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ACT June trailer orders

Trailer production strong, orders weak as cycles normalize

ACT sets its preliminary estimate at 6,200 units for June; FTR reports 343,000 trailer orders over the last 12 months

Preliminary estimates from ACT Research and FTR Intel indicate trailer orders declined dramatically in June.

ACT’s estimate is 6,200 units in June, and FTR reported 5,500 trailer orders, which is down 53% month-over-month and 70% year-over-year, leaving orders at their lowest level since 2009.

Final volumes will be available later this month. FTR expects its preliminary estimate to be within +/- 3% of the final order tally.

“Several aspects of June trailer orders were disappointing,” said Frank Maly, ACT’s director of commercial vehicle transportation analysis and research. “Total new orders continued to slide, coming in below 12,000 units. However, that weakness was exacerbated by sustained strong cancellations. Once those are taken into account, preliminary net orders came in at 6,200 trailers, the lowest monthly volume since September of 2009. Seasonal adjustment provided little support, with volume edging just over 7,000 units after adjustment.

“Despite indications earlier this year that fleets were anxious to place orders for 2020, discussions now indicate that fleets may have shifted to an extremely conservative stance. Softer freight volumes combined with lower rates could well be generating a reassessment of 2020 investment plans. Furthermore, cancellations continue to be strong, and that churn in the backlog is likely impacting this year’s fourth quarter.

“That’s an indication that this year may well close on a very weak note, setting a troublesome foundation for 2020.”

Despite a “disappointing” order report, production continued at a brisk pace last month, ACT maintained. Preliminary results indicate June likely will rank as the sixth best production month in history, with all of those top six occurring since last August. Backlogs commit the industry into mid-December at current build rates.

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FTR says incoming dry van orders were weak and cancellations high, as fleets adjusted orders previously placed according to their second-half needs. Refrigerated vans followed a similar pattern and flatbed orders remained feeble. Van production stayed fairly stable at high rates, while there is continued softening in the flatbed market.

Sales are expected to moderate sometime in the second half of the year, FTR said, as supply catches up with demand. Trailer orders for the past 12 months now total 343,000 units.

“Only a couple OEMs have started taking orders for 2020 and fleets did not respond much to this move in June,” said Don Ake, FTR vice president of commercial vehicles. “Carriers are reluctant to order at this time since commodity and component prices are uncertain due to the tariffs.

“It would appear that the market is returning to normal ordering cycles, with fleets evaluating their next year requirements during the summer and then starting to place those orders around October.

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