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February 3, 2022 3:40 PM, EST

January Class 8 Orders Plummet Compared With 2021

Mack AnthemMack Trucks announced its Anthem and Pinnacle models will include predictive cruise control with Econo-Roll. (Mack Trucks)

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Class 8 orders in January plunged compared with a year earlier to just above 21,000, and reflected the caution truck makers continue to exhibit in the face of ongoing supply chain difficulties and an already very lengthy backlog, ACT Research reported.

Orders reached 21,300 compared with 42,307 a year earlier.

“The first half of last year truck makers weren’t practicing that type of discipline, which is how the backlog got filled up and lots of customers got disappointed,” ACT Vice President Steve Tam told Transport Topics.

“Now the reality has come home to roost. The opacity of the supply chain, certainly, hasn’t improved,” he said. “I hope it hasn’t gotten any worse. Then you have to start thinking about geopolitical tensions and all the saber rattling happening in Asia.”

For example, Taiwan — long coveted by mainland China — accounts for 65% of the global semiconductor output, Tam said.

American Trucking Associations President Chris Spear issued a statement Jan. 21 on the announcement that Intel is investing $20 billion in a new computer chip manufacturing plant near Columbus, Ohio: “This is how we climb out from these COVID-induced shortages — by investing in our nation’s supply chain.”

Recent U.S. Department of Commerce data showed that median inventory held by chip consumers (including automakers or medical device manufacturers, as examples) has fallen from 40 days in 2019 to less than five days in 2021.

FTR pegged preliminary January orders at 21,400.

Truck makers are entering orders at the same rate as production, said Don Ake, vice president of commercial vehicles at FTR. “Normally, this would indicate a very stable market. In this case, it reflects a market frozen by a weak supply chain.”

One fleet executive said while his latest truck order has slipped again, even after it rolled over from 2021, he moved ahead to place a larger order for later in the year.

Oakley Transport vehicles

Oakley Transport is awaiting an order that rolled over from last fall. (Oakley Transport via Facebook)

Pete Nativo, vice president of fleet solutions at Oakley Transport, told Transport Topics he was given a date in mid-January for when the first truck in his latest order for 50 would be on the line. Then the dealer told him that date was not possible to meet, and the first trucks would go on the production line two or three weeks after the original date.

Nativo noted it takes a day or two to assemble the truck, then more time at the Fontaine Modification center — where they add the decals, pumps and compressors and do a pre-trip inspection of Oakley’s trucks. Then comes more time spent waiting to have a driveaway company bring the new truck to the carrier.

Lake Wales, Fla.-based Oakley is a bulk carrier that specializes in liquid and food-grade transportation. It operates about 725 trucks, all from Volvo Trucks North America.

“It could be a good month before I actually see the truck down here in Florida,” he said.

The order Nativo is waiting on is one that rolled over from last fall. He has another 120 trucks on order for the July-August time frame.

“Right now we are not even thinking about those because we can’t get the 50,” he said.

VTNA has come to Oakley and asked for surcharges, he said. “And they are asking a couple of thousand dollars more for the trucks in August. Bottom line is I’m trying to be patient on the new trucks and work with everybody. But we’re definitely seeing we are not getting the trucks when they said we would. So.”

A large publicly traded carrier had expected to spend $1 billion on capital expenditures in 2021; it couldn’t and missed that goal by $130 million.

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“This miss was almost entirely due to supply chain delays continuing to impact our ability to take timely delivery of our equipment. We remain committed to these investments and capacity to help serve our customers, and we anticipate net [capital expense] for 2022 to approximate $1.5 billion,” John Kuhlow, chief financial officer at J.B. Hunt Transport Inc., said during the fourth-quarter earnings call. That expectation includes $700 million for tractors for both growth and replacement.

In related order news, Mack Trucks announced its Anthem and Pinnacle models will include predictive cruise control with Econo-Roll, which temporarily disengages the driveline before the downhill descent, and allows the truck to roll, reducing fuel consumption.

The predictive cruise control system stores up to 4,500 routes, and is intended to offer maximum fuel efficiency and improve total cost of ownership, according to the Greensboro, N.C.-based company, a unit of Volvo Group.