Trucking news: ACT Research data says 2009 commercial trailer factory shipments hit lowest level in 35 years

Jeff Berman, Group News Editor -- Logistics Management, 1/25/2010

COLUMBUS, Ind.-Recent data from ACT Research Co., a publisher of North American industry data, market analysis and forecasting services, stated that commercial trailer factory shipments in 2009 were down 44 percent compared to 2008, reaching its lowest level since 1975.

ACT Partner and Senior Analyst Kenny Vieth told LM that 2009 came in at 80,414, well short of 2008's 142,557. While 2009 was clearly a down year, December shipments-at 8,296-represented the highest monthly total for all of 2009. In 1975, annual commercial trailer factory shipments came in at 78,000 units, according to Vieth.

And ACT said that almost every category of trailer factory shipments posted the lowest levels in 30 to 50 years, with only the reefer van sector holding up relatively well. The company added that December net orders for commercial trailers were up 140 percent from depressed levels in December 2008 and slightly below the 2009 monthly average.

Regarding 2009's data, Vieth said the economy played a big part in it, but he explained the "second shoe to drop" is the impact on trailer utilization and productivity of trailer tracking technology, especially in the dry van market.

"Back in the 1990s, Just-In Time came along and the driver shortage heated up," said Vieth. "And what the truckers did was increase their trailer-tractor ratios, with the big fleets doing things like going from two trailers per tractor to three, because the objective for them was to drop and hook and keep their power unit and driver moving and happy."

While truckers were increasing their trailer-tractor ratio and shippers wanted bigger trailer pools at this time, everyone was "buying trailers with abandon," said Vieth. And in the 2002-2003 timeframe, Vieth said trailer tracking technology was perfected, which helped carriers and shippers better understand how to do things like keep a battery charged on a tracking device for a trailer.

"While carriers always used to know where one-third their trailers were, because they were behind the tractor driving them, fleets were having to hand count the other two thirds of their trailers," said Vieth. "But things changed in 2004 when truckers started making money again all started buying trailer tracking technology. That turned out to be a massive productivity boost, and when the economy slowed down the bottom fell out of used trailer prices and everybody figured out how to maximize the productivity of their trailer units in working with their new technology. And as a result with the weak economy and low prices, we are in the seventh inning of the rationalization of dry van capacity to the new reality."

2009 was slated to be a bad year for dry vans, due to the economic environment, according to Vieth. But in 2008 he said the industry was holding up reasonable well prior to the financial crisis, which took hold in September 2008, when there was more freight to haul.

For 2010, Vieth said ACT is forecasting for slightly more than 100,000 commercial trailer factory shipments in the 100,000-105,000 unit range.

"The caveat there is that we have the slow growth economy that everyone is expecting," he said.

For comparison's sake, Vieth said ACT reported that 2006 saw 275,500 shipments move, with a steady market typically in the 200,000-210,000 range.

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