Monday, July 16, 2007

Economy Pinches Trailer Manufacturers

Today's Trucking News:Trailers parked, new trailer shipments down in '07
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.
....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.

The slump in housing and autos is taking a toll on the rest of the economy. Autos probably are a victim of all of the heavy incentive deals of the past few years which persuaded folks to buy a new car a year or two before they otherwise would have. Also light trucks are no doubt being hurt by the decline in construction (hurting work pickup buyers) and the rise in gas prices (persuading some lifestyle pickup drivers to move to cars)

Also, in the truck manufacturing industry there was a massive pre-buy to avoid 2007 Emissions standards, resulting in huge plunge 2007 model year truck sales. Trucking companies did not want to pay $7000 more for a truck that weighs more and has more things to break. Here we are also paying for the sins of the EPA in moving the 2004 mandate up 2 years (via a lawsuit against the engine makers for merely meeting the rules). The resulting engines and trucks were half baked, causing higher prices, losses in fuel economy and many, many breakdowns. Eventually (around the original launch date) the manufacturers got all the issues sorted out. This convinced most people that the hot ticket was to buy the year before and let someone else deal with all of the hassles of owning the latest EPA experiment.

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