The recent slump in orders for trailers and Class 8 trucks isn’t an indication that the fundamentals that underpin heavy vehicle demand are faltering, said ACT Research this week in its Commercial Vehicle Dealer Digest.
The heavy truck market continues to benefit from a still-broad spectrum of supply- and demand-side triggers, says Kenny Vieth, ACT’s president and senior analyst. “While the supply-demand balance for fleets is softening at the margins, demand for heavy commercial vehicles remains strong and upside production pressures in the first half of 2019 are considerable,” he says.
Three key considerations ACT has been reviewing are (1) freight rates have dropped — but only from record levels; (2) the addition of new technologies, such as better fuel economy, safety technologies and AMTs that weren’t available or being spec’d three to four years ago; and (3) increased demand being generated for drop-and-hook operations to keep drivers and freight moving.
“Preliminary December Class 8 data marked slowing orders, but that slowing must be viewed in the context of near-record backlogs,” Vieth says. “With Class 8 and trailer backlogs out more than 10 months, the fleets who are normally in the market this time of year have already placed their orders in the rush to get into the queue that began mid-year.”