March 28, 2011 6:00 AM, EDT

Truck Makers’ Backlog Grows to Nearly 100,000, ACT Says

By Frederick Kiel, Staff Reporter

This story appears in the March 28 print edition of Transport Topics.

Class 8 truck manufacturers have a backlog of nearly 100,000 units scheduled to be built over the next 12 months, more than double the number of a year ago, because of a substantial increase in orders over the winter, ACT Research Co. reported.

“The backlog-to-build ratio means that fleets who waited an average of 3.6 months to get delivery after ordering new trucks in June of 2010, now . . . have to wait 5.9 months,” Kenny Vieth, senior analyst at ACT, told Transport Topics.

Manufacturers and dealers, meanwhile, said their factories would have no trouble meeting the orders and that waiting time was generally less than ACT reported.

“Class 8 commercial vehicles net orders for North American markets totaled 24,300 units in February, down from January, but sufficiently higher than production, to push the Class 8 heavy-duty backlog volume to just under 100,000 units,” ACT, Columbus, Ind., said March 18. “Just one year ago, that number was just over 44,000 units.”

In January, Class 8 orders numbered more than 27,000 for North America, following November and January numbers of more than 25,000.

“These orders are obviously good for the industry, despite the increase in wait time,” Vieth added. “We would expect to see another two or three months of strong orders, as typically occur in a recovery, meaning that we’ll see an additional backlog growth for two-to-three months.”

“Overall optimism about the economy, paired with the need to replace aging trucks, has certainly created a stronger market than we’ve seen the past few years,” Kevin Flaherty, Mack Trucks Inc. senior vice president, U.S. and Canada, told TT.

“The construction segment continues to lag, but we’re still experiencing strong order intake for our Mack Pinnacle highway models and have the flexibility in our production processes to ensure customers receive the trucks they need when they need them,” he added.

Ron Huibers, senior vice president, sales and marketing, at Volvo Trucks North America, like Mack a subsidiary of Volvo AB, said that demand has continued to “drive orders” for the company.

“Volvo Trucks’ . . . operations have allowed us to meet increased demand . . . and adjust production to ensure timely delivery to our customers,” Huibers told TT.

Roy Wiley, spokesman for Navistar Inc., which builds International trucks, said that the company’s Class 8 orders were up, but Navistar already announced it was increasing its production capacity by 40%.

“This is good news, and it’s no problems for production,” Wiley told TT. “We can produce as many trucks as we get orders for.”

He added that Navistar was “back-loading production into the second half of our fiscal year. We don’t go into numbers.”

“The lead time for extending orders of new equipment has stretched out because the order intake has grown tremendously over the past four months,” Kyle Treadway, president of Kenworth Sales Co., West Valley City, Utah, said.

He said that the wait time was generally four months instead of six.

Treadway said that Kenworth Sales, which has 10 locations in Mountain and Western states, has increased its inventory of new trucks with the return of Class 8 demand.

“Fleets that buy from inventory are generally repeat customers and we know what they like, so that we pick a spec that appeals to as much customers as possible,” Treadway told TT. He is also chairman of the American Truck Dealers association.

Treadway said fleets that bought batches of 10-to-20 trucks were different.

“They want them just the way they want them,” Treadway said. “That is not the inventory buyer.”

“Wait times are going back to historic norms,” Jack McDevitt Jr. owner of McDevitt Truck Sales, Manchester, N.H., told TT. “The wait time is now 90 to 120 days across the board, all within a couple weeks of each other.”

McDevitt Truck, which has two locations in New Hampshire and one in Massachusetts, is a dealer for Mack, Volvo, Peterbilt and Western Star trucks.

“We’re not at the point right now that I’m worried,” McDevitt added. “It was nice where we were able to get trucks built within 30 days, because that gave a tremendous competitive advantage.”

“There were quite a few fleet orders early in the first quarter, but it slackened somewhat in March,” Jim Hartman, principal of Truck Enterprises, a Kenworth and Volvo dealer based in Harrisonburg, Va., told TT.

“We have a 90-to-120 day backlog, which is historically average and we have lived with it,” Hartman added.

“We’re primarily an over-the-road dealership so that we stock trucks that have most of the specs for that market,” he added. “If they want certain specs, they’ll be happy to live with 90 to 120 days lead time, which we have now.”

“The wait time is: We order today and get it in July,” Hoyt Rogers, president of Peterbilt of Memphis Inc., told TT. “The lead time has increased, but it’s okay.”