FTR reports that preliminary North American Class 8 orders for July hit an all-time high of 52,250 units, just surpassing the previous record of 52,194 orders in March 2006. Class 8 orders were tremendous for the U.S. market, with most OEMs achieving elevated levels. Orders were up 25% month-over-month (m/m) and 187% year-over-year (y/y). Orders have been astounding in 2018. Five of the highest 12 order months ever have occurred in the first 7 months of this year. North American Class 8 orders for the past 12 months have now totaled 445,000 units.
Fleets are desperate to get new trucks, but supply is limited. Because fleets are frustrated by the current situation and are uncertain when they can receive trucks, they are placing a large volume of orders in hopes of getting some deliveries at some point in the future. In essence, there is a truck shortage. Freight growth is robust and industry capacity is extremely tight. OEMs have been hindered because numerous parts and component suppliers have not been able to produce and deliver on time.
Don Ake, FTR Vice President of Commercial Vehicles, comments, “The supply chain issues began around March. OEMs started falling behind in deliveries to fleets in April. Deliveries did improve a bit in June, but most OEMs are still operating in catch-up mode. It is uncertain when suppliers will be able to improve delivery times and for OEMs to ship all orders on time. Realistically it may take up to a year for everyone to catch up.
“This is a unique situation where strong demand is meeting limited supply. Prices can’t rise enough to alleviate the situation. Therefore, the market is responding by placing an immense number of orders into the backlog. Fleets are reserving places in line, so they can get the maximum number of trucks in the future. It is a bizarre occurrence and it will not be resolved soon. Conditions may be abnormal, but they are abnormally good.”
Final data for July will be available from FTR later in the month as part of its North American Commercial Truck & Trailer Outlook service.