August Trailer Orders Reflect Complicated Market

Oakley trucks waiting for fuel. (Oakley via Facebook)

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U.S. trailer orders in August jumped compared with a year earlier, but were still tepid at 17,700, the third-lowest this year and barely up from July’s total, ACT Research reported, citing trailer makers’ preliminary numbers.

A year earlier, orders were 12,366. In July, orders reached 16,997, the year’s second-lowest point, according to ACT, which reported fleets still want to make sure their orders are in queue.

FTR pegged preliminary August orders at 16,400, and noted demand continues to be exceptionally robust, but the fleets struggle to add replacement trailers and find the opportunity to bring on additional equipment.

This is the mixed backdrop: Trailer prices are rising, and so are the costs to build them. The supply chain, as it has for months, clunks forward, then does not, then does. The availability and cost of labor is more of a factor. Backlogs are dropping as build rates increase a little. More trailer makers opened up their order boards for early 2023.

And trailer makers are vigorously optimistic over long-term demand.

“Unless freight volumes significantly drop or trucking companies stop making money, demand for trailers will be there for a long time,” said David Giesen, vice president of sales at Stoughton Trailers.

Great Dane in early September opened up its order board for flatbeds and has seen “very good order intake,” said Chris Hammond, executive vice president of sales. “For vans and reefers we are just now taking orders and expect continued strong demand, which will show up in next month’s numbers.”

Depending upon the application, tanker or van, we’re seeing price increases of 12% to 20%, said Pete Nativo, vice president of fleet solutions at Oakley Transport.

Lake Wales, Fla.-based Oakley is a bulk carrier that specializes in liquid and food-grade transportation.

“I have a couple hundred trailers ordered and they have been coming along pretty well,” he said. About 80 are dry van trailers from Utility Trailer Manufacturing Co., and have been on schedule all along, he said. “And on my tanker side, I have 150 tankers ordered and supposed to be built in the first quarter of next year. Their sales folks were in here recently saying everything is still on schedule. The tankers will come from Wabash.”

The way it is working, said Hammond, is some raw commodity costs come down, like steel, while conversion costs — which experts identify as direct labor and overhead expenses incurred when turning raw materials into finished products — for those same commodities go up negating any real savings and in some cases leading to higher costs on some products.

Meanwhile, Wabash is just months away from producing its last-ever conventional refrigerated trailer at its Lafayette, Ind., plant, said Dustin Smith, chief strategy officer at Wabash.

“And as we wind down the production of that backlog, we are gutting that facility and investing $90 million into that plant and we are going to launch an all-new dry van plant in that same footprint” to meet strong demand, he said.

In 2023, Wabash also will be going to market in the over-the-road thermal management space with only 53-foot trailers badged as Acutherm, EcoNex, he said.

Wabash EcoNex

EcoNex is Wabash’s new name for its thermally efficient, durable molded structural composites. (Wabash)

EcoNex is Wabash’s new name for its thermally efficient, durable molded structural composites.

“Any product with a thermal management focus, we want to brand as Acutherm, our new sub-brand,” Smith said. “That way people start feeling a common theme across our product line for all things that are managing thermal characteristics. Wabash is firmly planting a flag (from vans to truck bodies to trailers and tankers) in this space and creating a brand to go to market around. We intend to serve this market in a pretty powerful way.”

Hammond expects with the pandemic lockdowns in China recently, the industry is in for more supply disruptions in the coming weeks — and Great Dane’s suppliers “continue to express challenges with labor, and that too will constrain supply.”

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On the other hand, he also suggested some dealers have stock units available as some fleets relying on the softening spot rate freight market back off of buying equipment. “We’ll see some shift to dedicated orders in the market, but stock equipment plays an important part for our customers who win new contracts and need trailers in a very short time frame.”

Giesen said Stoughton has improved on the number of its partially built trailers, stalled due to component shortages, “but we still have more room for improvement here.”

Sean Kenney, chief sales officer at Hyundai Translead, said the company’s orders for August were in line with expectations. “Production schedules are beginning to stabilize with the supply chain slowly improving.”