The first signs of trucking's pre-buy ahead of 2027 emission regulations might be underway.
ACT Research reported Tuesday that trucking industry data was disinflationary in May, with truck orders rising despite lower Cass shipments and stalling spot trends. The company says the activity could show an industry prioritizing planning for emissions rules over cost economics.
“Typically by this point in the cycle, Class 8 tractor orders have fallen considerably further, but longer-term considerations are outweighing cost economics in many cases,” says Tim Denoyer, ACT Research’s vice president and senior analyst. “Strong truck orders provide more evidence of pre-buying ahead of 2027 emissions standards, likely extending overcapacity a while longer.”
But there is evidence not every carrier is thriving and capable of expanding at this point.
“Small fleets remain resilient as ever, but the record number of operating authority revocations over the past 18 months shows considerable capacity contraction,” Denoyer adds. “For-hire truckload conditions are taking longer to improve this cycle than in prior ones, partly because of that resilience. But we think the ongoing capacity expansion by private fleets is outweighing the capacity contraction in the small part of the market.
[RELATED: ACT Research updates Class 8 forecast]
He adds, “Elevated equipment demand as fleets gear up for EPA 2027 is a key factor likely to drag overcapacity on even further. The for-hire cycle will improve once excess capacity additions end. That will likely be a while.”
Finally Denoyer says on the ongoing question of whether the truckload market rebounds or continues to bounce along the bottom, “this situation may lead to some more bounces.”
