Trucking news: FTR cites strong growth in Class 8 net orders in June

Showing that there is still positive momentum in the trucking sector, freight transportation consultancy FTR Associates said this week that June Class 8 truck total net orders were up significantly compared to May.

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Showing that there is still positive momentum in the trucking sector, freight transportation consultancy FTR Associates said this week that June Class 8 truck total net orders were up significantly compared to May.

At 15,567 units, June was up 20.5 percent compared to May and was up 90.8 percent compared to a rocky June 2009. FTR said that June orders reflect an annualized rate of 188,000 units, which brings the annualized rate for orders in the first half of 2010—which includes U.S., Canada, Mexico, and exports—to 137,000 units.

FTR President Eric Starks said in a statement that this increase in order activity is a welcome sign that the recovery for the commercial vehicle sector remains right on track, adding that with the stronger order activity, third quarter production levels will likely b higher than anticipated.

And in an interview with LM Starks pointed out that while these numbers are positive, most of these orders are for replacement vehicles.

“Looking at these numbers, they really need to be a couple thousand higher to start seeing additional expansion to fleets,” said Starks. “Carriers are being more optimistic about replacing equipment, which is good.”

A meaningful uptick in order activity is not likely to occur until August or September, according to Starks. But June’s strong performance is a good indicator that things are starting to firm up.

And while freight tonnage numbers of late have seen some fluctuation, Starks said that is to be expected.

“This [data] confirms the freight environment is on solid footing,” said Starks.

FTR’s data follows a late June release from ACT Research Co., a provider of data and analysis for trucks and other commercial vehicles, whom reported that commercial trailer net orders in May were up 59 percent year-over-year.

On a year-to-date basis, net orders for trailers are up 69 percent, said ACT, coupled with order cancellations running low as truck fleets continue to see increased demand for services.

“All signs are indicating that freight growth is rapidly absorbing excess truck capacity,” said Kenny Vieth, senior analyst and partner with ACT Research, in a statement.

And in its ACT North American Commercial Vehicle Outlook ACT said that its 2010 forecast for Class 8 vehicle production was increased by 4,500 units. This brings the total projection to 146,000 units, according to Vieth. Despite the increase, Vieth told LM in a recent interview 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.

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

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