34th Annual NTDA Convention gathers in Tucson

TUCSON—The desert served as an appropriate (if not exactly appreciated) location for 35th Annual NTDA Convention, an annual gathering of trailer dealers that this year coincided with the longest market lull in recent memory.

But association members understand trailer cycles, and know from experience the convention is the place to be to find new solutions to industry challenges, and maybe commiserate with some old friends.

Along with an extensive social agenda and just-for-fun activities, the traditional working program featured updates from NTDA leaders, compelling pitches from select suppliers, and a keynote that suggested, basically, anyone who is surprised hasn’t been paying attention.

To wrap it all up, the general session included a chat with ACT Research President and Senior Analyst Ken Vieth, who’d just delivered the firm’s trailer forecast, and NTDA government affairs representative Tim Lynch, senior director at Morgan, Lewis & Bockius LLP. Moderated by TBB Editor-in-Chief Kevin Jones, the discussion touched on the economic outlook, regulatory turmoil, and the evolving role of the trailer industry.

TBB: Ken, we’ve heard commentary suggesting the economy is faring better than anticipated. What is the foundational assessment of the environment for the trailer and trucking sectors?

Vieth: So, as I said in my presentation, tariffs are a drag on an otherwise good economy. Again, corporate profits were good, consumer balance sheets were good coming into this. The data center buildout, the utility buildout—there's a lot to like. What tariffs did was brake-check an otherwise good economy and that caused everybody to downshift. But, once we get past the impact of tariffs, it's still a good economy.

TBB: Tim, the political environment is defined by extreme uncertainty—shutdowns, deregulatory pushes, and policy shifts. How does this instability impact long-term business planning?

Lynch: Coming from Washington DC, you're always asked, ‘so what's going on in Washington?’ And the cynical answer I give is ‘not much good.’ But I can report that the answer today is not anything, with the shutdown. So when folks ask me, ‘Who really has the leverage on this shutdown?’ my answer is, well, the guy that wants to shrink the government. There's no better way to do it: Just shut the government down. But there’s been a number of issues, particularly in the trucking industry. As a matter of fact, hours-of-service regulation, for example: Republican administrations generally allow for a more liberal view of that. In Democratic administrations, the FMCSA was way more restrictive. Business wants certainty—basically they say, 'Look, I can adapt, but I just need to know what the rules are going to be.'

TBB: The specter of regulatory change, especially regarding emissions, poses a significant threat to CV manufacturers. What is the practical concern surrounding rules like the EPA’s Low NOx regulation?

Vieth: One of the challenges, as we look at the EPA's Low NOx regulation, is the stickiness of the regulation and the challenge of getting rid of it. One thought is that the Trump administration will say, ‘well, we can't get rid of the regulation as soon as we'd like, but we're not going to enforce it.’ Well, if you're an engine manufacturer, if you don't sell the engine that the regulation says you have to sell, and another party comes into power in 2028, are they going to say ‘you guys have just spent the last two years violating uh this regulation and you're going to have to pay you know colossal fines.’ So if the Trump administration does something like this, truckers are going to be expecting the old engine and uh the engine manufacturers are going to be like, 'No, tough luck for you.' So, this is going to cost an extra $20,000 in tariffs on a Class 8 truck in 2026. And then we get another $20,000 engine on Class 8 trucks in 2027.

Lynch: Particularly for the supplier community, both in the auto and truck side, it's not like you flip a switch and say, ‘We're going to manufacture this on Monday, then Tuesday we’ve got to manufacture something different. I don't think there's a real appreciation for the lead time, the research time, and for those research dollars. When the rug gets pulled out from under them. who do they call up and say, ‘You’ve got to compensate me for five years with R&D.’ Good luck with that.

TBB: If federal regulation is scaled back, does the industry risk replacing federal stability with a patchwork of aggressive state-level rules?

Lynch: There's a downside to that. And the downside is you're starting to see states, particularly states like California, saying, 'We're going to step into the breach. If you're not going to regulate, then we'll regulate.’ We're even seeing this in the labor arena where the National Labor Relations Board has always been preeminent. Now California, New York, Illinois, obviously blue states, are stepping in and then we may end up with a network of things that may not be possible.

TBB: Ken, despite the high costs and regulatory risks facing tractors, you expressed ‘guarded optimism’ about the trailer market. Why?

Vieth: We work on the theory that truckers hate to pay taxes. So they want to invest a certain amount of their profits back into their businesses every year. And if trucks become very expensive you pull back your capex on trucks. After you get past tractors, one of the answers is trailers. It's not a one-for-one, every dollar I don't spend on tractors, I'm going to spend on trailers. But certainly some of those dollars I'm not going to spend on tractors in 2026 are going to fall into ‘let's upgrade our trailer fleet.’

TBB: How significantly does the Federal Excise Tax (FET) magnify the cost pressure on new equipment?

Lynch:I know that for NTDA the FET is a big deal. And now you're going to apply a 12% excise tax on all of these cost increases. And as I understand it, you can't finance the excise tax. So there's a big ball coming down that hill.

Vieth: If you start with a $20,000 price increase, you’ve got say 20% between FET and state sales tax—so that’s $27,000 or $28,000 for the guy that's taking delivery of the truck.

TBB: The downturn has been lengthy. What are current market conditions like, particularly for segments that typically thrive in a slow economy?

Vieth: This is an industry that's, peak-to-trough, 60% in the worst downturns and 30% in an average downturn. This has just turned out longer than most. One thing I've heard is that the aftermarket is not doing particularly well. Typically, when the new market is in the tank, you at least get a little bit of love on the aftermarket side. But it sounds to us like a good business to have been in this year would have been in cinder blocks—because guys are jacking up their trucks and taking the tires off of the trailers that are parked against the fence, because they don't have the money to afford new tires. The one segment performing surprisingly well is flatbed. There is decent activity in the big construction markets, the buildout of data centers. Flatbed rates, relative to dry van and reefer, are holding up reasonably well.

TBB: Tim, on Capitol Hill, what key legislative or advocacy items is the association focusing on right now?

Lynch: The underride guard issue, obviously, has been around for a very, very long time. The industry stepped up and addressed the rear underride guard. But on the side guard issue there's excellent arguments against it.  The industry needs to continue to argue and make the case why this is not a great idea. Another issue that the association really got behind is the dealer floor plan inventory tax deduction. [Trailer dealers] are the only entity now that is still under the 30% cap. We've got the legislation drafted. I look out in this audience and I have to believe that you folks are in virtually every congressional district. We just have to mobilize the grassroots. There's an old saying in Washington that if you're not at the table, you're going to find yourself on the menu.

TBB: Looking ahead, how will the inevitable adoption of autonomous trucking affect equipment demand and fleet operations?

Lynch: I’ve been in this industry for 40 years, and we have killed roughly 45,000 to 50,000 Americans on the highway every year. Yet, look at what the trucking industry has done: CDLs, hours of service, roadside enforcement, all the equipment that's going in the vehicles—great, great things, and yet we still only marginally reduce that fatality number. But making the case [for autonomous trucks] on Capitol His is a tough push.

Vieth: Initially, on the tractor side, you have to have vehicles with redundant systems—so it drives uh you know some healthy demand on the front end. But then it really crushes heavy-duty vehicle demand. If you've got a vehicle that's 50% more productive because it's running 200,000 miles a year, that productivity is going to allow for lower vehicle sales. For trailers, think it puts upward pressure on trailer-to-tractor ratios.

TBB: What is the most important takeaway for dealers navigating this difficult period to avoid costly errors?

Vieth: You just have to be paying attention. Spot rates are a leading indicator. I would have said the load-to-truck ratio, but that’s kind of misfiring in 2025. If you see a positive trend in spot rates that looks sticky and you’re reading your preferred financial source, and it's starting to feel a little bit better. Look for used equipment prices starting to move positive, and rates starting to move positive. But you don't want to get ahead of your skis, either.

TBB: Final thoughts on political engagement, Tim?

Lynch: Stay engaged. If you ever do a call on Washington, you will be astounded at the number of groups that are coming into every congressional office for a half hour. There’s maybe 20 or 30 issues a day that a congressman or senator is hearing about, or their staff is hearing about, and they can't react to everything. But if you're not even going in there, if you're not even talking to them, they won’t know. So when NTDA puts out a plea to contact the congressman or senator, it's important, and it matters. It really, really does matter.