Class 8 Orders Hold Up

Strong Class 8 production levels continue to eat away at the backlog, reports Truck News.

Class 8 truck orders in July exceeded expectations at 13,500 units, according to preliminary data from FTR, while ACT Research reported 16,000 orders.

Taking the FTR numbers, that’s an 8% pullback from June but a 25% year-over-year increase. These order volumes are still below replacement demand, FTR reports. Orders, while surprising on the upside, were still weak and in line with seasonal weakening. Meanwhile, the backlog continues to whittle down.

“We had expected net orders to fall below 10,000 units monthly several months ago as fleets wait for OEMs to open 2024 build slots, but that did not occur,” FTR chairman Eric Starks explained. “Build slots are anticipated to open soon, so orders likely will not fall much further – if at all – in the near term. Build slots for 2023 are already filled, so it is unclear when these orders will be slotted, and the situation clearly will add pressure to increase production through the end of the year.”

July is typically the low-water mark for monthly orders, according to ACT Research.

“As represented by seasonal factors, this is the time of the year when expectations for orders are low. For both the medium-duty Classes 5-7 and heavy-duty Class 8 markets, July is the traditional low-water mark for monthly order placements,” said Kenny Vieth, ACT’s president and senior analyst. “That low expectation is reconfirmed this year as both MD and HD 2023 backlogs, as measured by backlog-to-build ratios, are essentially full. In addition to already filled backlogs constraining order flows, 2024 orderboards are not yet or just barely open, making the opportunity for bigger numbers elusive. All that said, July order activity was largely in line with or slightly above year-to-date trends.”

Meanwhile, FTR’s Shippers Conditions Index for May rose from 7.1 to an even stronger 8.6, reflecting lower fuel costs and freight rates combined with slightly weaker freight volumes. The industry forecaster is expecting conditions to remain positive for shippers through mid-2024.

Full story here.

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