“There is no reason for trailer OEMs to overbook, with increasing uncertainties regarding the supply chain,” said Don Ake, FTR vice president of commercial vehicles.  -  Source: FTR

“There is no reason for trailer OEMs to overbook, with increasing uncertainties regarding the supply chain,” said Don Ake, FTR vice president of commercial vehicles.

Source: FTR

Trailer orders in April were down substantially from March, although up slightly over a year ago, as lockdowns in China and the war in Ukraine prompted caution in the market.

FTR reports preliminary trailer orders fell in April to 16,800 units, 53% below March order activity and up 4% year over year. Trailer orders for the past 12 months have totaled 252,000 units. ACT Research numbers put April numbers at 16,100 units, down almost 60% from the previous month and up slightly from the same month last year.

This followed a month when March trailer orders surged to their highest since December of 2020, representing most of the trailer-maker build slots for dry vans for the rest of the year.

While seasonal patterns typically see a drop in trailer orders in April, preliminary reports indicate that volumes fell more than might have been expected, according to Frank Maly, director of commercial vehicle research at ACT Research.

March trailer orders were significantly higher than a year ago, making the April drop from the previous month look even worse.  -  Source: ACT Research

March trailer orders were significantly higher than a year ago, making the April drop from the previous month look even worse.

Source: ACT Research

“While some may think recent economic challenges could be a contributing factor to the sequential decline, it’s more likely that a reluctance to push the orderboard horizon into next year is responsible, as OEMs continue to closely control order acceptance,” Maly said.

“There is no reason for trailer OEMs to overbook, with increasing uncertainties regarding the supply chain,” said Don Ake, FTR vice president of commercial vehicles.

The situation in Shanghai, which has been locked down due to a COVID-19 outbreak, he explained is going to delay some components that are needed to make trailers, while the war in Europe is creating shortages of aluminum.

“These and other doubts have delayed OEMs from issuing quotes for 2023 requirements,” Ake said. “So, the low order volumes reflect OEMs filling in the months of the 2022 production schedule they feel more confident about.”

ACT’s Maly said their discussions indicate that active negotiations between OEMs and fleets continue, as fleets prepare to make commitments for 2023 production, when that opportunity becomes available.

The pent-up demand for trailers is estimated at over 100,000 units, according to FTR. ACT said the lower order levels for April will still result in an average backlog-to-build ratio of just over eight months for the total industry.

Pandemic-triggered supply chain difficulties the world has been experiencing are now expected to extend into 2023. “OEMs will then have to build at high rates for an extended time to catch up to demand,” Ake said. “The short-term prospects are subdued, but the long-term outlook remains bright.”

0 Comments