COLUMBUS, Ind. – The new year started on a softer note, as preliminary reports show trailer net orders came in close to the December order pace.
January’s volume of 24,100 net orders was just shy of the 26,400 number released Dec. 26, 2021, according to ACT Research.
FTR reported preliminary trailer orders for January held firm at 26,300 units, up 1% month over month and down 13% year over year. Trailer orders for the past 12 months totaled 242,000 units.
The first month of the year was also 17% below last January 2021’s activity, according to ACT Research. Final January results will be available later this month.
“OEMs continue to carefully manage their order intake in an effort to control the length of their production commitments,” Frank Maly, director of CV transportation analysis and research of ACT Research, said. “January’s net order volume matching December’s intake is evidence of that effort. The industry backlog stretched through August, on average, at the start of the year. January reports point to a closing backlog that could extend into September, with dry van and reefer commitments likely reaching early into the fourth quarter.”
Maly said this production environment means that fleets will continue to struggle to acquire equipment as they move through the year.
“While we expect OEMs to ramp volume throughout 2022, the pace will be slower than both OEMs and fleets would prefer,” Maly said. “Component, material and staffing headwinds will continue to challenge any meaningful increase in production volume.”
FTR reported that the industry is in a tight holding pattern, as supply chain shortages continue to prevent build rates from rising. OEMs have decided to maintain healthy backlogs, but not raise those levels much until there is a much clearer picture of future build rates.
Preliminary net orders are expected to be moderately higher than production totals for the month.
“The commercial trailer industry is remarkably steady right now,” Don Ake, FTR vice president of commercial vehicles, said. “Production has basically flatlined for nine months and now January orders are equal to December.”
Ake said that the supply chain failures have created one of the most stable environments in the history of the industry. OEMs are not confident about getting more parts and components in the future, so they are not yet booking all the fleet commitments into the backlog.
“The longer the supply chain stays clogged, the more pent-up demand there is. Fleets are desperate for all types of trailers,” Ake said. “As freight demand grows, the lack of available trailers puts stress on carriers and shippers alike. Once they get more parts and components, OEMs will be pressed well into next year as they try to catch up with demand.”
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