Trailer orders in January fell back significantly from a huge December. But the numbers suggest a return to normal order patterns after more than two years of disruption.
Manufacturers have plenty of pending orders to build, both trucks and trailers.
“Orders continue to flow in and we still have pent-up demand to fill,” Chris Hammond, executive vice president of sales for Great Dane, told FreightWaves.
“We are seeing some customers defer ordering in 2023 as the economy begins to slow down as talk of an economic recession increases. We don’t expect a trailer recession in 2023. But the frenetic pace of the past few years has mitigated.”
That pace included a record 57,300 orders in December, the second-highest monthly intake since ACT Research began tracking in 1996. Preliminary January bookings retreated to a still-respectable 24,200.
“Demand remains strong. And with the backlog-to-build ratio near the 10-month mark, on average, fleets needing trailers continue to stay the course,” Jennifer McNealy, ACT’s director of commercial vehicle research, said in a news release. “Nearly as soon as a build slot is available, there is a fleet ready to fill it with an order.”
OEM leader Hyundai Translead said it expects elevated orders in coming months. Wabash reported a record backlog of $3.4 billion at the end of 2022, up 46% compared to Q3 and 34% above December 2021.
Trailer replacement demand trumps additional capacity
“There is a lot of replacement ordering in certain segments as customers want a younger fleet and they don’t want to change their normal replacement cycles,” Hammond said. “We do see capacity additions in some fleets. But I’d say it is trending more to replacement as a percentage of orders versus the past couple of years.”
Supply chain disruptions are fewer than during the pandemic, but they remain part of the production landscape, Hammond said.
The pent-up demand for new equipment offsets recession worries.
The December Class 8 truck backlog of 243,800 units will probably fall to around 235,000 when all January data is parsed, according to Kenny Vieth, ACT president and senior analyst. OEMs pushed to finish incomplete “red tag” trucks in December, which artificially lowered the backlog-to-build ratio to about eight months. Pent-up demand is about 60,000 trucks, Vieth said.
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Wabash Q4, full-year revenue, operating income hit records
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