Truck Trailers

SIC 3715

Companies in this industry

Industry report:

This industry covers establishments primarily engaged in manufacturing truck trailers, truck trailer chassis for sale separately, detachable trailer bodies (cargo containers) for sale separately, and detachable trailer (cargo container) chassis for sale separately.

Industry Snapshot

After several down years in the early 2000s, truck trailer manufacturing in 2006 surpassed the high revenue years of the 1990s, which had culminated with $6.72 billion in revenue in 1999. Shipments dropped off sharply in the early 2000s, falling to $3.96 billion in 2002 before climbing back up to $4.4 billion in 2003. Industry revenue topped $8 billion in 2006; however, sales declined in 2007 to $7.37 billion and again in 2008 to $6.73 billion. However, with an economic recession in full swing, sales plummeted in 2009, with output dropping to the lowest level since 1978.

In 2009 Utility Trailer, Great Dane, and Wabash National led the industry at the end of the decade. These top three manufacturers built 57 percent of all trailers and the top 10 firms accounted for over 80 percent of all trailers produced.

Organization and Structure

Like heavy trucks, truck trailers are purchased for specific applications and are therefore manufactured in a variety of styles and types. Van, container chassis, and flatbed trailers comprise the majority of trailer shipments, while the remainder consists of a small number of more specialized trailer types. Both the number of axles and length of trailers vary, with the most popular trailers having two axles, followed by single-axle designs and trailers with three or more axles. Popular trailer lengths are 48 feet and 28 feet.

Trailers are used singly or in combinations of three, as in triple "pups." Pups are 28-foot trailers that have limited use in 16 states. Sometimes three of these trailers are attached to a truck tractor to form triple pups, which together span about 104 feet. Trucking firms have urged Congress to expand the use of triples. Even though the triple pups save trucking firms millions of dollars, The Truck Safety Coalition, a not-for profit partnership between Citizens for Reliable and Safe Highways and Parents Against Tired Truckers, fought to keep larger trucks off the roads.

Background and Development

Container chassis trailer shipments steadily increased during the early 1980s with the growth of intermodal shipments of goods, a system using two or more methods of transport, including trucks, trains, and ships. The demand for a variety of trailer types, including custom designs, prompted the establishment of several original equipment manufacturers (OEMs) in the trailer industry. Furthermore, industry deregulation prompted increased competition. Many trailer manufacturers were small businesses serving local areas, often employing 50 or fewer workers.

One safety-related addition to new truck models in the late 1990s was the implementation of anti-lock brakes in truck trailers. The anti-lock brake system (ABS) designed especially for truck trailers was expected to result in substantial savings for motor carriers by providing controlled braking, enhanced vehicle stability, increased driver control, and stable stopping during emergency brake situations. Rockwell WABCO Vehicle Control Systems' Easy-Stop (TM) was one of the first innovations of ABS for truck trailers.

During the early 2000s, shipment values fell as trucking companies held off replacing equipment during a weak economy. The number of trailers built in the United States fell from approximately 240,000 units in 2000 to 145,000 in 2001 for a 40 percent decline in the industry. In 2002, trailer production fell another 5 percent to 138,000. During 2003, the industry began to turn around, as trailer production increased 30 percent. Pent-up demand drove the industry in 2004, with production increasing another 30 percent to approximately 235,000 units, and orders topped 250,000 units in 2005. After peaking in 2006 with 282,750 units manufactured, the uncertain economic climate of 2007 pushed down production to 218,422 units. The global economic recession of 2008 severely impacted this industry segment and caused manufacturing to drop to 151,641 units, a 31 percent decline from the previous year.

Steel prices and part shortages were the major factors hampering the truck trailer industry during the mid-2000s. Steel prices, which increased between 70 and 100 percent, added between 10 and 15 percent to production costs. Material costs for a stainless steel tanker rose between $4,000 and $6,000. Steel components, such as wheel hubs, axles, and valves, also were in short supply.

Although air disk brakes were introduced to the industry and were standard equipment in Europe, in the mid-2000s U.S. manufacturers had not widely adopted the superior braking system because federal regulations for stopping distances did not require their installation. Improvements in the industry included the development of remote climate control for refrigerated trailers, which can be monitored and temperature-adjusted electronically from a remote office.

Current Conditions

The global recession of the late 2000s had a severely negative impact on the industry, causing sales to drop by 46 percent between 2008 and 2009. Hardest hit were platform trailers, which are used to haul products for the construction and auto industries--two industries particularly depressed during 2009. According to statistics gathers by Trailer Body Builders, the top 27 companies shipped 78,258 trailers in 2009, down from 146,182 trailers in 2008.

Refrigerated trailer sales were only down 19 percent, which pushed Utility Trailer from its traditional third spot in the rankings to number one in 2009. At issue was the deadline for the implementation of California Air Resources Board's clean air requirements, which went into effect July 17, 2009. The act required that certain "reefers" be modified to meet new emissions requirements. Those that could not be modified had to be replaced.

The worst of the recession appeared to close with the end of 2009 as orders for trailers were up in 2010. Trucking business was on the rise, and trucking firms had more cash in hand to make needed equipment upgrades. In August, as reported in Trailer/Body Builders, ACT Research found that trailer sales were up 55 percent over the previous year.

Industry Leaders

Wabash National Corporation was a former industry leader, producing 70,000 trailers in 1999. After falling below 50,000 units in 2003 and 2004, production in 2005 climbed back to over 51,000 trailers. The company's net sales for 2006 were $1.3 billion compared to $1.2 billion for 2005. Wabash National regained the top spot in 2008 with 32,094 units sold and revenue of more than $836 million, although the company posted a net loss of $125.8 million. In 2009 Wabash National fell to the third spot, shipping just 12,800 trailers, down 62 percent from the previous year. Cost containment measures during the year included eliminating three dry van production lines at its main plant in Lafayette, Indiana, and selling the production facility of its wholly owned subsidiary Transcraft Corp. The company's revenues for 2009 dropped to $337.8 million and the firm posted a net loss of $101.8 million.

Great Dane Limited Partnership, of Savannah, Georgia, emerged as the industry's leader in 2004, producing approximately 55,000 trailers. In 2006, Great Dane set a new company record with more than 60,000 trailers shipped from its nine factories. Great Dane produces flatbed, refrigerated, and standard dry van trailers. In 2005, Great Dane fulfilled nearly 33 per cent of the market demand for refrigerated vans and more than 28 percent of the market demand for all dry freight vans. Great Dane's dry freight sales in 2006, with more than 20,000 SSL models trailers, represented nearly 15 percent of the industry's shipments. Great Dane patented the single-sided laminate interior that is unique to their SSL dry freight vans. However, in 2008, the company fell to second place behind Wabash National Corp. in units shipped with 28,500 and revenue at nearly $423 million. In 2009, Great Dane occupied the second spot behind Utility Trailer, shipping roughly 15,000 trailers.

Utility Trailer Manufacturing Company, based in City of Industry, California, ranked third, with over 34,000 trailers produced in 2005 but jumped to the number one spot in 2009 due primarily to the stronger performance of its refrigerated trailers relative to the much weaker performance of the rest of the industry. Utility, a privately held company, is traditionally a leading manufacturer of refrigerated trailers, shipping over 16,000 annually in the mid-2000s, more than three times the number shipped by its closest competitor. Overall, in 2008, the company held its position as third leading manufacturer, with 22,890 units shipped and earnings of more than $380 million. In 2009, Utility shipped 16,544 trailers, a 27 percent decline overall. While its "reefer" shipments were down just 2 percent, shipments of dry weight and flatbed trailers fell off 60 percent and 58 percent, respectively.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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