Trailers parked, new trailer shipments down in ’07

COLUMBUS, Ind.-The sluggish U.S. economy is to blame for a slowdown in the number of trailers being shipped to North American trailer dealers, according to trailer OEMs and industry analysts.

For the first five months of this year, total shipments were down almost 12 percentage points (11.8 percent) compared to the January-to-June period of 2006. And according to industry research experts A.C.T. Research, that number will probably be more like 15 percent by the end of the year.

Meanwhile, now that the pre-buy to avoid new 2007 power units is long gone, class-8 tractor sales have fallen 33 percent from January through May of this year, after record sales in 2006.

But trailer experts said that drop off in sales had little to do with the downturn in truck shipments and more to do with the general economy.

Van sales have slowed in 2007, but the hardest hit
have been flatbeds, says Great Dane’s Chris Hammond

“No one tracks the retail sales of trailers,” said Kenny Vieth, partner at A.C.T. “So this is the most accurate number we have of new trailers being moved into use.”

In 2007, 95,974 tractors and 2,561 chassis were shipped from January through May, compared with 107,805 trailers and 7,040 chassis during the same period in 2006.

According to Chris Hammond, vice-president of dealer sales for Great Dane Trailers, hardest hit have been flatbeds. He attributes that to the U.S. construction slowdown. “Refrigerated trailers have been selling well, and dry vans are somewhere in the middle,” he says.

A.C.T.’s Vieth said that weakness in the auto and housing sectors means truckers don’t have to expand their trailer fleets. Parts for domestic products such as car seats — springs, nuts, frames and padding — are moved to assembly plants in trucks from which point they again travel by truck to an auto plant. The final product goes by truck to car dealers, he said.

“Fleets that buy trailers generally act in a reactive rather than a proactive manner,” said trucking analyst Chris Brady, the president of Commercial Motor Vehicle Consulting.

“That means they buy trailers in reaction to what they’ve seen in the past six months, rather than what they think the market will be like in the future, and that’s why trailer sales are falling.”

According to Jamie Scarcelli of Wabash, his customers said they planned to buy nearly as many new trailers in 2007 as in the previous year. “However,” he added, “actual order placement rates are slower as our customers’ businesses continue to follow the economy.”

Great Dane’s Hammond said he expects a recovery in 2008. The slowdown did lead to some layoffs at Great Dane, but Hammond said “when orders picked up, we rehired.”

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