The trailer order season started weak, “well below expectations,” according to one industry forecaster, causing concerns about the remainder of 2024 and into next year.
There’s mounting evidence that cash-strapped fleets are more inclined to buy new power units than trailers. But there’s some positive news for truckers, as the spot market has gained strength in both the U.S. and Canada.
Trailer orders gain no traction as 2025 order boards open
Trailer orders totaled 11,532 units in September, which FTR says is the lowest number for the month since 2016, down 63% year over year. As 2025 order boards were opened, these orders “fell well below expectations, raising concerns for the upcoming order season,” FTR reported.
Trailer makers have curtailed their build rates by 11% from August and 40% year-over-year, marking their lowest monthly output since July 2020.
“Although trailer orders were weak in September, Class 8 orders slightly exceeded expectations at nearly 33,000 units for North America. This divergence suggests that some fleets are prioritizing spending on new power units over trailers, possibly due to reduced profitability or shifting trade cycles,” explained Dan Moyer, FTR’s senior analyst of commercial vehicles.
“Higher-than-ideal trailer inventories at dealerships, lower fleet capital expenditures on trailers, and shrinking backlogs likely will put downward pressure on trailer build rates for the rest of 2024. If trailer orders for 2025 don’t pick up soon, some OEMs may extend or expand production cuts into next year.”
ACT Research reported a 61% year over year decline, with 12,100 units ordered.
“Since September is the traditional start to the order season, this month’s uptick was expected. It’s also no surprise that the data is significantly below the September 2023 intake, given the soft demand recorded throughout this year,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research.
“September’s data brings year to date 2024 U.S. trailer net orders to 101,600 units, a 34% contraction when compared to the first nine months of 2023, and puts Q3 2024 net orders at just 27,000 units, 51% lower than the same quarter last year.”
McNealy added, “Industry anecdotes suggest that the ‘pause button’ is expected to remain pressed through the remainder of 2024, and those on the frontlines are expressing concern about 2025. The timing and size of 2025 order bookings is the wildcard. Additional indicators supporting the lack of optimism include still-elevated cancellations and backlogs lower than we’ve seen in a decade. Despite positive momentum in the U.S. economy, lingering weak carrier profitability suggests little support for trailer orders to bolster 2025 backlogs into the end of 2024.”
Canadian spot market continues to improve
There’s better news for carriers, at least those who play in the spot market. Loadlink Technologies noted that Q3 saw a “significant spike” in load postings – in part driven by the short rail strike – with September levels settling into a more typical range.
September load postings were up 7% year-over-year, while truck postings fell 9% from August levels and 18% year-over-year, tightening capacity. Third quarter load volumes were up 17% over the same period last year.
The truck-to-load ratio improved, with 3.31 trucks posted a load, down from 4.34 last September. “This reflects a positive trend, indicating the market is moving in the right direction,” Loadlink said in a release.
How about in the U.S.?
Spot market conditions are also on the “upswing” in the U.S., according to DAT Freight & Analytics, reporting on September volumes.
The Truckload Volume Index in September was up year-over-year, 6% for van, 12% for reefer and 2% for flatbed.
“September showed we’re firmly into a new freight cycle after nearly 22 months of rather extreme expansion and 27 months of contraction,” said Ken Adamo, DAT chief of analytics. “We expect seasonality to provide some tailwinds over the next few months, and hopefully modest improvements in rates coupled with retail freight volumes and stable fuel prices can get the motor carrier base on more solid footing.
“Entering Q4, we’re seeing equilibrium with truckload supply and demand, especially in the spot market. The shape and feel of this new cycle will probably be more like the 2013 to 2017 cycle than the rollercoaster ride of 2018 to 2022, with the ELD mandate, manufacturing recession, and unpredictable supply shocks of the Covid pandemic.”
Most recent data all green
Truckstop and FTR Transportation Intelligence, meanwhile, indicated rates and volumes strengthened in the week ending Oct. 18.
Dry van rates popped for the fourth straight week for the first time since May 2021 and saw their strongest year-over-year gain since March 2022. Reefer rates saw their second-largest gain since May and the strongest year-over-year comparison since July.
Even flatbed rates rose. Total load postings jumped nearly 25% versus the same week in 2023, marking the biggest jump since early 2022. Load posting growth exceeded those of truck postings, pushing the Market Demand Index up to 72, its highest level in 13 weeks.
