FTR and ACT report North American manufacturers booked 14,100 Class 8 orders in February in a drastic and unexpected decline in activity.
The February total was down 20% from January and 18% year-over-year, FTR said, and it marked the lowest order activity for February since 2010. Fleets already were cautious in their equipment purchases due to the flat freight market and slowing economy, and now the COVID-19 virus has added to the uncertainty.
Orders had been right at replacement levels for four months, but now it appears fleets will take a pause in replacing older trucks until current anxiety dissipates. Class 8 orders have totaled 177,000 over the past 12 months.
“This is not good news for the trucking industry or the economy,” said Don Ake, FTR’s vice president of commercial vehicles. “It appears fleets have decided to delay some orders until the health crisis has passed. There is no pressure for fleets to order more trucks since most carriers have enough capacity to handle current freight volumes.
“The market was already in a wait-and-see mode before the virus spread. Now, fleets are just waiting for things to calm down before returning to normal ordering patterns. The industry was already taking a pause after two years of great sales. The current uncertainty has just made more fleets leery of taking on additional risks.”
ACT says the February Class 8 net order total of 14,100 units is down 18% from January and 16% from the same time last year. February’s Classes 5-7 net orders rose to an 11-month high of 22,200 units, which is up 12% from January but down 12% from a strong year-ago comparison.
“Weak freight market and rate conditions, as well as a still-large backlog, continue to bedevil new Class 8 orders,” said Kenny Vieth, ACT’s president and senior analyst. “February is not a particularly strong Class 8 order month and this February’s results, seasonally adjusted, were the weakest monthly order rate since last August.
“With COVID-19 becoming a hot topic at the end of February, one wonders if that impacted order activity.
“COVID-19 did not seem to bother medium-duty vehicle buyers as much, as that segment reported a third consecutive month of solid orders. Starting in February, the calendar rolls into the peak order season for medium-duty vehicles.”