March trailer net orders, at 13,600 units, were nearly 25% lower y/y, and 7k units below February’s intake. This brings Q1’24 net orders to 48.3k units, down 29% from Q1’23’s faster paced order environment, with its pent-up demand and moderately congested supply chain, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailers report.
“Seasonally adjusted, March’s orders were 13,800 units compared to a 20,200 seasonally adjusted rate in February,” said Jennifer McNealy, Director–CV Market Research & Publications at ACT Research. “On that basis, orders decreased 32% m/m. Dry van orders contracted 28% y/y, with reefers up 6%, and flats 40% lower compared to March 2023.”
She added, “Total cancellations oscillated to the higher side of the pendulum in March. Thanks to a smaller denominator, the cancellation rate jumped to 2.3% of the backlog, from February’s improved 1.3% rate. Seven of ten markets tracked remained above the 1% mark, with OEMs indicating cancellations from fleets and dealers.”
McNealy concluded, “Capex remains constrained, and this means fleets are forced to make even more difficult decisions about how to spend their money. In the current carrier profit trough, the decision is compounded by the impending EPA regulations for power units, which are expected to have materially higher costs. Softer fleet demand isn’t the only thing weighing on the minds of trailer manufacturers, though, as elevated dealer inventories have resulted in waning demand there, too.”
State of the Industry: U.S. Trailers Report Overview
ACT Research’s State of the Industry: U.S. Trailers report provides a monthly review of the current US trailer market statistics, as well as trailer OEM build plans and market indicators divided by all major trailer types, including backlogs, build, inventory, new orders, cancellations, net orders, and factory shipments. It is accompanied by a database that gives historical information from 1996 to the present, as well as a ready-to-use graph packet, to allow organizations in the trailer production supply chain, and those following the investment value of trailers, trailer OEMs, and suppliers to better understand the market.
ACT Research Overview
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis, and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
Additional Resources
Preliminary net trailer orders decreased nominally from February to March. At 13,600 units, orders also were lower compared to last March, down 24% y/y. Seasonal adjustment (SA) at this point in the cycle leaves March’s tally essentially unchanged at 13,800 units. Final March results will be available later this month. This preliminary market estimate should be within +/-5% of the final order tally.
“Against year-ago data still impacted by pent-up demand that is now gone, softer order intake activity continues to meet expectations,” said Jennifer McNealy, Director CV Market Research & Publications at ACT Research. She added, “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.”
She continued, “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. 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.”
McNealy added, “While we remain cautiously optimistic and don’t believe this year will be catastrophic for the trailer markets in general, we note that 2024 thus far is matching expectations as a year of transition. While some specialty segments have no available build slots until late in 2024 at the earliest, the industry’s largest segments remain under pressure, and cancellations are anticipated to continue their oscillation into and out of elevator territory as dealers and fleets recalibrate their inventory and immediate needs.”
- Orders: 13,600 units (-25% y/y)
- Cancellations: 2.3% of backlog
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