FTR reports preliminary North American Class 8 net orders soared in October to 40,100 units. ACT Research reported October orders at 38,900 units.
According to FTR’s estimate, this is the first over-40,000 unit month for Class 8 orders since October of 2018, FTR says. Orders were up 26% m/m and up 83% y/y. Class 8 orders for the past twelve months now stand at 215,000 units, FTR reports.
Fleets continue to order Class 8 trucks in large quantities for 2021 delivery. The freight markets are holding up surprisingly well after coming out of the lockdown stage of the pandemic, FTR says. Consumer retail sales remain vibrant, necessitating frequent restocking which has kept freight rates elevated, capacity tight, and generating the need for more trucks.
The hefty order volume in October indicates the market is beginning to return to its traditional order cycles. If the pace holds up, the fourth quarter of 2021 should look similar to the surge that took place in Q4 2014, although it won’t be quite as strong, FTR says.
“September was the turning point for the Class 8 market,” said Don Ake, vice president of commercial vehicles for FTR. “Fleets became much more confident about future freight demand and began placing large orders to replace older units and for expansion purposes, as capacity tightened. In just a few months, the industry has gone from fear, to hope, to optimism. It appears the industry has sluffed off the uncertainties about the pandemic for now.
“There is still some pent-up demand from the OEM shutdowns in March and April, but there is also widespread momentum generated after the economic restart that is continuing to build,” Ake continued. “Industrial freight is still lagging somewhat. If manufacturing starts to rebound, sales go even higher.”
“Keeping in mind the freight backdrop of consumer spending on goods expanding and those for services contracting, preliminary October N.A. Classes 5-8 vehicles order data rose to 68,200 units. That volume represented a 17% gain from September and an 80% improvement compared to year-ago October,” added Kenny Vieth, ACT’s president and senior analyst. “October was the largest Classes 5-8 order tally in 26 months, and this month’s orders marked a fifth consecutive positive year-over-year reading, after 18 consecutive months of negative comparisons.”
Regarding the medium-duty market, Vieth said, “There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand, and clearly, the shift in consumer spending from experiences to goods has been beneficial for the providers of local trucking services, as e-commerce has grown by leaps and bounds during the pandemic.”
