Pent-up demand from low orders during the COVID-19 quarantine is helping to push truck orders to strong levels.
Graph: FTR
Class 8 orders surged in September to the highest since October 2018, as a stronger than expected economic and freight recovery is giving fleets more confidence and spurring equipment orders.
FTR reported preliminary North American Class 8 net orders of 32,000 units for September, with order activity up 55% from the previous month and 160 compared to a year earlier. Class 8 net orders for the last 12 months now total 197,000 units.
ACT Research reported similar numbers, reporting 31,100 units, up 60% from August and a whopping 145% from an easy year-ago comparison.
“Preliminary data show that September orders for medium- and heavy-duty vehicles posted positive readings for a fourth consecutive month, after 19 consecutive months of negative year-over-year comparisons,” said Kenny Vieth, ACT president and senior analyst. He continued, “In aggregate, Classes 5-8 orders rose 49% from August and improved 88% compared to year-ago September.”
The orders are a combination of growing replacement demand and some expansion demand in those regions where capacity is tightening, according to FTR.
“The Class 8 truck market continues to recover faster and better than expected,” said Don Ake, vice president of commercial vehicles for FTR. “This strong order volume suggests fleets believe there will be steady freight growth going forward. Rates have improved, so carriers have the cash, and now they also have the confidence. When you combine those two factors, orders tend to surge.”
Ake also explained that there was considerable pent-up demand in the market, as orders sank in the March to May time period. Trucks that would have normally been ordered then are being ordered now.
“The order volume is very close to August’s trailer orders,” Ake added. “It appears that the fleets took care of their trailer needs first, and then caught up to the truck side in September. Ordering for 2021 deliveries will begin in earnest this month, so the industry has solid momentum going into the fall ordering season.”
ACT’s Vieth said as orders rebounded to relatively healthy levels early in the third quarter, most of those orders were targeted at filling open 2020 build slots. “With most of that work done by the end of August, we suspect the lion’s share of September’s orders were booked into 2021,” he said.
On the medium-duty side, ACT reported the Class 5-7 North American market saw orders at a healthy 26,900 units in September, up 37% month-over-month and 48% versus year-ago September volume.
“There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand,” Vieth said, “and clearly, the shift in consumer spending from experiences [services] to goods has been good for the providers of local trucking services.”
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Medium-, Heavy-Duty Truck Orders Positive 4th Month in a Row - Heavy Duty Trucking
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