Subscribe to our free, weekly email newsletter!


Increase in truck buying activity remains intact, says ACT Research

By Jeff Berman, Group News Editor
April 13, 2011

Pent-up demand based on various factors continue to point to an upcycle in buying activity for commercial vehicles, according to data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles.

Among the factors cited by ACT are deferred replacement, tight freight-carrying capacity, improved fleet financial performance, and easing in credit activity. The firm added that Class 8 net orders continue to be brisk, following a brief pause in January, with commercial trailer orders back on a solid growth path.

What’s more, ACT officials said that in the most recent release of ACT’s North American Commercial Vehicle Outlook that the U.S. economic recovery is “proceeding at a slow, but self-sustaining pace,” adding that the current economic outlook, coupled with recent market performance, indicating that rising commercial vehicle production forecasted by ACT through 2011 and into 2012 remain intact.

“While some growing pains are occurring as the industry ramps up to meet the widespread increase in demand, the commercial vehicle market will continue at a solid pace,” said Sam Kahan, ACT’s chief economist, in a statement. “‘Our outlook is for 2011 real GDP to grow 3.0% on a year-over-year basis. While this is slightly less than previously thought, it is in line with most forecasters.”

ACT reported last week that that a preliminary reading of heavy-duty Class 8 commercial vehicle net orders for North American markets increased to 29,200 units in March, representing the largest monthly order intake since May 2006. 

As LM has reported, ACT officials said that continued strong demand for equipment indicates trucking fleets are ramping up replacement of vehicles, which has largely been deferred the past two years.

What’s more, ACT’s forecast for the Class 8 market indicates that 2011 will be at least 50 percent better than 2010 and closer to 60 percent when production is factored in.

“We are expecting good things,” said ACT Vice President, Commercial Vehicle Sector Steve Tam. “Tonnage is getting better, but there is still a ‘freight bubble.’ We still move a disproportionate amount of freight in the second half of the year. It is not a huge percentage but when you look at the total tonnage, it does not take long to add up.”

And when looking at demand in ACT’s forecasts, Tam said roughly 70 percent of all orders are typically for replacing existing equipment due to things like aging and wear and tear.

This, said Tam, is what is driving the majority of the growth in ACT’s forecast annually.

“Our forecast model actually says that we ought to be building something closer to 275,000-to-280,000 units for this year, but we have held that back because we don’t think the industry is capable of doing that,” said Tam. “The OEMS can do it, as can the first-tier guys, but there are some supply base constraints in the second and third tier that would preclude that from happening.”

For related articles, please click here.

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

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

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