April was likely the last month that U.S. freight fleets continued to buy Class 8 tractor capacity at above replacement-level pace, offering the hope of “green shoots” of recovery from “one of the worst quarters in history for for-hire carriers,” according to a report from transportation analysis firm ACT Research.
“After a year of cost-defying buying by private fleets, we project this month is likely the last for above replacement-level US Class 8 tractor capacity additions,” the Columbus, Indiana, firm said in its “State of the Industry: NA Classes 5-8” report.
That news comes after a similar report in which ACT trimmed its prediction of the growth of trailer purchases, citing economic pressures after truckload carrier companies saw their profit margins sink to a 14-year low point in the first quarter, due to overcapacity in the freight hauling sector.
Now that trend could extend to the “power units” that haul those trailers as well, as North American Class 8 net orders totaled 15,850 units in April, up 32% against the same period last year, but U.S. Class 8 tractor orders fell 25% year over year in April.
“April orders reinforce our belief that in addition to weak for-hire market conditions, private fleet expansion is slowing,” Kenny Vieth, ACT’s President and Senior Analyst, said in a release. ”This would be welcome news for the beleaguered for-hire market, as the journey back to healthier financials starts with capacity restraint.”
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