Attendees at Truck World in Toronto check out a Summit Bodies service truck on display at the Kenworth booth.Photo: Saul Chernos
While North American Free Trade Agreement renegotiations and tariff threats are infusing uncertainty into the economy, attendees at Truck World in the Toronto suburb of Brampton, Ont., reported business as brisk and gaining traction in the wake of previous recessionary years.
Based in Toronto, Pro Reefer and Mobile Truck Services provides round-the-clock mobile services for trucks, trailers, reefers and heaters, and national account manager Derek Hone told Service Truck Magazine his company is growing and signs for his sector look promising.
“We have 65 service trucks in our fleet and we take care of Toronto, Montreal, Regina, Winnipeg and Vancouver, our sister company is Triple Diamond Truck Center, a truck shop in Etobicoke (a district of Toronto), and we just became the official Zanotti dealer in Ontario for self-contained units,” Hone said.
Positive indicators
One positive indicator is that product from companies that build boxes for truck chassis are about 14 weeks out.
“With the box companies being so far out on the build dates on actual van bodies, that’s a good sign,” Hone said, adding that transportation is a strong indicator of overall economic activity.
Hone said owners always need to maintain and service their equipment to some degree, no matter how the economy is faring, and Pro Reefer services food refrigeration systems for hauling meat, dairy and produce. “It doesn’t matter how bad the economy is, people still have to eat. If a unit goes down they still need to get it fixed.”
While talk about the future of the North American Free Trade Agreement and threats of tariffs on materials such as aluminum and steel are potentially concerning, Hone said he thinks President Donald Trump is more likely to take action against countries other than Canada.
“I think he’s more interested in trying to level the playing field with China and maybe the deficit with Mexico,” Hone said. “But there’s too many what-ifs. We’ll have to see what happens.”
(As it happened, citing a lack of progress on NAFTA renegotiations, Trump decided in late May to eliminate an exemption he had granted to Canada, Mexico, and the EU from the tariffs.)
Rick Lawrence is national sales manager with Iowa-based SmithCo Inc., which manufactures
“Unless something goes sour, this is probably going to be our biggest year. Everything’s working. The agricultural people are buying, and construction and mining are up. Usually you have some markets that are down, others that are really peaking, but for the last year or so everything is up.”— Rick Lawrence, national sales manager, SmithCo Inc.Photo: Saul Chernos
side-dump trailers for aggregate, construction, demolition, mining and agricultural markets, and he reported a record year.
“Unless something goes sour, this is probably going to be our biggest year,” Lawrence said. “Everything’s working. The agricultural people are buying, and construction and mining are up. Usually you have some markets that are down, others that are really peaking, but for the last year or so everything is up.”
Lawrence said SmithCo’s markets cover all of the U.S. and Canada, and his participation on the trade show floor was to reach Canada’s aggregate market and also showcase trailers for hauling sand, gravel, demolition waste and other materials.
Hiccups cured
“It seems like everyone’s feeling good about things and trying to go forward,” Lawrence said, describing the recession of 2008-2009 as “a little bit of a hiccup” and tough times in 2000 as “one big hiccup.”
This year is decidedly in the other direction. “We do 700 to 800 trailers a year and we’re going to be in the upper area of that this year,” Lawrence said. “There seems to be more of the expensive, specialized, high-dollar trailers being purchased.”
While SmithCo buys steel from U.S. and Canadian suppliers, Lawrence said he’ll wait and see what happens. “The only thing we’ve noticed since the tariff talks have been going on is that Canadian and U.S. manufacturers have all raised their prices. We’re seeing anywhere from 10 to 30 percent higher-priced steel these days. There’s a lot of speculation going on right now, and I’m hoping by the third or fourth quarter the dust settles a little bit.”
Auburn Hills, Michigan-based BorgWarner/Delco Remy offers rotating electric products, thermal products and fan clutches. Regional sales manager Craven Mabrey described markets as strong, with truck sales, secondary sales and repairs all healthy.
“We have more tonnage on trucks being moved now than we’ve had in the past few years, and as the tonnage goes up more trucks are in service for a longer period of time,” Mabrey said, attributing the rebound to a once-depressed energy market that’s starting to come back and a housing market that’s holding strong.
“The majority of products for these markets have to be transferred by truck, so you’re going to see a lot more.”
Tough talking tool
Mabrey said the tough talk might simply be a “talking tool to do broader negotiations” rather than anything more specific. “Until we know all the details of it, it’s more of a shot across the bow. It may sound harsh, and like something ridiculous, but it may not ever come to the forefront.”
Delco Remy manufactures in Mexico, maintains its technical support center in Noblesville Indiana, and has warehouses in Mississauga, Ontario for its Canadian distribution and in Laredo, Texas for U.S. distribution. So the company could potentially be directly impacted by changes to NAFTA.
“I would like to see it stay just like it is, not even worry about it, and just continue along the way we are,” Mabrey said. “But there may be something else out there that’s upside down. It may be an advantage one way or the other that should be equalized.”
Jamin Swazo, on-highway marketing manager with Kenworth Truck Company, said business has been stronger overall for the U.S. and Canada.
“Everybody’s backlogs are pretty far out into the end of the year for on-highway trucks and vocational trucks,” Swazo said. “It’s been a good year for everybody. The whole market size is definitely a lot bigger (with) several thousand more trucks expected (industry-wide) by the end of the year.”
Paul Kangas, eastern Canada district sales manager with Dana Incorporated’s aftermarket group, has a bird’s eye view from his office in Timmins, Ont., and the company’s home base in Maumee, Ohio.
“We’ll see what happens”
“Distributors might see increased pricing, but our company has not put a price increase down. But it might eventually show up in the new year — we’ll see what happens with the tariffs.”
As Kangas sees it, Canadian steel isn’t the issue. It’s decidedly cheaper product coming from other countries.
“If that gets taxed by 20 percent, the next time you buy that part from China and bring it into the United States it’s going to cost you 20 percent more,” Kangas said. “Someone’s got to eat that up, right?”
In the meantime, Kangas reported business as steady. “I’m not breaking records. Sales are up a little bit, but it may not grow as much as last year.”
Based in Niagara-on-the-Lake, Ont., Wheel Monitor manufactures lift axle controls for trucks and trailers. Finance and operations vice-president Shannon Bell said January to April sales rose 30 percent over the same period last year.
“The last quarter of 2017 was very slow, but sales have picked up,” Bell said. “It was a pleasant surprise.”
Bell attributed this to increased truck sales, in turned prodded by increased demand to transport goods.
The fact the trade pact is under review “is causing me a little bit of grief because a lot of our goods that are transported into the U.S. right now are being stopped because every single item is being scrutinized to see if it’s eligible under NAFTA,” Bell said, describing week-long hold-ups at the border.
“It’s actually a bit of a nightmare because the government is scrutinizing everything,” Bell said. “They’re looking at it more and making sure they’re getting their tax dollars.”
— Saul Chernos
Saul Chernos is a freelance writer based in Toronto.