September 5, 2023

August Class 8 truck orders reach highest level since February


Preliminary net Class 8 truck orders reached 19,000 units in August, 9% below a year ago. But they were the highest in six months.

Bookings should begin to rise in September as the 2024 order season accelerates. But it’s hard to know how much pent-up demand remains from the pandemic and two years of supply disruption and whether that detracts from new orders.

“Despite rising order activity, the year-over-year comparisons will look horrible through November due to record order activity in the second half of 2022,” said Eric Starks, chairman of FTR Transportation Intelligence.  “The actual unit order levels will be more significant in the near term than the year-over-year change in analyzing the strength of the market.”

The impact of orders being pulled ahead to avoid higher priced and cleaner diesel trucks required in California is uncertain.

“For Class 8, August is the last month of ‘weak order season,’ the four-month period that begins in May,” Kenny Vieth, ACT Research president and senior analyst, said in a news release. “Adding to downward pressure, the 2023 build plan has been essentially filled since the end of Q1.”

August data show fleets are not shying away from ordering new equipment, which is a good sign for the second half of the year, Starks said.

Total Class 8 orders for the previous 12 months have equaled 294,000 units, FTR reported. 

The used truck market rebalances

The inability to get new trucks for much of 2020 and 2021 led fleets to hold on to trucks longer than the typical trade-in cycle of four to five years. Now that orders are being filled again, higher mileage used trucks are flooding retail dealerships and auctions, driving prices lower as fleets rebalance.

A lot of owner-operators are surrendering their Department of Transportation driving authorities and signing on with large fleets now that contract freight rates have fallen. Still, independent owner-operator entrepreneurs are constantly entering the market. 

While [used truck] values continue to soften, it is encouraging to see lots of new folks entering the fleet,” Steve Tam, ACT vice president, told FreightWaves in an email. “From a volume perspective, retail sales in the data we see are improving.”

Class 8 used retail sales declined 7.8% in July.

“Sales usually dip a percentage point or two in July. So, the decrease was in line with but greater than expectations,” Tam said in a news release Thursday. “Including auctions and wholesales, the total market volume fell 28% month over month in July.”

The retail market was 19% larger compared to July 2022, reflecting turn-ins of older trucks. The bankruptcy of Yellow Freight could potentially add 14,000 mostly day cab trucks to the used market. But the bankruptcy process so far has been orderly, disciplined and methodical, Tam said.

“Were all that equipment dumped into inventory at one time, the result conjures up images of a piranha feeding frenzy,” he said. “While it is still very early in the process and there are no guarantees, this approach should help to minimize the negative impact on used equipment values.”

Editor’s note: Updates with information from FTR Transportation Intelligence.

July Class 8 truck orders rise but still trail replacement demand

Class 8 orders quiet again in June as backlogs fall

High-mileage, late-model used trucks fetching lower prices 

Click for more FreightWaves articles by Alan Adler.

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