Trailer and truck orders, used truck prices surge in January

Jason Cannon

February 26, 2014

Trailer orders got off to a hot start in January, surging 28 percent year-over-year according to the most recent State of the Industry: U.S. Trailers published by ACT Research Co. (ACT).

“Seven of the ten trailer categories had year-over-year growth in January,” saysFrank Maly, Director – CV Transportation Analysis and Research at ACT.

“Particular strength came from reefer vans, which rose 80 percent from year-ago levels, tank trailers, which saw triple-digit gains from cancellation depleted results in early 2013, and heavy lowbeds which posted high double-digit gains (year-over-year) and (month-over-month),” he adds.

The industry is in the midst of its annual order season and January’s orders helped backlog open the year with a solid 8 percent month-over-month gain.

Maly says build rates, which fell 10 percent, were been negatively affected by the bitter weather that swept the country in January.

Trailers weren’t the only segment enjoying a big January.

Class 8 net orders started 2014 up 9 percent month-over-month and 51 percent year-over-year. Classes 5-7 also got off to a good start with orders up 14 percent month-over-month and 33 percent year-over-year, according to ACT.

“While orders were strong, one has to read between the lines to appreciate Class 8 retail sales in January,” says Kenny Vieth, president and senior analyst at ACT Research Co., LLC. “Thanks to year-ending tax and sales incentives, Class 8 retail sales posted a sharp drop in January from December. But this is the case every year.”

Applying seasonal adjustment gives a better picture, Vieth adds.

“Adjusted Class 8 sales rose 9 percent month-over-month to a 22-month high. Strong orders pushed backlogs to a 22-month high and the backlog/build ratio jumped to 4.9 months,” he says.

For medium duty, all of January’s sequential order strength and most of the year-over-year improvement came from the heavier end of the market, Classes 6-7.

“Broken down by vehicle type, trucks accounted for virtually all of the sequential order increase,” Vieth says.

The average selling price of a used Class 8 truck in January was more than $44,000 in the month, ACT says, a 15 percent year-over-year gain and a record price, ACT reported.

However, prices in the year are expected to dip, based on “pent up demand,” says ACT’s Steve Tam. “Based on the assumption of satisfying some of the pent up demand, prices are expected to cool slightly in 2014, ranging from flat to down 5 percent.”

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