Does Trailer Order Surge Mean Sold-Out Build Capacity?

March trailer orders surged to their highest since December of 2020 – but for dry van orders, that may represent most of the trailer-maker build slots for the rest of the year.

The major jump in trailer orders during March will extend OEM commitments through most of the remainder of the year at current production levels, according to ACT Research.

“Is it a complete sell-out? Not entirely, but it’s getting quite close for many dry van and reefer OEMs,” Frank Maly. ACT’s director of CV transportation analysis and research, told HDT.

“The March surge is a short-term spike, but upcoming order volume will be driven by OEMs’ willingness to accept orders and their willingness to begin to open 2023 order boards,” Maly said, with concerns about setting pricing the major challenge.

“For example, one OEM informed me that their extremely low order volume for the month was the result of them being sold out for the year and they were unwilling to open up 2023 order boards at this time,” Maly said. “Others, accepting higher order volumes, were in the process of filling their remaining production capacity for 2022.”

For vocational trailers, there is more availability of build slots, even though their backlogs generally extend farther than normal, Maly said.

According to ACT and FTR, whose preliminary numbers vary slightly, March trailer orders were 36,200-37,900 units, up 40-41% month over month and 28-29% year over year. Trailer orders for the past 12 months have totaled 252,000 units, according to FTR.

FTR said most of the major trailer OEMs showed significant increases versus the past six months, and March’s strong order total is expected to raise backlogs over the 200,000-unit mark for the first time since May 2021.

ACT said final figures for the month will likely reveal total industry backlog now stretching into December at current production rates, heavily influenced by dry van and reefer commitments that basically fill their year.

Trailer Manufacturing Capacity

Both FTR and ACT said the numbers indicate that trailer makers could be optimistic that they will be able to increase their build rates later this year.

“This is great news for the trailer market,” said Don Ake, FTR vice president of commercial vehicles. “Most of the big OEMs were stuck in a holding pattern on orders since the supply chain tightened. The fact they have the confidence now to enter more orders may indicate that supplier deliveries are showing improvement, and labor shortages are abating.”

ACT Research expects that production rates will improve as we move through the year, “so that will likely open some additional, but limited, availability later in 2022,” Maly said. “The wildcards there center around both supply chain support and staffing. We heard last month that staffing seemed to be becoming less of a challenge. This month, comments indicated that the supply chain was beginning to smooth out as well. Obviously, both are positive trends, but likely helping to ease the challenges OEMs have had regarding production planning rather than generating a solid path to significant increases in production levels.”

“Because OEMs had their output limited by the supply chain, we estimate that pent-up demand for trailers could be as high as 100,000 units,” said FTR’s Ake. “It will take an extended time for OEMs to catch up with fleet requirements once the supply chain opens up.”