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What’s happening in the trailer market?

Sept. 16, 2016

A strong van trailer segment is helping the trailer industry outperform the truck market, according to Don Ake, vice-president, commercial vehicles for FTR. 

Speaking at the FTR Transportation Conference in Indianapolis, Ake said he expects trailer sales eventually to weaken further and more closely align with tractor sales, which is typical. Vocational trailers already have done so.  Ake recommended that people in the trailer business pay close attention to Class 8 truck sales, particularly those selling vocational trailers.

Ake gave his assessment of what is happening in the trailer market, segment by segment:

Dry tanks:  the market is still devastated. Tank trailer inventories are too high, and industrial markets are week. Because of the energy crash, too many newer units parked or available for sale.

Liquid tanks are being hurt by energy markets. The chemical market is below expectations. Food markets are descent, but not enough to lift the market.

Lowbeds, particularly those targeted for energy markets, are weak. Construction market is not growing fast enough to help, and the industrial market is flat.  The market is better for medium-duty low beds, but Ake was not sure why.

Flatbeds: Backlogs are down 56% vs. last year, dealer inventories are bloated, and trade-in values are down.  Enough are out there to handle current freight demand.  Aluminum flats doing better than steel

Dumps:  The supply of trailers has caught up with demand.  Revenues of fleets are not increasing. 

Dry Vans:  Orders have slumped but backlogs are still better than 2014.  Cancellations are elevated because slushy backlog.  Big fleets are still ordering trailers, but smaller fleets are pulling back.  Dedicated/private fleets are placing stronger orders, and there is still some pent up demand.  Ake said this is a correction, not a collapse. Pricing pressures are due to tighter capacity. Demand doesn't seem to be there, but if prices get low enough, fleets may buy more.

• Reefers:  Refrigerated vans are facing stricter requirements, leading to a potential need for them to be replaced sooner.  Trends in the refrigerated market include increased CARB standard enforcement, consumer preferences in food quality and variety, more refrigerated food warehouses, and more products being shipped at room temperature.