TRAILER TERMINAL TRACTOR MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The trailer terminal tractor market size is estimated to be valued at US$ 6.68 Bn in 2023 and is expected to reach US$ 11.31 Bn by 2030, exhibiting compound annual growth rate (CAGR) of 7.8% from 2023 to 2030.

Terminal tractors, also known as yard trucks or yard dogs, are heavy-duty vehicles that are designed for moving trailers and containers in and around logistics facilities such as ports, warehouses and distribution centers. They improve operational efficiency in cargo handling by transporting trailers over short distances on the private facility where they operate. This eliminates the need for long-haul trucks to do the job within the confinement of the terminal area. The growth in e-commerce and logistics is a key driver for the market as it increases the need for efficient movement of cargo at facilities.

The trailer terminal tractor market is segmented into fuel type, tonnage capacity, end-use industry, technology, number of axles, and region. By fuel type, diesel accounted for the largest market share in 2021. However, electric terminal tractors are expected to grow at the fastest rate driven by sustainable transportation trends.

Trailer Terminal Tractor Market Regional Insights

• North America is expected to be the largest market for trailer terminal tractor market during the forecast period, accounting for over 40.0% of the market share in 2023. The growth of the market in North America is due to high adoption in the region’s large number of warehouses and distribution centers.
• The Europe market is expected to be the second-largest market for trailer terminal tractor market, accounting for over 25.2% of the market share in 2023. The growth of the market in Europe is due to increasing seaport volumes and stringent emission regulations promoting electric models.
• The Asia Pacific market is expected to be the fastest-growing market for trailer terminal tractor market, with a CAGR of over 16.8% during the forecast period. The growth of the market in Asia Pacific is due to rapidly growing e-commerce and manufacturing sectors in the region.

Figure 1. Global Trailer Terminal Tractor Market Share (%), by Region, 2023

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Trailer Terminal Tractor Market: Analyst’s Viewpoint

The trailer terminal tractor market is expected to witness steady growth in the near future. North America remains the dominant as well as the most lucrative market for trailer terminal tractors given the scale of logistics operations in the region. However, Asia Pacific is expected to witness the fastest gains as developing economies boost expenditure on infrastructure and expand manufacturing activities.

The key drivers boosting demand include growth in global trade and e-commerce. As the volume of cargo shipments increase across countries, airports, and seaports will need to upgrade equipment to improve terminal throughput. Fleet replacement of aging tractors will further spur replacement demand. However, rising geopolitical tensions pose a risk if they disrupt global supply chains. Environmental regulations mandating transition to cleaner fuels could increase costs.

Manufacturers are differentiating through new features such as telematics, remote diagnostics and driver assistance. This allows fleet operators to track assets, enhance uptime and boost driver safety. Autonomous operation is an increasing focus of research and development (R&D) as it could help address the driver shortage issue. Consolidation activity in the industry is also gathering pace as large full-line players seek market share.

Trailer Terminal Tractor Market Drivers:

• Expanding e-commerce and online retail sectors: Rapid growth of e-commerce and online retail globally is a major driver for the trailer terminal tractor market. More consumers are purchasing products online, which is leading to tremendous growth in order volumes for online retailers and e-commerce companies. This results in rising demand for efficient movement and handling of freight volumes at logistic facilities and transportation hubs. Trailer terminal tractors improve productivity in trailer movements, loading/unloading, and transloading operations. Their utilization in warehouses, fulfillment centers, and distribution centers is rising as companies aim to optimize workflow and enhance throughput.
• Development of smart and connected logistics infrastructure: Logistic companies and freight transportation hubs are increasingly adopting advanced technologies like internet of things (IoT), telematics, Global Positioning System (GPS) tracking, artificial intelligence (AI), and others to develop smart, efficient and connected logistics infrastructure. Intelligent logistics systems powered by automation, real-time tracking and data analytics which are enabling seamless trailer and container handling operations. This is driving uptake of trailer terminal tractors equipped with telematics and fleet management capabilities for seamless connectivity, location monitoring and coordination of yard truck fleets.
• Focus on sustainable logistics and supply chains: With rising emphasis on environmentally responsible business practices, logistics and transportation companies are focused on reducing their carbon footprint by implementing clean energy solutions. Electric and hybrid trailer terminal tractors help achieve this goal by eliminating emissions during trailer handling activities. Stringent emissions regulations especially in North America and Europe are also compelling facilities to replace diesel yard trucks with zero-emissions electric models. This transition to sustainable material handling is propelling market growth. In January 2023, GoComet Solutions Private Limited is the world's leading Logistics Resource Management platform, highlighted that the Port of Los Angeles in the U.S. provides facilities for both passengers and various types of cargo. These include cruise ships, containers, vehicles, breakbulk items, dry goods, liquid bulk, and storage spaces. The port plays a vital role in managing a significant portion, around 20%, of all incoming shipments for American seaports. Spanning an expansive 7,500 acres, efficient container tracking is essential for the port's operations to ensure the seamless movement and transport of goods that is to be valued at billions of dollars annually.
• Expansion of logistic facilities globally: Countries across the world are ramping up investments in development of large-scale logistic parks, mega warehouses, freight corridors and multimodal transit hubs to strengthen cargo handling infrastructure. For instance, in India, the government plans to build 35 multimodal logistics parks by 2025. The U.A.E is developing the Dubai Logistics City. Such initiatives lead to rise in demand for trailer terminal tractors for efficient unit load handling at these facilities. Growing air and ocean freight volumes also create need for expansion of airport and seaport capacity, driving adoption of terminal tractors.

Trailer Terminal Tractor Market Opportunities:

• Deployment of autonomous trailer yard tractors: Autonomous technologies are disrupting material handling processes across intralogistics facilities. Self-driving trailer terminal tractors equipped with sensors, Light Detection and Ranging (LiDAR) and Artificial Intelligence (AI) software can navigate autonomously in yards and warehouses. They improve productivity and efficiency while reducing labor costs that are associated with conventional operator-driven trucks. Pilot deployments of autonomous yard trucks have exhibited their feasibility. Wider adoption of driverless trailer spotting systems will create lucrative growth avenues. According to the National Highway Traffic Safety Administration, human errors contribute to over 90% of road accidents.
• Adoption of hydrogen fuel cell terminal tractors: Hydrogen fuel cells are emerging as a promising zero-emission powertrain for heavy-duty vehicles. Hydrogen-powered terminal tractors overcome issues such as limited range and long refueling times associated with battery-electric models. Their rapid refueling and long operating times between refills make them ideal for round-the-clock operations. Logistics companies are demonstrating interest in testing and deploying fuel cell yard trucks as they transition to sustainable material handling.
• Rise of electric truck charging and hydrogen refueling infrastructure: Expanding charging and refueling infrastructure for electric and hydrogen trucks will facilitate adoption of zero-emissions terminal tractors. Investments by logistics facilities in high-power electric vehicle (EV) charging stations and indoor hydrogen refueling systems will allow seamless transition of yard truck fleets to clean energy alternatives. Declining costs of charging and refueling equipment will also spur infrastructure growth. This will boost market prospects for electric and fuel cell terminal tractors.
• Emergence of terminal tractor rental and leasing services: Rising trend of leasing and renting commercial vehicles is also applicable to the terminal tractor market. Logistics companies are increasingly opting to lease instead of purchasing yard trucks to avoid large upfront capital investments. Terminal tractor OEMs (Original Equipment Manufacturer) and rental companies are offering flexible short-term and long-term leasing options. Rental services allow affordable access to advanced electric and autonomous tractors. They reduce risks associated with ownership while providing cost savings.

Trailer Terminal Tractor Market Trends:

• Growing adoption of lithium-ion batteries: Conventional lead-acid batteries are rapidly being replaced by advanced lithium-ion batteries in electric terminal tractors. Li-ion batteries offer benefits such as longer cycle life, rapid charging, lower weight, and smaller size. They allow electric yard trucks to achieve longer run times between charges. Falling prices and improving performance is facilitating adoption. Major OEMs like Kalmar, Terberg and Orange EV are deploying li-ion powered electric terminal tractors at customer sites. According to the report by the International Energy Agency, the demand for automotive lithium-ion (Li-ion) batteries increased by approximately 65%, reaching 550 GWh in 2022 as compared to 330 GWh in the previous year. This growth is mainly to a 55% rise in new registrations of electric passenger cars in 2022 compared to 2021.
• Platooning of terminal tractors: Platooning technology for automated trailing of multiple trucks is gaining traction in terminal tractor fleets. Platooning eliminates need for a driver in the trailing trucks, thus allowing single-operator control of multiple terminal tractors hauling containers and trailers. This increases efficiency and reduces cost of operations. Logistics facilities are piloting platooning terminal tractors to streamline workflow. The technology leverages wireless communication and automated driving capabilities.
• Advanced trailer docking and automation solutions: Integration of cameras, sensors and automated control systems for self-docking of trailers is rising. Advanced auto-docking technologies such as self-steering axles and automated trailer alignment systems reduce driver input and human errors in precision tr`ailer positioning. They enhance safety and prevent terminal tractor and cargo damage. Automated yard truck docking solutions are enabling faster turnaround when attaching or detaching trailers.
• Usage based insurance for terminal tractors: Innovative insurance models like usage based insurance (UBI) are emerging for commercial vehicles including terminal tractors. UBI offers dynamic insurance rates based on real-time yard truck utilization metrics rather than fixed traditional premiums. Parameters such as mileage, operating hours, location, and driver behavior are monitored using IoT sensors to determine insurance costs. This allows logistics firms to benefit from cost savings due to fewer underwriting risks.

Trailer Terminal Tractor Market Restraints:

• High acquisition costs: Advanced electric, hydrogen and autonomous terminal tractors are significantly more expensive than conventional diesel trucks. Large upfront investments that are required to purchase newer technologies can deter adoption by price-sensitive buyers. For example, an autonomous yard tractor can cost over 3 times that of a standard diesel tractor. Many facilities with constrained budgets may be reluctant to incur such high capital expenditures. This may slow replacement of aging fleets. However, advancements in autonomous technology can enhance operational efficiency, thereby leading to improved productivity and reduced labor costs.

Counterbalance: The cost of the trailer terminal tractor needs to be reduced by the companies so that many facilities are able to afford the cost such tractors.

• Lack of trained operators: Skilled operators familiar with new electric and automated terminal tractors are essential for leveraging their benefits. However, lack of trained personnel due to technological complexities can hinder adoption. Operators accustomed to driving diesel trucks require extensive retraining for operating advanced electric and self-driving yard tractors. Shortage of qualified drivers can restrict market growth. On the flip side, advancements in user interface designs and intuitive controls are simplifying the learning curve for operators, thereby making it easier for them to adapt to these new technologies.

Counterbalance: Proper skilled operators who are well trained in handling automated terminal tracyors needs to be employed, thus driving the market growth.

• Infrastructure limitations: Transition to alternative powertrains like electric and hydrogen fuel cell requires developing supporting refueling/recharging infrastructure. Lack of adequate charging stations and hydrogen refueling systems at logistics facilities can deter investment in zero-emissions tractors. Limited technical expertise and high costs that are associated with deploying modern infra remain key challenges. Until robust infrastructure availability, diesel-powered tractors will dominate the market. On the other side, advancements in technology are continually driving down the costs that are associated with establishing these facilities. Collaborative efforts between industry stakeholders, policymakers, and energy providers are paving the way for innovative solutions and financing models to accelerate infrastructure deployment. As these initiatives gain traction, they are likely to bridge the existing gaps, facilitating a more seamless transition to electric and hydrogen-powered tractors, eventually reducing the dependency on diesel-driven vehicles in the long run.

Recent Developments

New product launches

• In August 2023, Kalmar, a division of Cargotec, announced its acquisition of the product rights for the electric terminal tractor line from Lonestar Specialty Vehicles (LSV) based in the U.S.
• In March 2023, TICO (Terminal Investment Corporation) Manufacturing, recognized as a leading manufacturer of terminal tractors and one of North America's largest terminal tractor fleet owners and operators, unveiled the full-scale production of its pro-spotter electric terminal tractor. Collaborating with Volvo Penta, is a Swedish marine and industrial engine manufacturer, TICO has incorporated Volvo Group's established driveline, batteries, and electronic accessories into the pro-spotter electric (EV model). Having received initial orders for this model during its pre-production phase, TICO plans to deliver its inaugural retail unit by May 2023, with mass production set to begin later in the second quarter of this year.
• In February 2023, Orange EV manufactures and sells heavy-duty industrial electric vehicles, introduced its T-Series electric terminal truck to the market. Setting itself apart, the T-Series from Orange EV offers capabilities comparable to traditional diesel terminal trucks but with enhanced benefits. Operators can transport equivalent loads while experiencing a 90% reduction in fuel costs and completely eliminating both diesel fuel consumption and emissions.

Acquisition and partnerships

• In June 2022, Kriete Truck Centers is a 3rd generation family-owned truck dealership organization, revealed its new status as an authorized dealer for Autocar terminal tractors.
• In June 2021, Autocar, LLC, recognized as North America's pioneering brand specializing in severe-duty vocational trucks, partnered with Big Truck Rental, the continent's foremost rental provider for essential services vehicles, to unveil North America's sole national terminal tractor rental initiative for fleets. This significant collaboration addresses a notable void in the underserved terminal tractor rental sector.

Figure 2. Global Trailer Terminal Tractor Market Share (%), by Technology, 2023

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Top companies in Trailer Terminal Tractor Market

• Kalmar (Cargotec Corporation)
• Terberg Special Vehicles
• MAFI Transport-Systeme GmbH
• Mol CY NV (Mol)
• TICO Tractors
• Capacity Trucks
• AUTOCAR, LLC
• Sinotruk (China National Heavy Duty Truck Group Co., Ltd.)
• Dongfeng Commercial Vehicle Company Limited
• Saic Hongyan Commercial Vehicle
• C&C Trucks Co , Ltd
• Orange EV
• BYD Motors Inc.
• Baumann Manufacturing
• Toyota Kirloskar Motor
• Taylor-Dunn ( WAEV INC.)
• XCMG Group
• Liugong Machinery Co., Ltd.
• Zoomlion Heavy Industry Science&Technology Co., Ltd.
• Volkswagen

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