Depressed freight levels combined with excess capacity and the ability to extend equipment life should translate into continued reduced demand for dry van trailers in 2010, though sales should pick up over the levels experienced in 2009, according to interviews with industry experts and OEMs.
“The same dynamics affecting the Class 8 tractor market are affecting the trailer market – there’s no freight, the industry is still plagued with excess capacity,” Eric Starks, president of research firm FTR Associates, told FleetOwner.
FTR estimated earlier this year that only 70,000 semi trailers are expected to be built in 2009; a rate that will improve only modestly to 89,000 units in 2010. “Even with the economy starting to turn around a little bit, those are two huge problems to deal with,” said Starks. “It’s going to take several years to work through the glut of existing equipment out there.”
As a result, while the outlook for trailer sales in 2010 is somewhat better than 2009, that is not saying much, explained Stuart James, vp-sales at Hyundai Translead. “A return to anything approaching a ‘normal’ market volume is still many months away,” he told FleetOwner.
Craig Bennett, senior vp-sales & marketing for Utility Trailer Manufacturing Co., is slightly more optimistic concerning trailer demand next year. He expects a 5% to 10% bump up in sales volume, as demand for lighter-weight designs continue to grow and fleets can put off replacing current equipment only so long.
“Fleets can’t postpone new equipment purchases indefinitely,” Bennett told FleetOwner. “The dry van market is tough right now, no doubt, but there continues to be a growing need for strong yet lightweight equipment. This is a direct result of emissions regulations. As tractors continue to get heavier with the addition of emission control systems, trailers need to become lighter, so the vehicle can haul roughly the same payload.”
Of greater near-term concern is the impact the recession is having on the suppliers of critical trailer components, Bennett said. “The supplier base these days is very much a concern – it’s become very unstable due to the economic conditions,” he explained. “That’s why picking your partner at the OEM level today is much more critical – in this market environment, picking the right supplier is a full-time job.”