Trucking lines reduced their orders for new vehicles in February as they waited for economic conditions to improve.
Orders for Class 8 trucks, the big rigs used on long-haul routes, fell to 17,900 last month, down 43 percent from a year ago and off 2 percent from January,
according to ACT Research data cited by The Wall Street Journal.
The newspaper said trucking companies began to cut investments in their fleets last fall as freight demand slowed.
“Orders for commercial vehicles in February largely mirrored the ongoing U.S. economic narrative,” ACT President Kenny Vieth said in a statement.
He said weak factory activity is preventing truckers from placing orders for new vehicles, although some economic indicators show signs of a manufacturing rebound. The Institute for Supply Management on Tuesday said factory activity contracted at a slower rate in February than a month earlier.
Analysts see risks of a continued downturn if truck orders don’t rebound in April as buying typically begins to climb to prepare for the late-summer shipping season.
“Production estimates may need to come down further if orders do not pick up from the current levels in the coming months,” Michael Baudendistel, an analyst at Stifel Nicolaus who forecasts Class 8 truck production falling 24 percent from 2015, said in a reported cited by the WSJ.
Meanwhile, naval shippers carrying coal, iron ore and grains have never had it this bad and should expect little relief for another two years, Herman Billung, chief executive officer of Norway’s Golden Ocean Group Ltd., said at a conference.
An enormous oversupply of vessels isn’t sustainable and the dry-bulk industry will soon be contending with “a lot of bankruptcies,”
he told Bloomberg News. “In dry bulk, we haven’t seen as bad a market since the Viking age. Has it ever been this bad in modern history? I would say no.”
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