US trailer production faces lower demand, disruptions amid coronavirus outbreak

ACT Research has reported that lower demand and supply chain disruptions affecting the US trailer industry could lead to a 'catch-22'.

ACT Research’s U.S. New Trailer Components and Materials Forecast provides those in the trailer production supply chain, as well as those who invest in said suppliers and commodities, with forecast quantities of components and raw materials required to support the trailer forecast for the coming five years. It includes near-term quarterly predictions for two years, while the latter three years of the forecast are shown in annual details. Additionally, analysis is segment into two categories: those needed for the structural composition of new trailers and those used in production of undercarriage assembly.

“OEMs could be in a ‘catch-22’ situation; while trying to adjust their operations to lower market demand, they could still be further challenged by component supply disruptions,” said Frank Maly, Director–CV Transportation Analysis and Research at ACT Research.

“The impacts of lower freight volumes and freight rates are creating a pincer move on fleet financials, and as a result, fleets are very seriously reviewing their equipment investment plans.

“With production rates on a downtrend due to ongoing market conditions, the ‘elephant in the room,’ the impact of the coronavirus outbreak needs addressed, too. It could impact availability and the timely supply of many of the components needed to complete trailer construction.

“During ACT’s recent Seminar 62, it was commented that it isn’t just major or high-ticket items that could cause a disruption; the lack of minor, lower-priced components such as lenses for trailer lights could prevent a trailer from being fully completed,” he said.

Additionally, the report alerted readers to “expect any meaningful disruption in production resulting from component supply issues to cause both trailer OEMs and their component supply base to seriously review their sourcing strategies.”

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