ACT Research says its latest trailer order data shows 2024 is shaping up to be "a year of transition." FTR also reported a drop in March orders.
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Preliminary net trailer orders dropped nominally from February to March, ACT says, dropping 24% year-over-year to 13,600 units. Seasonal adjustment leaves March's tally essentially flat at 13,800 units. FTR shows March orders are down 7,659 from February, a 38% month-over-month decrease.
"Against year-ago data still impacted by pent-up demand that is now gone, softer order intake activity continues to meet expectations," says Jennifer McNealy, director of commercial vehicle market research and publications at ACT. "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."
FTR Transportation Intelligence
FTR's analysis shows trailer orders down 18% year-over-year and 25% below average for the last 12 months. Production is up less than 1% month-over-month to 23,505 units, which is down 21% year-over-year but still in line with the average production level from 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 15,100 units," Eric Starks, FTR's chairman of the board says. "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."
McNealy adds ACT doesn't see a catastrophe in the making, but 2024 is shaping up to be a year of transition.
"This month's results continue to support our thesis that when fleets don't make money, their ability and/or willingness to purchase equipment is muted," she says. "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. 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."
