The second half of the year hot streak for trailer orders continued in December.
ACT Research and FTR reported preliminary order totals of 42,500 and 41,700 units, respectively, on Wednesday, slight gains over November and another historically positive month after the COVID-impacted sales troughs of the summer.
FTR says order volume in the fourth quarter was the highest ever recorded.
“The last four months are very similar to the order surge in August to Nov. 2018,” says FTR’s Don Ake, vice president, commercial vehicles. “These orders have boosted the backlogs after hitting a low point in July during the throes of the pandemic. Orders should begin falling in January if the 2019 trend repeats. However, there are enough orders in the backlog for a healthy production year.”
ACT Research says its December preliminary estimate is 140 percent better than the same period last year, and gives the market a full year order total for 2020 of 288,000 units— 40 percent better than 2019.
“December activity closes a tumultuous year on a very solid up note,” says Frank Maly, director, CV transportation analysis and research, ACT Research. “As has been the story throughout recent months, dry van demand continued to drive the market. While October and November were the best two dry van order months in history, final stats will likely show December not far behind, ranking fifth best.”
Both Maly and Ake attribute the strong close of the year to fleet confidence and market optimism.
“After rushing to the sidelines in the spring, fleets surged back into the market as the year proceeded, reacting to capacity challenges as well as higher freight rates. Those factors drove a dramatic shift in the short-to-medium term outlook for fleets, driving them to make aggressive investment commitments in the latter part of the year,” says Maly.
Ake agrees, adding, “Fleet optimism continues to gain momentum. Freight volumes are healthy and growing while the industry is still scrambling to handle the economic restart. The growth should continue as people get vaccinated and employment rises. I also expect manufacturing activity to intensify soon. This will lift industrial-oriented freight.”
Maly estimates the total industry backlog was more than 200,000 trailers entering the new year, “the best orderboard level since April 2019.” At current production levels, he says “many OEMs would well be fully-committed for 2021 production slots. However, OEMs will work to increase production levels as we move through the year, pulling that backlog horizon forward.”