Heavy truck orders are not very robust

By Tom Stundza -- Purchasing, 4/23/2008 9:29:00 AM

Heavy truck orders are being pushed out to 2009 as fleet operators start preparing to meet new 2010 emissions regulations, according to a review of bookings tracked by analysts at Bear Stearns using data from A.C.T. Research.

Seasonally-adjusted, Class 8 order intake in March of 184,000 at an annualized rate compares with A.C.T.'s earlier build forecast of 213,000. Overall Class 5-8 builds remain weak, A.C.T. Research reports, down 26% in March.

“Quoting activity appears to be strong, though fleets increasingly are asking for (and, we believe getting) '09 slots,” says the Bear Stearns report. Further proof: Class 8 cancellations of 2008-build orders were high in February and March.

“We have been anticipating improved Class 8 orders in the second half of this year-- not due to a back-half macro recovery, but rather into stabilizing freight fundamentals and ahead of the next emissions deadline,” Bear Stearns reports.

But, over the last several weeks, two dynamics appear to be developing: First, the fourth-quarter 2007 year-over-year improvement in freight tonnage didn’t carry over into the first quarter of this year. “And ultimately, people buy trucks to move freight,” says Bear Stearns. Second, “fuel pressures are heightening; cost recoveries appear to be slipping, which squeezes carrier profitability.”