Strong trailer orders in August indicate early opening to 2018-19 season

Total trailer net orders came in at over 38,000 units in August, representative of a 31 percent increase month-over-month and a staggering 142 percent increase year-over-year, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report.

“Seven of ten trailer categories were in the black month-over-month, while year-over-year eight of ten were better. Year-to-date net orders are up 40 percent, led by a 110 percent gain in reefers, while dry vans are up 33 percent,” CV Transportation Analysis and Research at ACT Research Director Frank Maly said.

August’s standout numbers are indicative of an an early opening to the 2018-19 order season. The order season normally kicks off in September or October, then runs through February, according to Maly. He said last month’s numbers likely represent a pull forward in that whole time frame.

“We don’t see that there’s a whole lot of upward room on the production side,” he said. “We went through a phase of OEMs adding capacity a few years ago. Now, we’re at a point where they’re kind of building to the available materials.”

Maly anticipates less dramatic year-over-year comparisons in the coming months due to the strength of last year’s season.  

“We saw 38,000 units in August. By comparison, the last four months of last year averaged 36,000, with monthly totals ranging anywhere from 25,000 to 46,000,” he said. “It started out on the slower end in September and ramped up pretty evenly through year-end, We’re starting to get to some tougher comparisons.”

Still, Maly expects to see solid numbers continue to roll in as the busy season approaches.

“Fleets obviously need the product because of capacity challenges,” he said. “They have the means to acquire the product because profitability is good, given the volume they’re moving and their rates they’re moving it at. Everything has fallen into place here.”

He also noted that OEMs continue to experience inventory issues.

“Indications are that OEMs would have built more trailers but were limited by continuing component and material availability challenges. Tires are frequently noted as a bottleneck, with undercarriage components and wheels continuing to be mentioned as well,” he said. “Red-tags are also apparently continuing to occur, but less mention of them may indicate a bit less overall impact than in Q2. That said, we expect an attempt to clear some of those in the quarter-ending month of September.”

The backlog continues to stretch out into next April, and Maly said cancellations continue to be low.