Trailer orders ticked up in May, but still lag 2019 figures
ACT says net orders for the month rank as second weakest in industry history, and expiration of PPP funds could hit small and medium fleets hard.
Companies across the U.S. ordered 3,107 freight trailers in May, showing a “significant” improvement from April but barely putting a dent in the industry’s deficit compared to 2019 as pandemic conditions continue to hamstring the economy.
Net trailer orders for May were 71% below the industry’s level for the same month last year, according to the Columbus, Indiana-based industry analyst firm ACT Research. That large gap persisted despite vendors tallying new orders of 7,400 units—good for a 29% rise from April before accounting for cancellations, ACT said in the firm’s monthly “State of the Industry: U.S. Trailer Report.”
“Although up from April’s record low, May’s net orders will still rank as the second weakest in industry history,” Frank Maly, director–CV Transportation Analysis and Research at ACT Research, said in a release. “There is little incentive for fleets to invest in new equipment right now. While there has been a general re-opening of the U.S. economy and some post-quarantine consumer-generated surges have been reported, caution continues to be the watchword.”
Even as orders remain sluggish, ACT is tracking “apprehension” by original equipment manufacturers (OEMs) and dealers of trailers that conditions could grow even worse. Small to medium-sized fleets could see “serious implications” if funds from the U.S. Small Business Administration’s Paycheck Protection Program (PPP) loans run out before a post-lockdown economy generates freight at sufficient volumes and profitable rates, the firm said.
ACT Research: U.S. Trailer Net Orders Record Significant Sequential Improvement in May, But 71% Lower Y/Yhttps://t.co/7AnTbYEMJs
— ACT Research (@actresearch) June 22, 2020