February Trailer Orders Down 2.6% Year

Staff Reporter

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U.S. trailer orders fell just shy of 26,000 units in February, falling short of the year-ago total, ACT Research reported.

Preliminary data shows orders decreased 2.6% year-over-year to 25,800 from 26,500, according to ACT. But sequentially they were up 6.1% with the prior month hitting 24,300 units. The year began with orders falling by over half after closing out last year at the second-highest level on record.

"The decline versus last year can largely be chalked up to backlog length," said Jennifer McNealy, director of commercial vehicle market research at ACT. "Trailer backlogs at the start of 2023 are 50,000 units above year-ago levels. February's preliminary data shows orders for dry vans and platform trailers driving the sequential uptick."

ACT Research plans to include backlog-to-build ratio data in its final report for the month. It was hovering around 10 months in January. McNealy noted build data is still facing challenges but improving while demand remains strong.

Preliminary Net Trailer Orders Indicate Strong Demand Continues.https://t.co/e8cpyKzwhk#Trailers, #Transportation, #truck, #trucking, #ACT, #ACTResearch pic.twitter.com/LaNp3zURQx — ACT Research (@actresearch) March 22, 2023

"February orders were good for Great Dane and we continue to see several segments needing equipment as many fleets saw their fleet age rise over the past couple of years when production levels could not meet demand," said Chris Hammond, executive vice president of sales at Great Dane. "We think this continues in some areas while we are seeing some caution by other fleets as the economy cools a bit. Overall, the expectation for 2023 is for trailer builders to have all they can handle as we continue to manage supply chain and labor challenges."

Utility Trailer Manufacturing Co. is a dry van, flatbed and refrigerated van manufacturing company based in City of Industry, Calif. The company has nearly all of its order boards booked until the end of the third quarter but continues to face supply chain issues.

"We continue to be cautiously optimistic," said Mark Glasgow, chief of sales at Utility. "Our order boards have not seen a significant drop-off. We’re continuing to sell through. But, we run our backlog a little differently than some of the other fleets because of our dealer network and they’re still working on filling out the fourth quarter with the slots that we’ve allocated to them."

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Glasgow noted that despite the lingering supply chain challenges, there haven't been any significant issues or major order board cancellations. He does expect some slowing in the fourth quarter but that is by design since allocated space gets smaller so the company can prepare for the next year.

"I think the cautiously optimistic side of it is that the economy holds solid enough for our order board to be buildable," Glasgow said. "We don't get fraught full of cancellations due to an economic downturn and things of that nature. There is slowing into business, there's no doubt about that."

Glasgow noted that the marketplace not overheating the last few years because of constrained materials has helped. The company still has around 10,000 units unaccounted for in its backlog, especially with dry van since that is the largest and most volatile sector.

Faghri

"While industry trailer orders in February are modestly below elevated year-ago levels, underlying demand remains strong, and there is still a large backlog in the industry," said Ali Faghri, chief strategy officer at XPO. "XPO is the only LTL carrier with an in-house trailer manufacturing capability. Our manufacturing facility in Searcy, Arkansas, gives us a strong competitive advantage over peers as trailers continue to be in high demand and the lead time between orders and the manufacturing process remains well above historical averages."

XPO produced over 4,700 trailers at its facility last year and plans to increase output to over 6,000 in 2023. The carrier views its in-house supply of trailers as enabling it to win more business and provide better service to customers.

Armory Technologies found in its own market research that freight is getting denser and shippers are loading more pallets onto trailers. The company has introduced a lightweight wall panel for semi-trailers and box trucks to help compensate for the additional weight.

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"It's been an incredibly robust market for anybody in the freight industry," Armory Technologies CEO Paul Dowd said. "All of them have seen a tremendous opportunity in the past two years and I think that's going to exist for at least another year or more. And so how they outfit their trailers almost to an extent is irrelevant because they’re at the mercy of how fast the OEMs can produce the trailers. And so as we come online with product that they can put into their manufacturing, it's just one piece of many pieces in the flywheel."

XPO Logistics ranks No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and No. 6 on the TT Top 100 logistics companies list.