Trailer Demand Should Start To Rise

Three quarters down and one to go...

For those of you who may not be aware of ACT Research, our emphasis is research and forecasting of the commercial vehiclemarket, including truck, tractors andtrailers. We recently published our monthly update on U.S. commercial trailer volumes through September,which covers shipments, production and order volumes for 10 trailer categories, two of which are liquid and bulk tanks.

While the commercial vehicle volume is down from 2015. In the trailer market, last year set up a “tough comp.’’ Total trailer factory shipments actually set an all-time volume record in 2015, just edging outthe previous record set all the wayback in 1999.

While the trailer market istracking to lower volumes this year,2016 should still surpass 2014 levels and will likely rank among the topfive best years in industry history. Also noteworthy is that, over the past 12 months, the ratio of trailers to tractors being shipped this year, a measure of the emphasis of fleet investment, has been biased toward trailers.

We closely monitor order volumes and industry backlogs, and the foundation they are setting for 2017 is a bit concerning, particularly for the first half of the year. OEM trailerorder backlogs actually peaked in December 2015 and have been on a steady decline ever since. The past three or four months, we’ve also seen a jump in order cancellations. As we close in on year-end, it’s not unusual for fleets and dealers to reconsider their equipment requirements, with cancellations sometimes being the result.

That’s the picture for the total market, which is highly impacted by dry vans and reefers. The picture for vocational trailers, in particular liquid and bulk tanks is, as you mightexpect, a bit different. Retrenchment in the energy sector has obviously taken its toll; liquid tank shipments plateaued in 2014 and have been on a fairly steady decline since then. We anticipate this year will be the weakest annual volume since 2010. Bulk tank-trailer shipments peaked in mid-2015 and have been in dramatic decline since. We project 2016 bulktank volumes to be about 35 percent of 2015 shipments.

The recent jump in both oil and natural gas prices have helped those rig counts rebound from a low point earlier this year that occurred close to Memorial Day. Better trailer demand should be a result. So, while the tank-trailer segments might be going through some difficult times, with more drilling activity occurring along with improved energy prices,we do anticipate some moderate improvement in the upcoming year.

Source: Tank Transport

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