According to ACT Research’s recently released Transportation Digest, Class 8 market indicators are divergent, with some at all-time highs even as other metrics point to coming weakness. The medium duty market measures are lower in the short-term, but still positive against longer-term comparisons.
On February 4, 2019, Kenny Vieth gave an interview with CNBC's Nightly Business Report. At that time the commercial vehicle trucking industry was coming out of a record setting year, 490,000 heavy duty, class 8 orders. However, questions were being asked about industry capacity and the potential for high backlogs (300,000 at the time of interview) and cancelations coming in later 2019. At the time of this interview, there was a 3-month decline in new truck orders, considered a signal of a potential slowdown.
According to the recently released N.A. Commercial Vehicle On-Highway Engine OUTLOOK, published by ACT Research and Rhein Associates, engines over 10L are projected to account for more than 85% of the Class 8 production between 2020 and 2024, and the trend to smaller displacement engines is expected to continue.Tom Rhein, President of Rhein Associates commented, “Although the over 14L engine category will remain the largest segment in 2019, there is a trend to smaller displacement engines in the over 10L market segment for Class 8 trucks and tractors, with an acceleration prompted by new emission regulations expected in 2024.” Regarding Classes 5-7, Rhein said, “In this market, the current metric of interest is gasoline penetration, which continues to see share gains.”
The average price of total used Class 8 trucks in July dipped 4% month-over-month, while rising against longer-term comparison, up 9% year-to-date. Same-dealer sales, on the other hand, were flat in July compared to June, but contracted 18% versus the first seven months of 2018, according to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research. The report also indicated used Class 8 average miles was neutral month-over-month and down 1% year-to-date, while average age rose 2% compared to June and 4% on a year-to-date basis.
New US trailer orders of 13.9k were up 22% month-over-month, and after accounting for cancellations, net orders of 10.3k hit their first sequential increase in nine months, rising 64% from June. Year-to-date, however, net trailer orders are 46% below last year, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailer Report.
The latest release of ACT’s For-Hire Trucking Index, with July data, showed surprising improvement and trend reversal in every category. Two statistical factors were at work – seasonality and base effects – as July is typically soft, and after such a weak June, it wasn’t as bad sequentially. Commentary from fleets was mixed, but suggested there was underlying improvement in freight volume through July. The Volume Index of 56.7 (SA) in July was 50.0 on an unadjusted basis. The July Pricing Index, at 50.3 (SA), stabilized after declines in Q2, but continued to drop on an unadjusted basis at 47.0.
Steve Tam, Vice President of ACT Research, joined Steve Kingston of FreightWaves Radio for an interview at ACT Research's Seminar 61 this August 12-14, 2019. Steve and John discuss the Class 8, Medium Duty, Used Truck and Freight markets during their interview.
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