Yep, it’s painful. Back when the rates were $5.00 a mile on the spot market, you could go and buy anything. I saw plenty of very expensive, nowhere near fully loaded trucks get bought up like the overpriced meme stocks on Reddit. Well, now they’re getting dropped off at the dealerships because rates fell off the cliff and “owners” were unable to make those spicy payments. And if you want a shiny new trailer, get in line. The list is still a year out, and could be longer if the manufacturers open the calendar.
We told you not to go and buy those over-priced trucks, now look at yourselves
“The market is primarily absorbing trucks from fleets no longer retaining all of their older iron as new trucks trickle in and, to an extent, from owner-operators leaving the industry or going to work for a fleet.” – Chris Visser, senior analyst and commercial vehicles product manager for J.D. Power Valuation Services
I am reviewing a couple of articles from FreightWaves’ Detroit Editor Alan Adler, in which he talks about the truck and trailer markets. First, it seems truck prices are cooling as the big truck auctions, like Richie Brothers, are seeing final bids drop. Adler reported that prices have fallen 11% from the April sales for 2020 models. Prices have been dropping 15.9% month-over-month for the 2019 builds, and 9.9% for 2018 models.
“In May, 3- to 5-year-old trucks averaged 12.0% less money than April, but 57.5% more money than May 2021. Year-over-year, late-model trucks sold in the first five months of 2022 averaged 82.6% more money than the same period of 2021.”Chris Visser, J. D. Power
For those who want to buy their own truck, hold off a bit longer. I would wait until maybe year’s-end, during the off-season right after Thanksgiving. I’d watch several Richie Brothers sites and get to know what used trucks are bringing. Learn what the highs and lows are for each model, then wait for the time to strike.
Waiting to place that order for a new trailer? Well, wait some more
One of the biggest stories from when rates were at record highs was that demand for trailers was going to the moon. Order books were packed, with nearly year-long waits for shiny new builds. Add on the lack of materials needed for the builds, and you had a recipe for even more price hikes.
Adler had an article on June 15 in which he talked about the situation with the major trailer manufacturers still running tightly packed production books. Orders for the month of May were 18,300 units, according to ACT Research. That may be down 7% from April’s run, but is still 111% higher than 2021 year-over-year.
For those that bought new trailers, be happy your build is one of the 250,000 units that did make it out of the manufacturing plants, according to FTR Transportation Intelligence. And if you do get a slot in the calendar, don’t sit on your hands. Keep working that trailer lease or whatever you’re using until they call you to go drive the trailer out the gates.
Why are trailer orders taking so long to be built?
One of the reasons for the slow release of builds is that parts are in short supply. When the manufacturers get one trailer off the backorder list, another goes on it. Many parts are made overseas, and with the container trade situation, getting those onshore and onto the assembly lines can be difficult.
Some trailer manufacturers are holding off filling the 2023 order calendar due to supply chain woes. Chris Hammond, Great Dane’s Executive Vice President of Sales, has said Great Dane will not open its order books for 2023 right now “as we manage the supply chain to determine capacity changes.” But for those still looking for spots, there is a sliver of hope.
“We’ve not really seen any cancellations. If there is a small cancellation, the spot is quickly filled with another order.”Chris Hammond, Great Dane E.V.P. of Sales
So yes, work those phones daily for a chance to get in line for a trailer. But be wary of what David Giesen, Stoughton Trailers’ Vice President of Sales, had to say about his company’s situation: “We still have customers requesting more equipment than we can build. There is significant pent-up demand, especially in dry vans.”