Two leading industry analyst firms are reporting robust orders for new trucks in November. Both ACT Research and FTR recorded new Class 8 North American vehicle orders up approximately 30% compared to the previous month.
ACT Research said in a press release that preliminary North America Class 8 net orders in November were 51,900 units, up 33% from October and a 197% improvement from year-ago November.
Similarly, FTR reported preliminary North American Class 8 net orders “exploded” in November to the third-highest total ever at 52,600 units. December 2020 Class 8 order activity was the best performance since August 2018, the firm said. FTR added that North American orders were up 31% compared to October, and almost three times the level seen in November 2019. Class 8 orders for the past 12 months continue to increase and now stand at 250,000 units, the firm’s researchers found.
FTR said the “tremendous” volume reflects several large fleets placing their orders for the entirety of 2021 to lock up build slots, which they perceive could be in short supply next year. Fleet confidence remains solid entering 2021, so carriers are getting their truck orders in early for next year's deliveries. Consumer-oriented freight remains vibrant and industrial freight is expected to improve in the coming months, FTR said, so fleets are placing big orders anticipating needing more trucks throughout next year.
However, FTR cautioned, orders should begin to wind down in the next several months as large fleets conclude their seasonal ordering. Still, taken as a whole, FTR called the November orders “great news” for the trucking industry, adding that they are pumping up the national truck backlog, which had dropped to a three-year low in September.
Sounding an optimistic note, FTR added that the higher backlog indicates that the industry will have a stable, positive year in 2021, and noted that will be a welcome relief for the industry after the shock and chaos of 2020.
“The pandemic-impacted economy continues to play into the hands of trucking,” said Kenny Vieth, ACT president and senior analyst. “With freight rates surging to record levels the past three months and carrier profits certain to follow, orders accelerated in November. Preliminarily, North American Class 8 net orders rose to the third highest level in history, proving once again our favorite commercial vehicle demand axiom: When carriers make money, they buy, or at least order, trucks.”
In medium-duty, ACT Research said, North American Classes 5-7 demand continued in line with recent activity, at 27,200 units. That's a 9% decrease from October’s 30-month high, but still up 78% compared to last year.
Regarding the medium-duty market, Vieth added, “There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand. Clearly, the shift in consumer spending from experiences to goods has been good for the providers of local trucking services as e-commerce has grown by leaps and bounds during the pandemic.”
“The Class 8 market is trying to rebalance after suffering through woeful order numbers early in the pandemic,” said Don Ake, vice president of commercial vehicles for FTR. “The huge November orders mean that Q4 will be a fabulous one, regardless of what comes in for December, and that portends well for the expected increase in production early next year. Fleets are still trying to catch up with the jump in freight volumes resulting from the economic restart and the generous stimulus money, which is being spent predominately on consumer goods and food. This will only intensify if there is a second round of payouts.”