Truck and Trailer Buyer's Market to Become Buyer's Market in 2011

January 1, 2011

Welcome to T2T for 2011 and Happy New Year to you all.

2010 trucking profits demonstrated a recovery in the teeth of the worst economic recession since the Twenties and the Great Depression. While 2010 opened with a glut of stagnant stocks of trailers and trucks for sale, the final quarter of the year roared into action. As one punter boldly observed, 2010 started off like a lamb but went out like a lion. New and used orders demonstrated a very healthy recovery led by dry van trailer sales and greater recruiting impetus of the national and regional carriers recruitinjg new talent to meet logistic services demand.

What is Happening with Trucking Sales?

Truck and trailer sales are driven by the economy like everything else. As economic activity hots up, demand for logistics and carrier services increases in direct proportion as goods and raw materials need to be shipped from A-to-B-to-C. The US consumer has returned to Main Street and is spending money again with a recovery to pre-recession levels of spending. As consumers unglue their check books and credit cards from their wallets, retailers have had to stock up with goods from manufacturers and distributors as excess stock levels were exhausted earlier on in the recession in early 2010.

This is driving demand for new and used truck and trailer sales because customers need more shipping services.

Throughout 2010 the market has been characterized as a buyer's market. Prices for trucking equipment have been depressed with virtually every company deferring capital investment and keeping hold of equipment for longer. Sellers had to reduce prices in order to move equipment, while truck manufacturers reduced capacity and delivered lower sales volumes into the market which in turn meant reduced used units too. A restriction in new supply of units did not mean there was scarce supply overall as the markets were saturated with excess stock capacity in any event.

Bottom line here was there were far too many sellers chasing far too few buyers who could effectively dictate price.

That is all set to change in 2011.

Demand for new and used trucks and trailers is increasing (trailer units alone demonstrated a 200% plus increase in the final quarter of 2010). The balance is shifting from buyers to sellers as excess stock levels of trailers and trucks for sale becomes bought up to meet the demand from industry and retailers to get goods and raw materials moved. As demand increases in line with the economic revival, equipment supply is going to become more of an issue and that means prices will start rising.

The buyer's market will change to become a seller's market.

If you are looking to sell equipment, the good news is that you are more likely to get a realistic price for your equipment and will probably need to wait for less time to make the sale. If you are looking to buy equipment, then now is the time to make the purchase as delaying will see the price move against you.

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