Total trailer shipments of 60,950 in the fourth quarter were 4.1% ahead of the 2005 fourth-quarter level as a 19% increase in non-van shipments offset a very modest 1% year-over-year decline in van deliveries.
In the van segment, insulated vans were running 12.6% ahead of year ago levels while dry freight vans were 3.8% below the fourth quarter of 2005 and "all other" vans were 12% behind the 2005 level.
In spite of the fourth-quarter easing, full year 2006 trailer shipments amounted to 257,100 units, a 7% advance over the 2005 level. This represents the fourth consecutive annual increase in trailer shipments.
There was, however, a slowdown in trailer demand, which started in the third quarter and took an additional 7.4% hit in the fourth quarter. Shipments of vans dropped 9.7% last quarter, while non-vans eased 1.4%.
"After an easing in demand during the second half of last year, we continue to anticipate a further slowing in demand for trailers as we proceed through 2007," EPA president Peter Toja said. "However, we expect only a moderate easing in shipments this year.
"With the Federal Reserve on hold with regard to interest rates and inflation moderating, we expect some stability in the financial environment. On the negative side, we look for a slowing in consumer outlays and a weak housing market to dampen demand for trailers.
"In the construction sector, housing demand has eased, leading to somewhat slower expansion in purchases of household goods. However, public, commercial, and industrial projects are holding up. At the same time, efforts to rebuild the Gulf Coast will add some support to construction activities.
"Manufacturing activities will slow somewhat in response to a dampening in consumer outlays, although continued growth in business outlays and foreign demand for our products will support some growth in manufacturing output. These developments should lead to further, albeit more moderate advances in demand for a variety of transportation equipment to move finished products as well as equipment to transport the components, intermediate products, and raw materials associated with these finished products.
"While liquid markets including food, beverage, fertilizers, chemicals, and gases are showing good growth, the danger of terrorist activities as well as accidental incidents which could harm the general population, will serve to speed up replacements of some aged units in the tank trailer markets. At the same time, the dynamic growth in ethanol production will boost demand for certain types of trailers to haul grain, ethanol, and dry distiller grain.
"Based on these observations, while we look for trailer demand to ease, we expect only a modest decline in shipments in 2007.
"Last year, total intermodal movements in the U.S. rose 5% as a robust 7.9% advance in container haulings offset a dismal 3.3% decline in trailer on flatcar volume. The Canadian roads also registered a strong 5.1% hike in intermodal movements in 2006.
"Amid the continued strong expansion of traffic, the roads continue to pursue aggressive investment plans involving improvements in both service and more cost effective utilization of equipment and facilities. And, improved levels of revenues, profits, and operating ratios are facilitating the investment process.
"However, even as railroads are increasing investments in port facilities, intermodal terminals, and equipment, domestic production of containers continues to decline as foreign producers of containers move into our markets. Under these circumstances, we look for an easing in domestic production of containers during the foreseeable future. Chassis production could well weather the storm of foreign penetration as spending for intermodal equipment by shippers reflects the fast growing environment of both international and domestic container movements."