According to reports from both FTR and ACT Research, trailer orders for April have dropped to a historic low. FTR reports that preliminary net trailer orders for April are at the lowest level since 1990, with just 300 units.
April order activity was -95% month-over-month and -98% year-over-year, with trailer orders for the past 12 months now totaling 162,000 units, according to FTR.
“Fleets remain in a severe wait-and-see posture until they can evaluate the damage done to the freight markets from the pandemic,” said Don Ake, FTR vice president of commercial vehicles. “Since the recovery from the economic crisis is highly dependent on the status of the health crisis, there is a huge amount of uncertainty in the trailer market. Buying activity appears to be on hold until the fleets can see a clear path forward.”
ACT Research’s Trailer Components Report sees a similar trend, pointing out that the trailer industry has double-backed from the production/capacity challenges of the last three years to “a massive retrenchment in production levels.”
“While there was no indication of any widespread COVID-19 lockdown driven shutdowns at trailer OEMs in the past quarter, the dramatic cessation of fleet investment has caused OEMs to quickly reassess their production volumes and staffing needs,” said Frank Maly, director of commercial vehicle transportation analysis and research at ACT. “The short-to-medium term outlook will be entirely dependent upon the return of business to some level of normality and stability, which will drive freight demand for both manufacturing and consumer spending.”
The quarterly report from ACT also predicts that trailer OEMs could “pull orders forward in an attempt to maintain production levels until the inevitable reductions in line rates and staffing occur.” This could also affect materials and component suppliers, as bills-of-material would, in turn, shift in both timing and specifications.
A number of fleets have pulled back on previously scheduled 2020 trailer orders, according to FTR, with the dry van segment getting hit the hardest and refrigerated van orders seeing similar issues. While vocational orders remained lukewarm after seeing a big drop in March, specialty segments are doing a little better this month.
“There are still way too many uncertainties present for fleets to buy new trailers in large numbers, said Ake. “Orders should improve soon, but are expected to remain modest for the next few months.”