Strong sales for Class 8 trucks expected in 2023 despite challenges

The trucking industry has faced several challenges, including higher finance costs, restrictive credit availability, and declining freight volumes and rate pressure. However, ACT Research continues to see healthy sales and build trends for Class 8 trucks this year, despite a likely recession that could hit by June.

One of the key factors contributing to the demand for new equipment is pent-up demand. Many fleets have deferred equipment purchases in recent years, and they are now seeking to get back to a regular trade cycle. Additionally, elevated carrier profits in the early part of the year have helped support demand for new equipment.

While a recession is expected to hit in the first half of the year, ACT Research does not believe that the pace of interest rate hikes will be aggressive enough to significantly impact commercial vehicle market performance. However, the industry is expected to see a softening in demand as lower freight volumes and rates, higher costs, improved equipment availability, and the gradual exhaustion of pent-up demand begin to exert downward pressure on demand.

Despite these challenges, freight brokers remain relatively optimistic about demand growth. According to the’s semi-annual freight broker survey, about 49% of those surveyed expect demand growth over the next six months, compared to 45% in the first half of last year and 76% in the second half of 2021. Additionally, brokers appear unfazed by the collapse in spot truckload rates and the effects of moderating economic activity on demand, contractual rates, and gross margins.

However, brokers are split about where rates are headed. Spot rates (excluding fuel surcharges) have fallen 24% over the past 12 months after peaking near the end of 2021. About 34% of brokers expect rates to decrease in the next six months, while 28% see them rising. The group is far less optimistic about the ability to raise contract rates with shippers over the next six months.

To see a rebound in manufacturing activity, which accounts for about 58% of trucking ton-miles, there needs to be a recovery in single-family housing. However, the weakened residential construction market and the softening manufacturing sector are headwinds for the industry.

Overall, the trucking industry faces several challenges in the coming year, but there are also reasons to be cautiously optimistic. The rosy outlook for freight is supported by a consistent demand for equipment, and the industry has a fair amount of visibility thanks to a robust backlog. While the outlook for the industry is somewhat uncertain, trucking remains an essential part of the economy and will continue to play a vital role in the years to come.

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