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Supply chain growls hurt the production of trailers needed to transport goods

The shortage of parts and labor is squeezing production at truck trailer plants, undermining truck companies’ efforts to expand their capabilities in the tight freight market.

Manufacturers produced 25% more dry vans (the most common type of semi-trailer used to transport goods) in 2019 than they are today. Industry orders can take up to eight months after peaking 13 months earlier this year. To traffic data provider ACT Research.

Equipment manufacturer based in Lafayette, Indiana

Wabash National Ltd

This year, we expect trailer production to be about 25% lower than before the pandemic due to the lack of everything from foam insulation to suspension components to taillight wiring.

Demand has been the highest in the company’s history, helping Chief Financial Officer Mike Pettit to boost backlogs for Wabash trailers and other products to up to $ 1.9 billion as of September 30. Told. For materials such as steel, which he said the price quadrupled between the August 2020 lows and the third quarter of 2021.

Factory backups are pushing down US trailer orders as transportation equipment manufacturers closed sales in 2022 due to a full production quota. Orders in October plummeted by about 69% compared to the same month in 2020, when truck companies were competing. According to ACT, the US economy is out of a pandemic blockade, so it will expand its production capacity. The truck convoy ordered about 17,400 trailers from US manufacturers in October, a decrease of more than 38% from September.

“It’s not because the fleet doesn’t want to buy or order trailers,” said Frank Marie, director of commercial vehicle transportation analysis and research at ACT. “At this point, the manufacturer is very hesitant to accept additional orders.”

Wabash’s Pettit said manufacturers are “selective” and prioritize top customers. “The dynamics of the market are like having to decline orders from all manufacturers, including Wabash,” he wrote in an email statement.

Don Ake, vice president of commercial vehicles at FTR, a research firm in the freight industry, said the lack of new trailers slowed product flow and increased trucking rates for retailers and other shippers. Said. Ake added that many older trailers are also idle due to the lack of replacement parts.

The backlog of Felling Trailers Inc., based in Sauk Center, Minnesota, is “four times larger than it was before 2021,” said Pat Jennissen, vice president of sales and marketing for the company. The manufacturer of the flatbed trailer temporarily stopped production in July because it was waiting for material delays, and now holds twice the normal inventory, and inventories such as tires to prevent future shortages. Is accumulating.

Bob Wahlin, Chief Executive Officer of Stoughton Trailers LLC, said labor shortages reduced production for Stoughton, Wisconsin-based companies and their suppliers, despite efforts to attract workers by raising wages and profits. He said he was doing it.

“For now, it seems that no one can produce as much as they want,” Warfarin said. “They just can’t get people.”

Equipment makers say the backlog is frustrating customers trying to refurbish their fleet.Trailer shortages are caused by shortages of semiconductors and other parts Reduced production of heavy-duty trucks..

Truck loading carrier based in Omaha, Nebraska

Werner Enterprise Ltd

Executives said in a statement on October 28 that they received less trucks and trailers than expected in the third quarter as parts shortages reduced their ability to meet manufacturer demand.

“Semiconductor chips, raw materials, components, and labor shortages make it increasingly difficult to meet current demand levels,” Werner CEO Derek Leathers said by phone. Said. “We expect this industry trend to continue until 2022.”

Logistics report details

Write in Lydia O’Neill lydia.oneal@wsj.com

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Supply chain growls hurt the production of trailers needed to transport goods

Source link Supply chain growls hurt the production of trailers needed to transport goods

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