Trailer Orders Jump by 31%; Backlog Stretches Into 2012

September orders for new trailers jumped 31% from a year earlier, following a summer slowdown, and trailer manufacturers said their production backlog combined with ongoing intake strength would keep factories busy well into next year.

However, ACT Research Co. and trailer makers said most of the new orders represented replacements, rather than fleet expansion.

“We’re still not growing the trailer fleet by any stretch of the imagination,” Steve Tam, vice president of ACT Research Co.’s commercial vehicle sector, told TT.

ACT said orders totaled 16,405 in September and predicted the industry will sell about 208,000 trailers this year. Production has nearly doubled to 157,795 units so far this year, compared with 87,961 units in the same period of 2010.

“In 2008, ’09 and 2010, we put only about 350,000 new trailers on the road,” Tam said. “Since we need about 200,000 a year just for replacement levels, that leaves a deficit of about 250,000 units, so we’ll be making that up for a while.”

Manufacturers said that trailer prices, which had risen sharply because of rising components prices, had begun to level off.

“Prices have moderated some from the steep ramp-up most of 2011 but are still up modestly into 2012,” said Craig Bennett, senior vice president sales and marketing, Utility Trailer Manufacturing Co., City of Industry, Calif. “The exception is tires, which continue to be very tight in supply and are experiencing steep increases into 2012.”

Charles Mudd, president of Vanguard National Trailer Corp., Monon, Ind., agreed, telling TT that “materials costs, other than tires, seem to be a little more stable, and availability is improving.”

Utility’s September orders “were up 43% versus August, but keep in mind that there were two extra workdays in September too, so it is not up that much, really,” Bennett told Transport Topics.

“Activity for new quotes had also picked up, mostly for delivery into next year, as we are now into 2012 for orders of any size, with the exception of flatbed products,” he added. “All models are pretty strong.”

“We remain optimistic that orders for 2012 will surpass 2011 by 5% to 10%, or even more, if we have real reform in Washington,” Bennett said.

“In September and what we’ve seen in October, both quoting and ordering activity have picked up over what had been a pretty slow June, July and August,” David Giesen, vice president of sales and marketing for Stoughton Trailers, Stoughton, Wis., told TT. “Some of the increase is seasonal, and some of it can be attributed to the better economic news, though not great economic news, that we’ve been hearing about.”

The U.S. Commerce Department estimated last that the economy grew at a 2.5% annual rate in the third quarter, up from 1.3% in the second quarter.

Order activity started to pick up late last year and continued through the springtime, hitting a high of 28,075 net new orders in March (5-9, p. 5). Orders fell during the summer to 13,103 in June, 13,298 and 12,549 in August, ACT reported. Last September, customers ordered 13,414 trailers.

“It feels as if the market is acting like a traditional fourth-quarter quoting period, with orders well into next year,” Chris Hammond, vice president of dealer sales at Great Dane Trailers, Savannah, Ga., told TT. “We went through the usual summer doldrums this year, but it was maybe worse than usual, and now we’re well into the normal October pickup.”

He said that Great Dane’s backlog for dry vans goes well into the middle of the first quarter of next year on some lines and into the second quarter on others.

Other trailer makers also said they were seeing better times.

“Quoting and ordering activity in September and October to date have been noticeably better than July and August,” said Glenn Harney, chief sales officer of Hyundai Translead, San Diego.

Harney said estimates of in­creased economic growth recently “was one of the factors” for increased trailer activity.

“We look for the first quarter to be fairly stable but really don’t know after that,” he added.

“Our intermodal lines are good to late December,” Harney said about the company’s build rate at a plant in Tijuana, Mexico. “Our dry-freight backlog is out through the early weeks of February, and our reefer line is early January.”

“We are seeing steady quote and order activity for the first quarter of next year,” Vanguard’s Mudd said. “Not spirited activity, but steady.”

Great Dane’s Hammond said that the company was opening a new factory in Statesboro, Ga., in the first quarter of 2012 to build refrigerated trailers.

“We’ll start production modestly, carefully, and the plant will employ 400 people when it becomes fully staffed,” Hammond said.