The production of heavy-duty commercial vehicles appears to be bogged down, again, due to parts shortages, resulting in demand far exceeding manufacturing capabilities.
“As we’ve said for some time, commercial vehicle demand is hot, but supply chain problems persist. While demand is as strong, or stronger, than it has ever been for both medium- and heavy-duty vehicles,” Kenny Vieth, ACT Research president and senior analyst, reportedly said. “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.”
Backlogged Class 8 truck orders and reinvestment into late-model rigs appear to be driven by parts shortages. It’s no secret that China continues its zero-covid policies and millions of workers are under lockdowns. Asian truck drivers are experiencing movement limitations, container ships are delayed, and manufacturing plants are closed or slowed. With components not readily available, semi-truck makers struggle to fulfill tractor-trailers orders this year, and that trend could continue.
“We’re not ready to open up fully the 2023 order board because of the uncertainties of what the parts supply is going to be and the cost,” Paccar Inc. executive Preston Feight reportedly said. Paccar manufacturers Peterbilt and Kenworth trucks.
Difficulty securing parts, particularly semiconductor chips, prompted Class 8 truck manufacturers to cancel thousands of orders in 2021. Commercial motor vehicle manufacturers are also reportedly fielding 55 percent fewer orders than in the first quarter of 2021. With limited availability and Class 8 truck prices rising, fleet operators are inclined to stand pat, even with high-mileage semis they would normally trade-in.
For example, Las Vegas-based Truline Corp usually buys 60 new trucks annually and maintains a fleet of 300. The outfit received 30 Peterbilt heavy-duty trucks in March. But the problem for this and other freight-hauling operations is the trucks were ordered early last year with an initial delivery date of August 2021. The food and beverage hauler doesn’t anticipate ordering replacement vehicles, given the systemic delays driven by parts shortages. Organizations such as Truline are resigning themselves to decline freight contracts because they are unable to expand fleets.
Although economists anticipated something of a manufacturing rebound in 2022, wide-reaching Covid-related and supply chain issues have tamped down production. Normal annual North American truck order completions typically exceed 300,000. Truck makers churned out 344,560 in 2019 before backsliding to 264,470 in 2021. ACT Research has reportedly down-graded production expectations for 2022 from 300,000 to 296,000 based on first-quarter output and parts scarcity.
“Demand continues to outstrip the industry’s ability to build trucks,” Vieth reportedly said.
Although the industry continues to face adversity, there are ample truck driving opportunities available for current and future CDL professionals. The year-over-year workforce shortage shows no sign of slowing, and companies need more drivers to haul goods and materials using rigs already in service.
Sources: wsj.com, fleetequipmentmag.com
Having back orders for parts on new trucks, it helps to sell used equipment. Price gouging if used junk has risen as well as after market parts.