As Trailer Demand Outpaces Supply, Price Increases and Long Lead Times Continue into 2021
January 6, 2021
The Covid-19 pandemic has brought plenty of changes to our daily lives, from social distancing and mask wearing to restaurant and event closures and more. The trailer industry has felt it too, resulting in long delays and price increases, and while we are doing our best to keep up, the reality is that the demand is outpacing supply as we begin 2021.
At Advantage Trailer, we have always operated under a three-pillared approach that places importance on relationships, specialized expertise, and value. Covid has impacted all three – travel restrictions have made it hard to visit customers, unemployment wages have limited the potential employee pool, and shutdowns have severely hurt worldwide supply chains.
Let’s talk about that last one.
We have always maintained great relationships with our manufacturers and sought to offer a diverse range of trailer options to meet the needs and price points of our customers. We don’t carry low-end trailers that some of our local competitors do because we believe in setting our customers up for success rather than cutting corners to save a few bucks here and there.
We have been an ATC Platinum dealer since 2012 and continually look to fill voids on our lot that offer customers a great value.
Unfortunately, 2020 has made that much harder. Manufacturers have been feeling the squeeze of labor and supply shortages, but customer demand for trailers hasn’t declined during that time.
Every single one of our manufacturers has more orders than they can fulfill in the usual timeframe, and we receive phone calls every day from customers looking for trailers that we simply can’t keep in stock.
According to a July article published by the North American Trailer Dealers Association (NATDA), raw materials such as wood have been depleted due to business and border shutdowns and increased demand from outside the trailer industry. For example, more homeowners have done renovations while stuck at home in 2020 and they’re also traveling more which has led to a huge uptick in purchases of RVs.
“There’s a battle for any remaining part remnants as RV manufacturers and suppliers, largely based in Elkhart, IN, fight against trailer manufacturers and parts suppliers with similar product lines and material 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 parts before they’re considered complete and shipped off to the dealers. And for every RV that a dealer may have on order, there may be multiple people willing to put down a deposit on that RV and buy it sight unseen.”
The same can be said for trailer manufacturers. For the past six months, we have not only seen trailer lead times increase substantially from all our manufacturers but also seen standard parts change on a moment’s notice, options disappear, and prices increase.
This has forced our sales and fabrication teams to do the extra work of trying to source generators, awnings, and other parts in order to finish trailers in our order bank that the manufacturers lack the parts to finish.
We have also been dropped by manufacturers who cut back in order to produce only for a few select dealers based for which they could meet demand. Thankfully, we were able to bring on Cross Trailers and Discovery Trailers this year to help keep trailers on our lot, but none of that has kept prices from increasing.
Just in the past month, we have received notices from most of our manufacturers that their prices are increasing anywhere from 5% to 15%. So while a $5,000 trailer may now be $5,750, for example, you can be assured that it’s an industry-wide problem, not specific to Advantage Trailer or any of our manufacturers.
According to Terry Lovely of Cross Trailers, price increases totaling 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 that steel is being allocated to vendors, causing even more shortages and price increases.
“One vendor reported a 9-month lead time to receive materials and 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 the trailer industry and it’s not likely to improve any time soon. Customers in need of trailers – especially custom trailers – should expect to pay higher prices and wait longer to receive their trailer. The best way to improve your lead time is to provide timely approvals so the process isn’t delayed any further on your end.
Advantage Trailer will continue to work with our manufacturers to try to keep trailers as affordable as possible and delivered as quickly as possible for our customers, but be aware that this is the current state of the entire trailer industry. As always, we will continue to provide outstanding customer service and value-driven trailer solutions to get you the trailer you need.
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