[Editor's note: This post first appeared in the August print edition of Trailer/Body BUILDERS magazine.]
First the bad news, or the not-so-great news if you’re an optimist: Industry get-togethers won’t be happening through the fall. NTDA, ATA, FABTECH, and other major events will be held virtually or not at all. The good news is that’s pretty much the only bad news we have in this month’s magazine, and we get it out the way early with the lineup of cancellations and explanations beginning on Page 14. So, if you want only the good news—and there’s plenty of it from trailer manufacturers large and small—skip ahead a few pages (and down a couple of paragraphs on this page).
NTDA, for example, had “no choice”: Indian Wells, CA is simply off-limits for “non-essential” public gatherings. And as much as we could argue the NTDA Annual Convention is very essential to this business, the Governor of California apparently doesn’t see it that way.
NTDA President Gwendolyn Brown captures the thinking of many organizations forced to make hard decisions since March.
“While it feels like a disservice to our members to not be able to provide them with an in-person networking and educational event this year, the Board of Directors and I believe in our hearts that we are doing the right thing by protecting our members’ best interests, safety and health. I pray that God leads the hard-working doctors and scientists to find a vaccine as soon as possible,” Brown says.
Amen. Now let’s take those lemons and make some lemonade. That’s what the Modernize the Truck Fleet coalition is hoping to do, with an ongoing lobbying effort to repeal the Federal Excise Tax on heavy-duty highway equipment in the next recovery package. Get the details on Page 16.
Likewise, ACT Principal and Industry Analyst Jim Meil, speaking at this month’s ACT Seminar (held virtually, of course), finds the silver lining in the pandemic’s impact on the economy (Page 28).
“Long-term forecasts are inherently a shaky proposition,” Meil says. “But if history is any guide, the expansion that follows the COVID recession will last well beyond 2025, perhaps reaching end-of-decade.”
Frank Maly, ACT director, CV Transportation Analysis & Research, discusses the US trailer market.
“Orders have improved after the COVID-driven lockdown levels of spring, but OEMs are still seeking to bring production into equilibrium with order placement,” Maly said. “However, there are indications of some ‘green shoots’ in the market that could be pointing toward improving times ahead.”
Indeed, that’s the bottom line from Wabash National’s bottom line, detailed in the company’s quarterly report and chat with investment analysts—always a good source for industry insights. CEO Brent Yeagy praised the “remarkable level of dedication” of the organization in delivering results that, in a normal market, would be considered disappointing at best.
“I don't seek to lead the company to break-even quarters but, given the situation the world was in during the start of this quarter, I’m pleased with the financial performance during this historically difficult time,” Yeagy says.
Among his observations, beginning on Page 21, Yeagy points to the rise in dealer orders that began this summer—after an over-stocked spring. That was confirmed in the July trailer orders report from FTR that hit my in-box as I sat down to write this column and send TBB to the printer—so you’ll need to go online for the FTR charts. But here’s the summary from Don Ake, FTR vice president of commercial vehicles.
“The best news about July is that some of the orders came from dealers. OEMs were concerned that their dealers were overstocked in May and that would limit future production,” Ake says. “However, dealer sales were stronger than expected in June and July, prompting dealers to place some restocking orders. This indicates some medium and small fleets are finding plenty of freight to haul. The improved business conditions also indicate larger fleets are beginning to replace older trailers, after pausing during the pandemic.”
By the way, trailer orders in July reached 19,300 units, their highest level for the year, according to FTR. July order activity was up 33% from June and up 84% from July 2019.
“July’s order volume is significant, as it allows most OEMs to maintain production rates for the next few months. Fleets are displaying renewed confidence in the freight markets and have increased their ordering volumes accordingly,” Ake notes. “OEMs also feel much better about business conditions than they did in Q2. While sales are not vibrant, they are still much better than were expected only a couple of months ago. The industry is making a solid comeback considering the circumstances.”
I’m sure we’re all looking forward to the near future when we no longer have to qualify everything related to 2020 by adding “considering the circumstances.”
