Weak Freight Fundamentals Expected to Pressure Class 8 Truck Order Peak

According to ACT Research’s latest North American Commercial Vehicle Outlook, even though its forecast remains unchanged this month in conjunction with continued positive order activity relative to said forecast, ACT cautioned that the freight market fundamentals that inform the U.S. for-hire truckload, the largest single Class 8 truck market, are still flatlining.

“Freight markets have not improved as we have trekked through the second half of 2023, with no demand-side relief to date, even as strong Class 8 tractor sales have continued to add to the supply side of the equation,” Kenny Vieth, president and senior analyst of ACT Research, said. “In the short term, one of the things staying our hand from deeper forecast cuts in the face of weak freight fundamentals and falling carrier revenues and profitability has been a solid industry-wide start to ‘order season.’”

Starting around the last trimester of the year, OEMs open their out-year order books, leading to a period of outsized orders that typically extends into March, according to ACT Research, which noted that this elevated seasonality is one reason why it typically emphasizes seasonally adjusted figures in its analysis of month-to-month data.

“Looking to 2024, we note that ‘order season’ typically stretches through Q1,” Vieth said. “While orders have been strong season to date, weak freight fundamentals are expected to limit the duration of this year’s peak order season. Looking forward, we would note that December is typically the strongest month of the year for Class 8 and nearly the strongest for trailers. Seasonality alone suggests a big number to end the year. Q1 is historically weaker for orders than Q4.”

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