According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, April Class 8 net orders pulled back to a seven-month low, with benign cancellations. ACT Research attributes the order pullback not to any slowing in demand, but a reflection that the 2021 backlog is essentially filled.

“As we’ve said for some time, commercial vehicle demand is hot, but supply chain problems persist,” said Kenny Vieth, ACT Research’s President and Senior Analyst. “Since the end of last year, ACT has been reporting that the 2021 question is not one of demand, but rather supply.”

 Vieth noted, “The freight economy continues to enjoy broad-based strength, evident in freight rates that caught fire last July and have remained at or near record levels for months. With freight rates at current levels, carrier profits are soaring. Finally, jammed ports, inventory restocking, and persistently tight driver capacity suggest that the current freight and profitability landscape has legs, giving truckers the confidence to buy equipment.”

By commercial vehicle segment, Vieth commented, “While demand is as strong, or stronger, than it has ever been for both medium- and heavy-duty vehicles, the industry’s ability to tackle that backlog has been beset by a series of issues that have thrown roadblocks in front of its ability to turn orders into trucks, including chip shortages, steel output, and plastic resin availability. Capacity to produce Class 8 vehicles this year essentially is full, and using 2018 as a guide, we would expect OEMs to begin opening 2022 order books in June and July. Broad-based economic strength continues to build the best medium-duty market since ACT began reporting data, with the order trend eclipsing the prebuy-fueled market of 2006.”

ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders and retail sales.

ACT Freight Forecast: Rates Up, Supply Chain Constraints Persist

ACT Research released the latest installment of the ACT Freight Forecast, U.S. Rate and Volume OUTLOOK report.

Tim Denoyer, ACT Research’s Vice President and Senior Analyst, said, “Supply side constraints will keep the truckload market very tight in the near-term, as freight demand remains exceptionally strong, so the peak in spot markets remains ahead of us.”

Denoyer added, “The semiconductor shortages impacting Class 8 tractor supply don’t have quick fixes, and neither do the structural factors inhibiting driver supply, such as demographics and drug testing.”

He concluded, “This is perhaps the strongest freight market ever for carriers and the most challenging ever for shippers. But in our view, the industry is no less cyclical, and in our three-year freight volume and rate forecast horizon, we explore the timing and magnitude of eventual rate relief for shippers.”

The monthly 56-page ACT Freight Forecast report provides three-year forecasts for volumes and contract rates for the truckload, less-than-truckload and intermodal sectors of the transportation industry. For the truckload spot market, the report forecasts rates for the next 12-15 months.