There is a straightforward relationship between trailer industry health and economic activity.
Economic growth creates new freight to haul. Adding new freight to the existing pile means more capacity is needed to haul that freight. So, more freight means more trailers, improved productivity within the existing trailer fleet, or a combination of the two.
Economic downturns reduce freight volumes, putting downward pressure on new equipment demand and potentially delaying replacement demand as well.
Overcapacity is a new vehicle market killer that typically coincides with an economic slowdown or even contraction. Those slowdowns tend to occur after a freight cycle that has helped put large amounts of new equipment into operation, irritating the situation.
Because trailers are typically purchased in multiples relative to Class 8 tractors, Class 8 tractor and driver supply are the key reasons for equipment over- and under capacity relative to freight to be hauled. So, even if your interest is exclusively in the trailer realm, we encourage you to maintain a strong awareness of US tractor market activity.
While economic activity determines the number of new trailers needed for the population to accommodate new work, replacements are needed to continue hauling already existing freight flows.