Class 8 orders fell below 7,000 in May, both FTR Transportation Research and ACT Research found. ACT Research findings showed 6,700 new orders in May, while FTR’s estimate was slightly gloomier at 6,600.
In contrast, new orders in May 2019 totaled 10,886. Although figures were much gloomier this year, it is an improvement over new orders in April – a dismal 4,100. FTR predicts that orders bottomed out in mid-April, but the coming recovery will be long and slow.
‘Reflecting the state of the broader economy, there was little to cheer about in May’s industry order activity,” said ACT President, Kenny Vieth. ‘Considering COVID-related lockdowns across the US and North America at the start of the month, and a slow reopening occurring through May in most areas, it was not an exercise building customer confidence.’
Freight has had a precarious few months, and it’s fair that operators are waiting to see if things stabilize before purchasing new equipment. Volumes were painfully low this spring, and it will likely be a while before they fully recover. Consumption, a harbinger of freight volumes, declined by 13.6% annually in April. Furthermore, it’s likely that consumer spending will not fully recover until unemployment stabilizes. The employment situation for May comes out on Friday, and some estimates suggest it could report 20% unemployment or higher.
‘Most of the country still had some severe restraints in place for part of May. It is difficult for fleets to plan for future equipment needs under these highly abnormal conditions. Carriers are more worried about what’s happening today, about their manpower needs and short-term issues, than ordering trucks,’ explained Don Ake, FTR’s Vice President of Commercial Vehicles. All in all, the U.S. economy has some ways to go before it can support a trucking market like the one in 2018 again.