Class 8 truck orders come out of the gate slowly to start 2019

Class 8 commercial truck orders were down in January, according to recently issued data from two U.S.-based companies tracking commercial truck buys and orders.

By ·

Class 8 commercial truck orders were down in January, according to recently issued data from two U.S.-based companies tracking commercial truck buys and orders.

ACT Research reported that based on preliminary North America Class 8 net order data, 15,800 units were ordered in January, which represents a 26% decline compared to December and a 68% annual decline.

“Regarding Class 8, recall that January 2018 marked the point at which orders went vertical,” said Kenny Vieth, ACT president and senior analyst in a statement. “We view this January’s order softness as having more to do with pulled-forward orders and a very large Class 8 backlog than with the current supply-demand balance. Softening freight growth and strong Class 8 capacity additions suggest that the supply-demand balance will become a story in 2019, but January seems a premature start to that tale.”

Data from freight transportation consultancy FTR noted that ordered Class 8 units in January were off 26% compared to December and the lowest monthly output going back to October 2016’s 15,600 units.

FTR added it was the lowest order month for January since 2010, while observing that January’s low Class 8 order number was somewhat expected, given that the majority of fleets already have all of their 2019 orders in the books and are not expected to place additional orders for a while. While Class 8 order backlogs are pegged to decrease, FTR said it expects the rate to be more than 70% higher annually, adding that over the last 12 months, Class 8 orders are at a total of 402,000.

“Orders had to fall below 20,000 units at some point,” said Don Ake, FTR vice president of commercial vehicles, in a statement. “There were record breaking orders placed last July and August, and this is the payback for that volume. Even with the weak January numbers, over 330,000 trucks have been ordered in the last nine months, so demand for trucks in 2019 remains strong. This is more of a resting point than a turning point. There is an enormous amount of orders in the backlog. The key will be how many of these trucks get built and when. The fundamentals of the economy and freight growth remain solid, so there is no reason to panic.

Ake added that the production rates the first few months of the year will be a better indicator of Class 8 demand than current orders are, saying that FTR expects the cancellation rate to remain elevated, as fleets move their orders around in the backlog.

“Order rates are expected to remain suppressed for a few months, but build rates and retail sales are forecast to climb,” he said.

Ben Hartford, transportation analyst at Robert W. Baird & Co., commented in a research note that these lower Class 8 unit orders could be intact for a while.

“Continued weakness in Class 8 net orders and elevated cancellation rates are likely during 2019,” he wrote. “Combined with expected growth in 2019 build rates (~335k, +5% yoy), backlogs should fall through 2019, improving investor sentiment among cyclical truckers on the margin. That said, while annual replacement demand for Class 8 units is likely above the implied current level (~265k), incremental fleet growth in 2019 is expected given assumed 2019 build levels, limiting visibility to the timing of a trough in industry yield growth -- an important catalyst for cyclical truckers, in our view.”


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Practical advice for integrating new technology
As one of the world’s leading location platforms, HERE shares insights and tips to streamline the supply chain technology integration across the whole organization.
Download Today!
From the August 2019 Logistics Management Magazine
The staff of Logistics Management (LM) is honored to present the logistics and transportation community with the results of our 36th Annual Quest for Quality Survey
Ocean: Protecting margins in a soft market
Warehouse Voice Technology Speaks for Itself
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
Creating the ROI for Multi-Carrier Parcel Shipping Solutions
This webinar will reveal how manufacturers, retailers, and 3PLs can utilize their own data to identify and demonstrate ROI for multi-carrier parcel shipping by leveraging state-of-the art business intelligence to increase performance.
Register Today!
EDITORS' PICKS
36th Annual Quest for Quality Awards: Winners in the spotlight
Which carriers, third-party logistics (3PL) providers and U.S. ports have reached the pinnacle of...
State of Logistics in 2019: What’s next?
Tight capacity, high rates, rapid e-commerce growth and a booming economy fueled an 11.45% rise in...

Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...
alumix.com.ua

https://bigcircus.com.ua