Trailer Orders End Record Year In Fizzle As Large Fleets Are Set For 2019
Little Rock, Arkansas – FTR reports preliminary trailer orders for December at 28,000 units, a 38% drop from November and 39% below a year ago.
Trailer order activity moderated in December after experiencing tremendous levels over the previous three months. Total trailers orders of 127,000 units in Q4 2018 were the second highest quarter ever with 2018 totaling 409,800 trailer orders, by far a record year.
Don Ake, FTR vice president of commercial vehicles, commented, “This drop was expected since the first half of the year is already booked for dry vans and refrigerated vans. Most of the big fleets already have their requirements orders in for 2019.”
Ake said the mid-size and smaller fleets are the ones competing right now for build slots. “Now the medium and small fleets are searching for the remaining build slots, based on their expected needs in the second half of the year,” Ake stated.
Ake also expressed some optimism about the U.S. economy for 2019. He said because many different sectors are still ordering equipment it portends a continued positive economic outlook. “Flatbed, tanker and dump fleets continue to order at respectable rates, indicating the economy is generating freight demand across various sectors and industries,” Ake commented.
Frank Maly, ACT’s Director of CV Transportation Analysis & Research, attributed the fall off to hesitancy on the part of some OEMs to take additional orders. “While some fleets likely stepped back to assess their 2019 investment plans, our discussions also indicate that some of the slide occurred as OEMs resisted booking additional orders into already-extended backlogs that might have pushed their commitments into 2020,” he said.
2018 Finishes As Record Year For Trailer Orders
2018 was a banner year for trailer orders as OEMs received orders for more than 420,000 units, up 35% from 2017. Most trailer categories posted year-over-year gains, with reefers posting an industry-leading gain of almost 90% versus 2017.
ACT reports the industry enters 2019 with the highest orderboard in history, committing dry vans and reefers well into Q4’19, which pushes the overall industry average into early Q4.
Class 8 Truck Sales Slip Again In December
ACT recently reported preliminary used Class 8 volumes (same dealer sales) slipped for a second consecutive month in December (-7%), marking the first time since January 2016 that same dealer sales have fallen below 2,000 units.
Other data released in ACT’s preliminary report included year-to-date comparisons for December 2018, which showed that volume was up 8% compared to the end of 2017. Average price rose 13% ytd, while average miles were flat and average age, improved but was still 3% below year-to-date December 2017.
Regarding ACT’s medium duty forecasts, Vieth said, “Preliminary December orders were modestly below the current trend, with orders averaging 25,000 units per month in 2018, which continued to exert moderate upward pressure on forecasts.”
Even though some economic warning signs are beginning to show, FTR’s vice president of trucking, Avery Vise, says he expects the trucking environment will remain stable especially in the first half of 2019. “We would anticipate that trucking conditions will be relatively stable through the first quarter of 2019 and perhaps a bit beyond that, but the second half of the year should be noticeably weaker due to factors such as lower active truck utilization and increased cost of capital.”
Image courtesy of Great Dane Trailer