Spikes Seen in Demand for Trailer Rental and Production

 

Volatility is nothing new to the world of freight and transportation, but 2020 has been truly unique. The COVID-19 pandemic shocked global markets, and transportation was not immune to the aftermath of COVID-19 economic shutdowns. Over the past few months however, orders for new trailers, used trailers, and rental trailers have exploded, indicating a growing need to ship and store E-commerce related freight.

According to Transport Topics, demand for rental and lease trailers are now at an all time high. The cause of the historic demand are industry consolidation and a general shift from long-term leases to short-term rentals. The start of 2020 painted a picture of a decline in trailer rentals; however, more trailers were needed to store freight due to factory and store closures following the initial lockdowns from the pandemic. E-commerce has also prompted a major demand for less-than-truckload local deliveries, and this has directly brought on an increase in shorter-term trailer rentals. The biggest surprise from this spike, is the willingness of lenders to shift from historically preferential long-term leases to the shorter-term rentals they are now supplying. Long-term leases offered greater cash flow security, but a shift if customer needs has forced a pivot in how companies are lending.

In addition to an increase in trailer rentals, trailer production has also seen a recent spike. This appears to be largely “makeup” production for cancelled orders during the initial phases of the pandemic, but it’s a welcomed sign to the industry that was hit quite hard. Freightwaves also notes that the average age of a dry van trailer is about 6 years, indicating a strong demand for brand new and newer-used trailers. There is still much uncertainty about where freight markets and E-commerce orders are heading, but it’s an encouraging sign to an increase in demand for new trailer and rental trailer orders.

https://www.ttnews.com/articles/demand-rental-lease-trailers-historic-highs

https://www.freightwaves.com/news/makeup-orders-boost-tractor-and-trailer-production-for-now

https://www.utilitytrailer.com/dry-vans/features-options/

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