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The Fog Of The Present

The Fog of The Present

As is normal we would roll with either of the following to sum up the present:

Everyone has a Plan until they get punched in the face.

The Fog of War.

Understanding where the UK Tipping Trailer Market is heading in 2023 is at best a dark art but mostly likely just reactionary to the conditions experienced this week. A statement of the obvious. Anyone with 'a plan' at the moment is really just a gambler in the casino. The long term trajectory for UK PLC is clearly negative over the next 30 years. Our leaders and teachers are not addressing the need for global competitive advantage for the UK to allow us to enjoy a better standard of living than our neighbours. We are simply relying on the legacy of empire - we have built up a world beating amount of capital which is slowly or stepwise being consumed by our population. As economists would put it - we are missing the Y factor. This being, taking the standard resources that we sit on as a country, and by efficiency and clever national thinking getting more out of those resources than the competition could or will.

So if this is true then the purchasing power of the UK PLC tipping trailer and moving floor base will be trending downwards too - unless there are factors to protect our sector as an 'island of excellence'. If our UK haulier purchasing power is tracking downwards then we will be looking towards the lowest price producers of equipment and not top end. So for a while we will hang on to our aspirations of a Top End Scania and a top end trailer. This will drift downwards. So perhaps we should look to the countries that already sit in that mix - Chad or Mali spring to mind - always reminds me of the comfort of the British Armed Forces looking up and noticing the label on their parachute proudly states 'Made in Chad'. More likely we are tracking lower wealth countries such as Romania, Poland, Spain etc.  We may also being looking for longer life cycles or greater survivabilty from our products and increased repairability. That might push the other way - buy quality buy once argument - the STAS, Knapen, Titan solution. Arguably the Titan can give 20 years of service in a tough environment. Titan Trailers have evolved in a nasty American waste market where the work is brutal and the distance to repair shops can be high. In my opinion a Titan can outlast its nearest competitors by almost double the life and still remain surprisingly sharp and tidy. I would consider myself bruised by 25 years in this industry and I cannot completely explain how the Titan does it - it just does. If you look at the Fred Sherwood fleet - there are 2004 Titans that from the outside look like 2018 trailers. Clearly satanic rituals must have been performed in Canada to achieve this engineering miracle. 

So how big will the market be in 2023 for trailers in our class? Supply side problems have diminished and become less of an issue in Q1. Energy costs are high. Labour costs are actively being negotiated but are unlikely to be less than a 10 per cent increase into Q2 Q3. Probably interest rates rises will decreasing the affordability of large priced trailers will be the larger factor. IMHO we have some more interest rate increases yet to absorb. With joy I might write 'Fuck the Bank Of England'. Despite the clevers of the Bank's Committees their hindsight seems exemplary but their foresight no better than mine or yours. Retail finance rates will still be climbing into 2024 and the pool of providers drying up. The expression that our lending 'is closed to wheels' will start being used again. Banks are fearful of bad lending and in some boardroom or rather plush London restauarant that expression will get used and large lenders will just STOP lending to our industry. This will allow rates of the remaining lenders to rise still higher as scarcity of appetite to lend plus searching for higher BETA will push rates higher. The Gold standard will be 6 percent, Silver 8 to 12 percent and the Bronze just disappear.  I would suggest that the market size will be deflated and be travelling about 60% of historic levels. This may not have any real world affect on companies such as Fruehauf who are still in recovery and discovery mode having come out yet again from bankruptcy. (And remember the words of the Chief Economist to Downing Street - 'it took extreme skill to make a company go bankrupt during Covid'. Wilcox, PPG, Aliweld, KBF etc also look to be stuck in limited ruts and unable to change their market positions. So once again it will be the scale professional European manufacturers - who also have their woes - to absorb market share in the UK in 2023 and 2024. There are the cheap end suppliers from Poland and Turkey entering the market for the first time and top end Manufacturers increasing their market share enormously. STAS for example may have had about 40% market share for the first time in the UK.

So to set sale into the second half of 2023 and then into 2024 confidently and with a plan means that you either have a direct line to Mystic Meg or you will get punched on the nose. But I do predit tricky times for our industry and about a 60% market size for the rolling 12 month period. Happy to be wrong!!

God Bless You All - and with the usual sign off this Blog are but the musings and ramblings of a deranged mind and should only be held up in the court of Law as anything other than total drivel. Plenty of other opinions are available - contact me at andrew@newtontrailers.com if you want to chew the cud.

Posted by Andrew on 04/04/2023