Preliminary orders of Class 8 trucks in March were the lowest since February 2010 as the coronavirus pandemic sank orders already trailing replacement demand.
ACT Research pegged orders at 7,800 in March, 51% below what was expected to be an easy year-over-year comparison. The spread of coronavirus has led all four major heavy-duty truck makers to suspend production for much of April.
FTR Transportation Intelligence estimated March orders at 7,400, off 52% from the same month a year ago.
ACT and FTR track orders and other data for the industry. ACT predicts 2020 production will be 53% below the near-record build of 345,000 trucks in 2019.
Production levels in 2018 and 2019 already pointed to a difficult first half of the year as fleets had purchased most of the new trucks they needed.
“On a seasonally adjusted basis, March was the weakest Class 8 order month since February 2010, and with COVID-19 becoming an even hotter topic over the course of March, one wonders about the impact on order activity on a go-forward basis,” said Kenny Vieth, ACT president and senior analyst.
Class 8 orders have totaled 170,000 units over the past 12 months, according to FTR.
FTR said uncertainty over the duration of the health crisis is limiting orders to short-term, definite needs. Orders are likely to stay near the 10,000-truck mark for a few months until the economy, which is still weakening, begins to recover.
“The only good news here is that the number was still positive despite the high number of expected cancellations,” said Don Ake, FTR vice president of commercial vehicles. “The gross order number is probably higher than 10,000 trucks, which means at least some fleets need more vehicles.”
Carriers with contracts for consumer goods, like paper goods and groceries, and medical supplies are continuing to have ample business.
“We always knew [toilet paper] was important and saw it as not a very glamorous product. But all of the sudden, it became very glamorous,” said Jeff Shefchik, president of Paper Transport Inc. in De Pere, Wisconsin.
With plentiful newer trucks in their fleets, most carriers will pause their replacement cycles due to the crisis, Ake said, adding that large fleets with immediate needs and the financial resources will continue to place modest orders.
Smaller fleets with equipment needs may tap into the used truck market, where prices are low for most recent model years.
The second quarter will be tough on the Class 8 market, and the third quarter is still highly uncertain, Ake said.