The impact U.S. and retaliatory tariffs are having on the new truck market are becoming clearer, as more fleets choose to sit on the sidelines amid the uncertainty.
Numbers out today showed order activity in April totaled just 7,400 units, compared to the seven-year average of 18,963. Truck tonnage also slipped, according to the most recent data, and spot market pricing was lower across all equipment types.
Class 8 orders plunged in April
Preliminary Class 8 orders in April fell to 7,400 units, according to FTR, the lowest monthly total since May 2020 when order activity cratered due to Covid shutdowns. The seven-year average for April is 18,963 units, FTR reported.
The industry forecaster blames uncertainties over tariffs, the economy and freight markets, which have collectively killed enthusiasm about making capital investments in new rolling stock.
“New and pending U.S. tariffs and retaliatory tariffs will significantly increase costs for Class 8 trucks, tractors, and related components. In addition to slowing economic and truck freight market growth, prolonged tariff-driven cost increases and, potentially, regulatory changes could further suppress near-term demand within the Class 8 segment,” said Dan Moyer, senior analyst, commercial vehicles.
“This will very likely reduce industry volumes, complicate production planning, and negatively affect profitability and stability for OEMs and suppliers in the North American Class 8 truck market. This challenging environment is further complicated by anticipated revisions to the U.S. EPA’s 2027 NOx regulations. Although orders may be approaching their seasonal/cyclical low point, it is unclear how long these depressed demand levels will persist.”
ACT Research counted a slightly better tally of 7,600 orders.
“Between the end of the industry’s annual ‘order season’ and the uncertainty surrounding the impact of U.S. economic policy that peaked at the start of the month on ‘Liberation Day,’ April delivered the weakest cumulative MD and HD order tally since the beginning of the pandemic when markets were comparably unsettled,” explained Ken Vieth, president and senior analyst at ACT Research.
“When released by ACT mid-month, NA Classes 5-8 net orders are expected at 19,200 units, the lowest volume since May 2020. Seasonality provides only modest lift in April.”
Regarding medium duty, he added, “The order trend for MD Classes 5-7 vehicles continued to deflate. ACT’s preliminary look at April NA Classes 5-7 orders puts the month’s volume at 11,600 orders, down 41% from last April’s level. Seasonal adjustment provides only modest support.”
Truck tonnage slipped in March
For-hire truck tonnage slipped 1.5% in March, according to the American Trucking Associations (ATA).
“Solid manufacturing output in March, led by robust auto production, likely helped truck freight tonnage not fall more after a very strong February,” said ATA chief economist Bob Costello. “Overall in the first quarter, tonnage increased marginally from both the fourth and first quarters of 2024. While the gains were not strong at half a per cent and less, it was the first time that the quarterly average increased both sequentially and from a year earlier in two years. That tells me that the freight market did in fact turn around in the first three months of the year despite an uncertain outlook.”
Spot rates down across the board
U.S. spot market rates were down across all equipment types for the week ended April 25, according to Truckstop and FTR Transportation Intelligence.
It marked the first week of the last 11 in which flatbed rates were lower than the previous week. Dry van rates are running at June 2020 levels, up only a penny from then.
Reefer rates fell after a strong week. Diesel prices are more than 40 cents/gallon less than a year ago, Truckstop noted. Flatbed and reefer rates were higher year over year.
And load postings increased modestly on the heels of two weeks of sharp decreases.
