Last month proves strongest July in history for trailer orders

ACT Research’s preliminary estimate for July net trailer orders came in at 29,300 units, making last month the strongest July in industry history.

“After a steady June, fleets came roaring back into the market in July,” ACT Director of CV Transportation Analysis and Research Frank Maly said. “OEMs had their strongest July net order volume in history, breaking a record that was set in 1994.”

Net orders came in 102 percent higher than last July and 45 percent over June volume. Year-to-date net orders are just over 200,000 trailers, up 30 percent from 2017, according to Maly.

“When seasonally adjusted, July came in above 44,000 units, the second strongest monthly reading in industry history,” Maly said. “That converts to a stunning 528,000 SAAR. Both dry vans and reefers paced overall performance, closing the month with backlogs that now stretch into March of next year.”

Maly noted July tractor orders were massive as well, and contributed strength across all industry segments to a “perfect storm” of factors, including strong capacity challenges and fleets with good bottom lines. Fleets have both the need and the ability to invest in equipment right now, creating an ideal environment for an order surge.

At the top line, North American Class 8 net orders totaled 52,629 units in July, making it the fifth time in seven months industry orders topped 40,000 units, according to an ACT media release.

July is usually the weakest order month of the year, with October through about March being the typical order and build season. That makes last month’s numbers all the more staggering.

“What changed the timing on this is fleet equipment demand, but also when the backlogs get longer, it encourages fleets to get in line or it’s going to be a long time before they get their equipment,” Maly said. “If you’re a fleet, especially a large fleet, and your OEM tells you an order placed now will be delivered in March or April, that in itself is encouragement to get in and stake your claim so you get equipment on a timely basis.

Cancellation rates are also low, which is important because if the industry is going to turn, what usually happens first is a surge in cancellations, according to Maly.

“People back away when they suddenly realize, ‘Hey, the equipment I had on order, I’m probably not going to need,’” he said. “We haven’t had any of that happen. In fact, it’s exactly the opposite.”

Maly anticipates another strong order month in August, and he said it could end up being a record month for production as well.

“I think OEMs might be seeing some challenges as far as components and labor are concerned,” he said. “If our current build plans came to pass, August would be the strongest production month in industry history. The challenge there is going to be getting the parts and the labor.”

Final July numbers will be available later in August. ACT’s methodology allows them to generate a preliminary estimate of the market that should be within +/- 3 percent of the final order tally, according to the company.