As the global economy continues to groan under the weight of the coronavirus crisis, a “significant number” of North American trucking fleets have canceled their orders to buy new Class 8 vehicles in response to the market’s sharp and sudden downturn, according to a report by the research firm FTR Transportation Intelligence.
Preliminary North American Class 8 orders plummeted in March to 7,400 units, their lowest order total since 2010 and a whopping drop of -48% from one month earlier, and -52% from the same month last year, Bloomington, Indiana-based FTR said.
FTR does not expect demand to rebound anytime soon, saying fleets are limiting their orders to short-term, definite needs as they face uncertainty over the duration of the Covid-19 crisis. The firm anticipates that monthly orders will stay near the 10,000-truck mark “for a few months” until economic activity regenerates. Looking at future trends, FTR says the second quarter of 2020 will be tough on the Class 8 market, and the third quarter is still highly uncertain.
“The only good news here, is that the number was still positive despite the high number of expected cancellations,” Don Ake, FTR’s vice president commercial vehicles, said in a release. “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.”
The numbers were nearly identical to another report released yesterday by ACT Research Co., which found that preliminary North American Class 8 net orders in March fell to 7,800 units, down 45% from February and 51% lower than a year ago.
The collapse in truck purchase statistics actually moved in the opposite direction from freight rates, which have enjoyed a recent increase, Columbus, Indiana-based ACT said. The reason is that the trucking sector is seeing high demand due to China reopening its plague-shuttered factories and U.S. stores restocking shelves to meet consumer shopping sprees.
“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,” Kenny Vieth, ACT’s president and senior analyst, said in a release. “However, increasingly bad news on the Covid-19 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.”
