Class 8 Orders Season Launches Below Year-Ago High Point
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The North American Class 8 market kicked off the opening of order boards for next year with September figures below a prior-year surge, according to ACT Research.
Preliminary data showed a 31.5% year-over-year drop to 36,800 units from 53,700. But those orders at the time had set an all-time record because of pent-up demand heading into the opening of order board for this year.
The recent report also showed truck orders were up 93.7% from the prior-month total of 19,000 units. August marked the end of a three-month streak of year-over-year growth.
“Between reports of falling carrier income and margins, still sloshy load-to-truck ratios, weak spot rates reported by DAT and a sense over the past six weeks or so that the U.S. economy’s year-to-date outperformance was starting to lose some momentum, we were unsure how the market would respond when the 2024 order boards officially opened,” said Kenny Vieth, president and senior Analyst at ACT.
Vieth
ACT also noted Classes 5-7 net orders were up 13% month-to-month at 23,100 units but 14% lower compared with the highest month in 2023. It also pointed out that over the past six months orders have averaged 20,400 units per month on a seasonally adjusted basis.
“One thing we did know was that nearly all the August-ending Class 8 backlog was scheduled for build in 2023,” Vieth said. “So strong orders are imperative for the industry to maintain current strong production rates very far into 2024.”
[September Preliminary State of the Industry: Classes 5-8 Vehicles Update] - Class 8 truck order season kicks off with 36,800 units in September. https://t.co/Sz6tpbWr4r#truck #semitruck #trucking #transportation, #Class8, #ACT, #ACTResearch — ACT Research (@actresearch) October 4, 2023
FTR Transportation Intelligence reported orders decreased 44.8% year-over-year to 31,200 units from 56,500. The economic and freight forecasting firm noted both the month-over-month increase and the year-over-year decrease were within expectations given that build slots opened and that the market continues to normalize after exceptional order volumes last year.
Starks
“Build slots have opened for 2024 production, and fleets are placing orders at a solid pace,” FTR Chairman Eric Starks said. “Although a large increase in September was expected due to available build slots, it is still a positive indicator for the industry. We saw increases across the board versus August — another indication that this is a broad-based gain for the market.”
Starks was not anticipating orders to match the level they reached last year. But he indicated fleets continue to be willing to order new equipment despite weakness in the overall freight market. He added that increasing orders confirm expectations of replacement demand in 2024. FTR set total Class 8 orders for the previous 12 months at 270,000 units.
Seidl
“ACT reported September preliminary orders of 36,800 units, representing the highest order month so far this year,” Cowen analyst Jason Seidl wrote in the report. “ACT expects Class 8 backlog to increase by around 9,400 units to end September backlog at 162,000. This is not inconsistent with our expectation of an uptick in orders as OEMs open their 2024 order book. Even so, the uptick is notable given a stubborn truck market malaise.”
Mack Trucks North America President Jonathan Randall expressed his optimism in the truck market during a media event Sept. 26. He said the market has remained strong for his core Classes 6-8 business. He also has seen high demand continue in the vocational and [contract of affreightment] segments.
Randall
“Hearing of some softening in the over-the-road segment,” Randall said. “However, we still don’t have inventory sitting. If trucks are available, they’re getting sold. If a customer decides that they don’t want to take their full order, what they don’t take is getting sold someplace else very quickly.
“So, we haven’t seen that pullback yet, although we’re conscious that it certainly could be coming. In the meantime, as we’ve opened up the order books for next year already with Mack, we’ve had very robust order intake already for the first half of next year.”
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