With supply chain issues largely normalized, truck and trailer OEMs continue to report smaller, more manageable, and less impactful disruptions.
July's trailer build rate was 14% lower month-over-month, partly attributable to one less build day. As expected, production outpaced orders into July’s annual order trough, dropping trailer backlogs 15% year-over-year, said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research.
"Because large backlog declines are seasonal, and thanks to a lower build rate, the seasonally adjusted backlog-to-build ratio shed a modest 20 basis points to 6.9 months," she added. "The current backlog essentially commits the industry into the beginning of 2024.”
Fleet commitments improved in July but were still somewhat mixed, McNealy said, noting that clouds on the trailer market horizon bear watching, yet industry stakeholders remain cautiously optimistic about 2024.
"Total cancels dropped to 1.7% of backlog," she said, "following two months of elevated activity. Some OEMs have told us customers are cutting back on their anticipated order appetite for this year and next, with fewer customers remaining on the sidelines to pick up near-term build slots as they become available. Clearly, the demand dynamic is shifting.”
According to this quarter’s issue of ACT Research’s Trailer Components & Raw Materials Forecast, ACT’s U.S. trailer forecasts for 2023 increased during the past three months. The 2024 forecast is now higher, reflecting higher build in 2023 and 2024, with the economy continuing to outperform expectations, higher GDP and freight forecasts, and more normalized supply chains.
“Build in the last three months (May-July) of 81,700 units was 7% higher than the same three-month period last year, while net orders of 26,300 trailers were about 58% lower for the May-to-July-2023 period, versus the same three months in 2022,” said McNealy. “Providing better context for market activity, order backlogs at 157,300 units were 15% lower than the 184,900 units pending production last year.”
As part of its recent trailer-maker survey, McNealy said ACT asked about 2024 orderbook openings and dealer inventory levels. Based on responses, she said it appears that about 35% of the industry’s Q1’24 books have opened, with limited slots available beyond that.
"Regarding dealer inventories, answers were product dependent, with generalist trailer levels higher than specialty trailer inventory levels," she added.
