Trailer orders whacked by geopolitics in April

Trailer orders plummeted nearly 60% month over month in April as manufacturers faced so much uncertainty that they booked only orders they could confidently deliver. 

COVID shutdowns in China, the war in Ukraine, inflation and worsening supply chain disruptions muted orders, according to FTR Transportation Intelligence.

Preliminary trailer orders fell to 16,800 units in April. That was 53% below March but 4% ahead of the same month a year ago. ACT Research forecast net orders of 16,100 units, down almost 60% from March and up slightly from the same month last year. 

On a rolling12-month basis, trailer orders total 252,000 units, FTR said.

‘No reason’ to overbook trailer orders

“There is no reason for trailer OEMs to overbook with increasing uncertainties regarding the supply chain,” said Don Ake, FTR vice president of commercial vehicles. “The reductions will likely impact all trailer segments when final April numbers are tabulated.”

For now, manufacturers are focused only on trailer orders they can deliver this year. Quotes for 2023 are on hold as supply chain difficulties are now expected to last into the new year. Shortage-driven price spikes on aluminum, a key material in trailer making, and China’s pandemic lockdowns delaying parts shipments create a double whammy.

“Final reporting will likely show that these lower trailer order levels will still result in an average backlog-to-build ratio of just over eight months for the total industry,” said Frank Maly,  ACT director of commercial vehicle transportation analysis and research.

“OEMs continue to closely control order acceptance,” he said. “That will stretch through the end of the year at current production levels.”

Added FTR’s Ake: “The pent-up demand for trailers is estimated at over 100,000 units. OEMs will then have to build at high rates for an extended time to catch up to demand. The short-term prospects are subdued, but the long-term outlook remains bright.”

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