Trailer builders have their work cut out for them, according to industry researchers who project higher demand for 2024, despite July 2023 reflecting the weakest trailer order month of the year so far.
Trucking industry data aggregator ACT Research, in its latest quarterly report on upcoming trailer builds, heightens its expectations for 2024 builds, however, attributing the bullish prognosis to a higher-than-expected U.S. gross domestic product and more normalized supply chains.
Builds from May to July totaled 81,700, a 7% increase year-over-year, though net orders of 26,300 trailers were 58% lower than the same period in 2022. Order backlogs at 157,300 units were 15% lower than the 184,900 units pending production last year.
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“As part of our recent trailer-maker survey, we asked about 2024 orderbook openings and dealer inventory levels,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT. “Based on their responses, 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.”
The number of trailers built last month dropped 14% compared to June, but production still outpaced orders due to an expected decline, resulting in a 15% reduction in trailer backlogs.
“The current backlog essentially commits the industry into the beginning of 2024,” McNealy stated.
Total cancellations dropped to 1.7% of backlog following two months of elevated cancellation activity, according to McNealy's ACT.
“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," she concluded.
