U.S. trailer orders reached the second-highest point ever in October, 55,250 units, on surging demand for dry van and reefer trailers, according to ACT Research Co.
“Our projection ranks October as the second-best net order month in history, up more than 70% year-over-year,” said Frank Maly, ACT’s director of commercial vehicle transportation analysis and research. ACT cited data that it will revise later this month.
While strength in dry vans continues to support overall industry results, the preliminary numbers point to last month’s refrigerated-trailer volume as the highest ever recorded, according to ACT.
A year earlier, trailer orders totaled 32,101.
The highest all-time order month was September, with 60,760.
Research firm FTR pegged October’s orders at 53,000.
“They are running full go, and not making a lot of money doing it,” Don Ake, vice president of commercial vehicles at FTR, said of trailer makers.
Hikes in raw materials, tariffs and labor costs have aligned at the same time.
“These rapid increases are a source of anguish for our customers and are leading to some very detailed discussions between them and our sales team,” Hyundai Translead Chief Sales Officer Stuart James said.
Pinpointing the impact of the increases was difficult for a time, and the company was reluctant to even quote 2019 pricing, he said. “Once we could confidently quote, the surge was unleashed as fleets and dealers raced ahead with locking in their production needs. No one likes the increases, but I think there is a general acceptance that they’re here for real and possibly for some time to come.”
To meet demand, Hyundai is using an allocation system in some months in which everyone gets something but no one gets everything they wished for that month, James added.
Utility Trailer Manufacturing Co. agrees the industry is in an environment of rising costs and the resulting uncertainty.
“We could probably push our backlogs out a little further if suppliers would give us firm pricing they were willing to stand behind moving out a few more quarters,” said Brett Olsen, Utility’s marketing manager.
He added that the trailer maker sees no sign of a decline in demand.
“We don’t even see the crest or peak of the [demand] wave, let alone the break, yet,” Olsen said.
At East Manufacturing Corp., a third price increase since January went into effect Nov. 1 on all of its products. East builds all-aluminum trailers in the dump, platform and refuse segments.
“Material cost increases have continued in almost all areas,” East President David dePoincy said.
Great Dane trailer display. (John Sommers II for Transport Topics)
For customers of Great Dane Trailers, David Gilliland, vice president of national accounts, said, “It really varies on the product as to the lead time, but it’s safe to say we have a strong backlog well into 2019.”
Great Dane has 10 U.S. manufacturing plants that produce a wide variety of dry vans, refrigerated vans, and flatbeds and dry and refrigerated truck bodies, Gilliland said.
Meanwhile, Ake expects trailer orders to slow down as the order boards are likely full into 2019.
“It is very difficult to determine where we go from here because we have so many orders placed for 2019,” he said. “There may not be a lot of slots left. It’s hard to make sense of it because we’ve just had so many orders come in.”
Next month could be down to 30,000 or fewer, and December to 15,000, Ake suggested.
But that would not mean things are falling apart, he added.
Given the past two months of record-shattering volumes, new orders would have to plummet over the next four months to keep from having a six-month record through February 2019, he said.
One trailer maker is watching the aftermath of the recent elections but expects demand to be on track to remain strong through 2019.
“As you know, elections can have effects. We will see if the midterms cool anything off,” said David Giesen, vice president of sales at Stoughton Trailers. “Some chatter is that the ‘blue wave’ could cool down the economy.”
Charles Willmott, chief sales officer at the Strick Group, believes the trailer market will cool beginning in the third quarter of 2019, if not sooner, and continue to soften into 2020.
But the economic and political landscape is as confusing and tumultuous as it has ever been, he said.
Wilmott added, “And in my opinion, the ability to look beyond Dec. 31, with any certainty, is impossible.”