Hot truck demand handcuffed by chip shortage

A shortage of semiconductor chips is slowing auto manufacturers’ efforts to meet soaring demand for Class 8 trucks as U.S. freight capacity remains tight with the winter peak season right around the corner, two reports found Thursday.

Preliminary North American Class 8 net orders in August hit a five-month high of 36,900 units, driven by the economic rebound from the pandemic recession and hot consumer buying activity, Columbus, Indiana-based ACT Research found.

“Demand for commercial vehicles was alive and well in August, as the Classes 5-7 market continued to build on record-setting volumes. And after a period of moderation related to limited 2022 build slot access, Class 8 orders began their climb into the end of 2021,” Kenny Vieth, ACT’s president and senior analyst, said in a release. “While the supports for new vehicle demand remain in unprecedented territory, the industry’s ability to convert that demand into vehicles remains constrained by numerous supply-side issues that begin with, but are not limited to, semi-conductors. As such, production challenges are likely to weigh on orders, even as backlogs continue to rise.”

A separate report also pointed to the tight chip supply as a chokepoint for truck production. According to Bloomington, Indiana-based FTR Transportation Intelligence, preliminary North American Class 8 net orders for August rose 51% from July to 39,400 units, a similar number to ACT’s finding.

Despite that demand, manufacturers are still having difficulty scheduling production in the first quarter due to continuing uncertainties with the supply chain.

“The supply chain is still impacting the entire industry and Class 8 orders are no exception,” Don Ake, vice president of commercial vehicles for FTR, said in a release. “It’s difficult to know how many trucks you can produce in the first quarter when many components, and especially semiconductors, are in short supply. Once commodity costs stabilize and the supply chain gets into balance, orders will soar, and build rates will jump.”

In the meantime, truck production is proceeding at a more “measured” pace than expected, he said. “Fleets have wanted to place their 2022 orders for months. They are in desperate need of trucks presently and with the freight market being so robust, anticipate that build slots will again be scarce next year. OEMs, on the other hand, have been reluctant to open their order boards due to high commodity prices and supply chain uncertainties,” Ake said.

Don Ake shares why heavy truck production levels can't meet demand. Unsurprisingly, it involves supply chain issues. Watch now: https://t.co/LZOtoE4mkm

— FTR | Transportation Intelligence (@FTRintel) September 2, 2021

Preliminary NA Class 8 net orders in August were 36,900 units, while NA Classes 5-7 net orders jumped to 31,900 units, both representing five-month high readings.https://t.co/r1rSZttY3U#truck #semitruck #trucking #transportation, #ACTResearch #ACT pic.twitter.com/W8J4rlQDbv

— ACT Research (@actresearch) September 3, 2021