Orders Class 8 trucks in North America March decreased 8.7% year over year, according to data from industry analytics firm ACT Research.
Orders have steadily declined since late 2023, and March was the first month since May 2023 when orders dropped below 20,000 units, ACT Research reported. Net orders of Class 8 vehicles in March totaled 17,100 units, down 10,400 units since February, according to ACT Research.
“Nascent improvements in the freight market and select OEMs’ efforts to smooth demand, notwithstanding forced conservatism among a portion of the truck buying populace, capped Class 8 order activity in March,” Steve Tam, analyst and vice president of ACT Research, said in a statement. He added that “while we will have to wait for the details of the month’s order volumes, logic suggests waning demand for tractors in the market retrenched in March.”
The bigger picture
New truck orders are dropping, and operators with financing arrangements for both new and used vehicles are pinching pennies. The industry expects rising delinquencies and defaults on equipment loans in the coming months.
“Trucking is in an industry-specific recession,” Kit West, business development director at Wyoming truck lender C.H. Brown, told Equipment Finance News last week.
Lenders are clamoring for a Federal Reserve rate cut that would give the industry some relief. But without enough goods to move, the trucking industry could remain in turmoil.
The lack of a consistent amount of freight to ship combined with rising inventory rates make profitability difficult across the industry, West said. Tonnage shipped fell 1.7% year over year in 2023, according to analyst Carl Chrappa, senior managing director of the asset management division at equipment advisory company Alta Group.
Inventory levels for medium-duty trucks, heavy-duty trucks and semitrailers all were up YoY, according to data from Sandhills Global in February.
“Fright rates will definitely play a role in orders of new trucks, especially for fleet companies,” Sandhills Equipment Lease and Finance Manager Jim Ryan told EFN. He added decreases in “inventory levels are not going to stop this year in Class 8. The more lease returns that hit the market, the more it’s going to put a strain on late-model dealer inventory.
“A lot of the new orders from what I have heard are pre-sold, but with the rising cost of new trucks again, this will do nothing but put a real strain on used inventory, especially late-model inventory.”
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