Home Safety Apparel Calm before the storm: Muted June trailer orders conceal coming boom

Calm before the storm: Muted June trailer orders conceal coming boom

Muted orders for new trailers in June are hiding a coming boom in bookings when manufacturers open their order books for 2022.

“There is built-up demand that will quickly consume the slots that open up,” David Giesen, vice president of sales at Stoughton Trailers, told FreightWaves.”We have been full for a while, so new order intake has been very limited.  Demand is still very much there.”

At first glance, the order intake in June would suggest otherwise.

Preliminary reports from ACT Research showed manufacturers posted 11,100 net orders in the month. That was 20% above May orders but 19% below the same point last year when the industry was beginning to recover from pandemic shutdowns.

“Some [manufacturers], due to their extended backlogs, continue to be unwilling to book meaningful order volumes at this time,” said Frank Maly, ACT director of commercial vehicles transportation analysis and research.

“There is built-up demand that will quickly consume the slots that open up. We have been full for a while, so new order intake has been very limited.  Demand is still very much there.”

David Giesen, vice president of sales at Stoughton Trailers

Existing dry and refrigerated van orders awaiting production stretch intothe first and second quarters of 2022. Adding more orders would be fruitless, and trailer makers won’t allow it anyway.

“We sold out vans and reefers months ago and now flatbeds have pretty much filled up for the year over these past few weeks,” Chris Hammond, executive vice president of sales at Great Dane, told FreightWaves.

Labor constraints

Giesen and Hammond both said it is difficult to hire enough workers to keep up with production. 

“All of our lines are running, but ramping up to meet demand has been very challenging,” Hammond said. “Our suppliers have similar issues, so we have to watch both our own employee numbers as well as understand our suppliers’ issues with people and materials.”

Stoughton is affected on all lines and has been unable to ramp up following the COVID shutdown.

“This is one of the biggest barriers in growing capacity,” Giesen said. “Hopefully after additional incentives end, more workers will reenter the workforce.”

Monitoring supply shortages

Manufacturers are working with their larger customers to determine 2022 needs, but they have delayed taking official orders because they don’t know how much to charge for them in a volatile pricing environment for commodities. While prices for wood have normalized recently, steel and aluminum continue to cost more.

“The actual demand for trailers will not be ascertainable until the supply chain problems dissipate,” said Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence. “The production situation for early 2022 could be complicated if OEMs cannot build all the orders currently on the books in 2021.” 

FTR reported preliminary June orders of 11,000 units, 16% higher month over month but 24% lower than June 2020. On a 12-month rolling basis, orders total 364,000 units.

When capacity and materials costs stabilize, Stoughton will look at opening 2022 orders, Giesen said.

“We have commitments from our largest customers and will work with all channels appropriately,” he said. 

The same cautious approach is in place at Great Dane.

“We continue to monitor supply chain issues, of which there are many, and the costing environment,” Hammond said. “Things have been too volatile to launch 2022 sales and we don’t expect to launch for a few more weeks. “ 

Trailer builders get respite in May as orders edge back toward normalcy

April trailer orders slide but blow away near-zero builds a year ago

March trailer orders stabilize but supply chain issues stunt production

Click for more FreightWaves articles by Alan Adler.

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