Truck squats because the springs are designed to give a car like ride and are not very stiff.
Go buy a set of tufftruck varrable rate springs, if yo want to keep that OEM ride. They will essentially give you 50% more payload ability.
IOf yo do not care to keep that smooth as silk ride, then get teh constant rate spings, 1211 I think, and truck hardly budge unless its serious tongue weight.
Search forum for tufftruck and see all the love folks have for those springs.
Adding airbags essentially removes the springs from teh process, so to Timbrens or bump stops.
Basically, by taking away the springs, you have really stiffened your ride, which is not good when heavily loaded, though a 1.2 ton shoudl never be in that heavily loaded a situation ti si still not good for truck or towed vehicle. With bags or bump stops, springs no longer absorb the weight and provide cushion. so the occurances that the springs would smooth out are now directly transfered to your axle and frame. Not only does your ride suffer when air bags or bump stops are engaged, but so too does the truck.
the process is:
Upgrade springs,
upgrade tires, sidewalls specifically
Upgrade shocks
add air bags if needed.
If none of those gets the job done, you need a 3/4 ton for the job you are trying to do.