FTR reports that preliminary U.S. net trailer orders for October set an all-time record at 56,500 units. October’s orders were up 9% m/m and up a sturdy 68% y/y. With this latest banner month, trailer orders for the last twelve months now equal 249,500 units.
Fleets again ordered dry vans and refrigerated vans in large quantities, most for delivery in the second half of 2021. Flatbed orders improved and should reach their highest total this year. Backlogs are expected to rise to levels not seen since mid-2019. The fantastic order volume should enable the OEM’s to increase build rates entering 2021.
The surge in consumer-based freight continues to strain capacity and boost freight rates. Healthy fleet profits are resulting in large trailer orders for replacement of older dry vans and reefers and also for expansion due to the chaotic freight environment. Carriers are utilizing more drop-and-hook runs to compensate for the current driver shortage. Compounding the problem is a pronounced shortage of wood and aluminum components, which is limiting OEM van production. Fleets are concerned about these supply issues continuing, so many are placing all their requirements orders for 2021 now to lock up future OEM build slots.
Don Ake, FTR vice president of commercial vehicles, commented, “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. 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.”
“There are still significant risks due to the increase in positive COVID-19 tests. The industry powered right through the summer despite rising infections. 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.”
