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June 19, 2020 9:15 AM, EDT

May Trailer Orders Fall to Second-Worst Level Ever

TrailersA trailer body in production at a Great Dane manufacturing plant. (Great Dane via YouTube)

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U.S. trailer orders in May sank to the second-lowest level of all time as they struggled to clear 3,000 in another month of strong cancellations, ACT Research reported.

Net orders reached 3,107 compared with 10,501 a year earlier.

The worst-ever order total was 207 in April, according to ACT.

“It is better, but not gangbusters by any stretch of the imagination,” Frank Maly, ACT’s director of commercial vehicle transportation analysis, told Transport Topics.

Cancellations were about 4,250, he said. That compares with cancellations of 5,600 in March and April.

Frank Maly, ACT director of commercial vehicle transportation analysis

Maly

“Some of that is coming from trailer makers taking some stuff out of their backlog used as placeholders to support dealers when those orders come in. But there are also fleets that are continuing to back away from their commitments. There’s no major incentives to make investments at this point,” he said.

In May, unlike in April, no trailer segment posted negative orders, in which cancellations outnumber new orders.

Trailer makers remained positive.

“In May we started to see some life coming back into the customer interest category. We had many more conversations on adding some trailers to fleets and received some orders. While May’s numbers were modest adds, June is turning out to be a decent month from an order perspective for Stoughton Trailers,” said David Giesen, Stoughton vice president of sales.

Longer lead times still are in play with some components, he said, but that’s because suppliers lowered build capacities to match the market.

At the same time, dealers are sitting on a fair amount of inventory. “They must order on speculation and the COVID-19 crisis was not forecasted or anticipated when those orders were placed,” Giesen said.

Maly said plants in Mexico are not coming back as quickly as other locations. “With everything being shut down so hard and so quickly, we are now in a restart mode for a lot of those folks, and that doesn’t happen smoothly. You get fits and starts as things kick back into gear,” he said.

Despite the challenges, one trailer maker has a new vocational model available for ordering.

East Manufacturing introduced the NST model, its weight-saving narrow spec dump trailer.

“Reducing weight is still important to our customers so they are more fuel efficient,” said Chris Cooler, vice president of sales at East. “The NST is ideal for loads that weigh out before they cube out. For example, gravel often weighs out a trailer before it is filled so we’ve reduced the trailer’s cubic capacity and weight to drive lower transportation costs.”

Sometimes when you make those product-launch moves in a softer market, “you can get some market share gains, and hold them,” Maly said.

Meanwhile, most trailer makers seem to have the order volume to keep their production lines operating all year, said Joe Maslanka, vice president of fleet solutions at Coyote Logistics.

“That said, trailer delivery and timing remains an issue as the need by location for new equipment changes from the time of initial order to delivery,” he said.

The latest Coyote Curve update, its proprietary spot index, shows fleets are starting to reap the benefits of a strong inflationary market as the U.S. reopens, Maslanka said June 17.

Chicago-based Coyote is a UPS Inc. company. It has 3,300 employees and operates 20 offices worldwide.

Another trailer maker executive agreed momentum was building and noted increasing interest from most segments in acquiring equipment.

“Still, that’s below the past few years, but better than April and May. Most customers I’ve spoken with tell me the industry will rise with the further opening of [more] states in upcoming months,” Chris Hammond, executive vice president of sales at Great Dane, said.

RoadSigns

COVID-19 has placed significant strain on many freight networks. So how are third-party logistics providers adapting to meet these challenges? Host Seth Clevenger chats with two 3PL executives who have had firsthand experience contending with this crisis. Hear a snippet, above, and get the full program by going to RoadSigns.TTNews.com.  

Great Dane was one of the sponsors of the recent Run on Less Regional showcase that the North American Council for Freight Efficiency conducted with 10 fleets. Strick Trailers was another sponsor.

Fleets in the showcase, traveling 58,000 miles, achieved a cumulative 8.3 miles per gallon, or 103 ton-miles per gallon, compared with NACFE’s estimate of 6 mpg for the industry, according to the report.

“The proliferation and ages of trailers makes it difficult for fleets to keep the aero trailers with their most aerodynamic trucks,” the NACFE report found. “Most of the time it appeared that the trailers in this demonstration had at least side skirts on the trailers.”

Outside the showcase, three of the fleets use rear aerodynamic devices and five use gap devices. All 10 fleets put wheel covers on trailers.

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