North American Class 8 truck orders have surged to record highs over the past 12 months in response to the industry’s maxed-out capacity and other factors, and analysts at FTR see no signs of orders slowing down in the coming year.
FTR projects Class 8 orders in North America to total 315,000 this year and 340,000 in 2019 before moderating some in 2020 and 2021. Trailer orders, which have also set records in recent months, are also forecasted to remain strong. FTR projects trailer orders to set an all-time yearly record this year with 310,500 orders. They project trailer orders to be 305,000 next year before dipping some in 2020 and 2021.
FTR issued its updated truck and trailer forecasts at its annual conference in Indianapolis, Indiana, this week.
Don Ake, a senior analyst for FTR, said trailer orders have been climbing since 2015, with shifts in e-commerce and greater use of drop and hook driving much of the gains. Four of the all-time top six years for trailer orders have occurred since 2015.
Likewise, four of the top five months for truck orders have occurred this year. “That puts into perspective what we’ve seen this year,” he says. “Orders are at historically high levels.”
Holding back truck orders, and to an extent trailer orders, is manufacturers’ ability to keep up with order demand. Suppliers’ ability to provide truck OEs with parts has clogged truck and trailer manufacturing, says Ake.
Surging rates and tight capacity have been the main drivers this year of the flurry of order activity, says Eric Starks, president and CEO of FTR. Mitigating factors for truck and trailer orders in the coming year include political uncertainty with U.S. trade policy and inflation, he says.
An OEs view
Susan Alt, vice president of public affairs for Volvo Trucks North America, spoke in a separate session at the FTR Conference but corroborated the data presented by FTR analysts, as well as truck makers’ issues in securing necessary parts. “The supplier crunch is absolutely real,” she said.
The recent surge in truck orders has a different feel than the most recent order run-up in 2015, she said. That year, dealers were placing orders for trucks that often didn’t have a buyer attached as a means to secure build slots. “That’s what seems to be different,” this year, she said. “Our order board is solid. This is real freight out there.”
Alt said that trade tariffs instituted by the Trump Administration have driven up the prices of Volvo and Mack units already, though it hasn’t mitigated truck orders. “We use steel and we use aluminum,” she said. “But there’s so much freight demand it’s not having much of an impact“ on truck demand.