Near-record backlogs have filled 2019 build slots for many OEMs, and there continues to be some resistance toward booking orders into next year.
“While demand remains, we’ve heard OEM receptivity toward orders is mixed,” said Frank Maly, director of CV Transportation Analysis and Research at ACT Research. “Some are declining additional commitments, while other trailer manufacturers are accepting orders, but with pricing ‘to be determined,’ as a result of the uncertainty surrounding future component and material costs.”
Maly added, “Cancellation penalties have also entered the negotiations, as OEMs seek to both discourage speculative ordering and ensure that backlog ‘out-months’ remain firm.”
The report noted that ACT expects a slowing economy later in the year, likely resulting in lower freight rates and lower demand for freight transport. Meanwhile, cancellations remain near the top of the normal range, and the backlog-to-build ratio closed February at 8.2 months.
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The event that shaped the equipment finance industry in 2020 certainly needs no introduction. COVID-19, the cause of one of the most disrupted years in memory, is continuing to impact the leasing industry. We close the year out with the... read more