North American Class 8 net orders dropped in November to between 9,500 and 9,800 units, FTR and ACT Research reported, respectively.

The drop, down about 41% from October and down 82% year-over-year, was the lowest for the month of November since 1995.

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, FTR officials explained in a press release. 

“OEMs remain very reluctant to increase total backlogs with so much uncertainty about the supply chain,” FTR officials said. “Component deliveries, especially semiconductors, have been unreliable since March. OEMs 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.

Don Ake, vice president of commercial vehicles for FTR, predicts that once the OEMs are confident they can obtain the necessary production inputs, they will boost production and enter more orders.

“Backlogs remain at sturdy levels, but OEMs don’t want them much higher until they know their manufacturing capacity,” Ake said.

“Demand for new trucks is at record levels,” he added. “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.”

Kenny Vieth, ACT’s president and senior analyst, said: “Importantly, we reiterate, with critical economic and industry demand drivers at, or near, record levels, industry strength is exhibited in long backlog lead times, rather than seasonally weak orders. Looking to October data, the last full month of data in hand, the Class 8 backlog was nearly 281,000 units and at October’s build rate, the backlog-to-build ratio was 14.6 months, illustrating demand versus supply-side challenges.”

Class 8 orders now total 393,000 units for the previous 12 months, according to FTR.