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"When it comes to the manufacturing side of things, we are starting to dial things up a little bit," says Western Trailers' Dan Taylor. (Western Trailers)

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U.S. trailer orders in October trended slightly above the previous year’s results after a brief detour from recent gains, reported.

Preliminary net orders increased 3% year over year to 17,100 units. September had marked the first time orders trended below the prior-year results since April. October’s volume also showed a seasonally expected spike of 51% sequentially. The seasonally adjusted figure at this point in the annual order cycle lowers the monthly tally to about 12,600 units.

“Sequentially, October’s higher net order intake was expected, as it is usually one of the strongest order months in the annual cycle initiated at the end of Q3 when the industry begins opening next year’s order boards,” said , director of commercial vehicle market research for ACT. “Looking forward, concern continues that moderating economic activity, ongoing weak for-hire carrier profitability and ambiguous governmental policy — especially around the [Environmental Protection Agency] — low-[nitrogen oxide] rule — remain as challenges to stronger trailer demand.”

Positive Indicators

McNealy points to positive indicators as well, such as how pent-up demand is building. She also noted that fleets eventually will have to divert capital expenditure to trailing equipment purchases deferred over the past few years. ACT data also showed October’s number brings the year-to-date net order total to 138,300 units, 17% higher year over year.

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“On the surface, if you just looked at the numbers alone, we’ve had a ton of activity the last couple of months,” said Brandon Lairsen, vice president of trailer leasing at Transport Enterprise Leasing. “On the surface, it would be positive, be encouraging. But we’ve also taken in almost as many trailers as we’ve put out.

“And so, what that tells me is, if I think back to post-COVID when business spiked and demand for trailers was at an all-time high, the only way that you could get your hands on trailers was to commit to a five-year lease.”

Expiring Leases

Lairsen added that a lot of those agreements are now starting to come to an end. Because of that, he described the uptick being more so akin to the deck being shuffled instead of something more fundamental in the market. But he highlights the benefits, such as more opportunities to gain new business and diversify the customer mix.

“It gets us in the door with companies that we previously haven’t done business with,” Lairsen said. “It gives us the opportunity to grow with them when market conditions turn around. That’s the silver lining when I look at this for a company like us. But, as far as this being anything that indicates one thing or the other, I just don’t think [it does].”

Lairsen has instead seen a lot of his customers hang on as they navigate the market, but not everyone is and more lease agreements are expected to expire next year. Lairsen and his team have been proactive in reaching out to those customers to work with them on a timeline for a new trailer order.

“October orders for us were up about 30% above September, so that’s good,” said Dan Taylor, director of sales at Western Trailer. “We’re up about 40% year over year order-wise, so another good thing. When it comes to the manufacturing side of things, we are starting to dial things up a little bit.

“Our backlog is out further than some of our customers would like it to be. It’s in a more comfortable spot for us. It’s feeling a little better out there.”

Taylor recalled hearing from a few customers recently who said conditions were improving, yet he points to challenges that persist, such as quote volumes remaining high and it still being difficult to close deals in this market. His customers also are still struggling with low rates despite the recent pickup in activity.

“I think if we can see interest rates continue to drop, continue to go down, that’s going to be very helpful,” Taylor said. “That’s going to give us some confidence. … I think if we can see some stability in the tariffs, instead of they’re on and they’re off, they’re on and they’re off.”