Tractor Demand Not a Key Indicator for Market Health in 2024

According to ACT Research, Class 8 truck orders maintained unexpectedly robust levels throughout the initial months of 2024, surpassing last February’s figures by more than 20%.

Historically, freight-hauling semi trucks have been a reliable barometer of industry vitality, but as with many metrics, the interpretation of this statistic has evolved.

When queried about the condition of the national freight market, transportation service providers uniformly express dismay, characterizing it as dire.

National truckload carriers are already managing investors’ expectations for the first quarter. (Credits: FreightWaves)

In early March, long-term contract rates for dry van truckload freight continued to decline, registering a year-over-year decrease of over 7%.

Consequently, there is scant justification to anticipate any resurgence in this segment of truck orders.

ACT Research offers several explanations, attributing the sustained order levels to the expansion of private fleets and a degree of increased vocational spending, spurred by government investments in infrastructure and efforts to restore manufacturing.

This rationale aligns with the fractured nature of the domestic freight market since the onset of the pandemic in 2020.

Analyzing rejection rates across different trailer types, it becomes apparent that the flatbed market (FOTRI) followed a markedly different trajectory compared to the refrigerated (ROTRI) and dry van (VOTRI) sectors.

This divergence can largely be attributed to the nature of flatbed freight, which predominantly involves industrial and construction materials.

While tender rejection rates for refrigerated and van trailers declined swiftly, flatbed rejection rates took longer to rise, peaking after the downturn in refrigerated and van segments.

These sectors were significantly impacted by supply chain disruptions and production constraints during the pandemic.

The relative health of the flatbed market post-pandemic can be attributed to its lower profile and fewer new entrants during the crisis period.

The escalating national rejection rate for flatbeds lends support to the notion that there is heightened demand for heavy equipment within vocational projects, as well as within the broader truckload segment.

Josh Alba
Josh Alba
Josh Alba stands at the forefront of contemporary business journalism, his words weaving narratives that illuminate the intricate workings of the corporate world. With a keen eye for detail and a penchant for uncovering the underlying stories behind financial trends, Josh has established himself as a trusted authority in business writing. Drawing from his wealth of experience and relentless pursuit of truth, Josh delivers insights that resonate with readers across industries.
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x