According to this quarter’s issue of ACT Research’s Trailer Components & Raw Materials Forecast, OEMs are reporting that their orderboards for 2023 are fully open, with most booked through the end of the year (a few with spots still available in Q4), and some trailer makers are taking orders into 2024. That said, several concerns are weighing on their minds, including the tightening labor market, slowing demand into 2024, inflation pressuring consumer spending, business investment providing continued pressure on carrier profitability, recession risk, material supply availability and cost, and how all these factors are likely to impact dealer confidence.
“Build in the last three months (Feb-Apr) of 83,300 units, was more than 6 percent higher than the same three-month period last year, while net orders of 52,600 trailers was about 38 percent lower for the February to April 2023 period, versus the same three months in 2022,” said Jennifer McNealy, Director-CV Market Research & Publications at ACT Research. “Based on the same three-month comparison, backlog of 212,700 units this year was nearly 7 percent more than the 199,600 units pending production last year.”
McNealy concluded, “During the past six months, trailer manufacturers and major suppliers have largely indicated stable business conditions as compared to each prior month. Responses for May, relative to April, were in line with this trend.”
ACT’s U.S. trailer forecasts, as well as its forecast of the components and raw materials needed to manufacture that equipment, is not only based on build, but on an ongoing secular shift and pent-up demand.
According to Eric Crawford, ACT’s Vice President & Senior Analyst, “For dry vans especially, there is a strong case for a secular shift to higher trailer/tractor ratios by big fleets and the creation of trailer pools by mega-brokerages. At its core, this shift stems from a desire to raise productivity and reduce expenses in the brokerage space.” He added, “In 2023, we forecast elevated build rates and relatively muted economic growth will cut into pent-up demand by ~25k units, leaving ~32k units of pent-up demand as we enter 2024. That said, we forecast pent-up demand will be more than satiated by year-end 2024, as our 165k dry van build forecast implies an over-build of ~13k units.”