2011 Class 8 Fleet Declines Despite Jump in Registrations

The total U.S. Class 8 fleet dropped 2.1% in the 4th quarter of 2011 compared with the last quarter of 2010, as fleets continued to squeeze out their oldest trucks to bring freight capacity more into alignment with available loads, according to R.L. Polk & Co.

The total decreased — to almost 3.5 million vehicles in 2011 from 3.58 million in the fourth quarter of 2010 although Polk’s data showed 158,977 new Class 8 trucks were registered last year, a 38.2% increase from 2010.

“Despite the increase in freight volumes, no one is expanding their fleets,” Gary Meteer Sr., Polk’s account director for commercial vehicles, told Transport Topics last week. “What they’re doing is getting rid of their older models, trading in ones that still have value and taking the oldest off the streets.”

At the same time the fleet shrank, truck tonnage climbed 5.9% in 2011, according to American Trucking Associations.

Polk, based in Southfield, Mich., released its latest Quarterly Commercial Vehicle Report on Feb. 16.

Polk’s figures, based on state vehicle registration data, showed that Class 8 vehicles in operation peaked at 3.7 million units at the end of 2008, two years after U.S. Class 8 sales hit their historic high of 284,008, according to WardsAuto.com.

Many fleet executives said, “I’m not going to take a chance,” Meteer said, “and they are renting and leasing trucks to move the increased freight.”

Larger fleets were buying new trucks in higher percentages than smaller fleets, Meteer also said.

“Fleets that are running 500 or more trucks increased their registrations of new trucks by 30% over last year, compared to the industry average of 23%,” Meteer said, “so big fleets are making buys higher than the industry average over last year, but they were replenishing their fleets but not adding new trucks.”

Richard Witcher, CEO of Minuteman Trucks, a Navistar Inc. International dealer in Walpole, Mass., gave other reasons for the diminishing fleet size.

“Fleet owners are significantly trying to increase their productivity and manage their costs better than in the past, and that could be one reason for the declining Class 8 fleet size,” Witcher, also the new chairman of American Truck Dealers, told TT.

“Fleets are also paying more attention to the driver and to the customer as another way to increase efficiency, so that they can reduce the asset-managed portion of their business,” he added.

“Truck manufacturers have also been making serious improvements in product quality over the past 10 years, which has lowered downtime considerably, which then translates into fleets needing fewer trucks,” Witcher said.

Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., said fleet owners “are still rationalizing their capacity in relationship to freight volume.”

“When you see a decrease in Class 8 fleet size, that means more vehicles were scrapped than were brought into the system,” Brady told TT. “We’re rapidly reaching the point now where capacity equals freight volume, but that is looking at the entire Class 8 fleet.”

Brady said that “if you look at just truckload, we have already brought capacity into alignment with freight volume.”

Polk’s Meteer said that one statistic stood out in the company’s registration information on new Class 8 vehicles.

“The OEs had a very good year, when 38.2% more Class 8s were registered last year than in 2010,” Meteer said. “However, those new truck sales were not spread out evenly among the OEs.”

“Of the six major manufacturers participating in GVW 8 [gross vehicle weight class], International’s 2.7% year-over-year increase in new registrations was the smallest of the six major manufacturers and resulted in a decline of 5.8 points of segment share,” the Polk report stated.

“There is no indication in these numbers of why it happened,” Meteer said. “There are a whole host of possible reasons, such as losing the business of a single major fleet.”

However, Commercial Motor Vehicle’s Brady said that sales figures by WardsAuto.com gave Navistar much higher 2011 sales. Polk reported that customers registered 27,106 new Class 8 International in 2011, up 9.2% from 26,857 in 2010, while Ward’s reported that Navistar sold 35,938 new Class 8s in 2011, a 33.4% increase from 26,939 in 2010.

“There just has to be something missing from Polk’s report, maybe a type of vehicle that Ward’s counts as a Class 8, but Polk doesn’t,” Brady said.

“We continued our strong momentum in Class 8 in the second half of 2011, and that progress continues with the strong January results announced just last week (2-20, p. 1),” Jack Allen, president of Navistar’s North American Truck Group, told TT.

“The rate of replacement for fleets continues and, with our 15-liter coming on in 2012, we’re well-positioned as the market continues to rebound,” Allen added.