Both FTR Transportation Intelligence and ACT Research report that trailer order saw a decline in December 2019 from both the previous month as well as December of the previous year.
FTR states that preliminary trailer orders for December were the lowest since August at 16,500 units. December trailer orders were -17% month over month and -41% year over year. Trailer orders for 2019 totaled 203,000 units. This decline is likely because fleets are displaying the same caution on trailers as they are showing in their Class 8 order activity.
ACT Research’s preliminary estimates for trailer sales also indicates a significant decline for December 2019 with trailer manufacturers booked 17,200 net orders to their orderboards last month, which is a 13% decline from November volume. Activity was 37% below last December. For the full year, the industry saw a 51% decline versus 2018 volume. That annual volume was the lowest since 2011.
Before accounting for cancellations, ACT found that new orders in December were 17,900 trailers, off 16% month-over-month and 39% below last year. Full-year new orders of just over 244,000 units were down 44% versus 2018. Final volume will be available later this month. This preliminary market estimate should be within +/- 3% of the final order tally.
“The year closed on a disappointing note, as fleets continue to maintain a very conservative stance toward 2020 capital investment,” said Frank Maly, director of CV transportation analysis and research at ACT Research. “Backlog declined in 11 months of 2019, with October being the only exception to that trend. The year-end orderboard sets a very soft foundation for OEMs for the new year, as OEMs seek to better balance their production volumes to their existing orderboards,”.
The large carriers are being careful with their ordering strategy by placing smaller orders with shorter lead times than is typical at the end of a calendar year, according to FTR. A great deal of uncertainty exists at the start of 2020 due to a weaker manufacturing segment, the drag of tariffs, and a tumultuous political situation. Buyer nervousness is expected to increase throughout the year due to the upcoming election and conflict in the Middle East.
Don Ake, FTR vice president of commercial vehicles, commented, “Freight is forecast to grow only about 1% this year, putting little pressure on fleets to boost trailer capacity as they did the last few years. However, total freight levels remain elevated and trailer production for 2020, although down significantly from 2019’s record year, is forecast to be good from a historical perspective. Fleets are expected to continue to replace old trailers based on their standard trade-in cycles. Van trailers sales, spurred by strong consumer spending, are still doing better than the vocational segments.”
Trailer orders should stay in the 20,000 unit a month range for a while, as fleets continue to carefully match orders with short-term demand. Eventually, the manufacturing sector should recover, generating more orders for flatbed and dump trailers.”
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