From Freight Waves.
Class 8 truck orders in July resembled popular concert tickets the day after they are sold out. No one orders any.
The analogy by Don Ake, vice president of commercial vehicles for FTR Transportation Intelligence, captures the situation and the sentiment surrounding new equipment. Parts and components availability is improving. But it is not equal to the pent-up demand for tractors.
“OEMs could increase production by about 10% over the current rate if they could get the parts, but the supply chain remains clogged,” Ake said.
July orders amounted to a paltry 10,600 units, the weakest July since 2019. They were down 33% from June and down 60% year over year. Class 8 orders total 244,000 on a rolling 12-month basis.
The 2019 numbers cratered because of pull-ahead orders a year earlier that resulted in more than 50,000 orders in consecutive summer months as fleets tried to spend windfall proceeds from a federal tax cut.
Now three years later, no such booking bonanza is in sight — at least until manufacturers open their 2023 orderbooks. The OEMs won’t do that until they can read what will happen with supply chain disruptions and commodity price inflation.
Quiet understandings between manufacturers and their biggest customers are occurring, especially for fleets committing to multiyear deals.
“When booking commences for 2023, possibly as early as September, Class 8 orders could reach record heights,” Ake said.
At the bottom of the funnel, deliveries have improved in recent months. But the long slog of supply chain disruptions takes a toll.
See the complete article online at Freight Waves.