Preliminary December North American Class 8 net truck orders were mixed, according to recent data respectively issued by freight transportation consultancy FTR and ACT Research, a provider of data and analysis for trucks and other commercial vehicles.
FTR reported that preliminary December North American Class 8 net orders—at 23,100—saw a 139% gain over November, which was impacted by up supply chain uncertainty, rather than a lack of demand, while seeing a 55% annual decline. And the company said that, for all of 2021, Class 8 orders came in at 365,000.
The firm said that December’s tally was viewed as positive, in that all OEMs “entered some orders,” which it said indicates there is some optimism regarding improved supply chain performance. And it added that OEMs are content with maintaining backlogs at current levels while continuing to enter orders a portion at a time, mainly because of what it called uncertain supply chain conditions.
“The current order volume still understates the tremendous demand for new trucks,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “The OEMs have a large number of fleet commitments for 2022. They are delaying entering these orders until they know how many they will be able to build each month. Supply chain delays continue to constrain build rates. Fleets need a considerable number of new trucks right now. Industry capacity is extremely tight, resulting in elevated freight rates. The carriers have freight to haul and funds available for new trucks, but OEMs can’t build enough. Also, the large fleets have had to run vehicles beyond their trade-in cycles and need replacement trucks.”
ACT data: December preliminary Class 8 net orders—at 22,800 units—far outpacing November’s preliminary orders—at 9,800 units—and in line with October’s 23,600 Class 8 net orders.
“For Class 8, with backlogs stretching through 2022 and still no clear visibility on the easing of the everything shortage, modest December net orders reflect OEMs taking a more cautious approach to effectively manage the cycle of customer expectations,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. “As well, with a 12-month BL/BU ratio, and the industry only reporting units scheduled to be built within 12 months, some of the current order constraint is built into the data collection process: If the BL/BU is 12 months, new orders are ultimately consigned to the level of industry production. After hitting a [Class 8] cancellation speed-bump in November, orders rebounded to a level just above the second half of 2021 production trend in December. However, while improved, December’s orders were the second weakest of the year, reflecting ongoing supply-side shortages that continue to constrain production. Importantly, we reiterate, with critical economic and industry demand drivers at, or near, record levels, industry strength is exhibited in long backlog lead-times, rather than in seasonally weak orders.”