Trailer Orders for April, May Outpace Previous Two Qtrs.

This story appears in the July 6 print edition of Transport Topics.

U.S. orders for new trailers put in their best two-month performance in a year through May, leading original equipment manufacturers to express cautious optimism for their industry. However, major OEMs would not declare the recession at an end.

For-hire and private U.S. fleets ordered 8,950 new trailers in May, according to a June 23 report from ACT Research Co. That followed 12,023 orders in April, for a combined total of 20,973 — or more orders than in either of the previous two quarters.

The low point for new U.S. trailer orders came in the fourth quarter, which totaled just 17,653. During this year’s first three months it was a similar 18,239 orders for new units.

“We, maybe, have hit bottom, and there seem to be some pluses, but not big ones. Trailers are still dismal but better than they had been,” said Ken Vieth, ACT’s senior partner and general manager.

Trailer sales have followed a pattern similar to heavy-duty truck sales, falling steadily and significantly from a banner year of more than 260,000 units in 2006. Forecasters have said this year is supposed to be the industry’s worst sales year since 1975, with a prediction of around 70,000 units (click here for previous story).

ACT’s Vieth said the July-to-September quarter will provide an important test for any notion of recovery, as the third-quarter is traditionally the industry’s squishiest period for new orders.

Trailer manufacturing executives said the market’s strongest spots were refrigerated trailers and large private fleets.

Demand for refrigerated trailers has held up because of consistent demand for food and a new California environmental regulation on soot filters for reefer unit engines. Also, early survey returns to Transport Topics in connection with the Top 100 lists, to be published July 13 and Aug. 3, showed large private fleets were more inclined to increase their trailer fleets than were large for-hire fleets.

“We’ve seen some activity by reefer fleets that is in line with what you would expect,” said Chris Hammond, vice president of dealer sales for Great Dane Trailers. “In terms of food, the population is not changing, and in California there’s the new rule by CARB. There is an uptick, but is it a trend?”

“We’ve seen a slight upturn,” said Chuck Cole, manager of sales and product training for Utility Trailer Manufacturing Co. “We’re doing respectably based on current economic conditions, but it’s not what we’re used to.”

“We’ve seen a slight uptick in business,” said Glenn Harney, chief operating officer of Hyundai Translead, San Diego. “The problem is that it’s too early to tell if this will stick. It feels like we’ve hit bottom, but I can’t back it up.”

Hammond and Utility’s Cole both mentioned the California Air Resources Board’s rule on refrigeration units as leading to orders and even some sales. Cole said he has been hosting Web-based seminars on the subject for dealers and customers.

“Enforcement starts July 17 for units from 2001 and older,” said Cole. “Then as of Dec. 31 it goes to 2002 units and older.” Utility Trailers has its headquarters in City of Industry, Calif.

The rule pertains to engine emission standards for trailer reefer units operating in California. Cole said the issue can be addressed through retrofits, but some fleet managers are opting for replacements instead, although he said he could not quantify the amount.

Wabash National Corp. also was asked for comment, but declined to do so. Great Dane and Wabash are the two largest U.S. trailer OEMs, according to registration data from R.L. Polk & Co.

In a survey of large fleets, early results from TT’s surveys suggested that private fleets are more inclined to buy trailers now. Among 42 private fleets responding, the average company said it would buy 124 trailers during the next 12 months, compared with actual purchases of 94 units over the past 12 months, or an increase of 31.9%.

Among 62 for-hire fleets, the average response was for 176 new trailers to be purchased over the coming 12 months, compared with 315 actual purchases over the past 12 months, a decline of 44.1%.

Senior Features Writer Daniel P. Bearth contributed to this report.