Preliminary North American Class 8 orders were up in February 2021 on a month-over-month as well as year-over-year basis.
According to commercial vehicle research firm FTR, net orders reached 44,000 units for a 3% increase over January and 209% increase compared to February 2020. It says this was the second-highest total ever for the month of February, and that orders for the previous 12 months now total 338,000 units.
ACT Research, on the other hand, puts February net orders at 43,800 units which was a 4% increase over January and 212% improvement from the previous year. Classes 5-7, however, declined 4% compared to January but were still up 12% from the previous year.
Final numbers from both firms will be available around mid-March.
While there is strong demand for trucks, supply is somewhat short due to component and part shortages currently being experienced by many manufacturers. As such, FTR says fleets are placing orders at elevated volumes to try and get as many trucks as they can.
“There is tremendous pent-up demand for trucks. There are severe bottlenecks in the supply chain involving computer chips, wiring harnesses, and a whole host of various parts. OEMs are under intense pressure to deliver as many vehicles as they can, as soon as they can,” commented Don Ake, Vice President of Commercial Vehicles for FTR, in the firm's press release announcing its February Class 8 order data.
“The tight capacity has caused spot rates to spike from already elevated levels. Contract rates are rising also. Therefore, fleets have plenty of cash to spend. They desperately need trucks, so they are ordering at near-record levels.
“The supply chain is so dysfunctional right now and there are so many parts affected, it is difficult to predict when the logjam breaks loose. The vaccine should help component manufacturers find more workers. There are also lengthy waits at the ports causing delays in imported parts.”
“Beyond warmer inflation numbers, there is much to like in the current stream of economic data that indicate broad-based economic activity. As has been the case over the course of this pandemic period, economic growth is being driven by the goods-producing sectors of the economy,” said Kenny Vieth, President and Senior Analyst ACT, in the company's press release announcing its Class 8 order data.
He continued, “Consumer spending on goods, a red-hot housing market, a reaccelerating manufacturing sector, and pent-up inventories combine to provide very good visibility to near- to mid-term freight trends. Contract freight rates are at record levels, as are spot rates, after seasonal adjustment. Without injecting stimulus or infrastructure into the discussion, there is a lot to like about freight, the carrier profit outlook, and by extension the commercial vehicle demand landscape.”
Regarding the medium-duty market, Vieth commented, “The shift in consumer spending from experiences to goods continues to support providers of local trucking services, as e-commerce has grown by leaps and bounds in the pandemic economy.”
Demand for heavy-duty vehicles hot in 2021
ACT also recently introduced its Transportation Digest which combines proprietary ACT data and analysis from a wide variety of sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets.
In the new report it notes the heavy-duty truck market has started 2021 in a strong position as it built on the positivity seen at the end of 2020. “The massive supply-demand imbalance between freight and drivers in the second half of 2020 lit commercial vehicle demand on fire beginning in the fourth quarter of last year. At the start of 2021, commercial vehicle demand is hot,” said Vieth in ACT's press release announcing release of the new report.
He explained, “As an illustration, over the past 4 months ending January, Class 8 backlogs doubled. That period included best- and third-best ever orders for Class 8 tractors in November and December.
“While we are confident that the conditions driving demand should remain in place, what will dictate the trajectory of build, retail sales, and our forecasts will be the industry’s ability to navigate around both traditional and nontraditional supply-chain constraints.”
*Information based on press releases from ACT Research and FTR.