Wabash National is expanding its Trailers as a Service (TaaS) initiative three years after its 2022 launch, splitting it into two distinct products and creating a more short-term offering called Taas Pools.
Mike Petit, chief growth officer at the company known primarily as a trailer manufacturer, said in an interview with FreightWaves that the legacy TaaS product will be known as TaaS Plus.
But it is TaaS Pools that is the new product under the TaaS banner.
As Petit explained the TaaS value proposition, TaaS as opposed to traditional leasing involves “a lot more embedded management and maintenance of the trailer.”
“We will handle the uptime, make sure it gets fixed, make sure the damage gets segregated and charged back correctly,” Petit said. “So we do a lot of the things that you wouldn’t get in a lease where you have the asset and it’s on you to make sure it gets maintained.”
What TaaS Pools adds to that, Petit said, will be trailer assets situated at different locations around the country. They can be accessed by TaaS Pools customers that might need that capacity for a shorter period of time that would not otherwise trigger a longer-term need to get a trailer either through TaasPlus or a more traditional lease.
Hot business: Parts & Service
The creation of TaaS and subsequently TaaS Pools are part of a series of changes in the company that include the creation of the Parts & Services segment, which Wabash management has touted as a growth engine for Wabash which otherwise has suffered alongside so many others as the freight recession drags on.
In the company’s second quarter conference call in July, CEO Brent Yeagey, among other praise for Parts & Services’ performance, said the segment “is helping bring greater balance and resilience to the broader Wabash portfolio as we scale.”
Petit said the establishment of the Parts & Services segment and the network of locations that went along with “are support functions for TaaS, because TaaS is bundling all those particular offerings so that trailers can get service and get parts.”
The TaaS offering only has about 1,000 to 1,200 units on the road, according to Petit. “We’ve been trying to crawl, walk and then run with the expansion of TaaS,” he said. “Obviously the market has been weak but we’re also trying to make sure we have the capabilities and the right level of talent.”
TaaS Pools, Petit said, is “going through a proof of concept as we’re in the field.” There are pools of what he called “10ish units” in some large metropolitan areas waiting to be utilized by TaaS Pools customers. “And as we get market adoption, we’ll grow from there,” he added.
The TrailerHawk role
One aspect of that push for talent was the acquisition in February of technology company TrailerHawk. TaaS runs on that platform. When the acquisition was made, Wabash said in its prepared statement that owning TrailerHawk “(strengthens) Wabash’s Trailers as a Service offering, empowering logistics providers to achieve greater freight security, visibility and operational efficiency.”
With TrailerHawk in the fold, Petit said Wabash “now has an embedded set of professionals that can help us scale this initiative.” He predicted that next year will be the time when the scaling of the TaaS offerings will accelerate.
“I think we could see total TaaS units in a TaaS pool in the 10,000 to 20,000 range,” Petit said. “How long it takes to get there will depend on us making sure we have the right product mix and the right group solving the right customer problem.”
3PLs a market for pools
Petit identified 3PL companies as a logical market for the TaaS Pool offering. What would be available to customers, Petit said, would be a pool of “on-demand assets” that might sit on a shipper’s lot, ready to be utilized when a customer needs it.
TaaS Plus, the initial offering, is “more of a fixed monthly fee that you would enter into, so you always have that asset,” Petit said. “The pool is more of an on-demand usage asset.”
He further contrasted when a customer might use TaaS Pools versus Taas Plus.
The former user might turn to TaaS Pools “if it’s a lane that needs to ramp up or ramp down for whatever reason,” Petit said. “It’s much more flexible.”
But “if you know you’re going to move back and forth between two cities regularly, that would be a TaaS Plus move,” Petit said.
Wabash along with other companies connected to truckload and LTL markets has stark numbers that show the headwinds it has encountered.
For example, Wabash in the second quarter reported trailers shipments of 8,640. A year earlier it was 9,245.
Wabash’s stock price has suffered along with the decline in shipments. On December 11, Wabash (NYSE: WNC) hit a 52-week high of $20.63. It sunk to a 52-week low of $6.78 on April 30. It reached $11.73 on September 17 but closed Thursday at $8.90.
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