Forecasting transportation equipment production in 2021 is like being the traffic reporter during rush hour: Everyone knows they\u2019re stuck in a traffic jam, but it\u2019s the reporter\u2019s job to tell them anyway. That\u2019s how Don Ake, FTR Transportation Intelligence<\/a> vice president of commercial vehicles, prefaced his April 1 commercial vehicle market update.<\/p>\n \u201cWe’re still going to look at the numbers, but we’re stuck in traffic and I’m giving you the traffic report,\u201d Ake said. \u201cWe’re stuck in traffic because so many things are clogging the supply chain.\u201d<\/p>\n For the Class 8 market, the semiconductor chip shortage is the leading source of the production slowdown; for trailers, it\u2019s wood flooring. Problems, yes, but identifiable and predictably resolvable.<\/p>\n However, \u201cit doesn\u2019t stop there, but goes on and on,\u201d Ake continued: tires, harnesses, stamped parts, steel, aluminum.<\/p>\n \u201cIt’s all mixed together, and it’s all bad,\u201d Ake said. While the CV industry got out ahead of the traffic in the early stages of the recovery, now \u2014 with the broader economy rolling \u2014 multiple sectors are competing for many of the same materials.<\/p>\n For equipment manufacturers, the good news is pandemic recovery is excellent for freight and fleets; the bad news is OEMs can\u2019t build equipment fast enough.<\/p>\n \u201cDemand is ahead of supply, but in this case, supply is constricted,\u201d Ake said. \u201cIt’s not like we’ve hit capacity. It’s like we can’t get to capacity.\u201d<\/p>\n For the truck OEMs, backlogs are not yet to 2018-19 levels, so there is still some room for order growth. Production, however, has slowed: After peaking at 24,000 units in October 2020, February Class 8 production came in at 19,000.<\/p>\n For trailer manufacturers, record orders in late 2020 have pushed the backlog to an all-time high. So the 2021 decline in trailer orders \u201cdoesn’t say anything about the market; it just says that the cup is getting full, and there’s less orders that we can take,\u201d Ake added.<\/p>\n On the production side, trailer output \u201chit the wall\u201d at 20,000 units and has been \u201cpretty flat\u201d due to supply constraints. Ake attributed a slight increase in February to recovering flatbed demand and \u201cthe supply chain issues on the flatbed market are not as severe \u2014 yet.\u201d<\/p>\n FTR expects GDP growth in the first quarter to arrive at an annual rate of nearly 10% \u2014 up from the 6.6% forecast previously for the quarter \u2014 compared to 5% growth in the fourth quarter of 2020. Growth diminishes for the rest of the year but is still strong at 4.8% in Q2, 4.2% in Q3 and 3.3% in Q4.<\/p>\n Even more impressive are the GDP Goods Transport figures from FTR, with \u201cfantastic\u201d growth in Q1 at 17.4%. That slips somewhat to 6% growth on Q2 \u2014 still robust, however.<\/p>\n \u201cIt’s a very vibrant economy in the goods transport sector and it’s pushing the freight and the freight rates,\u201d Ake said.<\/p>\n FTR\u2019s equipment forecasts are based on the research firm\u2019s \u201ceconomically derived demand\u201d modeling, so the firm has a good idea of how many trucks and trailers should be built. However, Ake emphasized, the supply constraints are not accounted for.<\/p>\n \u201cYou can’t collect data in a supply-based forecast \u2014 you can collect opinion, but you can’t collect data,\u201d Ake said. \u201cOn the demand side, demand is tremendous. Fleets need more trucks; they need trailers. Growth is strong.\u201d<\/p>\n Anecdotally, FTR sources report that the chip shortage that has spread from the automotive side into commercial trucks could last until August. And, with Class 8 vehicles needing from 15 to 35 such chips, depending on the technology involved, \u201cthis is a big deal,\u201d Ake explained.<\/p>\n \u201cIf you don’t have chips, you have obvious production problems,\u201d he said. \u201cTypically, you have supply chain issues and then they get better. What’s happened recently is that they’ve intensified.\u201d<\/p>\n Indeed, while Volvo in late March announced scheduled \u201cstop days\u201d across its global truck manufacturing operations, \u201ceverybody is in the same situation,\u201d Ake suggested.<\/p>\n \u201cNobody’s significantly better or worse than anybody else,\u201d he said. \u201cThere are reports many OEMs are partially assembling vehicles because they have to. And that’s got to be a nightmare.\u201d<\/p>\n And such a challenge for manufacturers, in turn, is a challenge for industry analysts: Partially assembled vehicles don\u2019t count in the production totals until they\u2019re delivered, which will result in some significant swings in the month-to-month totals for the next couple of quarters.<\/p>\n The trailer industry, likewise, has its own set of supply chain issues.<\/p>\n \u201cSome trailer OEMs are saying this is such a mess, it could last to the fourth quarter,\u201d Ake said.<\/p>\n As a result, FTR has not changed its forecasts for 2021 but has pushed production into the second half of the year, with \u201crollover demand\u201d impacting the 2022 outlook.<\/p>\n For Class 8, FTR\u2019s 2021 production outlook remains at 298,000 units, with 2022 increasing from the previous projection of 319,600 to 325,000.<\/p>\n That market pressure is especially significant for trailer production, Ake suggested. FTR added 500 units to its 2021 outlook, bringing this year\u2019s total to 283,500, and pushed 2022 production to 308,000 units, up from the previous forecast of 295,000 units.<\/p>\n Speaking briefly of the medium-duty segment, FTR\u2019s Class 4-7 production total held at 225,000 units for 2021 and 238,500 for 2022.<\/p>\n The caveat to the FTR outlook, Ake noted, is that the possibility remains that OEMs will not be able to meet the revised forecast production levels in the second half of 2021, either. So further adjustments are likely.<\/p>\n Indeed, that rollover, combined with continued strong demand, could make 2022 the current cycle\u2019s peak year, eclipsing the production totals FTR currently predicts for 2023.<\/p>\n \u201cIt’s a tough market, it could get tougher \u2014 it presents a lot of challenges,\u201d Ake concluded. \u201cThis is a tough time, but this is a tough industry. We will work as hard as we can, as long as we can, to make it work.\u201d<\/p>\n<\/div>\n By Kevin Jones<\/a><\/span><\/p>\n Josh Fisher<\/a><\/span><\/p>\n Source: https:\/\/www.fleetowner.com\/<\/a><\/span><\/p>\n The computer chip shortage that spread from the automotive side into commercial trucks could last into late summer as many OEMs partially assemble vehicles while the supply chain becomes more strained. Forecasting transportation equipment production in 2021 is like being the traffic reporter during rush hour: Everyone knows they\u2019re stuck in a traffic jam, but…<\/p>\n","protected":false},"author":3,"featured_media":10670,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18],"tags":[365,321],"_links":{"self":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10669"}],"collection":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/comments?post=10669"}],"version-history":[{"count":1,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10669\/revisions"}],"predecessor-version":[{"id":10671,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10669\/revisions\/10671"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media\/10670"}],"wp:attachment":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media?parent=10669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/categories?post=10669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/tags?post=10669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"040721](\"https:\/\/base.imgix.net\/files\/base\/ebm\/fleetowner\/image\/2021\/04\/040721_FTR_1_HD_truck_builds.606da309eff9b.png?auto=format&fit=max&w=1440\")
<\/span><\/p>\n2021-22 outlook<\/h3>\n
![\"040721](\"https:\/\/base.imgix.net\/files\/base\/ebm\/fleetowner\/image\/2021\/04\/040721_FTR_3_components.606da309ed98d.png?auto=format&fit=max&w=1440\")
<\/span><\/p>\nChips are down<\/h3>\n
![\"040721](\"https:\/\/base.imgix.net\/files\/base\/ebm\/fleetowner\/image\/2021\/04\/040721_FTR_2_trailer_builds.606da309edac5.png?auto=format&fit=max&w=1440\")
<\/span><\/p>\n2021 forecast and beyond<\/h3>\n
CUT COTS OF THE FLEET WITH OUR AUDIT PROGRAM<\/strong><\/a><\/h3>\n
![\"\"](\"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-content\/uploads\/sites\/3\/2020\/04\/nueva-ley-auditoria.jpg\")
<\/a>The audit is a key tool to know the overall status and provide the analysis, the assessment, the advice, the suggestions and the actions to take in order to cut costs and increase the efficiency and efficacy of the fleet. We propose the following fleet management audit.<\/p>\nFLEET MANAGEMENT AUDIT<\/strong><\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"
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