Preliminary North American Class 8 new truck orders see sequential March gains

Preliminary March North American Class 8 new truck orders were up over march, according to data respectively published by freight transportation consultancy FTR and ACT Research, a provider of data and analysis for trucks and other commercial vehicles.

FTR reported that preliminary March North American Class 8 net orders—at 21,500—increased 3% from February to March and fell 47% annually, with that tally in the same tight range they have been over the past several months. What’s more, FTR said that monthly orders have varied less than 400 units per month in 2022, as March was near the average of 21,300 over the past seven months, with Class 8 trucks totaling 300,000 units over the last 12 months.

The firm explained that OEMs are content to book orders a month at a time, just under current production rates, and keep total backlogs in check. And it added that orders are expected to hover around this range until OEMs have confidence in improved future supply chain performance. FTR also noted that demand for new trucks remains robust but production has been significantly restricted by shortages of semiconductors and other components, coupled with labor shortages at the OEMs and suppliers also still an issue.

“The March order total reflects a market frozen in place,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “All the OEMs are evaluating the business environment monthly and only entering enough orders to fill in about a month’s worth of production in the schedule. March’s number indicates that production levels stayed flat. This trend began seven months ago and has not varied much. Once supply chain issues improve, OEMs will be able to substantially increase orders. But until then, conditions remain stagnant. Several automakers recently announced computer chip supplies remain tight, but there are still expectations of supply chain improvements in the second half of the year.”

ACT data: ACT reported that preliminary March North American Class 8 orders were 21,300 units.

“Long backlogs and supply-chain constrained production activity kept new order activity trending within a narrow range,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. He added, “Based on preliminary March inputs, NA Classes 5-8 net orders were up slightly compared to February, and while orders have been moving sideways for most of two quarters, March’s intake was the best since October.”

He added that while recent economic news focusing on freight and freight rate data, has been less positive, while reiterating that the ground rules of ACT’s OEM data collection remain the biggest constraint on orders presently.

“The OEMs only report orders that are scheduled to be built within 12 months,” he said. “With the Class 8 backlog-to-build ratio at 11 months in February and the medium-duty backlog-to-build ratio at around 8 months, order volumes since early Q4’21 have largely been mirroring production activity. In both cases, backlog-to-build ratios are essentially double normalized levels.”

Class 8 orders remained range-bound, in March, posting what Vieth called a virtual carbon copy of February’s order intake.

“With Class 8 backlogs stretching through 2022 and still no clear visibility on the easing of the everything shortage, March’s net order haul reflects the ongoing conservative approach by the OEMs looking to limit the risk of overbooking and underbuilding that plagued the industry in 2021,” he said.