Transportation equipment markets continue to outpace the broader economy which, by some measures, has been walking a recession tightrope for much of 2022. Carriers have continued to profit, even as rates have fallen, and they need trucks and trailers, explained Eric Starks, chairman and CEO of FRT Transportation Intelligence.
And while supply chain disruptions and labor challenges have kept production below demand levels, the result is essentially to push business into 2023, Starks explained in delivering the trailer market outlook at this year’s NTDA convention. So the trailer business should, once again, be better than the broader economy through next year.
But there’s a fundamental risk to the market.
“Any of you worried about inflation?” Starks asked. “Yep, I am. This is the biggest issue out there.”
Still, the basic math for equipment is that orders follow utilization. And while utilization has begun to slip, Starks anticipates that order activity will stabilize around 60,000 trailer per quarter—or about 20,00 per month, “and that's not a bad number.”
Additionally, Starks noted some “structural changes” in the way that carriers handle their equipment in an evolving supply chain—and that’s trending to more demand for trailers than the basic forecast calls for. FTR predicts total U.S. production to finish this year 303,000, up 13.1% annually, to be followed by 325,000 in 2023 and 310,000 in 2024.
The bottom line: “We anticipate the next year is going to be good,” he said. “The biggest risk is not the economy. The biggest risk is the ability to find labor and the ability to find components.”
Dry Van
• Component shortages and labor remain the greatest inhibiting factor to increasing build rates in the dry van segment
• OEMs have seen declining levels in the number of partially completed units, however, there remains a lot of room for improvement in the overall supply chain.
• FTR forecast calls for 2022 to finish at 179,883 (up 11.2%) and come in at 194,000 in 2023 and 186,054 in 2024.
Refrigerated Van
• Refrigerated van production continues to be hindered by limited availability of refrigeration units due to the shortage of compressors and semiconductors.
• FTR forecast calls for 2022 to finish at 45,354 (up 13.7%) and come in at 48,400 in 2023 and 45,831 in 2024.
Flatbed
• OEMs remain skeptical about starting to fill build slots for 2023 as labor and component supply chains remain a persistent constraint.
• FTR forecast calls for 2022 to finish at 31,429 (up 31.5%) and come in at 32,200 in 2023 and 30,597 in 2024.
Liquid tank
• Liquid tanks build rates remain strong amidst record backlog levels that are likely to result in a very sturdy 2023.
• FTR forecast calls for 2022 to finish at 8,737 (up 20.8%) and come in at 9,600 in 2023 and 9,115 in 2024.
Dump trailers
• Dump trailers orders climbed sharply in August to their highest monthly level since December 2021. As spending on infrastructure proceeds, the dump segment is likely to stay stable through 2023.
• FTR forecast calls for 2022 to finish at 7,725 (up 3.2%) and come in at 8,600 in 2023 and 8,189 in 2024.
