FTR reports that preliminary trailer orders for December were the lowest since August at 16,500 units. December trailer orders were -17% m/m and -41% y/y. Trailer orders for 2019 totaled 203,000 units.
Fleets are displaying the same caution on trailers as they are showing in their Class 8 order activity. The large carriers are being careful with their ordering strategy by placing smaller orders with shorter lead times than is typical at the end of a calendar year. A great deal of uncertainty exists at the start of 2020 due to a weaker manufacturing segment, the drag of tariffs, and a tumultuous political situation. Buyer nervousness is expected to increase throughout the year due to the upcoming election and conflict in the Middle East.
Don Ake, FTR vice president of commercial vehicles, commented, “Freight is forecast to grow only about 1% this year, putting little pressure on fleets to boost trailer capacity as they did the last few years. However, total freight levels remain elevated and trailer production for 2020, although down significantly from 2019’s record year, is forecast to be good from a historical perspective. Fleets are expected to continue to replace old trailers based on their standard trade-in cycles. Van trailers sales, spurred by strong consumer spending, are still doing better than the vocational segments.”
Trailer orders should stay in the 20,000 unit a month range for a while, as fleets continue to carefully match orders with short-term demand. Eventually, the manufacturing sector should recover, generating more orders for flatbed and dump trailers.”
