Preliminary July North American Class 8 net truck orders were flattish compared to June and saw annual gains in July, 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 July North American Class 8 net orders—at 26,500 units—fell 1% compared to June, and rose 25% annually. The firm also noted that over the last 12 months, total Class 8 net orders came in at 394,000 units.
With June and July Class 8 net orders in similar territory, FTR explained that it reflects how the sector is in what it called a holding pattern at the bottom of this ordering cycle. And it added that ordering for 2022 has commenced at most OEMs but remains delayed some due to cost uncertainty and the possibility of enduring supply chain bottlenecks.
“July ordering was similar to June in that OEMs took a limited number of orders for delivery in 2022,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “Fleets need a significant number of new trucks right now and they perceive this need will continue throughout next year. However, OEMs are having difficulty establishing reasonable 2022 pricing, with commodity and other costs elevated. It is uncertain if current higher production costs are transitory or will persist into 2022. Also complicating the situation is that shortages of semiconductors have limited Class 8 production. It is estimated that supply of trucks is falling approximately 25% behind market demand. We are running out of time for OEMs to catch up. Most of the unproduced orders will roll into the first quarter of 2022. If those months are already booked solid, it creates even more headaches for the industry. Things won’t approach any degree of normalcy for months. Until semiconductors begin flowing into the OEMs in sufficient qualities, we will be playing catch up.”
ACT data: July preliminary Class 8 net orders—at 25,800—almost exactly matched June’s 25,809, according to ACT.
“In 2018, there was an explosion of orders across the industry, as dealers raced to get their places in rapidly growing out-year backlog queues,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. “Underlying drivers of commercial vehicle demand are considerably hotter than they were three summers back, with 6-plus percent GDP growth, capacity constraints across multiple shipping modes, at/near-record trucking freight rates, surging carrier profits and record used equipment valuations providing deep support for Class 8 demand,” He added, “While conditions are in place to sell-out 2022 backlogs in a very short time horizon, the industry appears to be approaching order distribution much differently this year. That being said, while order rates remain below the backlog-filling volumes of Q4 and Q1, the 3- and 6-month seasonally-adjusted annualized rates remain well above the industry’s ability to produce.”