Wabash was hit with a debt downgrade this week, a move tied to a trailer market that remains stuck in low gear and is pressuring cash generation and leverage, according to a report by FreightWaves published Friday, November 7. The action underscores how quickly credit risk can rise for equipment makers when replacement cycles stall and backlogs thin. ([]())
Fresh demand signals back up the credit call. New orders for North American Class 8 tractors — a bellwether for fleet capital spending — totaled about 24,300 units in October, FTR reported this week. That was an 18% month-over-month uptick but still 22% below last year, marking a tenth straight month of annual declines. Translation for the trailer side: fleets are still prioritizing cash preservation over growth, which typically delays trailing equipment refresh as well.
Underlying freight demand remains too soft to flip that spending switch. DAT’s update on Tuesday, November 4, showed U.S. for-hire tonnage slipping to a three‑month low in September, with load-to-truck ratios and spot pricing still signaling weak carrier bargaining power. When volumes and rates sag, trailer orders become easy to postpone — and OEM build schedules harder to keep full.
The secondary market is reinforcing the same message. Sandhills Global’s latest read on Thursday, November 6, found U.S. used semi‑trailer inventory and values trending down in October, with asking prices and auction results slipping across key categories like reefers and dry vans. Softer used prices typically lengthen trade cycles and curb appetite for new equipment — another headwind for manufacturers such as Wabash.
On Wall Street, expectations are being reset accordingly. In a note dated Wednesday, November 5, DA Davidson projected a deeper fourth‑quarter loss for Wabash and kept a Neutral rating, citing sluggish industry orders and margin pressure. That outlook reflects how much of 2025’s demand recovery now rests on replacement needs in 2026 rather than a near‑term rebound.
Why it matters for fleets and the broader trucking economy: a lower credit rating can raise borrowing costs for OEMs, increasing sensitivity to production swings and working‑capital needs. If OEMs tighten output or adjust pricing to protect margins, fleet buyers could see less aggressive discounting and longer lead times for certain specs. At the same time, the current setup — weaker spot rates, cautious tractor orders, and cheaper used trailers — encourages carriers to sweat assets longer, which delays the inflection in new‑build demand that manufacturers are counting on.
Bottom line: the downgrade doesn’t create the downturn, but it puts a sharper number on it. Until freight volumes stabilize and fleet profitability improves, the trailer cycle will remain constrained — and so will Wabash’s room to maneuver.
Sources: FreightWaves; FTR Transportation Intelligence; Fleet News Daily; DAT Freight & Analytics; Sandhills Global; MarketBeat
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