Analyst Q&A: SpecialtyTransportation.net (STN) Part 1

Analyst Q&A: SpecialtyTransportation.net (STN) Part 1

The Research and Markets’ Analyst Q&A series is back for 2017!

We launched this feature in June 2016. It was designed to give our readers exclusive insights into a wide variety of industries and markets. Challenges, trends and growth forecasts are covered, providing readers with invaluable information from the very best researchers and analysts in the business.

In this week’s edition, we’re focusing on the freight transportation industry. We spoke to Brij Madan, owner of SpecialtyTransportation.net (STN). Brij has carried out numerous strategic and business assignments in the global transportation and industrial market segments.

STN is a long standing American consultancy that provides market research and business analysis in niche segments of the transportation industry. In business for over 30 years, STN specializes in projects that require expert research inquiry and analysis.

Let’s get started.

CHALLENGES

Q. What are the 3 biggest challenges facing the vocational truck/body industry? How will these changes influence the industry and how will market players respond?

Driver shortage is currently the biggest challenge faced by the freight transportation industry. Carriers are now exploring alternate segments of the workforce to fill this gap, including retraining workers looking for a career change, older workers searching for post-retirement jobs, ex-servicemen, etc.

For vocational trucks/bodies serving the oil and gas sector, the downturn in fracking activities has severely impacted demand. Increased drilling activity since 2010 had resulted in a surge in demand for vacuum trucks, hydro excavators and to some extent, vacuum loaders. But demand for vacuum truck bodies from this sector has been subdued since mid-2014.

Manufacturers have responded by focusing on alternate market segments, including telephone and electrical utilities. Improvement in construction activities and the general economy has helped manufacturers offset the decline in demand from the oil and gas sector.

TRENDS

Q. What are the key trends underlying the manufacture of van bodies for commercial applications? Are you seeing a greater demand for vehicle-based deliveries?

The industry is going through some interesting market dynamics resulting from the growth in internet orders for residential deliveries. Van body fabricators now offer dry freight and refrigerated units specifically designed to meet the needs of distributors for middle-mile and last-mile deliveries.

This, in turn, is spawning design innovations to accommodate efficient and rapid deliveries to households, ranging from multi-purpose vehicles for both dry goods and refrigerated foods, and use of pup trailers for multi-purpose goods. Accordingly, food deliveries are looming large in future van designs.

Competitively, cargo vans (ready-built) are improving in design, with higher rooftops and extended cargo areas. The lower size levels present a serious alternative to van bodies on chassis, especially dry freight and PDVs but also to insulated/refrigerated. The larger size cargo vans are getting pretty close to the small end of, say, gasoline-powered walk-in vans—and offering virtually the same features. This segment has experienced exponential growth in recent years. Upfitters now offer trade specific vocational upfits and these vans are competing aggressively with truck chassis mounted service and utility bodies.

The anticipated higher growth in short-haul deliveries has caught the eye of trailer manufacturers, who are now diversifying into van body fabrication, either through acquisition or product development. However, they will be up against companies that have many years of savvy production and marketing experience as specialists in van body fabrication.

CONCLUSION

Brij touches on subjects that are explored in-depth in STN’s latest report on the van body manufacturing industry. It predicts that van body fabricators are on the cusp of consumer-led growth in residential deliveries. It says this is the “single factor is changing a once-staid business” into an industry that requires “innovative thinking on design and functionality.”

Although much of our focus was on challenges in today’s blog, there are many positives in the long term for the vocational truck/body industry. According to STN, there is a revolution taking place in all aspects of freight transportation, from technology to the rapid increase in ecommerce.

Don’t forget to check back tomorrow for Part 2. We will be putting more questions to our expert, including:

  • Where do you see the market for truck bodies and lift equipment heading in the next five years?
  • What have been the most important technological developments in freight transportation over the last decade?
  • How will these developments impact the vocational truck/body industry in the coming years and what can we expect to see?

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Published by Research and Markets

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