Shipments of complete truck trailers increased 8.7% in the second quarter, according to research conducted by Economic Planning Associates (EPA Inc), Smithville NY.
The second-quarter gain is on top of a 15.7% rise in trailer shipments during the first quarter. EPA Inc reports a 26% increase for trailer manufacturers during the first half of 2004.
According to the EPA Inc survey, manufacturers shipped 42,900 vans during the second quarter, 27.9% higher than the second quarter of last year. Non-van shipments totaled 13,700 units, a whopping 41.7% above the similar period of last year.
Dry freight, insulated, and “all other” vans each scored impressive gains last quarter, while platform and tank trailers continued to lead the parade in the non-van sector, says EPA Inc’s Peter Toja.
“In this environment of stricter legislation involving drivers’ hours of service, sharply higher fuel costs, rising insurance premiums, and the movement of truck traffic toward rail via intermodal haulings of trailers on flat cars (TOFC), the continued strong interest in new trailer equipment is extremely pleasant news to trailer builders,” Toja says. “And we expect further quarterly advances in trailer shipments during the remainder of 2004 and into 2005.
“This year, we anticipate continued growth in shipments of a variety of trailers as our expanding economy leads to greater traffic flows and improvements in trucking revenues and profitability. At the same time, low interest rates, moderate inflation, and the more liberal depreciation guidelines of the Tax Stimulus Bill will facilitate the investment decision. In addition, the lack of interest in new trailer equipment during recent years has served to further age the existing fleet which will intensify replacement pressures as we proceed through 2004 and into 2005.”
EPA Inc looked at a number of factors affecting freight (and the need for truck trailers). Among those factors:
• Housing demand should remain at historically high levels both this year and next. However, the company considers this year’s extremely strong pace of home building in the first half to be unsustainable.
“We expect some quarterly easing in starts from now through the first half of 2005,” Toja says. “Even with the modest easing, the levels of home sales and housing starts will support further gains in demand for furniture, carpeting, appliances, and consumer electronics."
• Durable goods will advance approximately 5% during 2004, with a 4% gain predicted for nondurable goods.
• Business investment advanced at an annualized rate of 8.8% in the second quarter. “During the next few quarters, corporate spending will focus on equipment, particularly productivity-enhancing capital goods,” Toja says. “As production schedules expand and capacity utilization rates tighten later this year, expenditures for new plants and/or modernization of existing plants will spur the rebound in nonresidential construction of commercial and industrial facilities. And, we expect improved corporate financial performances and relatively low interest rates to facilitate the investment decisions on both equipment and structures as we proceed through the end of this year and into 2005.”
• Manufacturing output revived during the second half of 2003 and continued into late spring of this year. However, manufacturing output flattened in June, amid industry wide reports of sharp rises in steel and aluminum prices and tightened material allocations.
“Given our outlook for continued strength in consumer spending, a revival in business equipment demand, and faster growth in exports, we expect manufacturing output to once again begin to expand at a healthy clip,” Toja says. “From this point on, we envision quarterly advances in factory output through the end of 2005.”
• Intermodal traffic among the U S railroads has been accelerating. Through August 7 of this year, container traffic was running 8.2% above the similar period of last year. At the same time, trailer loadings continue to rebound. After a 2.0% increase last year, trailer haulings by rail were running 12.8% above the comparable period of last year.
“To support this growth, railroads are already poised to add a significant amount of intermodal truck hauling capacity as demand for railroad spine cars intensifies,” Toja says. “In addition to increased demand for intermodal trailers this year, we also look for some modest gains in demand for containers and chassis as TTX continues to add container hauling equipment to the national pool of railcars."
EPA Inc will provide its clients with short- and long-term forecasts of customer market activities as well as individual trailer types and container and chassis in the company’s quarterly Truck and Trailer report this month.