Fleet owners canceled orders for 8,610 Class 8 truck tractors in October, the highest cancelation rate since September 1995 according to ACT Research.
Jim Meil, principal at ACT Research, says the cancelation wave amounted to 10.5 percent of the backlog of trucks that have been ordered but not yet built.
“Backlogs are an expression of confidence in future shipping demand,” Meil says, “so the dropped orders suggest there are more businesses, more customers out there who for one reason or another might have lost that faith. This is a high number by any benchmark.”
October’s cancellations reflect a decline in the trucking industry as a whole that dates back to late last year as carriers trim expansion and fleet replacement amid lackluster shipping demand and slipping freight rates.
Meil says it is unclear whether October’s cancelation numbers signal a broad deterioration in the market or that several large orders were canceled in the same month. Larger economic indicators didn’t change course heading into October, he adds.
“I don’t see anything different in terms of freight or an economic dynamic, but trucking manufactures do typically validate their backlogs in October, which may have shown things were a little bit shakier for some of that intended business than the manufacturers thought back in the summertime,” Meil says.