US trailer market cooling

US trailer orders were down 10 per cent month-over-month in June and 56 per cent on a year-over-year basis, FTR reported.

With 11,900 units ordered, the industry saw the weakest June result since 2009, the consultancy established.

“Orders were below expectations due to elevated dry van cancellations,” explained Don Ake, FTR’s Vice President of Commercial Vehicles. “Orders have totalled 271,000 units the last twelve months, with backlogs falling to their lowest level since September 2014. “

According to Ake, orders in all trailer segments were similar to May’s totals – with the exception of dry vans, which were down by 2,000 units from the previous month. Segmented trailer production was either flat or marginally down.

“It appears that the Q4 backlog has begun to soften because of moderating freight demand, with fleets re-evaluating their second-half requirements.

“Monthly trailer orders have averaged only 13,700 units, so the market is cooling. Backlogs fell 15,000 units, likely a record drop for one month.”

Despite that concerning development, Ake said production remained strong in the van segments. “Backlogs are still decent and production should fall only moderately in the coming months.

“However, flatbeds and tankers are not expected to improve any time soon. Dump trailer orders have weakened, so production cuts are probably on the way.”

June data published by fellow US research company, ACT Research, is equally bearish: The company reported trailer net orders fell seven per cent month-over-month, and contracted a staggering 52 per cent year-ove-year.

“June net orders were the lowest monthly volume since July 2012, amid weak Q2 fleet financial projections, lower freight rates, and disappointing freight demand,” said Frank Maly, Director–CV Transportation Analysis and Research at ACT.

“Perceptions are that none of these factors will reverse course in the short to medium term, and this does not position the industry well for the remainder of the summer.”

He added that this is “particularly a concern” because seasonal patterns already label July and August as the weakest order months of the year: “Increased production capacity, with multiple facilities coming on line, will challenge OEMs to balance that new capacity with possible fleet investment restraint.

“Additional capacity and willingness to aggressively continue replacement programs will come under close evaluation.”

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