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The Fog of The Present
As is normal we would roll with either of the following to sum up the present:
Everyone has a Plan until they get punched in the face.
The Fog of War.
Understanding where the UK Tipping Trailer Market is heading in 2023 is at best a dark art but mostly likely just reactionary to the conditions experienced this week. A statement of the obvious. Anyone with 'a plan' at the moment is really just a gambler in the casino. The long term trajectory for UK PLC is clearly negative over the next 30 years. Our leaders and teachers are not addressing the need for global competitive advantage for the UK to allow us to enjoy a better standard of living than our neighbours. We are simply relying on the legacy of empire - we have built up a world beating amount of capital which is slowly or stepwise being consumed by our population. As economists would put it - we are missing the Y factor. This being, taking the standard resources that we sit on as a country, and by efficiency and clever national thinking getting more out of those resources than the competition could or will.
So if this is true then the purchasing power of the UK PLC tipping trailer and moving floor base will be trending downwards too - unless there are factors to protect our sector as an 'island of excellence'. If our UK haulier purchasing power is tracking downwards then we will be looking towards the lowest price producers of equipment and not top end. So for a while we will hang on to our aspirations of a Top End Scania and a top end trailer. This will drift downwards. So perhaps we should look to the countries that already sit in that mix - Chad or Mali spring to mind - always reminds me of the comfort of the British Armed Forces looking up and noticing the label on their parachute proudly states 'Made in Chad'. More likely we are tracking lower wealth countries such as Romania, Poland, Spain etc. We may also being looking for longer life cycles or greater survivabilty from our products and increased repairability. That might push the other way - buy quality buy once argument - the STAS, Knapen, Titan solution. Arguably the Titan can give 20 years of service in a tough environment. Titan Trailers have evolved in a nasty American waste market where the work is brutal and the distance to repair shops can be high. In my opinion a Titan can outlast its nearest competitors by almost double the life and still remain surprisingly sharp and tidy. I would consider myself bruised by 25 years in this industry and I cannot completely explain how the Titan does it - it just does. If you look at the Fred Sherwood fleet - there are 2004 Titans that from the outside look like 2018 trailers. Clearly satanic rituals must have been performed in Canada to achieve this engineering miracle.
So how big will the market be in 2023 for trailers in our class? Supply side problems have diminished and become less of an issue in Q1. Energy costs are high. Labour costs are actively being negotiated but are unlikely to be less than a 10 per cent increase into Q2 Q3. Probably interest rates rises will decreasing the affordability of large priced trailers will be the larger factor. IMHO we have some more interest rate increases yet to absorb. With joy I might write 'Fuck the Bank Of England'. Despite the clevers of the Bank's Committees their hindsight seems exemplary but their foresight no better than mine or yours. Retail finance rates will still be climbing into 2024 and the pool of providers drying up. The expression that our lending 'is closed to wheels' will start being used again. Banks are fearful of bad lending and in some boardroom or rather plush London restauarant that expression will get used and large lenders will just STOP lending to our industry. This will allow rates of the remaining lenders to rise still higher as scarcity of appetite to lend plus searching for higher BETA will push rates higher. The Gold standard will be 6 percent, Silver 8 to 12 percent and the Bronze just disappear. I would suggest that the market size will be deflated and be travelling about 60% of historic levels. This may not have any real world affect on companies such as Fruehauf who are still in recovery and discovery mode having come out yet again from bankruptcy. (And remember the words of the Chief Economist to Downing Street - 'it took extreme skill to make a company go bankrupt during Covid'. Wilcox, PPG, Aliweld, KBF etc also look to be stuck in limited ruts and unable to change their market positions. So once again it will be the scale professional European manufacturers - who also have their woes - to absorb market share in the UK in 2023 and 2024. There are the cheap end suppliers from Poland and Turkey entering the market for the first time and top end Manufacturers increasing their market share enormously. STAS for example may have had about 40% market share for the first time in the UK.
So to set sale into the second half of 2023 and then into 2024 confidently and with a plan means that you either have a direct line to Mystic Meg or you will get punched on the nose. But I do predit tricky times for our industry and about a 60% market size for the rolling 12 month period. Happy to be wrong!!
God Bless You All - and with the usual sign off this Blog are but the musings and ramblings of a deranged mind and should only be held up in the court of Law as anything other than total drivel. Plenty of other opinions are available - contact me at andrew@newtontrailers.com if you want to chew the cud.
Posted by Andrew on 04/04/2023
STAS have 4 factories (to the best of my knowledge). Originating in a village called STASgem in Belgium they moved to Waregem in the 1950's.
So the original main factory is Waregem - which was state of the art and still is impressive. This is where they now do their signature Aluminium chassis and tipping trailers.
The second factory is in Tournai - about 30 mins from the main Factory in Waregem. It offered a large area of land and more plentiful labour being close to the high unemployment hotspot on the French border. It started in about 2003 and targeted Walking Floor Trailers freeing up more space in the Waregem factory for just tipping trailers. It is huge and has had a 2022 expansion. Highly organised and highly robotified and deeply Green thinking. It is fly by wire from the offices and design team in Waregem. It is a treat to visit due its scale and ambition. It is logic and clever thinking in a bottle.
The third factory is in Freudenberg, Germany. STAS purchased the Luck factory which was a modern site on the edge of one of the most picture postcard towns you will ever see (google Freudengberg Altstadtkern). I worked with the Luck factory prior to the STAS purchase. It is focused on lightweight steel chassis and steel body trailers and is the go to trailer for German scrap metal. Smaller than Waregem and Tournai it is a bit of a question mark factory. Too small to scale, too useful to lose.
The fourth factory is in Medias, Romania. Expansion east is the logic for all European Scale manufacturers. The factory has been rebuilt in 2022 and 2023 and is therefore now STAS's most advanced factory. It benefits from being new factory, new machines, new methods. Clearly it is seeking to make use of lower factor cost of an all Romanian workforce and lower cost foot print. However it benefits from 100 years of STAS methods and CLEAN management. It powers the expansion into the UK market and will be fully on stream Q2 2023.
I have worked with all 4 factories over 26 years and my favourite is Freudenberg, then Medias then Tournai then Waregem. Throughout the evolution it has been fun to witness the DNA of STAS thinking develop - always quality first and thought leading in a way I do not witness in our industry elsewhere.
Posted by Andrew on 11/01/2023
Back to the day job - 2023 - to infinity and beyond
I thought I would do a survey on how optimistic the industry felt on work day 1 of 2023 ....... There is an argument that the number of walking floor trailers and tipping trailers entering the market in 2020, 2021, and 2022 was below the trend replacement line. All for known reasons, Brexit, Covid supply chain shocks etc. Therefore 2023 should be a good uptick year for sales. However price inflation and interest rates changing affordability will dampen this uptick. As Donald Rumsfeld famously hashed - what are the unknown unknowns? Optimism, strikes, and UK viability will work their own factors heavily through Q3 and Q4. The first signs of this will be full order books being peppered by customer cancellations. This could lead to a rout. However I am a natural optimist and I think it will end up an ok sort of year. God bless.
Posted by Andrew on 03/01/2023
Tilt Test Standards - IRTE Class A - lies damn lies and statistics - - lets not go there.......yet again.
As we all know the IRTE Class A tilt test has always been a bit of a debating point. Lots of potential for 'gaming' the physical test. Do you load it correctly full to the brim or lay steel sheets on the floor? Do you put a production trailer in or a 'special'? Do you test one trailer and lay your claim for testing over your full and plentiful option lists of suspensions and axles. Pretty much all insiders know the answer to that one as we all got messed up by the Lafarge testing round of 2003......air up or air bags deflated anyone? German engineers arguing with their UK sales arm as to what to say and what they should not say. What an unholy mess - one manufacturer even constructed with nearly a third chassis I beam just for the test - amazing.
But interestingly lots of UK manufacturer websites make the claim that their trailers are tilt tested and even splash it all over their home pages?
Interesting claim as many have changed their chassis suppliers, cylinders suppliers, axles manufacturers and body styles and lengths since they last tested......also interesting as the Qinetiq Tilt Test bed closed some years ago..... and unless you let me know otherwise there is no where else in the UK to do the test...... so watch out for large claims with small evidence is all I would go with......lets not go there....as the claims by some that ALL of there trailer range is Class A Tilt Tested might just be a screaming magnificent con... I once stood in the board room of the then UK number 1 manufacturer when the then MD laughed at an email he received from his clearly angry ex Head of Tipping Trailer Product stating that they should withdraw their claim about IRTE Tilt Testing Class A as they had not tested a single trailer at 44 tonne - and that was in 2007 some 7 years after 44 tonne came in. I learned then not to take too much notice websites. (He did not withdraw the claim nor do any range wide testing).
And as usual my disclaimer - I am an idiot who knows nothing and whose view and opinion is worthless and should not be used in a court of lawyer and wishing you all apple pie and warm beer.
Posted by Andrew on 22/12/2022
Merry Christmas - sticks in the throat a bit - it shouldn't. Sorry but you know how it goes when you have seen a few Christmases?
Been a bit of a year- what with 3 Prime Ministers, 1 King, and another World War and Messi - glorious Messi. We have been busy bees at Newton this year. We have had an amazing selling year although that tide is turning into December. So 2023 is a roll of a dice as to whether it is going to be a boom or bust. Certainly Q1 and Q2 is shaping up as a bust but we might see an uptick after the summer? Meanwhile Newton has been working hard on it's planet net zero adventure. Lots of hard work working with lots of fantastic people at Cranfield University and our amazing group of suppliers to understand, collect data and make substantial changes to our trailers for 2023. We must get to net zero and Newton needs to do its tiny part in this. So we are working hard to generate a new generation of trailers to reduce eCO2 kgs in the products we sell. At the moment we sound like one hand clapping but in 5 years time everyone will be at it. As you all know I can Bore For England on this topic and if you ever want a good chin wag - then pick up the phone and lets talk carbon and saving the world one trailer at a time.
Love hugs and apple pie this Christmas to you and all you hold dear.
Newton Team
Posted by Andrew on 22/12/2022
