Supply chain challenges continue to restrain truck orders, analysts say

Orders for Class 8 trucks remain flat despite strong industry demand, signaling that OEMs expect ongoing supply chain challenges to continue for awhile yet.

“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,” explained Don Ake, FTR’s vice-president of commercial vehicles, in a press release.

Feb Class 8 truck orders
(Illustration: FTR)

North America registered about 21,000 Class 8 truck orders in February, down 2% on the month but down a full 53% year over year.

“The steady order numbers do not reflect at all the huge demand for new trucks. There is a severe shortage of new and used trucks and the economy continues to generate steady freight growth in all segments,” Ake said. “Even with the recent stagnant booking volumes, orders for the last 12 months are at an impressive 320,000 units.”

The challenges are not limited to Class 8 trucks. February’s Class 5-8 orders were essentially flat compared to January, said ACT Research president and senior analyst Kenny Vieth. ACT Research reported net Class 5-7 orders of 18,300 units in February.

Order volumes largely reflect actual production activity, he added.

“While order weakness is attributable to supply constraints, the ground rules of data collection play a part: The OEMs only report orders that are scheduled to be built within 12 months. With backlogs effectively stretching 12 months, and with limited forward visibility, order volumes have largely been mirroring production activity.”

Vieth stressed that long lead times for trucks, rather than weak order volumes, are a better measure of the trucking industry’s strength.

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