US trailer net orders down in May

North America’s total trailer orders were seasonally weaker than expected according to freight intelligence experts.

Orders in May, according to FTR, fell 56 per cent from the April level to 5,766 units – down 14 per cent year-on-year and 65 per cent below the average for the past 12 months.

The number of trailers ordered over the last 12 months now totals 198,200 units.

The May decrease, according to FTR, was primarily driven by a substantial drop in gross orders coupled with the sustained high level of cancellations.

Trailer production decreased by 5.0 per cent month-on-month and 22 per cent year-on-year in May, totalling a still relatively high level of output at 21,781 units. This build level is 10 per cent lower than the average May level over the past five years.

With net orders coming in substantially below production levels, backlogs in May dropped, falling by almost 18,500 units to end at slightly more than 128,500 units.

The larger month-on-month decrease in backlogs than in production resulted in a decrease in the backlog-to-build ratio to 5.9 months. This ratio is the second lowest level since 2020 and is right in line with the historical average prior to 2020. The current ratio indicates little overall incentive for trailer manufacturers to adjust production levels.

“Truck freight hasn’t entered a recovery yet despite occasional signs of improvement,” said FTR Senior Analyst – Commercial Vehicles, Dan Moyer.

“The softness is particularly reflected in this month’s lower orders in the dry van and refrigerated van segments, although reefer van orders are still up year-on-year for 2024 to date.

ACT Research also shared its analysis, citing US trailer demand under growing pressure.

May net orders, at 6,100 units, were about 46 per cent lower year-on-year and 7,650 units below April’s intake. May’s tally brings the year-to-date net order activity to 68,200 units, 25 per cent lower than the first five months of 2023.

Jennifer McNealy, ACT Research Director – CV Market Research & Publications, said that on that basis the orders decreased 59 per cent month-on-month.

“Dry van orders contracted 85 per cent year-on-year, while reefers, albeit at low volumes, were still an improvement from last May’s negative net order tally,” she said. “Flats were 37 per cent lower compared to May 2023.”

McNealy confirmed that total cancellations in May were also high.

“The cancellation rate rose to 3.2 per cent of the backlog from April’s 1.5 per cent rate,” she said. “Eight of ten markets remained at or above the 1.0 per cent mark, with OEMs indicating cancellations from multiple fleets and dealers.”

McNealy said fleet willingness to spend on trailers is under growing pressure due to the capex constrained environment and the expansive EPA mandate landing in 2027.

“Coupling these factors and overstocked dealer inventories that are proving harder to move and the absence of a need for carriers to boost trailer:tractor ratios in the short-term, as capacity remains plentiful and spot market volumes and rates remain under pressure from private fleet capacity expansions,” she said. “And it adds up to a challenging part of the cycle for the US trailer industry.”

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