Preliminary Class 8 net orders in December were down slightly month over month, but showed strong totals year over year.
December Class 8 orders came in at 50,900 units, down 2 percent from November, but a 153 percent improvement from year-ago December, according to ACT Research.
FTR reports Class 8 orders for December continued at an extremely high level at 52,100 units. December 2020 order activity was just 700 units fewer than November, up 169 percent over a year ago. Class 8 orders for 2020 totaled 283,000 units.
ACT reports Classes 5-7 demand, with orders at 35,100 units, rose 28 percent sequentially and 73 percent compared with last December. That order volume represents a second-best-ever volume, while the Class 8 net order intake marks the fourth highest level in history.
“The pandemic-impacted economy continues to play into the hands of trucking, as consumers continue to substitute spending on services with spending on goods, even as the manufacturing sector begins to ramp,” says ACT President and Senior Analyst Kenny Vieth.
“Simultaneously, the driver supply remains constrained and that supply-demand imbalance is reflected in rate data. With strong freight volumes, drivers in short supply, rates surging and carrier profits certain to follow, the precise recipe for surging new vehicle demand, which continued in December, is created,” Vieth says.
Learn how to move your used trucks faster
With unsold used inventory depreciating at a rate of more than 2% monthly, efficient inventory turnover is a must for dealers. Download this eBook, “Sold! Best Practices for Moving Used Trucks,” to access proven strategies for selling used trucks faster.
The industry has soaring momentum rolling into 2021, as freight growth is robust, freight rates are elevated, and fleet profits keep rising. Consumer-based freight remains vibrant and there are indications that manufacturing activity is finally beginning to accelerate, FTR states.
“The Class 8 market ended the most challenging year with a bang. To get two back-to-back order months over 50,000 is a stellar accomplishment, after previously seeing orders crater to under 5,000 units in April. Now, 2021 has the potential to be an incredible recovery year,” says Don Ake, FTR vice president of commercial vehicles.
“As the economy continues to improve, fleets are showing increasing confidence about business conditions in 2021. Profits are more than sufficient to replace used trucks and freight growth is stimulating expansion demand. Put those dynamics together, and the industry is headed toward a robust year,” Ake says.
“Everything right now is headed strongly in a positive direction. Consumer goods remain vibrant. The manufacturing sector is showing definite signs of strength after struggling last year,” he says. “The second stimulus will pump more money into the economy and accelerate the recovery. The vaccine is expected to get more people back to work and provide an economic boost. And the fleets are responding to this wave of good news by ordering trucks in near-record numbers. After being slowed significantly by the pandemic, the Class 8 market is roaring ahead at a rapid rate.”
Regarding the medium-duty market, ACT’s Vieth says, “There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand. Clearly, the shift in consumer spending from experiences to goods has been good for the providers of local trucking services as e-commerce has grown by leaps and bounds during the pandemic.”
