October was the first 40,000-plus unit month for Class 8 orders since late 2018, adding to already increased order activity from September, according to FTR, which is reporting orders of 40,100 units. ACT Research’s preliminary order total was 38,900 units.
The October order total is up 27 percent from September and a 78 percent improvement from year-ago October, ACT states. FTR reports orders were up 26 percent month over month and up 83 percent year over year.
“Keeping in mind the freight backdrop of consumer spending on goods expanding and those for services contracting, preliminary October Classes 5-8 vehicles order data rose to 68,200 units. That volume represented a 17 percent gain from September and an 80 percent improvement compared to year-ago October,” says ACT President and Senior Analyst Kenny Vieth.
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“October was the largest Classes 5-8 order tally in 26 months, and this month’s orders marked a fifth consecutive positive year-over-year reading, after 18 consecutive months of negative comparisons,” Vieth says.
FTR states fleets continue to order Class 8 trucks in large quantities for 2021 delivery. The freight markets are holding up well after coming out of the lockdown stage of the pandemic and consumer retail sales remain vibrant, necessitating frequent restocking which has kept freight rates elevated, capacity tight and generating the need for more trucks, FTR reports.
“September was the turning point for the Class 8 market. Fleets became much more confident about future freight demand and began placing large orders to replace older units and for expansion purposes, as capacity tightened. In just a few months, the industry has gone from fear, to hope, to optimism. It appears the industry has sluffed off the uncertainties about the pandemic for now,” says Don Ake, FTR vice president of commercial vehicles.
“There is still some pent-up demand from the OEM shutdowns in March and April, but there is also widespread momentum generated after the economic restart that is continuing to build. Industrial freight is still lagging somewhat. If manufacturing starts to rebound, sales go even higher,” Ake says.
The hefty order volume in October indicates the market is beginning to return to its traditional order cycles. If the pace holds up, the fourth quarter of 2021 should look similar to the surge that took place in Q4 2014, although it won’t be quite as strong, according to FTR.
ACT reports Class 5-7 demand jumped to its highest point in October since March 2018, with 29,300 units. That order volume represents an improvement of 6 percent from September and an 84 percent uptick compared with last year.
“There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand and, clearly, the shift in consumer spending from experiences to goods has been beneficial for the providers of local trucking services, as e-commerce has grown by leaps and bounds during the pandemic,” Vieth says.
ACT and FTR will release final order numbers later this month.