Banner year for trailer shipments

SHIPMENTS of complete truck trailers were up almost 30% in 2004, according to figures compiled by ACT Research of Columbus, Indiana.

Manufacturers shipped an estimated 235,886 complete trailers last year, up 29% from the 183,162 that were shipped in 2003.

In addition to the complete trailers, the industry shipped an estimated 36,718 containers, container chassis, dollies, and converter gear, up 6% from a year earlier.

Of the 235,886 complete trailers shipped last year, 171,253 were vans. This represents a 26% increase from the industry's output in 2003. Remaining trailer categories, including trailers such as platforms, tanks, and dumps, were up 35% compared against 2003 shipments.

Manufacturers finished 2004 with a flourish. Net orders in December reached 31,100 units, the highest monthly total in six years. Thanks in part to December's strong performance, manufacturers appeared to be back on track in the fourth quarter of 2004 after seeing trailer shipments stall in the third quarter.

“Strong orders coupled with moderating build rates in the fourth quarter allowed for healthy backlog growth that should allow the industry to maintain production in the neighborhood of 1,000 units per day in the first half of 2005,” says Kenny Vieth with ACT Research. “The ability of the industry to raise production rates starting around the second quarter is predicated on the industry's ability to grow backlogs in the first quarter.”

Current backlog volumes will not support significantly higher production rates without continued strength in incoming orders, Vieth says. “Historically, order activity cools as the industry moves through the second quarter, so backlog gains have to occur in a relatively short timeframe.”

ACT Research expects artificially strong demand for Class 8 trucks, the result of the market buying ahead of the effective date for tighter emissions regulations that will be in effect for 2007. This will moderate the demand for truck trailers, causing capital to flow towards tractors and away from trailers. On the surface, this appears to be negative, but ACT Research considers it a positive.

“This situation is likely to be beneficial for the trailer market as the industry is not as likely to overheat in 2006 as the industry typically does late in the cycle,” Vieth says.

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