With a recovery in freight continuing to push out, tractor demand is projected to remain soft. With freight market conditions remaining soft, carrier profitability remains as an obstacle to stronger new equipment demand, according to the latest release of the North American Commercial Vehicle OUTLOOK by ACT Research.
“The publicly traded for-hire fleets, whose balance sheets we have tracked for over three decades, saw their weakest net income margins since Q1/10 in Q1/25. With freight rate growth lagging the rate of inflation last quarter, there is no expectation that margins improved much in Q2,” Kenny Vieth, president and senior analyst of ACT Research, said. “Private fleets have spent the past two years adding to fleet capacity, and we believe they have little need for additional supply, especially given significantly upside-down cost economics.”
“Like the tractor market, fading fundamentals and uncertainty have similarly negatively impacted demand for vocational equipment. Worsening housing and construction markets and regulatory uncertainty have sapped strength that looked all but certain at the beginning of the year,” Vieth said. “With that in mind, preliminary June Class 8 orders totaled 9,400 units, down 36% Y/Y.”
