March Trailer Orders Surge to Nearly 38,000
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March U.S. trailer orders surged to nearly 38,000 amid some supply chain relief — to the highest level since December 2020, ACT Research reported.
Orders hit 37,900 and were 28% higher than the 29,910 net orders from a year earlier, according to ACT.
Some supply chain relief was beginning to be felt, ACT noted, as the backlog extends into December at current production rates.
March preliminary net trailer orders of 37.9k are up 40% versus February and are the best monthly order volume since December 2020.https://t.co/oEraGmlEw1#Trailers, #Transportation, #truck, #trucking, #ACT, #ACTResearch pic.twitter.com/7bzEK5oy3j — ACT Research (@actresearch) April 18, 2022
FTR pegged the preliminary orders at 36,200.
“It was a solid order month,” said Don Ake, vice president of commercial vehicles at FTR.
And yet, the trailer makers he spoke with expressed only cautious optimism. “When I checked in with them I thought I was going to hear much more positive comments; although they weren’t negative.”
Meanwhile, Chris Hammond, executive vice president of sales at Great Dane, said the company is still uncertain when to open up orders for 2023, “and I can’t really guess at this point. It will certainly be many weeks away at the earliest.”
Some suppliers have told Great Dane that raw materials for steel components are affected due to sourcing from Russia and Ukraine, which are at war. “Those suppliers are working to source from other regions in the world.”
David Giesen, vice president of sales at Stoughton Trailers, also noted how much uncertainty remains on cost and availability of materials and parts going into 2023. “We are waiting for more stabilization before we book the business.”
Utility Trailer Manufacturing Co. is filling up the third quarter with firm orders, said Senior Vice President of Sales Craig Bennett. “While we have some business that extends into fourth quarter we have not opened it up yet, officially; 2023 will come after that.”
He also said the war in Ukraine has tightened up the already tight aluminum supply on a worldwide basis driving up costs. “Several other products come from them and also Russia and are being affected by the war in terms of higher costs and reduced supply. The war is another complicating factor reducing material supply and thus limiting trailer output.”
At the same time, interest rates are expected to continue to increase. Trailer makers said they did not expect that to slow demand.
Any increase in costs will force customers to look again at the economics of their purchases, Hammond said, and suggested the carriers’ focus will be on whether the freight rates they are charging shippers will sustain their plans for growth.
Kenney
Hyundai Translead expects to open the 2023 order in the third quarter, said Chief Sales Officer Sean Kenney, “which puts us more in line with historic planning.”
As for captive financing, Giesen said it is an important aspect of Stoughton’s business for customers that require flexible terms and an immediate approval.
Stoughton has been giving an estimated price to the customer based on current known projections, he said, “with the understanding that this price may change as needed right up to the time we build the trailer.” Almost all customers have adapted and are very understanding of the environment, he said.
Kenney said while captive financing was a growing aspect of Hyundai Translead’s business, it is not large enough to “truly be material” at this point.
Utility is not directly involved in financing trailer retail contracts, Bennett said. “However, we have relationships with some key lenders who do and some of them also provide floor plan financing [loans for inventory], which we do require of our dealer group.”
He added he was told retail prices of used trailers have topped out and retreated some.
“It was astronomical and has to come down,” Bennett said. “Lenders are starting to tighten up their lending standards now. Both of these trends show that while demand is still very strong, we have probably topped out and demand will moderate some later this year.”
Giesen noted due to the increase in equipment prices Stoughton customers are requesting longer finance and lease terms.
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