A healthy economy and strong freight demand pushed truck trailer orders and prices for used big rigs higher in February.
February trailer orders reached 33,800, a 27 percent increase compared with the same month a year earlier. The robust order count marked the strongest February in industry history, said Frank Maly, ACT Research’s director of commercial vehicle transportation analysis and research.
“We’ve been seeing some amazingly strong order months,” Maly told Trucks.com.
ACT is forecasting orders for 305,000 trailers this year, a 5 percent increase from 2017.
“That would likely rank it in the top three or four of our all-time volume numbers,” Maly said.
Overall, trailer order cancellations have been extremely low so far this year, he said.
“What that tells us is that fleets are pretty firm in their investment plans,” Maly said.
Looking ahead to next year, there may be a slight decline after a strong order year in 2018, but 2019 should be another good year, he said.
“It may be more of an easing rather than a downturn,” Maly said.
FTR Transportation Intelligence, another trucking industry consulting firm, estimates that manufacturers posted orders for 32,000 trailers last month, up 24 percent from a year ago, but down 20 percent from January.
“The trailer market remains red-hot,” said Don Ake, vice president of commercial vehicles of FTR.
This marks the fifth consecutive month that orders were above 30,000, FTR said.
“This is good news for the economy and the industry in that carriers expect the solid freight demand to last throughout 2018,” Ake said.
One result is increased demand for used trucks in the heaviest Class 8 weight segment. The average price of a Class 8 used truck rose 3 percent to $42,000 in February compared with the same month a year earlier. But that was off 2 percent from the $43,000 average in January.
“Dealers are reporting that used truck sales have strengthened,” said Steve Tam, vice president of ACT.
“The industry has done a good job of consuming the excess inventory that we had, which was really the key thing that was keeping downward pressure on pricing,” Tam told Trucks.com.
Used truck prices will continue to remain strong for most of the year, but may dip late in the year, Tam said.
“I think we will see price appreciation for a good part of the year, but because of the strength of the new truck market, we do expect to see an increase in inventory flowing into the used truck market, which is once again going to put downward pressure on pricing in late 2018 and into 2019,” he said.