Increased freight demand is being cited as the main reason behind a record-setting uptick in trailer orders this January – especially for refrigerated models.
Research firm FTR Transportation Intelligence noted that its preliminary data placed January trailer orders in the 40,000 range for the third consecutive month and, if the numbers hold when final orders are reported, this will be the first time in history that the industry has booked orders at levels in any three-month period.
“The vibrant economy continues to produce sturdy freight growth and fleets are hurrying to add capacity. That has showed up in the truck numbers and even more in the trailer numbers,” noted Don Ake, FTR’s vice president of commercial vehicles, in a statement.
“Motor carriers continue to add trailers as a way to increase total productivity,” he added. “All trailer segments are now looking very bright for 2018. Overall business confidence is surging due to tax reform and it’s making a hot market even hotter.”
According to ACT Research, its preliminary estimate for net trailer orders this January hit 39,100 units, which is a record-setting number, the firm said.
“January net orders came in 22% better year-over-year, and while [39,100 units] is down 15% from December, that’s a comparison to the second-best month in industry history. And it was the best January on record,” noted Frank Maly, ACT’s director of CV transportation analysis and research.
“This continues a string of extremely solid order placement,” he added in a statement. “November and December of last year, along with January of this year, rank as the third, second, and fifth highest order months in industry history. Tight trucking capacity and solid freight rates are supporting both fleet needs and investment ability. Lengthening industry backlogs also encourage fleets to join industry order boards.”
While the majority of trailer categories posted positive year-over-year growth in order levels, the refrigerated or “reefer” segment led the way last month. “Reefer net orders set an all-time monthly record, coming in 250% better than last January,” Maly said.
Bob Costello, chief economist for the American Trucking Associations (ATA), noted in a presentation last week at NATSO Connect 2018 – the annual convention of the trade group formerly known as the National Association of Truck Stop Operators – that refrigerated freight demand in particular witnessed a major uptick in 2017 that’s continued into 2018.
TL freight volumes increased 2.8% in 2017 versus 2016, more than surpassing the weak 0.1% increase in TL volumes that occurred in 2016 versus 2015. By segment during 2017, dry van freight demand went up 2%, flatbed increased 2.2% and refrigerated spiked by 5%. On top of that, dry van demand surged 7% in the fourth quarter of last year and the pace hasn’t let up yet, Costello noted.