Trucking Industry in Chaos! Orders PLUMMET as Carriers RACE to Buy New Trucks?
Truck company earnings are weak, but new truck orders are surprisingly strong. Analysts say the slowdown in April is seasonal and OEMs are still fulfilling orders at a healthy pace. Despite the economic uncertainty, carriers are still investing in new trucks.
CONTENTS: Trucking Industry
Mixed Signals for Truck Orders
The downturn in the trucking industry, reflected in poor first-quarter earnings for both truckload and LTL carriers, is showing varied effects on new Class 8 truck orders, according to leading data tracking firms.
FTR Transportation Intelligence indicated that initial net orders for April stood at 14,000 units. This marked a 28% decline from March figures but represented a 12.5% increase compared to April 2023.
Upbeat View on April Orders
Trucking Industry
In contrast, ACT Research reported Class 8 net orders for last month at 15,600 units, representing a decrease of 1,800 units, or 10.3%, from March but indicating a 30% increase from the previous year.
FTR commented that April’s truck order figures align with recent demand patterns and meet seasonal projections. Strong first-quarter numbers have alleviated worries about a sudden drop in demand. FTR noted that the market for new Class 8 vehicles is slightly surpassing replacement-level orders.
Steady Pace for Truck Builds
Over the previous three months, new orders have averaged approximately 25,000 tractors. FTR noted that the slowdown seen in April is typical for the season.
According to FTR, original equipment manufacturers (OEMs) are still maintaining a healthy pace in filling build slots. While many OEMs experienced decreases in orders, some observed slight upticks.
Carriers Invest Despite Slowdown
Trucking Industry
Dan Moyer, senior analyst for commercial vehicles at FTR, remarked in their release that despite the decrease in orders compared to the previous month, the notable increase from April 2023 suggests a robust market. Moyer acknowledged the ongoing stagnation in the freight market but highlighted that this hasn’t dissuaded trucking companies from investing in new trucks.
OEMs Meet Order Expectations Despite Challenges
Ken Veith, President and Senior Analyst at ACT, characterized the freight market as experiencing a prolonged period of stagnation with persistent overcapacity and disappointing profitability in the first quarter.
Despite these challenges, Veith noted that the order books at original equipment manufacturers (OEMs) are generating outcomes that meet expectations.
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