U.S. sales of new, Class 8 trucks fell sharply in January, according to data received from Wards Intelligence. Manufacturers reported sales of 16,175 trucks, down 27.7% from December sales and down 13.0% from January 2024. It’s not uncommon for January sales to lag behind December, since December is typically a strong month. The month ends the fiscal year and calendar fourth quarter for most companies, and truck purchases can help offset taxes. The year-over-year comparison comparing January results with the same month of the prior year, the sales decline indicates that the market has slowed. The entire year of 2024 saw U.S. Class 8 sales down 9.7% from 2023. January results show that the decline continues. Overcapacity remains an issue for the trucking industry. While the supply of available trucks exceeds available freight, rates will remain low. There are, however, some positive signs One such sign is the number of vocational trucks included in Class 8 sales. The Infrastructure Investment and Jobs Act, commonly known as the “Bipartisan Infrastructure Bill,” earmarks tons of government cash for building roads and bridges, improving water systems and more. Companies who expect to be involved in the building are purchasing dump, concrete and other vocational trucks in preparation. Trucks that are sold for vocational needs won’t be hauling system freight. According to ACT Research, President and Senior Analyst Kenny Vieth, “Vocational build per day rose to a level not seen since 2006, at 513 units per day in November, and blew past that level to 537 units per day in December.” Inventory of new Class 8 trucks is another issue that could impact the rate new ones are manufactured. Dealer lots are awash in new equipment and body manufacturing businesses are limited in how many dump, concrete and trash bodies they can produce. There may be a slowdown on the regulatory side as well. Environmental Protection Agency’s Clean Truck regulations, scheduled to take effect with model year 2027, are expected to be challenged by the Trump administration and may be scrapped entirely. The same for 2028 Greenhouse Gas regulations (GH3) that push buyers to Zero Emissions Vehicles. The president’s Department of Government Efficiency (DOGE) has announced large staff reductions at the agency, predicting a 65% reduction in spending. It remains to be seen how deep cuts in budget and staff will ultimately be, and whether regulations currently on the books will be downsized or gutted completely. While actual sales of Class 8 trucks slowed, so too did incoming orders for more. North American preliminary orders for new trucks totaled 24,000, according to FTR Transportation Intelligence. Senior Analyst for Commercial Vehicles Dan Moyer pointed out that tariffs imposed by the Trump administration could have a significant impact on pricing. “ With roughly 40% of U.S. Class 8 trucks built in Mexico and around 65% of Canada’s Class 8 trucks built in the U.S., tariffs and likely counter-tariffs threaten to disrupt supply chains and drive up vehicle prices,” he said in a recent press release. Moyer pointed out that manufacturers and suppliers may shift some production to avoid crossing borders and incurring tariffs, but such moves “are complex and will take some time to implement.” In the meantime, negotiations with both nations continue. Tariffs and counter-tariffs with China threaten parts supply for both manufacturing of new and maintenance of existing trucks. If the tariffs are fully implemented and truck costs rise appreciably, orders for new equipment could drop quickly. However, while fewer trucks hauling freight could push rates upward, tariffs could also reduce the amount of available loads, especially imports, which would have the opposite effect on rates. Retail sales of used Class 8 trucks saw a strong January, increasing 16% over December sales, according to ACT Research. Typically, January used truck sales decline about 11% from December. Trucks sold by auction, however, declined by 59%. Auction sales often indicate dealers stocking up on inventory in preparation for the coming market, so a decline can indicate a lack of confidence in the coming market. Compared with January of 2024, used truck sales rose a whopping 56%, with both the average age and average odometer reading declining. The cost of credit remains a sticking point, as does economic uncertainty. Freight carriers need trailers to haul product, and January was a strong month for trailer orders, too. ACT reported preliminary trailer orders of 21,300, up more than 51% from January 2024 order numbers. The good times aren’t expected to last, however. Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research, explained, “Notwithstanding the improvement thus far in the 2025 order cycle, ACT’s expectation for weak trailer demand relative to recent performance remain, as continuing weak for-hire truck market fundamentals, low used equipment valuations, relatively full dealer inventories, and high interest rates impede stronger activity in the near term.” If the scheduled EPA regulations remain in effect, carriers may choose to invest in more tractors, pre-buying to avoid emissions and fuel efficiency mandates. Trailers generally require less maintenance and can be kept in service far longer. But a bill that would drastically reduce the requirements of EPA actions for both passenger vehicles and trucks of all sizes, the Transportation Freedom Act, was recently introduced in the U.S. Senate with support from trucking industry groups. Like tractors, trailer sales could be impacted by tariffs, especially those on steel and aluminum products. FTR’s Dan Moyer said, “Tariffs will affect not only fully assembled trailers imported into the U.S. but also domestically produced trailers, which depend on imported materials and components. Expect market volatility as OEMs try to adapt to uncertainty over scope and timing of tariff impacts.” Analysts are predicting slow growth in freight rates and gradually improving trucking conditions for 2025, with many looking for better days in the second quarter or even the second half of the year. Uncertainties over tariffs, upcoming EPA mandates, reduced government spending and more will undoubtedly add difficulty to equipment investment decisions, especially if interest rates remain stubbornly high. The road ahead could be bumpy.
