US Trailer Production Facing Massive Retrenchment in Production Levels

ACT Research says dramatic cessation of fleet investment has caused OEMs to quickly reassess their production volumes

According to this quarter’s issue of ACT Research’s Trailer Components Report, the US trailer industry has shifted from the production/capacity challenges of the last three years, with their corresponding pressures on the component and material supply chains, to a massive retrenchment in production levels.

“While there was no indication of any widespread COVID-19 lockdown driven shutdowns at trailer OEMs in the past quarter, the dramatic cessation of fleet investment has caused OEMs to quickly reassess their production volumes and staffing needs,” said Frank Maly, Director–CV Transportation Analysis and Research at ACT Research. He explained, “The short-to-medium term outlook will be entirely dependent upon the return of business to some level of normality and stability, which will drive freight demand for both manufacturing and consumer spending.”

Maly also noted, “Higher freight demand will eventually challenge fleet capacity, and drive an improvement in freight rates, which will help build fleet confidence and generate the desired combination of equipment need and ability to pay.” He added, “However, the path to get to that point likely will be arduous.”

The report alerted readers, in the meantime, to “expect trailer OEMs, where possible, to pull orders forward in an attempt to maintain production levels until the inevitable reductions in line rates and staffing occur,” which will also challenge materials and component suppliers, as bills-of-material will likely shift in both timing and specifications.

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