FTR CEO Jonathan Starks tried to offer good news for trailer dealers during an industry forecast keynote address Thursday at the National Trailer Dealers Association (NTDA) Convention in Indian Wells, Calif.
Touching on his 2023 presentation while taking the stage, Starks admitted last year’s forecast was a tough one. Trailer demand was falling and outlook for this year was grim. That’s mostly come to bear. Starks said FTR data indicates truck orders in 2024 have mostly followed five-year averages but trailers have not (see chart below).
Starks said FTR believes the trailer market “is sitting at the low point” of its business cycle due to overcapacity created in the market out of the pandemic, which has produced utilization volatility and a “lumpy” year for orders.
The good news, Starks said, is the market will likely not go down from here. The bad news is it might not pick up immediately, nor will it rise substantially.
“We’re continuing to see economic growth going into 2025 and I don’t see anything on the horizon, outside of an external event, is going to change that,” Starks. “But we also don’t think that economic growth will be overly connected to goods demand, which means limited growth [potential] for freight, and for equipment.”
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According to Starks, the strongest sector of the economy today is services. Industrial production is steady yet muted while goods production and distribution — which led early post-pandemic growth — have stabilized into historical norms.
But Starks said slow growth is still growth. The falling sales the trailer industry has experienced over the last year should end very soon. FTR anticipates October and November orders will see some increases, with demand picking up and kick starting a recovery in the market that “should be sustained through 2025 and into 2026,” he said.
Starks said there are other good signs for the market too.
Trailer production has fallen throughout the year but manufacturers have capacity to grow, while inventories and backlogs are at the lowest levels in years. He also said FTR’s market research indicates carriers have increased their trailer-to-truck ratios, which could create sustained demand for new equipment as fleets turn over their larger trailer inventories.
“It should get better from here,” Starks said.
