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Component shortages for trailer OEMs impacting aftermarket: ACT Research

Nov. 23, 2021
'Price increases for components and materials have meaningfully impacted the market in 2021 and will likely continue to do so in 2022,' ACT's Maly says

Component and material availability continue to be a significant problem for trailer manufacturers, and the issue is widespread, not contained to any small group of parts and materials, according to this quarter’s issue of ACT Research’s Trailer Components Report.

“In addition to supply-chain constraints, workforce availability and reliability are both mentioned as challenges for trailer OEMs,” said Frank Maly, director–CV Transportation Analysis and Research. “And, while parts availability and staffing considerations are impacting OEM production, they are also challenging to aftermarket channels.

“Reports of sidelined equipment, both power units and trailers, due to a shortage of replacement parts, are being heard. Sometimes that’s due to widespread availability issues, but sometimes it’s because parts have been re-directed to the production side of the business and away from aftermarket support.”

And while ACT is aware of additional industry production capacity under development, OEMs remain reticent to fully open their 2022 orderboards in the meantime, Maly noted. Instead, ACT expects trailer OEMs to carefully manage their order acceptance over the next few quarters, as they continue to face unusually long backlog-to-build ratios.

“Price increases for components and materials have meaningfully impacted the market in 2021 and will likely continue to do so in 2022,” Maly said. “Many OEMs have had to re-negotiate pricing on previously accepted orders with fleets, implementing either price changes or material surcharges during the year. Sometimes, given their extended backlogs, OEMs returned to their customers more than once for these adjustments, additional reasons for manufacturers’ current caution.”

Indeed, the front-and-center concerns of the broader commercial vehicle industry likewise are supply-chain constraints, as well as the inflationary ramifications that flow from them, according to ACT’s recently released Transportation Digest.

“In addition to the front-and-center supply-chain constraints, ACT also remains focused on key industry demand drivers,” said Kenny Vieth, ACT president and senior analyst. He continued, “The Cass Shipments Index has been on an upward track for almost a year and a half, which is no surprise, given the shift in consumer spending from services to goods during the pandemic.”

Vieth characterized the nationwide focus on the supply-chain in the business press and the general media as “unprecedented.”  And most of the links in supply-chain nodes from ports to factories to distribution centers to retailers and households are “trucks and trailers.”

“Reviewing forecast risks, the two most visible and worrisome unknowns in the near term are 1) ongoing supply challenges for OEMs and suppliers impacting industry production, and 2) the threat posed by COVID, especially if holiday gatherings are a catalyst for another wave,” Vieth said. “We also note rising risks in China, from the financial risks of over-leveraged real estate, to rolling power outages, to geopolitical issues like environmental policy and increasing tensions with Taiwan.”

ACT Research’s U.S. New Trailer Components and Materials Forecast is compiled to provide 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.

The Transportation Digestreport, which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets.