Class 8 Orders Increase 32%
This story appears in the Oct. 13 print edition of Transport Topics.
Orders for new Class 8 trucks jumped 32% in September from a year ago to 24,900, the highest September in eight years, ACT Research Co. reported.
Orders slipped by about 500, or less than 2%, from August, which was revised slightly downward to 25,363.
FTR, another freight consulting firm, gauged September’s orders at a similar total of 24,477 heavy-duty units.
Year-to-date orders through September totaled 249,294, up 32.4% from the comparable period last year, according to ACT figures.
September orders for trucks in Classes 5-7 were up 9% to 18,500, representing the best medium-duty vehicle volume since April. Orders for those classes were up 3% from August.
September orders were “better than we expected,” said ACT Vice President Steve Tam. He said it was the highest September since 2006, when orders totaled 30,627 during the pre-buy period prior to 2007 federal emissions regulations.
ACT had forecast in the low 20,000s, “So almost 25,000 is a very nice upside. That’s three or four months in a row where we’ve been pleasantly surprised” by higher-than-expected orders, Tam said.
“July, August and September are typically the weakest months of the year on the Class 8 side. July’s generally the [lowest], while September’s not that far behind,” running about 14% below an average month,” he told Transport Topics.
The fourth quarter is typically the strongest — end-of-year orders have topped 26,000 in two of the past three years — with October and November running about 8% to 9% higher and December about 20% above a given year’s monthly average, Tam noted.
Another factor is that original equipment manufacturer Navistar International Corp.’s fiscal year ends in October, “and they want to get customers signed up to get good-looking year-end results,” he added.
Navistar is seeing a “record year” for its LoneStar model, driven by orders from Indianapolis-based truckload carrier Celadon Group, said Bill Kozek, Navistar’s president of North America truck and parts, speaking last week at American Trucking Associations’ Management Conference & Exhibition in San Diego.
“I think many of the large fleets have probably already been in the marketplace and made their orders,” Tam said. “OEMs are pretty happy with where their build schedules are for the remainder of this year, so they’re trying to incentivize truckers to take delivery in the first quarter of next year and beyond.”
Martin Daum, CEO of Daimler Trucks North America, said at MC&E that “orders are up” and that order boards for the parent company of Freightliner Trucks are “completely full.”
Daum said orders being taken now are for trucks that will be built in 2015 and predicted this year’s North American Classes 6-8 sales volume will be 10% above last year and that next year will be 10% above 2014.
Magnus Koeck, Volvo Trucks’ vice president of marketing, said, “Orders have increased as consumers continue to gain more confidence in the economy. Replacement demand continues to be a primary driver, as well as the expansion of some fleets to meet tightening freight capacity.”
Mack Trucks’ John Walsh, vice president of marketing, said higher orders were “spurred primarily by replacement demand as well as the expansion of some fleets amidst the current freight environment.”
One analyst said last week that the trucking industry is feeling optimistic about the economy and that fleets are continuing to order and buy trucks to boost their bottom line.
“The industry really needs these trucks. Freight’s good, profitability’s good, fleets are [getting] old — my expectations are that order rates will continue to accelerate,” said Rhem Wood, a transportation industry analyst with BB&T Capital Markets.
Associate News Editor Jonathan S. Reiskin and Staff Reporter Seth Clevenger contributed to this story from San Diego.
