European trailer market Lead-Times index, presented by TIP

What is the current state of the trailer market? TIP’s Lead-Times Index provides key insights for transport professionals looking to prepare for the future. Hot off the press, this article shares the current state of the market through our index that has been updated up to September 2023. Our sourcing team is also sharing its recommendations for how to respond to these changing market circumstances.

What is the ELT index, presented by TIP? The European Lead-Times (ELT)

Index offers a holistic analysis of market forecasts. It provides an up-to-date statistical measure of lead-time trends, enabling us to better anticipate the future.

The index is calculated based on market conditions and trends. The market average is 50; a higher figure indicates a longer average time between ordering and receiving equipment, while a lower figure implies a shorter average time. The flat demand for transportation equipment that we highlighted in our previous report has indeed led manufacturers to decongest their order books, causing our index to hover around the market average in the first months of 2023. With consistent flat demand, the index has further decreased to 37.8 in September 2023, marking a return to November 2020 levels.

Equipment price is trending down

In response to the flat demand for transportation equipment, trailer manufacturers are adapting their manufacturing processes. We have received reports of OEM’s that are reducing their production capacity by working 5 days a week in one or two shifts to cut weekend and night labor surcharges, as well as to address the general workforce shortage. The significant leadtime reduction is a reflection of current market conditions.

We also expect the cost base of manufacturing to decrease as the supply chain continues to stabilize, resulting in fewer disruptions and less required rework. However, there is still a high inventory of material so prices will not decrease until the inventories have been used. The impact of energy cost for the upcoming winter is also not clear either.

What is our recommendation?

Based on current market conditions, this is an excellent time to update or expand your fleet. With substantially lower lead times TIP customers stand to benefit immensely and might even view this as an opportunity to elevate their fleet to new heights. Having a pre-emptive strategy will enable timely action when market conditions are most favorable.

Increasing numbers of shippers/customers aim to reduce the environmental footprint of their entire supply chain, and transportation naturally has a significant role in this. By deploying electric vehicles or electrifying specific components — such as the cooling engine of a reefer — significant strides can be made. TIP guides its customers in their net-zero journey with the electrification of their cold-chain fleet. We have been testing and piloting 3 separate e-reefer innovations: plug-in battery only, solar-powered and energy recuperation axle where the primary energy source in all three is a battery pack. Discover how you can electrify your fleet.

Adjust to market circumstances with TIP

As a leading equipment service provider, TIP Group maintains a close eye on market developments and trends. Our relationships with major OEMs and our various touchpoints throughout the transport chain are key to obtaining timely market insights. By synthesizing this information, we offer unparalleled anticipation and adaptation to market shifts—a benefit we extend to our clients.

Our prior recommendation encouraged addressing imminent equipment needs by extending the life of existing equipment or purchasing second-hand alternatives. This advice proved to be sound. Not only do we offer leasing and rental options, but we also provide maintenance and repair services that enable this strategy.

Of course, the same goes for our current recommendation. TIP is well-equipped to assist you in adapting to market conditions and optimizing your fleet's performance. For personalized guidance and to address any concerns, we encourage you to consult your designated TIP representative. They are committed to helping you attain your objectives.

Whether you're already a TIP customer or considering becoming one, we offer our services from more than 130 locations across 18 countries in Europe and Canada. Our experts are on hand to maintain all asset types, and we now also offer high-quality second- trailers and trucks in both Europe and Canada. Contact us now!