Preliminary Class 8 tractor orders in August reflect robust spot freight rates as pandemic-driven demand for consumables over services continues.
ACT Research reported 19,500 preliminary net orders, down 4% from July, but up 75% from an easy year-ago comparison. FTR Transportation Intelligence pegged orders at 20,500 units with net orders totaling 177,000 over the last 12 months.
Counting Class 5-7 medium-duty trucks, truck orders rose to an eight-month high. The third consecutive month of gains followed year-over-year declines in 18 of the previous 19 months, ACT said.
The heavy-duty order strength came despite some trucks being sidelined by financially troubled companies.
“Considerable parked Class 8 tractor capacity, generous unemployment benefits, and consumers spending more on goods and less on experiences has created a perfect storm for carrier profits over the past several months,” said Kenny Vieth, ACT president and senior analyst.
Ordering just what is needed
Large fleets continue to buy new trucks according to their replacement cycles. Few orders reflect added capacity, FTR said.
“This is an odd situation in that it is a highly uncertain, yet very stable, environment,” said Don Ake, FTR vice president of commercial vehicles. “You have a pandemic, a presidential campaign, and social unrest all occurring at the same time. However, the economy is briskly recovering and generating ample freight.”
Orders are closely matched to production rates, meaning backlogs are stable,
“Orders are expected to stay in the 20,000 range for the next few months with buyer confidence increasing as the economy recovers and freight volumes rise,” Ake said. “There is less uncertainty regarding the pandemic as businesses and consumers adapt to the current environment.”