A sharp increase in net trailer orders for October is tempered by a low backlog level that will keep production rates low for the immediate future, according to the latest trailer activity report issued by ACT Research Co. Net commercial trailer orders jumped 80% for the month over September’s numbers-- and saw a 124% increase from October 2008.
Six of nine trailer types showed gains, led by a 155% increase in dry van net orders. Even with the increases, though, ACT reports that the backlog for orders is at 3.9 months, below levels that would support increasing production rates. Backlogs increased by 2,500 units in October.
“An issue that adds complexity to interpreting current order activity is that October is normally the beginning of a seasonally strong period for orders,” said Kenny Vieth, ACT partner & senior analyst. “While the sequential increase was well beyond a normal seasonal uptick, the limited orders in backlog will still keep a lid on production in the near term.”
Also, FTR Associates reports that only 70,000 semi trailers are expected to be built in 2009, improving only to 89,000 units in 2010. “The same dynamics affecting the Class 8 tractor market are affecting the trailer market – there’s no freight, the industry is still plagued with excess capacity,” Eric Starks, president of FTR, told Fleet Owner earlier this week.