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ACT Research: Trailer Demand Challenged by Limited CAPEX, Impending EPA Regulations

April 24, 2024, 07:00 AM
Filed Under: Trucking

March trailer net orders, at 13,600 units, were nearly 25 percent lower y/y, and 7k units below February’s intake. This brings Q1’24 net orders to 48.3k units, down 29 percent from Q1’23’s faster paced order environment, with its pent-up demand and moderately congested supply chain, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailers report.

“Seasonally adjusted, March’s orders were 13,800 units compared to a 20,200 seasonally adjusted rate in February,” said Jennifer McNealy, Director–CV Market Research & Publications at ACT Research. “On that basis, orders decreased 32 percent m/m. Dry van orders contracted 28 percent y/y, with reefers up 6 percent, and flats 40 percent lower compared to March 2023.”

She added, “Total cancellations oscillated to the higher side of the pendulum in March. Thanks to a smaller denominator, the cancellation rate jumped to 2.3 percent of the backlog, from February’s improved 1.3 percent rate. Seven of ten markets tracked remained above the 1 percent mark, with OEMs indicating cancellations from fleets and dealers.”

McNealy concluded, “CAPEX remains constrained, and this means fleets are forced to make even more difficult decisions about how to spend their money. In the current carrier profit trough, the decision is compounded by the impending EPA regulations for power units, which are expected to have materially higher costs. Softer fleet demand isn’t the only thing weighing on the minds of trailer manufacturers, though, as elevated dealer inventories have resulted in waning demand there, too.”

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