While preliminary reports from both ACT Research and FTR show a continued downhill slide in net U.S. trailer orders, the lack of orders is not due to decreased demand — quite the opposite, in fact.
As manufacturers continue to cope with materials shortages caused by the COVID-19 pandemic, February’s polar vortex and other issues, the backlog of orders outweighs available units. Because of this, many OEMs are not accepting new orders.
“Trailer orders remained low for the fourth consecutive month in July. The issue is certainly not demand related, as fleets remain bullish regarding equipment acquisition. With existing orderboards stretching through the end of Quarter 1, 2022 on average and well into Quarter 2, 2022 for dry vans and reefers, OEMs continue to limit order acceptance,” said Frank Maly, ACT’s director of commercial vehicle transportation analysis and research.
Preliminary figures from ACT show trailer OEMs posted 7,100 net orders in July, roughly two-thirds of June’s volume and 63% less than the same month last year.
“OEMs’ concerns regarding their supply chain, staffing availability, and pricing of components and materials are mainly responsible for the continued reluctance to accept further orders in the near-term, Maly said. “However, when the order season eventually opens, expect a surge of pent-up volume to flood in, likely resulting in a very significant commitment of available 2022 production capacity.”
Analysts at FTR recorded orders of 8,200 units in July, down 32% from June and a 58% drop from July 2020. According to FTR, trailer orders for the past 12 months now total 354,000 units.
“The orders are in for 2021 but the challenge remains to build the trailers,” said Don Ake, FTR’s vice president of commercial vehicles. “OEMs continue to struggle hiring factory workers. Suppliers are struggling to keep pace due to a shortage of manpower and imported parts and components. The supply chain is still experiencing disruptions and bottlenecks. Some improvement in production is expected this year, but there are indications some supplies will be restricted into next year.”
FTR’s report described dry and refrigerated van orders as “paltry,” while noting that OEMs are booked full for 2021 and not entering orders yet for 2022.
“Fleets are desperate for new dry vans to compensate for the shortage of new trucks and drivers in the current tight capacity environment,” Ake explained. “There is a growing amount of freight to be moved and the industry continues to struggle to deliver it on time. Spot loads and rates remain elevated.”