New Truck Orders Plunged in October

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The Wall Street Journal / November 18, 2015

Trucking companies ordered 44% fewer vehicles than they did a year earlier, indicating concerns about future freight transportation demand

Trucking companies placed 44% fewer orders for large trucks in October than they did last year, in the latest sign of a weak outlook for the freight transportation industry.

Orders for new Class-8 trucks, the large trucks commonly seen on highways or at construction sites, fell to 25,900 in October, down from an all-time high of 45,956 in the same month a year earlier, ACT Research said.

October orders are closely-watched in the trucking industry because it is the month when manufacturers roll out their next-year models and fleets cement their capital expenditure plans and negotiate deals with their suppliers.

“October usually sets the pace for the year,” said Jim Miel, the research company’s principal industry analyst. “This is definitely a belt-tightening, a freight correction.”

Mr. Miel said that while last year was strong for trucking equipment orders, the market began to change in the second quarter of 2015, as transportation companies began to feel the effects of reduced oil production, excess shipping capacity and softness in freight rates.

A number of large trucking companies have said in recent months that they will scale back purchases of trucking equipment in the face of weak demand.

In the spot market, the number of available trucks rose 4.2%, while available loads fell 4.1% in the week ended Nov. 14, according to DAT Solutions. Spot market rates fell $0.02 for van, refrigerated and flatbed freight.

ACT had expected orders to come in at between 30,000 and 35,000, Mr. Miel said. Orders did increase 34% from September, a typical seasonal bump.