After pushing its 2024 North American Class 8 production forecast upward earlier this year, ACT Research chose to make no changes to its forecast this month, the company announced Monday in its industry outlook report.
While 2024 retail expectations were unchanged, ACT says to date its Class 8 production forecast has ticked up on a massive production beat relative to expectations in February.
“With the preliminary look at March orders indicating that demand may finally be cooling from non-fundamental levels, and recognizing that Q2 through mid-Q3 is the historically weakest period of the year for orders, we are more comfortable with the 2024 forecast from here,” says Kenny Vieth, ACT’s president and senior analyst. “With spot rates still at sharp operating loss levels into early April, and carrier profitability halved in the past two years, we continue to pose the question, 'Who’s buying Class 8 tractors at the bottom of the cycle?'
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“Certainly, it is not embattled for-hire TL fleets,” he says. “Our answer over the past year has been private fleets, who have reclaimed freight from load boards and taken market share from for-hire markets.”
Vieth also notes ACT Research's expectation that recent sharp contractions in for-hire carrier profits would force the market to rebalance in 2024 has given way to private fleets heeding OEMs’ cautions about 2027 costs three years ahead of the EPA’s Clean Truck mandate.
“Current estimates are putting the day one cost of the mandate, inclusive of taxes, at around $30,000 per Class 8 unit. Most of that added cost is tied to the warranty and useful life extensions," says Vieth. “With around 40% of Class 8 buyers purchasing warranty extensions due to high-mileage operations (for-hire TL), not all carriers will feel the regulation’s bite equally.”
He also notes, “Given the anticipated pre-EPA’27 mandate demand swell into 2026, supply chain integrity is an especially critical CV activity in 2027. Private fleet capacity positioning is just one part of the ‘this purchasing cycle is different’ story along with ongoing domestic vocational and Mexico market strength.”
