Sales of commercial vehicles, trailers raise show uncertainty

April 14, 2022

Land Line Staff

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Though freight activity has moderated, there are reasons to be optimistic about the economy and sales of commercial vehicles, says an analyst for ACT Research. In addition, trailer sales have perked up, says another ACT analyst.

For the first time since the second quarter of 2020, transportation metrics stopped moving “up and to the right” in the first quarter of 2022, according to an ACT news release.

“While a mid-2022 deceleration in freight activity and rates has long been anticipated in ACT’s freight market research, and the timing of the turn was as anticipated, the magnitude of the correction was considerably larger than expected,” Kenny Vieth, ACT’s president and senior analyst, said in a news release. “Early April data suggest rate moderation continued. Other transportation metrics, like load/truck ratios and load turndowns, also fell sharply in March, moving from tight to neutral levels and reinforcing the weakness exhibited in spot rates.”

Despite the caution flags, there is still much to like about the current situation, Veith said.

“Carrier profitability, pent-up demand, and pre-buying remain large forces that should propel the industry into the end of 2023,” he said.

The risk of stagflation has grown as the U.S. and Canadian job markets have remained hot.

“Unlike in, say, 2007, consumer debt service as a percentage of disposable income is running well below the record levels of the pre-Great Recession period, and corporate profits are at all-time highs, so there is greater capacity economy-wide to absorb shocks,” Veith said.

ACT Research has recently released its North American Commercial Vehicle Outlook, which makes forecasts for the next five years with the objective of helping original equipment manufacturers and industry suppliers plan.

Trailer sales

ACT Research also reviewed trailer sales in its monthly report State of the Industry: U.S. Trailers.

“Preliminary reports show that net trailer orders in March reached the highest level since December 2020,” ACT reported in a news release. “Bookings of 37,900 units were up 40% month-over-month and 28% better year-over-year.”

Final March results will be available later this month, but this preliminary market estimate should be within 3% of the final order tally, ACT stated.

For April, some original equipment manufacturers have noted that their extremely low order volume was the result of a “sell-out” of their projected available production slots for the remainder of the year, Frank Maly, director commercial vehicle transportation analysis and research at ACT Research, said in a news release. Others, accepting higher order volumes, were in the process of filling their remaining production capacity for 2022, he said.

Some manufacturers have been unwilling to officially open for 2023 orders over concerns about setting prices, he said.

There are indications that some supply-chain relief was beginning to be felt, he said.

“Final figures for the month will likely reveal total industry backlog now stretching into December at current production rates, heavily influenced by dry van and reefer commitments that basically fill their year,” Maly said.

Columbus, Ind.-based ACT Research publishes commercial vehicle industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. LL

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