Watch Now

Supply chain weakness hits January Class 8 truck orders

Managing backlog continues to be priority for truck manufacturers

Class 8 truck orders declined 8% month over month in January and were 50% below the same month a year ago as the supply chain crisis continues to hamper production. (Photo: Jim Allen/FreightWaves)

Class 8 truck orders fell in January as manufacturers matched orders to what they could produce while avoiding further swelling of their backlogs.

A lack of visibility into supply chain bottlenecks makes caution the common theme among OEMs. Most are focused on finishing and shipping red-tagged trucks that piled up in inventory in 2021. Demand for new trucks far outstrips supply, a condition unfamiliar to an industry where the opposite is most often true.

Watch now: Recapping 2021 Class 8 truck orders

OEMs took in 21,400 new orders in January, 50% less than the same month a year ago, according to FTR Transportation Intelligence, which said 343,000 bookings have been accepted on a rolling 12-month basis. ACT Research put preliminary orders for Class 8 trucks at 21,300. Orders were down 8% from December but roughly the same over the past four months.

Class 8 truck orders total 343,000 on a rolling 12-month basis with a 50% year-over-year and 8% month-over-month decline. (Source: FTR Transportation Intelligence)

“OEMs are entering orders at the same rate as production,” Don Ake, FTR vice president of commercial vehicles, said in a statement. “Backlogs have tracked in a narrow range for the last 10 months, which is odd in this cyclical industry. Normally, this would indicate a very stable market. In this case, it reflects a market frozen by a weak supply chain.”

Order restrictions will ease as the supply chain crisis — led by a shortage of semiconductors used in practically every industry that has electronic content — begins to improve.  

‘Constrained production capabilities’

Many industry experts expect gradual improvement as soon as Q2, but another COVID variant following omicron could limit worker availability and dash such projections. 

“Constrained production capabilities and long backlogs continue to hamper new order activity,” Kenny Vieth, ACT president and senior analyst, said in a statement. “Order weakness continues to be primarily, if not entirely, due to supply-side shortages that continue to restrict production.”  

The order volume over the past 12 months would equate to a robust year of production.

“The orders are there but the OEMs continue to be limited in what they can produce due to shortages of semiconductors and other components,” Ake said.

The danger, according to Vieth, is overbooking and underbuilding, which created a condition where manufacturers have practically no open build slots for 2022.

“OEMs are not confident they can get parts, so they limit the number of orders they enter,” Ake said. 

Electric truck production cutting in line ahead of diesel orders

Truck order cancellations spike, but not for lack of demand

Inability to produce pushes Class 8 orders to lowest November in 26 years

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.