April Truck Orders Surge

This story appears in the May 9 print edition of Transport Topics.

Orders for new Class 8 trucks in North America shot up dramatically in April to around 38,000, about 160% higher than the year-ago level, lengthening delivery schedules, according to industry officials.

One truck dealer, Eric Jorgensen, president of JX Enterprises, Waukesha, Wis., said the lead time to get delivery of new trucks from the brands he sells has “pushed up from days or weeks to about five months now.”

Another dealer, Duane Kyrish, president of Longhorn International, San Antonio, told Transport Topics he had talked with other International dealers, “and they all say the heavy-duty business is really picking up and the order backlog is going through the roof.”

“People who buy now won’t be able to get delivery until late September or October,” said Kyrish, who is International’s American Truck Dealers board member.

FTR Associates, based in Nashville, Ind., put April orders at 37,922 Class 8s on May 4. ACT Research Co., Columbus, Ind., said the same day that North American heavy-duty orders came to 38,200.

“I think the basic story is that we still have very strong fundamentals that are driving these order numbers,” Steve Tam, vice president of ACT’s commercial vehicle sector, told TT.

“The first and foremost is the age of the fleets, at an unprecedented 6.7 years for active trucks,” Tam explained. “That presents us with the need, and then enabling that need is first of all trucking profitability, which has been improving, along with the capital industry, which is now more willing to participate and making more capital available.”

“By and large, we’re still seeing healthy order activity throughout the original equipment manufacturers, and that’s good,” said Eric Starks, president of FTR Associates. “That means it’s a fairly broad-based recovery.”

Tam added that owners of small and medium fleets have begun to place new orders in significant numbers, joining the majors he said had begun the order upsurge late last year.

Tam said ACT recorded the most new heavy-duty vehicle numbers in April since March 2006, when ACT counted 52,194 new orders.

Two original equipment manufacturers commented on the April order numbers.

“We’re very encouraged by the strong highway market,” Ron Huibers, Volvo Trucks North America senior vice president, sales and marketing, told TT.

“While we don’t expect such robust figures every month, market trends recently prompted us to upgrade our North American market forecast from 220,000 to between 230,000 and 240,000 units,” Huibers added.

“The paper orders were a little ahead of most expectations, and we attribute that to several things,” Navistar Inc. spokesman Roy Wiley told TT.

“First, it’s a ‘pre-order,’ ahead of anticipated price increases, and many customers, especially smaller ones, have been putting in orders to guarantee a build slot this year,” Wiley said. Navistar makes International trucks.

Most OEMs announced a commodities surcharge for the second quarter of as much as $975 per heavy-duty vehicle.

New truck dealers were enjoying the boom and had diverse viewpoints.

“I would say that things really started picking up in the fourth quarter of last year, and it’s been continuing to improve, with orders exceeding our expectations, especially in the first quarter,” Jorgensen of JX Enterprises, a Peterbilt and Volvo dealer, told TT.

“What’s surprising is that fleets have continued to order even though fuel prices are doing what they’re doing,” Jorgensen said. “Yes, they’re cautious over that, but to the same degree, they’ve gotten very busy, and they’re running, making money, and need new trucks.”

“The thing we’re seeing is that the larger fleets and medium fleets are in the market and buying, with some nice and significant orders . . . recently. But the small fleets are a little less active,” Kyrish of Long Horn International said.

Two Freightliner dealers said lead times were longer.

“Business is definitely picking up, and order boards are stretching out,” Frank Ellett, president of Virginia Truck Center, Roanoke, Va., told TT.

The company has four locations in Virginia and one each in North Carolina and South Carolina. All the locations offer Freightliner and Western Star Class 8s, and two of the Virginia dealerships sell Mack Trucks.

“Freightliner premium trucks, or over-the-road, have solid build schedules through December,” Ellett said. “Speaking only for my own dealership, they’re sold out for the rest of the year.”

Ellett, Freightliner’s ATD board member, said that vocational Freightliners were still available, and Macks could be ordered for September.

Spokespersons for Daimler Truck North America and Mack said they did not have enough time to study order figures to comment.

Todd Albanese, vice president of sales, Los Angeles Freightliner-Western Star, Whittier, Calif., said the lead time varies greatly with specifications.

“I just sold an order of 25 new [Freightliner] Cascadia sleepers yesterday for delivery in July,” Albanese told TT on May 5.

“Delivery dates are all up in the air,” he said. “Yes, if you want certain engines or components, you may not get delivery now till next year.”

Kyle Treadway, president of Kenworth Sales Co., West Valley City, Utah, which has 18 locations in seven mountain and western states, was more cautious.

“In our company, we saw a surge in orders in the first quarter, but then they tapered off with the rise in fuel prices,” Treadway told TT.

“The rate of intake has slowed,” said Treadway, who also is ATD chairman. “I’m not worried. We’re not seeing a cliff ahead, but it’s not accelerating any more.”