Transportation order volumes mixed on high trailer demand, low Class 8 orders

Net order volumes of new trailers and Class 5 to Class 8 trucks were mixed in April as the transportation industry saw more demand for trailers and a continuing decline in demand for Class 8 vehicles.  

ACT Research reported May 21 that it expects a turnaround in the Class 8 market. April is expected to be the last month for “above replacement-level Class 8 tractor capacity additions,” the Columbus, Ind.-based analytics firm predicted in its new report on the state of the North American transportation industry.  

“We’re probably either at or just past the bottom on the macroeconomic and freight side,” ACT Research Vice President Steve Tam told Equipment Finance News. “We’re starting to see improvements in freight.  

“The first quarter, from a seasonality perspective, is usually pretty tough, and we got handed nasty weather in January, which threw a bigger wrinkle than normal into things,” Tam added.  

But the industry is rebounding and “demand for equipment has remained pretty robust. We’ve actually seen sequential year over year increases in volumes in most outlets,” he said. 

The order count 

ACT Research’s May report found:  

• Preliminary counts of net trailer orders in North America totaled 13,700 units, up 21% YoY in April; 
• Final North American Class 8 net orders were 15,850 in April, up 32% YoY;  
• U.S. Class 8 tractor orders were down 25% in April; and 
• Total North American orders of Class 5 to Class 7 trucks were up 1.9% YoY in April to 18,863 units. 

Coming regulations impact trailer orders  

Orders of trailers are up because supply chains are easing, ACT Research reported.  

“Against year-ago data, with pent-up demand beginning to wane and supply-chain congestion, for the most part, cleared, order activity continues to meet expectations,” ACT Research Director of Market Research and Publications Jennifer McNealy said in the report.  

But trucker profitability and upcoming stricter emissions standards enforced by both the U.S Environmental Protection Agency and the California Air Resources Board remain a concern for operators and fleet managers. These changing standards could result in a downturn in trailer orders in the short term as operators opt to save money now to pre-buy more expensive equipment that is regulation-compliant later.  

“While we do see fleets starting to make more money later this year, thereby increasing their ability to purchase equipment on the horizon, the impact likely will be muted for the trailer industry,” McNealy stated in the report. “We continue to expect their willingness to spend those available dollars will lean toward the purchase of new power units ahead of the EPA’s implementation of 2027 regulations, which we believe has already begun,”  

ACT Research has anecdotally heard that the “pause button is expected to remain pressed” during the next year as dealers and fleets reassess their inventories and needs, she noted.  

Class 8 truck production is expected to decline 16% through 2024 before it returns to a growth pattern in 2025 and 2026 as manufacturers increase output in advance of 2027 regulations, analysts at William Blair reported in March.