Increase in truck buying activity remains intact, says ACT Research

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.

By ·

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, 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. Contact Jeff Berman

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!

Latest Whitepaper
Revisiting Supplier Relationship Management to Boost Real Value in the Supply Chain
Supplier relationship management (SRM) initiatives are on the rise, and companies who successfully implement these programs can realize a significant return on their technology investments.
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...