Trailer Orders Rebound During August, But Still Lag Year-Ago Pace, Report Says

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

Trailer orders rose 4.1% in August from a year earlier to 15,780, the highest level in four months, ACT Research reported.

Order activity also jumped 23.9% from July’s tally of 12,739, which was the lowest in nearly three years. Through eight months, 2013 trailer orders stand at 134,645, down 5.9% from the same timeframe last year.

ACT Vice President Steve Tam described August as a “good but not great” month for trailer orders.

He said the sequential gain follows the trailer market’s typical seasonal pattern, with July being the low-water mark followed by growing order activity for the remainder of the year.

Fleets are placing orders for new trailers mostly to replace their old equipment, but there is a small amount of expansion as well, Tam said.

“From a macro perspective, we’re still increasing the trailer fleet, although it’s very marginal. We’re very close to where we need to be in terms of fleet size,” he said.

FTR President Eric Starks said last week the trailer market is on track to reach 236,000 units this year and remain essentially flat next year, when it is due to hit 237,000 before sliding to 210,000 in 2015.

“Trailer production has been tremendously stable, and the trailer market continues to be tighter than the Class 8 [truck] market,” Stark told Transport Topics during his group’s transportation conference last week.

Despite the August increase, manufacturers’ backlogs declined to 69,255 orders at the end of August, down 6.8% from 74,305 at the end of July, as they continue to build trailers at a faster rate than they book fresh orders, ACT’s Tam said.

Chris Hammond, vice president of dealer and international sales at Great Dane Trailers, said orders have increased as customers look ahead to 2014.

“We’ve seen activity pick up for next year’s needs in both quoting activity and orders received,” he said. “We’re getting close to that time of year in the fourth quarter, so it’s not a big surprise to see more activity.”

Larry Roland, marketing director at Utility Trailer Manufacturing Co., said the company’s year-over-year orders gain in August was “significantly better” than the industrywide number.

“We’re planning on keeping current production in place but will be watching closely to make sure that it makes sense,” said David Giesen, vice president of sales and marketing at Stoughton Trailers.

Stoughton’s August order intake was stronger than last year, but customers still have some concerns about the economic recovery, the current political environment

and the hours-of-service changes, he said.

“Those things are still weighing on people,” Giesen said. “Even for replacement [orders], they want to see things get a little better before they spend money.”

“I don’t anticipate a big boom at the end of the year,” he added. “We usually get a seasonal uptick and I think that’ll come, but I don’t think it’ll be huge.”

August orders at Hyundai Translead were down about 5% from last year as customers took more time to make their decisions, said Glenn Harney, the company’s chief sales officer.

“Some quotes just took longer to get to orders this year,” he said.

Even so, Hyundai Translead isn’t planning to scale back its build rates.

“We fully expect to finish the year at the current high production levels,” Harney said.

Wabash National Corp. did not respond to a request for comment before Transport Topics’ deadline.

Year-to-date orders for dry vans, the largest trailer segment, closely reflected the overall trend, declining 3.7% from a year ago, to 70,310.

Craig Bennett, senior vice president of sales and marketing at Utility, said dry vans have declined from their “frenetic pace” last year.

Cumulative orders for platform trailers, however, have dropped 19.8% from last year.

Through eight months, manufacturers have received 14,389 platform orders, compared with 17,951 a year ago. However, 2013 platform trailer orders are tracking well ahead of the 11,759 booked in the first eight months of 2011.

Tam said platform trailer orders spiked last year as fleets prepared for the rebound in the construction market.

“You’ve got to have that equipment in place to be ready to support that increase as it’s occurring rather than reacting to it,” he said.

Utility’s Bennett said platform and flatbed trailers “are always cyclical.”

“They have slowed down after a big increase last year, as the U.S. economy is still not hitting on all cylinders as far as infrastructure and housing [are] concerned, both of which are drivers for that segment,” he said.

Meanwhile, year-to-date orders for reefer trailers have risen 3.7%, to 21,692 units.

Hyundai Translead’s Harney said reefer orders have been driven by the federal Compliance, Safety, Accountability safety program and compliance with California Air Resources Board regulations.

“Reefers have historically been less volatile than other segments, and that continues to be the case in this cycle,” Great Dane’s Hammond said.

Cumulative orders for liquid tank trailers have fallen 37.2%, to 4,185 units, according to ACT.

Tam attributed that drop to a slowdown in the oil and gas industries as prices have stabilized, especially for natural gas.

News Editor Lorrie Grant contributed to this story from Indianapolis.