Meeting demand for used trailers Trailer refurbishments are rising, prompting
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SDC Trailers portfolio of used sales to develop into an integral part of its business Words: Kevin Swallow Last year, SDC Trailers returned to its used trailer site in Sutton-in-Ashfield, Nottinghamshire, after a three-year hiatus. The company originally moved into the site in 2001 to store its used trailers, but something was missing — so it built an office and a workshop. The site acts as a holding pen for returning trailers bound for new owners and it permits the three-strong workforce to do any pre-MoT work and repairs, thus saving the need to outsource the work.
It is one of three sites — along with a factory at Toomebridge in Co Antrim, Northern Ireland, and the SDC Northern dealership, at Scotch Corner, just off the A1(M) in Richmond — that the business bought in 2010.
SDC Trailers has been involved with used trailer sales since 1998. Throughout road transport, manufacturers often felt that handling part-exchanges for new trailers was a necessary evil. These days, managing a product through its lifetime, from the moment it leaves the production line to its likely overseas destination, allows the manufacturer several bites of the cherry, making used sales an integral part of the manufacturer's portfolio.
Demand Key to this burgeoning reputation and revenue earner is the demand for used trailers from operators. It is a demand that emerged from the slump in new trailer sales through the tail end of 2008 and 2009, as operators reined in capital spending, sought to sweat assets, or turned to used as a cheaper alternative.
Stephen Mdvor, export and sales manager, and sales manager Vince Croot handle more than 1,800 trailers (mainly SDC products) a year, which come back to SDC primarily through part-exchange, as well as some buy-back and a little bit of sourcing.
McIvor says the number of trailers coming back in this year is likely to increase as there are some major deals in the pipeline with supermarkets, retail, distribution and rental sectors.
The most popular types of trailers being retailed back into the UK markets are predominately 2007and 2008-built curtainsiders and skeletals, coming back in on five-year lease agreements.
In a tough economic environment, operators are keen to keep costs down. But as trailers enter their sixth and seventh years, costs can creep up. McIvor says these rising costs affect the bottom line and bring operators back to market to either trade in for new, or to have rolling stock refurbished. "This is customer-led; at five to six years there is less to do when it comes to refurbishment on the trailer curtains, sign-writing and paintwork," he says. "We can change the height, or convert them into flatbeds; we can refurbish them at a fraction of the cost of a new trailer.
"The MoT comes into that as well, but for the trailers we have a stake in [buy-backs], we have customer-returns conditions for tread depth on tyres, MoT length and the condition of the brakes," he adds.
Refurbishment Refurbishment work is split between the Mansfield and Toomebridge factories. Croot says customers willing to run on their existing fleet will either pay for the refurbishment or sell the trailer to SDC, which then does the renovation and sells it back to the operator on twoto three-year deals. This often works out cheaper for the operator.
About 90% of the trailers returning to SDC get some refurbishment work done, but it's specified by the customer and no work is done before a sale. "The trailers' second life tends to be with smaller operations, the dedicated hauliers, own-account, small hire business, as well as a bit of trade," says Croot. "Smaller firms tend to buy outright and are not interested in residual values."
If an operator wants a used trailer, McIvor is happy to take their older trailer in to satisfy export demands. "We export about 30% of the trailers we get and we do it ourselves, not through agents," he says. Although Africa is a key market, the biggest customers are the Middle Eastern countries such as Saudi Arabia and UAE, which are asking for better-quality products. Key specification includes drum brakes, he says, but they are starting to ask for disc brakes.
"They still like flatbeds, but they are starting to go for curtainsiders to satisfy their blue-chip customers," he says.
Since 2010, export has been affected by rising shipping costs. "That has gone up 25% in the past couple of years, and that dictates demand," he adds.
In the next two years, Saudi Arabia will introduce an MoT system for trailers — it already has one for trucks — so customers are asking for younger equipment. "That will only help the UK customers because the more we can export, the better it is for retail. They want anything up to 2004 and last year we sold some 2006/07 stock.
"If it's a 2004-built trailer, it might be difficult to retail here as it might need refurbishing to get it up to scratch. But if we can export it, we don't do the refurbishment and we can achieve a better margin," he adds. • Stephen Mcivor Now in his 25th year with SDC Trailers, Mclvor started on the shop floor before moving into repairs and warranty in 1998. He took on used sales in 2001, before moving into sales full time in 2006. He is now responsible for UK sales and export.
Vince Croot Croot started out as a technician in 1985 for a transport and hire company before taking up more senior roles in the business. He joined SDC Trailers' used sales division in 2009, tasked with reducing the amount of stock it had. "It was very different turning from poacher to gamekeeper. With my experience I knew a lot of what transport companies need and expect, especially in terms of timescale, and what they need in terms of trailers," he says.