The demand for new trucks in 2020 was not reduced from the coronavirus pandemic, merely moved forward in time.
According to Freight Transportation Research (FTR), North American Class 8 sales in July was approximately 20,000 units. That is 28% higher than in June, and to compare apples to apples, double the orders from July 2019.
Economy Back on Track?
Jonathan Starks, FTR’s chief intelligence officer, says it is too early to break out the champagne.
“As we hit the height of summer demand, the freight markets showed strength and resilience and that led to additional orders for trucks. The order activity for both June and July were more robust than expected and is good news for the equipment producers. However, despite the increasing orders, FTR still expects the Class 8 market to maintain a slow, steady recovery.”
Starks is worried about how the United States Congress and other administration units will handle the coronavirus pandemic in the second half of 2020, and how uncertainty regarding the future of 2020 could put an end to the run of good Class 8 sales.
We at TopMark Funding are cautiously optimistic, considering key industry factors:
- Rates per mile are at and above pre-pandemic levels (but still have a ways to go before matching the same month last year).
- The Outbound Truck Volume Index is higher than it was in March, when supplies were flying off the shelves.
- Job counts in the transportation industry went from heavy losses in April to slight losses in May to slight gains in June.
- Truck sales are increasing, even when compared to the same month last year.
- Trailer sales are increasing, even when compared to the same month last year.
It looks as though the coronavirus pandemic’s secondary effect on the economy is starting to disappear, as the transportation industry, suffering in April, has steadily been recovering ever since and has not shown much indication of things slowing down but instead speeding up.
While it is true that the future is unknown, it appears that it would take a second global catastrophe in 2020 to stall the trucking industry again. Fingers crossed that does not happen.