Truck Registrations Grow

This story appears in the Sept. 1 print edition of Transport Topics.

Registrations of new Class 8 trucks climbed 16.7% in the first half of 2014 from a year earlier as strong freight demand and tight capacity spurred large fleets to boost equipment purchases, IHS Automotive reported.

The increase pushed the total population of Class 8 registered trucks in the United States to 3.71 million at the halfway point of the year, the highest level on record and up 3.3% from a year earlier.

The six-month total of 107,158 new registrations puts the industry on pace for its best year for new equipment since the 2006 “pre-buy” event and the third-best since 2000, according to IHS’ Polk report on commercial vehicles.

Growth accelerated in the second quarter, when first-time registrations rose 17.8% to 56,307 after a 15.4% year-over-year gain in the first quarter.

Gary Meteer Sr., director of global commercial vehicle products at IHS, said the elevated levels of factory orders this year have begun to materialize in the registration data.

“This quarter has been the first time we’ve seen a really good indication that those orders were recent and those vehicles went through the production cycle, went to a business and got registered,” he said. “That’s a very encouraging sign for the commercial truck business.”

At fleets with more than 500 trucks, new first-half registrations surged 20.8%, Polk reported, compared with 5.6% growth at companies with two to 500 trucks. Registrations did jump 57.2% at businesses with a single truck, but those carriers represent only 10.8% of all new registrations.

Three months earlier, the U.S. fleet added enough trucks to surpass its size at the end of 2008 after contracting during the recession. Now, however, the Class 8 fleet has expanded for eight consecutive quarters on a sequential basis.

Meteer cautioned that the registration data are an imperfect measure of the total trucks in operation because they include some trucks that are not necessarily in use on the highway every day. Examples include trucks that are changing hands, awaiting resale on the used market or soon destined for the scrap yard.

The number of trucks in flux is higher than usual given the amount of new registrations, which often are accompanied by a trade-in of an older model, he added.

Several carriers agreed that freight demand has improved but also pointed to a key challenge that could restrain growth — the shortage of qualified drivers.

Michael Gannon, group president of the fixed asset division at CRST International Inc. said CRST, of Cedar Rapids, Iowa, is receiving many requests from customers to increase capacity, but since 2012 the company has been expanding its fleet only through acquisitions.

“We’d like to grow more,” he said. “It’s just been a challenge with the driver market.”

He said CRST plans to buy about 550 new tractors this year and about 575 next year, in line with its usual purchase cycle.

The carrier strives to keep its number of unseated trucks below 3% and is “honing in on that,” he said.

CRST ranks No. 24 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada.

“The demand for capacity in the market right now is such that we’ve never seen,” said Michael Eggleton Jr., vice president at Raider Express, a refrigerated carrier based in Fort Worth, Texas.

The 170-truck fleet recently moved forward with plans to purchase 100 new power units — with about 60 representing expansion — in order to take advantage of that demand, he said.

Eggleton described the freight environment as “almost too good to be true.”

“If I had 300 trucks, I could put them all to work tomorrow,” he said.

Despite the company’s growth, the driver shortage remains a limiting factor, Eggleton said.

The report also showed that used-truck transactions rose 10.1% in the second quarter from a year earlier.

“Clean used Class 8 trucks are in high, high demand,” Meteer said.

Hogland Transfer Co., a local carrier in Everett, Washington, buys equipment on the used market and has expanded its fleet from about 54 to 60 trucks since the beginning of the year, company President Steve Holtgeerts said.

He added that the driver shortage has been manageable be-cause his drivers are home at night, making it a particularly desirable job.

“It may take a little longer to find the person with the right qualifications for our business, but we haven’t had to park trucks because we haven’t had drivers,” he said.