Preliminary data for the month of April shows that Class 8 truck orders remain on a downswing, dropping 9% from March of this year, according to numbers gathered by Nashville, IN-based research firm FTR Associates.
April 2009 Class 8 figures are also down 57% compared to April 2008. That reflects an annualized rate of 95,220 units, said Eric Starks, FTR president, who added that these figures continue to represent a significantly depressed Class 8 retail sales environment.
"We don't see any near term increases in Class 8 order activity because the fundamentals of the trucking industry today don't support that," he said. "We take a hard look at everything likely to impact Class 8 sales, and right now, that data indicates no significant improvement in new equipment demand."
Indeed, several motor carriers noted in their first-quarter earnings reports that they are reducing the numbers of tractors in their fleets – rather than buying new ones – as freight volumes continue to be depressed.
Werner Enterprises said it reduced its fleet by 4% during first quarter of 2009 with a 150-truck reduction in January followed by a 175-truck cut in March. Yet it found the decline in freight shipments over the first quarter exceeded its reduction effort.
"We have continued to right-size our [truckload] tractor fleet according to customer demand, which resulted in a reduction of 948 tractors, or 23% [in the first quarter this year],compared with the tractor count at the end of the first quarter 2008," resulting in a total tractor count of 3,109 units, said Kirk Thompson, president & CEO of J.B. Hunt Transportation Services in the carrier's earnings statement.
Thompson also pointed out that the company's dedicated contract services (DCS) fleet contracted by 13% in the first quarter, relating to a decline in average trucks of 373 units to 4,524 vs. 4,897 units compared to the same period in 2008. "The decline in truck count primarily relates to continued, proactive reductions in some existing fleets as customers continue to adjust to current lower business demand levels," Thompson said. He noted this fleet contraction may persist throughout the current economic recession.
Primarily due to its aging tractor fleet, J. B. Hunt's total maintenance expense increased from 7.9% of operating revenues in the first quarter of 2008 – excluding fuel surcharges – to 11.3% in the first quarter of this year.