Trailer Orders Creep Upward as Backlogs Continue to Grow

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

New trailer orders edged up 1.3% to 13,615 in June from a year ago, ACT Research said, with most manufacturers continuing to report healthy backlogs.

June marked the 15th monthly year-over-year gain in the past 18 months, although orders were down 4.1% from May. ACT Vice President Steve Tam said the order tally was in line with normal seasonal cycles.

“On the trailer side, the recovery there was delayed longer than it was on the Class 8 [tractor] side, so it’s about time these guys are finally starting to put some new equipment out on the road,” Tam said.

Through the first six months of 2012, trailer manufacturers received 117,491 net orders, compared with 119,122 in the first half of 2011, Tam said.

Despite that lower orders total, trailer makers’ backlogs stood at 104,000 units in June, a 6.1% increase from the same month a year earlier, Tam said.

An official at Great Dane Trailers, Savannah, Ga., said the company’s backlogs now extend into 2013 for most product lines.

“When you get a big burst of orders like we did at the end of [2011] and the beginning of [2012], it really pushes things out,” said Chris Hammond, vice president of dealer sales.

In recent months, however, new orders have cooled.

“We’re slowly adding onto those backlogs, but it’s just not the rapid pace it had been early in the year,” said Hammond, who added that Great Dane saw a slight decline in June orders compared with a year ago.

Wabash National Corp., Lafayette, Ind., said in its quarterly earnings report last week that new trailer shipments rose to 11,700 units in the second quarter, 400 above the previous year’s quarter.

“While shipment volume came up shy of our expectations, this is directly attributed to our commitment to drive price and margin enhancement through more selective order acceptance as we opted to decline some low-margin, high-volume opportunities in favor of capturing higher margin orders,” CEO Dick Giromini said in an Aug. 1 conference call.

“Overall order patterns remained consistent with recent historical averages and in line with the current stage of the industry recovery, and are expected to again show strength later in the year,” Giromini added.

Mike Cobb, sales manager at Vanguard National Trailer Corp., Monon, Ind., said his company’s production schedule is nearly full for 2012.

“Right now, we have seen a little bit of a slowdown [in new orders], only because we haven’t opened up next year yet,” he said. “As soon as we do that, we expect a lot of people to get in line and start placing orders.”

Dave Giesen, vice president of sales and marketing at Stoughton Trailers, Stoughton, Wis., said his company’s backlog remains at “historically high levels.”

One of the company’s customers, however, canceled 350 dry-van orders in June, he said.

“I think part of the issue is people are ordering out further than they usually do because of our backlogs,” Giesen said.

Stuart James, vice president of sales at Hyundai Translead, said several major fleets have approached the company to line up future orders for later this year.

“There’s a need for new equipment out there still,” he said, adding that many fleets that were facing a cash crunch during 2007-2009 decided to extend their replacement cycles.

“We think some of that’s being corrected now, and we expect that to continue into next year with just a little bit of luck,” James said.

The average trailer age was 8.1 years in 2011, but ACT Research expects that number to slip to 8 years in 2012. The average age peaked at 8.2 years in 2010.

Tam said durability improvements have contributed to the high average trailer age in recent years.

“The quality of trailers has really increased dramatically over the last decade,” he said. “Where we used to see low sevens, high sixes for an average age, we don’t need to be there anymore.”

Modern trailers now feature technology such as powder coating to protect the undercarriage from rust, he said, while their floors and sidewalls also have become more durable and easier to maintain.

Hammond, of Great Dane, pointed to another factor: Fleets are using their trailers more efficiently.

“They’re got more technology on their trailers to know where it is, when it’s being utilized and when it’s not,” he said.

Polar Tank Trailer, a unit of Polar Corp., St. Cloud, Minn., noted a drop-off in orders for sand trailers used to serve the hydraulic fracturing, or fracking, industry.

“The market, I think, may be saturated,” said Garrity Gerber, Polar Tank Trailer’s marketing manager. “Until the rig count starts to go up, we probably won’t see another influx of sand trailers.”

Utility Trailer Manufacturing Co. and Heil Trailer International did not respond to requests for comment before Transport Topics’ deadline.