Owner Operator The future cost of Dry Van trailers: It isn't looking good...

[Mike]

I had my dry van trailer in the shop last week for a brake issue and an annual inspection. While I was there picking the trailer back up, I decided to pay the sales department a visit. I left that conversation a little depressed....

in 2017, I bought my brand new 2018 model Great Dane for around $28k. Nothing fancy about the trailer at all other than the inflation system which I took off because it has been more of a hindrance than a help.

Upon speaking with sales, they told me that pre pandemic, stock unit dry vans had increased in price to around $32-35k on average.

Going forward, I was told that the new normal number for 2023 and later would most likely be in the $50k range. Part of this is due to increased cost of material, part is due to increased labor rates, and part of it is due to new stock units being delivered with telematics (think: smart trailer). Basically, it's looking like you will be able to monitor air pressure via an app in the new trailers, and things like that will be standard equipment.

Don't get me wrong, I do like the idea of the new technology (if it works), but I am not thrilled at all with the new cost.

Short term, I am completely rethinking my idea of not keeping my trailer for 10+ years.

Long term, I am going to have to strongly consider if I continue after my current trailer with a trailer of my own at all. How rates go will clearly be a factor here, but to get a trailer built like I want in the next couple years, I am very likely looking at around $70k to get what I want, or at the very least checking out other manufacturers besides Great Dane.

 

[Electric Chicken]

50k sounds low. I've seen 65k for dry van.

It's absurd. It's to the point where I'm looking at local loads and the rate difference doesn't support a $60,000 trailer purchase if there even is a difference at all. Even if there's a better rate, it's offset by sitting for lives on both ends and the extra fuel from always dragging a parachute and idling for comfort.

I don't trust these older trailers that I don't know the history of, and they're going for pre-pandemic new trailer prices. That's a fundamental problem for me.

 

[Mike]

50k sounds low. I've seen 65k for dry van.

Yes, the current market is super inflated due to demand. The price I am referring to is once everything normalizes as much as it is going to normalize.

 

[Electric Chicken]

Yes, the current market is super inflated due to demand. The price I am referring to is once everything normalizes as much as it is going to normalize.

Oh gotcha. Sounds about right, if such a thing ever happens.

Trucks are stupid too, to the point I can get a lot more hotels if I want to run OTR before I'm even close to buying a new truck.

 

[Mike]

Oh gotcha. Sounds about right, if such a thing ever happens.

Trucks are stupid too, to the point I can get a lot more hotels if I want to run OTR before I'm even close to buying a new truck.

I'm very happy that I am not in a position where I have to buy equipment anytime soon. I would be very nervous about pulling the plug on a purchase over the next couple of years, maybe even longer.

Equipment costs are skyrocketing.
Driver wages are skyrocketing in many cases.
Rates have been skyrocketing for a while now.

When this normalizes to whatever the new normal is, It is anybody's guess as to what happens with all of this.

It will all come tumbling down at some point, but not idea what will tumble the most.

Talked to a driver yesterday. Company he is leased to just sold about 40 trucks and 100 trailers. Clearly, it was a cash grab because of the used market prices, and in the short term, probably a good idea since the equipment was likely sitting due to a lack of drivers. Grab some cash, and now you can pay other drivers a little better. But what about when the cash runs out? What about the equipment ultimately having to be replaced? Who knows, maybe they were thinking ahead and simply don't plan on being stuck with a large amount of drivers they can't afford to pay in a year or two.

 

[Electric Chicken]

I agree. I used to say I wouldn't do it but now I believe I'd put a coffin sleeper on this Mack before I tried to go out and buy something else. Even if I had to get a custom job made.

I don't think I'd have the guts to get into this myself if I had to buy something now.

It's easy to look at the rates and go "oh yeah no problem I can make that payment" but that's now, not 5 years from now when you still have the same loan with the same payment and now it's needing bigger repairs out of warranty.

 

[GAnthony]

worst part about all that, is when you buy it, insure it, and some asswipe sideswipes it and takes off. that new trailer could be in the shop for a while waiting on replacement parts.

i can only imagine the insurance costs on those new trailers as well.

 

[GAnthony]

I agree. I used to say I wouldn't do it but now I believe I'd put a coffin sleeper on this Mack before I tried to go out and buy something else. Even if I had to get a custom job made.

I don't think I'd have the guts to get into this myself if I had to buy something now.

It's easy to look at the rates and go "oh yeah no problem I can make that payment" but that's now, not 5 years from now when you still have the same loan with the same payment and now it's needing bigger repairs out of warranty.

still gonna be some very good used equipment on the market, albeit higher priced, but doable for less as you'd know.

gonna be a lot of o/o's seeking those back rows of the truck stops, rather than out in full view, begging for sideswiping.

 

[mndriver]

****ing ridiculous….


I’m looking forward to another 08/09.

 

[mhyn]

i have a friend working at one of CA Utility deals as a salesman. He said many costumers called in and asked to remove them from waiting list of new dry vans.. Looks like soon we will see new dry vans parked at dealers.

 

[Uncle Birchy]

I had my dry van trailer in the shop last week for a brake issue and an annual inspection. While I was there picking the trailer back up, I decided to pay the sales department a visit. I left that conversation a little depressed....

in 2017, I bought my brand new 2018 model Great Dane for around $28k. Nothing fancy about the trailer at all other than the inflation system which I took off because it has been more of a hindrance than a help.

Upon speaking with sales, they told me that pre pandemic, stock unit dry vans had increased in price to around $32-35k on average.

Going forward, I was told that the new normal number for 2023 and later would most likely be in the $50k range. Part of this is due to increased cost of material, part is due to increased labor rates, and part of it is due to new stock units being delivered with telematics (think: smart trailer). Basically, it's looking like you will be able to monitor air pressure via an app in the new trailers, and things like that will be standard equipment.

Don't get me wrong, I do like the idea of the new technology (if it works), but I am not thrilled at all with the new cost.

Short term, I am completely rethinking my idea of not keeping my trailer for 10+ years.

Long term, I am going to have to strongly consider if I continue after my current trailer with a trailer of my own at all. How rates go will clearly be a factor here, but to get a trailer built like I want in the next couple years, I am very likely looking at around $70k to get what I want, or at the very least checking out other manufacturers besides Great Dane.

It's just like with newer cars and trucks..

All this Extra Technology crap some of it "Mandated" but a good portion of it just "Installed" assuming everyone wants it and doesn't mind paying for it either..

This has probably added extra 10 grand to price of New 4 Wheelers and probably about 30/40 grand to a price of a new Semi Tractor..

Near Zero Interst rates until Recently kept "payments down" but that is changing now.

My question is if Inflation doesn't cool off and the FED hikes all the way to 6/7/8 points and considering even with good credit banks usually charge an extra point or two as profit to themselves on making the loan.

Poorer Credit scores will probably have loans well into the "Double Digits" as a rate..

So Higher Prices and now Higher Interest on that who is gonna be able to "Afford" to buy one anymore?

 

[Uncle Birchy]

It's just like with newer cars and trucks..

All this Extra Technology crap some of it "Mandated" but a good portion of it just "Installed" assuming everyone wants it and doesn't mind paying for it either..

This has probably added extra 10 grand to price of New 4 Wheelers and probably about 30/40 grand to a price of a new Semi Tractor..

Near Zero Interst rates until Recently kept "payments down" but that is changing now.

My question is if Inflation doesn't cool off and the FED hikes all the way to 6/7/8 points and considering even with good credit banks usually charge an extra point or two as profit to themselves on making the loan.

Poorer Credit scores will probably have loans well into the "Double Digits" as a rate..

So Higher Prices and now Higher Interest on that who is gonna be able to "Afford" to buy one anymore?

I never got a response here @Mike what are your thoughts about "Record" prices of equipment and "rapidly" rising "interest rates"

 

[Mike]

I never got a response here @Mike what are your thoughts about "Record" prices of equipment and "rapidly" rising "interest rates"

Add it to the rising cost of everything else, and the result is a very damaged economy.

Personally, I’m thankful that I already have my home financed, semi trailer is relatively new, and I got a new truck before interest started getting out of hand.

Hopeful that things work themselves out over the next 2-3 years because I won’t go into bad debt just to buy more new equipment and be dependent on rates being high to survive.

 

[Rigjockey]

I guess timing is everything. It's going to be tough on folks that own equipment near the end of it's lifecycle or was poorly maintained.
I suppose the choice would be fix and maintain or take a big hit in financing.

The ziptie crowd may be out of business. Not that, that is a bad thing.

 

[389 Hood]

If I see something that needs fixing, I fix it or get it fixed. It's their money and both of our safety.

 

[mndriver]

I recently tinkered with the thought of swapping my fold out outriggers for a slide out trailer. Used equipment has taken a hit, but the damage has been done to the new equipment market.

Inventory with high price tags due to increased steel/material costs and unrealistic price differential for trade equipment.

 

[Sinister]

TLDR.

Perhaps leasing one of these expensive trailers is back on the table?

The depreciation on the tractor has to have run out so you may need the write off at this point.

I don't know. I'm spitballing here.

 

[Sinister]

****ing ridiculous….


I’m looking forward to another 08/09.

In the housing market also.

Not to derail...

 

[Uncle Birchy]

TLDR.

Perhaps leasing one of these expensive trailers is back on the table?

The depreciation on the tractor has to have run out so you may need the write off at this point.

I don't know. I'm spitballing here.

Ya can kinda "write-off" Depreciation on your Taxes..

But Sky High Prices and we're going back 1980s Interest Rates too fight inflation..

So now ya gotta buy Sky High record Prices but unless ya got Ca$h in the Bank..

Ya gotta "Borrow" that money "Pay" Interest..

 

[Sinister]

You can only depreciate down to zero, and in only a few formats.

All at once...over time...etc.

After that you better have a plan fir the IRS.

Especially with today's disposable trucks.

When mega fleets are leasing instead of buying that should tell you something.