Preliminary Class 8 trucks orders slipped last month, ACT Research and FTR reported Tuesday.
ACT Research pegged orders at 14,100 units, down 18 percent from January and 16 percent lower than 2019. FTR’s estimate also was 14,100 units, down 20 percent from January, 18 percent month over month and the lowest order activity for the month of February since 2010.
“Weak freight market and rate conditions, as well as a still-large backlog, continue to bedevil new Class 8 orders,” says Kenny Vieth, ACT’s president and senior analyst. “February is not a particularly strong Class 8 order month and this February’s results, seasonally adjusted, were the weakest monthly order rate since last August.”
FTR reports the slow month could be attributed to multiple factors. Fleets were already being very cautious in equipment purchases due to the flat freight market and slowing economy; now the COVID-19 virus has added to that uncertainty, the company says. Orders had been right at replacement levels for four months but now it appears fleets will take a pause in replacing older trucks until current anxiety dissipates.
FTR states Class 8 orders have totaled 177,000 units over the past twelve months.
“This is not good news for the trucking industry or the economy,” says Don Ake, vice president, commercial vehicles, FTR. “It appears fleets have decided to delay some orders until the health crisis has passed. There is no pressure for fleets to order more trucks since most carriers have enough capacity to handle current freight volumes.
He adds, “The market was already in a wait-and-see mode before the virus spread. Now, fleets are just waiting for things to calm down before returning to normal ordering patterns. The industry was already taking a pause after two years of great sales. The current uncertainty has just made more fleets leery of taking on additional risks.”
The market was stronger in the medium-duty space, Vieth says. ACT says its February’s Classes 5-7 net orders rose to an 11-month high 22,200 units, up 12 percent from January, but down 12 percent from a very strong year-ago comparison.
Regarding medium-duty activity in February, Vieth says, “COVID-19 did not seem to bother medium-duty vehicle buyers as much, as that segment reported a third consecutive month of solid orders. Starting in February, the calendar rolls into the peak order season for medium-duty vehicles.”