Class 8 truck orders in November drop after a promising October. North American Class 8 orders for November were 17,300 units, down 21 percent from October, and was the lowest November total since 2015, according to FTR’s preliminary report. ACT Research reports 17,500 units in November, down 20 percent from the previous month.
FTR reports fleets are remaining extremely cautious heading into 2020, placing small orders and not extending orders too far beyond the first quarter. A couple OEMs reported decent order activity, but total orders fell below expectations. Class 8 orders for the past 12 months have now totaled 180,000 units.
“The fall order season has gotten off to a slow start. Freight growth has stalled from the high rates of last year. This is causing fleets to be much more measured in their ordering for 2020. There still will be plenty of freight to haul, so we expect fleets will continue to be profitable and to replace older equipment. However, there won’t be a need for much additional equipment on the roads,” says Don Ake, FTR vice president, commercial vehicles.
“There is still a great deal of uncertainty in the environment, which is creating apprehension in the trucking industry. Manufacturing has receded for four straight months, slowing economic growth. The trade war and tariffs are destabilizing prices and supply chains and the tumultuous political climate just adds to an uneasy mix. The industry thrives on stability, but we are now on a rocky road,” Ake says.
Preliminary November data indicates Class 8 net orders failed to sustain October’s “encouraging” start to the order season, says Tim Denoyer, ACT vice president and senior analyst.
“The freight market downturn worsened in the past month and uncertainty surrounding trade and tariffs continue to weigh on truck buyers’ psyches. With rising pressure on carrier profits from the combined impact of lower rates and the recent, rather sudden jump in insurance premia, recent events have not developed in the industry’s favor,” Denoyer says.
“While private fleets continue to add capacity on the retail end, the market is increasingly heeding for-hire price signals and the stage is being set to right-size the fleet, bringing it closer to equilibrium with the work to be done,” he adds.
ACT also reports Classes 5-7 orders fell 8 percent month over month in November to 15,300 units.
“This marks an eighth consecutive month of below-trend net order activity [for the medium-duty segment], likely reflecting souring investment sentiment amid ongoing trade uncertainty and adding pressure to the 2020 production outlook,” Denoyer says
Complete industry data for November, including final order numbers, will be published by ACT Research in mid-December.
Final data for November will be available from FTR later in the month as part of its North American Commercial Truck & Trailer Outlook service.
