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May 21, 2022 11:23 AM, EDT

Trailer Orders Tumble to Year’s Low Point

trailerUtility Trailer Manufacturing Co.

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Net U.S. trailer orders in April rose 36% compared with the 2021 period, but plunged compared with March to settle at the lowest point since October, ACT Research reported.

Orders were 19,614 compared with 14,387 a year earlier, but were the lowest volume since October’s 17,405.



This March, orders reached 37,901 for the high point of the year, according to ACT.

The net number for April was up compared with industry analysts’ reporting of preliminary numbers, as one trailer maker sharply revised its number higher after issuing its initial data. ACT had a preliminary estimate of 16,100, while FTR’s preliminary estimate was 16,800.

ACT noted trailer makers continue to maintain tight control of how many orders they accept this year, with orders placed for 2023 largely on hold.

“Just as dry vans provided solid support in March, they were responsible for the dramatically lower April bookings,” Frank Maly, director of commercial vehicle transportation analysis at ACT, said.

“Final reporting will likely show that these lower order levels will still result in an average backlog-to-build ratio of just over 8 months for the total industry,” he said. “That will stretch through the end of the year at current production levels.”

FTR pegged net orders at 18,800.

“There is no reason for trailer OEMs to overbook, with increasing uncertainties regarding the supply chain. The [COVID lockdown] situation in Shanghai is going to delay some components that are needed to make trailers,” said Don Ake, vice president of commercial vehicles at FTR. “Trailer makers’ costs are too high and they are not going to quote yet.”

Shanghai, which has been in a long, strict lockdown to stamp out community spread of the virus, had announced plans to start opening the city beginning May 20. It’s the first time officials have set a timeline for reopening, Bloomberg News reported.

The war in Ukraine has also spiked the price of aluminum, Ake said, although it remains below its “unreal” earlier peak. “It went from horrible back to bad.”

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A U.S. ton of aluminum was $2,859 on May 19, down compared with the 52-week peak of $3,966 per ton, according to reports.

Ake doesn’t see orders improving much more until the fall.

“They have to do quoting sometime,” he said of the trailer manufacturers. “It will probably be more like a traditional year — the order rate will start to edge up in August, build momentum in September and be big in the fall.”

Wabash, the sole publicly traded trailer maker, reported it shipped 11,695 trailers in Q1 compared with 9,660 a year earlier — with some of those used for storage and drop-and-hook situations.

Its backlog reached $2.3 billion, an increase of $800 million compared with the 2021 period.

For the full year ending Dec. 31, the company increased its outlook for revenue by $200 million to $2.5 billion.

“Evidenced by record first-quarter backlog, demand across our portfolio of solutions remains strong,” CEO Brent Yeagy said. “With our customer base and supply chain both overwhelmingly levered to the United States, we are largely insulated from international volatility and fortunately situated to benefit from improving labor market trends and new and existing customers that are utilizing trailers in new and interesting ways.”

According to Maly, Wabash said in a recent market day call with analysts that it is discussing with strategic partners whether to accept orders that would be timed out more than 12 months ahead.

“That’s not been the pattern for the trailer side,” Maly said, but noted that Wabash indicated these extended orders would not come from its existing backlog.

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