Built on solid Midwestern values, Wabash National is as American as apple pie. it also is a billion dollar company with a large chunk of the market share, but it’s their deep roots and heritage which keep them ahead of the game.
Founded as a start-up in 1985 in Lafayette, Indiana, a town known for its pre-American Revolution trading roots, Wabash National is more than just another success story born from humble beginnings. The proudly American 4,400-strong company is the poster child for how to survive and strengthen, during an economic crisis.
Introducing new elements into already-successful business divisions may not work for every organisation, but this has proved a smart move for Wabash National. While some companies scramble to move production overseas in order to save on costs, Wabash National has not gone down this route and instead focuses on its home market. Supporting the US economy is as important now as it ever was in the ‘good old days’.
“By no means is Wabash National, or any company for that matter, crisis proof,” says Dick Giromini, President and CEO of Wabash National Corporation. “The US recession that began in 2009 had a dramatic impact on our business, but we have taken steps to better ensure our ability to manage the ups and downs of our industry cycles.”
As well as reviewing and updating business practices in light of recent global events, Wabash National developed and introduced several initiatives to make sure it is less dependent on one specific industry. To this end, Wabash National is better positioned to manage and navigate its way through downturns. It has widened its customer base and sells to a number of industries outside of transportation equipment, including energy and environmental services, and residential and commercial portable storage. It is this diversification of the business, which has proven to be a winning formula for the 27-year-old trailer manufacturer.
“It isn’t enough to simply know your customers and understand their needs,” says Giromini. “To maintain our position in a constantly evolving market we must always stay one step ahead. To survive and thrive in an ever-changing global economy, it is vital to anticipate needs, proactively solving problems to aid our customers’ businesses to run better, smoother and more cost-effectively for the long-term.”
Wabash National currently enjoys between 35 and 40 per cent of the dry freight van market. Overall, the company holds 23 per cent market share in the US trailer industry, including refrigerated and platform segments. While the industry is yet to experience sales like it did in 1999 – Wabash National produced a record-setting 70,000 trailers – the company closed 2011 strongly, with over 47,000 trailers shipped, maintaining 23 per cent industry-wide market share. Giromini says Wabash National is poised to maintain its number one position for the foreseeable future.
“Our focus has remained consistent since we were established in 1985. We continue to move the industry forward through innovation, providing transportation products that lower our customers’ operating costs,” says Giromini. “In 2012, we will introduce several new innovations that further reduce maintenance costs and improve uptime.”
DuraPlate XD-35 is just one part of the company’s overall strategy. Wabash National was the first to introduce a composite plate dry freight trailer, DuraPlate®, in 1996. Since then, the company has produced over 400,000 DuraPlate trailers and continues to enhance the design to reduce cost of haul in specific freight applications—most recently, DuraPlate XD-35 (extreme duty with 35,000 lbs/ 15,900 kg floor rating). Designed for very specific freight hauls in niche markets such as metal, paper and heavy equipment, it won’t result in significant market share growth for the company, but solves a major problem for specific types of fleets.
Business analysts agree that this dedicated focus on innovative solutions and advancing the science of trailer design is what puts Wabash National ahead of the game and allows the organisation to uphold its position as the number one trailer manufacturer in North America. But Giromini maintains that the company is not following a secret formula, just sound business practice.
“While we can’t control the commodities market or raw materials costs, we can continue to push the envelope to lead the industry in trailer design – seeking out lighter and stronger materials that improve performance,” he says. Wabash National constantly monitors and observes industry trends; not only is this done to protect existing product lines, but to also keep a watch on new venture opportunities and to support established and new business prospects. To capitalise on market trends and provide customers with solutions, Wabash National has a formal product commercialisation process, which Giromini says enables them to identify and prioritise product development opportunities.
“The key driver in leading innovation is the voice of the customer,” says Giromini. “This is followed by market opportunity, product manufacturability, start-up costs, time to market, and a number of other factors. Not only does this process help ensure product development efforts are aligned with customer needs and market trends, it also allows us to create sustainable, scalable solutions as the operating environment inevitably changes.”
Although Wabash National has historically been US-focused, one new market opportunity which presented itself last year will see the company diversify and turn towards the Southern Hemisphere. “We have recently entered into an agreement with Trailer Corporation of Australia, an entity of Macfield Multimodal Equipment that is headquartered in Adelaide,” says Giromini. Through this agreement, Wabash National dry freight and refrigerated vans may become available throughout the Australian market.
Amidst this upbeat outlook, however, there are some challenges facing Wabash National. Assuming the current slump doesn’t affect trailer demand and the build rate uptick continues, the company will need to maintain the supply in order to keep its position in the marketplace which means having capable talent on the ground.
“With such a concentrated increase in orders for 2011, hiring and training a skilled workforce and getting them up to speed to meet this demand has proven challenging.” To combat this problem, Wabash National has implemented several new programs to attract, retain and cross-train assocates across various lines of the business as demands shift. “We have also automated operations and technical processes wherever possible to reduce expenses, optimise work practices and productivity while enhancing the worker’s on-the-job experience,” he says. “This has not only streamlined the business but also increased overall capacity to accommodate growing and fluctuating demand.”
Looking to the future, Wabash National will continue as it started – to support the local economy and community. “The company was built on strong Midwestern American values, which we still uphold today – safety, integrity, trust and mutual respect. These form the foundation on which we perform work and conduct ourselves daily. And that will never change.”