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April Class 8 orders down sharply year-over-year, data show

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FTR reported preliminary North American Class 8 orders for April at 16,400 units, 52% below April 2018, noting April is the fourth consecutive month for Class 8 orders to be below the 20,000 mark. Pictured is the Freighliner Cascadia. (Courtesy: DAIMLER TRUCKS NORTH AMERICA)

The two major organizations that report on and analyze commercial vehicle data both said year-over-year Class 8 orders were down sharply in April.

ACT Research said preliminary North America Class 8 net order data show the industry booked 14,800 units in April, dropping a moderate 6.2% from March, but down 57% from year-ago April.

ACT will publish complete industry data for April, including final order numbers, in mid-May.

FTR reported preliminary North American Class 8 orders for April at 16,400 units, 52% below April 2018, noting April is the fourth consecutive month for Class 8 orders to be below the 20,000 mark and is the lowest April total since 2016.

FTR said orders have remained remarkably consistent for the first four months of the year, tracking within a narrow 1,000-unit range, with April just 5% up from March. Class 8 orders for the past 12 months now total 380,000 units.

“We continue to contend that current order weakness has more to do with very large Class 8 backlogs and orders already booked than with the evolving supply-demand balance,” said Kenny Vieth, ACT’s president and senior analyst. “Of course, contracting freight volumes, falling freight rates, and strong Class 8 capacity additions suggest that the supply-demand balance will become an issue later this year.”

FTR said fleets continue to search for open build slots in the 2019 production schedule.  Backlogs remain fluid with orders being rescheduled, often opening up build slots in the near term. FTR said it expects this type of order pattern continuing until ordering for 2020 begins, said Don Ake, FTR vice president of commercial vehicles. “Near-term build slots are becoming available as fleets rearrange orders based on current needs. There still is limited cancellation activity, as fleets do not want to give up build slots they may need at a later date. They remember what happened last year when they needed trucks but could not get enough of them.”

Ake said economic growth is expected to moderate soon, slowing down the freight markets. “However, currently there is still a need to replace older trucks and also get more new trucks on the road,” he said. “Fleets have their expected requirements orders in for the year and are working with the OEMs to schedule production and deliveries as needed. Some washout of the backlog due to increased cancellations is still expected to occur later this year.”

 

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ATA For-Hire Truck Tonnage Index surges 7.4% in April

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Compared with April 2018, the SA index increased 7.7%, the largest year-over-year gain since July. (The Trucker file photo)

ARLINGTON, Va. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index surged 7.4% in April after decreasing 2% in March. In April, the index equaled 121.8 (2015=100) compared with 113.4 in March.

“The surge in truck tonnage in April is obviously good for trucking, but it is important to examine it in the context of the broader economy,” said ATA Chief Economist Bob Costello. “February and March were particularly weak months, as evidenced by the 3.5% dip in tonnage due to weather and other factors, so some of the gain was a catch-up effect. In addition, the Easter holiday was later than usual, likely pushing freight that would ordinarily be moved in March into April.

“I do not think the fundamentals underlying truck tonnage are as strong as April’s figure would indicate, but this may signal that any fears of a looming freight recession may have been overblown,” he said.

March’s reading was revised up compared with our April press release.

Compared with April 2018, the SA index increased 7.7%, the largest year-over-year gain since July.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 117.7 in April, 1% above March level (116.6). In calculating the index, 100 represents 2015.

Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

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ACT says trailer order volume soft in second straight month

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This chart compares trailer order volume for three years. (Courtesy: ACT RESEARCH)

COLUMBUS, Ind. — ACT Research’s preliminary estimate for April 2019 net trailer orders is 14,500 units.

Final volume will be available later this month. ACT’s methodology allows the company to generate a preliminary estimate of the market that should be within +/- 3% of the final order tally.

“Order volume was soft in April for the second straight month. Several factors appear to be in play. OEMs continue to be reticent to fully open 2020 orderboards. This is evident in our measurement of the extent of the industry’s backlog, which has remained in the November or December timeframe throughout the first four months of 2019,” said Frank Maly, ACT’s director of CV transportation analysis and research. “While we hear comments of some fleets anxiously awaiting the chance to snap up 2020 build slots, some also appear to be evaluating their existing commitments. Cancellations in April were the highest since August 2016 on both a unit and percent of backlog basis, and have remained elevated since December. That resulted in an interesting dichotomy in April orders; while new orders were actually up versus March, cancellations were significant enough to pull the net order number into the red month-over-month.”

Maly said while down slightly from March, production continues at a brisk pace, although material/component availability and staffing continue to challenge OEMs. Seasonal patterns actually called for a slight increase for April production, so that small sequential decline likely confirms the impact of the aforementioned headwinds.

“Additionally, our discussions indicate that red-tagged units continue to challenge OEM production efficiency,” he said.

ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets.

ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies.

More information can be found at www.actresearch.net.

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Price of diesel inches up three-tenths of a penny

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Overall, the price for the week ending was down 11.4 cents a gallon lower than last year.

WASHINGTON — The average on-highway price of a gallon of diesel increased three-tenths of one cent to $3.163 for the week ending May 20, according to the Energy Information Administration of the Department of Energy.

The increase was precipitated by a 1.1-cent increase in the Rocky Mountain states (Colorado, Utah, Wyoming, Idaho and Montana) and a 1-center increase in the Central Atlantic states (New York, New Jersey, Delaware, Pennsylvania and Maryland).

The largest decrease was five-tenths of a penny in the Lower Atlantic states (Florida, Georgia, South Carolina, North Carolina, Virginia and West Virginia).

Two regions remained the same as last week.

Overall, the price is down 11.4 cents a gallon lower than last year.

For a complete list of prices by region for the past three weeks, click here.

 

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