North American heavy-truck orders
are hitting a speed bump, with cancellations jumping to the fastest pace in about two years as a stagnating economic recovery prompts fleet owners to delay or scrap purchases.
The March rate shot up to 9 percent from 6.1 percent a month earlier, according to data compiled by Bloomberg. North American freight shipments fell 1.3 percent in March and grew less than 1 percent in April, according to Cass Information Systems Inc.’s Freight Shipment Index.
Preliminary April orders for Class 8 trucks added to evidence of a surprise slowdown by falling to the lowest since September 2010
, according to FTR data. Continued weakening in orders may lower industry expectations, Peter Nesvold
, a Jefferies Group Inc. analyst, wrote in a note to clients May 4.
That’s already happened at FTR. As recently as March, the firm was predicting Class 8 shipments of 285,000 units, or 12 percent more than a year earlier. It has since cut that estimate to 275,027 units, an 8 percent increase, as truckers delay purchases to refresh the oldest fleet since at least 1980.
“Slow and inconsistent economic growth” helped drag the freight unit of trucker Arkansas Best Corp. (ABFS)
to a drop of about 9 percent in daily tonnage in the first 3 1/2 weeks of April
, said Amy Mendenhall, director of investor relations
. Rate increases at the Fort Smith
, Arkansas-based company and “tough comparisons” from prior periods also damped volumes, she said.
One freight-company investor said the drop in truck shipments may be due to unusual weather, not a faltering economy.
Slower March and April deliveries may be the result of truckers being able to move more goods during a mild winter
, said Eric Marshall
, director of research at Dallas-based Hodges Capital Management Inc., which oversees about $700 million. The firm’s holdings include trucker Saia Inc. (SAIA)
and railroads Union Pacific Corp. (UNP)
and Kansas City Southern. (KSU)