Trailer Orders Fall for First Time in Five Months in November
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U.S. trailer orders fell sequentially for the first time in five months in November, plunging more than 40% month-over-month, according to preliminary data released by ACT Research.
Preliminary November net orders totaled 21,100 units, some 14,200 less than October’s total, and a 47% slump compared with the same month in 2022, according to the ACT data. Just one month — September — has seen a year-over-year increase so far in 2023.
“With 35% of the year’s orders historically booked in [the fourth quarter], the quarter’s seasonal factors run roughshod on the nominal data. Seasonally adjusted, November’s orders are reduced to 15,700 units. On that basis, orders decreased 40% [month-on-month],” said Jennifer McNealy, director of CV market research and publications at ACT.
Trailer orders in November were 7% above the current monthly average for 2023, according to FTR Transportation Intelligence calculations. FTR reported November U.S. trailer net orders fell by more than 13,000 units, or 38%, month-on-month to 21,362 units. Orders were down 45% compared with the same month in 2022, it added.
McNealy
Original equipment manufacturers are adjusting their expectations as a result.
“As an OEM we have felt the shift in the market and although orders continue to be placed, they are certainly off the pace experienced over the last few years. This being said, the past few months have met well with our recalibrated expectations of the market,” Theresa Check, Hyundai Translead Western senior director of sales, told Transport Topics on Dec. 26.
November’s per day trailer build rate at OEMs decreased 3% to 1,178 from October’s 1,220-unit per day rate, McNealy said in a Dec. 22 blog.
Overall, production was more than 12% lower month-over-month, mostly due to two fewer build days in November, McNealy said, adding: “Supply chain issues have essentially normalized, with OEMs reporting smaller, less impactful disruptions.”
Trailer production was 23,770 in November, down 12% month-on-month and 9% year-over-year, FTR said, noting that a drop in output once October ends is normal, and that the average 2023 monthly build is “still healthy” at more than 27,200 units.
“With orders coming in under production levels, backlogs in November fell slightly, shedding almost 2,500 units to end at just over 140,000 units,” said FTR board Chairman Eric Starks.
Starks
“The more pronounced fall in production resulted in an increase for the backlog-to-build ratio to 5.9 months. This ratio is in line with the historical average prior to 2020 and suggests the industry is moving toward a pre-pandemic level of stability,” Starks said.
Trailer backlogs contracted 32% in November compared with the year-ago month, which featured a constrained supply chain and pent-up demand, McNealy added.
In the used market, inventory levels of semi trailers have been on a steady incline for many months and in November reached a record high, up 86.16% year-over-year, said Sandhills Global, which operates truckpaper.com, auctiontime.com, machinerytrader.com and tractorhouse.com.
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An excess of supply of the most popular category, dry van trailers, was largely behind this, Sandhills Global said Dec. 6. Inventory rose 1.57% month-over-month in November.
“The market outlook for heavy-duty trucks and trailers is still weak, and that isn’t likely to change over the next few months,” Truck Paper Sales Manager Scott Lubischer said. Truck Paper is an online marketplace for used commercial vehicles and trailers.
Orders are not getting any better in December in most segments of the trailer market.
Hammond
“Trailer orders have slowed through the holiday season as expected, but there are still segments with pent-up demand that are outperforming the overall trailer market,” Great Dane Executive Vice President of Sales Chris Hammond told TT on Dec. 27.
Expectations for 2024 are similar, McNealy said, adding that order placement is at a slower pace than has been seen for the past few years.
Trailer industry concerns are now on the demand-side of the equation, unlike the last few years, when challenges were on the supply side, according to ACT.
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