Madison’s Idle Free Systems sees rapid growth as trucking industry charges full-speed ahead
It may be all downhill from here for Idle Free Systems — at least as far as its rate of growth is concerned. But that doesn’t mean that the Madison-based manufacturer of energy-saving auxiliary power units (APUs) is worried. On the contrary, the company’s future has never looked brighter.
Idle Free, whose APUs lower the energy consumption and operating costs of commercial trucks and school buses, recently announced that it saw remarkable year-over-year growth in 2012 of 250%, in the process doubling the size of its manufacturing facility and increasing its workforce by 30%.
It was such a banner year for Idle Free Systems, it’s unlikely the company will see its like again for many years, if ever. According to company CEO Robert Hopton, Idle Free is projecting around 35% year-over-year growth for the next three years — a more than respectable rate of growth but nothing like the breakthrough numbers the company registered in 2012.
“Now the base is significantly bigger, so we had a good year in 2010 — 100% growth in 2010 — 250% in 2012, so we’re at that point where we’re still in a high-growth mode,” said Hopton, “but [we’re at the point where] you have to start looking at more realistic year-on-year growth, and so we’re projecting that we will continue to grow over the next three years somewhere around 35% year over year.”
Big opportunities in big rigs
The company is part of a fairly crowded industry, though one that is growing rapidly as trucking companies see the potential savings and as anti-idling laws continue to take hold across the country. The market for over-the-road APUs —which allow drivers of big rigs to keep their A/C, heat, and other systems running without wasting energy by idling their trucks — is about $400 million a year. Idle Free has some big fish to contend with in the marketplace, but it touts the efficiency of its electric APU as a key advantage.
Idle Free Systems’ products are distinct first from diesel APUs, which have been around for about 15 years and still contend in the marketplace, and battery-powered APUs, which run on direct current.
“We’re an AC, an alternating current, system, which is a more expensive system but a much more robust and efficient system,” said Hopton. “So our system is a 120-volt system, not a 12-volt DC system. … A 120-volt system is much more efficient, and so we’re able to get better output and longer run time on one charge of our batteries versus our close-in competitors, which are the other battery-based APUs on the market.”
Idle Free Systems was originally the brainchild of Robert Jordan, a former truck driver who spent approximately 6,200 hours sleeping in his truck over a 20-year career. Jordan knew the comforts that idling provided, but he also knew how wasteful it was. That’s when Jordan decided to engineer a solution not just for himself but for his fellow drivers as well.
In 2003, Jordan sold his first APU for drivers pulling refrigerated trailers, and in 2007, Idle Free introduced an electric APU that worked with trucks pulling a dry van, storing energy produced by the alternator when the engine was on.
It looked like a clear road ahead for a company that appeared to have nothing but upside, but then the Great Recession put the brakes on anything transportation-related, forcing Hopton, who had just been hired, to rethink his approach.
“In 2008, we realized that the economy was very poor, new truck sales had come to a screeching halt, nobody was investing in new equipment … and so what we did was changed strategy and focused the company on the development of our next-generation system, which is what we’re now offering in the market,” said Hopton. “And that system, design, configuration, performance specs, we finished that out, proved it out by the end of 2009, so we really began selling in earnest for all practical purposes in 2010.”
The company’s current success is not merely attributable to the thawing of a once-frozen economy, however. According to Hopton, Idle Free’s APUs offer a robust return on investment.
“The EPA estimates that an over-the-road truck, if they idle that truck in order for the driver to have heat, air conditioning, and electrical power and so forth, the annual cost associated with that would be about $12,000 because of the diesel fuel consumed, etc.,” said Hopton. “If you look at our equipment, generally on average we use $9,000 as the install price for our technology, which means you would have an ROI of less than a year when you make the $9,000 capital investment in our type of technology. So fleets are very, very interested in this when it works, which ours does, because there’s significant cost savings by not idling and using an Idle Free APU instead.”
Of course, while Idle Free continues to grow at a torrid pace, it remains a small company, and that presents challenges.
“In a smaller company — we have fewer than 50 employees, but 10 open positions that I’m actively recruiting to fill — people wear many different hats, so it’s a credit to the team that they can work quickly, work effectively, work smartly to handle a lot of different responsibilities, so we are able to take advantage of the opportunities in the marketplace. And to be able to sustain that as we grow is all about the leadership that I establish here in terms of developing a culture for the company — fast-paced, high-growth, everybody getting involved and putting the best minds to work day in an day out on a project, task, whatever it may be.
“And so when we recruit, yes, we look for core skill sets, we look for a particular background, but a big part of it for me is fit. Are they capable, are they ready, and are they willing to come in, roll up their shirtsleeves, and regardless of what one’s title is on the business card, to get involved in many different aspects of a business in order to drive success?”
Today, the Idle Free electric APU is the recommended idle-elimination system for Mack Trucks, which has helped launch the company on its current upward trajectory. That said, the company is hardly content to sit on its hands.
“We’re always looking at ways to continue to improve and enhance our system, and so as a smaller company, we’re very nimble,” said Hopton. “We move very quickly, and if we find or identify a better way to do something with our system that we think will improve the performance, the durability, the longevity of the system, we fast-adapt, and so we always hope to stay ahead of our competition by not staying stagnant relative to product development and product enhancements.”
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