Trailer manufacturers adjust to fleet delays in weak freight market

The trucking industry is currently navigating turbulent waters, characterized by a notable decline in trailer demand. As manufacturers adapt to these challenges, understanding the factors at play becomes crucial for industry stakeholders. Let's explore the intricacies of the trailer market, the implications for manufacturers, and how the industry might rebound.

After a surge in demand post-COVID, the market is now facing a downturn, with forecasts indicating a slow recovery. This article delves into the current state of trailer production, the impact on manufacturers, and the future of the industry as it grapples with evolving economic conditions.

Current state of trailer demand

The demand for new trailers remains surprisingly low, and analysts anticipate this trend to persist until at least the latter half of 2026. Dan Moyer, a senior analyst at FTR, reported a 5% decline in order activity during the latest order season, with an alarming 39% drop in July compared to June. The market is also witnessing escalating cancellation rates as companies reassess the potential impact of tariffs on their purchasing decisions.

FTR predicts that prices for van trailers could rise between 16% and 28% due to tariffs imposed on steel and aluminum. Currently, production rates are exceeding demand, compelling manufacturers to exercise caution in their output to prevent market saturation.

On a positive note, Moyer highlighted that trailer inventories are "broadly healthy." The forecast for trailer production orders stands at a stark 187,000 units for this year, a significant decline from the 230,000 units produced last year, and a far cry from the 314,000 units in 2023.

Impact on manufacturers

Manufacturers are feeling the pinch of reduced demand for trailers. Charles Dutil, the CEO of Manac, emphasized that when freight markets decline, buyers tend to withhold investments in new trailers, opting instead to maximize the use of their existing assets.

• A typical fleet with 50 trucks usually replaces 10 to 15 trailers annually.
• In a challenging market, this number can drop to zero, leading to significant delays in equipment renewal.
• Uncertainty surrounding tariffs complicates the decision-making process for buyers.

Alan Briley, president of Fontaine Trailer Company, echoed these sentiments during the FTR Transportation Conference, stating that rising costs and challenges with offshore component manufacturers have made it difficult to predict future expenses accurately. As a result, Fontaine is exploring diversification within its supply chain, though concerns about labor availability during the nearshoring process linger.

Extended life-cycles and the push for maintenance

John Foss, vice-president of national accounts at Trailcon Leasing, pointed out that this market cycle feels distinctly different from previous ones. He noted that higher interest payments and a weak exchange rate are further squeezing trailer buyers, who are already grappling with decreased profitability.

Trailer prices surged after the COVID demand spike and have yet to revert to their historical norms. According to Foss, this may represent a new standard for trailer pricing. Many fleets are now extending the life-cycles of their existing trailers to cope with these changes.

Mandatory annual inspections are designed to ensure safety, yet the reality is that equipment can only be utilized for so long. Trailcon is actively extending the life-cycle of its fleet of 12,000 trailers, with a notable increase in demand for maintenance services as fleets seek to maximize their assets.

• Instances have arisen where trailers that should have been retired are still in use.
• Foss has observed trailers on the road that have been deemed unrepairable and are now being operated by other companies, raising safety concerns.

To address these issues, Trailcon has partnered with a salvage company to responsibly recycle trailers at the end of their useful life. Last year, they dismantled and recycled around 400 van trailers, salvaging viable parts while grinding the remainder for recycling.

Maintenance practices for prolonged trailer life

Jason Hirsch, vice-president of sales for Penguin Trailers, inspects thousands of trailers each year, witnessing the range of maintenance practices in the industry. He emphasizes that a solid maintenance program can significantly extend a trailer’s lifespan.

During an inspection of a fleet of 2007 dry vans, Hirsch was astonished by their condition. The owner attributed their longevity to regular maintenance, including:

• Quarterly inspections.
• Biannual deep cleaning.

Such diligence not only prolongs the trailer's life but also enhances its resale value, with well-maintained units commanding a premium of 20% to 30% upon sale or trade-in. The initial specifications of a trailer are equally important; Dutil notes that understanding the intended use can inform how a trailer should be built to withstand its operational demands.

Future prospects: The good times will return

Despite the current economic challenges faced by both trucking companies and trailer manufacturers, there is optimism for a rebound. Dutil advises fleet managers not to procrastinate on reordering trailers, as the cyclical nature of the industry suggests that demand will eventually surge again.

According to Dutil, historical patterns indicate that after periods of reduced renewal, demand will likely pick up by mid-2026 as economic conditions improve. Fleet ages will increase, and with it, the pressure to renew will also rise dramatically. When that happens, order books will overflow, pushing prices higher.

Hirsch agrees that maintaining a consistent replacement cycle offers multiple benefits:

• Reducing overall maintenance costs.
• Minimizing breakdowns and downtime.
• Enhancing the fleet's image to customers.

In a competitive landscape, fleets should leverage every advantage available to stay ahead.

For more insights into the current challenges facing the trucking industry, check out this analysis:

• With files from David Simard-Jean, Transport Routier

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