Class 8 net orders for the North American markets totaled 28,900 units in March, almost 4,800 units over February – pushing the Class 8 production backlog up to almost 108,000 units by month’s end, according to data tracked by ACT Research Co.
That backlog is almost 150% above the same time last year, reaching a level not seen since December 2006, noted Frank Maly, ACT’s director of CV transportation analysis and research at ACT.
“For the past 6 months, Class 8 orders have been booked at over 300,000 units on an annualized basis, [so] strengthening orders [are] outpacing production increases,” he said. “Further improvement in production levels will definitely occur as we proceed through 2011.”
Steve Tam, ACT’s vice president-commercial vehicle sector, added that the “structural fundamentals” of the trucking industry remain sound, despite the ongoing surge in oil prices and thus diesel fuel costs, meaning Class 8 order intake should remain strong.
“Obviously, fleets are paying more at the pump for diesel fuel, but that’s being offset by their ability to impose and collect fuel surcharges,” he told Fleet Owner. “Although collection of fuel surcharges lags diesel price increases somewhat, right now it’s not affecting cash flow for the mainstream. Freight volumes are up and fleets are retaining pricing power, so business is good.”
The need to replace aging equipment is at the heart of this boom in orders, Kenny Vieth, ACT president & senior analyst, told Fleet Owner in comments earlier this year, but it’s continued strengthening of the industry’s economics that are allowing it to occur.
Analysts suggest fleets need to bring in significant numbers of new equipment as the average age of Class 8 trucks in U.S. fleets is now 6.5 years – the highest it’s been in 30 years.
“There’s also a strong ‘forward component’ to [new truck] orders right now,” Vieth added. “Fleets are not placing orders now and expecting trucks to be delivered several months down the road; they want those new units as soon as possible. That ‘immediacy’ of new truck demand has been a key trend.”