A cratering number of dry van orders dropped the over net U.S. order total last month to 19,614 units, according to ACT Research.
April’s order intake was down more than 48% from the previous month, but were 23% higher compared to April of 2021. Dry van orders slid 64%, largely thanks to ongoing uncertainty surrounding material costs and build rates.
Frank Maly, ACT Research director of commercial vehicle transportation analysis and research, said that despite April’s drop, OEMs continue to negotiate with fleets “and that effort is building a large group of staged/planned orders that are not yet officially posted to the backlog. Once OEMs gain sufficient confidence in their supply chain and labor availability to open 2023 production slots,” he added, “expect a surge of orders to be ‘officially’ accepted.”
Don Ake, FTR’s vice president of commercial vehicles, said COVID lockdowns in China will delay some components that are needed to make trailers and the war in Europe is creating shortages of aluminum with an associated spike in pricing. “These and other doubts have delayed OEMs from issuing quotes for 2023 requirements,” he added. “So, the low order volumes reflect OEMs filling in the months of the 2022 production schedule they feel more confident about.”
Maly noted manufacturers traditionally have been unwilling to push commitments past 12 months, and crossing into a new calendar year (2023) this quickly would not normally be under consideration. “However, recent years, including the pandemic-battered 2020-2021, have been anything but normal, leading us to expect some OEMs to begin viewing deeper orderboards, with appropriate cost/price protections, which would result in both a competitive advantage and improved fleet relations,” Maly said.
The orderboard slid sequentially in April, and Maly expects the backlog to contract through late spring and early summer, “but the yet-to-be-determined date for opening the 2023 orderboards will reverse the backlog contraction and likely quickly extend the backlog well into next year,” he added.
Ake estimated pent-up demand for trailers at over 100,000 units – a level that’s held steady for several months. “But now, the supply chain difficulties are expected to extend into 2023,” he said. “OEMs will then have to build at high rates for an extended time to catch up to demand. The short-term prospects are subdued, but the long-term outlook remains bright.”
