The latest release of ACT Research’s For-Hire Trucking Index showed the supply-demand balance falling to 54 on a seasonally adjusted basis in June from 60.9 in May. This reverses much of the April/May rebound, amid both softer volume and faster capacity growth that loosened the market balance at the margin.

“The drop in June left the index well below the twelve-month average of 62.3,” said Tim Denoyer, ACT Research’s Vice President and Senior Analyst. “The for-hire industry made it through contract season in a very tight capacity situation and secured record rates at least into spring 2019. However, both accelerating Class 8 tractor production and slowing freight could continue to loosen the supply-demand balance from here.”

As part of this month’s survey, ACT Research queried fleets about the kind of lead times and price increases being seen for 2019 Class 8 truck orders.

“Responses to this two-part question show lead times averaging six to eight months, while those who opted to mention price increases indicated they are about 3 percent,” Denoyer commented.

The June fleet purchase intentions reading indicated an uptick in equipment demand, with more than 58 percent of respondents planning to buy trucks in the next three months. ACT Research believes that while improvement was reported in June, the recent softness in equipment demand readings may reflect the increasing scarcity of production slots remaining this year. Over the past 12 months, the buying index has averaged a strong 58 percent reading.

NA Class 8 Orders
ACT Research also recently reported that June’s North American Class 8 Orders continued above-capacity trend.

At the top line, NA Class 8 net orders totaled 42,224 units in June, marking the fourth time in six months in which industry orders cracked 40,000 units.

“North American Class 8 net orders continued to materially outpace the industry’s ability to sate demand, and June’s performance is more impressive in that it is typically one of the weakest months of the year for orders,” said Kenny Vieth, president and senior analyst. “When seasonally adjusted, June’s intake rises to 48,264 units. Seasonally adjusted, we have to track back to March 2006 to find the only month in history that surpasses June’s volume.”

Regarding the medium duty markets, Vieth said, “Demand for medium duty vehicles remained on a strong path in June, with Classes 5-7 orders rising to a three-month high of 26,649 units.”

“Through year-to-date June, medium duty orders are up 23 percent year-over-year, and current market strength continues to hearken back to 2006,” he added.