When Enrique Zanelli attended the University of Houston, he studied mechanical engineering and computer science. When he served in the Navy, he worked on the technical end of communications. He's always enjoyed taking things apart and putting them back together.
Now, as president of Choice Trailers — which manufactures custom-built, heavy-duty lowboys for the construction, oil-field, and mining industries — his curiosity has only intensified.
“Manufacturing is something I've always liked,” he says. “If I can make a better product, I do. What you see now, that's my creation. I've seen what everybody else does and I've taken the good and the bad and come up with something that works.
“I'm a manufacturer but also a user. Lowboys move our trailers. I talk to the drivers in the field. I go to job sites. Every time I see a trailer, I look at it to see how they're doing this and how they're doing that. I'm curious: ‘That's a good idea. Can I take that and make it better?’ Every time a lowboy pulls in here, I take a look.”
Details matter to the 51-year-old Zanelli. He inspects every trailer that rolls off the line and out of the paint booth before it is shipped out. True, he's able to do that because Choice produces about 250 a year.
But that's not the point. Even if Choice one day becomes so big that he is not able to offer his personal inspection stamp on every trailer, he is confident that the quality will still be there.
“I set a standard for my people so that I don't have to be as involved as I was at the very beginning,” he says. “They know if something isn't right, I'll let them know about it. The people who are with me have been for a long time.”
Choice Trailers began as a pet project. He had no idea it would become what it has.
After his Navy stint was up in 1982, Zanelli started Choice Equipment in Houston.
By the early 1990s, much of his equipment was going to Mexico and South America.
“In the ‘80s and ‘90s, Venezuela was very strong,” he says. “They were buying everything. I had a pretty good run in those years. Then they changed presidents, restricted imports, and tried to nationalize everything, and the economy stopped. Chile at that time was emerging, with copper the main export. That created a good opportunity for me.
“I went there and was introduced to a fellow, a small equipment guy who had lived in Houston. We became very good friends. We eventually became partners. Things began to pick up. We were shipping 40 to 50 machines a month.”
Chile was an underdeveloped country with an infrastructure that needed serious upgrading. Roads needed to be built. A lot of equipment was being imported, but they didn't have adequate trailers to haul it.
“One time, we shipped a used lowboy trailer, and everybody wanted to buy it,” he says. “We were shipping so much that all the shipping lines wanted our business. We were spending a lot in ocean freight. There were three major carriers, and one came out with an idea. They had a roll-on, roll-off type vessel. He had seen we were shipping trailers. He said, ‘I'll make you a deal: If you commit to me to give me so much volume per month, I'll give you a flat rate on length up to 40 feet, and 45-50 feet, and so forth. You can put whatever you want in it as long as you don't exaggerate the length.’
“I ended up paying as much for the trailer and two machines as I had been with just one machine by itself. And then when it got there, people wanted the trailer. I bought a bunch of used lowboys.”
Customers started telling him they wanted new lowboys, so he started buying from a big manufacturer. He experienced some quality issues. Having always had the design bug in him — “If I see something I can do better, I want to do it” — he started mapping out a way to get there.
He had been buying from Nuttall Trailers of Atoka, Oklahoma, and a year later, he received an offer to buy out an owner who was retiring. He accepted and went to work.
In 2000, he relocated to Houston and started Choice Trailers.
It wasn't the most opportune time to start a business. In the aftermath of 9/11, business was very slow. He was building a few trailers for his own use and selling a few here and there, mostly overseas.
“After 9/11, I had 10 trailers out in the lot,” he says. “When you're building two or three a month and have 10 in the yard, that's a lot of inventory. But I didn't give up. And then, the trailers were gone in a week. A lot of trailers we were building in the beginning were custom. People liked that. Oil-field trailers were my big thing. You can never find two haulers that want the same thing. ‘Well, that guy wants popup rollers here, but I want them back here.’
“One thing led to another. All of a sudden, the demand was greater than our production.”
Zanelli says Russia became a huge market for Choice in 2004.
He received an e-mail one day from a customer seeking a quote on a 70-ton trailer. He received an agreement and a deposit a few days later. Not long after that, four Russian men visited Choice's facility in west Houston.
“I was expecting to see guys about my age,” he says. “They were kids. I call them kids. They were in their late 20s and early 30s. They said, ‘Can you build 10 trailers for us?’ That's how we started. Somehow my name is getting out there and people are very happy.”
To Russia with loads
Zanelli says he was invited a few years ago to visit Russia for a trade show. When he got there, he understood why US-built trailers are in such demand.
“It's a country where for the past century, all manufacturing was geared to tanks and war equipment, and they kind of neglected everything else,” he says. “They were not geared to building trailers. It's a big contrast over there. You see extreme wealth and extreme poverty. There's a huge demand for everything.
“You go to the Port of Houston, and there's a huge line of trucks — Peterbilts and Freightliners going to Russia. It's a huge country. I think they control over 50% of the world's minerals. They had no economic development or growth during the Cold War. It was very interesting being there. Why do they have a huge interest in American products? They're closer to Europe, but I don't think Europeans are making quite the trailer we do. They make fancy stuff, but very expensive, too. For the every-day type of use they are using our trailers for in Russia, it must make a lot of sense for them to buy here and pay the freight, and they're still making money.”
He says 25% of Choice's work is custom, and 50% of that work is going to Russia. Most of the remaining custom work is going to Iceland, Angola, Nigeria, Venezuela, Colombia, Panama, Mexico, Puerto Rico, the Dominican Republic, Chile, Argentina, Peru, and Ecuador.
“Some of them have very specific requirements,” Zanelli says. “I'm building a 100-ton trailer for the Panama Canal Authority to move locomotives. It's 10-feet wide. We're also building one that will go to Iceland. It's very rugged terrain. It's always in extreme cold and extreme weather. And then it's all volcanic rock that's very hard. They use a lot of big machines. Regular over-the-road trailers here would not last over there. Not too many people in the US are doing this.”
Zanelli says he refuses to take manufacturing shortcuts, despite the volatility in steel prices.
“I see what's out on the market,” he says. “Even with high cost of steel, I still don't cut corners. I see a lot of other companies putting on smaller beams or going lighter with certain materials because of the cost of steel. The price of my trailer hasn't increased proportionately to what the cost of steel has. I've taken a lot of hits myself. I'm doing a lot of trailers now that were ordered four months ago. Obviously, steel prices have changed a lot. I don't hit up customers with a fee. I always make it a point that I keep the price what it was because that was the deal I made with you. But I want to let you know if you want one a month or two from now, the market has changed. I'll take the hit, but I'll keep the customer happy.
“My father used to always tell me, ‘Whether you're collecting garbage or shining shoes or building rockets, be the best.’ That's why I check everything. Since I've been building trailers, I've never had somebody come back to tell me, ‘I had a problem with your trailer.’ Now, if you have the bearings go out on an axle, that's different. I don't manufacture the axle, and there are proper warranties. But with my frames and what I build myself, I've never had a problem.
“I've had people send me pictures from the Andes Mountains in Chile. There's a guy coming down from one of the mines up high — so high they have to work with oxygen tanks — and they're bringing a big loader, a Cat 992 that must weigh 140,000 pounds, on a 50-ton trailer. The truck in front looked like a little toy. There's a big machine on the back, my lowboy, and then another truck on the back with chains just holding it so it wouldn't go downhill. These trailers hold up. We change tires all the time because they blow up, but the frame is no problem.”
Luis Martinez, Choice's former factory sales representative who now serves as an independent rep, says he noticed the quality of Choice trailers while working for a competitor that had produced a trailer that split in half.
“The company was competing against Choice overseas in South America,” Martinez says. “The customer was the one who brought it to my attention: ‘Hey, you should do your homework and find out what you can about these guys.’ My customer was telling me Choice's product was more durable and suited to his conditions. That's when I did my homework on Choice. I got so curious that I contacted Mr. Zanelli.”
Says Zanelli, “I was kind of cautious at the beginning. I thought he was a spy. But he was sincere. He came from out of town on his dime. I ran him through the interrogation process.”
He hired Martinez, and then they went to work in a bid to widen their territory. Even though Martinez can sell other trailers now, he still speaks highly of Choice.
Zanelli says the demand for Choice trailers far exceeds the capacity he has to build them in his 18,000-square-foot facility on 7.5 acres. That was always a source of frustration. But that's about to end. By the end of 2009, he expects to nearly double production to 500 trailers a year.
In July, he purchased a 100-acre spread in Katy, about 15 miles from their current property. There is an existing 26,000-square-foot facility and 3400 square feet of office space on 10 acres of industrial park; the other 90 acres are just a bonus.
That property will be available in March. Choice will operate out of both locations until it can complete the switch next summer by retrofitting the new facility with overhead cranes and other equipment.
The challenge will be to control the growth and not let the growth control the company.
“I always said, ‘I'm not going to sacrifice quality for quantity,’ ” Zanelli says. “I'm not going to increase the number of products if I have to shortcut or change my product. I'll change it to better it, not to cheapen it.”
Martinez says the worst thing Choice could do is undergo a metamorphosis in which it no longer is what it entered the market as — a negative change that makes the customer say, “When they started out, they were great. But not now.”
“The worst thing you can do to a distributor is not give them product to sell,” he says. “They're not manufacturing anything. They're the middle man between the manufacturer and end user. You can have the nicest people, best staff and facilities, and most up-to-date technology to get the product to the end user, but if you don't have product on the shelf, you might as well be shut down. You want to make sure that when you start bringing these folks on board, you have qualified them. You tell them, ‘You're going to represent us the way we want to be represented. We want to have good relations with our customers and end users. We want them to speak our name and say that we make a good product. But we also want to make sure we are growing. Yes, we would love your 30-unit order right now, but let's talk about how we're going to get those 30 units to you.’
“With the way the market is today, it's almost like running a Black Ops recon. You get in quick, get out quick, nobody detects you, you make your money, nobody gets hurt. So Mr. Zanelli is being cautious. He's saying, ‘Hey, this is our capacity for production today and this is where we hope to be and plan to be in the first quarter next year. If our numbers are off, it will be in your favor, not ours.’ “
Zanelli says that in order to maintain quality, he will double the work force.
“I'm going to change the strategy once we have the capacity,” he says. “I'm going to implement a lot more machinery and cutting. I have a lot of work now being done outside through outsourcing, a lot of cutting — these are things that would take too much time here and I don't have the right equipment to do. Once we're in the new location, I will have that in the plant. By doing this and being under one location and all in house, that will help.”
Zanelli also has hired a production manager with extensive experience in fabrication.
“He will look at manufacturing as, ‘This is how we plan, this is how we stage, these are the materials,’” Zanelli says. “We're going to make sure that first one that goes out the door is the same as the tenth one. Typically when you grow, you compromise some. We're going to have a program in place to make sure that doesn't happen.
“Once we are cut out with normal production, I want to go to a high line of trailers. I want to develop my own line, with my thoughts and what I've learned from the every-day trailer.”
The curiosity inside of Zanelli never fades away.