Subscribe to our free, weekly email newsletter!


Trucking news: ACT notes Class 8 vehicle production and orders are on the upswing

By Jeff Berman, Group News Editor
June 14, 2010

Citing a strengthening North American economy and improving supply/demand balance of freight hauling truck capacity, ACT Research recently said that a continuing rebound of orders and production of commercial vehicles is underway.

The provider of data and analysis for trucks and other commercial vehicles said in its ACT North American Commercial Vehicle Outlook that its 2010 forecast for Class 8 vehicle production was increased by 4,500 units. This brings to total projection to 146,000 units, according to ACT Partner and Senior Analyst Kenny Vieth. Despite the increase, Vieth told LM that a typical unit replacement figure is about 200,000.

“The good news is the forecast is going up and also that even though the forecast is going up it is still well below replacement levels for equipment so capacity continues to bleed out of the market, with incremental improvement in demand,” said Vieth.

Even though demand is improving, the current situation is still not a case of carriers asking for “as many trucks as you can build me right now,” Vieth explained. But he did say this may be coming in the next four-to-six months.

What’s more, Vieth said there have been modest upside surprises on orders in the last three months, which has been encouraging from an equipment perspective.

“What has been nice from an equipment perspective is the strength of demand has hit in all north American markets—in the U.S., Canada, and Mexico and up across equipment types so we have seen orders for tractors with and without sleepers going up,” said Vieth. “We have seen an increase in day cab trucks, and it is kind of everything being just a little bit better than it was.”

While production levels for Class 8 trucks are below replacement levels, Vieth said there continues to be an upward trend in used truck pricing. And over the past six months, he said ACT has seen a $5,000 increase in the six-month run rate it tracks over the past six months. ACT expects an increase of another $5,000 over the next three-to-five months.

“With the improvement in the economy, coupled with the falloff in used truck pricing, it creates a very good dynamic for used truck pricing from a used truck supply perspective,” said Vieth. “And we still have relatively low sales so there are not a lot of trade-ins coming into the market. The big carriers have spent the last three years taking capacity out of fleets, so even thought they have been buying new trucks they have been creating used trucks. I think the big carriers are no longer shedding capacity so that avenue of supply is going away. And we are still seeing reasonably decent exports of used trucks coming out of the U.S., because used truck prices are still low.”

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

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through the end of December with a nearly $11 billion stopgap fix.

XPO Logistics announced second quarter earnings and the acquisition of two companies, New Breed Logistics, a non asset-based 3PL focusing in contract logistics services, for roughly $615 million, and Atlantic Central Logistics, a 3PL provider of last-mile logistics services, for roughly $36.5 million.

The report, entitled “Outlook for the Domestic Transport and Logistics Market in 2H14 and Beyond,” takes the view that strong freight levels in the second quarter have left trucking companies in a good position: one in which they need to come up with new plans to handle rising demand. But even with that positive momentum afloat, the report observes that there are some familiar challenges intact, such as a lack of qualified drivers and the regulatory drag from the new hours-of-service rules that took effect in July 2013.

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

Article Topics

News · ACT Research · All topics

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