European trailer market Lead-Times index, presented by TIP

The European trailer market has been highly impacted in the past few months. In our previous market analysis, we saw exponential growth of raw material cost and delivery deadlines.

So, what is the status of the market as we start 2023? What can we expect for this year? Once again, our experts reveal the TIP European Lead-Times Index (ELT) to prepare you for the future.

What is the ELT Index?

The European Lead-Times Index provides a holistic analysis of the market forecast. It offers an up-to-date statistical measure of the lead-times trend to help us better anticipate the future.

It is calculated as a function of the market and market trends. The market average is 50; a higher figure indicates that the average time between ordering the equipment and receiving it is higher, and conversely, a lower figure indicates that the average time is lower.

As forecasted in our 2022 report, the lead-time index shows that there are some signs of stabilisation in the market. Indeed, the events which had previously led to a significant price increase have, to a degree, stabilised. However, the market has not returned to what it was ‘pre-pandemic’.

Despite some stabilisation, uncertainties remain in the market

There are fewer component shortages that are impacting the production of trailers. Additionally, the price of raw materials such as steel, aluminum and wood is, generally speaking, not continuing to increase as it was.

We also have noticed a positive correlation between lead times and price; now that the raw material prices are generally not increasing as they were, lead times, in some cases, are starting to shorten. Prices might still be higher than pre-Ukraine war, but the business interruptions in the manufacturing process are not to the level that they were.

Despite some stabilisation in raw material prices, manufacturers are facing other concerns such as inflation and energy prices, causing them to suffer from cost overruns due to rising energy costs.

Additionally, the demand for transportation equipment has been flat for a couple of months due to lead time, prices and the aforementioned war. We forecast that there won’t be a change in the coming months, which will allow manufacturers to decongest their order book.

What is our recommendation?

Our experts predict that in the coming months, prices from many manufacturers will remain stable. Once European countries find cheaper energy alternatives, there is likely to be a moderate downward shift in the 2nd or 3rd quarter for deliveries in 2024. Shorter lead-times result in less risk in manufacturing cost and avoiding an overheated component market, and consequently component cost.

If acquiring new equipment doesn’t appear to be an option at this moment in time, there are multiple ways to extend the economic life of a trailer which are easy to implement such as refurbishment, modification or even extra maintenance.

Anticipate your needs!

TIP closely watches the evolving market to understand, anticipate and adapt accordingly to the challenges. The ELT Index is a great example of one of the tools that we use.

For 55 years, TIP has been one of the leading providers of both equipment and services within Europe and Canada. We specialise in providing the transportation and logistics sector with leasing, rental, maintenance and repairs through a wide selection of trailer equipment.

Whether you are already a TIP customer or not, we offer our services from more than 130 locations spread over 18 countries in Europe and Canada, with experts on hand to maintain all asset types.

TIP also offers a wide range of high quality second-hand trailers and trucks across Europe and Canada.

Contact a TIP branch now to keep your fleet going!