Trailer shipments up 12%, EPA Inc reports

Trailer manufacturers shifted into a higher gear in the second quarter, according to figures compiled by Economic Planning Associates Inc (EPA Inc).

After losing a little momentum in the first three months of 2005, trailer shipments bounced back in the second quarter. The industry shipped 63,400 trailers between April and the end of June, 12.0% ahead of the similar quarter of last year, according to EPA Inc.

In addition to topping year-earlier levels, second quarter shipments represented a 7.3% advance from the opening quarter, compared with the 2.3% quarterly gain manufacturers posted in the first quarter.

Gains in trailer demand were widespread. Van and non-van shipments scored impressive gains both on a quarter-to-quarter basis as well as in year-over-year performances.

Second quarter total van shipments were running 9.6% ahead of last year’s second quarter. Dry freight vans were up 9.5% while insulated units were 8.9% higher than the year ago level. “All other” vans including drop frames, livestock, and open tops chalked up a 12.5% gain over last year.

Continued strong activities in the construction markets, the revival in durable goods manufacturing, a rebound in capital goods demand, and increasingly stringent regulations concerning the movement of industrial liquids and gases, all served to stimulate demand for a variety of trailers in the non-van segment which saw second quarter shipments rise 19.6% over the similar period of last year.

Year-over-year double-digit gains were recorded in the tank, platform, dump, and low bed categories. Even the smaller bulk and “all other” segments scored impressive gains last quarter.

“While we are concerned about the high levels of oil prices, the movement of some traffic from truck to rail, the persistent shortage of drivers, and continued actions by the Federal Reserve to hike interest rates, we remain constructive on the outlook for trailer demand this year and next,” says EPA Inc’s Peter Toja. “While the fed continues to take preemptive measures to keep inflation in check, interest rates remain relatively low from a historic perspective which should keep consumer and business spending on an uptrend this year and next. The escalation in oil prices to date is worrisome but we anticipate some easing in the months ahead.”

Major improvements in trucking revenues and profits, along with still relatively low interest rates, and moderate inflation, will make purchasing trucks and trailers a little easier.

“Manufacturing activities are advancing, and we look for further gains as consumers continue to note improvements in job availability and income, which will translate into increased spending,” Toja says. “Business purchases are also on the rise, and demand for a variety of capital goods will stimulate production activities among the durable goods industries.”

Toja points out that the construction markets are strong throughout all major categories—residential, commercial, industrial, and public. Continued high levels of activities during the next two years will support demand for a variety of trailers such as dumps, flats, and low beds.

Liquid markets such as food, beverage, fertilizers, chemicals, and gases are showing good growth, Toja says.

Intermodal traffic surged 10.4% last year. “With trucking capacity limited, a significant amount of over-the-road traffic moved into rail as witnessed by the 11.5% hike in TOFC loadings in 2004,” Toja says.

Through the first 26 weeks of this year ended July 2, container movements by rail were running 8.3% ahead of the 2004 pace. Trailer haulings by rail were up only 0.5% during this same period, resulting in a 7.5% hike in total intermodal haulings thus far in 2005.

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