US Trailer Industry Increases Build Rate in February, Demand Could Be Softening

According to the recent issue of ACT Research’s State of the Industry: U.S. Trailers report, the backlog-to-build ratio contracted to 8.5 months in February after closing January at 9.9 months, reflecting a higher build rate. For context, the average since Q3/21 has been in the eight-month neighborhood.

“With most categories showing higher build in February, backlogs slid slightly, down 0.5% sequentially but up 23% year over year,” Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research, said. “The dry van backlog was 0.4% lower month to month, with reefers down 0.6% and flats nearly 4% lower compared to January.

“Despite OEMs expanding availability, 2023 is not yet fully open, partially because manufacturers are facing volatile commodity costs, long lead times for some input components and improving but still challenging labor considerations, but also because OEMs are reluctant to overpromise and underdeliver on both price and timing.

“Demand overall remains robust, but some OEMs shared this month that conversations of softening are happening. That said, the same manufacturers indicated the talk has not yet turned into slowing orders or cancellations.

“Other OEMs told us they are seeing a few actual cancellations, but the cancel data is primarily a reflection of spec changes and plant rewrites. Some smaller fleets and owner operators have cancelled orders, but large fleets remain eager to fill the void. OEM conversations also continue to suggest supply-chain constraints are likely to remain a limiting factor to production in 2023, with manufacturers mentioning a renewed fluctuation in materials costs, particularly steel, and continuing long lead times of some components.”

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