November Class 8 Orders see positive momentum amid tariff uncertainty
Preliminary Class 8 order numbers look promising for November but remain lower compared to last year, according to recent data from ACT Research and FTR Transportation Intelligence. ACT Research reported November preliminary Class 8 orders at 37,200 units, a 21% increase from last month but 11% lower than last year. Kenny Vieth, president and senior analyst at ACT Research, wrote in the release, “We are still in the early stages of the industry’s building of 2025 backlogs, but through November, seasonally strong orders have made little progress in closing the backlog gap compared to year-ago levels.”
Rival firm FTR Transportation Intelligence reported similar findings, with Class 8 net orders totaling 33,500 in November, up 12% month over month but down 7% year over year. While order levels were lower y/y, the report adds that these orders are still above seasonal expectations, with November logging an average of 30,393 units from the past seven years. The report adds, “Despite ongoing stagnation in the truck freight market, net orders in September through November 2024 were 1% higher than the same period in 2023, signaling slight positive momentum for the 2025 order season.”
The recent election may also have an impact from the potential of added tariffs. Dan Moyer, senior analyst for commercial vehicles at FTR, said: “The solid m/m increase in net orders might reflect some fleets choosing to place orders following the conclusion of the November U.S. elections, but the election impact might not end there. On November 25, President-elect Donald Trump announced plans to impose tariffs as one of his first executive orders, proposing a 25% tariff on all imports from Mexico and Canada and an additional 10% tariff on Chinese goods. More than 40% of Class 8 trucks built for the U.S. market currently are built in Mexico.”
The upcoming EPA Phase III emissions regulations are also having an impact. Moyer notes the tariffs announcement adds more challenges by further straining supply chains and costs in the months ahead. He adds, “Orders over the next month or so could see a boost as fleets aim to preempt potential tariffs. If tariffs take effect in 2025Q1, OEMs may struggle to quickly ramp up production beforehand due to labor and supply chain constraints, especially during the slow production months of December to February. High Class 8 inventory levels could partially meet any surge in retail demand.”
November LMI marks 12th straight month of overall expansion
On Tuesday, the Logistics Managers’ Index released its November report, which saw a continuation of its 12-month rally marked by an organic recovery based on steadily improving economic fundamentals. The LMI is a diffusion index, with a reading above 50 indicating an expansion, while below 50 signals contraction.
The overall LMI reading was 58.4, a slight decline of 0.5 points from October’s reading of 58.9, which was the fastest rate of expansion since September 2023. The report notes, “Unlike many of the market shifts we observed in the past, this one was not a sudden spike stemming from an external jolt (e.g. pandemic, tax cut, international conflict). Instead, the story of the logistics industry in 2024 has been a healthy, organic recovery based on steady improvements in the fundamentals of the economy.”
Notabile LMI movements included a predicted slowdown in the expansion of inventory levels, which fell 3.3 points m/m to 56.1 and followed normal patterns of seasonality. Less inventory helped contribute to a slowing expansion in warehouse utilization, down 4 points m/m to 58.9, as well as transportation prices, which fell 0.3 points to 63.8. Both are still expanding but at slower rates.
The LMI also included commentary on the potential impacts of trade policy under the second Trump administration. The report notes that while the policies continue to evolve, “it is worth pointing out that the U.S.-China trade war, which began in the summer of 2018, led to a decrease in freight traffic for both imports and exports and was one of the factors behind the freight recession of 2019 to early 2020. That said, the 2018 tax cut was one of the things that had pushed freight into a boom in the first place – something that may be reflected in the strong uptick of many trucking stocks immediately following the election.”
SONAR spotlight: Dry van rally takes a post-Thanksgiving nap
Summary: The first Monday after Thanksgiving saw a dip in both dry van outbound tender rejection and spot rates as truckload capacity returns to the market. The SONAR National Truckload Index 7-Day Average (NTI) fell 4 cents per mile all in from $2.43 on Nov. 25 to $2.39 but remains 10 cents higher than last month’s reading of $2.29. Similarly, dry van outbound tender rejection rates remain elevated m/m but saw declines compared to the previous week. VOTRI fell 30 basis points w/w from 5.68% on Nov. 25 to 5.38% but is 56 bps higher m/m.
Looking at the past five years of seasonal data, the NTI saw dry van spot rates dip following the week after Thanksgiving but rebound in the middle of December as last-minute holiday shipments combine with truckload carriers positioning assets ahead of the Christmas holiday. Dry van outbound tender rejection rates also followed the post-Thanksgiving dip followed by a seasonal increase beginning around Dec. 15.
Compared to the NTI, which saw spot rates historically remain elevated through the first week of January, dry van outbound tender rejection rates fall much faster, usually days after the Christmas holiday depending on when it lands. Truckload capacity remains the key factor to watch, as the past two years saw a muted peak season due to excess capacity relative to truckload demand.
The Routing Guide: Links from around the web
Survey shows carriers eye market equilibrium despite ongoing challenges (Commercial Carrier Journal)
Werner case at Texas Supreme Court: Did driver fail to perform a legal ‘duty’? (FreightWaves)
FreightVana to acquire Loadsmith, grows drop trailer network (FreightWaves)
FMCSA denies requests to alter accident reporting procedures (FreightWaves)
HappyRobot’s $15.6M raise will focus on product development (FreightWaves)
LTL carriers waiting for next demand catalyst in post-Yellow world (FreightWaves)
