Truck & Trailer Study Rolls Into Town
Posted 07/17/08
A new Transportation Forecasting Series, researched by Global Insight, Inc., will be a key project for the Foundation in the coming months. The series of papers will focus on specific transportation asset classes including corporate and commercial aircraft, truck & trailer, rail, and marine equipment, with a study published every three months. The first paper, available later this summer, focuses on trucks & trailers and is titled, “Commercial Truck and Trailer Leasing and Financing.” The next asset class to be investigated will be rail and locomotives.
The truck and trailer study addresses current background and macroeconomic assumptions about this equipment type, an initial estimate of the demand, key markets, factors surrounding the financing of trucks and trailers, and leasing and financing trends.While the study shows that, overall, the transport leasing and finance industry is doing well, trucks and trailers are experiencing newly high delinquencies. Repossessions and liquidations of tractor-trailer trucks increasing in 2007 relative to the year before, and current financial difficulties are making financing leases more difficult. This year, the news for this market is equally depressing.
The lack of access to finance exists, but the market is deferring new acquisitions of trucks and trailers anyway, according to study findings. With the current economic climate, overcapacity exiting in the market, and low demand for transportation services, companies are not leasing vehicles as in the past.
But, fortunately, the equipment financing industry has not fallen victim to errors recently made by consumer lenders and the mortgage industry. And, now that risk assessment has returned, smaller, less-reliable borrowers (including smaller trucking companies) will be less able to obtain financing when needed. The truck and trailer study delves deeply into the specifics of the summary above, as will each paper in the transportation forecasting series.
Each study in the transportation forecasting series will be designed to provide an overview of the transportation finance industry, emphasizing the market size and growth fundamentals for each asset class. Each individual paper also will examine growth drivers and identify factors that may shape decisions with regard to financed versus owned assets. Issues such as technology, capital investment and productivity, possibly tax law and useful life considerations, also will be assessed.
This research will be complemented by a separate analysis of the factors that influence the financing decisions at the time of acquisition and the potential barriers of entry for asset finance firms. Market forecasts will be provided over a three to five year time frame for each asset class.
Watch for announcements of each study's debut or check the Foundation library often for updates.
Sites of Reference:
http://www.store.leasefoundation.org/
