The traditional ordering season for new Class 8 trucks opened in October with the highest activity in 11 months.
Still, the number of orders placed was the weakest for an October since 2016 — and 51% below October 2018.
Fleets placed 22,100 orders for new power units, according to ACT Research and FTR Transportation Intelligence, which said fleets are returning to the traditional fall timing for filling equipment needs.
In 2018, fleets pulled ahead orders into the summer months to assure they could get deliveries during a strong economy that boosted freight demand.
“Fleets are only ordering for their immediate needs,” said Don Ake, FTR vice president of commercial vehicles. “They are not willing to speculate much beyond the first quarter of next year.”
A couple of big fleets placed large orders for 2020 delivery, but otherwise, smaller orders were for the first-quarter build, he said.
Cautious approach
The surge in 2018 orders led to a backlog of trucks waiting to be built. The backlog reached 288,000 a year ago, but as orders tailed off beginning in November 2018, it has fallen to about 130,000 vehicles, erasing long wait times. Cancellations are expected to remain elevated as excess 2019 orders are removed from the backlog, Ake said.
“The (manufacturers) have plenty of open capacity right now, so carriers are willing to approach 2020 a step at a time,” he said.
With a moderating economy and a slowing industrial sector, fleets have less money for equipment purchases. Those that are replacing older units are taking advantage of fuel-saving automated manual transmissions and advanced safety equipment, said Kenny Vieth, ACT president.
“While freight market conditions remain weak, the market is arguably benefiting from a substantive change in the ‘must-have’ tractor spec: AMT, ADAS and superior fuel economy are considerations to offset weakness in the top line,” Vieth said.
Several truck makers at the recent North American Commercial Vehicle Show promoted upgraded advanced driver assistance systems that include automatic emergency braking and lane departure warning. Some are offering partially automated systems that ease driver workload.
Faster turns
There is also a move to faster replacement of equipment, according to Jason Skoog, general manager of Peterbilt Motors. He said meetings with a couple of dozen fleets at the American Trucking Associations’ Management Conference & Exhibition in October found a common desire to turn over equipment faster.
Two reasons for running newer trucks are that they attract drivers in a competitive market and maintenance costs are lower, Skoog said.