Manufacturers around the world are experiencing shortages in components, supplies, and even labor. And the semi-trailer industry has been hit hard by these global supply chain issues.
The shortage of materials was initially sparked by government-mandated plant shutdowns at the height of the pandemic. And even as the world has opened up again, other economic factors have created a backlog in new semi-trailer builds.
Scarce shipping containers affected pricing and delivery times. Additional port closures in response to the Ukraine war and even weather events worldwide have affected the availability of raw materials like rubber.
From tires to steel and computer chips, sourcing the materials required to build new semi-trailers continues to strain manufacturers as they struggle to keep up with demands and stabilize pricing.
The Most Significant Impact On Semi-Trailer Sales
These supply chain issues are creating a ripple effect across the country. A shortage of trailers and truck drivers has slowed delivery times and increased consumer pricing. In fact, inflation has risen by 8.6% in the last year — an all-time high since 1981.
The lack of raw materials has significantly increased the cost of building new semi-trailers — hard-to-source parts are valuable and, therefore, pricier. This increase in material costs is making it difficult for dealers to offer a price where they can make a profit and keep costs reasonable for the customer.
A dry van trailer that sold for $40,000 a year ago will now cost a customer about $60,000. These exorbitant prices, and a backlog in new semi-trailers, have created a limited supply of used trailers, driving up the price of those, as well.
Three Things You Can Do To Survive Supply Chain Disruptions
It can feel like a lost cause right now, but don't despair. You can take steps to minimize the impact of these supply chain issues on your business.
As many industries catch up from pandemic-era setbacks, so will semi-trailer manufacturers. While it could take as long as Sept 2023 to fulfill the backlog of requests, some manufacturers are scraping together the parts to begin rebuilding.
Work closely with your dealer to get what you need, and know they are doing their best to source parts and fulfill orders.
The upside is that the quality of semi-trailers has improved as the production rate has gone down.
There are businesses in every industry willing to capitalize on an economic downturn.
Yes, rising costs are real and affect the end price, but sadly, there are those willing to take advantage of the scarce supply and gouge customers. Most truck drivers live on a modest salary and struggle to remain in the industry as the costs outweigh the benefits.
With the low availability of dry vans and refrigerated trailers, it's tempting to take the first available trailer, so you don't miss out. But, there are companies doing their best to maintain the status quo and offer pricing that doesn't put you out of a job.
Even if you've been loyal to the same company for years, take the time to research all your options. You never know who's willing to put extra profits over people. You might find the semi-trailer that suits your budget elsewhere.
Don't Let Dollar Signs Sway You
Before you decide it's time to trade or sell your semi-trailer, there are many things to consider.
With reduced production of new trailers, the demand is high for used ones. This means you can sell your trailer for a profit, but there's a good chance you won't find a replacement and will end up paying more for another used one.
Keep in mind that the semi-trailer industry is cyclical. While this is the worst shortage the industry has ever experienced, it isn't the first. Equilibrium will return; the longer you can hold out, the better off you'll be.
Integrity Goes A Long Way
The pandemic has disrupted just about every facet of life across the globe. It hit the semi-trailer supply chain hard, costing the industry in truck and trailer sales and drivers.
Consumer costs have increased across the country. But as things begin to stabilize, pricing should reflect that. As component availability and costs return to manageable levels and semi-trailers return to normal production rates, prices should even out.
However, some businesses will push the price hike as long as possible to take advantage of increased profits. But, at what cost? The most significant impact will reflect on truck drivers as they retire or move on to other work.
If the investment to do their job eats into their already modest wage, drivers will find work elsewhere.
At CRTS, we take care of our customers with integrity. We're an independent dealership in the south Atlantic region and have been proudly serving the area for over 50 years.
We always have our customers' best interests in mind. If you are looking to trade in your used semi-trailer, we are happy to discuss your options — even if talking you out of it is the right thing to do.
Send us a message now, and let's find the trailer that best suits your needs.