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August 28, 2018 5:30 PM, EDT

Exceptional Demand Builds for Used Trailers

Used trailer market is heating up TT File Photo

The used trailer market is surging. Values are high and inventory is sometimes scarce as buyers look for alternatives to higher-priced new equipment, largely available only after long lead times, industry experts said.

Those conditions are setting up 2018 to finish as one of the strongest used trailer years to date, said Jeff Weber, director of used trailers for Great Dane Trailers.

“As the only major trailer maker with factory-owned branches and a vast premium dealer network, Great Dane is poised to dominate the used trailer market,” Weber said. “Currently, we are seeing a 20% trade versus 80% straight purchase within the market.”

Values are strong, he added.

Wabash National Corp. stated in its latest earnings report that used trailer sales in the first six months increased $4.8 million compared with the prior-year period, primarily because of a 600-unit increase in used trailer shipments.

Meanwhile, the skill set needed to sell those older products taken in trade profitably requires paying attention to a host of variables, another expert said.

When a customer orders a new trailer, the trade-ins usually don’t come in that same month, said Paul Wackerly, used trailer sales manager for East Manufacturing Corp. “You get them within six to nine months later, and with that, the market could actually take a step back, and then you have your trailers coming in with the supply and demand flipping on you — a true chess match.”

He said 95% of his inventory is trades on new trailers being built.

Another trailer executive suggested more inventory should be available.

“Based on a trailer life cycle of six to eight years for many new standard van-buying fleets, I would have expected more standard trade term trailers to be available by now from first time owners who purchased in 2012-2013. That is clearly not the case,” Strick Group Chief Sales Officer Charles Willmott said.

Used flatbed trailers still are scarce, and dealers may be losing out when it comes to reselling them, said Alan Briley, president of Fontaine Trailer’s commercial platform business, including flatbeds and drop decks.

Fontaine is a unit of the Marmon Highway Technologies/Berkshire Hathaway Co.

“We hear of more and more fleets opting to retail their used packages themselves,” Briley said. “Some of the big guys seem to be leaning that way.”

He said one effect of that was to slow down the process of used flatbeds coming on the market at one time.

“It doesn’t necessarily keep used flatbeds out of the market, but it keeps them off the market in big quantities,” Briley said, because those fleets don’t want to sell to a wholesaler and do want to hold out for a higher dollar — even selling five or 10 at time if they can get their number.

For dealers — a traditional source for used trailers — that has meant focusing more on new trailer sales and keeping up on parts and service business, Briley said.

In the meantime, used low-boy trailers become available less frequently and typically are a premium product when they do, one executive in that segment said.

“We don’t have nearly the peaks and valleys as your commodity-run trailers — dry vans flatbeds, step decks — that are built en masse,” said Troy Geisler, vice president of sales for Talbert Manufacturing Inc.

A study Talbert did in 2010 found that of all its trailers sold since 1987, 90% were still in service, he said. “There is a lot of patience that we see in our segment.”

Geisler added, “Our dealers are well-versed in determining value and getting that. They do a lot with trades, but you would be surprised at the number of people who just say ‘I no longer have a use for this.’ ”