ACT Research
Act Trailers Dec2021

2021 trailer orders close 'softer': ACT Research

Jan. 14, 2022
Production slots are committed through August at current build rates, however. But with fewer components requiring semiconductors, trailer production also showed some modest traction into year-end.

Preliminary reports show trailer net orders closed December on” a softer note,” with OEMs booking 26,600 units in December,” according to ACT Research’s State of the Industry: U.S. Trailers. That was 17% lower than November and 40% below the previous year’s soaring volume.

After a “very conservative path” from April through August, OEMs cautiously began to accept additional orders in September, noted Frank Maly, director CV transportation analysis and research for ACT Research. That “careful posture” continued through the remainder of the year.

“OEMs continue to balance staffing and supply-chain challenges as they seek to ramp production volumes to better fulfill fleet equipment demands,” Maly said.

Even with the lower December order volume, preliminary results point to month-over-month growth in industry backlog as the year closed, and it appears that 2022 production slots are now committed through August, at current build rates, ACT noted.

This preliminary report puts the full-year 2021 net orders at almost 248k trailers, down about 17% from 2020.

“The decline is entirely the result of supply-chain and staffing issues, as OEM output continues to trail actual fleet demand,” Maly said.

In a broader view of the CV industry, COVID risks have increased materially in the short term as the highly contagious Omicron variant continues its global sweep. Reports indicate growing strains on staffing across the US and global economies, thereby threatening manufacturing activity in Q1, ACT reports in its North American Commercial Vehicle OUTLOOK.

“Minimally, the world should be planning for a January of meaningful labor disruption, and by extension, increased manufacturing challenges, locally and globally,” said Kenny Vieth, ACT president and senior analyst. “Low-cost manufacturing countries with low vaccination rates have had trouble in previous COVID waves. To combat Omicron, the Chinese government has instigated shelter-in-place quarantines, continuing their strict lockdown policy. As China remains the world’s workshop, Chinese parts suppliers and ports going off-line is a real short-term risk.”

The “silver lining,” Vieth added, is that Omicron’s rates of serious infection and mortality are materially lower, especially for the vaccinated. And the Omicron has almost taken the more serious Delta variant “off the map,” based on infection ratios.

Regarding the impact to the North American commercial vehicle industry, Vieth suggested that despite broad-based demand strength, “traction” on commercial vehicle build has been “elusive.” The exception at year-end was better Classes 5-7 build rates related to the ability of the large pickup truck-based OEMs to move chips from smaller to larger GVW vehicles. That allowed some additional incomplete units to be finished into year-end.

With fewer components requiring semiconductors, trailer production also showed some modest traction into year-end, suggesting some easing in commodities capacity.

“It appears that the industry will begin 2022 with still unfinished 2021 units,” Vieth concluded. “At the levels we suspect, this is an unprecedented situation. If your company has parts on all those ‘built, but not built’ units, some adjustment will be required to align your 2021-2022 output with reported and forecast data.”