McNealy cautioned that expectations for subdued build and order intake levels this year remain intact. (Stoughton Trailers via Facebook)
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U.S. trailer orders continued fluctuating between year-over-year gains and losses by increasing again during May, ACT Research reported.
Preliminary net data showed orders increased 12% to 6,600 units when compared with the same time last year. The monthly results so far this year have been split between positive and negative prior-year comparisons. The latest figures also showed a contraction of 26% when compared to April. The report does point out, however, that this sequential drop was seasonally expected.
“Lower May net order intake was expected, as it is one of the weakest order months of the annual cycle,” said Jennifer McNealy, director of commercial vehicle market research at ACT. “More concerning, though, is this level of order acceptance does nothing to support backlog growth, particularly with the elevated cancellation rates reported in the past several months.”
McNealy cautioned that expectations for subdued build and order intake levels this year remain intact, pointing to weak for-hire truck market fundamentals, low used equipment valuations, relatively full inventories, high interest rates and the ambiguity of policy shifts still in play.
“I’m pushing 50 years in this business,” said Charles Willmott, principal CEO at WillGo Transportation Consulting. “I’ve not seen the circumstance that we’re in, thankfully, more than a couple of times in that career span. One being the Great Recession of 2007, 2008, which I still hold responsible for a lot of the circumstance that we’re experiencing today. And then the second anomaly that we’ve had along the way has been COVID.”
(Act Research)
Willmott added that the industry looked as though it were going to start normalizing this year. The trucking industry faced some freight demand whiplash with the coronavirus causing a surge in demand that was followed by a prolonged downturn.
“This is one of the deepest freight recessions that the trucking industries ever experienced,” Willmott said. “That certainly spills over into trailer sales. The major manufacturers are going to be down significantly, in my opinion, in 2025 versus 2024. And of course, the production of new trailers in 2024 was way down over the previous years.”
Willmott has been speaking with customers, manufacturers and leasing companies to gauge current trailer production levels and compare them with orders. Lately, he said, activity has slowed amid uncertainty in the freight market and broader economy. Most companies, he added, are holding off on investments until conditions become clearer.
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“It appeared, to my eye anyway, that we were going back into a period of much more stable and reliable, from a historical perspective anyway, supply and demand relationship entering 2025,” Willmott said. “But then the election happened and the Trump administration, in its zeal for tariffs and so forth, has thrown further uncertainty into things.”
Willmott said hopes for a market rebound this year have been reflected in trailer pricing. During the pandemic, prices climbed as high as $50,000, but have since returned closer to historical norms around $30,000. He added that trailer utilization has also declined, particularly in the rental and leasing segments.
“We have to keep a full-court press on just to keep orders coming,” said Dan Taylor, director of sales at Western Trailer. “But we’re running much slower than last year at this point in time. It’s definitely slowed down, people are definitely watching, trying to figure out which way to go. It’s really hard to get a deal closed and in the books.”
Taylor noted that his customers are primarily looking for stability in the market before they’re ready to make a move. They have instead been grappling with volatile market conditions around tariffs, pricing and interest rates. This has made it difficult to know whether they need to make a large equipment purchase like getting a new trailer.
“Nobody can really make a decision, they don’t know,” Taylor said. “We don’t know where they’re going to be price-wise. I don’t think interest rates are helping some companies at the moment. A few customers have come back and said, you know, I have pretty good equipment right now, I’m going to run it a while longer while I watch this through, which isn’t helpful for any of us.”
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