Class 8 Truck Orders Post Significant Gains from a Year Ago

December 06, 2017 by Clarissa Hawes

November orders for new trucks in the heaviest Class 8 weight segment surged 71 percent compared with the same month a year earlier.

Despite an 8 percent drop from October, big rigs continue to significantly outperform last year’s sales, according to FTR Transportation Intelligence.

Trucking firms ordered 32,400 Class 8 trucks in November. “Orders for Class 8 trucks have been sturdy and consistent,” said Don Ake, vice president of commercial vehicles at FTR. “The orders are right in line with our forecast of stronger production and sales in 2018.”

Orders for Class 8 trucks also surpassed 30,000 units for the second straight month. So far this year, truck orders for the North American market hit 274,000 units, FTR said.

New regulations may cut into freight productivity increasing the need to put more trucks on the road. That will help the new truck market.

Electronic logging devices, or ELDs, which will become mandatory on trucks on Dec. 18, are expected to “reduce productivity” over the next year, Ake said.

That’s because fleets already using ELDs are experiencing a 10 to 12 percent drop in productivity. The tracking devices cause a shift in the way trucking companies do business and there will be a learning curve as they adapt, Ake told Trucks.com.

ELDs link to a semi truck’s engine, capturing the movement and recording how much time a driver spends behind the wheel. Truckers must comply with a federal hours-of-service rule limiting driving to no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours.

The initial productivity loss typically shrink to around 3 percent after a year, depending on the fleet, he said.

The productivity problem most likely will impact smaller fleets over the next year as many larger fleets have jump started the learning curve. Most already have the devices installed on their trucks.

“Any restriction on productivity is going to be significant,” Ake said.

Potential problems could be looming as freight growth continues, but capacity tightens as the demand for more drivers continues to plague fleets.

“Wages still need to go up for truckers, they have improved some, but not substantially enough to alleviate the problem,” Ake said.

Manufacturers took preliminary orders for 259,153 Class 8 trucks during the first 11 months of this year, a 57 percent increase compared with the same period a year earlier, according to ACT Research.

New orders for Class 8 trucks are expected to come in at round 32,900 in November, an 8.7 percent drop from October, but up 69 percent from this same period a year ago, said Steve Tam, vice president of ACT Research.

November was still the second-best order month since January 2015.

December is typically the strongest order month of the year, Tam said.

“We think there’s a good chance of beating that October number [36,200], but it’s not a lock,” Tam told Trucks.com.

In 2018, ACT is forecasting that new Class 8 truck orders will be around 322,000, a 26 percent increase from 2017, Tam said.

“As an industry, through 2018, I think we will be increasing fleet size,” Tam said. “Some of the largest, publically traded companies may not, but some of the smaller and regional fleets – they are going to make that investment and add a few trucks.”

A broader set of North American truck orders – Classes 5-8 trucks – were 53,000 units in November, down slightly from a month ago, but up 44 percent over the same period a year ago. November’s order numbers were the best since February 2015, said Kenny Vieth, president and senior analyst at ACT.

Seasonally adjusted, orders rose 16 percent from October to 20,400 trucks in Class 5 through 7 weight segments in November and up 17 percent year-over-year. November’s order volume generated the “best year-over-year performance in six months,” according to ACT.

“Seasonal adjustment, which was a drag in October, turned incrementally positive in November,” Vieth said.

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