Trailer orders sank in June to their lowest of the year, but seasonality was a bigger factor than a significant decline in demand.
Still, preliminary bookings of just 6,300 units stood in stark contrast from a year ago, according to ACT Research. Orders were down 34% from May and 75% lower than June 2022.
“Seasonal expectations suggest orders are likely to remain soft the coming few months, particularly given near record-level order backlogs,” said Jennifer McNealy, ACT director of commercial vehicle market research and publications. “Trailer manufacturers normally spend mid-year working down the backlog ahead of the next year’s full orderboard opening.”
Trailer orders soften but backlogs remain elevated
Demand is softening against strong year-over-year comparisons, which created the large backlog of orders waiting to be produced. ACT estimates the trailer backlog should decrease by around 22,000 units to about 172,000 units when complete June data is released.
“We have a solid truck body and trailer backlog with a few spots to fill in some vans and [flatbeds] late in the year,” Chris Hammond, executive director of sales at Great Dane, told FreightWaves in an email. “Our FleetPulse telematics backlog is strong as well as virtually 100% of our trailers are now smart trailers.”
Great Dane is preparing for opening 2024 order books in August.
Cancellations of trailer orders creep up but most orders still in queue
“We are in our normal pre-open planning period,” Hammond said. “It’s more about getting the new year model changes finished up and getting the next year plan complete so we can turn on all orders in an organized fashion. Once we open the books, we have commitments in most segments to start the year. So you’ll see order intake data jump as you would expect.”
ACT said it is seeing elevated and broad-based order cancellations, something manufacturers allow until they order materials and components for the builds.
“We’re hearing that much of this is a dealer stocking issue, rather than a general decline in fleets’ appetite for equipment,” McNealy said. “Since backlogs remain relatively healthy, most fleets needing trailers remain in queue.”
Great Dane was unsurprised at some orders being pulled “based on spot rates [in] some segments. But we really haven’t had very much of that,” Hammond said.
Supply chain disruptions, however, continue to be an issue.
“We are seeing it with several suppliers still and expect that to continue for months to come,” Hammond said. “It’s not like it was a year ago but it’s still problematic by historical standards.”
Related articles:
Trailer orders slow in January, suggest a return to normalcy
December trailer orders 2nd highest on record
Pent-up and replacement demand feeds robust trailer orders
Click for more FreightWaves articles by Alan Adler.
The post Trailer bookings hit seasonal low in June awaiting ’24 orders appeared first on FreightWaves.