Trailer orders hit record high seven months removed from record low

11/13/2020

 

Trailer orders hit record high seven months removed from record low
U.S. net trailer orders for October set an all-time record at 56,500 units, according to preliminary data released Friday by FTR, leaping 9% month-over-month and 68% year-over-year. Trailer orders for the last 12 months now equal 249,500 units.

Fleets placed big orders in October for dry vans and refrigerated vans for delivery in the second half of 2021, which should enable OEMs to increase build rates entering next year. A shortage of wood and aluminum components, FTR Vice President of Commercial Vehicles Don Ake said, is limiting OEM van production. Fleets are concerned about the supply issues continuing, so many are placing all their orders for 2021 now to lock up build slots.

Flatbed orders also improved and could reach their highest total this year. Backlogs are expected to rise to levels not seen since mid-2019.

“This is a repeat of 2018 when fleets placed huge orders in September-October to reserve build slots in 2019. Then, it was because the hot demand was outstripping OEM and supplier capacity. Now, it’s because the pandemic has disrupted the supply chain and some essential components are having trouble making it through the pipeline fast enough,” Ake said. “We would expect these bottlenecks to be resolved over the next few months, resulting in some of the large orders of the last two months being canceled or pushed out next summer as happened in 2019.”

Carriers are utilizing more drop-and-hook runs to compensate for the current driver shortage, Ake said, and the surge in consumer-based freight continues to strain capacity and boost freight rates. Healthy carrier profits have translated to large truck and trailer orders for replacement of older equipment and fleet expansion.

“There are still significant risks due to the increase in positive COVID-19 tests. The industry powered right through the summer despite rising infections,” he added. “There is strong positive momentum right now, but it remains to be seen if possible new health restrictions will slow down the growth of freight. This industry is known for wild demand swings and we’ve gone from record low orders to record high orders in just seven months.”


Original article provided by:  https://www.ccjdigital.com/trailer-orders-hit-record-high-seven-months-from-record-low/


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