Trailer Orders Up 74% in July, Led by Surge in Dry Vans

This story appears in the Aug. 30 print edition of Transport Topics.

Orders for new trailers rose 74% in July over July 2009, pushing year-to-date levels ahead by the same percentage, ACT Research Co. reported.

The monthly order figure was 10,688, boosting the total through the first seven months of the year to about 81,000, a 74% increase over the 46,600 units ordered in the same period in 2009, said ACT, Columbus, Ind.

The figures show the industry is “continuing a healthy rebound from what was one of the worst years in the commercial trailer industry,” ACT said in its Aug. 24 report.

Separately, R.L. Polk & Co. said registrations of new trailers at least 24 feet in length increased 38% in the first six months of 2010 from a year earlier.

Trailers orders can be placed for delivery far into the future, while a trailer must be registered before it can be placed into service.

“This increase is significant, in that it indicates that the worst may be behind us and the market is beginning to add new trailers,” Polk said. “Significant is [that] the main trailer type, vans, increased 74.9% in the six-month period versus the same period last year.”

ACT said orders for dry van trailers, the largest segment in the commercial market, were up 134% year-over-year in July.

Although July orders fell 9% from June, the decrease was “entirely explained by normal seasonality of new orders,” ACT said.

Brent Yeagy, general manager for transportation products at Wabash National Corp., Lafayette, Ind., said orders from truckload fleets have spurred the increase.

“Wabash saw demand increase in late February and early March, mainly on the truckload side,” Yeagy told TT. “We’re still waiting for the less-than-truckload and specialty carriers to move.”

He said that Wabash’s truckload customers were mainly large, publicly traded companies “who became bullish when both their profitability and their tonnage increased at the same time.”

Wabash was the market leader in dry van registrations for the first half of the year, Polk said but did not provide exact figures.

“We’ve been seeing a consistently steep incline in demand, and it’s been increasing month-over-month,” Yeagy said. “I would say it’s definitely slanted to the dry van segment more than usual.”

Wabash’s build rate is confidential, Yeagy said, but the company hired 700 temporary workers and added a second shift at its Lafayette plant.

Mike Cobb, sales manager for dry van producer Vanguard National Trailer Corp., said Aug. 26 that sales exploded over the “past 60 to 90 days.”

“I’ve been in this industry since 1981, and I can’t remember any other time when we booked up the year so early,” Cobb told TT. “Our build capacity was booked solid through this year by the beginning of August, and we’re now filling the first quarter of 2011 rapidly.”

He said that Vanguard’s plant in Monon, Ind., expanded from a “skeleton” staff of 80 to 250 employees in the past two months, working two shifts of four days a week, 10 hours a day.

“We’re putting out about 35 trailers a day now,” Cobb said. “The only way we could go to three shifts is to work Friday, Saturday and Sunday, and we won’t do that.”

Vanguard is a subsidiary of China International Marine Containers Ltd.

Steve Kingman, executive vice president of Talbert Manufacturing Inc., Rensselaer, Ind., said his company’s products of heavy-haul and low-bed trailers are trailing other segments of the industry.

“We’re finally showing some signs of an upswing, but a little slowly, after a sluggish spell of several years,” Kingman told TT. “We depend on the construction and infrastructure industry, and only parts are recovering now.”

Elsewhere, Craig Frohock, general manager of trailer products at ArvinMeritor Inc., said his division has seen “substantially larger net order intakes for the last four or five months, and this has translated to much, much higher production over last year.”

ArvinMeritor’s product line for trailers was mainly for the undercarriage, including trailer axles, brake drums, air suspension systems and wheel components such as hubs.

Frohock said that ArvinMeritor brought back a substantial number of laid-off workers for its main trailer products plant in Frankfort, Ky.

ACT said it forecasts manufacturers to build 116,000 trailers for all of 2010, compared with 79,000 trailers constructed in 2009.

“The build rate this year is still well below the estimated replacement rate of 190,000 new trailers annually, so that the industry has a lot of room for growth,” said Steve Tam, vice president of ACT’s commercial vehicle sector.

He added that all major trailer manufacturers were weathering the recession.

“It’s a war of attrition, and so far, everyone is holding up,” Tam said. “All the major companies are hanging on, cutting costs, waiting for better days.”