Class 8 supply continues to rise faster than demand

Class 8 supply continues to rise faster than demand

The supply of Class 8 trucks continues to rise faster than demand for trucks according to the most recent ACT For-Hire Trucking Index from ACT Research Co.

“The capacity index [supply] rose faster than the freight index [demand] for the third consecutive month and the tenth time in the past twelve months in November,” said Kenny Vieth, ACT’s president and senior analyst. “We have to go back to the second half of 2012 to find a comparable period of imbalance – a period marked by anemic economic growth and strong U.S. Class 8 retail sales.”

Vieth added that with strong Class 8 sales expected into the end of the year, and no apparent catalyst to trigger stronger economic growth, capacity additions are expected to remain ahead of freight creation at least into the end of 2015.

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According to the latest numbers from ACT Research, preliminary North America Class 8 net orders were 27,700 units, up 600 units from January and 16% from a year ago. With the fourth-largest seasonal factor of the year at 8%, seasonal adjustment reduces February’s Class 8 intake to 25,600 units, up 5% from January.

“Weak freight and carrier profitability fundamentals, and large carriers guiding to lower capex in 2024, would imply pressure in U.S. tractor, the North American Class 8 market’s largest segment,” said Kenny Vieth, ACT’s president and senior analyst. “While we do not yet have the underlying detail for February order volumes, Class 8 demand continuing at high levels again this month suggests that U.S. buyers continue as strong market participants.”

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