Following a monthslong stretch of gains, preliminary North American Class 8 net truck orders saw a drop-off in July, according to recent data respectively issued by freight transportation consultancy FTR and ACT Research, a provider of data and analysis for trucks and other commercial vehicles.  

FTR reported that preliminary July North American Class 8 net orders—at 10,600—dropped to their lowest level going back to November 2021, adding it marked the lowest July tally since July 2019, while falling 33% compared to June and down 60% annually. FTR also noted that over the last 12 months through July, Class 8 orders have come in at a cumulative 244,000 units.The firm explained that OEMs have essentially run out of build slots for 2022 and are not yet entering orders for 2023. What’s more, it noted that the continued supply chain disruptions are limiting OEM output in 2022 and the fluctuating cost of materials and components has caused delays in confirming orders for shipment next year, while demand for new trucks remains strong.

“Orders, though paltry, met expectations since OEMs have filled almost all available build slots this year,” said Don Ake, vice president of commercial vehicles for FTR, in a statement. “July is typically the weakest order month of the year, so it is no surprise orders dipped to around 10,000 units. Fleets continue to shop around, looking for available trucks, but they are becoming increasingly difficult to find. The supply chain is improving very slowly, but not nearly enough to meet demand. It's like when popular concert seats are sold out, you get no sales the next day. Class 8 trucks are popular and in scarce supply in 2022. The OEMs just don’t have the capacity to meet the high demand this year. OEMs could increase production by about 10% over the current rate if they could get the parts, but the supply chain remains clogged. Ake said that despite the economic uncertainty, demand for new trucks is expected to remain robust in 2023.

“Freight is still forecast to grow at a steady clip,” he said. “When booking commences for 2023, possibly as early as September, Class 8 orders could reach record heights.”

ACT data: July preliminary North American Class 8 net orders came in at 11,400 units, well below the June preliminary number, at 25,700 units, reported ACT. 

“Do we think July’s weak orders represent the end of healthy demand? Perhaps,” said Eric Crawford, ACT’s Vice President and Senior Analyst, in a statement. “Recent spot rate weakness, and our expectation that a freight recession is inbound, would suggest yes. That said, considering 1) Class 8 backlogs stretch into 2023, 2) ongoing supply-chain issues, albeit easing somewhat, and 3) inflationary cost pressures, leave the OEMs in no rush to open order boards for 2023. In light of this confluence of factors, plus typically challenged seasonality in Q3, we hesitate to extrapolate too much from a datapoint that could prove to be an outlier. To be sure, though, it is a datapoint that warrants increased vigilance going forward.”

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Thu, August 25, 2022 - 2:00 pm EDT