As Trailer Demand Outpaces Supply, Price Increases and Long Lead Times Continue into 2021

The Covid-19 pandemic has brought plenty of changes to ourdaily lives, from social distancing and mask wearing to restaurant and eventclosures and more. The trailer industry has felt it too, resulting in longdelays and price increases, and while we are doing our best to keep up, thereality is that the demand is outpacing supply as we begin 2021.

At Advantage Trailer, we have always operated under athree-pillared approach that places importance on relationships, specializedexpertise, and value. Covid has impacted all three – travel restrictions havemade it hard to visit customers, unemployment wages have limited the potentialemployee pool, and shutdowns have severely hurt worldwide supply chains.

Let's talk about that last one.

We have always maintained great relationships with ourmanufacturers and sought to offer a diverse range of trailer options to meetthe needs and price points of our customers. We don’t carry low-end trailersthat some of our local competitors do because we believe in setting ourcustomers up for success rather than cutting corners to save a few bucks hereand there.

We have been an ATC Platinum dealer since 2012 andcontinually look to fill voids on our lot that offer customers a great value.

Unfortunately, 2020 has made that much harder. Manufacturershave been feeling the squeeze of labor and supply shortages, but customer demandfor trailers hasn’t declined during that time.

Every single one of our manufacturers has more orders thanthey can fulfill in the usual timeframe, and we receive phone calls every dayfrom customers looking for trailers that we simply can’t keep in stock.

Accordingto a July article published by the North American Trailer DealersAssociation (NATDA), raw materials such as wood have been depleted due tobusiness and border shutdowns and increased demand from outside the trailerindustry. For example, more homeowners have done renovations while stuck athome in 2020 and they’re also traveling more which has led to a huge uptick inpurchases of RVs.

“There’s a battle for any remaining part remnants as RVmanufacturers and suppliers, largely based in Elkhart, IN, fight againsttrailer manufacturers and parts suppliers with similar product lines andmaterial necessities,” the article explained.

While the trailer industry and RV industry are different,they’re very much related.

PerRVTravel.com, “There are RVs sitting in fields waiting for just a few partsbefore they’re considered complete and shipped off to the dealers. And forevery RV that a dealer may have on order, there may be multiple people willingto put down a deposit on that RV and buy it sight unseen.”

The same can be said for trailer manufacturers. For the pastsix months, we have not only seen trailer lead times increase substantiallyfrom all our manufacturers but also seen standard parts change on a moment’snotice, options disappear, and prices increase.

This has forced our sales and fabrication teams to do theextra work of trying to source generators, awnings, and other parts in order tofinish trailers in our order bank that the manufacturers lack the parts tofinish.

We have also been dropped by manufacturers who cut back inorder to produce only for a few select dealers based for which they could meetdemand. Thankfully, we were able to bring on Cross Trailers and Discovery Trailersthis year to help keep trailers on our lot, but none of that has kept pricesfrom increasing.

Just in the past month, we have received notices from mostof our manufacturers that their prices are increasing anywhere from 5% to 15%. Sowhile a $5,000 trailer may now be $5,750, for example, you can be assured thatit’s an industry-wide problem, not specific to Advantage Trailer or any of ourmanufacturers.

According to Terry Lovely of Cross Trailers, price increasestotaling 6% to the bottom line occurred in the final two and a half months of2020, and when they returned from holiday break, they received notice thatsteel is being allocated to vendors, causing even more shortages and priceincreases.

“One vendor reported a 9-month lead time to receive materialsand is being told no pricing is available at this time for those orders,”Lovely said. “Pricing will be allocated at time of shipment.”

That kind of instability is being felt throughout thetrailer industry and it’s not likely to improve any time soon. Customers in needof trailers – especially custom trailers – should expect to pay higher prices andwait longer to receive their trailer. The best way to improve your lead time isto provide timely approvals so the process isn’t delayed any further on yourend.

Advantage Trailer will continue to work with our manufacturersto try to keep trailers as affordable as possible and delivered as quickly aspossible for our customers, but be aware that this is the current state of the entiretrailer industry. As always, we will continue to provide outstanding customerservice and value-driven trailer solutions to get you the trailer you need.