Data from ACT Research shows that trailer orders did not end 2023 with a strong showing, and the start of 2024 might follow suit. December net orders were nearly 58% lower year-to-year, and total order cancellations nearly doubled from 0.9% in November, to 1.7% in December, ACT reported. “With freight markets continuing their bounce along the bottom, carrier profits at a low ebb, and pent-up demand exhausted, the 2024 game plan is more about hoping and coping than full steam ahead for the trailer market,” ACT Research stated about this month’s State of the Industry: U.S. Trailers report.
“With 35% of the year’s orders historically booked in Q4, the quarter’s seasonal factors run roughshod on the nominal data. Seasonally adjusted, December’s orders fall to 17,200 units, a 206k SAAR,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “Dry van orders contracted 87% y/y, with reefers down 56%, and flats 75% lower compared to December 2022.”
Delving into the cancelation rate, McNealy added, “Total cancellations increased to 1.7% of the backlog from November’s 0.9%, elevated for most segments and much higher for some. Digging down, several markets were again above 1.0%, including dry vans at 1.3%, flats at 3.5%, medium lowbeds at 1.5%, and dumps at 1.3%. Both tank categories reported a spike in cancellations, both around 7% of the backlog. Recent oil price weakness may bear some culpability.”
McNealy concluded, “December’s backlog-to-build ratio was squeezed by a stronger build rate offset by only a slight uptick in backlog. This combination of events resulted in a lower 2023-ending backlog-to-build ratio, at 5.3 months now versus the 5.8 months in November.”
