- Preliminary orders for Class 8 trucks went up in June, to 15,500 units, increasing 130% from May, according to a Friday report from FTR. The surge also puts Class 8 orders up 20% from June 2019, at 158,000 units through 12 months. ACT Research found roughly the same, pegging June orders at 16,000 units, a 139% rise from May, and up 23% from June 2019.
- ACT Research also found Class 5-7 truck orders were up 77% from May, although the numbers were down 20% from June 2019.
- Fleets are doing more than just ordering trucks. The trucking sector added more than 8,000 jobs in June, the Department of Labor reported Thursday.
Fleet confidence is improving as trucking firms see the green shoots in the economy. The economy added 4.8 million jobs overall in June, and the unemployment rate dropped to 11.1%, according to the Labor Department. Consumer spending on household goods rose 8.2% in May, according to the U.S. Bureau of Economic Analysis.
The increase in consumer spending signals a potential increase in volume for fleets, which translates to more confidence, hiring and tractor orders.
The Class 8 order market is on a "slow, steady" rise to recovery, Don Ake, FTR's VP for commercial vehicles, said in his report. He expects orders to exceed the 10,000-mark through the summer, if freight movement stays the same or improves. "But a significant increase is not expected until October, when the big fleets begin placing orders for 2021 delivery," Ake said.
Kenny Vieth, ACT’s president and senior analyst, said rapid improvement in freight rates in May and June helped fuel the orders. Dry van spot rates were close to 2017 rates, at $1.65 per mile, DAT reported on June 25. The dry van load-to-truck ratio rose 24% in a week to 3.56. The reefer ratio rose to 5.35, up 19% from a year earlier.
The crawl back from the brink has been considerable. In April, fleets placed 4,275 Class 8 orders, according to a May 20 news release from ACT Research. That was a decline of 71% year over year. Many sellers had too much inventory at the time, and precarious positions threatened to sink orders to OEMs to deeper depths in the summer.
"Class 8 production was at its lowest monthly build volume in our records, which began in 1979," Vieth said in May. "With so little produced in April, Class 8 inventories fell sharply month-over-month. The inventory decline was the largest sequential drop on record, and a big step in clearing a still-too-large new vehicle inventory."
The coronavirus pandemic may continue to drag on the economy for the rest of 2020. Steve Graham, a transportation equipment analyst for FTR, wrote Monday on the company's blog that the overall economy may be hampered a bit more than transport and manufacturing.
"The resurgence of the coronavirus in the South and West dominated the headlines, as new infections reached a new single-day record and passed 50,000 cases," Graham wrote. "Economic data in these areas seems to be slowing, according to high-frequency data which track mobility and restaurant reservations. Overall, a smooth climb back to prior peak levels looks increasingly less likely."