Trucking news: ACT reports commercial trailer orders remain down
June 29, 2011
Data published this week by ACT Research, a provider of data and analysis for trucks and other commercial vehicles, indicated that total U.S. trailer net orders dipped for the second straight month, falling 9 percent in May.
But even with the decline, ACT officials said the backlog in commercial orders is expanding, up 1 percent from April at 102,500 units. The firm also said that the trailer build was up 87 percent from May 2010 and industry backlog was up 122 percent annually.
“The decline in April net orders was actually in line with what would be expected from normal industry patterns,” said Frank Maly, Director CV Transportation Analysis and Research with ACT, in a statement. “The order board continues to appear solid, as supported by extremely low order cancellations. Fleets have taken their positions in OEMs’ production plans and, so far, are maintaining those commitments.”
Earlier this month, ACT reported that ACT reported that preliminary net orders in May for heavy-duty Class 8 vehicles in North American markets hit 24,400 units, marking the seventh straight month orders have been above the 24,000 mark and a “clear sign” of increased demand.
“Freight hauling capacity is still tight and not showing any signs of letting up,” said Steve Tam, ACT vice president-commercial sector, in a recent interview. “From a shipper’s perspective, that means carriers are going to keep coming back to them for rate increases and some assurance that business is going to keep going. They could be looking for more favorable fuel surcharges, depending on what happens with fuel prices. Unfortunately, shippers are getting the short end of the stick this time around, whereas things are going pretty well for carriers. They have the pricing power and the ball is in their court at this point.
Tam added that carriers also finally have the wherewithal to replace some aging equipment that requires more care and maintenance, which comes with an attached price tag.
This means, that it does not always make great economic sense to keep running older equipment, expediting the need for newer equipment, which Tam said is what many carriers are doing.
“More carriers are showing healthy balance sheets, which the banks are signing off on so carriers can get deals done to buy trucks,” said Tam.
ACT also reported this week that sales volumes of used trucks were down in all sales channels in May, with volumes down 15 percent from April.
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