Trailer orders rebounded in November as manufacturers took orders that will push backlogs into the third quarter of 2022. Is the supply chain improving or is it just wishful thinking?
“I think this is a blip,” David Giesen, vice president of sales at Wisconsin-based Stoughton Trailers, told FreightWaves. “The supply chain really hasn’t improved, and in some cases, it has worsened.”
“I think this is a blip. The supply chain really hasn’t improved, and in some cases, it has worsened.”
David Giesen, vice president of sales, Stoughton Trailers
Consensus among trailer manufacturers and analysts suggested that November’s 89% month-over-month improvement had more to do with processing paperwork than an end of shortages and volatile commodity prices for steel, aluminum and wood used to make trailers.
FTR Transportation Intelligence said preliminary orders of 32,000 likely would be the highest month this year and the best since December 2020. On a 12-month rolling basis, orders total 267,000 units, at the high end of what the industry could produce — if it had everything it needed.
ACT Research reported 31,000 preliminary orders for November, 78% ahead of October. Long lead times for production stretch into the second half of 2022, according to Frank Maly, ACT Research director of commercial vehicle transportation analysis and research.
Reluctantly taking orders
“More OEMs began to accept orders in November, an indication that they are growing more comfortable with the likely path of market factors such as component availability and pricing, as well as staffing,” Maly said.
The rebound in orders also suggests that some trailer manufacturers that held off writing orders for 2022 because of the inability to accurately price them finally relented.
“Most likely this would be a function of multiple OEMs opening up orders for 2022, allowing fleets to move forward with their planning,” said Sean Kenney, chief sales officer of Hyundai Translead, the market leader in dry vans.
Giesel said, “This is a case of writing some of the pending orders that have been sitting in the queue for a long time. [We] need to do this to get visibility and everything on order.”
Dry and refrigerated van and flatbed orders improved as OEMs finalize Q1 production schedules and try to manage backlogs while struggling with supply chain disruptions.
“The supply chain continues to struggle to meet demand in multiple aspects,” Kenney told FreightWaves.
Supply chain disruptions far from over
Don Ake, FTR vice president of commercial vehicles, said he sees the rebound — after nine months of orders below 30,000 — as a sign of increased confidence for a robust 2022.
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“Fleets are signaling they will need considerably more trailers in 2022 to handle the freight growth and relieve some of the pressures in industry capacity and the spot markets,” Ake said. “It also indicates the OEMs are beginning to look forward beyond Q1 and expect to be able to lift build rates at some point.”
But the uncertainty remains and may prevent a follow-on performance in December or January.
“Quoting prices for future sales remains a challenge and some OEMs are employing surcharges and other tactics to manage new orders and total backlog,” Ake said.
Chris Hammond, executive vice president of sales at Great Dane, said he thinks supply chain issues will frustrate the industry for several more months.
“There are small wins in some areas,” he said, “but unfortunately there are new problems in other areas.”
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