Part
01
of one
Part
01
What is the market size for trailer tails in the United States?
Hello! Thanks for your question about the market size for trailer tails in the US. The short version is that the total addressable market for trailer tails can be estimated at between $16.35 million and $21.8 million dollars, with trailer tails capable of achieving a 4-6% efficiency gain in trucks. Below you will find a deep dive of my findings.
METHODOLOGY:
I carried out this research by reading reports and government statistics concerning the number of trucks on the road in the US and the extent of uptake on trailer tails. I also used the STEMCO site to learn more about trailer tail technology. Where available, I took statistics from reports, and used back-of-the-envelope calculations to estimate market size and extent of uptake so far. I have arranged my research into categories pointing to the key information requested by the client.
NUMBER OF TRUCKS ON THE ROAD IN THE US
According to the most recent available federal statistics, there were 10,905,956 large trucks registered in the US in 2014, accounting for 3.85% of the total number of vehicles (260,350,938). Together, these trucks drove 279.131 billion miles per year.
While these vehicles only make up just less than 4% of traffic on America’s roads, but account for 20% of the carbon pollution from the transportation sector, making increased fuel efficiency a vital issue today.
COST AND EFFICIENCY GAINS OF TRAILER TAIL TECHNOLOGY
The same report estimated fuel efficiency gains of 4–6% as a result of trailer technology, with the manufacturer and patent-holder for the technology, STEMCO, claiming between 5.09% and 5.82% (at 65mph) depending on the type of trailer in question.
In monetary terms, STEMCO claim typical results are a saving of '3 cents for every mile you drive, or an average of 8 gallons of fuel for every 1,000 miles of operation'.
A 2013 survey found that the payback time (period until capital investment was accounted for by fuel savings) for trailer tails ranged from 12 to 32 months.
While impressive alone, these efficiency gains can be increased in combination with other similar devices, such as trailer skirts. A 2014 study found that adding both devices 'reduced the aerodynamic drag by as much as 25 percent, which represents about a 13 percent decrease in fuel consumption'.
EXISTING UPTAKE OF TRAILER TAIL TECHNOLOGY
NACFE found that in 2014 roughly 1/4 of all trailers had some form of efficiency technology, but this was dominated by other skirting. Trailer tail technology is patented by STEMCO who are the sole manufacturers. At the time of the 2014 report, STEMCO reported just 20,000 units of trailer tail technology had been sold, and report writers estimated 3% of new trailers sold that year were equipped with tail technology. Assuming a high rate of growth at 15-20,000/year since 2014, the total number of trailer tail-equipped trucks would remain low, at 50-60,000 today (an additional 15-20,000 for 2015 and 2016 respectively). This represents just 0.45-0.55% of the current total number of registered large trucks in the US, or at an average estimate, 0.5%.
This proportion is likely higher if we restrict the study to commercially used trucks: studies by the Lawrence Livermore National Laboratory reports that in 2014 3-4% of the nation's semi-trucks used trailer tails in combination with other efficiency technology such as side skirts, also suggesting that a high proportion of trucks using trailer tails are doing so in conjunction with other technologies.
POTENTIAL MARKET
From my research, it appears that trailer tails are suitable for installation on any 'semi-truck' (i.e. large truck). Where sources describe the process of upgrading to trailer tail technology, they have stated that the upgrade has been applied to whole fleets of trailers without exception, and the STEMCO website describes the way in which trailer tail technology can be adapted for different truck types.
I have therefore worked on the assumption that every vehicle classified as a 'large truck' for federal registration statistics (as cited above) is eligible for trailer tail technology. Using the above source for the price of trailer tails, an estimate for total addressable market size can be made:
10.9 million x $1500 = $16.35 million
10.9 million x $2000 = $21.8 million
I would estimate the total addressable market at between $16.35 and $21.8 million dollars.
With already-equipped trucks at an average of 0.5%, there is therefore an unexploited market of $16.27 to $21.69 million (0.5% of above stats subtracted from total).
As alluded to above, it is likely that the most promising part of this market those trucks involved in commercial haulage, where companies are seeking to make large efficiency gains across their fleets (see this article for instance).
FACTORS AFFECTING WILLINGNESS TO INSTALL TRAILER TAILS
Fuel efficiency:
Fuel efficiency has been cited as the number one reason to install trailer tails and other measures to increase aerodynamics. The savings and almost guaranteed return on initial capital investment outlined above have been cited by various truck companies as the key motivation for installation.
Complying with government regulations:
A secondary factor cited to influence the willingness of truckers and trucking agencies to install tails (and other efficiency-increasing devices) is the necessity of reaching government fuel standards. This was cited as a secondary factor by the company Mesilla Valley Transportation in their 2010 tail refit, on the grounds that as a company operating extensively in California, they needed to take steps to meet the California Air Resources Board’s (CARB) new heavy-duty tractor-trailer greenhouse gas (GHG) regulation. This is incentive is stronger now: nationwide fuel standards decreed by President Obama in 2015 ordered a 10-20% increase in fuel efficiency across the trucking industry by 2018, depending on the class of truck.
Desire for automated systems (negative influence):
The NACFE report cited above claims that one reason for slower adoption of trailer tails is due to concerns over manual deployment, as 'the majority of fleets prefer passive technologies such as skirts, underbody devices, or gap reducers that generally do not require driver intervention.' However, the STEMCO manufacturer website shows that this problem has since been addressed, with the option of auto-deployment without driver action offered on two of the three forms of deployment to choose from. This suggests that in the future this will no longer be a deterrent to uptake.
CONCLUSION
To wrap it up, the total addressable market for trailer tails can be estimated at between $16.35 million and $21.8 million dollars, with trailer tails capable of achieving a 4-6% efficiency gain in trucks. The penetration rate is low, at around 0.5%, and with few factors discouraging uptake, I would expect trailer tail uptake to grow in coming years.
Thanks for using Wonder! Please let us know if we can help with anything else!