Subscribe to our free, weekly email newsletter!


FTR reports May Class 8 net orders meet modest expectations

By Jeff Berman, Group News Editor
June 07, 2012

Freight transportation forecasting firm FTR Associates reported this week that its preliminary data for May Class 8 truck net orders came in at 17,650 units.

FTR said this number, which represents orders for all major North America-based OEM’s, is up following four months of declines to start the year, with May up 5 percent over April and down 24 percent compared to May 2011. And it added that the annualized order numbers for the most recent three-month period—including May—trends out to 216,700 units, which pales compared to the 308,000 annualized rate from the December-February period.
FTR officials said that May orders were within its expectation range although it remains below previous projections and estimates by various industry stakeholders.

And FTR President Eric Starks said in a statement that the ongoing weakness is putting additional pressure on the OEMs to lower their build rates over the next several months, adding that with monthly orders in the 17,000 range and production in the 25,000 range there is a “disconnect” in effect.

“A dramatic increase in order activity is needed in order for the OEMs to continue production at their current pace,” Starks said. “Over the next few months we expect orders to remain near current levels, as the summer is traditionally a slower time of the year for order activity. It is important to note that even with the recent slowing in order activity, the levels are still relatively healthy for the industry.”

FTR Director of Transportation Analysis Jon Starks reiterated that point, explaining in an interview that while things are sluggish on the orders front, they are not necessarily bad.

One reason for this disconnect, said Jon Starks, is that there was way too much optimism on the OEM side.

“They got ahead of themselves and saw things going in one direction much too fast, so when we get to the back half of 2012 we think there is going to be a significant reduction coming in terms of what the OEMs are doing,” he explained.

Unless there is a strong surge in orders in the next few months, Jon Starks said it is very likely OEM production numbers are going to have to come down. He also noted that a “weak spell” for orders in 2011 carried over into 2012, with OEM’s requiring time to sort through the net effect of orders.

Given that situation, he said it stands to reason that Class 8 sales will be sluggish for the next 6-to-12 months.

“At the beginning of the year OEMS were producing well above what the sales environment was and had built out quite a bit of inventory on the production side,” said Jon Starks. “Sales did not drop off, though, instead they were more sluggish than anticipated.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

With a 0.8 cent decrease, this week’s average price per gallon is $3.835 and stands as the lowest price since hitting $3.844 the week of November 25, 2013.

LTL carriers are rapidly investing in expensive, on-dock, three-dimensional size measurement capturing machinery, and they are hoping one day of being able to more accurately charge shippers rates based on the actual dimensions of their shipments, rather than the traditional weight-and-distance-based formula that has been in effect since the 1930s or even earlier.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) recently reported that its Freight Transportation Services Index (TSI) dipped 0.9 percent from May to June.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA