Industry-wide June trailer figures released by A.C.T. were down but inline with low expectations, according to Bear Stearns.
Total trailer orders were 14,245 in June (vs. Bear Stearns' 14,000-16,000 forecast), down 8% year-over-year (vs. down 5% year-over-year in May). Dry van orders 8,199 in June (vs. 8,369 in May), up 14% year-over-year (vs. down 4% year-over-year in May). Flatbed orders were 1,491 in June (vs. 2,277 in May), down 56% year-over-year (vs. down 27% year-over-year in May).
Dry van builds were 11,204 in June, down 20% year-over-year (vs. down 16% year-over-year in May). Total trailer backlog-to-build ratios deteriorated 10% year-over-year to 5.1x (vs. down 15% year-over-year in May). Dry van backlog-to-build ratios deteriorated 9% year-over-year to 4.6x (vs. down 19% year-over-year in May).
Dry van inventories were 10,578 in June (vs. 11,202 in May), up 77% year-over-year (vs. up 46% year-over-year in May). Dry van inventories are roughly 1,000 units higher than they were at the end of the first quarter, and "remain at near-alarming levels. Historically, we've seen the trailer OEMs cut production when inventories reach 7,000 — however, stock has shot well past that figure in the last few months."
Total trailer cancellation rates were 8.5% in June, deteriorating 330bp year-over-year (vs. deterioration of 520bp year-over-year in May). Dry van cancellations were 6.9% in June, deteriorating 180bp year-over-year (vs. deterioration of 240bp year-over-year in May).
"Based on our channel checks, our fundamental outlook for trailers remains weak," Bear Stearns said.