Truck cover and tarp markets pick up speed
Renewed demand for these niche markets helps support growth
Specialty Fabrics Review | August 2012
By Holly O’Dell
Like many industries, the trucking industry has had to deal with the effects of the slow economy. American Trucking Association recent statistics indicate that truck tonnage fell just 0.7 percent in May 2012 after dropping 1.1 percent in April. The numbers, however, show improvement over the same period in 2011, and that could spell good news for an important segment of the roadway freight market: truck covers and tarps.
Fabric suppliers and manufacturers of load covering systems have weathered the economic storm, responding to renewed demand and finding niche markets to support growth.
End users of truck load covers have been careful with expenditures, which led to belt-tightening throughout the supply chain. However, BondCote Corp. of Pulaski, Va., a supplier of vinyl-coated polyester for truck tarps, has seen improvement since late 2011, noting that users had been repairing their tarps instead of buying new ones through the recession.
“I’m not sure if it’s because the economy is improving that much or the fact that users finally have to buy new tarps. I think it’s a little of both,” says Eric Brown, BondCote’s national sales manager. “Also, the change in EPA emission regulations is driving higher new truck sales before the effective date, and new trailer sales are following suit.”
Economic challenges have put price pressure on the industry, too. “The tarp market is very commodity based,” Brown notes. “Everything is all about price, so all of the fabric suppliers have been forced to cut to the bone to reduce costs.”
Despite the economic downturn, some tarp suppliers and manufacturers report improving conditions. Dean Hammond, owner of Cardinal Canvas Products in Sioux Falls, S.D., admits to a difficult 2009, but the news has been good ever since. “The market came back in 2010, and 2011 was excellent for us,” he says, adding that the demand is so great that Cardinal Canvas has a backlog of orders for load tarps. “It all depends on how busy the truckers are, and they have been busy.”
As a distributor of tarp fabrics throughout North America, Atizapán, Mexico-based Grupo Piessa also has noticed a shift among its customers. “We can see the purchasing volume has decreased, but customers have been adjusting the orders, buying products with less weight or changing the specs in order to get better prices,” says Yadira Moreno, export manager for Grupo Piessa.
A decrease in tarp demand has some companies rethinking how they do business. “Industrywide, when you have these sorts of challenges, it becomes tougher for some companies to maintain their size,” says Ken Harp, president of Harp’s Tarps in Tucker, Ga. “In our case, we have had to work harder to grow. We are in an extremely competitive industry, and [a poor economy] forces you to become more efficient and stronger.”
Another hurdle comes in the form of end users’ expectations. “A lot of times the end users don’t always see the value in higher quality or the total cost of ownership over the long run of the product,” Harp adds. In particular, a slowdown in construction has taken its toll on the truck cover market.
“We are construction driven because trucks that haul building debris need tarps,” notes Michael Ciferri Jr., vice president and product manager for Donovan Enterprises in Stuart, Fla., a manufacturer of dump truck tarp systems and trailer tarp systems. If the construction industry experienced another big downturn, Ciferri says they would certainly feel it, but for Donovan, that scene is fading in the rearview mirror. “The last couple of years we have seen some rather steady growth,” he says.
Tarp and truck cover manufacturers have diversified their offerings—sometimes in unexpected market areas. Harp’s Tarps, for example, has completed custom projects unrelated to the freight industry. The company created a huge tarp bladder that was inserted into a sunken ship off the coast of Florida, then inflated with air to raise the vessel. The fabricator also has made octagons and hexagons for mats used in mixed martial arts fighting.
“When you get these new niche markets, you have higher margins,” Harp says, “and it is fun doing something different from squares and rectangles all day.”
Ciferri also recognizes the importance of diversification. “When you have a bunch of time and you aren’t selling a lot of truck tarps, you have got to find something else to do,” he says, but Donovan Enterprises did what it had to do to survive, particularly in the especially lean years of 2007–2009.
“Do I want to go out and sell sandbags today? No. But have I gone out and sold sandbags for a year? Yes. You are making quarters, but you have volume, and if you have the time and the distribution, it’s important to look at such opportunities,” he says.
Donovan Enterprises also has its eyes on worldwide growth. “International markets have been strong for us,” Ciferri notes. The company has a division in the United Kingdom and a master distributor in France, and it has sold product into Mexico, Australia and South Africa.
“Some countries are much more difficult to work in than others because they have all these requirements, and they think it should be easy to meet all of them,” he adds. “Then there are some countries that just want to cover the load and keep rocks from falling out.”
Although there haven’t been monumental changes in the composition of tarp fabrics, some suppliers are experimenting with different components. “We have been looking for new and better substrates that allow us to increase the resistance of our materials, like fabrics 14 x 14 1000 D and heavier,” says Piessa’s Moreno. “Also, we have developed with our suppliers UV-resistance additives and fire-retardant additives to accomplish the highest levels of quality requested by international regulations. We have produced some tarps that are phthalate-free to meet international regulations, too.”
BondCote’s Brown notes, “We can make a superior truck tarp fabric if the industry would pay for it, but once again, it is all about price. It very much limits what you can do to provide superior, innovative fabrics when the market will not pay for them.”
As long as government bodies continue to demand regulations for truck covering systems, suppliers and end product manufacturers will always have a place in the freight industry. “Load covering is becoming a bigger concern to shippers and transport companies on a regular basis,” says Brian Petelka, president of Load Covering Solutions Ltd. in Burlington, Ont., Canada, which also has U.S. offices.
“To be able to cover the loads so that they are weather protected and doing it all safely at ground level is a growing need,” Petelka says.