April Trailer Orders Rise 12% After 3 Straight Monthly Drops

Trailer orders staged a comeback last month after three straight monthly declines, climbing 12% above both the year-earlier month and March, as fleets stepped up the pace of replacing older equipment, ACT Research reported.

The order books at manufacturers swelled to 22,017 units, from 19,579 the year before and 19,598 in March. Last month’s report included a 12% rise in dry van orders, the industry’s largest segment, and reversed the three-month trend that left orders 1% behind the first three months of last year. 

“Fleets have been paying so much attention to power units that trailers haven’t gotten any love,” ACT Vice President Steve Tam told Transport Topics on May 23. He said carriers’ focus is on “continued replacement” rather than adding capacity. “Those that have taken the time to look at their trailers are shocked at what they are seeing in terms of condition.”

“We’re continuing to satisfy a pent-up replacement demand,” said Charles Mudd, president of Vanguard National Trailer Corp., Monon, Ind. “There was a slight seasonal low as in any normal year in March. But no one suspected a weakening market.”

Mudd also said that orders “are staying strong, and I don’t anticipate demand weakening. Our demand has stayed steady.”

In addition to dry vans, the flatbed and specialty trailer segments are doing best, ACT and manufacturers reported.

“The dry van business is hot and the flatbed market is even hotter,” said Craig Bennett, senior vice president of sales and marketing for Utility Trailer Manufacturing Co., City of Industry, Calif.

Flatbed orders increased 78% year-over-year, ACT said.

Flatbed orders are increasing as the long-dormant construction sector that drives flatbed markets is bouncing back, fueled by increases in building of homes and commercial activity (5-21, p. 1).

“We are experiencing a pretty good month when it comes to the dry freight side,” said Glen Harney, chief sales officer at Hyundai Translead, San Diego.

“I would not read an awful lot into” sales gains, Harney added, noting that some April orders could be carry-overs from March. “These are sales we were working on for several months.”

While van and flatbed improved, orders fell 33% for refrigerated trailers.

“We do recognize that there has been some softening on reefer orders, but it is in the truckload sector,” said Brandie Fuller, vice president of marketing at Great Dane Trailers, which she linked to carriers’ caution about freight volumes and rates.

She said orders from other segments of trucking remain strong.

Tam said the dip in refrigerated trailer orders mirrors recent trends, with April orders about 15% below average on a historical basis.

“Logically, it makes sense,” he said. “If you want to keep your ice cream frozen during the warm months of the year and you haven’t ordered your trailer by now, you may not get your new trailer in time to beat the heat.”

Orders also rose in the specialty trailer segment that includes liquid bulk and tank as well as grain and dump trucks.

The increase was 46% in net orders, including cancellations that more than tripled.

Tam noted there has been a sharp spike in order cancellations in recent months for the tank and bulk sector that could be tied to changing natural gas market conditions.

“The energy industry had been hot,” Tam said, until the recent drop in natural gas prices and rising inventory have prompted some fleets to cancel their orders.

Even with the cancellations, Tam said makers of specialty trailers have an order backlog that stretches into next year.

ACT’s month-to-month statistics followed the direction of year-over-year orders, with dry van, specialty and flatbed orders rising, while refrigerated orders dropped.

Trailer orders have risen at the same time that Class 8 truck orders have declined. The 55% drop in truck orders was described by Tam and others described as a “pause,” rather than a sign that future tractor orders will continue to drop.

Tam also said ACT expects trailer orders to reach 252,000 this year, or 20% above last year.

That pace of 21,000 per month would be similar to the first four months of this year, which have totaled 89,591, or an average of 22,388.

Compared with 2011, Harney said Hyundai Translead’s orders have seen “a nice bump-up. We’re enjoying the increase year-over-year.”

Other manufacturers also reported stronger business levels.

“We’re building more trailers from an output standpoint than last year,” Bennett said, describing the increase as “significant.”

Staff reporter Greg Johnson contributed to this report.