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May Class 8 truck orders slide seasonally and build slots evaporate

Preliminary orders fall to about 14,000, reflecting a seasonal dip and OEM caution

Class 8 truck orders declined in May for seasonal reasons and because manufacturers feared overbooking. (Photo: Jim Allen/FreightWaves)

A seasonal slowdown and manufacturers’ caution in booking more Class 8 truck orders than they can produce combined in May to create little change in the new equipment picture.

ACT Research said its preliminary estimate of 14,000 orders actually was a slight uptick considering seasonality. Orders typically decline from April to May.

However, uncertainty about the Russian invasion of Ukraine, interest rates, a potential recession, long backlogs and supply chain-constrained production kept new orders trending within a narrow range, said Eric Crawford, ACT’s vice president and senior analyst.

“We are coming to that time of year when orders tend to be seasonally weak, as OEMs typically have yet to open their forward-year build schedules,” Crawford said.

Class 8 truck orders like concert tickets

FTR Transportation Intelligence pegged preliminary May orders at 13,300, down 13% from April and 43% year over year. On a 12-month rolling basis, fleets have ordered 270,000 units. May’s total eclipsed November 2021 as the lowest-order month this cycle.

“The supply chain was making slight improvements in the last few months, but some of that progress stalled due to disruptions in China and Russia,” said Don Ake, FTR vice president of commercial vehicles. “The OEMs are not confident they can increase production in the second half of the year; therefore, they are not able to take more orders.

“This is like ticket sales for a popular concert. At the beginning, sales are high because there are plenty of seats available. But at the end, fewer tickets are sold because there are fewer seats to sell,” Ake said. “Orders could even slide under 10,000 in the summer months before the cycle begins for next year.”

OEMs are quickly running out of build slots for 2022. Supply chain disruptions prevent building enough trucks to meet demand even as freight demand is beginning to slow. Very few orders are being booked for 2023 because the costs of commodities and other components are inflated and variable, making accurate quoting difficult.

Upbeat assessment

Still, Paccar CEO Preston Feight gave an upbeat assessment at the company’s investor day on Wednesday.

“The market will be stronger for longer,” Feight said, pointing to pent-up demand and a likely pull ahead in orders before expensive emissions regulations take effect in 2024. Paccar, the parent company of Kenworth, Peterbilt and Europe’s DAF Trucks, projects delivery of 44,000-48,000 trucks globally compared with 43,000 in Q1.

Chip shortage fears chill Class 8 truck orders in April

Won’t get fooled again: Manufacturers avoid overbooking Class 8 orders

February Class 8 truck orders: ‘You can’t always get what you want’

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.