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Trailer orders stronger than normal in May; backlogs continue into 2019

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According to preliminary numbers from ACT Research Co. and FTR, May trailer orders declined slightly month-over-month in May, but are up significantly over last May, continuing a torrid pace of orders in 2018.

ACT’s preliminary estimate for May 2018 net trailer orders is 23,300 units.

“Fleet investment continues at a torrid pace. Net trailer orders were up year-over-year for the 18th straight month in May. While normal seasonal patterns call for a month-over-month decline in the high teens, May net order volume was just 2% below April,” said Frank Maly, ACT’s director of CV transportation analysis and research. “The major factors that have been driving the market, solid freight rates and tight capacity, with the added aid of beneficial tax changes, continue to provide the fuel for this ongoing order flow.

“At current build rates, it appears that dry van and reefer backlogs, on average, have crossed into early 2019,” Maly added. “Their influence pushes the industry average backlog-to-build well into December. Most vocational trailer categories appear to have backlogs that stretch into early fall.”

FTR reports preliminary May U.S. trailer orders at 21,200, continuing the traditional seasonal drop in orders, albeit at still strong levels.

“At 21,000-plus, this is still an impressive order total for May,” said Don Ake, FTR’s vice president of commercial vehicles. “In 2015, May was the weakest order month and this May’s number is 30% higher than that. There is a chance that May could be the lowest month this year if fleets start ordering for 2019 early. Some OEMs are booked solid for 2018 and are soliciting orders for next year.

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“The capacity crunch continues and there are reports of trailer shortages by shippers. The supply chain is getting plugged up and some full trailers are sitting at warehouses for days, waiting to be unloaded. These trailers are in effect pulled out of service in these regions causing temporary availability issues. Shipments are being delayed in many markets and more trailers are needed to keep the freight moving.”

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