- Class 8 orders for June indicate a revival in production and freight, ACT Research said in its monthly report on OEM sales. ACT reported 16,010 net orders in June, up 139.3% from 6,690 units in May.
- Orders for Class 5-7 trucks also had their best sequential monthly movement since just after the Great Recession ended in September 2009, ACT said. The overall commercial vehicle market is returning to normal, according to the report.
- Part of the surge is just the base of comparison, a time when many OEMs idled for several weeks during the COVID-19 pandemic, according to Steve Tam, ACT VP and analyst. Triple-digit percentile point leaps are not likely a trend because orders rebounded from what is likely to be a low point in recent history.
Another reason for the surge in orders is that OEMs may have opened their books, and have started to take orders for 2021 earlier than normal, Tam told Transport Dive on Monday.
But the numbers merely show a "reversion to the mean," Tam said in a brief interview. And OEMs are not out of the woods yet. The industry has a ways to go before it returns to pre-COVID-19 levels, Tam said. The economy and motor freight have been growing from May to mid-July. But business leaders may be deterred from a new and recent surge in COVID-19 cases.
Tam has yet to determine what kind of growth is in the orders: Is it replacement-level buying or is it fleets expanding? The latter is more attractive to OEMs as it includes the former. Tam believes the orders represent replacement buying, and have yet to show fleets are growing their numbers.
FTR previously found similar numbers for June. FTR reported on July 7 that Class 8 net orders in June went up 130% to 15,500 units, and were up 20% year over year. Class 8 net orders for the last 12 months now total 158,000 units, FTR reported.
Order volume should exceed the 10,000-unit mark "throughout the summer as freight volumes continue to improve," the report said. "The June order volume may not be sustainable in July, however, because some of the larger fleet orders may be difficult to replicate in the short term."
But the confidence that fleets showed in orders was a healthy indication, FTR said. Don Ake, FTR VP for commercial vehicles, said it is "encouraging that fleets are showing enough confidence in the economy to begin placing some viable orders."
"The trend should continue, but a significant increase is not expected until October when the big fleets begin placing orders for 2021 delivery," Ake wrote.
As for freight movement, Cass' June 2020 report says U.S. freight volumes "will not return to 2019 levels until 2021 at the earliest." While the Cass Freight Index for shipments was up 3.5% over May, the number was down 17.8% year over year.