Subscribe to our free, weekly email newsletter!


Trucking news: ACT says net orders for Class 8 vehicles continue to rise

By Jeff Berman, Group News Editor
May 26, 2010

As the economy slowly improves, truck capacity continues to tighten. That is apparent in the most recent data from ACT Research Co., a publisher of North American industry data, market analysis, and forecasting services for trucks and commercial vehicles.

According to ACT, net orders for heavy-duty Class 8 commercial vehicles were in April were up 91 percent year-over-year. This continues a sequential trend which has occurred in recent months, with net orders up 20 percent in February and 28 percent in March.

“From top to bottom, April was a healthy month for the Class 8 segment, at least in relative terms,” said Kenny Vieth, partner and senior analyst with ACT, in a statement. “Orders were above expectations, backlogs rose and retail sales remained elevated. If orders surprise on the high side again in May, it could have upside implications for our forecasts for the remainder of 2010 and 2011.”
Earlier this month, ACT said that Class 8 vehicle production is expected to increase by 6,000 units, which would hike 2010 year-over-year growth to 19 percent. ACT also said that its 2011 forecast was upped by 3,000 units for a year-over-year growth rate of 67 percent.
Company officials said that 2010 production growth is limited, due to it being well below replacement level demand. But they added that aging fleets have carriers expressing interest in upgrading fleets, with anecdotal evidence suggesting reserve capacity is in poor shape, due to carriers parking trucks during the recession.
As truck capacity continues to tighten, especially in the truckload sector, ACT is projecting that the industry will be at supply/demand equilibrium by the middle of this year, said John Burton, ACT vice president, transportation sector, in an interview.
“I would say carriers are increasingly optimistic, but issues with the transition to the new [EPA 2010] technology will cause some delays in when people start purchasing,” said Burton. “The other issue complicating the price of these EPA 2010 trucks are lower prices of used equipment right now. As the industry recovers, the used price market should somewhat recover, too, and that will help reduce the gap between new and used equipment.”
Used truck prices are likely to inch up throughout 2010 as industry demand decreases, which Burton explained will lead to an increased desire for people to come back into the industry and purchase used equipment at still depressed prices. And with Class 8 production predicted to increase 72 percent in 2011, coupled with many trucks being “cannibalized” by carriers to reduce maintenance costs, said Burton, a leading truckload carrier told ACT it would take $10,000-to-$15,000 per truck to get a good number of its parked units back online. This situation, he said, leads carriers to consider whether to repair them, put them in the used market, or take a loss and get a new piece of equipment.
As for what this data means to shippers, Burton said the one certainty is that rates-particularly in the truckload sector-are expected to rise in the next six-to-nine months. While this is unfortunate for shippers, whom have seen considerable rate relief during the economic downturn, Burton said rising rates are going to be a key component to returning the trucking sector to profitability, so carriers can reinvest in buying equipment again.

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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Article Topics

News · 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