Month-over-month orders for Class 8 trucks nearly doubled in August. But fleets are still not getting all the new equipment they want, even in a slowing economy.
FTR reported preliminary North American Class 8 net orders for August jumped 98% over July to 21,400 units as OEMs began to fill build slots for the first quarter of 2023. But caution remains to avoid a repeat of late-2021 cancellations due to overbooking colliding with supply shortages.
“OEMs felt the need to start filling in their Q1 production schedules for their prime customers,” said Don Ake, FTR vice president of commercial vehicles. “The supply chain is still clogged, so they still are unable to book all the commitments they still have.”
William “Rusty” Rush, chairman, president and CEO of mega-dealer Rush Enterprises, told FreightWaves the pent-up demand for new Class 8 trucks was 80,000 to 100,000 units earlier this year. That number may have declined a little, but demand remains strong for replacement of trucks kept beyond their normal trade cycles.
Rolling shortages of key components, most recently power window regulators, volatile pricing of commodities like steel and aluminum, and general inflation, contributed to OEMs keeping a lid on new orders.
Bookings expected to increase
“The industry has responded well to the supply shortages but will need an increase in production in 2023 to begin to balance out,” Ake said. “Some fleets have run their trucks well past their planned replacement cycles and desperately need new trucks.”
Bookings should grow in the next few months, the typical new order season, as OEMs fill remaining build slots. August orders were 46% below the same month a year ago, when OEMs were taking in more orders than they could fulfill.
The backlog of trucks awaiting production has been falling in recent months as manufacturers essentially accepted one new order for each truck produced. The Class 8 backlog should fall by around 8,900 units when complete August data are released, said Eric Crawford, vice president and senior analysts at ACT Research. That is less than the average 12,400-unit decline in May, June and July.
Because major customers place multiple-year orders, a true picture of backlogs beyond the next 12 months is an industry secret, according to Kenny Vieth, ACT Research president and senior analyst.