COLUMBUS, Ind. – The year is off to a less-than-desirable start for U.S. trailer manufacturers, according to recent reports released by ACT Research.
New trailer orders of 16.8k were down 9% month-over-month in January; after accounting for cancellations, net orders of 15k dropped 15%. Longer-term comparisons show net orders down 28% year-over-year, according to the organization’s State of the Industry: U.S. Trailer Report.
The report provides a monthly review of the current U.S. trailer-market statistics, as well as trailer OEM build plans and market indicators divided by all major trailer types including backlogs, build, inventory, new orders, cancellations, net orders and factory shipments. The report is accompanied by a database that gives historical information from 1996 to the present, as well as a ready-to-use graph packet, to allow organizations in the trailer-production supply chain and those following the investment value of trailers and trailer OEMs and suppliers to better understand the market.
“Fleets continued their conservative investment posture in all equipment categories in January,” said Frank Maly, director of CV transportation analysis and research at ACT Research. “Discussions indicate that the winds of weaker freight volumes and lower rates continue to buffet fleet financial results. They are also seriously questioning their need for additional equipment, as many indicate that capacity constraints dissipated many months ago.”
In addition to lower demand, this quarter’s issue of ACT Research’s Trailer Components Report indicates that the industry is experiencing supply-chain disruptions that could further impact production and sales.
This report provides those in the trailer-production supply chain as well as those who invest in said suppliers and commodities with forecast quantities of components and raw materials required to support the trailer forecast for the coming five years. The report includes near-term quarterly predictions for two years, while the latter three years of the forecast are shown in annual details. Additionally, analysis is segment into two categories – those needed for the structural composition of new trailers and those used in production of undercarriage assembly.
“OEMs could be in a ‘catch-22’ situation. While trying to adjust their operations to lower market demand, they could still be further challenged by component supply disruptions,” Maly said. “The impacts of lower freight volumes and freight rates are creating a pincer move on fleet financials, and as a result, fleets are very seriously reviewing their equipment investment plans.”
Another factor to consider is the impact of the COVID-19 virus – better known as the coronavirus – on global materials transport.
“With production rates on a downtrend due to ongoing market conditions, the ‘elephant in the room’ – the impact of the coronavirus outbreak – needs addressed, too,” Maly said. “The virus could impact availability and the timely supply of many of the components needed to complete trailer construction.”
A variety of parts for many products, including trailers, are manufactured in Asia. Because Wuhan, China, is ground zero of the contagion, the virus’ impact on the global economy is expected to have a ripple effect.
“During ACT’s recent Seminar 62, it was commented that it isn’t just major or high-ticket items that could cause a disruption; the lack of minor, lower-priced components such as lenses for trailer lights could prevent a trailer from being fully completed,” Maly said.
The quarterly Trailer Components Report also alerted readers to “expect any meaningful disruption in production resulting from component supply issues to cause both trailer OEMs and their component supply base to seriously review their sourcing strategies.”
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