Truck Orders Slow to Crawl Amid Pandemic
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Market uncertainty due to the effects of COVID-19 has depressed demand for new trucking equipment, with new Class 8 truck orders sinking to a 25-year low in April.
ACT Research reported that North American net truck orders totaled just 4,100 in April, the weakest level since August 1995 and down 72% from the comparable month in 2019.
The research firm also lowered its full-year projection to about 117,000 orders in 2020, well below replacement demand, ACT President Kenny Vieth said.
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“There is a weak pulse. It was already going to be a bad year,” he said, due to overcapacity that was present in the freight market even before the sharp drop-off in demand.
On the plus side, Vieth said truck manufacturers still have a backlog of 100,000 vehicles to build, despite the fact that there were plenty of opportunities for fleets to cancel those orders.
On balance, he expects that trucking capacity will be aligned with economic demand by the end of 2020.
“We have to unpack a number of challenges before orders recover,” Vieth said, including the pace of the economic recovery, its impact on manufacturing and other businesses, and the overall effect on fleet profitability, which soured in the first quarter.
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