US dry van orders reach near-record volumes following stimulus

A positive US net trailer order update.

Preliminary US net trailer orders for September ‘exploded’ to the third-highest month ever according to Freight Transportation Research (FTR).

FTR reported a total of 52,000 units for September.

Orders for the month were 23,500 units above August and 33,400 more than September 2019.

Trailer orders, including this latest activity, for the last 12 months now equal 224,00 units.

“The great majority of the September orders were for dry vans, FTR said in a statement.

“Refrigerated van orders were also comparatively robust. Flatbed orders are expected to continue their sluggish recovery. Backlogs are predicted to jump back up to December 2019 levels. The strong order totals from the last two months should push production up to pre-pandemic levels in Q4, with more increases expected, starting early next year.”

FTR reported that the Congressional stimulus package injected a tremendous amount of funds into the economy.

“This cash is being spent overwhelmingly in the consumer goods sector, as the service sector remains constrained during the pandemic,” FTR said.

“This has boosted dry van freight, constraining capacity, and lifting freight rates. Fleets have responded by ordering dry vans in near-record quantities. Also, despite reduced restaurant sales, many consumers have more disposable income available to spend on food, which is helping reefer sales.”

FTR Vice President of Commercial Vehicles, Don Ake, said there is an enormous amount of demand for dry vans to keep consumer goods on the move.

“Fleets are expecting the hot freight market to continue into 2021 and want to be prepared with adequate capacity,” he said.

“Reefer demand should also continue to be strong, and benefit from more restaurant activity as 2021 progresses.

“This appears to be a repeat of late-2018 when fleets ordered trailers in record numbers in September and October because of tight capacity and perceived limited build slots at the OEMs.

“There could be some irrational exuberance behind orders this high. Fleets are expecting the current conditions to continue well into 2021, and this may not be the case. The trailer market has seen incredibly wide swings in 2020 and it is difficult to determine how long the current momentum can last. Orders may stay elevated if fleets compete to lock up future build slots as they did in 2018-2019.”

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