With backlogs full and 2022 order books not yet open, truck orders begin to slide

Line of semi trucks
Most fleets have ordered all the trucks they need for 2021 and are getting frustrated because production is unable to keep up with demand.

Heavy truck orders reached 22,900 units last month, down 32% from April, according to preliminary data released by ACT Research.

May 2021 numbers were 242% higher than May 2020’s COVID-dampened order intake.

“As we have been tracking for several months, medium- and heavy-duty backlogs for the remainder of 2021 were essentially filled with April’s orders,” said Kenny Vieth, ACT president and senior analyst. He added, “With 2022 order books not yet opened, it is not particularly surprising that orders for both segments fell to levels last seen in August 2020."

The order pullback, Vieth said, aligns with expectations and is driven by the limited supply of open build slots in 2021, rather than demand for equipment. Vieth added that the heavy truck backlog was out nearly 12 months coming into the month, "highlighting ongoing demand strength.”

FTR noted that Class 8 orders are returning to a pace more in line with seasonal trends and now total 420,000 units for the previous 12 months.

Despite a torrid order pace for eight months, FTR Vice President of Commercial Vehicles Don Ake noted the drop-off in May does not represent a weakening of demand, as freight growth continues to be robust and spot rates are hitting all-time highs. 

"Most fleets have ordered all the trucks they need for 2021. They are getting frustrated because production is unable to keep up with demand," he said. "Carriers need more trucks on the road now, but semiconductor and other component shortages continue to restrict production. There is tremendous pent-up demand being generated in this market."

Freight is growing at a brisk pace, Ake said, but the supply chain bottlenecks slow the flow of new trucks coming off the production line. This, in turn, he added, is keeping the spot market "overheated."

OEMs are uncertain how to price 2022 models as prices for steel, aluminum, and rubber have spiked following the economic restart.

"It is possible we will see record order volumes when the OEMs open their 2022 order boards," Ake added.