Trailer orders took a break in January, at least from the record setting levels of late 2020, industry analysts report. But the numbers are still well above the pace one year ago.
FTR reports that preliminary U.S. net trailer orders came in at 30,000 units for January, falling 34% from the robust December numbers. However, orders were 83% higher than last January. Trailer orders for the past twelve months total 313,000. January trailer order activity “met expectations,” as most of the large fleets had already placed their 2021 requirements orders previously, FTR noted. A couple of trailer OEMs are booked solid for dry vans for all of 2021 and have limited capacity to book additional orders.
Orders for refrigerated vans have been robust for the last four months, so that pace is moderating also, according to FTR. Orders for flatbeds have risen noticeably over the last two months and are expected to continue to improve in January.
“Fleets are expecting 2021 to continue to be a great year for freight and have placed a hefty number of orders in the last five months,” Don Ake, FTR vice president of commercial vehicles, said. “Replacement demand is solid because carriers are profitable. Expansion demand is growing due to the capacity constraints that emerged after the economic startup. Orders should continue to ease down due to the lack of available build slots. The challenge right now is for OEMs to fill near-term orders due to raw material and component shortages.
“The good news about January orders is that flatbed orders continue to recover. This will allow OEMs to raise build rates through the first half of the year. Dump and tanker orders are also expected to show gains. This means the manufacturing and the industrial sectors are showing strength, and this should translate to lower unemployment and GDP support later in the year.”
The preliminary report from ACT Research put January net order volume at 29,100 trailers, up 94% from the same month last year. That was down 33% from December 2020 bookings.
“The year-over-year gain, with OEMs booking almost twice the volume they reported last January, was in line with expectations, as the industry continues to see solid interest from fleets for equipment acquisition. The slower order pace versus December was also anticipated,” Frank Maly, director, CV Transportation Analysis and Research at ACT Research, said. “The order surge last September through December, which sets the stage for solid production volumes this year, is actually somewhat of a limiting factor for additional orders in the short-term.”
For dry vans and reefers, orderboards currently commit many OEMs into late 2021, and that means 2021 production slots are becoming “a rare commodity,” Maly noted.
“There is a reticence for OEMs to open 2022 slots at this time, and actually, some uncertainty on the fleet side to extend CAPEX intentions that far out as well,” he said. “Increasing production rates continue to be a challenge for trailer OEMs, as headwinds from increasing staff and growing concerns regarding materials and components supplies are evident. Improvement in both those areas would generate additional production capacity as we progress through 2021.”