Class 8 orders in North America plunged for the second month in a row to an unprecedented level of 4,000 units, according to FTR. ACT Research reports 4,100 units.
FTR says April order activity was the lowest in the modern era (1996), 44 percent below March, and 73 percent less than a year ago. Class 8 orders for the last 12 months now total just 160,000 units. ACT reports the April total decreased 46 percent from March and 72 percent lower than a year ago.
“Despite all the economic calamity and a significant number of cancellations, Class 8 orders managed to generate a gain in April,” says Don Ake, FTR vice president commercial vehicles. “OEM production was shut down for most of April, yet order activity endured. There still are a few fleets that need new trucks. We expect retail sales to be somewhat higher than expected in April.”
Fleets are delaying ordering trucks until the economic uncertainty over the COVID-19 crisis abates, FTR reports. Fleets also canceled a significant number of orders that were scheduled for near-term deliveries. Orders are expected to rise in May to around 10,000 units. Class 8 order activity after that is highly dependent on the speed and strength of the economic recovery.
“The industry received a shock right along with the economy due to the virus response. Fleets will remain extremely cautious going forward, but we expect orders to modestly increase as the freight markets recover,” Ake says. “We have already seen some signs of life in refrigerated freight and expect improvement in dry van freight soon. The industry recovery will begin in May, but it will be gradual, just like the overall economy.”
Kenny Vieth, ACT president and senior analyst, says April represents the first full month of COVID-19 impacts on the trucking industry.
“Given broadly halted economic output leading to a sharp drop in freight volumes and rates, as well as more empty miles from fragmented supply chains further impacting carriers’ profitability, a negative order number was within the realm of possibilities,” Vieth says.
“We suspect that, as was the case in March, instead of cancelling, order holders are content to move orders from close-in to later build dates, as they analyze the ongoing COVID impact,” he says. “From a seasonal perspective, April is a relative neutral Class 8 order month and, as such, seasonal adjustments add little to actual data. On that basis, April was the weakest Class 8 order month since September of 1995, which actually produced a negative net order number.”
Final FTR and ACT data for April will be available later this month.
Credit: Source link