Encouraging economic signs for car haulers

Wallenius Wilhelmsen just ordered up two brand new Post Panamax ships.  These are specially designed ocean-going ships for RORO freight (roll on; roll off)

"Although the car carrying market at the moment might be somewhat weaker than we would like, we believe that the long term underlying growth potential for deep sea transportation of cars and high and heavy equipment is strong and positive," says Jan Eyvin Wang, president and CEO in WWASA. "We are therefore pleased to have come to an agreement with HHI to build two state of the art Post Panamax car carriers. The agreement also includes an option to build another two vessels."  Source.

(Highlight mine.)

I consider this especially encouraging, because these ships won't even be delivered until 2014 and 2015.  If a big company like this is willing to make this kind of long-term capital investment in such an asset, they must feel that future demand in 2014, 2015 and beyond... will support it.

According a article posted by the BBC on May 1st, 2013to the BBC, US auto manufacturers' sales are at six year highs.  Chrysler: up 11%; Ford, 18%; GM 23%.

One would hope that the increased sales and consequent increased hours at assembly plants and suppliers would create a virtuous circle in which the employment numbers could continue to improve.

What does it mean for car haulers in North America?

Well, if you're making money now, you're probably going to continue making money.  If you can convince the bank to underwrite the loan, you'll probably make more money with a new or refurbished truck.  Less downtime and shop bills, am I right?

"If you convince the bank to underwrite the loan."

A big if.  Seems like many banks are still frozen in that  2008 "Lehman Moment".  The big banks are like so many deer caught in the headlights, uncertain what to do.  One of my customers recently switched his business to a local credit union and got much better rates and service.

So in conclusion, if you think you're going to grow... be prepared to think outside the box as it relates to asset purchases.  If the fundamentals are there, it's probably worth doing... if you can find the money for a truck loan.