Chip shortage strains heavy-duty truck makers2 min read . Updated: 04 Mar 2021, 02:30 PM IST
- Surging orders for big rigs have the backlog at factories growing while key components are in short supply
The global semiconductor crunch is reaching assembly lines for heavy-duty trucks, as the shortfall in chips and other components hits manufacturers trying to fill surging orders from operators of big rigs.
North American production of Class 8 trucks, the biggest freight-carrying vehicles on highways, “has basically been flat since September in a market where more trucks are needed quickly," said Don Ake, vice president of commercial vehicles at transportation research firm FTR.
He said the backlog of orders at truck manufacturers has grown from 89,300 last June, after truckers had pulled back capacity plans in the wake of coronavirus lockdowns, to 205,000 in January, the most recent month for which those figures were available. Fleet operators ordered 44,000 heavy-duty trucks last month, more than triple the number they ordered in February 2020, according to preliminary data from FTR.
“The backlog is going to keep going up until production is able to do better," Mr. Ake said.
Truck manufacturers say the semiconductor shortage, which has pushed automobile manufacturers including Ford Motor Co., General Motors Co. and Honda Motor Co. to cut back factory shifts and reduce production, is part of a broader shortfall in components hitting their supply chains.
“Like the rest of the industry, we are navigating our way through a number of supply constraints, including those involving semiconductors, due to the steep ramp-up of production across the globe," Martin Weissburg, president of Mack Trucks and chairman of Volvo Group North America, said in a statement. “We’ve been able, thus far, to work our way through the issues without interrupting production," he said. “The situation is fluid, and we’re continuing to do everything we can to minimize the impact on customers."
A spokesman for Daimler Trucks North America LLC, whose brands include Freightliner, said labor and raw-materials shortages “continue to present challenges in our supply chain," but said the company has been able “to keep full vehicle production moving close to plan."
Columbus, Ind.-based engine maker Cummins Inc. is dealing with longer lead times on many components as well as absenteeism due to Covid-19, executives said in a Feb. 4 earnings call, adding the company expects the supply strains to ease in the second half of the year.
“It just feels like it’s a whack-a-mole, right?" Srikanth Padmanabhan, vice president of Cummins’s engine business, said at a March 1 investor conference. “Every day that we think of, there is a problem that we’ve solved and something else turns up… We’ve been working like this for the last 12 months and it’s going to be another 18 months and the entire supply chain is just exhausted," Mr. Padmanabhan said.
A spokesman said Cummins is working with suppliers and customers to mitigate supply-chain pressures and keep up with demand, adding that the company relies on multiple suppliers in a variety of markets. The company expects to meet its guidance.
Mr. Ake said manufacturers are dealing with shortages and rising prices on items from steel to the wiring harnesses that connect electronic components.
The crunch comes as tight trucking capacity is driving up shipping rates for companies rushing to restock pandemic-depleted inventories. That is giving fleets more cash to invest in new vehicles after a roller coaster year when freight volumes plunged in the early months of lockdown, then roared back as businesses reopened.
This story has been published from a wire agency feed without modifications to the text.