With another monumental order month in the books for June, the Class 8 new truck market appears well on its way toward a record setting year. FTR reports Class 8 orders for the last 12 months at 411,000 units, while ACT Research pegs the market’s seasonally adjusted annual rate at 492,000 units through year-to-date June. Both numbers are unprecedented.
Fleets are adding units at a pace not seen since 2006, when the industry went crazy ahead of the implementation of the Environmental Protection Agency’s (EPA) Phase 1 fuel economy and greenhouse gas regulations. But while those purchases were clearly motivated by an outside influence, the genesis of the industry’s current boom is harder to source.
The economy is strong and freight rates are up — and at some point, this tariff situation is going to come into play — but right now I haven’t seen a single thing that would justify Class 8 orders staying this high for this long. Class 8 orders have exceeded 30,000 units nine months in a row. June orders were more than double what they totaled a year ago (41,800 units to 17,600 units in 2017, FTR reports) and have tracked nearly 20,000 units above 2017 monthly totals for the entirety of this year.
There’s just no precedent, or reason for this … Unless the backlog is really that bad … And it sounds like it might be.
ACT Research President and Senior Analyst told The Wall Street Journal Thursday “we’re expecting in June that the backlog will rise to a level we haven’t seen since about 1999,” while FTR Vice President of Commercial Vehicles Don Ake said in his company’s monthly order report that the industry’s current demand can be traced to “burgeoning freight growth and extremely tight industry capacity.”
Regarding the latter, Ake said the OEM supply chain has been strained to a point where truck makers are unable to acquire the parts and components they need “to build more trucks fast enough.
“This bottleneck is causing fleets to get more orders in the backlog in hopes of getting more trucks as soon as they are available.”
