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Market Trends

U.S. Fleet Upfitting Industry Experiencing Uptick in Consolidation

September 5, 2017, by Mike Antich - Also by this author

The fleet industry is no stranger to acquisitions and mergers as we have witnessed with the decades long consolidation occurring among fleet leasing and management companies, automotive OEMs and their suppliers, and daily rental companies. The same holds true for the upfitting industry, which, in the first eight months of 2017, witnessed an uptick in acquisitions. Key upfitter acquisitions that occurred in the first eight months of 2017 were:

Jan. 13: Reading Truck Group, which itself was acquired earlier by J.B. Poindexter & Co., Inc., announced it had acquired substantially all of the assets of Caseco Manufacturing, Inc.,  a regional manufacturer and upfitter of service utility truck bodies and service crane bodies with four facilities located in Oklahoma and Missouri. Caseco operates a manufacturing plant in Claremore, Okla., where Reading will produce service utility truck bodies and service crane bodies.

March 9: Reading Truck Group acquired four upfitting facilities from PalFleet Truck Equipment Co., the service body line of business from the PALFINGER Group. The acquisition of the PalFleet locations expands Reading’s chassis pool availability in the Midwest.

April 3: Monroe Truck Equipment, which itself was  acquired earlier by Industrial Opportunity Partners, a private equity firm, announced the acquisition of Towmaster, Inc., a designer and manufacturer of low‐bed, heavy-duty utility and industrial trailers, and a manufacturer and upfitter of dump bodies and snow/ice removal equipment for trucks. Monroe now has seven facilities throughout the Midwest with 800 employees.

April 4: Utility One Source, founded by private equity funds managed by Blackstone, acquired North American Equipment Upfitters, its seventh acquisition since its formation in 2015

May 1: Dejana Truck and Utility Equipment, which was earlier acquired by Douglas Dynamics, announced it acquired Arrowhead Equipment, Inc., an upfitter in the upstate New York market, to augment its position as a leading bailment pool upfitter.

June 2: Federal Signal acquired Truck Bodies and Equipment International (TBEI), a manufacturer of dump bodies and trailers for $270 million. TBEI had a portfolio of six brands: Travis Trailer & Body Co., Crysteel, Ox Bodies, Rugby Manufacturing, DuraClass, and J-Craft. TBEI was combined with the businesses in Federal Signal’s Environmental Solutions Group to create a single platform offering maintenance and infrastructure equipment support to municipal and industrial customers.

Aug. 3: Masterack LLC, acquired earlier by J. B. Poindexter & Co., Inc., announced the acquisition of CVP Group, LLC, a manufacturer and distributor of Masterack products.

Aug. 8: Wabash National Corp., a major trailer manufacturer, acquired Supreme Industries to better position itself in “final mile” deliveries in the growing e-commerce shipping business. Wabash formally entered the final mile business segment in 2015 with the launch of its dry and refrigerated truck bodies. Supreme is one of the largest manufacturers of truck bodies, with 2016 sales of $299 million. It primarily produces light- and medium-duty truck bodies at seven facilities.

Growing Pains

As a result of the acquisitions during the past several years, there have been many changes in the upfitter footprint due to the consolidation of locations, which has impacted supply chain management. In the short run, this has sometimes resulted in longer lead times, but, in the long run, consolidation should produce stronger companies and a healthier industry. But there have been growing pains. The upfitting process is one of the most variable aspects of OTD forecasting, since it is influenced by the complexity of the upfit. With the increasing demand and growth of the commercial truck and van segments – particularly among utilities and service industries – the percentage of upfitted vehicles is growing. Upfitters are feeling the pressure of increased demand. In recent years, the huge influxes of vehicles needing upfitting have left some upfitters, at times, overwhelmed.

 “The upfit industry as a whole experienced several mergers and acquisitions this year. As a result, long established day-to-day and non-routine communication protocols were disrupted; suppliers were often unable to provide accurate and timely status information and we experienced occasional delays in getting vehicles completed,” said Jessica Krams, manager, vehicle order management for Wheels. “In addition, inadequate communication from some suppliers to the OEMs resulted in delays in vehicles returning to ship-thru traffic.”

Effective Upfitting Strategies

Upfitting a vehicle is a complicated process, fraught with opportunities to make mistakes, which is why it is critical to maintain established day-to-day and non-routine communication protocols. It is essential for fleet managers and suppliers to collaborate on upfits to ensure the upfitter can efficiently complete the job. In terms of expediting OTD, the best advice is to place orders as early as possible to mitigate potential delays and consider staggering orders throughout the model-year. In the final analysis, the most effective strategies to expedite the upfitting OTD process continues to be advance planning, which allows for early ordering.

Let me know what you think.

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Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

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