U.S. Trailer Production Facing Massive Retrenchment in Production Levels

According to this quarter’s issue of ACT Research’s Trailer Components Report, the U.S. trailer industry has shifted from the production/capacity challenges of the last three years, with their corresponding pressures on the component and material supply chains, to a massive retrenchment in production levels.

“While there was no indication of any widespread COVID-19 lockdown driven shutdowns at trailer OEMs in the past quarter, the dramatic cessation of fleet investment has caused OEMs to quickly reassess their production volumes and staffing needs,” said Frank Maly, Director–CV Transportation Analysis and Research at ACT Research. “The short-to-medium term outlook will be entirely dependent upon the return of business to some level of normality and stability, which will drive freight demand for both manufacturing and consumer spending.”

Maly also noted, “Higher freight demand will eventually challenge fleet capacity, and drive an improvement in freight rates, which will help build fleet confidence and generate the desired combination of equipment need and ability to pay.” He added, “However, the path to get to that point likely will be arduous.”

The report alerted readers, in the meantime, to “expect trailer OEMs, where possible, to pull orders forward in an attempt to maintain production levels until the inevitable reductions in line rates and staffing occur,” which will also challenge materials and component suppliers, as bills-of-material will likely shift in both timing and specifications.

ACT Research’s U.S. New Trailer Components and Materials Forecast provides those in the trailer production supply chain, as well as those who invest in said suppliers and commodities, with forecast quantities of components and raw materials required to support the trailer forecast for the coming five years. It includes near-term quarterly predictions for two years, while the latter three years of the forecast are shown in annual details. Additionally, analysis is segmented into two categories: those needed for the structural composition of new trailers and those used in the production of undercarriage assembly.

Additionally, ACT Research has created an easily accessible COVID-19 Market Watch webpage to track noteworthy high frequency macroeconomic and transportation-specific market indicators.

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