Being the business end of every rig makes trailers less than sexy. They spend their working days getting dragged around. But when times are tough they can be a very exciting leading indicator.
According to the 4th-quarter “Fleet Sentiment Report” published by Columbus, OH-based consulting firm CK Marketing & Communications, 70% of the fleets polled indicated they plan to purchase trailers sometime in the next six months, for both replacement (57%) and expansion (43%) purposes.
CK Marketing president Chris Kemmer says that figure is “significantly up from the 48%” that reported planning to do so in the previous quarter and includes a “strong demand” (31%) for refrigerated units.
We can only surmise that some of the fleets surveyed feel comfortable about no longer holding off on replacing aging equipment while others — shocking as it may sound — must be readying to expand their fleets to handle more business, especially reefer freight.
What's more, 67% of those polled are planning to purchase, of all things, power units over the same time frame. The majority (72%) of those are being designated replacement units. Nevertheless, that is another indicator that truck fleets are willing to start spending again in a big way.
The “Fleet Sentiment Report” is conducted with over 25 fleets. In the mix are private and for-hire fleets representing truckload, LTL and various vocational operations.
The report notes that only 22% (down a bit from 25% last quarter) plan to add new features to their power units.
Items cited cover an eclectic range of options, including tire-pressure systems, auxiliary HVAC systems, automatic transmissions with retarders and powered right-hand mirrors.
Perhaps those choices reflect a greater openness on the part of fleets towards applying new technologies to address various equipment issues.
More fleets (25%) say they'll add new features to trailers than did last quarter (18%). Choices noted here include air-ride suspensions, on-board scales and tire-pressure systems. As with tractors, these selections suggest a willingness to put technology to work even when it is not required.
This July Kemmer started asking the fleets, “As things stand today, will you avoid purchasing new trucks in 2007 because of the new emissions regulations and engine technology to meet those regulations?”
She reports that this quarter 26% said “yes” compared to 30% in the previous quarter. And this time out, 65% said they were “undecided,” up from 43% the quarter before.
But while Kemmer's research points to fleets gearing up to buy new, Harry Howard, ArvinMeritor's vp & gm-commercial vehicle aftermarket, reminds us the slowdown in production and sale of new commercial vehicles over the past few years means the industry fleet is aging overall.
In a recent “Issues & Trends” white paper he authored, Howard argues that the record surplus of used trucks in '01 and '02 has “all but disappeared” and that in turn “will increase the demand for parts consumption, as the component life cycles mature.”
Fleet managers and industry suppliers alike can only hope the positive trends suggested by Kemmer's research are just the start of something bigger. Maybe even a full-blown recovery for trucking?
We'll keep you posted. In the meantime, think big. After all, a lot can be said for the power of positive thinking.
For more information on the “Fleet Sentiment Report,” go to www.ckkemmercomm.com.