For U.S. Class 8, orders averaged 40,800 units per month in 2018, but for the first half of 2019, just 14,600 per month. Similarly, U.S. trailer orders averaged 35,100 units/mo. in 2018, and have managed just 13,500 units per month in the three months ending May.
Much of the weakness in orders in the first half of 2019 is a reflection of the strength in orders in 2018 and the large, filled backlogs at the start of the year. We are just at the point where the order focus will shift to 2020, so weakness from here on out will be more indicative of future activity than the order weakness experienced year to date.
Despite the slowdown in orders and falling backlogs, demand for used equipment persists at high levels. In April 2019, average used prices were up nearly 15% from a year earlier. Strength in used equipment, like new equipment, is attributed both to strong carrier profitability tailwinds into 2019 and the rapid improvements in technology and fuel economy that have come into the fleet in the current decade.
Replacing an older truck with a fuel-efficient late model truck will help to offset falling freight rates.