"> Class 8 orders drop to smallest total in nearly 3 years - 53' Reefer Trailer Rental Experts

Class 8 orders drop to smallest total in nearly 3 years - 53' Reefer Trailer Rental Experts

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Class 8 orders drop to smallest total in nearly 3 years 1
Class 8 orders drop to smallest total in nearly 3 years 2

Class 8 orders in North America fell to the smallest volume in nearly three years after the weakest month of May in a decade for heavy-duty trucks, according to preliminary research numbers.

FTR reported this week that Class 8 orders for May scraped the bottom of the order cycle, coming it at 10,400 units, or 29% below the slow April activity. This is the lowest volume for Class 8 orders since July 2016, according to both FTR and ACT Research. It was also the weakest month of May since 2009, reflecting a 71% drop year-over-year, according to FTR; ACT’s preliminary numbers show the year-over-year drop at 70%. Class 8 orders for the past 12 months now total 360,000 units, according to FTR.

ACT Research’s initial data show 10,800 Class 8 orders in May, which would be a 27% drop from a sluggish April.

“Fraying freight market and rate conditions along with a still-large Class 8 order backlog contributed to the worst North American Class 8 net order performance since July of 2016,” said Kenny Vieth, ACT’s president and senior analyst.

May saw NA Class 8 orders fall below the 15,900 units averaged through the year’s first trimester, according to Vieth, who added that year-to-date Class 8 net orders have contracted 64% compared to the first five months of 2018.

“May’s low orders were consistent with it being the last month in this year’s cycle,” Don Ake, FTR vice president of commercial vehicles, said. “The 2019 order pattern was pulled ahead by three months, so May’s orders are similar to what you normally would see in August. Ordering for 2020 is expected to begin in June, with several OEMs expected to start taking orders for next year.”

FTR Class 8 orders

May was essentially the last month for ordering trucks to be built this year, according to FTR, noting the small numbers indicate that fleets are just trying to find any open build slots left for the year. Backlogs should fall to the 220,000 range, according to FTR data, just where they were a year ago when the fervent ordering for 2019 began.

“OEM build rates remain at robust levels,” Ake added. “The economy and freight growth are expected to ease throughout the year, applying some downward pressure on the truck market in the second half.  Orders for the next couple of months should be a good indicator of fleet confidence about 2020.”

Regarding the medium-duty market, Vieth said that while the U.S. manufacturing/freight economy “has been droopy since late 2018, the medium-duty market continues to benefit from the underlying strength in the consumer economy.”

In May, North American Classes 5-7 net orders were 19,300 units, down 21% year-over-year and 19% from April, according to ACT. “One has to look back 22 months to find a weaker medium-duty order month on an actual basis or just two months when looking at the data on a seasonally adjusted basis,” Vieth added.