Designed to carry water for fracking, Freightliner 122SD Sleeper 8x8 AWD Extreme Heavy Haul Tanker with Evolution body.
NAPA, CA. “Now is a great time to be in trucking,” according to Richard Howard, sr. VP of sales and marketing for Daimler Trucks North America, LLC (DTNA). Characterizing current conditions as perhaps “a Golden Age” for the truck business, he said: “This is just an incredible time. Maybe the sky is not the limit after all.”
Howard and other DTNA executives and managers met with the press here to share information about the company’s performance in the first half of 2014 and to discuss their vision for the future and the strategies that will take them there. The vocational market segment took center stage.
Certainly broad economic indicators and the company’s performance numbers for the first half of 2014 offer plenty of reasons for optimism. Most market indicators point to a “pronounced expansion of the U.S. truck market in 2014/2015,” Howard noted, citing upturns in investments, freight levels, consensus expectations and truck orders. NAFTA Class 6-8 orders are forecast to be in about 372,600 for 2014, he said.
Freightliner also leads the retail sales market in Canada and the U.S. in both Class 8 and Classes 6-7. “Our market share development is excellent,” Howard said. “We have the right products now and there are more to come. There are more opportunities to grow.”
The company’s vision for the future rests not on luck but on a clearly articulated vision and aligned strategies, according to Howard. “At the end of the day, it is all about our people,” he noted. His “non-negotiables” [sic] for performance accountability include being number one for the company’s customers, number one for its dealers and number one as a team.
“Great people build great organizations,” he observed, adding that it requires passion, integrity, respect and discipline with a good dose of humility to become a leader, “and leadership is, of course, our goal.”
For example, one of the major strategies involving dealers andis to further optimize uptime for customers by reducing the time a truck spends in the shop to not more than three days maximum. David Hames, general manager marketing and strategy for DTNA explained what is involved in accelerating truck transit time through the shop.
Within two hours of arriving at the dealership, the customer should get an assessment of what it will take to fix the truck, he said. The goal is to avoid long waits just to get assessments. We want the right information quickly and Virtual Technician takes a lot of time out of that process.
Master scheduling helps move trucks through the service or repair process once the assessment is complete. If the job is easy, it should get handled right away, Hames said, but not at the expense of customers with more time-consuming work to be done.
“Information is creating organizational speed,” Howard told Fleet Owner. “Telematics is the new frontier. [It is taking us from data to knowledge to wisdom.] “We need to collectively understand our customers’ challenges, he added, noting that the industry may be going through a “service revolution—not evolution, but revolution.”
Focusing in on the vocational market, Hames said that the company’s goal is to be at “roughly 32 percent of the Class 6-8 vocational market for the U.S. and Canada.” Measuring progress to-date, he said that Freightliner’s share of this market has increased by approximately 14% since 2009.
“We can’t look at vocational as a secondary business,” he said, “or medium-duty as a side business. They are part of our core business. We want to be a well-rounded, diversified truck maker.”
The vocational market is all about “Real Cost of Ownership” or RCO, Hames noted. Productivity is the language of the vocational market, just as efficiency is the language of the over-the-road market. A concrete company, for instance, want to know, ‘Can I pour three driveways in a day instead of two?’ he said. The “Work Smart” descriptor for vocational trucks was chosen to reflect this market reality as distinct from the “Run Smart” positioning for over-the-road trucks.
We do more than integrate with equipment makers, Hames added. Equipment makers are also a part of our distribution network; they are partners. After all, the end customer measures us on the complete vehicle, not just the chassis. We recognize the value equipment makers provide and support them.
As an OEM in the vocational market, Hames offered, you really become a major component supplier to the truck equipment makers. In fact, the equipment mounted on the chassis may be worth several times more than the chassis in terms of cost.
Richard Saward, Freightliner’s general manager of vocational sales, further elaborated on the company’s “comprehensive corporate strategy for vocational leadership,” including the guiding customer-driven vision, products, people, processes and partners.
In 2009-2010, we decided we wanted to be number one in each vocational market segment by 2015, he told the audience. We are not there yet, but we are getting close at almost 31 percent.
Saward noted that an important step in achieving their goal was preparing dealers for what was to come in the vocational market and getting their buy-in. The dealers said they were with us, he recalled, but they also said that they expected us to go the distance, to execute the entire five-year plan---and we are.
In 2011, the company launched the SD (Severe Duty) family of chassis. “We are absolutely committed to the vocational market, Saward said, reminding the group that 2009 (a recession year) was not “exactly the best time to get into the vocational business.
“The market was not exactly clamoring for this, but we gave them another chassis alternative, a Freightliner,” he added.
“Some projects are not for the faint of heart, Saward observed. “Severe working environments will test you [and vocational trucks tend to have very long lifecycles—eight to ten years or even more]. They just keep running until they’re done.”
Interestingly, Saward added that some vocational fleets just plain don’t want to sell their used equipment because they don’t want others to use their old equipment to enter the marketplace and compete with them.
The vocational business is a one-truck-at-a-time business, he said. Trucks prove themselves in the field and that leads to other orders.
Freightliner currently offers some 35 options to help meet the needs of various vocational market segments from construction to utilities, refuse to government and everything in between. The vocational market is a “game of inches,” Saward said. “If you don’t have a particular option, you are out of a market segment.”
Saward gave special credit to the company’s “SmartPlex” electrical system for providing “a key market differentiator.” We put smart switches in place so truck equipment makers don’t have to rewire,” he explained.
Several new options for the company’s medium duty (M2) and severe duty (SD) truck models were also showcased, including: hood-mounted mirrors for the 108SD and 114SD; a new rock guard for the 108SD and 114SD to help protect the exposed region of the radiator between the grille and bumper; remote start/stop for the M2 106, M2 112, 108SD and 114SD with manual transmissions to benefit fuel economy and performance; Watson & Chalin lift axle suspensions available for all Freightliner severe duty (SD) truck models; and the Hendrickson AeroClad 12-inch Logger-Style Bumper available for the 122SD.
When it comes totrucks for the vocational market, Saward said, “We firmly believe in clean diesel, but will embed natural gas chassis into the vocational product line.” The big benefit of natural gas, according to Saward is the relatively low cost of the fuel as compared to diesel. The “tremendous subsidies” the federal government is offering to build natural gas fueling stations are likewise driving the growth of the natural gas truck market.
Freightliner also chose the conference as the venue to announce that the Cummins Westport ISX12 G heavy-duty natural gas engine will be available as a factory-installed option for the Freightliner 114SD severe duty truck model in 2015.
Tom Jody, leasing/marketing manager for Vac-Con, Inc., one of Freightliner’s equipment manufacturing partners, wrapped up the business portion of the meeting with a view from the other side of the OEM/equipment builder relationship. Like the other speakers, Jody stressed the unique purpose-focused nature of vocational vehicles and the special demands that places on equipment maker/OEM partnerships to deliver dependable results.
“A vocational truck is about how much it can earn for the customer,” he said. “…The sales process is complex, long, intricate and political…and the chassis may be less than one-third of the bid.
“Integration of our equipment is [also] complicated and becoming more so with every emissions regulation change,” he added. There are five key elements of a successful partnership, including trust, co-operation, mutual understanding, common business goals (in this case being customer-driven) and ethical parity-- a recipe that would serve all sorts of partnerships well.