Preliminary Class 8 truck orders were down slightly month over month in January but remain far ahead of the same period last year, ACT Research and FTR reported Tuesday.
FTR pegged January's Class 8 preliminary order total at 42,800 units; ACT was slightly lower at 42,200 units. FTR says its total was down 18 percent from December, ACT was down 17 percent. Both totals were more than 140 percent better than January 2020. Last month also was the market's fourth straight eclipsing 40,000 units.
“At this introductory pass at 2021 commercial vehicle data, the consumer economy lacks the stimulus-fueled robustness that characterized spending into early Q4,” says Kenny Vieth, ACT’s president and senior analyst. “Even as consumers look less hearty – at least in the short-term –manufacturing sector indicators show that the industrial economy is shaking off the dust of two years of tepid activity. The slower economic expansion of the past two months is reflected in spot freight rates, which have trended lower since November. Some, but not all, of the pullback relates to seasonality, which was also reflected in January’s preliminary commercial vehicle net order data.”
FTR's Don Ake, vice president, commercial vehicles, says heavy-duty OEMs are working diligently to keep up with the market's steady demand.
“Currently there are shortages of raw materials and component parts, which will result in supply being unable to meet the demand of Class 8 trucks in the short-term," he says. "Class 8 suppliers are working diligently to ramp up production but are hindered by the pandemic and material shortages. In addition, imported parts deliveries are being delayed up to two weeks at the ports.”
He adds, “The supply chain is struggling after the surge in demand following the economic restart. Now companies are having problems hiring back enough workers due to virus concerns and protocols. Also, the steel plants took longer than expected to fire back up. Demand for Class 8 trucks is surging, but the supply chain is hindered.”
Overall, FTR says orders for the previous twelve months now total 308,000.
Ake adds he believes the market is prepared to manage its supply issues with minimal disruptions.
“Our industry is very skilled and experienced in dealing with roadblocks. It will handle this situation better than other sectors. However, this will limit first-quarter production and will probably run over into part of Q2. When the vaccine enables employment to increase and the other bottlenecks are removed, this will end up being a robust year for Class 8 sales,” he says.
As for the medium-duty space, Vieth says, “Despite January’s preliminary net order moderation, the pandemic-driven shift in consumer spending from experiences to goods remains a benefit for the providers of local trucking services, and the symbiotic relationship between heavy-duty freight rates and medium-duty demand continues to impact this market segment.”