Although trailer manufacturing facilities are cropping up in places such as Waco, Texas, a persistent labor shortage continues to tamp down production.
With demand for tractors and trailers exceeding manufacturing capacity in 2021, optimism remains high that newly-minted plants will fill the backlog of orders. At year’s end, U.S. trailer orders surged, with November and October experiencing what appeared to be the beginning of a turnaround.
“November net U.S. trailer orders of 32,103 units increased more than 84 percent from the previous month, but were nearly 20 percent lower compared to November of 2020. Before accounting for cancellations, new orders of 33.9k units were up more than 73 percent versus October, but 18 percent lower than the previous November,” according to ACT Research’s State of the Industry: U.S. Trailer Report.
Overall orders remained lower than 2020, but the month-over-month improvements were reason for optimism. Trailer manufacturers remain keenly aware they must navigate inflation and uneven supply chains in 2022. But demand for new trailers is undeniable.
“The trailer market has settled into a pattern similar to Class 8 trucks. Orders have now averaged 26,000 units for the past four months, only a few thousand more than monthly production. That means backlogs have only gone up 6 percent despite there being tremendous demand for new trailers. You won’t see the order numbers consistently rise until there are ample parts to support significantly higher production,” FTR vice president Don Ake reportedly said.
Many anticipated the supply chain disruptions would wane after the gift-giving holiday. The conventional wisdom was the height of consumer goods purchases would slow, and manufacturing materials would flow more freely. But now, trailer manufacturers appear to be staring down a frustrating labor shortage.
“It appears that a labor shortage at domestic suppliers is now the number one constraint. The flow of commodity materials has improved, and even imported parts deliveries have increased. The employment level at the OEMs is also a significant issue,” Ake reportedly said. “At least one OEM is offering $1,000 sign-on bonuses for all factory workers. It is anticipated that trailer build will increase steadily once the labor constraints loosen up.”
Millions of people joined the “Great Resignation” movement over wages and working conditions since the spring of 2021. Coupled with the recent Omicron strain, workers are heading to the unemployment lines rather than contracting the virus.
According to the U.S. Department of Labor, upwards of 231,000 and 286,000 workers filed for unemployment during January’s first and second week, respectively. Those figures were substantially higher than anticipated. The rising jobless claims come after hitting a 52-year low in early December and a modest 3.9 percent unemployment rate. However, more than 6 million people are reportedly unemployed and trailer manufacturers appear to be competing for qualified workers.
Sources: ccjdigital.com, nypost.com
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