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Business Weekly – Intermodal innovators

Tuesday, June 4, 2013BusinessWeekly_June0413_IntermodalInnovators

Reitnouer Inc., maker of aluminum flatbed trailers, switches back to steel for shipping by truck or train

By Erin Negley
Reading Eagle

A welder takes care of some subassembly. Previously, all Reitnouer products were bolted.
From the outside, the nondescript industrial building off Tuckerton Road in Muhlenberg Township looks like just another warehouse.

Inside, though, it crackles with activity. Welders fuse raw steel beams together, sparks flying, and then add aluminum floors, hydraulic arms and lots of reflective tape.

The bright blue containers are a huge departure for Reitnouer Inc., one of the largest manufacturers of bolted, all-aluminum, flatbed trailers in North America.

Thirty years ago, Bud Reitnouer set out to make a new flatbed trailer and created a niche market with a product that was lighter than steel and stronger than welded aluminum. This new container, however, is completely different: welded, steel and good for rail, ship and truck transportation, what the shipping geeks call intermodal.

Yes, the rail containers are a switch, but Reitnouer is excited about the new venture with Raildecks Intermodal, a Canadian equipment supplier. It takes him back to the sense of finding something new that he had when he launched the company 30 years ago.

“It’s a better design than anything that’s out there, and the market’s in its infancy, just like it was with aluminum flatbeds when I started,” Reitnouer said.

Finished folding flatbed train trailers, a new product for Reitnouer and its partners.
Reitnouer had just graduated with a math degree from Bloomsburg University when he started his namesake business in 1983. Traditionally, truck trailers were welded steel. Companies switched to aluminum for a lighter trailer that could handle a heavier load. But the same welding technique was used for the aluminum trailers.

“With the aluminum being heat-treated, when you weld it, you have a significant strength loss and unknown properties,” Reitnouer said. “Where if you bolt it together, mechanically fasten it, you don’t lose those properties. It’s the reason why airplanes and stuff are riveted together and bolted together.”

Inspiration came through the family business. His father, Miles, had started a metal-fabricating business in the family’s Reading row home in 1967. The company, now Dor-Mae Industries, is owned by Reitnouer’s sisters, Mitzi Reitnouer and Pam Houck.

With that tooling experience and equipment, Reitnouer started his business in the same machine shop. As business picked up, he moved production to Hamburg and then built its current headquarters in Muhlenberg Township in the late 1980s.

Transportation companies look for durability and low weight in flatbed trailers, said Bruce Sauer, editor of Trailer Body Builders, a trade publication for companies that produce and sell commercial truck bodies, trailers and truck equipment. While aluminum trailers are still welded, Reitnouer is known for its bolted aluminum trailers.

“That’s one of the things that Bud has pioneered,” Sauer said. “He came up with the bolted design.”

Growing the flatbed niche

Flatbed trailers haul construction supplies, steel pipes and large items that don’t fit into a box trailer.

“It is a large market, because a lot of products that move won’t fit in a normal trailer,” said Jim Runk, president and CEO of the Pennsylvania Motor Truck Association, a trucking trade association based in Camp Hill, Cumberland County.

About 18 percent of tractors haul flatbed trailers the majority of the time, said Ted Scott, director of engineering and technology at the American Trucking Association.

Flatbed trucking is a niche market, but it’s fairly large because its serves large sectors, such as the construction industry.

Brad Stevenson, assembly supervisor, left, and owner Bud Reitnouer in the company’s plant.

Without any special permits, tractor-trailers can’t weigh more than 80,000 pounds, trailer and payload combined. Buying an aluminum trailer is usually more expensive than steel, but it’s lighter, said Larry Gross, president of Gross Transportation Consulting Inc., Mahwah, N.J., which follows the freight and train transportation sectors.

“You can make more money with a lighter piece of equipment because it can carry more,” he said.

At first, Reitnouer had to teach trucking companies and truck owner-operators the benefits of his new bolted aluminum trailer. In addition to the weight and the strength, it’s easier to repair a bolted trailer, he said. The business grew through word of mouth, first with sales from owner-operators and then fleet trucking companies, including Prime Inc. in Mississippi and Anderson Trucking Service Inc. in Minnesota.

By 2000, with no advertising or extra sales staff, the company had grown to handle a significant portion of the East Coast market plus sales across the country. Reitnouer’s children were old enough, so he decided to take the company to the next level.

He hired two salesmen and set a few lofty goals: Partner with a dealer in each state to get into new areas; limit warranty returns to less than half of 1 percent to measure how the trailers hold up; and secure 98 percent repeat business to show you’re meeting customer needs.

The company also tailored trailers to the different needs of regions: heavier capacities in the North and building materials in the South and Midwest.

These moves and a focus on customer service grew sales from $30 million in 2000 to $120 million in 2006.

“You just treat the customer like I want to be treated,” Reitnouer said. “So they stay with you. And if you build a really good product that doesn’t have a lot of problems, you don’t need a lot of sales guys.”

One of the biggest challenges for a flatbed trailer manufacturer is the volatility of the market. Depending on economic forecasts, suppliers and manufacturers will increase or decrease orders quickly. And companies like Reitnouer need to move fast as the supply pipeline empties or fills.

It’s not uncommon for business to shift 30 to 40 percent, but Reitnouer called this last downturn a depression because business dropped 90 percent. The company had to lay off employees, but staff now is back to pre-recession levels.

The company was able to handle past bumps by growing its market share. But as one of the larger suppliers, it has become more difficult to grow.

Timing is right for intermodal

That’s why this new venture comes at a perfect time for Reitnouer. Boyd Intermodal, an Alabama company, and Raildecks partnered with the company to manufacture a new flatbed that would allow industrial freight, like steel beams and aluminum coils, to be transported by rail.

The intermodal market moves freight through two types of transport, such as ship and rail or rail and truck. Intermodal transport moves freight off the road and can save money over long distance, but delivery can take longer.

The Raildecks containers are interesting, said Gross, the transportation consultant, and they look to be the first to open intermodal transportation to flatbed.

“Intermodal has become a fast-growing piece of the transportation world and it’s growing faster than truck,” he said. “There hasn’t really been a product that gives access to flatbed for intermodal.”

Two containers can be stacked or combined with a regular chassis container. On the return trip, the containers fold and can be stacked four high.

Raildecks wanted a company that had a solid reputation and experience with aluminum flatbeds, said Rick Jocson, company CEO. Customers referred him to Reitnouer, which they called an innovative company.

Reitnouer said he’s excited about this new container, which could grow to about a quarter of business with in three years, with even more potential overseas.

It’s even been spotted close to home. Assembly supervisor Brad Stevenson saw one filled with steel tubing at local train crossing.

The company leased a 78,000-square-foot building on nearby Tuckerton Road and started making the new containers in January. Muhlenberg staff helped streamline the permitting process in about four months.

“Without them being so helpful, we couldn’t have put this together,” Reitnouer said.

Contact Erin Negley: 610-371-5047 or enegley@readingeagle.com.