ACT Research’s preliminary estimate for January 2019 net trailer orders is 25,800 units. Final volume will be available later this month.

“While the industry had the weakest January order volume since 2016, it was still sufficient enough to generate very minor orderboard growth. January net orders were off 7 percent versus December and 35 percent down year-over-year. Slower dry van and reefer trailer volume contributed to the declines. Indications are lower orders were not the result of weak fleet demand, as some OEMs report unwillingness to accept additional orders that would extend orderboards that, according to some reports, already fill available 2019 build slots,” said Frank Maly, ACT’s Director of CV Transportation Analysis and Research.

Maly also noted, “That slight gain in the orderboard means that January was the third consecutive month that the industry posted an all-time record backlog, although the pace of improvement is beginning to wane. With backlogs extending through the year for dry vans and reefers, OEMs would likely need to quickly open 2020 orderbooks to allow for further backlog growth in the near-term. Also, although the industry reported the highest monthly cancellations since August 2016, the rate of cancellations versus the orderboard remains well within acceptable limits.”

Freight Rates and Trucker Profits Pressured in 2019

While overall economic conditions are better balanced than they were a month ago, freight data remain soft, according to ACT Research’s latest State of the Industry: Classes 5-8 Report.

“Slower freight growth, an easing of driver supply constraints, the resumption of the long-run freight productivity trend and strong Class 8 tractor fleet growth will increasingly pressure rates, and by extension, trucker profits in 2019,” said Kenny Vieth, ACT Research’s President and Senior Analyst.

“Regarding Class 8, orders have decelerated sharply over the past several months, with net orders in January reaching 16,089 units, the lowest monthly order intake since October 2016,” he added. The report indicated that at present the slowdown seems to be more a story of the second-half 2018 order pull-forward and large backlogs, and less about freight cycle and capacity issues.

Regarding the medium duty markets, Vieth commented, “January’s Classes 5-7 net orders were a virtual carbon copy of December, at around 23,000 units, and medium duty orders have been a model of consistency the past 10 months. However, they are entering a period of tough year-ago comparisons.”