Preliminary Class 8 truck orders see lowest order levels in years

By LM Staff · May 7, 2020

Preliminary North American Class 8 truck orders saw steep declines, driven on by the impact of COVID-19, or coronavirus, according to recent data issued respectively freight transportation consultancy FTR and ACT Research, a provider of data and analysis for trucks and other commercial vehicles.

FTR reported that preliminary North American Class 8 orders—at 4,000 units—fell significantly for the second straight month, with April’s order activity marking the lowest in the modern era, going back to 1996. April’s low output was down 44% compared to March and was off 73% annually, with Class 8 orders over the last 12 months, at 160,000 units.

The firm noted that fleets are delaying ordering trucks until the economic uncertainty over the COVID-19 crisis abates. And it added that fleets also canceled a significant number of orders, which were scheduled for near-term deliveries. For May, FTR said orders are pegged to head up around 10,000 units, with Class 8 order activity after that being highly dependent on the speed and strength of the economic recovery.

“Despite all the economic calamity and a significant number of cancellations, Class 8 orders managed to generate a gain in April,” said Don Ake, Don Ake, FTR vice president commercial vehicles, in a statement. “OEM production was shut down for most of April, yet order activity endured. There still are a few fleets that need new trucks. We expect retail sales to be somewhat higher than expected in April. The industry received a shock right along with the economy due to the virus response. Fleets will remain extremely cautious going forward, but we expect orders to modestly increase as the freight markets recover. We have already seen some signs of life in refrigerated freight and expect improvement in dry van freight soon. The industry recovery will begin in May, but it will be gradual, just like the overall economy.”

Data from ACT was in line with FTR’s, with the firm reporting that Class 8 orders for April—at 4,100 units—was off 46% compared to March and down 72% annually, which it called an easy year-ago comparison.

“April represents the first full month of COVID-19 impacts on the trucking industry, and given broadly halted economic output leading to a sharp drop in freight volumes and rates, as well as more empty miles from fragmented supply chains further impacting carriers’ profitability, a negative order number was within the realm of possibilities,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. “We suspect that, as was the case in March, instead of cancelling, order holders are content to move orders from close-in to later build dates, as they analyze the ongoing COVID impact. From a seasonal perspective, April is a relative neutral Class 8 order month, and as such, seasonal adjustments adds little to actual data. On that basis, April was the weakest Class 8 order month since September of 1995, which actually produced a negative net order number.”

May 7, 2020