May Trailer Orders Decrease 54% Year-Over-Year
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U.S. trailer orders more than halved in May compared with a year ago to an estimated 9,100 units, according to data released by ACT Research.
Preliminary data show orders decreased 54% year-over-year from 19,783, ACT reported. Orders also fell about 10% sequentially compared with the prior month’s preliminary total of 10,000 units. Every month in 2023 so far has experienced a year-over-year decline, after closing out December 2022 with the second-highest level on record.
“Seasonal expectations call for orders to continue their pullback in the coming months, particularly given near record-level order backlogs, as trailer manufacturers normally spend midyear working down the backlog ahead of the next year’s order board opening in the fall,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research.
Giesen
Backlogs are, in fact, still very packed and much longer than usual, said David Giesen, vice president of sales for Stoughton Trailers. The Stoughton, Wis.-based company’s 2023 order book already shows few openings through the end of the year, he noted. . Giesen added that a customer recently lamented bygone years when ordering a new trailer meant a 90-day wait, and suggested that his competitors were likely in the same situation on backlogs. Otherwise, he said, the market would quickly exploit the opportunity.
In fact, ACT’s McNealy said backlogs remain robust across the industry. Most trailer categories are still near the top of their target ranges, she added, with many fleets needing trailers remaining in the queue for orders already placed.
McNealy
Using preliminary May orders and the corresponding manufacturer build plans from the company’s April data, the trailer backlog should decrease by around 19,000 units to around 194,000 units when complete May data are released, McNealy added.
Expectations are that monthly numbers will continue to fall, executives said.
“As we plan for 2024, we are seeing the expected summer slowdown in orders,” said Chris Hammond, executive vice president of sales at Chicago-based Great Dane. “The spot market has also had an effect on some sectors, such as stock inventory sales, as we would expect.”
McNealy said, “Albeit against strong comparisons, demand is softening. In addition to the seasonally anticipated slowing in orders, we’re starting to see increased and broad-based cancellations.”
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Giesen echoed that net order declines in recent months have come as a result of cancellations, especially from smaller players. But he stressed that trailer demand is normalizing ,with large customers staying in the market and some smaller customers pulling back. He expects larger players to continue submitting orders in the months ahead.
There are segmental bright spots though, Great Dane’s Hammond noted.
“We believe demand is set to remain strong for the reefer segment through 2024,” he said. “Dry vans might slow down next year some, but there is still pent-up demand out there pushing that market forward.”
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