North American fleets ordered fewer new class 8 trucks in November than last year as supply chain delays handcuffed automakers’ efforts to solve the tight trucking market by selling more vehicles, new figures show.
Preliminary net orders in November were 9,800 units, which representing a drop from both the previous month and from the same period last year, according to statistics from Columbus, Indiana-based ACT Research.
That slump was more a result of long backlogs than weak demand, as the pandemic economic recovery and e-commerce shopping boom continue to generate near-record levels of transportation industry strength, ACT said.
“Long backlog lead times resulting from ongoing supply-side constraints continue to pressure new order activity,” Kenny Vieth, ACT’s president and senior analyst, said in a release. “With backlogs stretching into late 2022 and still no clear visibility about the easing of the ‘everything’ shortage, modest November order results suggest the OEMs are continuing to take a more cautious approach to booking orders so as not to extend the cycle of customer expectations management.”
That analysis tracked very closely with another measure of November truck orders, with the transportation consulting firm FTR finding preliminary North American Class 8 net orders of 9,500. That number was down 41% from October and down 82% from the same month in 2020 as orders plunged to the lowest for the month of November since 1995.
Bloomington, Indiana-based FTR was likewise quick to point out that “the low order total in November is not due to any lack of demand for new equipment which is very high but rather due to the uncertainty in the supply chain.”
That uncertainty about obtaining critical components such as semiconductors is forcing original equipment manufacturers (OEMs) to remain “very reluctant” to increase their total backlogs, Don Ake, FTR’s vice president of commercial vehicles, said in a release. In fact, OEMs had optimistically booked a huge number of orders a year ago, expecting to be able to build at full capacity throughout 2021, but parts and components shortages prevented them from completing many of these trucks, he said.
“This strategy will continue until the supply chain situation improves. Once the OEMs are confident they can obtain the necessary production inputs, they will boost production and enter more orders,” Ake said. “Backlogs remain at sturdy levels, but OEMs don’t want them much higher until they know their manufacturing capacity. Demand for new trucks is at record levels. There is tremendous pent-up demand generated in 2020 and 2021. Spot rates are at record levels, and contract rates are rising. Prices for used trucks are also at record highs. And when the manufacturing sector of the economy gets past the supply chain crisis, there will be even more freight to haul.”