Truck Parts & Service 0118

Eaton adds national distributor in Mexico | TruckPro acquires distributor

STATE OF THE AFTERMARKET:

Surviving the new status quo AFTER SLIPPING IN 2016, THE INDEPENDENT AFTERMARKET REBOUNDED AGAINST TOUGH ODDS IN 2017

JANUARY 2018 |

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Finding the right service price 22

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Volume 54 | Number 1 | January 2018

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Cover Story

@TPSMagazine /truckpartsandservice Truck Parts & Service

Editorial

Editor: Lucas Deal Equipment Editor: Jason Cannon Associate Online Editor: Bill Grabarek editorial@truckpartsandservice.com

Design & Production

State of the Aftermarket report

Art Director: Richard Street Advertising Production Manager: Leah Boyd production@truckpartsandservice.com

Sales

Vice President of Sales: Scott Moldanado sales@truckingmedia.com

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Corporate

Chairman: Mike Reilly President/CEO: Brent Reilly Chief Operating Officer: Shane Elmore Chief Financial Officer: Kim Fieldbinder Senior Vice President, Sales: Scott Miller Senior Vice President, Editorial and Research: Linda Longton Senior Vice President, Acquisitions & Business Development: Robert Lake Vice President, Events: Stacy McCants Vice President, Audience Development: Prescott Shibles Vice President, Digital Services: Nick Reid Vice President, Marketing: Julie Arsenault

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Features 22 The flaws in service pricing 24 Don’t let service be a commodity

Departments 1 2 6 10

Editorial Staff Editorials Industry Focus Tech Updates

28 31 32 32

Marketplace Classified Ads Product Spotlight Advertisers’ Index

ONLINE RESOURCES Visit us online to browse the latest industry news and products, the Buyers’ Guide and industry white papers and technical data at

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Editorial | Lucas Deal

Excited about what’s to come

By Lucas Deal, Editor lucasdeal@randallreilly.com

H

ello and welcome to 2018! I hope you’re as excited about the upcoming year as I am.

After a tenuous 2016 the independent aftermarket rebounded in a big way last year, posting nearly unanimous year-over-year improvements for suppliers and distributors alike.

In conducting interviews for our state of the aftermarket report on page 12, I get the sense the distribution channel has weathered a tough stretch and is entering a growth period again. I hope that’s the case for each of you, or, at the very least, that you’ve positioned yourself well enough to leave the struggles of 2016 behind.

I think there is a lot to be excited about for the independent heavy-duty aftermarket in 2018.

The upcoming — or current, if you’re reading this at our booth on the expo floor — Heavy Duty Aftermarket Week (HDAW) is once again set to be the largest in industry history, complete with two new featured programs and many of your annual favorites.

In addition to HDAW, both marketing groups achieved corporate milestones last year and have a variety of new initiatives scheduled to introduce to their distributor members and the industry over the next 12 months. In speaking with both groups late last year for our industry report, it’s clear to me that HDA Truck Pride and VIPAR Heavy Duty are doing everything

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within their power to support their stockholders in our increasingly competitive marketplace.

Make no mistake about it, the aftermarket is becoming a battle ground.

We can’t let pretty black numbers stop us from addressing our threats and concerns New suppliers from North America and overseas are flooding into the industry, pulling market share from longtime suppliers and challenging the distribution channel with both direct to customer and white box value-line products. Online e-tailers such as Amazon and eBay remain on the periphery of the industry, continuing to sell commodity products and high-volume items as they determine their best method for how and when (not if) they

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enter the heavy-duty marketplace.

And those concerns still pale in comparison to the battles you’re fighting in your business each day. Finding talented employees, improving delivery times, increasing warehouse efficiency, accessing repair training and tooling information all remain daily struggles in the aftermarket.

I don’t know that we as an industry can solve them all, but here at Truck Parts & Service, we’re going to do what we can to help in any way that we can. We have stories on our editorial calendar addressing all of these issues and others that exist in our market.

Right now we are working with sources and conducting interviews, constantly searching for any edge that exists that we can bring to you.

We know this business is hard. We want to do anything we can to help — and we want to hear from you. While most of the issues mentioned above are hotly debated across the aftermarket, a number of articles found in these pages and our website also are spurred by reader suggestions. If you want to know why something is how it is, let us know and we’ll go investigate.

The aftermarket is on the upswing again and that’s great, but we can’t let pretty black numbers stop us from addressing our threats and concerns.

If the aftermarket is to stack another great year on top of 2017 we’ll need to work at it. That starts today.

So, how can we help?

START WITH THE BEST AND KEEP IT THAT WAY. Your truck’s driveline is only as strong as its weakest link. That’s why you should rely on genuine Eaton aftermarket products. Eaton aftermarket parts are made from high quality materials and incorporate the same manufacturing consistency and latest engineering designs as our production parts. There is no substitute for quality. Insist on genuine Eaton parts and get back on the road with confidence.

Learn more at roadranger.com/genuine

©2018 Eaton. All rights reserved.

Editorial | MacKay & Company

No Economic Excuses

By John Blodgett MacKay & Company

A

s we enter into a new year (2018 for those of you keeping track) most firms have, or maybe a little belatedly, are now determining what their goals are for the year. This is the same for the heavy-duty aftermarket as it is for any industry.

We are currently (as of January) in the 103rd-consecutive month of economic expansion for the U.S. economy since the end of the recession in June 2009. Obviously, all those months were not easy going, many portions of the economic recovery and expansion were very weak and for some sectors, such as fracking and oil drilling, there have been some high highs and some low lows.

The economy during this expansion has dealt with exchange rate issues, burdensome government regulations, a slowing economy in China, economic slowdowns in Europe, outright recession in Brazil and other factors. Not that everything is peachy keen (good) across the world; there is still Dennis Rodman’s friend in North Korea, but globally on whole, things are good.

As of Dec. 8, 2017, unemployment was at 4.1 percent, a 17-year-low in the U.S. People that had fallen off all records for unemployment are coming back to work and many of those working are seeing their incomes increased, which

bodes well for consumer spending.

Trucking payrolls grew by 1,800 in November, imports are up — which means good activity at the nation’s ports — and consumer and business confidence are at record high levels.

Truckable Economic Activity, a MacKay & Company report on the trucking economy, has not been this positive since before the recession.

MacKay & Company tracks fleet utilization and it has been very strong for the first three quarters of 2017.

Parts sales for aftermarket component manufacturers and their distributors have been consistently up in 2017 over 2016. Truckable Economic Activity (TEA), a MacKay & Company report on the trucking economy, has not been this positive since before the recession.

Bob Dieli, the MacKay & Company

economist, has a short term economic tool called Enhanced Aggregate Spread and it is currently showing a good economy out past mid-year. (See Bob for details.)

So, if you are somebody who is responsible for obtaining sales goals, this would not be a good time to throw in the excuse of the economy for slow sales or anticipated underperforming to target goals.

Not being able to meet customer demands, competition, accidently running over a customer’s dog, may all still work as excuses, but blaming a bad economy likely won’t work in 2018. If you still think the economy is bad here — contact someone in Brazil for some level setting.

Our current forecast for the aftermarket (soon to be updated this month) is up slightly compared to a strong 2017, but my guess is when we get fourth quarter fleet utilization, our outlook for 2018 will be more robust.

These are the good old times (unless you are certain politicians or newscasters) that we will be referring to during the next recession (not if, but when and hopefully many years from now).

So, enjoy and get excited to attack the opportunities. I think most people would agree it is more fun trying to keep up with customer demands vs. trying to keep your doors open, although both can be exhausting.

John Blodgett has worked for MacKay & Company for more than 20 years and is currently vice president of sales and marketing, responsible for client contact for single and multi-client projects. He can be reached at john.blodgett@mackayco.com.

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Industry Focus

CIT Trucks has opened its new full-service dealership in Peru, Ill., just east of CIT’s previous location.

Dealer News Volvo of Denver has completed an expansion renovation to its parts and service department to better serve its customers.

McCoy Freightliner announces its Portland and Salem, Ore., have been recertified Elite Support by Freightliner.

Volvo Trucks of Texas has opened a new location in Corpus Christi, Texas.

Palmer Trucks has acquired two new locations in Kentucky. The two locations are the Peterson Truck Center of Louisville as well as Kenworth of Bowling Green.

Valley Truck Centers has increased its Freightliner and Western Star business with the purchase of Toledo Freightliner Western Star of Toledo and Great Lakes Western Star.

Trudell Holdings, parent company of Trudell Trailer Sales, has acquired majority ownership of Northeast Great Dane.

Kenworth Sales Company recently unveiled its remodeled and expanded location in Lewiston, Idaho.

CVSN updates board leadership The Commercial Vehicle Solutions Network (CVSN) has its updated the officers and directors of its board.

Andy Robblee with Six Robblees’ is the group’s new president. Vice President is Troy Zurbuchen with Midwest Heavy Duty, and Treasurer is Sean Ryan of Point Spring and Driveshaft. Angelo Volpe remains executive vice president.

Additionally, this year two new distributor directors and one supplier director were installed. The new distributor directors installed are: Ian Johnston, Harman HVS, and Tom Labat, Vander Haag’s Inc. The new supplier director is Jerry Conroy, Bendix Commercial Vehicle Systems.

“As an association, CVSN is proud to have these top industry executives on our board of directors and appreciate their input, time commitment and valuable contributions for the betterment of our industry,” says Volpe.

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M&K Truck Centers has acquired Wilkes-Barre Truck Center as the first M&K dealership in Pennsylvania.

Kuo Consulting Group refocuses strategic direction, expands services Industry veteran and President Edward Kuo has announced a strategic refocusing of his technology consulting company Kuo Consulting Group (KCG), making available additional technological expertise on a short-term project basis in the heavy-duty aftermarket.

“There is now a wide variety of technologies that are core to business success throughout the distribution chain. The challenge is that a large number of warehouse distributors and parts manufacturers have great intentions, but lack the time and expertise on staff to actually implement what they need. As a result, many initiatives fail or never even get off the ground,” says Kuo. “The new KCG will be able to provide the heavy-duty parts market an experienced CIO-type project leader on an ‘as needed’ basis.”

Kuo Consulting Group’s new primary areas of focus are: analytics; business intelligence (BI); customer relationship management (CRM); digital marketing; e-commerce; inventory management; product information management (PIM); strategic direction.

Industry Focus

Online aftermarket courses upcoming The University of the Aftermarket has opened registration for eight online courses that will begin in March.

The University says these online courses enable motor vehicle aftermarket professionals to sharpen their professional skills and earn continuing education units (CEUs) that can be applied toward their AAP (Automotive Aftermarket Professional) or MAAP (Master Automotive Aftermarket Professional) designations.

The upcoming courses begin March 19 and conclude May 13. Registration for the classes will be open until March 5, 2018.

The classes are: ■ ACC-2415 – Fund of Managerial Accounting ■ AM-2560 – Strategic Sales and Marketing ■ AMM-2100 – Heavy Duty Parts & Service Aftermarket ■ FIN-3010 – Financial Management ■ MGT-2300 – Principles of Management ■ MGT-3500 – Operations Management ■ MGT-4030 – International Management ■ MKT-2080 – Principles of Marketing

National truck stop chain purchases Speedco Love’s Travel Stops & Country Stores has finalized its acquisition of Speedco, a national network of service locations that provides quick lube and inspection services to the trucking industry, from Bridgestone Americas.

The transaction will expand Love’s Truck Tire Care service with 52 new locations, the company says.

“The partnership of Love’s and Speedco combines two top brands in the diesel service industry into one network,” says Tom Love, founder and executive chairman for Love’s Travel Stops & Country Stores.

TruckPro adds Pennsylvania distributor TruckPro has acquired the assets of Class 8 Parts, Inc. in New Holland, Pa. Class 8 has been in business since 1998 and is a leading provider of after-market truck parts in Central Pennsylvania.

“Class 8 Parts is a highly successful, privately held after-market truck parts provider, and owners Don Sindall, Doug Sindall and John Lowry built an organization with a reputation for providing exceptional service to its customers,” says Chuck Broadus, TruckPro’s CEO. “Class 8 Parts is a great addition to the TruckPro family and allows us to expand our footprint in the Northeast region and provide additional products and enhanced customer service to our local customers and national accounts in this region.”

People In The News Pressure Systems International (PSI) has promoted Jonathan Gravell to vice president/ business development.

Rodger L. Boehm has been added to the board of Gravell directors at Meritor.

Navistar appointed Joe Kory senior vice president of parts.

Accuride President and CEO Rick Dauch has been elected chairman of the Heavy Duty Business Forum for 2018. Kent Jones, vice president, Global Business Development and

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Sales for ZF Friedrichshafen AG, was named 2018 vice chairman.

Bridgestone Americas has named LaTres Jarrett as its director of marketing for Bandag.

Work Truck Solutions has added Shawn Horswill as vice president, customer success and Joe Schneider as vice president, marketing and sales operations.

Stet Schanze of Gray Manufacturing has been elected chairman of the board of the Automotive Lift Institute (ALI).

The National Automotive Service Task Force (NASTF) has named Donny Seyfer as its executive officer.

Fleet Brake opens new location Fleet Brake has moved into new facility in Red Deer, Alberta.

Fleet Brake says the location is equipped with multiple service pits with hydraulic jacks, a new frame rack, the longest alignment pit in Alberta, and a new parts showroom. The new location’s address is 158 Queens Drive, Red Deer, Alberta, ToM oJo. The facility number is 403-343-8771 and fax number is 403-340-0888.

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Industry Focus

Lubrication Specialties enjoys milestone year Lubrication Specialties, Inc., (LSI) is celebrated its 20 anniversary in 2017.

Founded in 1997 by Chris Gabrelcik, LSI began as an equipment chemical solutions provider for commercial and industrial accounts for major manufacturers including: Nucor Steel, American Showa, Midwest Industries, X-Tec and Navistar.

In 2004 LSI developed its first automotive and heavy-duty transportation product. LSI now offers a full line of oil and fuel additives for gas and diesel engines under the brand Hot Shot’s Secret. th

Eaton adds national distributor in Mexico Eaton has named DIMNSA as a distributor to broaden its aftermarket transmission and clutch distribution for customers throughout Mexico.

With nearly 500 distributors throughout the country and an extensive sales and support structure, Eaton says DIMNSA will provide the company with opportunities to grow its aftermarket business in the region.

“The value of partnering with DIMNSA is important to our aftermarket strategy,” says Tim Bauer, vice president, Aftermarket, Vehicle Group North America. “With our strong product portfolio and current aftermarket relationships, Eaton sees the relationship with DIMNSA as an opportunity to accelerate the growth of our transmission and clutch aftermarket business.”

Phillips & Temro expands on global scale Phillips & Temro Industries (PTI) has signed a definitive agreement to acquire Carlor Engineering, a Belgian manufacturer of coolant heaters used in power generation and heavy-diesel engine applications.

According to PTI, the acquisition of Carlor increases the breadth of PTI’s engine heating product offering and establishes a PTI presence on mainland Europe.

“This acquisition is consistent with our vision of becoming a global market leader through innovation, diversification of end markets and customer focus while building a culture of continuous improvement,” says Tom Moser, president and CEO at Phillip & Temro Industries.

Power Heavy Duty adds stockholder Blanchard Machinery Company has joined Power Heavy Duty.

Based in West Columbia, S.C., Blanchard Machinery Company serves a customer base of medium-duty fleets and larger that include school buses, over the road trucks, municipal fleets and construction equipment within the Columbia area, the company says.

“For 35 years, the staff at Blanchard Machinery Company has been committed to providing South Carolina’s capital city with high quality products and services,” says Mark Iasiello, general manager, Power Heavy Duty. “We are pleased to welcome them to the growing family of Power Heavy Duty distributors.”

VIPAR Heavy Duty adds Great Plains distributor Camrock Oil and Supply, based in Elk City, Okla., is the newest company to join the VIPAR Heavy Duty network of distributors as a stockholder.

Camrock Oil and Supply serves fleets, owneroperators, independent service facilities, municipalities and industrial companies in the northwest Oklahoma and northeast Texas markets. “[Camrock Oil’s] dedicated management team is committed to growing their business and supplying customers with high quality products and outstanding service. We are pleased to welcome them to the VIPAR Heavy Duty family,” says Jim Pennig, vice president of business development, VIPAR Heavy Duty.

Truck Parts & Service Calendar Event information can be submitted at: www.truckpartsandservice.com/story-ideas/

Jan. 21-22 Jan. 22 Jan. 22-25 March 5-8 March 6-9

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Service Opportunities Learning Days, Las Vegas Heavy Duty Aftermarket Dialogue, Las Vegas Heavy Duty Aftermarket Week (HDAW), Las Vegas Technology & Maintenance Council (TMC) Annual Meeting, Atlanta The Work Truck Show, Indianapolis

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Industry Focus

FleetPride holds open houses at new locations FleetPride held a grand opening of its newest Texas branch in Houston and an open house at its recently acquired facility in Montrose, Colo.

“We are excited to add another branch in the Houston market.

This new location allows us to reach new customers, and increase our service levels to existing customers,” says Mike Harris, senior vice president of sales and branch operations. “We are focused on keeping customers on the road, and providing them with faster deliveries, better availability, and the best selection of truck and trailer parts in the industry.”

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By Lucas Deal, Editor lucasdeal@randallreilly.com

Tech Updates

IMPORTANT TIPS FOR MAINTAINING CUMMINS ENGINES

K

eeping abreast of the latest part updates and installation techniques can prevent costly errors and even catastrophic failures.

Industrial Parts Depot (IPD) manufactures and distributes a broad range of replacement parts for engines, and offers these five tips to help repair facilities and engine rebuilders service Cummins ISX15 engines more accurately and efficiently.

Choose updated critical parts: The current update of OE pistons for

ISX15 (15-liter, single cam) engines features a special bushingless design with a closed skirt that is specifically made to work with APR (anti-polishing ring) cylinder liners.

Use special installation tools when possible: Special installation tools ensure successful repairs.

Protect oil ports and passages from particulates: Replacement of gaskets is an integral part of every in-frame or out-of-frame engine overhaul.

Choose the correct style of

SAFETY RECALLS Caterpillar, Inc., is recalling all 2016 Navistar CT660S trucks equipped with certain Spicer D or E series steer axles. The castellated nut on the steer axles may not be properly torqued, allowing the tie rod to loosen. If the tie rod loosens, it may disconnect from the steering knuckle, causing a complete loss of steering and increasing the risk of a crash.

Daimler Trucks North America (DTNA) is recalling certain 2016 Western Star 4900 and Freightliner Cascadia vehicles, equipped with certain Spicer D-Series and E-Series steer axles. The castellated nut on the steer axles may not be properly torqued, allowing the tie rod to loosen.

If the tie rod loosens, it may disconnect from the steering knuckle, causing a complete loss of steering and increasing the risk of a crash.

DTNA is recalling certain 2012-2018 Thomas Built Bus Saf-T-Liner C2 school buses. The affected vehicles are propane-powered and have propane fuel lines that may contact the transmission yoke, possibly causing a propane leak. A propane leak in the presence of an ignition source can increase the risk of a fire.

Daimler Vans USA, LLC is recalling certain 2016 Mercedes-Benz Sprinter 2500 and 3500 vehicles. The label on the B-pillar may state a higher maximum vehicle load capacity than the vehicle is designed for. As such, these vehicles

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The following are safety recalls issued by the National Highway Traffic Safety Administration:

fail to comply with the requirements of 49 CFR Part 567, “Certification.” If the load capacity information is incorrect on the label, the vehicle may be overloaded, increasing the risk of a crash.

East Manufacturing is recalling certain 20132018 Frameless Dump Hybrid trailers. These trailers have draft arm tubing that may crack and fail. If the draft arm tubing fails, a loss of vehicle control could occur, increasing the risk of a crash.

Ford is recalling certain 2015-2017 Ford Transit vehicles, equipped with a trailer tow module.

Water can enter the tow modules and corrode the wiring causing issues such as rapidly flashing turn signals, loss of instrument panel display, an electrical short and possibly the deployment of seatbelt pretensioner. An electrical short can increase the risk of a fire. Turn signal, instrument cluster or seatbelt pretensioner problems can increase the risk of a crash.

HME is recalling certain 2015 Silverfox SFO fire emergency trucks equipped with certain Spicer D or E series steer axles. The castellated nut on the steer axles may not be properly torqued, allowing the tie rod to loosen. If the tie rod loosens, it may disconnect from the steering knuckle, causing a complete loss of steering and increasing the risk of a crash.

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connecting rod bearings: Cummins ISX series engines use three different styles of connecting rods, making it vital to use the proper type of bearings when replacing these parts.

Press-in type camshaft bushings: While it may be a common practice to drive the camshaft bushings in for other engines, installation instructions specify that the cam bushings (injector and valve) need to be pressed in (rather than driven), and also pre-lubricated.

Navistar is recalling certain 2017 IC Bus CE and 2016-2017 IC Bus RE school buses, equipped with certain IMMI school bus seat assemblies equipped with 3-point lap and shoulder belts.

Under load, the seat belt buckle mount rod can fracture. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 210, “Seat Belt Assembly Anchorages.” In the event of a crash, if the buckle mount rod fractures, the seat occupant may not be restrained, increasing their risk of injury.

Navistar is recalling certain 2015-2018 IC Bus RE school buses. The drop hose fittings for the air brakes may not be oriented correctly, and, as a result, the brake hoses may contact the tire when the wheels are turned to the limit. Contact with the tires may damage the service brake air hose, causing the brakes to become inoperative or lengthening the distance needed to stop the bus, increasing the risk of a crash.

Navistar is recalling certain 2015-2018 IC Bus RE commercial buses. The drop hose fittings for the air brakes may not be oriented correctly, and, as a result, the brake hoses may contact the tire when the wheels are turned to the limit.

Contact with the tires may damage the service brake air hose, causing the brakes to become inoperative or lengthening the distance needed to stop the bus, increasing the risk of a crash.

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Cover Story

By Lucas Deal, Editor lucasdeal@randallreilly.com

STATE OF THE AFTERMARKET:

Surviving the new status quo After slipping in 2016, the independent aftermarket rebounded against tough odds in 2017 12

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Cover Story

T

he arrow is pointing up for the medium- and heavy-duty independent aftermarket as it enters 2018. At least that’s the mood of the industry heading into this month’s Heavy Duty Aftermarket Week (HDAW).

After a somewhat unexpected dip but fortunately quick recovery over the past two years, regular market disruptions and increased competition for steady sales growth have been established as status quo.

Yet the aftermarket remains resilient, and after surviving its recent tribulations, the independent channel enters 2018 leaner and more flexible to address its threats and maximize its opportunities.

The industry is again cautiously optimistic about the future, and unlike the last time sentiment was that way, market drivers this time appear to be right in line.

Recent market update It was a little more than two years ago when 77.4 percent of responders to a Truck Parts & Service reader survey claimed their businesses had equaled or surpassed 2014 results, with nearly 72 percent of those same responders setting sales goals for at least 2 percent year-over-year growth for 2016.

That mood of careful optimism was quickly shattered as the market lost its footing, slipped below projections and struggled to maintain its 2015 pace for most of 2016.

Oil field cutbacks throughout the United States and Canada took the biggest bite out of sales, but it wasn’t the energy sector alone that weakened the aftermarket in 2016.

A regulation push from Washington D.C. damaged business

Distributors - How would you rate your company’s 2017 to date performance against 2016 results?

Equal to 2016 results (+/- 2 percent) Slightly above 2016 results (2-10 percent) Significantly above 2016 results (10+ percent) Slightly below 2016 results (2-10 percent) Significantly below 2016 results (10+ percent) Source: Truck Parts & Service November 2017 reader survey.

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45.1% 26.8% 13.4%

12.2%

2.4%

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Cover Story conditions for several industries reliant on trucking, while those same industries (and others) paused or slowed business planning ahead of the 2016 Presidential election.

“I think people were sitting back waiting to see what would happen,” says Walt Sherbourne, vice president of marketing at Dayton Parts. “There was a period where people didn’t know what to expect.”

“The economy just wasn’t as buoyant under those conditions,” adds Al Dragone, CEO at FleetPride.

The tide turned not long after President Trump’s election victory, as businesses throughout the country began implementing strategies developed contingent on a Republican win. A slow tide of regulatory rollbacks across the board followed, as did rising global fuel prices that drove work back into North American oil fields.

After a strong year across the board in 2017, S&S Truck Parts is one of many industry suppliers with high hopes for the coming year.

Coupled with Canada’s strong and swift recovery from an even weaker 2016, the entirety of the aftermarket climbed back on track last year.

MacKay & Company Vice President of Sales and Marketing John Blodgett says

the aftermarket’s turnaround was apparent in industry data as early as January.

Referencing the company’s Aftermarket Index, which tracks component supplier sales performance on a monthly basis, Blodgett says the company’s early 2017

Where everybody knows your name In an industry so reliant on relationships, both suppliers and distributors believe their bond improved in 2017.

According to Truck Parts & Service ’s November 2017 reader survey, 95 percent of suppliers believe their relationships with distributor partners were stable or strengthened during the last calendar year. Distributors were equally positive, with 37.8 percent claiming to have stronger relationships and another 56.1 percent claiming their relationships were steady.

On the manufacturing side, many suppliers have turned to the Internet to create resources for the distribution channel.

Dana was one of those suppliers, debuting an e-commerce platform at Heavy Duty Aftermarket Week (HDAW) and then a Distributors historical literature - How would library of its entire 56.1% you rate your product category later relationship in the year. with your The latter was suppliers in something Dana previ37.8% 2017? ously provided as a 6.1% print guide, but shifted Our overall to an online platform relationships have improved in 2017. for functionality and Our overall relationships have deteriorated ease of access, says in 2017.

Peter Cirulis, vice Our overall relationships have remained president, Commercial stable in 2017.

Vehicle Aftermarket, Source: Truck Parts & Service November 2017 reader survey.

Customer Experience,

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Strategy and Product Suppliers Planning.

How would “Our goal was to 55.0% you rate your put our knowledge out relationship there and make it readily with your available,” he says. distributors Strengthening down40.0% in 2017? stream relationships with 5.0% front-line distribution Our overall employees and end users relationships have improved in 2017. also allowed suppliers Our overall relationships have deteriorated to drive more business in 2017. through the distribution Our overall relationships have remained channel in 2017. stable in 2017.

“I think we’ve Source: Truck Parts & Service November 2017 reader survey. maintained and improved our relationships by going wider,” says Phillips Industries President Rob Phillips.

“We’ve gotten to know a lot of the people at the distributor level and have worked to teach them about our products.”

Distributors relish that in-person contact, too. Suppliers reducing their sales forces or turning to alternative representation is one of the channel’s biggest complaints for its supplier partners.

“We know rep agencies are a necessary evil, but a large percentage of them are not very helpful,” says Jim Burke, president at Drive Train Industries.

“They aren’t able to provide the education and technical support like the manufacturers.”

Cover Story predictions of 1.6 to 1.8 percent industry growth ballooned to nearly 5.0 percent

by November, with monthly readings in the independent distribution channel regularly tracking 3.5 to 4.5 percent per month.

MacKay & Company believes that’s been “mostly driven by fleet utilization,” Blodgett says, as truck tonnage and freight have grown throughout the year.

For companies that set their annual sales goals before the turnaround began, 2017 has been a year of superlatives.

“It has far exceeded our goals that we established this time last year,” HDA Truck Pride President and CEO Don Reimondo said in November. “It has been a phenomenal year. Better than we could have ever anticipated.”

“Relative to 2016 in particular [2017] is shaping up to be one of the most

Distributors What are your expectations for overall aftermarket sales in 2018?

61.0% 22.0%

Distributors What are your company’s aftermarket sales goals for 2018?

3.7%

13.4%

1.2% 2.4%

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64.6%

18.3%

Equal to 2017 goals (+/- 2 percent) Slighter higher than 2017 (2-10 percent) Significantly higher than 2017 (10+ percent) Slighter lower than 2017 (2-10 percent) Significantly lower than 2017 (10+ percent) 0.0%

Equal to 2017 results (+/- 2 percent) Slighter higher than 2017 (2-10 percent) Significantly higher than 2017 (10+ percent) Slighter lower than 2017 (2-10 percent) Significantly lower than 2017 (10+ percent)

productive and profitable years in our history,” says VIPAR Heavy Duty President and CEO Chris Baer.

On the whole, Truck Parts & Service readers agree. According to a November 2017 reader survey, 50 percent of independent distributor and service providers rated their 2017 performance as at least 2 percent above pre-year projections, with

13.4%

Source: Truck Parts & Service November 2017 reader survey.

72 percent of those same readers pegging last year as superior when directly compared to 2016.

Even soft spots in the market — such as a wet summer impacting Southern logging and low inventory levels in areas most impacted by energy fluctuations — seem capable of righting themselves quickly. On the whole, the marketplace is

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For all the information you need about the best product line – bottom line, visit MeritorDrivelines.com. ©2017 Meritor, Inc. All rights reserved.

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Cover Story stronger than it was two years ago.

“I think we’re very pleased with where we are entering [2018],” says D.J. Hoffman, managing partner at S&S Truck Parts. “The last year has been steady for us and we believe it can continue.”

“Everyone is openly admitting we are in a strong upswing, as we have seen through the last two quarters,” says Tim Kraus, president of the Heavy Duty Manufacturers Association (HDMA). “A lot of miles are being driven by trucks right now, and that means more new vehicles and service parts.”

Market purchasing shifts At the distributor level, adapting to new technology and evolving customer preferences have driven most purchasing trends.

Components such as air disc brakes, LED lamps and automated manual transmissions — all introduced at the OEM level years ago — are now found on a significant portion of independent aftermarket-serviced equipment and have captured market share over legacy systems. First-fit gains for some manufacturers have boosted aftermarket sales as well.

“We’ve been fortunate with our fifth wheel business in that our OEM side has grown quite a bit, and that always drives our aftermarket business because customers want to replace like-for-like, especially with a safety product like the fifth wheel,” says Carl Mesker, vice president, Aftermarket, Americas at SAF-Holland.

After a bumpy 2016, Canadian distributors such as Fleet Brake rebounded aggressively last year. Growing energy sector business was one major driver for change.

Additionally, advanced technology introduced for OEM and aftermarket use is dramatically altering how aftermarket suppliers and their distributor partners promote product in the marketplace.

‘Smart’ technology is a prime example of this transition. New technology outfitted with electronic control modules and telematics capabilities require a different sales approach with end users.

Truck-Lite, which introduced its telematics-equipped Road Ready lighting system earlier this year, has supported its new product through education at the end user and distributor level, says Andrew Liuzzo, marketing communications specialist.

“It’s not a typical product for our distributors, which has stimulated a different approach for us,” he says. “It’s important for [customers and distributors] to really understand how it works to make a purchasing decision.”

If you were not limited on time and money, which part of your business would you most like to improve?

(Please rank them in order of importance. You may use each number only once. 1=most important, 5=least important)

Upgrade overall look of business Parts department Service department Upgrade technology Retail facility/customer lounge

1 18.9% 12.2% 27.0% 39.2% 2.7%

2 10.1% 30.4% 24.6% 27.5% 7.2%

3 7.9% 28.6% 20.6% 25.4% 17.5%

4 31.5% 20.4% 13.0% 9.3% 25.9%

5 26.0% 12.0% 6.0% 4.0% 52.0%

Source: Truck Parts & Service November 2017 reader survey.

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Bendix has done the same with its channel partners to support its safety and collision mitigation products.

“It’s important to keep them on the cutting edge of what they need to know regarding those parts,” says Jerry Conroy, regional vice president of Aftermarket sales.

But even as sales of these advanced technology systems have prospered, the aftermarket also has experienced a boom in customer demand for “white box” or private label value line products. This development has caused consternation for independent distributors who believe value line products create an additional price point to attract cost-conscious customers, but do so at the expense of the premium brands they strive to represent.

“A brand is something a customer wants. It’s something they search for and trust,” says John Bzeta, president at Fleet Brake. “Anything can be in a white box.

And it can be replaced in an instant.”

Distributors also are struggling with the marketing and promotion of private label products. For a channel that strives to be subject matter experts, independent distributors are uncomfortable selling products that lack the sales and training support of premium brands.

But they are indeed selling them. As the medium- and heavy-duty truck population ages, more and more customers

Cover Story are turning to value lines to keep their oldest assets on the road. Both independent distributors and their premium suppliers have entered the private label marketplace in an effort to maintain their customer base against competition from dealer white box lines and offshore product entering the marketplace.

“If you’re a supplier and you see customers turning to value lines, I understand why you may feel the need to follow them. I can’t fault [manufacturers] for that,” says Reimondo. “But I think one value the independent distributor brings to the marketplace is education and expertise, and you lose that with value lines.”

Suppliers acknowledge their

predicament. Many have introduced branded value lines to support their independent distribution channel partners.

“We have started offering an alternative to our premium brand,” says

Corneliu Bogdan, sales manager, heavyduty aftermarket and OES at Firestone Industrial Products. “We understand and appreciate our distributors have the intentions to be a premium house, but

Quality

The technician question reigns supreme

Reliability

Finding and keeping quality technicians remains the 800-lb. gorilla in the aftermarket service channel entering 2018.

More than 46 percent of responders to Truck Parts & Service ’s November 2017 reader survey tabbed Availability of Technicians as their top business concern among 11 key industry issues. That number dwarfed both the second and third largest concerns, Changing Technologies (10 percent) and Availability of Counter/Sales Personnel (8.8 percent).

Additionally, another 28 percent of responders ranked the technician issue as their second or third biggest issue, meaning nearly three quarters of the market views the tech shortage as a serious problem. The next largest concern among responders was again technology, which was ranked as a top three concern by 42.3 percent of the marketplace.

The best strategy to combat the shortage found thus far is recruitment: Finding young people entering the technician field and supporting them through their education and into their career.

“We’ve started going out and really searching for people,” says John Vander Haag, president at Vander Haag’s. “Tech schools, community colleges. We are trying to find young technicians, and training them to be experts.”

Service The Firestone brand is internationally known and respected.

We are the industry leader with a large base of customers. So whether you’re looking for OEM, aftermarket or industrial application solutions, you can trust Firestone’s quality, reliability and unparalleled service.

firestoneip.com FI17007_TPService_halfpage_Nov.indd 1

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Cover Story the dynamic of the market is changing and we need to have a value line.”

Accuride’s 2017 acquisition of KIC was made for a similar reason, says President and CEO Rick Dauch, and now allows Accuride to compete at all price points with a full breadth of branded products.

“I think as suppliers we’re caught in the middle a bit as to how to proceed,” he says.

SKF is another company that now offers product at multiple price points for its most popular lines. Scott Simmonds, the company’s vice president of heavyduty sales, says SKF’s expanded portfolio ensures the independent channel can remain competitive with all customers.

“We’re trying to make sure our distributor has all of the different options we can possibly give them to earn that business,” he says.

Independent channel challenges The independent distribution channel is facing challenges from other areas, too.

Large retail wholesale businesses and automotive distributors continue to add SKUs for accessories, tools and small commodity items, while online Amazon, eBay and other retailers grow their annual truck part sales at an exponential rate.

Bill Wade says this “breakdown of the

Please select your company’s position on the following topic: Product offering 2.4% 3.7%

31.7% 50.0% 12.2%

We’ve expanded product lines in 2017.

We’ve considered, but did not expand, product lines in 2017.

We have reduced product lines in 2017.

We’ve considered, but did not reduce, product lines in 2017.

We have not consider changing our product lines in 2017.

Source: Truck Parts & Service November 2017 reader survey.

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Adding service capabilities to existing parts operations remains a viable growth strategy for independent business.

traditional channels of distribution” is only the beginning of what’s to come for the aftermarket. As customers become more acclimated searching for and purchasing products online Wade says their preference to do so will only increase, as will their expectations that brick-andmortar distributor partners meet them in the virtual world.

“There are plenty of people out there who know how to put a part in a box and ship it,” he says. “If your only role is to sit there with inventory on your shelf and wait for a call to deliver it, you’re finished.”

Aftermarket suppliers aren’t nearly as pessimistic about conventional distribution — in person product expertise remains a key aspect of their sales structure — but do believe online sales in the heavy-duty aftermarket are here to stay. For their part, many suppliers are developing online ordering systems and expansive product reference guides to better support their distributors on the front line.

Tom Ondrejcak says S&S Truck Parts built its new ordering website, which debuted at HDAW last year, specifically with its distributors’ employees in mind.

“We want our website to be an easy information source for our customers.

To be a place where when they need information they can go there and find it,” says Ondrejcak, the company’s director of sales.

Meritor had a similar focus in

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launching Meritor Parts Express in the spring, and like S&S has followed by training its distributors to use the tool.

“We want to make it as easy as possible for our customers to do business with Meritor,” says Brett Penzkofer, Meritor’s vice president, Aftermarket, North America.

Ease of use tools are increasingly valuable in an industry where technology is craved but rarely acquired. According to Truck Parts & Service’s November reader survey, nearly 40 percent of independent aftermarket businesses say if they were not limited by time or money the first area of their business they would improve is their equipment and technology. That number was followed by their service department (27 percent) and the overall appearance of their facilities (18.9 percent).

Consolidated Truck Parts specifically targeted its service technology when it decided to invest in upgrading its technology last year. Consolidated’s service operation has been its strongest division for many years, and CEO Rudy Niswanger says the company has committed to updating it as much as possible to ensure it remains a premium provider in its market area.

“These trucks are changing so fast.

You can read something is coming and then you blink and it’s upon you,” he says. “We want our customers to view us as experts, so we have to keep up with what is out there and be up to date as best we can.”

Cover Story Independent channel opportunities Niswanger’s point on expertise is an important one because despite the above concerns, opportunities still remain for independent aftermarket businesses to grow in this industry. A strong majority of suppliers, distributors and service providers expect the market to expand this year, and that means more business available for everyone.

Positioning one’s self as a subject matter expert is one sure fire way to earn customer respect, loyalty and sales.

“We believe our ability to provide value-added services gives us a leg up compared to some of our competitors,” says David Segal, president at Sanel Auto Parts. “We’re not the lowest price place where a customer can get a part, but

when they come to us we provide peace of mind.”

“Our business model is built around providing a lot of service, having inventory in stock and being able to provide

a lot of technical expertise for our customers,” adds Bruce Sommerville, vice president and COO at Drive Train Industries. “It’s not conducive to us being a low-cost parts provider in the

As drilling increases, so does the aftermarket The energy sector has sprung to life again in 2017 after nearly two years of dormancy throughout North America.

In Texas and Oklahoma, where oil wells were abandoned en masse earlier this decade, work returned slowly in the early months of the year before accelerating. FleetPride CEO Al Dragone says his company’s Central region locations were its most profitable nationwide thanks to the boom. Component suppliers also saw their business nudge up in high-energy areas.

“You could see those pockets where business was bouncing off the bottom of the trough from the prior years,” says Brett Penzkofer, vice president, Aftermarket, North America at Meritor.

The same was true in Canada, where low oil prices had been even more damaging.

“We experienced a recession due to commodity pricing for almost two years. A lot of our region was deeply affected by the price collapse,” says John Bzeta, president at Fleet Brake. “We’re up tremendously from 2016, but that was a significant drop.”

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Cover Story marketplace, nor do we want to be.”

Many suppliers appreciate distributors making that commitment, and continue to enhance their product literature and training libraries to assist distributors hungry for product knowledge.

“We are working to adjust some of our programs based on customer input,” says Tim Bauer, vice president of aftermarket at Eaton. “We want to build a foundation for lasting win-win relationships.”

VIPAR Heavy Duty is dipping its toe into this area as well, says Baer. “What we want to do is not create a product so much as become a resource center for them.”

The channel itself is another strength.

Many independents have a leg up on their dealer competitors in regard to relationships with their customers, an edge the independent channel doesn’t plan to relinquish.

“I think the relationship with our customers is unique,” says John Vander Haag, president at Vander Haag’s. “We work hard to get to know them and understand their businesses and their markets. I don’t think dealers always do that as well.”

“The independent aftermarket has the ability to react faster to customer needs, and that’s beneficial to all of us,” adds Peter Cirulis, vice president, Commercial

Distributors Please select your company’s position on the following topic: Business expansion

45.1%

15.9%

35.4% 3.7%

We’ve expanded our facilities in 2017.

We are considering expansion, but no changes have been made in 2017.

We’ve reduced our facilities in 2017.

0.0% We are considering reduction, but no changes have been made in 2017.

We have not consider changing our facilities in 2017.

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Vehicle Aftermarket, Customer Experience, Strategy and Product Planning at Dana.

That relationship focus also helps when recruiting and retaining talent.

Employee loyalty goes both ways.

“We’ve had situations where one of our guys will leave for a dealership and we’ve found they’ll get to that dealership and then they are just a number. The team atmosphere isn’t the same; then we’ll usually get them back,” says Todd Pate, vice president at Covington Heavy Duty.

Expectations for the future Turning their eyes to 2018 and beyond, independent aftermarket distributors and their suppliers believe that customer-centric approach, coupled with a healthy trucking industry, are reasons for optimism.

Niswanger, whose business serves multiple energy sectors, says he expects a resurgent energy market to help bolster his already bullish outlook for 2018.

“We’ve expanded our footprint, increased our capabilities and product lines. I think that’s where a lot of our growth is going to come from,” he says.

Dauch is equally optimistic. The new chairman of the HDMA’s Heavy Duty Business Forum, Dauch cites truck builds, utilization and the electronic logging device (ELD) mandate as potential sales drivers within the market, as well as energy business, tax changes and

Distributors Please select your company’s position on the following topic: Employment level

50.0%

36.6%

13.4%

Our total personnel rose in 2017 Our total personnel fell in 2017 We have no net change in personnel in 2017

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Source: Truck Parts & Service November 2017 reader survey.

After a strong rebound in 2017, distributors and suppliers alike are bullish entering 2018.

infrastructure investments as external positives for trucking.

Bogdan agrees, and also references energy and infrastructure as reasons for the arrow to point up in 2018.

“I think we could see the economy take off,” Dauch says. “We are gearing up for a robust 2018.”

Truck Parts & Service readers agree.

An incredible 74.4 percent of distributor responders to November’s survey predict the aftermarket will grow by at least 2 percent this year, and of those who didn’t, 22 percent of the remaining 25.6 percent see the market as flat.

Supplier responses were nearly identical, with 69.7 percent expecting at least 2 percent growth and 72.7 percent setting growth goals of 2 percent or higher.

Mesker says SAF-Holland uses a detailed formula that includes economic data, MacKay & Company forecasts, Class 8 truck build rates and corporate sales data to make predictions. Like other aftermarket businesses, SAF-Holland enters the new year confident.

“For 2018 we think [our aftermarket business] is going to continue to grow, likely ahead of 2017 pace, and 2017 was a really good year for us,” Mesker says.

Even before last year closed, Sherbourne was excited about the potential for the aftermarket this year.

“I’m always looking forward. I can’t change the past but I can impact the future,” he said in November. “I think we’ve done a lot of things very well in 2017 and I think we can do even more next year.”

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By Lucas Deal, Editor lucasdeal@randallreilly.com

Service Bay

Getting your slice of the pie T

he independent service channel has a love-hate relationship with pricing.

For most independent service providers, an attractive labor rate can be a company’s best marketing tool. But due to a pricing strategy where most businesses set their rates based on competition and not competency, some aftermarket service providers also may find themselves trapped with labor rates that undervalue their services and capabilities in the marketplace.

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Finding the right labor rate for an independent service business can be done with a thorough evaluation of one’s operation and service efficiency (see page 24), but it’s arduous. Sticking with the status quo leaves money on the table to keep trucks in the bay.

To better understand how harmful competition-based pricing can be, it helps to understand its weaknesses.

Every business is different The most obvious negative to pricing against competitors is setting a labor rate

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that doesn’t reflect the quality of one’s work.

This is most common in markets where customers have multiple service centers to choose from for any one repair. A new service provider undercuts the market with an unreasonable rate; customers flood to that facility to try the discount garage; and neighboring facilities, spooked by the sudden and likely short-term market shift, drop their rates in turn to earn back their customers.

The long-term damage for established service centers in that scenario isn’t due

Service Bay

Premium independent service providers deserve a premium labor rate to the immediate down flux in customers but the decision to chase those customers with a lower rate. A service provider should only lower price when it has increased operational effectiveness (and is thus able to operate with lower costs), or reduced its number of services offered.

Doing so to chase customers only further weakens margins in an already competitive landscape.

It’s also important to remember that while there is a subset of service customers who will always chase price, many end users value quality of service and

The most important thing is that the vehicle be repaired properly the first time with no come backs.

– Jim Pascale, president at Pascale Service Corporation

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uptime above cost when making a service decision.

“The most important thing is that the vehicle be repaired properly the first time with no come backs. Most customers do not complain about the price if the repair is done properly by a qualified repair shop,” says Jim Pascale, president at Pascale Service Corporation.

Regarding low-price competitors, Pascale adds, “They are perceived as being cheaper but in the long run it costs the customer more in downtime or not having the vehicle repaired properly.”

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Service Bay

ROI opportunities are lessened Service providers also undervalue their work when they fail to raise rates. A service provider can avoid falling victim to the scenario above and still be undercharging due to an outdated labor rate.

Prices don’t need to go up every six months, but a service provider who commits to purchasing new diagnostic tools and updated service equipment while providing regular training for their technicians has a significantly larger investment in their operation than a competitor who does nothing. They owe it to themselves for their labor rate to reflect that.

Bobby Willingham, president at Davenport & Willingham, says his business evaluates its investment in its shop on an annual basis. The company’s labor rate doesn’t go up annually, but Willingham says he doesn’t shy away from price increases when necessary.

As the 2014 HDA Truck Pride Truck Service Expert of the Year, Davenport & Willingham views itself as a premium service provider in its region, and Willingham says the company’s rate relative to its independent competitors reflects that.

years that we’ve been here, I’ve never had anybody say anything to me because we did increase our rate,” Willingham says.

Loyalty doesn’t equal security

Variable pricing is another misstep commonly found in the independent service channel. Repair facilities earn contracts with a regional fleet or municipality and are then hesitant to increase their rates on those accounts when updating pricing because of the fear they will lose the volume of work those accounts provide.

Matt Goodding, branch man– Bobby Willingham, president at Davenport & Willingham ager at Sadler Power Train, says he sees this with some competitors in his “We charge more than anybody else marketplace. The businesses advertise because we have invested in this place specific prices for off-the-street business, and we believe we are worth it,” he says. but actually have different rates for estabThat belief has been confirmed by a lished customers. This strategy is harmlarge, loyal customer base that continues ful because it turns loyal accounts into returning to Davenport & Willingham. less profitable customers. The financial “To be honest with you, in the 28

In the 28 years that we’ve been here, I’ve never had anybody say anything to me because we did increase our rate.

Don’t be a commodity Efficiency key for service department earnings The wholesale independent aftermarket sells a lot of commodity items. Bob Greenwood says service is not the same kind of business.

Unlike the identical brake drums and widgets found in thousands of distributor warehouses across North America, every service center is unique. Succeeding in the independent service channel today takes training, tooling, experience and expertise.

It’s a significant commitment. For service providers dedicated to their business and customers, Greenwood, president and CEO at Automotive Aftermarket E-Learning Centre, says that commitment isn’t something to take lightly.

In an industry where labor rates have so long been determined by competition, Greenwood says it’s time for service centers to start looking internally. Pricing in the independent service channel isn’t

24

about where a service center falls in relation to its competitors, it’s about how much value that service provider brings to the marketplace.

“This is not a pricing game or a commodity game,” he says. “This is a true profession and the key to success isn’t sales, it’s net profit.”

Profit comes from efficiency.

After years chasing volume, Greenwood says prosperous service operations in the future will thrive by maximizing shop performance. The goal shouldn’t be to rack up customers it should be to rack up billable hours. A line around the corner is great publicity, but it needs to be supported by a proficient operation to also be great for the bottom line.

Greenwood says a service provider with a lower than market average labor rate and talented stable of technicians will draw in a lot of customers. But if

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By Lucas Deal

those technicians are slow in completing their work for any reason —— inadequate tooling, incomplete diagnostic testing, meticulous techs —— the service center will still struggle to make a profit because the facility is inefficient.

“If you’re only operating at 60 percent efficiency, you’re really only earning 60 percent of your per hour rate,” Greenwood says. “You have to know what your true per hour rate is” before resetting a labor price.

Once that percentage is established Greenwood says service providers should begin evaluating methods for improvement. The potential hindrances to efficiency mentioned above are commonly found in the medium- and heavy-duty service channel, and when corrected, can dramatically improve shop throughput.

Service Bay

A well-trained and tooled independent service operation should demand a labor rate consistent with its investment.

investment a service provider makes to its operation doesn’t vary across repairs, so why should pricing?

“We don’t ever adjust our pricing like

that,” Goodding says. “We decide what rate we’re going to have and that’s what we charge for everything.”

As a group, he says Sadler Power

Greenwood admits it’s a difficult task.

“There is no silver bullet to fix everything immediately. It can easily be a two-year period because you are talking about changing a culture,” he says.

“The business model a lot of [service providers] were raised on is broken and they can’t keep doing things that way and expect it to work.”

He stresses diagnostics, specifically, as an area needing an overhaul. Advertising a full diagnostic test in one hour or less does a service center no favors because today’s medium- and heavy-duty equipment is too advanced to be fully inspected in that time. Yes, a customer wants their asset back quickly, but if asked, most would prefer an extra few hours in a bay at the beginning of a repair than a day addressing previously undiscovered issues at the end.

Additionally, the fix doesn’t just come in billing for two (or more) hours of diagnostic testing instead of one. It’s also in how a service center approaches every new repair.

“You are not just selling a job,” Greenwood says.

“You are being hired to provide safety and reliability for your customer and it is your professional responsibility to make sure that you do that.”

Providing that right equipment and training for technicians is another driver of service efficiency and profit that can be mishandled in the independent service channel. Issues normally arise in how these resources are valued.

Most equipment problems are cost based.

Greenwood says service centers that fail to update diagnostic or service tools due to upfront expense are ultimately weakening their ability to efficiently complete repairs and help their customers. The same is true regarding training. Technicians cannot be expected to improve departmental efficiency without the most updated training possible on the work they are expected to complete.

Other efficiency drivers, such as parts procurement and customer communication and repair authorization strategies, also should be evaluated and optimized before an independent service provider begins the math on a new labor rate.

Once a service center is running at or near peak efficiency the labor rate calculation is straightforward: cost of operation per billable hour plus profit margin equals hourly labor rate.

Daunting as it sounds, Greenwood says when compared to the status quo, the decision to change

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Train’s customers are “very accepting” of the standardized pricing structure.

Customers are aware of the financial commitment Sadler Power Train has

This is not a pricing game or a commodity game.

This is a true profession and the key to success isn’t sales, it’s net profit.

– Bob Greenwood , president and CEO at Automotive Aftermarket E-Learning Centre should be a no-brainer.

“The amount of money these businesses are leaving on the table in net profit is incomprehensible,” he says. “For a 10-bay shop, it could be between $200,000 and $350,000 per year.”

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Service Bay

An independent service provider with immediate access to parts and tooling can command a higher rate because of its ability to minimize downtime.

made to serve them and know rates must be established accordingly.

“They understand that you’re going to have an increase here and there,” Goodding says. “We make sure we always provide quality work for a reasonable rate.”

Channel discrepancies Then there’s dealers. The independent service channel has typically positioned its labor rates below dealer competitors.

The general reasons for this — dealers provide specific service and have

Maximizing revenue in the service business comes from maximizing shop efficiency and billable hours.

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exclusive access to some tooling and training — are sound, but in individual instances pricing flaws can appear.

The major issue is informational access. The dealer channel receives OEM-provided technical training and diagnostic equipment independent service centers cannot acquire. Independent service centers also lack background knowledge on dealer efficiency rates, and the internal calculations dealers make when setting their labor rate.

Without revelations into those areas, any independent pricing decision based on a dealer’s business becomes nothing more than an uneducated guess.

Bruce Greer is in a unique position regarding his knowledge of the independent versus dealer pricing structure.

As general manager of Golden State Peterbilt and Kroeger Equipment & Supply (where he is also president), Greer is responsible for setting labor rates for three dealerships and an independent

T R U C K PA R T S & S E R V I C E | J a n u a r y 2 0 1 8

service facility.

Greer says both service businesses receive as much training as possible for the work they offer. The dealer locations do have a higher labor rate, but Greer says the elevated price reflects a more comprehensive service offering, not any technical superiority.

“I think the independent service channel sometimes views itself as second-tier suppliers and that’s not the case,” he says.

“Once you get away from the warranty work and the engines, emission systems and other service only the dealers are doing, the aftermarket service provider is a tier-one supplier.”

That’s something Greer makes sure to promote with his customer base, and says other independents should do the same.

“The independent [service provider] doesn’t do enough to market themselves as a premium provider for the repairs they can be a premium provider for,” he says.

Marketplace

The Buzz The five hottest products as determined by readers of truckpartsandservice.com

Intelligent trailer light management system Grote Industries introduces its Guardian Smart Trailer System, a new lighting alert system that provides real-time status updates of an entire trailer lighting system and works with any type of lamp.

Created in collaboration with one of the largest trailer manufacturers in North America, the system works by being integrated into a trailer’s wiring harness system at the nose box.

According to Grote, the system’s sensor continuously monitors voltage and current passing through the wire harness.

The system is programmed to differentiate notable or sudden changes from those that are gradual and could be caused by lights warming up or ambient temperature conditions, the company says.

Assorted aftermarket products Dorman HD Solutions has added six new former dealer only heavy-duty products to its aftermarket product offering.

The company’s new components include more than five HD Exclusive EGR valves, HD Exclusive engine crankcase breather elements, and five SKUs of HD Exclusive door mirror switches, as well as oil filter covers, A/C refrigerant pressure sensors, and five SKUs of cruise control switches. The products fit International, Volvo, Freightliner, Sterling, Mercedes-Benz tractors and Cummins engines.

Expanded truck accessory and tool offering Automann continues to add new products in key component categories: chrome and stainless steel accessories; snow removal brushes; tire repair; and wiper systems.

Covering all makes, Automann has more than 25,000 products available. The company says its distributors can combine parts in all categories on orders with other Automann products with no minimums.

Driveshaft replacement program introduced Meritor has introduced Driveshaft on Demand, a quick and economical replacement program for Meritor Xtended Lube MXL and Permalube RPL drivelines as well as Spicer 10 Series and SPL 170/250 driveshafts.

Meritor says OE dealers and warehouse distributors can order replacement or customizable driveshafts at competitive prices with same-day or next-day shipping arrangements, eliminating long lead times.

Customers can download Driveshaft on Demand specifications form MISC-1783 on Meritor’s Literature on Demand website. The company says ordering is a simple, three-step process that asks customers to identify the U-joint series, assembly type and driveshaft measurement.

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T R U C K PA R T S & S E R V I C E | J a n u a r y 2 0 1 8

Expanding engine, suspension component product lines NEWSTAR continues to expand its selection of quality tested heavy-duty components with a new crop of engine components and air bags.

NEWSTAR says the engine products include belt tensioner, NOx sensors, valve cover gaskets and assorted EGR kits. The assorted products work with Caterpillar and Cummins engines, as well as Volvo and International tractors.

The four new airbags fit a variety of Hendrickson and Watson & Chalin applications.

Marketplace

Refrigerant recovery tool Robinair has debuted its new 34888HD heavyduty A/C RRR machine for North America.

The new machine is engineered to save time in the shop with fully automatic operation and a removable tank for larger A/C systems. Robinair says technicians can set the 34888HD and walk away as it recovers, evacuates, leak tests, recharges and drains and injects oil back into the system.

Cordless impact wrenches Dewalt announces two new 20V MAX* 1/2 in.

Mid-Range Impact Wrenches (DCF894 and DCF894H).

Dewalt says each tool achieves 330 ft.-lb. of maximum torque, 0-3,100 impacts per minute, and no-load speeds from 0-900 and 0-2,000 RPM in two mode settings (low and high) designed for use in a wide variety of applications.

The wrenches also feature Precision Wrench Control that helps sense when a bolt is getting tight and pauses before impacting to help avoid over-torque. In reverse, Dewalt says Precision Wrench Control regulates how quickly a nut or bolt is removed, helping to prevent run-off.

The new wrench will come standard with a three-year limited warranty, one-year free service contract and 90-day money-back guarantee, the company says.

W W W . T R U C K PA R T S A N D S E R V I C E . C O M

Heavy-duty diagnostic tool Bosch introduces its new 3823 ESI[truck]Pro heavy-duty diagnostic tool.

The 3823 features the most heavy-duty vehicle coverage in its price range to scan, diagnose, troubleshoot and repair trucks faster, Bosch says.

It includes OEM-specific coverage, manual DPF regeneration capabilities, component actuations and actuation tests.

Additionally, Bosch says the new diagnostic tool covers all major medium- and heavy-duty truck, engine, transmission, and brake system combinations with diagnostics, component actuations, special tests and automatic module identification for Class 6-8 trucks.

Engine gasket line MAHLE Aftermarket has unveiled a new line of MAHLE Performance gaskets for high-performance engines.

The line initially covers select gaskets for the most popular engines modified for increased output. In addition to head gaskets, MAHLE says the new line includes intake and exhaust gaskets for many popular applications, also using the very latest technologies.

Spiral wrap for air, electrical assemblies Phillips Industries introduces spiral wrap products that can be used for replacing old spiral wrap or making new combination air and electrical assemblies.

The Phillips 3-in-1 and 4-in-1 assemblies, which combine straight air and electrical cables, have become popular because they keep cables organized and shielded from damage, the company says. Phillips Industries is therefore offering pre-cut spiral wrap lengths of 8 and 10 ft. for these combination assemblies that need replacement wrapping, or for creating new combination assemblies, the company says.

J a n u a r y 2 0 1 8 | T R U C K PA R T S & S E R V I C E

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Marketplace

Lighter weight fifth wheel Fontaine Fifth Wheel introduces the Fontaine 6NWB. According to Fontaine, 6NWB features the light-weight 6000 NoSlack top plate mounted to the light-weight Fontaine NWB sliding bracket. The net result is about 60 lb. lighter than the competition, the company says, plus it features the added benefit of Fontaine’s No-Slack technology so the lock automatically self-adjusts to trailer kingpin variances for a smoother ride, lower maintenance costs and longer component life.

Fontaine says the 6NWB is rated at 50,000 lb. vertical load with a drawbar pull rating of 150,000 lb.

Off The Line Spotlighting a new OEM innovation

150-amp alternator

Tesla debuts Class 8 tractor Tesla has debuted its forthcoming electric semi, scheduled to enter the market in 2019.

Promising a range of up to 500 miles at maximum weight and highway speed, the company says the tractor consumes less than two kilowatt-hours of energy per mile when fully loaded.

Without a trailer in tow, Tesla Founder Elon Musk says the truck features a five second 0-60 time, versus about 15 seconds for a comparable diesel truck. At a full-load

30

of 80,000 lb., he says the electric truck can hit the 60 mph mark in 20 seconds, about a third of the time of a diesel truck, and adds the truck can climb a 5 percent grade at a steady 65 mph. Most diesel Class 8s, he says, would top out around 45 mph on the same grade.

“We wanted a vehicle that feels incredible,” Musk says, “that accelerates like nothing else.”

The company is currently accepting reservations for $5,000 per truck with production set for 2019.

T R U C K PA R T S & S E R V I C E | J a n u a r y 2 0 1 8

Prestolite Electric has launched the AVi168, a new 24V, 150-amp alternator from LeeceNeville Heavy Duty Systems.

At a weight of only 29 lb. and offering at least 40 more amps at engine idle over other models, the AVi168 drop-in replacement alternator offers the best power-to-weight ratio in its class. Also available from Prestolite is the AVi168W, a battery-less variation that is ideal for use in many applications, the company says.

Wire connection joint Diddco, LLC, introduces a new wire connection product that can connect up two to six wires together in one joint.

Built for the trucking industry, this wire connection product may be used wherever wires need to be connected. All materials are American made, completely water, chemical and salt resistant, and made of 316 SS and plastic that can be used inside or outside, the company says.

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Ad Index Company

Contact Info

Automann

Page

Company

Contact Info

Page

automann.com

BC

Midwest Truck & Auto Parts, Inc

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daytonparts.com

21

Midwest Truck & Auto Parts, Inc

worldamerican.com

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roadranger.com/genuine

3

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19

Firestone Industrial Parts

firestoneip.com

17

S&S Truck Parts

Great American Trucking Show

gatsonline.com

27

SAF Holland

Memo Parts

memoparts.com

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Dayton Parts EATON

Meritor Mach Truck Parts

ProMiles

sandstruck.com

IBC

safholland.us

11

directequipmentsupply.com

31

meritorpartsxpress.com

31

Classifieds

machtruckparts.com

IFC

Meritor, Inc.

meritordrivelines.com

15

Direct Equipment

Meritor, Inc.

meritorpartsxpress.com

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Meritor, Inc.

This advertisers’ index is a service to readers. Although every effort is made to maintain accuracy, Truck Parts & Service cannot assume responsibility for errors or omissions.

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