Two Trailer Makers Set Sights on Moving Vans to Capitalize on Growing Relocation Market

This story appears in the Feb. 10 print edition of Transport Topics.

A pair of leading dry-freight trailer manufacturers told Transport Topics they are prepared to supply 53-foot household goods vans — a market dominated by another manufacturer — to carriers anticipating a moving season that could become the best in years.

Since the recession, there has been a modest increase in household goods moves. And according to Linda Bauer Darr, president of the American Moving & Storage Association, that growth is expected to continue.

“Although we saw a decline in the number of military and civilian government moves in 2013, household goods shipments by individuals [reached 190,131, up from 180,898 in] the previous 12 months,” she said. “This continues an overall upward trend since the depths of the Great Recession in 2009.”

Darr added, “We also saw a continuation of the steady rise in the average weight of commercial shipments for the third year in a row to its highest level in six years, which is consistent with a recovering economy as families and individuals add to their possessions.”

To get their share of that projected growth, Stoughton Trailers, in Stoughton, Wis., said it has returned to manufacturing 53-foot furniture vans after nearly a decade’s absence.

And Strick Trailers, based in Monroe, Ind., said it is prepared to enter the niche after testing the market in 2012.

Stoughton cited demand for replacements from customers with its older furniture vans — plus the opportunity to make inroads in a manufacturing niche where Louisville-based Kentucky Trailer dominates sales.

In 2012, Kentucky Trailer claimed a 71% share of the moving van sales market, according to SpecialtyTransportation.net. Stoughton had an 8% market share that year. The 2012 numbers are the most current available.

“We pretty much know what the regular . . . moving van should look like. That’s what we are going to start with — and from that, as we get orders to do things differently, we would do that,” said David Giesen, Stoughton’s vice president of sales and marketing.

Giesen would not speak directly to features that could differentiate Stoughton’s furniture vans from Kentucky’s other than to say his company intends to offer a trailer at a better value.

Charles Ducas, Kentucky Trailer’s senior vice president of sales, marketing and business development, said demand for its 53-foot furniture vans would see a low double-digit increase this year from 2013. He called that a welcome trend compared with 2008 and 2009, which was “draconian from the demand side.”

And Ted Edwards, who owns Movers Supply House in the Bronx, N.Y., called Kentucky Trailer the “definitive player” in this marketplace because nobody has been able to compete with its combination of price and quality.

Edwards said that, based on his experience with the used-equipment market, “The biggest competitor to a new Kentucky trailer is a used Kentucky trailer.”

Movers Supply House operates the website usedmovingvans.com and supplies the covers, dollies, ramps and various other pieces of equipment used in a move as well as sells new vans.

Nonetheless, Strick also sees 53-foot furniture vans as “a market we are interested in,” said Steve Burns, general manager of plant production, who added that he is “prepared to [provide price quotes for] high-quality furniture vans.”

Burns said Strick was prepared to enter the market after building some 53-foot furniture vans — for the first time — in 2012 to test its production capacity and the marketplace. Strick’s market share in the niche that year was lumped into the “others” category, which was less than 3%.

“We did some publicity in 2012 but found . . . demand was soft at the time,” Burns said.

Now, with demand rising, he said Strick understands custom trailer applications and has had success designing and building specialty trailers — including other 53-foot drop vans for automotive parts transport and mobile technology centers.

“We have the capacity and are focused on specialized products,” Burns said.

Giesen told TT in December that he anticipated Stoughton’s new 53-foot furniture vans would be in production and ready for sale during the first quarter. The company had not set a target for first-year sales but instead would let it be demand-driven.

“The furniture van does take a lot more to build. It’s a lot more involved. . . . If people tell us, ‘I need to get X amount,’ we will figure out away to build X amount,” Giesen said.

To meet customer demand, Kentucky said it is developing programs for summer rentals and one- to two-year leases of 53-foot trailers as new options for movers facing the annual surge in people needing to relocate. However, Ducas said the manufacturer was not ready to announce start dates.

He said that it has been challenging to accumulate the “gently used or OEM reconditioned trailers” that would supply the new programs, but that was beginning to change.

“We have been able to acquire assets, and we are working on commitments for more that will eventually lead to a seasonal rental fleet and short-term leases,” lasting one or two years, he said.

Ducas added: “We are . . . honored to have a significant market share in the household goods business for trailers” thanks to an intense focus on customers and their specific needs.

These needs include different door configurations, different load requirements, tie-downs for automobiles and security needs.

“Is it just double-slotted logistics posts? Or do they need bull rings mounted in the floor?” Ducas asked. “That’s really what sets us apart. We are not building 1,500 furniture vans all of the same type.”

Giesen said Stoughton stopped building 53-foot furniture vans about 10 years ago to concentrate on dry freight vans when the demand for them picked up.

Now, Stoughton is finishing the new household goods — or HHG — trailer design and working on the production schedule.

“We didn’t want to take orders without having that other pre-work done,” Giesen said.

But Ducas pointed out a possible problem for the market, saying that demand for new trailers would be even higher but for the driver shortage.

“Numerous times, I’ve had customers that purchased trailers last year prior to the 2013 moving season [who said], ‘I would have bought more if we had more drivers,’ ” he said. “It’s an impediment that hits all of us in this market sector.”

Meanwhile, in Evansville, Ind., at Atlas Terminal Co., Paul Young, senior director of operations and sales, said he was so busy, “I honestly almost didn’t take this interview because I’m quoting right and left. Everyone wants their stuff before summer.”

Atlas Terminal Co., a subsidiary of Atlas Van Lines, sells new and used furniture vans and is a service center for the Stoughton and Kentucky brands. The company also sells Freightliner, International and Kenworth cab chassis and reconditions furniture vans, moving trucks and tractors.

Young told TT that this year, revenue for ATC is expected to be up 12% from 2013.

Atlas Van Lines operates about 3,500 vans and 1,600 straight trucks, Young said.

Also affecting the niche is new single-family home sales — which totaled 428,000 last year, a 4.5% increase from 2012 and the most since 2008, the U.S. Commerce Department reported Jan. 27.

AMSA’s Darr said, “We are also encouraged by the . . .rise in existing home sales and . . . new home sales during 2013, which should mean more business for our members in the year ahead.

“We recognize, however, that tighter mortgage-lending rules and limited inventories may limit additional growth this year.”

The moving industry’s growth, however, is not tied to more people moving each year, one executive explained.

Instead, “It is a relatively flat industry. And a lot of your growth comes from you doing a better job and taking away from your competition [with] your advertising, your branding, customer service and providing the better value option,” said J.D. Morrissette, president of Interstate Van Lines in Springfield, Va.

He said his competition includes other traditional full-service moving companies and those in the do-it-yourself market such as Phoenix-based U-Haul International or container options such as Pods Enterprises Inc., based in Clearwater, Fla., or 1-800-Pack-Rat in Bethesda, Md.

Morrissette said his business plan for 2014 was to add four or five new 53-foot vans and to retain and refurbish older vans he might have sold in past years.

“So we are going to increase our fleet size,” he said. “We are anticipating over 10% growth in 2014 that will require additional resources.”

Morrissette added that the growth was mainly driven by his military and national accounts.

Morrissette said that spec’ing new trailers was “only limited by what your imagination is.”

Morrissette said Interstate, which uses only vans from Kentucky Trailer, operates 150 trailers of its own fleet and has agreements with 400 other independent service providers.

Morrie Stevens Jr., vice president of commercial agency division for Stevens Worldwide Van Lines in Saginaw, Mich., said his outlook for 2014 “was pretty favorable.”

He said he plans to buy a minimum of 10 new 53-foot vans.

“The interstate carriers want the additional cube for longhaul service. We buy almost exclusively 53-footers unless there is a request to buy one smaller,” Stevens said, adding that the new trailers allow owner-operators to make more money with the same tractor investment.

Over the past five years, Stevens has purchased between 10 and 20 new 53-foot trailers annually, he said. The company then refurbishes 10 to 20 of its older trailers — mainly 48-footers from the mid- to late-1990s and some 53-foot trailers.

It finances and sells the refurbished trailers to its agents.

Adding agents is a key part of Stevens’ strategy for growing his van line. The new agents come from those who switch lines or others that are emerging, smaller van lines that seek a first-time agency relationship.

Stevens said that by providing his company’s agents with 10 or 20 used trailers, the agents — individuals and companies — “are also growing capacity. It’s a strategy that has worked pretty well.”

Noting that the U.S. Department of Defense is the largest customer “for all of us” in the moving business, Stevens said, “Every year, our market share continues to grow.”

Darr of AMSA added, “As the economy continues to grow over the next few years, we are looking at improved prospects for professional movers.

“Corporations should start to engage in more employee relocations as the labor market tightens, and individuals will be better able to relocate once their home mortgages stabilize.”