New Class 8 truck preliminary orders exceeded 30,000 in September as replacement needs and additional capacity to meet stay-at-home goods demand pushed builds into early 2021.
The surge to 32,000 units was the highest monthly total since October 2019, according to FTR Transportation Intelligence. September bookings were 55% higher than August. Class 8 net orders for the last 12 months now total 197,000 units, FTR reported.
Trucking is proving resilient during the COVID crisis because consumers are buying more physical goods for use at home instead of services, like vacations, travel and eating out at restaurants.
“The Class 8 truck market continues to recover faster and better than expected,” Don Ake, FTR vice president of commercial vehicles, said in a press release. ”This strong order volume suggests fleets believe there will be steady freight growth going forward.”
Higher spot rates boost fleet expansion
In regions where capacity is tightening, some expansion orders are being booked,
“Rates have improved, so carriers have the cash, and now they also have the confidence,” Ake said. “When you combine those two factors, orders tend to surge.”
ACT Research reported preliminary orders of 31,000 slightly below FTR . At the lower end of the funnel, August retail sales of 17,685 were the best of 2020 to date, according to WardsAuto.com.
The order numbers do not take into account more recent and less-encouraging financial data. That includes a slowing recovery in hiring, rising personal debt and the lack of additional federal stimulus to offset the COVID crisis.
“As orders rebounded to relatively healthy levels early in Q3, most of those orders were targeted at filling open 2020 build slots,” Kenny Vieth, ACT president and senior analyst, said in a press release. “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.”
Tractors following trailer order rebound
Pent-up demand created when orders cratered in March and April was filled in August and September.
“The order volume is very close to August’s trailer orders,” Ake said. “Therefore, it appears that the fleets took care of their trailer needs first. And then caught up to the truck side in September.”
The traditional fall order season for new equipment begins in October.
“This is still a risk-filled environment, with some of that uncertainty having intensified recently,” Ake said. “But many fleets are focused on future business prospects and are willing to assume the short-term risks for long-term gains.”