Fleets ordered fewer trailers month-over-month in March, with ACT Research and FTR both reporting decreases in orders logged.
ACT said preliminary net trailers orders dipped “nominally” from February, coming in at 13,600 units, but FTR said March trailer orders fell by 7,659 units from February, a 38% month-over-month decline to 12,313 trailers.
Those tallies also were down year-over-year, the firms reported.
ACT said March orders decreased by 24% year-over-year, and FTR said they fell 18% year-over-year, leaving trailer orders 25% below the average for the last 12 months.
“Against year-ago data still impacted by pent-up demand that is now gone, softer order intake activity continues to meet expectations,” Jennifer McNealy, ACT director of CV market research and publications, said in a news release. “Net orders remain challenged by a backdrop of weak profitability for for-hire truckers.
“Anecdotal commentary from trailer manufacturers and suppliers through the past several months have indicated this slowing, as they have shared that orders are coming, but at a more tepid pace when compared to the last few years.”
Trailer build levels
Trailer production increased by less than 1% year-over-year to 23,505 units in March, ACT added, but remained down 21% year-over-year. That number is in line with the average production ACT has seen over the past three years.
“With orders coming in below production levels, backlogs in February fell somewhat, shedding more than 11,500 units to end at more than 151,000 units,” said Eric Starks, FTR chairman of the board. “The increase in production coupled with the fall in backlogs resulted in some reduction in the backlog-to-build ratio, which stands at 6.4 months. This ratio is slightly below the average level for the last half of 2023 but is above the historical average prior to 2020.
“The current ratio suggests that, overall, trailer manufacturers have little incentive to alter production levels in the near term.”
Buying power ‘muted’
McNealy said the month’s results support ACT’s thesis that when fleets aren’t making money, their willingness to buy new equipment is “muted.”
“For the trailer industry, this is compounded by the power-unit prebuy ahead of the EPA’s implementation of 2027 regulations, which we believe has already begun,” she said. “As a result, cancellations remain elevated, and the choice about how to spend limited capex dollars is swinging the pendulum against trailer purchases right now.
“While we remain cautiously optimistic and don’t believe this year will be catastrophic for the trailer markets in general, we note that 2024 thus far is matching expectations as a year of transition. While some specialty segments have no available build slots until late in 2024 at the earliest, the industry’s largest segments remain under pressure, and cancellations are anticipated to continue their oscillation into and out of elevator territory as dealers and fleets recalibrate their inventory and immediate needs.”