European semi-trailer fleet has grown continuously in recent years

European semi-trailer fleet has grown continuously in recent years

Flexibility, resilience and regulation support the European trailer market

The European trailer market is usually sensitive to the economic cycle, but this time is slightly different. Headwinds slow new order intake, but backlogs secure double-digit recovery for registrations in 2022. The need for flexibility in a volatile world supports the trailer market. And new regulation adds to that

European semi-trailer fleet has grown continuously in recent years - 1

Content

  • European semi-trailer fleet has grown continuously in recent years
  • But no excess capacity due to the increased need for flexibility
  • Inefficiency pushes usage, with a lack of trailers not capacity space
  • Soaring commodity prices have pushed up prices for trailer manufacturers
  • Curbed production slowed new trailer registration
  • Germany and France lead the recovery in trailer registrations in 2022
  • Trailer registrations expected to show a continued recovery into 2023
  • Market leaders Schmitz and Krone benefit from larger trailer output
  • Shift from curtain siders to box trailers holds despite more expensive configuration

The European semi-trailer fleet has expanded only slightly in the past two years, but continues to grow and is now estimated at around three million. In contrast to the truck fleet, the trailer fleet has outpaced road transport activity over the last four years. New trailer inflow has also increasingly shifted from drawbars to the more flexible semi-trailers. The replacements of trailers can be postponed more easily than trucks, as new emission standards are making less of a difference and extra capacity entails few extra costs for fleet owners. Fleet owners increasingly choose to keep trailers in their fleets and also refurbish them more often if necessary.

European semi-trailer park expanded more than transport demand

Development of trailerpark vs. transport performance in ton/km (EU), index (2015 = 100)

European semi-trailer fleet has grown continuously in recent years - 2

Source: Eurostat, CBS, ING Research

But no excess capacity due to the increased need for flexibility

Despite the relatively strong growth of the semi-trailer fleet, there’s little evidence of large excess capacity. Rental companies also still reported high occupancy rates in the first half of 2022. A primary explanation is the higher volatility of road transport flows. Including timing preferences, this requires a higher extent of flexibility and spare capacity to meet peaks.

Offering flexible logistics solutions is an important reason why logistics service providers like DSV only operate trailer capacity, and this also explains the increased role of rental companies like TIP and PNO as capacity and flexibility providers. Trailer units are increasingly used as temporary storage objects in the logistics process. The driver shortage is an extra reason to leave more trailer units at docks to save on waiting times for drivers. The surge in e-commerce also pushed up transport and storage demand. For example, Amazon has started to build up its own European trailer fleet.

Empty vehicle kilometers in European road haulage on the rise again

Share of empty road freight transport vehicle km's in the EU-27

European semi-trailer fleet has grown continuously in recent years - 3

Source: Eurostat, ING Research

Inefficiency pushes usage, with a lack of trailers not capacity space

After years of gradual improvement, efficiency in European road transport has deteriorated in recent years, showing up in higher ‘empty running’. This explains why trailer capacity is still being felt as ‘tight’, while total capacity space should suffice. Uncertainty and unpredictability in current supply chains are one factor, and growing e-commerce volumes lead to smaller shipments and increased time pressure. On top of this, new regulation leads to higher trailer utilisation:

  • Brexit: longer waiting times due to extra custom checks for attained or unattained shipments (of agricultural products) to and from the UK lead to longer turnaround times.

Often journeys take one day longer.

  • The European mobility package (which came into force in February 2022) is a new set of rules for the EU road transport sector. This requires the operator to ‘return home vehicle’ once every eight weeks, next to 'return home driver' which should occur once every four weeks. Return home vehicle in practice also holds for trailers registered in foreign European countries (for instance in the Netherlands for fiscal, insurance, and inspection purposes). Given the disbalance of freight traffic between East and West, this is expected to lead to more empty running, despite efforts to find a workaround.

The better utilisation of data in planning, cooperation, and the use of freight platforms offer opportunities to organise freight transport more efficiently, but in the meantime, inefficiencies benefit the trailer market.

Soaring commodity prices have pushed up prices for trailer manufacturers

Given their usage for chassis and bodies, high steel and aluminium prices have a big impact on trailer manufacturers. Due to the war in Ukraine, wood products – used in flooring – have become more expensive as well. New curtain siders have become some 25%-30% more expensive to order compared to pre-pandemic levels, and increases for other configurations are at similar levels. Like truck manufacturers, trailer builders struggle to manage price risks in the ordering process.

Read full article on ING Economics: Flexibility, resilience and regulation support the European trailer market | Article | ING Think

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Transport sector Transport

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This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

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