January’s North American Class 8 orders followed the trend of the past few months as evidence builds that some of the record order numbers from 2018 will not result in as many physical deliveries as hoped.
ACT Research said that preliminary data for January showed Class 8 orders coming in at 15,800 units, down 26 percent from December’s 27,800 units. Orders have been trending down since the record highs reached in mid-2018. Fleets ordered 27,900 units in November 2018, which was down 36 percent from October. January’s preliminary number is down 68 percent from January 2018.
“Regarding Class 8, recall that January 2018 marked the point at which orders went vertical. We view this January’s order softness as having more to do with pulled-forward orders and a very large Class 8 backlog than with the current supply-demand balance,” said Kenny Vieth, ACT’s president and senior analyst. “Softening freight growth and strong Class 8 capacity additions suggest that the supply-demand balance will become a story in 2019, but January seems a premature start to that tale.”
Fleets ordered a record number of vehicles in 2018 – more than 420,000 units. The previous best year on record was in 2004 at 313,000 units.
“Full-year results indicated just how robust current fleet investment plans are, as the industry set an all-time record for annual net orders last year. More than 420,000 orders were booked in 2018, up 35 percent from 2017. Most trailer categories posted year-over-year gains, with reefers posting an industry-leading gain of almost 90 percent versus 2017,” said Frank Maly, ACT’s director of CV Transportation Analysis & Research.
Brad Delco, senior vice president, research analyst with investment firm Stephens, told attendees at the 20th Annual Trucking Owners and Leaders Roundtable (sponsored by Katz, Sapper & Miller and Scopelitis, Garvin, Light, Hanson & Feary) that there are already signs that all those trucks will not be delivered to fleets. Delco said that order cancellation rates, which had been around 5 percent at the start of 2018, topped 20 percent in each of the last three months of the year.
Retail sales delivery of Class 8 vehicles is estimated at 253,000 in 2018, Delco said, and are projected to be 254,000 in 2019. Retail sales had been 197,000 in both 2016 and 2017.
