Preliminary December North American Class 8 truck orders are stable

Preliminary North American Class 8 orders were stable in December, according to data issued respectively this week by 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 20,000, rose 14% from November’s 17,300 to December. November’s tally was the lowest for the month going back to 2015. While the 14% sequential gain is sizable, FTR said that it December remained below what it called “less than robust results” from October and were down 7% compared to December 2018. And it also stated that Class 8 orders for 2019 came in at 179,000 units.

The firm said that motor carrier fleets are being very cautious in the current market environment and are ordering only what they know will be needed over the next few months. And it added that for the fourth quarter Class 8 orders averaged just under 20,000 units per month, which it said is right at replacement demand levels, with the expectation that order rates are expected to remain in the 20,000 per month range in the coming months.

“This is as balanced and stable as you are going to see in Class 8 ordering,” said Don Ake, FTR vice president commercial vehicles, in a statement. “Fleets are ordering trucks according to their standard replacement cycles and also for normal delivery cycles. They are not speculating about the future direction of the freight market because there is too much uncertainty. This is a ‘wait and see’ approach. The freight market is strong, but growth has stalled. The good fleets are making money, the weak fleets are leaving the industry. It is a rebalancing environment. Fleets have the funds to replace old units and with a growing economy, they have the confidence to do so. However, the equipment market is in a holding pattern due to economic and political factors. The political uncertainty will only intensify up to the election.

Data from ACT matched up with FTR’s, with the firm reporting that Class 8 orders for December came in at 20,000, for a 14% gain over November and a 6.5% annual decrease. ACT said that these December numbers come in at a time when the industry starts to transition to easier annual comparisons.

“Overbuying through 2019 and insufficient freight to absorb the ensuing capacity overhang continued to weigh on the front end of the Class 8 demand cycle in December,” said Kenny Vieth, ACT’s President and Senior Analyst, in a statement. “Recalling July and August, orders were down 80% from the corresponding months in 2018. December’s orders brought the full-year 2019 volume to 181,000 units versus 490,100 units in 2018. For all of Q4, Class 8 orders were booked at a slightly above the 2019 trend 195,600-unit SAAR.”