February Class 8 truck orders tank on coronavirus uncertainty

Preliminary orders of new Class 8 tractors dropped 20% in February from January, raising the specter that coronavirus could be worsening already anemic bookings by risk-averse fleets.

“It appears fleets have decided to delay some orders until the health crisis has passed,” said Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence. “There is no pressure for fleets to order more trucks since most carriers have enough capacity to handle current freight volumes.”

FTR and ACT Research reported a preliminary order total of 14,400 units in February, which is traditionally a slow month for orders. This was the lowest order activity for the month of February since 2010 and down 18% year-over-year. Class 8 orders have totaled 177,000 over the past 12 months, FTR said.

“Weak freight market and rate conditions, as well as a still-large backlog, continue to bedevil new Class 8 orders,” said Kenny Vieth, ACT’s president and senior analyst. “This February’s results, seasonally adjusted, accounted for the weakest monthly order rate since last August.”

Orders had been right at replacement levels for four months, but now it appears fleets will pause in replacing older trucks until current anxiety dissipates, FTR said.

“The market was already in a wait-and-see mode before the virus spread,” Ake said. “Now, fleets are just waiting for things to calm down before returning to normal ordering patterns. The industry was already taking a pause after two years of great sales.”

If the coronavirus is a factor affecting heavy-duty truck orders, it is not impacting Class 5-7 medium-duty bookings, which rose to an 11-month high of 22,200 units, up 12% from January but down 12% from a very strong year-ago comparison, ACT said. February kicks off the peak order season for medium-duty trucks.

According to FreightWaves SONAR (Orders.CL8), year-over-year Class 8 orders were down  26.4%.