requires all 53-ft trailers operating in California be certified EPA SmartWay or be equipped with aerodynamic devices and low rolling resistance tires to achieve a 5% fuel saving (4% for reefers). It went into effect January 1, 2010 and will apply to all new 53-ft 2011 and later model year dry-freight van and refrigerated trailers.

This ranking of companies by the number of trailers manufactured does not necessarily reflect the relative success of the companies in terms of revenue received or profitability. The dollar value of a trailer can be far different depending on complexity of design, type of construction, materials used and quality level.

This Trailer/Body Builders survey is made by personally telephoning a member of the management team at each trailer manufacturing company. The editors wish to congratulate the leading firms listed here, first of all for surviving the worst financial crisis and recession since World War II. Secondly, they are to be congratulated for sharing their individual production numbers with the rest of the industry. When the numbers are so embarrassingly low, the temptation is strong to keep private information private. We applaud them for their industry-minded spirit that works for the betterment of the entire industry. Thank you.

Utility Trailer Manufacturing in City of Industry, California, demonstrated the benefits of supplying the food industry in a recession year. Utility Trailer production was down only 26% to 16,544 total trailers, primarily due to its strong position in the refrigerated trailer segment. Utility produced 12,428 reefers, down only 2% from their 2008 number. But dry freight van trailers were down 60% to 3,246, and platforms were down 58% to 870.

Utility Trailer has hired back several hundred workers that had been on lay-off. Production at its five trailer plants in the United States has increased steadily since the bottom of the recession for Utility and the trailer industry in January 2009.

Craig Bennett, senior vice-president of sales and marketing, says they are hoping the trend will continue this year, but the industry is facing more problems, such as increasing regulations, increasing material costs, the increasing cost of regulatory compliance, and the bankruptcies of several suppliers.

Utility Trailer remains the largest manufacturer of refrigerated trailers in the world.

Great Dane Limited Partnership built approximately 15,000 truck trailers in 2009, principally dry freight vans, refrigerated vans, and platform trailers. This is 13,500 fewer than in 2008, a decline of 47%.

Wabash National Corporation shipped 12,800 truck trailers, down 62% from the 33,300 trailers sold in 2008. Shipments include sales of some trailers that were built in 2008, making the number actually built in 2009 about 1,500 units less than shipments. The shipments include 9,547 dry freight vans and 1,813 refrigerated vans. Platform shipments numbered 844. The company also built 48 dump trailers, plus some others unspecified by type. Wabash also built 354 converter dollies, but that number is not included in the trailer totals.

“We are encouraged to see order activity pick up,” said Dick Giromini, president and CEO. “Our backlog at the end of the year was $137 million, up from $96 million in September and $110 million as of a year ago. Key economic indicators also show noteworthy levels of stabilization and even incremental improvement. Industry sources expect trailer demand to increase during the third and fourth quarters of 2010, with demand improving markedly in 2011 and 2012.

“Wabash has meaningfully reduced its breakeven point and positioned itself for increased profitability as volume levels improve,” Giromini said.

Cost containment at Wabash during the past year included the Lafayette Transformation Project which eliminated three dry van production lines in its main plant in Lafayette, Indiana.

In November Wabash announced that it was selling the Anna, Illinois, production facility of its wholly owned subsidiary, Transcraft Corp.

Terry Campbell, general manager of Transcraft, said all production of platforms and dump trailers and bodies would be moved during the first half of 2010 to the company's new facility in Cadiz, Kentucky, which has been building Transcraft's aluminum platform and dump product lines. The Anna plant is being sold to a local lumberyard and home center business that wants to expand.

Hyundai Translead of San Diego, California, produced 4,716 trailers in 2009, down 28% from 2008. This includes 3,775 dry van trailers, down 33%, and 941 refrigerated trailers, a 5% increase over 2008 production.

“We are putting out more quotes — real quotes this year,” says Stuart James, VP sales. “The first quarter of 2010 is an uphill battle, but the second quarter is looking good, and the last half of the year looks even better.”

Manufacturing facilities for Hyundai Translead are in Tijuana, Mexico, just across the border from San Diego.

Timpte Inc in David City, Nebraska, had an outstanding year, down only 13% after an 8% increase the previous year. Timpte built 2,825 hopper trailers in 2009, almost all of them for hauling corn, soybeans, and other commodities.

Dale Jones, president and CEO, says both the corn and soybean crops were good in 2009, and ethanol production remained stable. Barring any crop failures, he thinks the grain trailer market will remain about the same in 2010.

The strong ag market resulted in a small plant expansion at Timpte last year. The company added onto the plant to expand the final inspection department.

Wilson Trailer Company in Sioux City, Iowa, produced 2,750 truck trailers in 2009, down 21% from the previous year. Its strong position in the ag market with both livestock trailers and grain trailers has been supplemented over the years with platform trailers and gooseneck trailers. Its five manufacturing plants are located in Yankton and Lennox, South Dakota; Moberly, Missouri; and two in Sioux City, Iowa.

Stoughton Trailers LLC produced 2,600 trailers, down 53% from 2008, which had been down 52% from 2007. These are all van trailers, with the exception of some grain hoppers, a new line that Stoughton restarted three years ago in an attempt to diversify. All are produced in the headquarters plant in Stoughton, Wisconsin.

Ken Wahlin, president, says ordering is better than last year at this time, and quote activity is improving. However, he foresees a bumpy year ahead with possible problems looming in material costs, fuel prices, and customer survivability.

Heil Trailer International of Athens, Tennessee, reports production of 2,300 total trailers globally, down 43% from 2008. This includes commercial trailer business, military contracts, and international operations. Heil tank trailer plants are located at its headquarters in Athens, Tennessee, and at Rhome, Texas. Its Kalyn Seibert subsidiary manufactures heavy-duty lowbeds in Gatesville, Texas. Heil's international tank trailer plants are in Canuelas, Argentina, and Bangkok, Thailand.

Greg Heyer, Heil vice-president sales and marketing globally, says the company is expecting a flat year in 2010. Production in the first quarter of 2009 was still good working off the backlog from 2008, and the slowdown came later in the year. That big backlog is not there this year.

Fontaine Trailer Company in Haleyville, Alabama, built 2,125 platform and lowbed trailers, down 36% from 2008 after a 54% drop from 2007. Hank Prochazka, VP sales for the Fontaine Trailer commercial business, says sales would have been down much more except for the introduction of a new model, the Revolution. One model is all-aluminum and the other is a hybrid with steel frame and aluminum deck. He says the company is starting to see some improvement in ordering and sell-down of dealer inventories.

Fontaine closed its Kent, Ohio, plant and moved that all-aluminum production to the Haleyville facility. It also closed the Princeton, Kentucky, plant and moved its military production to Jasper, Alabama.

MANAC in St Georges, Quebec, produced 2,000 trailers in 2009, down 52% from the 4,150 built in 2008. MANAC produces a diversified line of trailers from its two Canadian plants ranging from dry vans to logging trailers. Its two US plants manufacture platforms in Kennett, Missouri, and bottom dumps in Oran, Missouri. Charles Dutil, MANAC president and CEO, says the company is starting out the year with a better volume of business than it did a year ago, which is encouraging.

Vanguard National Trailer Corp in Monon, Indiana, built 1,715 trailers in 2009, down 61% from production in 2008. These are generally all dry-freight vans, although the company is gearing up its refrigerated trailer production using sidewalls, floors and roofs built and insulated in China and assembled in Monon (See December issue of Trailer/Body Builders, pages 14 to 24).

“We expect 2010 to be a better year and Vanguard to be a much stronger force in the market,” says Charles Mudd, president. “I expect the market will be slightly better than the economists predict. Many fleets are aging and they can't wait any longer to replace some older equipment.”

Polar Tank Trailer LLC in Holdingford, Minnesota, produced 1,190 tank trailers in 2009, which was off 46% from the previous year. John Koll, vice-president of sales and marketing, says that Polar increased its market share last year. He expects sales to grow by 30% to 40% this year, based in part on a broader product line. Polar already produces a variety of liquid and dry bulk tank trailers, but has now expanded with other models within that diversified line. Polar has also expanded its company-owned service centers to over 20 in number.

Talbert Manufacturing Inc in Rensselaer, Indiana, shipped 1,170 lowbed and flatbed trailers in 2009, which is down only 6% from 2008 production. This successful stability resulted from several government contracts, the largest of which was completed in October 2009. Several smaller government contracts are continuing, and with some increasing commercial business, the company is hoping to produce about the same number of trailers in 2010. Stephen Kingman, executive vice-president, says that quote activity has been increasing for the past three or four months.

Walker Group Holdings manufactured 1,100 tank trailers, off 50%, plus another 800 tank trucks, according to a preliminary report from John Cannon, vice-president of sales and marketing. Walker Group includes tank trailer production by Brenner Tank LLC of Fond du Lac, Wisconsin; Walker Stainless Steel of New Lisbon, Wisconsin; and Progress Tank of Arthur, Illinois.

Strick Corporation of Fairless Hills, Pennsylvania, completed 1,099 trailers, a drop of 69% from 2008. However, revenue did not suffer the same large drop, because the company is now building highly specialized and higher value vans, flatbeds, and lowboys instead of the more standard trailers. Ben Katz, marketing manager, says high volume assembly lines in Monroe, Indiana, and Berwick, Pennsylvania, have been switched over to more customized production. Heavy-haul trailers are built in Strick's Sumter, South Carolina, plant.

Trail King Industries manufactured 1,025 truck trailers in 2009, a 69% drop from the previous year. “In one year's time, we went from our best year ever to the worst year in 15 years,” says Chuck Noel, vice-president of administration. However, ordering right now is better than a year ago, and he is optimistic that previous levels of production can be regained in several years.

Lowbeds, tilt beds, hydraulic tail and heavy haul trailers were down 71% to 727 units. Dump trailers were down 52% to 262, and pneumatic dry bulk trailers were down 84% to 36 units. Not counted in any of these figures are the 112 light utility trailers under 20,000-lb capacity that are not counted as strictly defined truck trailers (having at least one axle over 10,000-lb capacity). If the light utility trailers were included, it would bring Trail King's total production to 1,137 in 2009.

Trail King closed its Brookville, Pennsylvania, plant in October, 2009. This leaves it with the headquarters plant in Mitchell, South Dakota, and its newest plant in West Fargo, North Dakota.

Doepker Industries Ltd of Anaheim, Saskatchewan, produced 920 truck trailers in 2009, down 23% from 2008. This was right on target with the company's prediction a year ago. For the 2010 year, Bill Schuler, vice-president of sales and marketing, thinks Doepker production will be up about 16% to 1,070 trailers.

Schuler believes ag trailers will remain in good demand and that flatbed demand will increase gradually through the year. He thinks gravel trailers and heavy-haul equipment will be in moderate demand, but forestry equipment will be low.

MAC Trailer Manufacturing of Alliance, Ohio, completed 904 truck trailers, a drop of 59% compared to 2008. While the company's dump trailers, transfer trailers, and platforms were all down, the one bright spot was MAC's new pneumatic dry-bulk trailer that was introduced during the year. Mike Conny says that the new product is performing well with no major problems.

Pitts Enterprises of Pittsview, Alabama, produced 893 truck trailers, down 37% from 1,417 trailers in 2008. Jeff Pitts, president and CEO, says all three segments of the company are performing well in this depressed economy. This includes forestry trailers and lowbeds from its headquarters plant in Pittsview; Dynaweld platforms and lowbeds in Columbus, Georgia; and Dorsey van trailers, refrigerated vans, platforms and chip trailers from the Elba, Alabama plant.

Kidron built 878 refrigerated distribution trailers, down 17% from the 1,060 built in 2008. These are mainly food service trailers, ranging up to 53 feet long. Kidron has consolidated all of its refrigerated trailer production in its Montgomery, Pennsylvania, plant, the former Grumman Olson facility. Refrigerated truck bodies (not counted here) are produced in Lakeland, Florida, and its headquarters plant in Kidron, Ohio. John Sommer, executive VP at Kidron, says that they are starting the year with a better backlog than a year ago.

Kentucky Trailer built 690 trailers, a 35% drop from the 2008 number. Most of these are drop-frame vans for the moving and storage industry, but some are flat-floor freight vans. Because of the crisis in housing-related industries, Kentucky Trailer has diversified in a joint venture with High Tech Performance Trailers of Paynesville, Ohio.

Kentucky Trailer has expanded greatly the service side of the business, and now has taken over Western Truck and Trailer in Fontana, California. That location will be operated as Kentucky's western repair and refurbishing center for all kinds of van trailers, according to Larry Roy, chief financial officer.

The biggest change is that Kentucky Trailer is now in its 240,000 sq ft manufacturing plant in the Riverport Industrial District in Louisville, after selling its former central-city site to the University of Louisville.

Road Systems Inc in Searcy, Arkansas, turned out 640 new-built and refurbished trailers, all long semi-trailers 48 to 53 feet long. This is a decline of 66% from 2008. Lynn Reinbolt, president of Road Systems, says the company had a big increase in the reconditioning and repair side of its business. It reconditioned 2,010 trailers for its parent as well as commercial customers. This reconditioning can include body repairs, floor replacement or repair, door work on both overhead and swing doors, etc.

East Manufacturing Company in Randolph, Ohio, produced 570 all-aluminum platforms, dump trailers, and transfer trailers, down 54% from 2008. However, shipments were up for both December and January over a year ago. David Tate, president of East Mfg, looks for a gradual increase in the market throughout 2010. He thinks aluminum dump trailers will do better than the 20% to 25% increase forecast for the trailer industry in 2010.

Western Trailer in Boise, Idaho, put out 512 complete trailers, down 26% from 2008. Tod Swanstrom, engineering manager, says customers are more optimistic and quoting activity is picking up, but the company is still expecting a slow start this year.

Tremcar Inc built 468 liquid and dry bulk tank trailers in 2009, down 44% from 2008. Daniel Tremblay, president, says about a third of these are for the U.S. and two-thirds for Canadian haulers. Tremcar's headquarters plant is in St-Jean sur Richelieu, Quebec, and another in Toronto, Ontario. Its U.S. plant is in Strasburg, Ohio. He expects a somewhat improved year in 2010. He says queries have picked up, especially in the last two weeks of January.

Reitnouer Inc in Reading, Pennsylvania, had a disastrous year, down 71% after a 24% decline the previous year and a loss of 53% in 2007. It built 3,738 aluminum platforms three years ago, but only 435 in 2009. “Our customers haul for the construction and automotive industries,” says Bud Reitnouer, president. “We were building at the rate of 40 a week before the financial melt-down, but only four a month four months later.”

That kind of shock is enough to inspire diversification. Reitnouer will introduce two new transfer trailers at the Mid-America Truck Show in Louisville in March. One dumps on a platform tipper and the other has a moving floor. Both are aluminum, no-weld, bolted and bonded construction, just like the Reitnouer platforms.

Beall Corporation built 389 aluminum trailers in 2009, down 59% from the previous year, and 194 aluminum truck bodies used in doubles trains, down 28%. This adds up to 583 cargo units, a decline of 52% from 2008. Beall specializes in petroleum tank trailers, pneumatic dry bulk trailers and dump trailers, plus truck chassis-mounted bodies.

About the Author

Paul Schenck | Senior Editor