3Q Registrations of New Trucks Best Since 2006

This story appears in the Dec. 8 print edition of Transport Topics.

Registrations of new Class 8 trucks jumped in the third quarter to the highest level in nearly eight years as large firms replenished and expanded their fleets, IHS Automotive reported.

The quarter’s total of 59,327 new registrations — up 22.3% from a year earlier — was the strongest since the fourth quarter of 2006, when buyers were rushing to obtain new trucks ahead of tighter federal emission standards, according to IHS’ quarterly report on commercial vehicles.

“It’s clear from what we’ve seen recently that there’s been some fleet expansion going on,” said Gary Meteer Sr., director of global commercial vehicle products at IHS. “The big fleets appear to have decided to add to their vehicle populations. The data suggests strongly that they are in the market at a level that we’ve not seen in quite some time.”

The surge in demand for new equipment during the third quarter helped boost the total population of registered Class 8 trucks in the United States to 3.75 million at the end of September, the largest size on record and up 3.9% from a year earlier.

Meteer said the increase in new registrations reflects trucking companies’ growing confidence.

“There’s no bad news putting people on the edge of their seats, worrying,” Meteer said. “It’s not so much good news as it is a lack of bad news.”

The growth seems to be continuing into the fourth quarter, with ACT?Research reporting that new orders of Class 8 trucks in November nearly doubled the year-earlier figure (see story at left).

Year-to-date, new Class 8 registrations have climbed 18.9% to 166,960 units, the IHS data showed.

Growth for the first nine months was driven by a 22.7% jump at fleets with more than 500 trucks, while companies with two to 500 trucks saw a more modest 7.8% increase. Registrations have surged 58.9% at businesses with a single truck, but they account for only 11.3% of all new truck registrations.

One truck dealer said many of his fleet customers have been expanding their capacity.

“They’re seeing increased demand, and in fact, were it not for the driver shortage, they would be growing even more,” said Kyle Treadway, president of Kenworth Sales Co., which operates 20 locations in the western United States. “The driver shortage is the lid on this growth market.”

He attributed the increase in new equipment sales to factors including rising maintenance expenses for older trucks and the heightened value of used equipment, enabling fleets to get “top dollar” for their trade-ins.

“The truck market we see today is unquestionably the best we’ve seen since the recession,” Treadway said. “It’s not at the levels of the peak in ’06, but I think that’s a good thing because we couldn’t keep up with that pace.”

Some fleets, such as Buddy Moore Trucking in Birmingham, Alabama, have been growing through acquisitions rather than adding vehicles organically.

The flatbed and dry van carrier added about 120 trucks last year when it acquired MSJ Trucking, increasing its total fleet to 300 units, said Buck Moore, the company’s president.

The fleet is not currently expanding, though, largely due to the driver shortage.

“We would like to add equipment, but we just don’t think we can staff the trucks,” Moore said.

The company has ordered trucks for 2015 delivery, but they are all replacements for vehicles it purchased coming out of the recession, he said.

Sequentially, the total U.S. Class 8 fleet size has been expanding for nine consecutive quarters, according to the IHS data.

The growth in new registrations has been led by the central and southern regions of the United States, which saw increases of 22% and 21.8%, respectively, for the first nine months of 2014. New registrations rose 12.5% in the Northeast and 11.7% in the West.

Meteer estimated that new Class 8 registrations will reach a total between 211,000 and 220,000 in 2014, which would be the industry’s strongest level since 2006.

He also predicted that new registrations would continue to rise in 2015, but at a slower pace. His firm currently projects 4% growth next year.