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External pressures drag out typical cycle for trailer orders

Shortages in parts, volatile commodity pricing vex trailer OEMs

New trailer orders were either up or down in September. Data firms that track the bookings disagreed. (Photo: Jim Allen/FreightWaves)

It may or may not be a fundamental change, but the fall order season for trailer orders isn’t playing out like anything resembling the traditional opening of orderbooks.

Even the data analysts who track the industry landed miles apart on bookings in September.

ACT Research said its preliminary reporting showed net trailer orders were 25,700 units, up about 45% from August but around 10% lower than the same month last year.

FTR Transportation Intelligence pegged September bookings at 21,500, rising 29% month over month and 24% year over year. Initially, it reported orders of 12,500. On a rolling 12-month basis, new trailer orders amount to 280,000.

The two firms typically report monthly counts within a few hundred units of one another.

Chart of trailer order activity through September 2022. (Source: ACT Research).

If the analysts cannot agree on what’s happening, what about the trailer manufacturers?

A permanent change for trailer orders?

“I am not certain I would refer to it as permanent, however, the overall industry certainly appears to have started opening 2023 later than normal in consideration of the recent operating environment,” Sean Kenney, chief sales officer for Hyundai Translead, told FreightWaves.

Chris Hammond, Great Dane executive vice president of sales, said manufacturers have learned to be cautious about overpromising and underdelivering.

“Many OEMs are careful in making promises as we’ve disappointed folks when we weren’t able to product,” Hammond told FreightWaves.

One thing on which everyone agrees is a pent-up demand for equipment.

“Some trailer manufacturers are reporting expectations that when they do open the remainder of their 2023 orderboards in the next few months, those spots will also fill rapidly, despite no firm pricing available at this point,” said Jennifer McNealy, ACT Research director of commercial vehicle market research and publications.

A pricing quandary hampering trailer orders

Pricing amid volatility in commodities vexes even veterans in the trailer business.

“The challenge with costs is getting the commodity through the whole process,” Hammond said. “If aluminum ingot goes down, that’s good. But if the conversion and the transportation cost of the aluminum goes up, it offsets any savings or, in many cases, still pushes some extrusion costs upward.”

Overall visibility of the supply chain remains murky because suppliers must cope with the impacts of inflation on their business and product offerings, Kenney said.

“Some trailer types have done better than others,” Hammond said. “You’ll recall what an issue foam was early this year. That had a huge effect on reefers only.”

Just too few trailers available

Retail dealers cannot keep enough trailers in stock to meet demand, said Charles Roth, FTR commercial vehicle analyst.

“At the same time, large carriers haven’t been able to keep up with replacement cycles, which has driven the level of pent-up demand for new replacement units to above-average levels,” Roth said.

Manufacturers of new trucks and trailers have adopted the same philosophy: Only take orders for what you know you can produce.

“This conservative stance has led many OEMs to hold off on opening the books,” Hammond said. “I know we held off on vans and reefers longer than we had in prior new year model openings.”

Editor’s note: Updates to include revised figures from FTR.

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Click for more FreightWaves articles by Alan Adler

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Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.