FTR reported Monday U.S. trailer net orders increased by 26% month over month to 5,961 units in July. The number was a strong improvement from June but still well below seasonal objections and down 38% year over year.
Other July statistics also show the scope of the market's softness.
Despite the monthly gain, FTR says July 2024’s net order total was the fourth lowest in the past four years. Cancellations as a percentage of total gross orders also remained above 30% for the third consecutive month. And although some trailer segments experienced month over month improvements in net orders, the challenging truck freight environment continues to suppress U.S. trailer demand for 2024.
“FTR believes that some fleets may be prioritizing capital expenditures on new power units over investing in new trailer equipment, possibly due to reduced profitability or shifts in trade cycles,” says Dan Moyer, FTR senior analyst, commercial vehicles.
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Overall, FTR states total trailer build decreased by 10% month over month and 26% year over year in July, totaling an output of 18,203 units. That figure is 19% lower than the average July build level over the past five years, according to FTR data.
Finally, with net orders coming in substantially below production levels, backlogs in July dropped, falling by 13,219 units to end at slightly above 100,000 units. FTR says the marginally larger month over month decrease in backlogs than in production resulted in the backlog-to-build ratio ticking down to 5.5 months. This ratio is at the second lowest level since July 2020 and is roughly four-tenths of a month below the historical average prior to 2020. The current ratio indicates some limited incentive for manufacturers to continue to slow production, the company says.
“The upcoming opening of 2025 order books in a few months, along with a potential recovery in truck freight, could improve market conditions, although such an outcome is far from certain,” says Moyer. “A recent FTR survey revealed that dealer trailer inventories in Q2 of 2024 were lower compared to the previous year, but they remain well above ideal levels. Considering these factors, OEMs must exercise caution and precision in their production planning.”
