Coronavirus affects Class 8 truck orders in March

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Updated Apr 7, 2020

Uncertainty over the duration of the COVID-19 crisis is limiting truck orders to short-term, definite needs, according to FTR, which is reporting preliminary North American Class 8 orders fell in March to 7,400 units. ACT Research is reporting 7,800 units for the month.

The March tally is the lowest order total since 2010, according to FTR. Orders decreased 48 percent month over month and 52 percent year over year.  FTR says a significant number of fleets canceled orders previously placed due to the sharp and sudden downturn in economic conditions.

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FTR expects orders to stay near the 10,000-truck mark for a few months until economic activity regenerates. Class 8 orders have totaled 170,000 units over the past 12 months.

“The only good news here is that the number was still positive despite the high number of expected cancellations. The gross order number is probably higher than 10,000 trucks, which means at least some fleets need more vehicles. A few carriers are doing well in the short-term, depending on the region and the type of freight being hauled,” says Don Ake, FTR vice president, commercial vehicles.

“It is expected that most fleets will pause their replacement cycles due to the crisis. Large fleets that have immediate needs and the financial resources will continue to place modest orders,” Ake says. “Additionally, smaller fleets may tap into the used truck market for their short-term needs to reduce the financial risk. The second quarter will be tough on the Class 8 market and the third quarter is still highly uncertain.”

ACT is reporting March orders were down 45 percent from February and 51 percent lower than the same period a year ago. March’s Classes 5-7 net orders were 14,700 units, down 36 percent from February and 31 percent from year-ago levels.

“Supply-side restocking on goods from China and demand-side restocking to support the surge in consumer staples actually created a positive, if temporary, inflection in freight rates,” says Kenny Vieth, ACT president and senior analyst.

“However, increasingly bad news on the COVID front through the month and manufacturing beginning to shutter at the end of March were a heavy weight on an already overcapacitized industry operating a very young fleet.” Vieth says. “On a seasonally adjusted basis, March was the weakest Class 8 order month since February 2010 and with COVID-19 becoming an even hotter topic over the course of March, one wonders about the impact on order activity on a go-forward basis.”

Regarding medium-duty activity in March, he says, “After a reasonably buoyant February, the medium-duty market felt the impact of COVID-19, if with less severe symptoms than Class 8. It is important to remember that March marks the beginning of the peak order season for medium duty vehicles.”

Final data for March will be available from FTR later in the month as part of its North American Commercial Truck & Trailer Outlook service. ACT Research will report final order numbers for March by mid-April.

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