At more than twice the level of last July — and the strongest July in industry history — more than 29,000 net orders were booked in July 2018. Furthermore, every trailer category was in the black year-over-year, with dry vans and reefers posting some of the strongest gains, according to this month’s edition of ACT Research’s State of the Industry: U.S. Trailer Report.
“Despite the historically strong year-over-year showing, month-over-month performance was a bit different, with five of the 10 trailer categories in the black and weaker performance concentrated in the vocational segment,” says Frank Maly, ACT Research director, commercial vehicle transportation analysis and research.
“Seasonals call for a sequential decline in production, and July results were directionally correct. However, results were weaker than anticipated since we expected volume to beat normal seasonals, given the strong support from backlogs,” Maly says. “We continue to hear comments regarding component challenges as well as labor issues; inability to hire is not only a driver situation.”
Additionally, the report notes the industry is experiencing inventory-related issues. “There are two phenomena presently impacting trailer inventory: red-tags and completed trailers,” Maly says.
Some completed trailers are not being removed from inventory because fleets don’t have the available drivers to get them, opting instead to keep all available drivers in revenue-generating operations. Red-tags are those in a “work-in-process” category, not officially classified as inventory but very close to it; many in this limbo because of component supply issues.
“Slow retrieval of completed trailers is likely a continuing issue, but red-tags may have actually softened some of that impact,” Maly adds.