American Trailer Exchange, Inc.
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By Greg Pratt
President, American Trailer Exchange, Inc.
This article provides an overview of the United States used truck trailer market. These trailers, also known as semi-trailers, include dry freight van (box) trailers, flatbed (platform) trailers, drop deck (step deck) trailers, and refrigerated van (reefer) trailers. Truck trailers haul a majority of products that are manufactured and shipped in the
There are thousands of suppliers and buyers of used truck trailers who routinely buy and sell used trailers in the United Sates. American Trailer Exchange estimates that the secondary (used) truck trailer market is approximately 400,000 units annually, equaling over $3 billion in sales. Dry freight vans, platform trailers, refrigerated vans and tank trailers constitute the vast majority of this equipment. Trailers have a useful life of at least twenty years. They are typically traded several times during their useful lives as they pass from long distance service, to regional hauls, to local cartage use, and finally to storage service. A general rule of thumb is that trailers are remarketed every five years and then used indefinitely as storage units. Average annual new trailer shipments are approximately 250,000 units. Trailers have a variety of specifications and configurations that determine their use and set segments within the buying market.
Used Truck Trailer Supply Sources
The supply side of the secondary trailer market is somewhat fragmented with no nationally organized distribution system. There are only a few used trailer suppliers with a nationwide scope. The used truck trailer market is comprised of trailer manufacturers who take trade-ins for resale; private and public carriers who usually sell excess equipment to dealers; equipment leasing companies and banks who remarket their off-lease assets through their asset management departments; a small number of firms who buy in large lots from national trucking companies and redistribute equipment through dealers; and, over 1500 equipment dealers and brokers who serve regional market areas. No single participant has over a 5% share of the market. Market fragmentation often results in inefficiencies in the market with equipment passing from the original seller to brokers, dealers and other middlemen before reaching the ultimate end user.
Types of Companies Contributing to the Used Truck Trailer Supply Chain
1. Trailer Manufacturers: There are over 100 truck trailer manufacturers in the
2. Trucking Companies: Trucking companies consist of both public and contract carriers. Public carriers are available to shippers on a for hire basis for shipments ranging from one piece to multiple full truck loads. Contract carriers dedicate their equipment and drivers to shippers on an exclusive basis. According to Transportation Technical Services (TTS) there are over 27,000 registered trucking companies in the U.S. and
3. Private Carriers. Private carriers are firms that operate an in-house trucking division to haul their own freight, including manufacturers of all types, wholesalers, distributors and retailers. TTS says there are approximately 20,000 registered private carriers in the U.S. and
4. Banks and Equipment Leasing Companies: Bank loans and equipment lease financing are the primary means for end users (trucking companies and private carriers) to acquire new trailers. Unavoidably, banks and equipment leasing companies must occasionally regain possession when leases expire or credit defaults occur. Historically, this segment sells or re-leases trailers to their customers at the end of the initial lease term. The industry also sells to other buyers in the secondary market in order to increase residual values and overall profitability of leases. Asset Managers of general equipment portfolios with a wide variety of asset types do not usually have the people resources to specialize in a single asset type. They often look to experts to handle their equipment management and remarketing needs, including negotiating equipment returns, and transporting, storing, repairing and remarketing trailers. Wholesale auctions are another method used to dispose of off lease and repossessed trailers.
5. Dealers: According to the Department of Labor’s Standard Industrial Classification (SIC) System, there are over 1500 trailer dealers in the
Used Trailer Buyers (End Users)
Trucking companies, private carriers, manufacturers and distribution companies are the main buyers of used truck trailers. Typically used trailer buyers consist of non-branded national companies, mid to small size firms, and owner-operators. Most of these companies purchase trailers through the over 1500 truck trailer dealerships in the
New trailers are often preferred by national companies and major long-haul carriers for a variety of reasons, including five-year warranties, accelerated depreciation, reduced maintenance cost, and company image. Beyond function, van trailers provide national brands with the benefit of consistent low-cost advertising through graphics on the sides and rear of trailers, so newness and image are important factors. On average, large fleet owners sell trailers after five to seven years.
Unlike an automobile, where style and image play important roles in determining value to the owner, functionality and condition are most important to many truck trailer owners. With proper maintenance, the useful life of a trailer can exceed twenty years. The price of a five-year old trailer that may have 75% of its useful life remaining is approximately half of the original price, so used trailers are often a cost-saving alternative to most companies that ship products.
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