Friday, November 14, 2014

Big Bets on Big Rigs

Near-Record Tractor-Trailer Orders Will Help Keep the Economy Moving in 2015.

Will the U.S. economy experience a strong 2015? The nation’s motor carriers seem to think so. 

Enough North American Class 8 truck orders were placed in October  – approximately 46,000, reported the Journal of Commerce – to make it the second highest order month ever recorded, with orders up 87 percent month-over-month and 76 percent year-over-year. After two strong quarters of strong freight demand and higher rates, carriers are beginning to add capacity, and that’s good news for U.S. shippers having an increasingly hard time hiring trucks, and paying more for them when they do. Large trucking companies, both truckload and less-than-truckload, still have capacity levels at least 15 percent lower than in 2006. 

Demand for medium-duty Class 5 to 7 trucks is increasing, too. In total, 67,900 orders for Class 5 to 8 trucks were booked in October, a 50 percent year-over-year increase. Class 8 trucks, anything with gross vehicle weight rating (GVWR) over 33,000 lbs., are the long-haul semis that move freight over the highways. Class 5 through Class 7 trucks, with a GVWR between 16,000 and 33,000 lbs., are the smaller and medium-size service vehicles you see around town.

Over the past twelve months, Class 5 to 8 net orders have totaled 563,600 units, the strongest 12-month period since the twelve months ending January 2007. This time, however, truck operators aren’t buying vehicles in advance of costly new emissions requirements, but in preparation for an anticipated steady rise in freight volumes, said analysts.

Indicators of future economic activity look strong. October was the 66th month of expansion for the U.S. economy, and the country has added over 200,000 jobs a month since February, the best record since 1995. Real GDP has expanded more than three percent in four of the last five quarters. 

While the issue of training, hiring and retaining enough drivers to keep those trucks on the road continues to plague the industry, at least carriers are taking steps to make available the tractors and trailers they need to literally keep the economy moving.

Kirk Shearer
800-989-0054 x103

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