Fleets continued to place large orders in January, while OEMs struggle to keep up with demand due to material shortages.
FTR reported preliminary orders of 42,800 units in January, up 144% year-over-year but down 18% from December 2020. Orders over the past 12 months total 308,000.
Fleets are rushing to add capacity to meet vibrant freight growth, but OEMs are struggling to keep pace.
“Currently there are shortages of raw materials and component parts, which will result in supply being unable to meet the demand of Class 8 trucks in the short-term,” said Don Ake, vice-president, commercial vehicles. “Class 8 suppliers are working diligently to ramp up production but are hindered by the pandemic and material shortages. In addition, imported parts deliveries are being delayed up to two weeks at the ports.”
Truck and component makers are also struggling to hire back enough workers, due to virus concerns and protocols, Ake added, and steel plants took longer than expected to fire back up.
“Demand for Class 8 trucks is surging, but the supply chain is hindered,” he said. “Our industry is very skilled and experienced in dealing with roadblocks. It will handle this situation better than other sectors. However, this will limit first-quarter production and will probably run over into part of Q2. When the vaccine enables employment to increase and the other bottlenecks are removed, this will end up being a robust year for Class 8 sales.”
ACT Research, meanwhile, reported preliminary Class 8 orders of 42,200 units. Kenny Vieth, ACT’s president and senior analyst, said while consumer-driven activity is moderating, the industrial economy is “shaking off the dust of two years of tepid activity.”
“The slower economic expansion of the past two months is reflected in spot freight rates, which have trended lower since November. Some, but not all, of the pullback relates to seasonality, which was also reflected in January’s preliminary commercial vehicle net order data,” Vieth said.
As for medium-duty orders, Vieth added: “Despite January’s preliminary net order moderation, the pandemic-driven shift in consumer spending from experiences to goods remains a benefit for the providers of local trucking services, and the symbiotic relationship between heavy-duty freight rates and medium-duty demand continues to impact this market segment.”