December 2017

Truck Orders Jump To Highest Level In 3 Years

Truck Orders Jump To Highest Level In 3 Years

Much of this and other data on freight shipping comes from ACT Research and FTR Transportation Intelligence, both of whom are bullish on the trucking industry’s near future. Let’s look at the numbers.

Year-to-date orders after seasonal adjustment have been consistent, ranging from 41,400 units in May to 48,900 units in October, according to ACT Research President and Senior Analyst Kenny Vieth.

Meanwhile, North American Class 8 orders for the past 12 months have totaled 261,500 units, according to FTR. And, at 36,200 units, preliminary October Class 8 net orders surpassed expectations by a considerable margin.

October’s orders represented a 160 percent year-over-year jump from a particularly easy, cancellation impacted, year-ago comp, according to Vieth.

“October is typically the second strongest order month of the year,” he said.

Harvey and Irma’s Impact

The jump in Class 8 orders in October signals improved freight conditions and rates that will almost certainly lead to a rebound in carrier profitability in 2018, according to Vieth.

Says Jonathan Starks, FTR’s chief operating officer: “The market seems well situated for a strong production environment to persist into 2018.”

Starks said he’s not surprised by the strong fall order season as FTR’s been anticipating the trend since early in the year. What made the prediction a certainty was this fall’s volatile hurricane season.

Hurricanes Harvey and Irma merely exacerbated an already tight truck market so the strong order activity in October was no surprise to us,” he said.

ATA Concurs

American Trucking Associations, which tracks freight volume, concurs with ACT and FTR and points to a predicted robust holiday season as part of the reason for the uptick in trucks orders.

For instance, during the last four months leading up to the holiday shopping season, freight volume is up 6.7 percent. This suggest that retailers are expecting strong consumer spending this year, according to Bob Costello, the ATA’s chief economist.

Here’s more ammo: In a National Retail Federation survey, 69 percent of Americans or 164 million people said they plan to shop over the Thanksgiving weekend, a period that includes the now infamous Black Friday and Cyber Monday. And in the first

22 days of November, more than $1 billion per day was spent by on-line shoppers. On Thanksgiving alone, nearly $2 billion was spent.

All signs point to vigorous spending through the holidays, ensuring a healthy end to 2017 and a huge boost to the trucking industry.

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