Net orders for heavy-duty Class 8 trucks rose in September, posting month-to-month and year-over-year gains, according to two vehicle research firms.
Both ACT Research and FTR Associates said preliminary data indicate an increase in order activity, as freight demand holds up and carriers retire older equipment. Net orders for Class 8 trucks were up 12 percent from August and 56 percent from a year ago, reaching “the high end of expectations,” according to FTR Associates.
FTR Associates said it expects nearly 23,500 Class 8 net orders for the month, while ACT Research predicted Class 8 orders would approach 23,800 units.
“The strength in orders is indicative of healthy underlying fundamentals in the heavy truck market,” said Kenny Vieth, ACT’s president and senior analyst. “Fleet equipment is old, trucker profitability is good and used truck values are strong.”
But new truck orders don’t necessarily translate to additional capacity, or even sales. Manufacturers are still working through a production backlog.
Most carriers are buying replacement vehicles as they retire older equipment, rather than expanding their fleet capacity to handle new business. Nearly 75 percent of the truckload carriers surveyed by Transport Capital Partners in the third quarter said they did not plan to add capacity over the next year.
Last quarter’s respondents were split almost evenly as to whether operating ratios are sufficient to justify purchasing new equipment, TCP said in its survey.
Concerns about the direction of the economy could lead to cancelled orders. “If the cancellation rate of new truck orders start rising, the capacity issue will likely be discussed more frequently,” TCP said in its Business Expectations Survey.