Although January trailer orders were basically unchanged from the previous month at 16,600 units, it was the lowest January order activity since 2011, according to FTR’s preliminary data. Trailer orders have totaled 194,000 units over the last 12 months.
Orders remained in a narrow track for the third consecutive month, closely following the trend in the Class 8 market reflecting cautious equipment buying by fleets. Large fleets, especially leasing fleets, are not ordering many vans. Additionally, the flatbed market remains weak due to the sluggishness in the manufacturing sector of the economy, FTR reports.
“Much of the uncertainty that was present in the economy has been abated. Two trade deals have been signed, some tariffs have been softened, the manufacturing outlook has improved and the situation in the Middle East has calmed,” says Don Ake, FTR vice president of commercial vehicles.
“However, fears about the coronavirus have now caused the equipment markets to pause and buyers to remain cautious. Business investment, both inside and outside the transportation industry, will continue to tighten the closer we get to the presidential election. Fleets are confident to replace older trailers, but under the current low-growth freight environment, there is no motivation to expand operations,” Ake says.
He adds OEMs continue to adjust their line rates to the new order environment. “Backlogs will continue to fall but will be much more front-loaded, with few orders going out more than six months,” he says.
