Dive Brief:
- NFI Group, parent company of transit bus manufacturer New Flyer, “saw record orders” in the first quarter of this year, President and CEO Paul Soubry said on the company’s earnings call Friday.
- Across North America, more than half of public bids are for zero-emission buses, but NFI deliveries of such vehicles last quarter accounted for about 18% of total new vehicle deliveries for the company, according to its financial results report.
- The industry’s struggle to deliver buses continues due to supply chain challenges, worker shortages and financial issues, with NFI reporting a record-high backlog valued at $11.7 billion.
Dive Insight:
Last year saw upheaval among transit bus manufacturers in the United States. Proterra entered Chapter 11 bankrupcty in August while Nova Bus said it would pull out of the U.S. market by 2025. NFI Group undertook a $444 million refinancing plan, which the company is working through. On the May 3 earnings call, Soubry said, “The first quarter was another major step in our recovery.”
In February, Soubry joined transit agencies, labor groups, suppliers and manufacturers along with the American Public Transportation Association and Federal Transit Administration at a White House roundtable on clean bus manufacturing. To help the bus industry, the FTA recommended that transit agencies make advance or progress payments to manufacturers, include price adjustment clauses in their procurement contracts, modify contracts to accommodate price increases and seek additional federal funds to cover those increases.
“We're actively discussing pricing adjustments with a number of customers,” Soubry said on the call, while cautioning that they only have a few older, inflation-burdened contracts in their current backlog.
“Supplier performance has seen significant improvement,” he said, cautioning that some risk remains and that NFI continues to see “some challenges” in labor availability. Going forward, however, he said, “We're now embedding contract labor price indexing on new orders wherever possible.”
NFI reported bus and motor coach deliveries up 42% in the quarter, year over year, and received its largest-ever combined order of 2,290 buses from the City of New York and the New York Transit Authority.
Looking ahead, NFI projects a record market in the public bid domain, anticipating procurement plans over the next five years for 21,350 “equivalent units,” which the company defines as a single 30-foot to 45-foot bus. An articulated transit bus counts as two units.
Soubry expects zero-emission buses to grow as a percentage of total bus deliveries, rising to between 30% and 35% this year and over 40% in 2025.
