Truck Orders: Ramping Down Signals Turning Point in 2025
After attending ACT Research's Market Vitals: The Current and Future Health of the Market Seminar 71 on August 21-22, 2024, Brett Lankford from Fetch Freight and Tim Denoyer from ACT Research sat down to discuss key insights about the Class 8 market, the impact of private fleets on out-of-cycle orders, current economic conditions, and what all of this means for rate recovery and the overall truckload cycle. Scroll down to read the full conversation between Brett and Tim. Despite ongoing challenges in the freight industry, demand has shown surprising resilience, largely driven by strong consumer spending. However, the freight market itself hasn’t seen much improvement—it remains stagnant. One of the main reasons behind this is the rapid growth of private fleets. Companies are investing heavily in their own transportation networks, which has led to a significant shift in volume away from the spot market. These private fleets often have more favorable cost structures, allowing them to expand aggressively and take market share from traditional for-hire operators. Another factor contributing to the lack of movement in the market is the declining prices of used trucks. With lower costs to re-enter the market, owner-operators are coming back in greater numbers, increasing supply and further complicating the balance between capacity and demand. The conversation around truck orders suggests that the industry is at a crucial turning point. Prices are being finalized, and order books are about to open for 2025. While there’s some optimism, sentiment remains cautious. This hesitation could actually be positive for the spot market in 2025, as it may signal a slowdown in production. A reduction in manufacturing output would help stabilize the market by reducing excess capacity. On the equipment side, inventory levels are rising, and the flow of new orders is beginning to slow. Truck manufacturers are approaching a critical moment where they will need to reduce production. While this might be difficult for suppliers and OEMs, it could bring much-needed relief to freight rates. As we hear more from fleets, it’s becoming clear that this slowdown is on the horizon. It’s part of the natural cycle of the freight market, and while it may create short-term challenges, it sets the stage for a healthier and more balanced market in 2025. Another topic that is gaining attention is emissions regulation. While progress has been made, it's still moving at a slow pace. The industry is starting to prepare for these regulations to become a central focus again in the freight cycle discussion. As stricter standards are implemented, companies will need to adapt, which could lead to additional costs and changes in fleet operations. The freight market, especially the for-hire segment, has been in a prolonged downturn. But as the market continues to adjust, the fundamental forces of supply and demand are still at play. Excess capacity must be addressed, and this correction is essential for restoring balance to the industry. As supply begins to rationalize, carriers and providers should see some relief, creating a stronger foundation for future growth. In summary, the freight market is currently navigating a period of stagnation and oversupply. However, with the industry's resilience, smart adjustments in truck production, and evolving emissions policies, there's hope for a meaningful recovery in 2025. Keep an eye on these trends as they continue to shape the future of the sector. Knurled Nuts,Knurled Nut Driver,Knurled Thumb Nut,Knurled Thumb Nuts Suzhou Chenran Precision Fasteners Co., Ltd. , https://www.chenranfastener.com1. Resilience in Demand, but Stagnation in Freight
2. Truck Orders: Preparing for 2025
3. Emissions: A Growing Concern
4. A Long Downturn and Market Correction