Preliminary October Class 8 truck net orders see declines

Preliminary October North American Class 8 net truck orders saw both sequential and annual declines, 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 October North American Class 8 net orders—at 24,500 units—fell 12% compared to September, and fell 39% annually. The firm also noted that orders have been in the 23,00-to-28,000 range in five of the last six months, as OEMs continue to deal with production-related issues, and over the last 12 months, total Class 8 net orders came in at 437,000 units.

“The OEMs are having tremendous difficulty planning production for Q1,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “Unfinished orders are rolling over from 2021 and there are fleets placing new orders for 2022 delivery. All these fleets are desperate for new trucks and the challenge for the OEMs is to book the maximum production possible without excessive overbooking. The OEMs are using different methods in managing the backlog. Some are canceling 2021 orders and rebooking those orders in 2022, sometimes at higher prices, as commodity and other costs remain elevated. Others are only booking a limited number of orders every month.”

Ake also observed that it is interesting that the order rate has been basically tracking the production rate since May, with a couple of exceptions.

“It indicates that the market is essentially frozen in this range of around 22,000-26,000 trucks,” he said. “Without the clogged supply chain, production would be significantly higher, and orders would be elevated also.”

ACT data: October preliminary Class 8 net orders—at 23,600—were down from September’s 27,400, according to ACT data. And the tally was also down annually, well below October 2020’s 38,900.

“Supply-side constraints continue to pressure new order activity,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. “With backlogs stretching into the second half of 2022 and still no clear visibility on the easing of the everything shortage, modest October order results suggest the OEMs are taking a more cautious approach, so as not to extend the cycle of customer expectations management. 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 soft orders in October. In addition to ongoing strength in key freight-generating economic sectors and pent-up goods demand growing across a broad front, ACT’s preliminary read of the publicly traded TL carriers Q3 financial results shows net profits approaching best-ever levels.”