Preliminary information for October from ACT Research indicates that the US trailer industry booked 54,200 net orders for the month, up 6% from September and more than 68% better than the same month last year.
Photo: ACT Research
Before accounting for cancellations, new orders crossed the 56,000-mark, ACT notes. Final volume will be available later this month. This preliminary market estimate should be within +/- 3% of the final order tally. ACT Research’s State of the Industry: U.S. Trailers report provides a monthly review of the current US trailer market statistics, as well as trailer OEM build plans and market indicators divided by all major trailer types, including backlogs, build, inventory, new orders, cancellations, net orders, and factory shipments.
“September’s rank as third-best month in industry history was short-lived, as October activity now takes that title,” Frank Maly, director CV Transportation Analysis and Research at ACT Research, said. “Fleet commitments over the past two months have now pushed industry backlog to the highest level since June of last year. Increases in both freight volumes and rates, along with capacity challenges, have influenced fleets to aggressively enter the market.
“Current production rates would result in industry backlogs extending into next July. Expect OEMs to adjust build rates upward to take advantage of this positive shift in fleet investment.”
Similarly, FTR reports preliminary U.S. net trailer orders for October at 56,500 units, “an all-time record,” in FTR’s books. October’s orders were up 9% from September’s huge total and up a “sturdy” 68% from 2019. With this latest month, trailer orders for the last twelve months now equal 249,500 units.
Fleets again ordered dry vans and refrigerated vans in large quantities, most for delivery in the second half of 2021, according to FTR. Flatbed orders improved and should reach their highest total this year. Backlogs are expected to rise to levels not seen since mid-2019. The “fantastic” order volume should enable the OEM’s to increase build rates entering 2021.
Regarding the freight environment, FTR suggests that a surge in consumer-based freight continues to strain capacity and boost rates. Healthy fleet profits are resulting in large trailer orders for replacement of older dry vans and reefers, as well as orders for expansion due to the chaotic freight environment. Operationally, carriers are utilizing more drop-and-hook runs to compensate for the current driver shortage.
Compounding the problem is a “pronounced” shortage of wood and aluminum components, which is limiting OEM van production, FTR adds. Fleets are concerned about these supply issues continuing, so many are placing all their requirements orders for 2021 now to lock up future OEM build slots.
“This is a repeat of 2018 when fleets placed huge orders in September-October to reserve build slots in 2019,” Don Ake, FTR vice president of commercial vehicles, said. “Then, it was because the hot demand was outstripping OEM and supplier capacity. Now, it’s because the pandemic has disrupted the supply chain and some essential components are having trouble making it through the pipeline fast enough.”
Tempering the surge, FTR anticipates these bottlenecks will be resolved over the next few months, resulting in some of the large orders of the last two months being canceled or pushed out next summer, as happened in 2019.
“There are still significant risks due to the increase in positive COVID-19 tests. The industry powered right through the summer despite rising infections,” Ake said. “There is strong positive momentum right now, but it remains to be seen if possible new health restrictions will slow down the growth of freight. This industry is known for wild demand swings and we’ve gone from record low orders to record high orders in just seven months.”
This article was originally posted by American Trucker.
