It’s 2025, when bad news is good news, and carrier bankruptcies are welcomed as a needed precursor to healthier rates.
There’s good news on that front this week as ACT Research indicates the pace of capacity contraction is quickening.
Bad news is bad news for Class 8 truck makers and dealers, as orders remain weak. But this too could be seen as a positive for carriers anxious to see more capacity exit the market.
Class 8 orders down 22% YoY
Class 8 order season has begun with a whimper, with 24,300 units booked in October. That’s up 18% from September but down 22% year over year, marking the 10th straight month of annual declines.
The 10-year October average is 31,198 units. The on-highway segment accounted for the majority of the year-over-year decline, FTR reported.
“Combined net orders for September and October are 32% below year-ago levels, highlighting persistent weakness in freight fundamentals and limited carrier profitability,” said Dan Moyer, FTR’s senior analyst – commercial vehicles.
“The month-over-month uptick in October likely reflects targeted replacement activity rather than renewed investment. For OEMs and suppliers, visibility remains limited, and order trends are expected to stay uneven until freight volumes and rates improve. In the meantime, fleets are focusing on cost control and asset utilization over growth, delaying a meaningful rebound in equipment demand until economic and market conditions stabilize.”
Tariffs on heavy-duty trucks are now in effect, raising prices of new vehicles, but Moyer said they are “less severe and more targeted than expected.”
“USMCA carve-outs, offsets, and the delayed parts tariff create a measured policy that encourages reshoring and strengthens North American supply chains,” he said. “Some production appears to be already shifting toward U.S. assembly, though expanding capacity will take time.”
ACT Research reported Classes 5-8 orders of 40,000 units, down 17% year over year.
“Preliminary Class 8 orders totaled 24,500 units in October, down 21% year over year, a notably weak number when you take into consideration October is seasonally the strongest month for orders with a 25% seasonal factor. This is the time of year when next year’s backlogs get built,” said Carter Vieth, research analyst at ACT Research.
“Rising costs, still-weak spot rates, and ongoing uncertainty continue to hamper for-hire carriers, and as a result, have led to a muted order season to date. Additionally, private fleet demand has slowed after recent expansion.”
Capacity contraction quickens
In other news from ACT Research, the pace of carrier contraction is quickening.
“Class 8 tractor production is on track to decline about 35% from 1H to 2H this year, to a rate several thousand trucks per month below what is needed to maintain the fleet size,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “In our view, lower capacity in an otherwise stable demand environment could move the cycle forward and actually create for-hire demand by reversing the insourcing of recent years. But this will take time.”
The U.S. driver market is no longer loose, but not yet tight, Denoyer added.
“The new rules on non-domiciled drivers could tighten driver capacity over the next one to two years, but heavy truck tariff costs are starting to constrain equipment capacity,” Denoyer concluded.
Carrier optimism growing
A Q3 survey by truckstop.com and Bloomberg Intelligence suggests carriers are increasingly optimistic about freight volumes, though less so when it comes to rates.
“Many believe the bottom may be near in terms of volumes, and are cautiously preparing for better days ahead, despite ongoing pessimism on rate recovery,” said Todd Markusic, customer insights manager at Truckstop.com.
Most responding carriers (60%) said freight volumes were stable through Q3, and 80% said they expect those volumes to remain flat or increase over the next six months.
Only 15% of responding carriers said Q3 revenue grew year over year, while 42% said revenue was steady. Only 37% expect rates to improve over the next six months, down from 55% who felt that way at the beginning of the year.
Sixty-nine per cent of carriers said they believe tariffs will harm the trucking industry, while 41% believe U.S. enforcement of English language proficiency rules will have a significant impact on the industry.
“The industry’s current conditions are testing every business, especially small fleets,” Markusic said. “But carriers are adapting and showing resiliency.”
Spot rates fall in advance of peak season
Truckstop.com and FTR Transportation Intelligence reported spot market rates were down across the board for the week ended Oct. 31. This is a seasonal norm, truckstop.com reported, ahead of peak season.
“Dry van spot rates were down for the third time in four weeks, while refrigerated rates decreased for the first time in five weeks. Flatbed spot declined for only the second time in six weeks,” truckstop.com reported.
“Based on historical performance, spot rates for dry van and refrigerated equipment are expected to firm this week as Thanksgiving and Black Friday/Cyber Monday approach. Flatbed spot rates, however, generally decline in early November.”
Spot volumes rose week over week for the first time in a month, but so too did truck postings, pushing the Market Demand Index down slightly to 82.4, its lowest level in 10 weeks.
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