Trailer Orders Rise 3.5% to Highest Since April

This story appears in the Nov. 4 print edition of Transport Topics.

New trailer orders in September were the strongest since April, and 3.5% higher than a year earlier as fleets continue to replace aging equipment, ACT Research and manufacturers said.

September’s net total of 17,459 was also 9.4% more than August’s revised tally of 15,961. Despite that growth, cumulative 2013 orders still lag last year’s pace.

Through nine months of this year, U.S. manufacturers have received 151,981 trailer orders, down 5% compared with the first nine months of 2012.

ACT analyst Frank Maly attributed that downturn to a cautious mentality among fleets.

“Given everything that’s happening in Washington, and given the slow growth of the economy, caution continues to be the overarching word right now,” he said. “That being said, as soon as that fleet psyche changes, they’re positioned to make their move very quickly.”

He also said sequential growth should continue in the fourth quarter as fleets place orders for next year’s production cycle.

“We’re now at the point where we’re looking to set the foundation for 2014,” he said.

Wabash National Corp., the only publicly traded company among the major U.S. trailer makers, last week reported lower third-quarter profit than a year ago but said it expects “continued strong demand” in the fourth quarter.

“We believe the demand environment for trailers remains strong as fleet age, customer profitability, used-trailer values, regulatory compliance and access to financing all support continued demand for new trailers,” CEO Dick Giromini said in the company’s Oct. 29 statement.

On the company’s earnings call, Giromini specifically referenced truckload carriers’ reports that the hours-of-service changes have cut into their productivity.

“Productivity losses such as these may lead to increased demand for additional drivers and equipment to fill the gap,” he said.

Wabash National said its quarterly net income declined to $16.2 million, or 23 cents a share, from $18.4 million, or 27 cents, a year ago.

Wabash shipped about 12,600 new trailers in the third quarter, and the fourth quarter got off to a “strong start” with October shipments exceeding 5,000 units, Giromini said. The company projected that full-year trailer shipments will be between 46,000 and 47,000.

Larry Roland, marketing director at Utility Trailer Manufacturing Co., said his company is “still feeling hesitation, with few fleets ordering to increase fleet size.”

Nevertheless, Utility saw a “considerable” increase in orders in September from August, although it didn’t quite match last September, which was the company’s best month in 2012, Roland said.

“The overall year has been steady and followed a fairly predictable pattern throughout,” he said.

Chris Hammond IV, vice president of dealer and international sales at Great Dane Trailers, said order intake and quoting activity improved in September.

“Fleets are ordering and replacing aged equipment,” he said. “This year was much like last year, and our expectation for next year is much of the same.”

Glenn Harney, chief sales officer at Hyundai Translead, said his company saw “definite caution” from fleets in September, but activity picked up in October.

“We expect the orders received to meet or exceed last year during the fourth quarter, and that will allow us to stay pretty close to our current build rate,” he said.

David Giesen, vice president of sales and marketing at Stoughton Trailers, said his company also saw year-over-year growth in September, but 2013 has not lived up to projections that it would be a “better than average” year.