Innovative new convertible trailer could mean huge reduction in empty running

This article first appeared in the July 2014 issue of Automotive Supply Chain.

Some innovations seem so sane and sensible that you find yourself wondering why someone hadn’t thought of them before. How about a car transporter that converts into a step-deck freight carrier so it never runs empty? Sam Ogle spoke to the man who developed the concept.

In late 1996, Bill Pawluk was operating his vehicle transportation company out of Alberta, Canada hauling cars to the United States. Although the fleet of 20 trucks was kept busy on runs into the US, backhauls with vehicles were hard to come by and Pawluk calculated that his trucks were running empty on 37% of their mileage.

Unlike most traditional car hauliers who accept empty running as an occupational hazard of the business, Pawluk decided to do something about it. “We asked ourselves if we could harness those empty miles,” he recounts. “So we got our engineering team together and designed a system whereby we converted from a fully functional auto carrier hauling multiples of seven, eight, nine or ten units to a step-deck trailer. Once you have a step-deck trailer configuration, you now have all kinds of additional freight options. We were able to reduce our empty running from 37% of total miles to 2% within one year. That’s how we paid for the entire development programme.

“We felt that this idea didn’t necessarily have to be restricted to our use but that it was something the entire industry could utilise. Our first trailer was on the road by the end of 1999 and, today, we have a convertible auto trailer that is as good as any auto trailer out there in the market worldwide, but which can still reconfigure into a usable step-deck or flat-deck trailer.” A private manufacturing facility in British Columbia built the first convertible trailer to the design specifications that Pawluk and his team provided. The original design was very close to what it is today. Essentially it is identical, although there have been some functionality improvements over time. “The very first trailer we had made money,” smiled Pawluk. “Commercialising this product has been a lengthy process,” he explained. “When we originally started, we built these trailers for ourselves and, as soon as we hit the road, we found that we were followed into truck stops by people who would pull up alongside to look at the equipment. We were getting phone calls asking where the trailer could be bought. At that point, I realised that this was a patentable concept.

“We filed for patents in the US and other parts of the world and were successful in obtaining them. It is very important for us to protect the intellectual property. We invested a lot of money into this concept and we felt that a good way to recover some of that research and development funding would be through the patent process and the full commercialisation of the product. We have since decided to get out of the transportation industry and market the product worldwide.

We felt that, if we were going to be serious about this we had to take ourselves out of the haulage business completely, otherwise our customers would feel that we were competitors. There is a conflict of interest in serving two masters.”

Bill Pawluk is now CEO of Convertible Trailer Manufacturing, headquartered in Calgary, Alberta, Canada and has entered into a JV partnership with the French Groupe Lohr which is the largest auto carrier manufacturer in the world. “Their expertise is second to none,” said Pawluk. “We introduced our concept to them and they readily accepted it. We wanted to tap into their expertise and allow them to tailor the trailer according to their experience while still utilising our concept.”

So who are the potential buyers of CTM’s ground-breaking equipment? “Our customer is anyone in the auto logistics industry, anyone who moves product and not necessarily only the auto customer,” said Pawluk.

“Traditionally, in the automotive industry the freight side has never really interacted with the vehicle side. You have an auto transporting sector and you have the general freight flat-deck transportation sector. We feel that this convertibility is going to allow the mixing of those two sectors and allow the germinating of new business and increased efficiencies. We want to appeal on an industry-wide basis worldwide.”

Whilst the convertible trailer was never originally designed to be a green initiative it has, nonetheless got green written all over it because it is an efficiency-increasing innovation. “If you can better utilise your existing capacity and reduce your CO2 footprint, that must help from an environmental perspective,” said Pawluk.

“We have now developed a model which is called a stinger convertible in North America and a draw-bar in Europe where the tractor has a head ramp so that you can load vehicles onto the tractor itself as well as onto the trailer. For the hi-mount system - in Europe they call it the semi-trailer or articulating model - all the vehicles are strictly on the trailer with nothing on the tractor. The stinger or draw-bar system is more efficient because, typically, it can hold one to one-and-a half more vehicles than an equivalent-sized hi-mount or semi-trailer system. We have tested the stinger and it works, but we have a legislative issue with it in the US. This is the primary reason I have shifted my focus to Europe where there are no legislative barriers as far as an auto carrier converting into a step-deck or flat-deck system is concerned. Nothing which says you can only haul autos on that equipment. As a matter of fact, the transportation authorities in the EU have enthusiastically welcomed this idea.

“The definition of a stinger is that it has a tractor which hauls vehicles on it, three vehicles typically, sometimes four, with the trailer hauling another five or six. Each of these is governed under different legislation in the US. When you convert the trailer you can haul freight on it. On the tractor you can haul wheeled vehicles and truck campers, a little camping unit which goes on the back of a pick-up in North America and resembles a box, but nothing in that legislation says that you can haul general freight. Even though it has no wheels, the truck camper is not classified as freight, it is a truck camper. Right now, we have a lobby under way in the US to get this legislation amended. We have gone to the Federal Highways Board which says that it can’t change the wording or give us the interpretation that we need; it has to go through Congress in the summer or autumn of this year.”

So, what has been the initial reaction to the new trailer? “The reception has been encouraging,” said Pawluk. “Everyone identifies with what we are doing and with our purpose. No-one knows how to adjust their operations to accommodate this innovation yet. Now, we are at the stage where we can sell the product and assist companies to find their backhauls to help make their operations more efficient. “We find that this product is complementary to the existing product lines, although we feel that, in the future, it will eventually overtake the conventional auto carriers,” said Pawluk.

“There will be no reason why anyone should use anything other than a convertible-style auto carrier. Once auto and freight logistics practices include the convertible trailer concept, then the industry will be forever changed to the new, more efficient business model.

“This is why I have been heavily focused on creating a partnership with Lohr Industries. They understand that this is the future and believe that auto carriers cannot remain purely auto carriers because of the empty running factor which is the highest of all transportation sectors. The empty mile factor in new vehicle transportation in North America is 42%. We don’t know what it is in Europe; we expect it to be somewhere less than that but not significantly less. Our aim is to reduce that empty mile factor. The industry standard in general freight for empty miles is between 12% and 17%. The automotive sector is not communicating with the rest of the transportation world. Our aim is to combine inbound and outbound flows and to create a higher efficiency for a convertible trailer by reaching out to the general freight industry.

“Furthermore, once auto logistics starts working with general freight logistics, then auto carrier companies can source their backhauls from anywhere in the general freight sector, making this business model the new standard in general freight transportation logistics worldwide. Convertiblity will benefit all transportation modality companies and consumers alike.” So, how much will the convertible trailers cost compared to conventional transporters? The good news is, marginally more. The even better news is that buyers will be able to write off the cost of this equipment within a year to five years depending on how well they utilise it. “Based on North American numbers, if you cover 10,000 miles a month, 4,000 of which are empty, and if you fill one third of those empty miles, the equipment pays for itself outright in five years,” said Pawluk. “If you buy a conventional piece of equipment, you typically have to pay for it over five years anyway. This pays for itself by the added benefits and the extra business it generates. Many people have tried to solve the problem of empty miles but we feel that we have based our concept on some very strong principles. No-one has ever put in the time, thought and effort that we have into this product.”