THE results are in for the trailer manufacturing industry for 2015, and the results are impressive.
According to our annual survey, trailer manufacturers built more than 300,000 trailers last year for the first time since 1999, the best year in trailer manufacturing history. They produced a few more trailers than in 1999, even though major industry downturns in 2002 and 2009 led to substantial reductions in industry capacity.
It took a lot of overtime last year, but manufacturers were able to squeeze out slightly more trailers than what is generally considered to be industry capacity.
Check out Page 20 for our annual report on trailer output. Paul Schenck, Trailer/Body Builders’ co-founder, spent last month surveying key executives from the 25 largest trailer manufacturing companies in North America and processing the results. And while this year’s numbers are strikingly similar to 1999—the only other time trailer manufacturers built more than 300,000 trailers—there are also some interesting contrasts.
Let’s start with the plants that were part of those record numbers. Since that first record year in 1999, several manufacturing facilities have been closed, and others either have been sold or repurposed.
Wabash and Great Dane continue to be North America’s two largest trailer manufacturers, just as they were in 1999. But the third largest manufacturer in 1999 no longer exists. A mere three years after manufacturing more than 30,000 trailers during the industry’s record year, Trailmobile sold its sprawling plants in Charleston, Illinois, and Jonesboro, Arkansas, to Great Dane.
Dorsey Trailers, a high-volume manufacturer primarily of van trailers in 1999, contributed 9,000 trailers to that record total. The company has since been acquired by Pitts Enterprises. Pitts has repositioned away from large fleet orders and toward low-volume, high-spec specialty manufacturing.
Of course, manufacturers have built new facilities and upgraded existing ones since 1999. Even so, Wabash CEO Dick Giromini estimates that total industry capacity is now 300,000 trailers per year—a loss of about 55,000 units.
But changing ownership does not necessarily mean that a plant will produce fewer trailers. The best example of that is Vanguard National. The CIMC company established a base in the United States when it acquired the HPA Monon plant in Monon, Indiana. The Monon plant built 8,400 trailers in 1999, but under Vanguard’s ownership, the plant exceeded that year’s production by 60%. In addition to building 13,535 trailers in the former HPA Monon facility, CIMC now has two container chassis plants in the United States—one in California to serve the West Coast and a new one in Virginia to serve the East Coast. The two plants combined to build more than 29,000 container chassis last year.
Other trailer manufacturers also produce container chassis, and they also reported higher numbers for 2015. Total production by the container chassis manufacturers we surveyed was just shy of 40,000 units last year, up 27% from 2014.
If 2016 is as strong as last year, trailer manufacturers should not have to log quite as much overtime. Several manufacturers are building new plants or enhancing the production of existing ones. Some of these projects are expected to go online this year. These new facilities eventually are expected to add about 50,000 trailers to overall industry capacity—essentially restoring the capacity that was lost to recession.
Will we be able to duplicate or exceed 2015 production this year? Backlogs continue to be strong, customers generally are in strong financial position, and even record production has not yet completely satisfied the pent-up demand resulting from the last recession. And demand for container chassis should remain given the number that are at least 25 years old.
But we also know that trailer manufacturing can be a volatile business. The years of gradual increases leading up to this year’s record production are rare. Economies change, customers change, and the regulatory environment can impact demand for trailers. It’s a constantly changing business, which is why our list of the top 25 trailer manufacturers changed significantly in the 15 years separating these two high-water marks for the trailer industry. ♦
