Trucking news: ACT report projects 2010 Class 8 vehicle sales to be up 26 percent year-over-year

By Jeff Berman, Group News Editor
July 15, 2010 - LM Editorial

The market for Class 8 vehicles continues to show sustained strength, according to recent data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles.

In its North American Commercial Vehicle Outlook, ACT projects full-year production of Class 8 vehicles to be up 26 percent in 2010 compared to 2009’s 118,400 vehicles.

This news comes at a time when truck rates are seeing consistent gains in recent months in conjunction with tight capacity, especially on the truckload side. And the majority of these new trucks is for replacement vehicles, rather than to add capacity, note industry experts.

“Most carriers are in the process of getting back on their feet so the last thing they want to do is to add capacity,” said ACT Senior Analyst and Partner Kenny Vieth in an interview. “But many carriers’ fleets are very old, freight volumes are growing, and we are starting to see a recovery in freight rates at this point….and it has been a long time since carriers replaced any trucks [until recently].”

In recent months, large carriers like J.B. Hunt and Con-way Freight, among others, have made significant replacement truck orders.

Vieth said that Class 8 market demand is on the cusp of a cyclical pop, with order likely to flow rapidly in the fourth quarter as the population of trucks relative to the freight to haul continues to shrink. There are still below-replacement level retail sales occurring, coupled with projected 3 percent GDP growth in the next year, which could lead to strong demand while production ramps up in various industries that count on truck services to move their goods.

“Even if the economy comes in below expectations we should still be able to get to a pretty healthy rebound in demand year-over-year,” he said.

ACT’s news follows a recent report from FTR Associates, which said June’s Class 8 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.”



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).


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Article Topics

News · Trucking · Truckload · LTL · Freight Rates · All topics

About the Author

Jeff Berman, 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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