5 questions with Vanguard Trailers President Charlie Mudd
posted on 09/16/2010 15:21
SkyBitz recently caught up with Charlie Mudd, President of Vanguard Trailers. Vanguard has become the fastest-growing trailer manufacturer in North America. We asked Charlie five key questions about where the trucking industry is heading, as well as the status of Vangaurd's business today and into the future.
Q: Where do you see the U.S. trailer market going in the next 12 months?
A: This year feels much better than how it actually compares to historical markets, because of how terrible the market actually was last year. A.C.T. forecasts this year’s numbers to be 48,100 dry vans - still a very low production year. They forecast 2011 to be 90,000 dry vans and 2012 to be 125,000 dry vans. I would assume the other trailer types such as refrigerated, flatbed, etc., to increase at similar rates.
I believe the trailer market will outperform the pace of the general economic recovery over the next 12 months because of some necessary replacement purchasing that has been delayed for a couple years. Solid carriers who now see the market starting to improve are now placing orders for equipment at a faster pace than the economy would actually dictate. The extremely slow freight market of the last two years caused carriers to delay purchases and conserve any strength possible on their balance sheets. The eventual effect of that is an increase in maintenance requirements for the equipment that is aging in their fleets.
Every carrier has a slightly different schedule based on their actual use of the equipment, routes traveled, weight of freight transported, frequency of loading and unloading, etc. For some fleets the increased expense may not be just the actual equipment repair maintenance. Rather, another six months or longer use then requires a new set of tires or another brake job, considerable expenses.
Q: What is the next big technology breakthrough in trailer design?
A: In short, lighter weight materials. Because of the recent changes in emissions laws, tractors now weigh approximately 2,500 pounds more than just a few years ago. The weight restrictions on North American highways have not changed. Rather than haul less freight, carriers are trying to reduce the weight of other components on their tractors and their trailers.
Hauling more weight in many cases translates directly to more revenue. It has also become a competitive factor. There are many lighter weight materials, and places weight can be taken out of a trailer through design. The problems become cost and durability. Take too much weight out of a trailer and you significantly shorten its useful life. Many lighter weight materials are far too expensive for a carrier to afford in a trailer. Reasonably priced, light weight, durably designed trailers are a topic of discussion with most carriers today. There are several breakthroughs in flooring materials and design elements that are on the horizon.
Q: What is the most common mistake you see trucking firm make today when making an equipment or technology purchase?
A: I would say that at times trucking firms don’t adequately study or consider alternative suppliers, specifications or products. I clearly respect the experience and knowledge that trucking equipment managers have, especially when it comes to how certain equipment specifications are valuable in their particular operations. However, there are new products, designs and developments that sometimes don’t get considered because a certain spec or brand has always worked in the past. Again, I respect where that’s coming from, but unfortunately I do see potentially valuable options go without consideration.
Q: Do you see trailer technology in the U.S. becoming more similar to Europe (e.g. electronic breaking)?
A: No, I don’t see that in the near future as long as regulations don’t change. There are significant cost issues with this. However, there is a very recent proposal in congress to increase the maximum weight for trucks operating on interstate highways. That kind of rule change could open the door for technology changes that aren’t considered to be necessary today.
Q: How are you managing growth at Vanguard today?
A: There is a need to carefully manage the growth at Vanguard - balancing customer and dealer needs, raw materials and component products availability and costs, and building the workforce with often untrained workers. As the market improves we clearly want to satisfy our customers’ and dealers’ requirements.
However, we must also keep a focus on what’s happening in the economy. While trailer manufacturing is improving, not all general economic indicators point solidly forward. We want to keep moving forward and yet avoid the mistake of moving too quickly, causing the need to cut back and regroup should the economy falter.
At the same time our suppliers have been building their businesses back carefully. Synchronizing our growth with theirs, while they also coordinate with other manufacturers, has proven to be a challenge over the last few months. Scheduling production and making promises to customers only to come up short on materials or components is costly in many ways.
Finally, as we have increased our workforce we have added some very fine people who simply don’t have the manufacturing experience yet for us to operate at our peak efficiency. While we may have the right number of people and the right number of hours available to build the equipment we have scheduled, there is a necessary learning and training period required to achieve the safety, quality, efficiency and quantity goals we have set. This process is extremely important to our success.
In the market, Vanguard spent quite a bit of time and effort to build and strengthen its sales team and dealer network over the last two years. We could not wait for the economy to change before we made certain we had close relationships with the carriers and markets we wanted to grow with. We now have one of the strongest sales teams and dealer networks I’ve ever worked with. Our customers and prospects have learned and will learn to count on our support and response.