2012 Is U.S. Trailer Makers’ Best Year Since ’06

This story appears in the Feb. 4 print edition of Transport Topics.

U.S. trailer makers took in more orders for new equipment in 2012 than in any other year since 2006, and said they have a strong enough backlog to keep busy through the middle of this year, even as the economy has cooled.

A Jan. 28 report from ACT Research Co. said net December orders came in at 30,594, or 21.7% above the final month of 2011. The annual total rose to 239,219, up 1.1% from 236,589 in 2011.

The record for trailer orders was 286,500 units in 2006, the same year that truck sales peaked. When the recession hit, however, trailer orders plunged to just 85,100 units in 2009. Since then, annual orders have nearly tripled, according to ACT figures.

ACT also said shipments of finished trailers from factories rose by about 13% to more than 240,000 units last year from 213,000 in 2011.

“We track 10 types of trailers in our survey, and all of those categories grew in terms of shipments on a year-over-year basis,” said Frank Maly, ACT’s director of analysis and research. “The December orders lay a strong foundation for 2013. There are still deals in the pipeline that are rolling out.”

“We finished off pretty well in December,” said Chris Hammond, vice president at Great Dane Trailers, who noted the Savannah, Ga., company’s order backlog is “pushing well into the second quarter.”

“There is still a hangover effect from 2009 to 2010,” he said, as customers realign their trade-in cycles.

Glenn Harney, senior vice president at Hyundai Translead, said quote and order volumes have remained steady and that production for vans is fully booked through mid-May and through mid-June for refrigerated trailers.

Utility Trailer Manufacturing Co. made more trailers last year than it has ever done, said Larry Roland, the Los Angeles-based company’s marketing director, adding that the 2012 sales volume exceeded 2011 by 13%.

Combining Utility’s production in dry vans, flatbeds and refrigerated, Roland said that last year, the company’s sales “did very well in the grand scheme of things.” It sold more than 18,000 refrigerated trailers, the second-highest amount in its history behind 2006.

Stoughton Trailers sales and marketing vice president Dave Giesen said some of his customers for dry vans have been bumping up against an informal “10-year rule.”

“There are some shippers who simply won’t load or unload a trailer that’s older than 10 years,” said Giesen, describing the preference as driven by safety concerns.

So far, he said, he sees the sales as replacement purchases rather than growth in the nation’s total trailer fleet.

With another year of modest growth, orders will be comparable to the 2004-2006 high-volume days, when orders rose from 245,000 in 2004 up to the 2006 peak.

Management at Fontaine Trailers, a maker of flatbeds and other platform trailers, expects this will be a “solid year, but maybe slightly off from 2012,” said Alan Briley, vice president of sales and marketing for Fontaine’s commercial platform division.

Flatbed carriers “were replacing equipment for the first time in several years,” Briley said.

Fontaine’s backlog of unfilled orders was nine to 12 months a year ago, he said, a level that starts to get difficult. Now it is three or four months, he said.

MAC Trailer Manufacturing has been lucky in its expansion, said Steve Hallas, vice president of sales. The company entered the pneumatic bulk tank business in 2009, the bottom of the recession, and benefited from sales to companies needing to haul sand for hydraulic fracturing in oil and gas fields.

“We had a record year for sales in 2012, after having a record in 2011,” Hallas said.

Pneumatic bulk demand has dropped off, he said, but flatbed demand has grown to compensate.

Jeffrey Kauffman, stock analyst for Sterne, Agee & Leach, said he thinks fleet managers are shifting investment incrementally from trucks to trailers.

“Trailers will crowd out trucks in 2013,” he said.

Orders for new trucks contracted, year-over-year, for most of 2012, and U.S. retail truck sales have shrunk since September, even though 2012 was better than 2011, according to surveys by ACT and WardsAuto.com.

“We’ve noticed the separation between trucks and trailers,” said Rence Oliphant, a vice president of sales and marketing for suspension maker Hendrickson International. “It’s gotten slower in trucks, but trailers have held on.”

Oliphant said fleet managers postponed trailer purchases longer than their tractor buys, so the need to buy trailers is more acute. In addition, a new heavy-duty tractor can cost about $125,000, so fleet managers might wish to postpone such a major purchase, he said.

“Fleets are looking for value in their capital spending now, and trailers are probably a better bargain,” Oliphant said, adding that, while all types of trailer makers are buying suspensions, the dry van market is “the hottest.”

Wabash National Corp. declined comment because it is scheduled to report earnings this week. The company announced it has purchased assets from Beall Corp.

Vanguard National Trailer Corp. did not return calls seeking comment.

Senior Reporter Rip Watson contributed to this story.