Spikes Seen in Demand for Trailer Rental and Production

Author: Daniel Guttman   Date:

 

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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Daniel is Vice President of Fleet Card Services. His focus is on growing Guttman Energy’s Fleet Card Services business, including our Fuelman Fleet card and Pac Pride commercial fueling operations Daniel’s responsibilities include finding new offerings to enhance our card offering, improving the profitability of the business, and driving growth through both new customer additions and acquisitions of competitive card decks. Prior to his current role, Daniel served as the Manager of Business Development. His previous roles also include data analyst, wholesale and commercial sales, as well as pipeline scheduling. Daniel received his Bachelor of Arts degree from the University of Vermont and has earned educational certificates from the University of Pittsburgh, the Kellogg School of Business at Northwestern University, and Harvard Business School. Daniel Guttman has become the first fourth generation family member to become an executive of the company. Daniel’s great-grandfather founded the Company in 1931.

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