In the most recent week, FTR posted its June trailer order data and shared a tough decision trailer makers are faced with in light of tariffs: eat cost increases or raise prices in a down market?
Canada’s spot market sank in June after a stronger May, and in the U.S., the spot market seems to have settled down into its usual summer slowdown.
Trailer makers’ tariff decisions
As we reported last week, trailer orders more than doubled in June from May levels, reaching 13,827 units, according to FTR.
Dan Moyer, senior analyst, commercial vehicles, shared how tariffs are affecting decision-making by trailer manufacturers.
“Tariffs are increasing the materials cost of building trailers, especially with the doubling of the rate on imports of steel and aluminum to 50% in early June,” Moyer said.
“Trailer manufacturers and their suppliers continue to face a difficult choice: either absorb the rising costs themselves or pass them on to fleets, which could significantly influence decisions around fleet expansion and maintenance. This financial pressure – along with lingering market uncertainty – appears to be leading many fleets to postpone new trailer purchases and instead consider refurbished units or alternative configurations.
“Ultimately, the market is becoming increasingly price sensitive. Trailer life-cycles are being extended, and demand is gradually shifting toward used equipment and non-traditional trailer options. These trends reflect a broader adaptation to the current economic and regulatory environment.”
Canada’s spot market settled in June
A strong May for the Canadian spot market gave way to a lackluster June, according to the latest data from Loadlink Technologies. Total load postings on the board dropped 16% from May and were down 18% year over year.
However, Loadlink says certain market segments are showing signs of stability, especially outbound cross-border and domestic loads for vans and reefers.
“This environment is creating new opportunities across the supply chain, as carriers may benefit from reduced competition on outbound lanes, while brokers can take advantage of more flexible coverage options in a softer market,” Loadlink said in a release.
Inbound cross-border loads remain under pressure, as outbound loads show signs of “resilience,” according to the company.
The truck-to-load ratio rose to 3.35, a 21% jump from May’s 2.7 level, indicating more trucks posted per available load. Year over year, the ratio was about the same.
“While outbound postings held steady in June, the overall volume decline and tightening capacity will continue to put pressure on the market. While the turnaround isn’t happening as fast as we would like, there are still opportunities for brokers and carriers to explore certain lanes that can lead to sustainable profitability,” said James Reyes, general manager at Loadlink Technologies.
U.S. spot market sees summer slowdown
And south of the border, spot market activity fell back to seasonal levels for the week ended July 18, according to Truckstop.com and FTR Transportation Intelligence.
Nothing unexpected to see here, as the spot market typically softens between the July 4 holiday and around mid-August.
“After two weeks of declines, broker-posted dry van spot rates have essentially erased the spike that occurred during the holiday week,” Truckstop.com reported. “Refrigerated spot rates fell further after more than offsetting the July 4 week gain during the previous week. Flatbed spot rates decreased to their lowest level since early March. In an unusual situation, the three principal equipment types saw essentially the same decrease in spot rates week over week.”
With load postings declining and truck postings rising, the Market Demand Index eased to 85.3 after hitting its highest level in eight weeks during the previous week.
