The story of Class 8 truck orders in February can be summed up in the classic Rolling Stones’ lyric: “You can’t always get what you want. But if you try sometime, you’ll find you get what you need” in the exorbitantly priced used market.
Manufacturers kept the lid on how many orders they would accept in February because they don’t know when the supply chain gridlock will ease enough to ensure a steady flow of parts.
And the Russian invasion of Ukraine may worsen the availability of semiconductors already causing nearly complete trucks to be parked until scarce semiconductors can be found.
“If you have a 12-month backlog-to-build ratio, you can really only take in orders approximating what you just built,” Kenny Vieth, president and senior analyst at ACT Research, told FreightWaves.
The shortfall of new trucks has led fleets to hold on to trucks past their typical four-to-five-year trade-in cycle. That, in turn, has led to a practical doubling of auction prices for the trickle of late-model used trucks available.
“Based on used truck prices, fleets are getting what they need, but not at the price they want,” Vieth said.
FTR Transportation Intelligence reported that preliminary North American Class 8 net orders held steady in February at an expected 21,100 units. That was 2% lower month over month and 53% below the same month a year ago. Class 8 orders have totaled 320,000 on a 12-month rolling average.
OEMs continue to book fleet requirements a portion at a time to keep production schedules in line and backlogs manageable.
“The steady order numbers do not reflect at all the huge demand for new trucks,” said Don Ake, FTR vice president of commercial vehicles. “There is a severe shortage of new and used trucks, and the economy continues to generate steady freight growth in all segments.”
The bad news, Ake said, is that February orders bode ill for future production.
“By not booking more orders, OEMs are signaling that the supply chain remains clogged, and they don’t anticipate being able to ramp up production in the next couple of months,” he said.