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Hold that line: January trailer orders sync to bulging backlogs

Trailer manufacturers seek Goldilocks’ ‘just right’ temperature of orders and production

January trailer orders matched what manufacturers were able to produce without growing their backlogs beyond their current bulging levels. (Photo: Wabash)

Trailer orders in January stabilized to keep bulging backlogs from growing further as the ongoing supply chain crisis and COVID-related worker absences prevented meaningful production improvement.

“OEMs continue to carefully manage their order intake in an effort to control the length of their production commitments,” said Frank Maly, ACT Research director of commercial vehicle transportation analysis and research.

ACT pegged January preliminary volume at 26,100 net orders, in line with the 26,400 recorded in December. January’s orders trailed the same month a year ago by 17%.

Backlogs, Maly said, could extend into September, which is causing OEMs to limit the number of new orders accepted to keep the number of unbuilt orders from growing. The same situation is playing out in Class 8 truck orders, where parts shortages — topped by semiconductors — continue to bedevil production.

“This production environment means that fleets will continue to struggle to acquire equipment as we move through the year,” Maly said. “While we expect OEMs to ramp volume throughout 2022, the pace will be slower than both OEMs and fleets would prefer.”

Struggling to keep up

Even when a manufacturer can recruit new workers, as Wabash (NYSE: WNC) did in Q4, the new hires were deployed to cover builds assigned to workers who called in sick.

“The additional headcount that we brought in was able to mitigate that to some degree, but it did preclude us from building the extra volume that we’ve planned on getting from that,” Wabash CEO Brent Yeagy said on the company’s Q4 earnings call on Feb. 2.

Meanwhile, Wabash’s backlog at the end of Q4 stood at a record $2.5 billion, 70% greater than the fourth quarter of 2020.

Watch now: Behind the imbalance of trailer orders and production

FTR Transportation Intelligence reported 26,300 new orders in January, up 1% over December but down 13% year over year. On a rolling 12-month average, trailer orders total 242,000 units.

“The supply chain failures have created one of the most stable environments in the history of the industry,” said Don Ake, FTR vice president of commercial vehicles. “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,” Ake said. “Fleets are desperate for all types of trailers. 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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Click for more FreightWaves articles by Alan Adler.

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.