Trailer orders for 2021 totaled 249,000 units, according to FTR, despite widespread material shortages that included basically everything needed to assemble them – wood, rubber, metal and people.
December order intake slid to 26,500 units, down 18% month-over-month and down 42% year-over-year. As OEMs continue to manage backlogs carefully thanks to ongoing supply chain disruptions, order volume was close to the average of the previous three months.
“It appears that a labor shortage at domestic suppliers is now the number one constraint. The flow of commodity materials has improved and even imported parts deliveries have increased. The employment level at the OEMs is also a significant issue," said Don Ake, FTR vice president of commercial vehicles. "At least one OEM is offering $1,000 sign-on bonuses for all factory workers. It is anticipated that trailer build will increase steadily once the labor constraints loosen up.”
OEMs are booking orders a batch at a time as they estimate how many trailers they can build in future months based on parts and component availability. Fleets anticipate needing large numbers of trailers in the coming months, but OEMs are reluctant to enter all the commitments into the backlog under current conditions.
“After a very conservative path from April through August," Frank Maly, Director CV Transportation Analysis and Research of ACT Research said OEMs cautiously began accepting additional orders in September.
"That careful posture continued through the remainder of the year. OEMs continue to balance staffing and supply-chain challenges as they seek to ramp production volumes to better fulfill fleet equipment demands,” he said. "Even with the lower December order volume, preliminary results point to month-over-month growth in industry backlog as the year closed, and it appears that 2022 production slots are now committed through August, at current build rates."
Ake noted that the trailer market has settled into a pattern similar to Class 8 trucks. "Orders have now averaged 26,000 units for the past four months, only a few thousand more than monthly production," Ake said. "That means backlogs have only gone up 6% despite there being tremendous demand for new trailers. You won’t see the order numbers consistently rise until there are ample parts to support significantly higher production."
At just under 250,000 for the year, Maly noted trailer order volume closed 2021 down about 17% from 2020, a decline he said "is entirely the result of supply-chain and staffing issues, as OEM output continues to trail actual fleet demand.”