Trailer Demand Prospects Dim Further as FTR Cuts Forecast
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Demand and consequently output prospects for U.S. trailer manufacturers continue to dim, said Dan Moyer, FTR Transportation Intelligence senior analyst for commercial vehicles.
The research group cut its 2024 trailer production forecast to 233,602 in recent days from 248,800 in March, with the latest estimate indicating a 25.7% year-on-year decrease in manufacturers’ output.
Speaking at the FTR Transportation Conference 2024 in Indianapolis, Moyer said indicators of demand, such as orders, cancellations, backlogs and lead times, alongside the weak for-hire freight environment, were all inhibiting trailer demand.
The three-month period of May through July saw orders below 6,000 trailers per month, according to FTR data, for the first time since the company began tracking the figures. Total trailer orders are near a four-year low, said Moyer, with only the start of the COVID-19 pandemic marginally undercutting this figure.
So far in 2024, trailer orders are down 20% year over year, while July orders fell 38% compared with the same month last year. Dry van trailer orders in 2024 fell 29% through July, while flatbed orders slid 9% compared with the first seven months of 2023, but refrigerated trailer orders rose 18%.
Moyer
Also in the May through July period, trailer cancellations were above 30%. But so far in 2024, cancellations are down 43% year over year, said Moyer.
Simultaneously, trailer backlogs were down 45% year over year in July at 100,300 units, and trailer lead times fell below 5.5 months in July, compared with around nine months at the start of 2024 and about 11 months at the start of 2023.
Meanwhile, dry van and reefer trailer dealers’ inventories are double where they would like them to be, Moyer said. Dry van freight accounts for 32.7% of all loads.
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“That is going to create some problems in the coming quarters,” Moyer said, adding: “This is an issue that is not going to go away. The outlook isn’t great. Potentially, there’s some cuts to be made.”
In March, FTR expected U.S. trailer production in 2025 to total 275,000 units but now expects build numbers to total 260,300.
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That said, there could be a rebound in 2026. FTR’s 2026 production forecast currently stands at 296,300 units, compared with 290,000 trailers in March.
Further upside is seen in 2027 and 2028 when 302,000 and 305,000 trailers are expected to be built, respectively.
However, Moyer said there is risk to the downside in terms of dry van trailer production in 2025 if for-hire freight market rates remain soft.
FTR currently expects dry van trailer production to total 146,000 units in 2024 and 158,000 units in 2025, Moyer told conference attendees.
“We need to see orders coming in in the next three or four months or that puts some pressure on the front half of next year,” FTR Chairman Eric Starks said.
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