June Trailer Orders Up 6%

The more than year-long surge in orders for new trailers showed signs of leveling off in June, increasing just 6% from 2010 levels, compared with an overall 65% gain over the first half of 2011, ACT Research Co. said.

Customers ordered 13,103 new commercial trailers in June, compared with 12,389 in June 2010, but it was the third straight monthly decline from March’s total of 28,075, the peak so far in the current recovery. The June number was 25.8% lower than May’s total.

However, manufacturers said the market remained strong, citing a low number of order cancellations and high numbers of requests for price quotes.

“The decline in June was bigger than expected,” ACT analyst Frank Maly told Transport Topics. “In fact, seasonal patterns would have called for a little bit of increase in June orders.”

Trailer manufacturers have received 118,763 new orders through June this year, compared with 71,941 in the first six months of 2010, ACT reported July 26.

Maly said that market factors remained strong.

“We have to keep the positives in mind and look to see what happens in the next month or two,” Maly said. “Production continues to be solid, and cancellation rates are extremely low.”

He added that the companies have built more than 100,000 new trailers through June of this year, “almost double” the 52,000 trailers they built in the same period last year.

“Never before has our industry experienced such a rapid recovery in demand as we have seen over the past 12 to 18 months,” Dick Giromini, chief executive officer of trailer maker Wabash National Corp., said in an Aug. 2 statement.

“Quote requests and discussions with customers remained very active,” Charlie Mudd, president of Vanguard National Trailer Corp., Monon, Ind., told TT. “Our order rate was lower [in June], only because we were mostly booked through the end of the year and not yet accepting orders for 2012.”

“We had one of our better months in June,” Glenn Harney, chief sales officer of Hyundai Translead, San Diego, told TT. “We did see a little drop-off in orders after June, but counter-balancing that, we’ve had more requests for quotes on new trailers than we’ve probably ever had.”

Wabash increased its projections for trailer shipments this year, even taking into account the three-month decline in orders.

“We are increasing our new trailer shipment expectations for full year 2011 to an estimated 46,000 to 48,000 units,” Wabash’s Giromini said. “With shipments now reaching pre-recession levels, a continued strong backlog of $736 million and the outlook for further growth in trailer demand, we remain confident on our strategic positioning.”

Wabash’s earlier forecast for 2011 was 45,000 to 47,000, spokesman Tom Rodak told TT. He added that the company’s 2011 projections were up sharply from the output of the previous two years.

“We shipped 24,900 units in 2010, which was nearly double our 2009 shipments,” Rodak said. Manufacturers shipped more than 19,000 new trailers in June, up from 12,000 in June 2010.

Chris Hammond, vice president of dealer sales at Great Dane Trailers, Savannah, Ga., was more cautious.

“Order activity has gotten into a gray area,” Hammond told TT. “We’re not shocked to see lower orders in the summer, but the drop was deeper than we’d have liked to see.”

Hammond said the depressed housing industry and slower automobile sales did not help trucking.

“But what’s driving the trailer market is still the age of the fleet,” he explained. “Fleets are still having to trade out their very old equipment, and that’s helping us.”

Hammond said that he believed that other trailer manufacturers,  such as Great Dane, were mainly taking orders for 2012.

“We’re closing the books on the year,” Hammond said. “By the time you publish, I think 95% of everyone’s year will be closed out, and they’ll all be working on first-quarter [2012] sales.”

Craig Bennett, senior vice president sales and marketing at Utility Trailer Manufacturing Co., City of Industry, Calif., was optimistic.

“New order intake is slower than last month, but not dramatically,” Bennett told TT. “Dry vans are still very strong, and we are putting out more dry vans from both our dry van plants now than last month, and still increasing.”

David Giesen, vice president of sales and marketing at Stoughton Trailers, said the Wisconsin company has seen a slowdown in orders, but he was also confident.

“[Our] numbers were relative to industry,” Giesen told TT. “June was slower than anticipated from an order standpoint.” He added that May orders declined from the April figures.

Giesen said the order slowdown “could be a three-month blip. We are . . . seeing some signs of improvement.”

He said another sign for optimism was, “We have had no cancellations.”

“We have been carefully increasing our 2011 build rate and opening some additional production capacity in 2011,” Mudd added. “We have not had any difficulty booking orders for the additional capacity. We are just this week starting to quote 2012 production.”