U.S. trailer order volume slid sequentially for the fourth month in a row, but it’s all relative when one considers that more than 26,000 net orders were posted in January, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report.
The report explains that the long-running order stream that started in the fall of 2017 and never really seasonally slid in mid-year is finally running out of steam, but not from lack of demand.
Meanwhile, FTR Intel reported that final order numbers for January came in at 26,300 units down 5 percent month-over-month and 39 percent year-over year.
FTR said the considerable year-over-year negative comparison is primarily the result of the huge spike in orders during January 2018, as fleets scrambled to catch up with robust freight growth. Cancellations were elevated in January for the second straight month, as fleets shift orders around to more precisely fit their requirements. Orders during the month were particularly strong for specialty trailers. Trailer orders for the past 12 months now total 396,000.
“Two factors are impacting order placement,” said Frank Maly, director – CV transportation analysis and research at ACT Research. “First, the dramatic surge in orders during the second half of 2018 rapidly filled available 2019 build slots, so few production spots are available, and secondly, just because fleets want to order doesn’t mean OEMs are willing to extend their obligations, given uncertainties of component costs that far into the future.”
Maly said January’s minor sequential backlog decline was that metric’s first month-over-month slide since June, with net order volume not quite strong enough to outpace build during 2019’s first month, as seven of the ten trailer categories posted sequential backlog declines.
Further, the report noted that with reefer backlog currently projected to extend into early February 2020, OEMs would like to increase build rates this year, but noting that cooperation from key component suppliers would be needed.
ACT said overall, total industry backlog approaches Thanksgiving.
“This was still a positive month for trailer orders considering how many orders are already in the backlog,” said Don Ake, FTR vice president of commercial vehicles. “All trailer segments are expected to start off 2019 with momentum, which is good news for the industry and general economy. The business uncertainty and more subdued economic indicators have not impacted the trailer market as of yet. We do expect the market to cool slightly in the second half of the year as freight growth moderates, but for now, there is still a huge demand for new trailers across most segments.”