December Trailer Orders Held Down by Ongoing Challenges
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U.S. preliminary net trailer orders in December fell 39% compared with a year earlier and 17% below November’s peak volume as operational challenges remained firmly in place, according to ACT Research, which cited trailer makers’ initial data.
Orders in December reached 26,600, according to ACT. A year earlier, orders climbed to 43,806. In November, they were 32,103.
ACT’s preliminary report put the full-year 2021 net orders at almost 248,000 trailers, down 16.6% from 289,206 a year earlier.
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At the same time, industry backlog grew and it appears production slots are spoken for through August, ACT noted.
FTR pegged preliminary net orders at 26,500.
Fleets anticipate needing large numbers of trailers in the coming months, according to FTR, but trailer makers are reluctant to enter all the commitments into the backlog under current conditions.
“These are very challenging times to operate a manufacturing business. COVID, weather, supply chain disruptions, worker availability are all continuing issues this year,” Craig Bennett, senior vice president of sales at Utility Trailer Manufacturing Co., told Transport Topics.
“We are building all the trailers we can but are limited by all the above issues,” he said. “The demand remains strong.”
Driving that demand is plenty of freight and high rates.
Van and refrigerated truckload freight rates hit new highs in December, with national average prices up 21.9% and 29.5% respectively compared with a year earlier, DAT Freight & Analytics reported.
National average truckload spot van and reefer rates increased for the seventh consecutive month and the average van rate reached $3 per mile for the first time, according to DAT.
Bennett said Utility, the leader in refrigerated van sales, is on allocation from most of its major suppliers, including raw materials.
“Many are still claiming force majeure,” he said. “We have implemented an allocation system of our own to control our limited production and take care of our good customers.”
Meanwhile, satisfying the Los Angeles County Health Department that the company is doing all it can to control the spread of COVID is a major challenge, Bennett said. Utility is based in City of Industry, Calif.
David Giesen, vice president of sales at Stoughton Trailers, also said customers are getting partial orders. “Customers are not getting as much as they want, or when they want it.”
But he did not believe customers were double ordering.
Labor is still an ongoing concern and likely will be for the foreseeable future, he added, but the “bleeding” has stopped.
The availability of components and materials, he said, is as or more concerning than labor issues. “We just have many limiting factors in the industry at this point, which is keeping any growth in check.”
One trailer maker expressed gratitude for the workforce on hand over the difficult past two years.
“Like just about every business in the country right now, we are hiring as many employees as we can attract. We are hiring across the country, offering competitive pay and benefits from our plants to our branches,” said Chris Hammond, executive vice president of sales for Great Dane.
Asked if there was some best news out there now, he said the situation every few months turns optimistic that things will level off and get back to the once-familiar normal.
“I’m not sure if there’s ever going to be a normal,” Hammond said, “but we have to find new and innovative ways to meet the needs of our customers as we all try to navigate the challenges we find ourselves in.”
He added Great Dane has been in business for more than 120 years and this is just another challenging time, like many challenging times before.
“If we stay focused on getting the job done, and building the equipment America needs to keep moving forward, I know we will all get through this together,” Hammond said.
But could double ordering be occurring?
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“With the economy ramping back up and e-commerce going strong,” he said, “our customers are trying to get their hands on any equipment they can to deliver the goods that people depend on.”
In mid-January, the online bidding site eBay had 82 for-sale listings for a range of commercial truck trailers.
For example, a listing for a Wabash 2007 dry van trailer with a reserve price of $3,100 had received three bids — with the last one being for $3,050.
A 2019 Globe 55 Ton Detachable Lowboy with 4th axle flip was offered at $84,900, with no bids yet.
Giesen said the hardest thing now is “saying no to our loyal and good customers. Demand far exceeds current capacity and availability.”