Thanks in part to the Securities and Exchange Commission (SEC), it’s earnings season, so I get my hands on the public presentations of the leaders in trucking in North America. Last week Daimler announced its full-year, record results for 2015. As I look at the results for 2015 across all the name brands, it certainly seems the "big get bigger." The big companies have the wherewithal to invest the money needed to keep up with regulations for emissions, fuel economy, and safety, as well as expand their operations globally to the markets that are growing.
At the same time, we can still find a few manufacturers working to get into the commercial vehicle market. Caterpillar is working to make a name in vocational trucks. Weichai Group in China wants to take the same path and become a maker of trucks for North America. They already ship their Shaanxi Heavy Duty Truck (Shacman) to over 80 countries. Even though someone might call these companies new-entrants, they are still big companies on a global basis. That’s because it does take large scale to underwrite the research and development needed.
For the supply base at the Tier 1 and Tier 2 levels, this means they, too, must become larger and be able to supply parts to plants all over the world. There will still be some opportunities for small volume, specialized parts. What I see happening, however, is that those small, local suppliers no longer deal directly with the vehicle OEM. They may not even deal with the Tier 1 supplier. Instead, they are pushed into being a specialized supplier to the Tier 2.
The larger the company, the more it must focus its efforts on high volume with little variation to achieve the benefits of scale. The larger company may outsource the smaller volume, custom items. In all of this, technology marches on creating opportunities for everyone in trucking to improve the total cost of operation.
Lot’s of people talk about the Internet of Things or IoT. I prefer to call this Information on Trucking, because that’s the purpose. We need more and better information, in real-time, on trucks and the freight being hauled. That’s driving the need for connectivity, more than autonomous trucks and platooning. So, as you review the plans of the OEMs and suppliers to the trucking industry, watch for what they say about new technology and where it will take them—and you. SEC has a new meaning—Safety, Efficiency, and Connectivity.
