Fleet Size Rises 1% in 2Q, Report Says

This story appears in the Aug. 24 print edition of Transport Topics.

The number of Class 8 vehicles operating in the United States totaled 3.641 million units in the second quarter, an increase of less than 1% over the same quarter in 2008, transportation research firm R.L. Polk & Co. said.

Polk, which bases its figures on registration data, said Aug. 14 that truck registration numbers for the past three quarters included the three highest totals since the company began to collect heavy-duty data, despite the prolonged drop in freight volumes.

The number of trucks in use hit a high of 3.65 million in the fourth quarter of 2008, then slipped to 3.63 million in the first quarter this year. The second quarter totaled 33,000 more trucks than the same period last year.

Gary Meteer, Polk’s senior account director of commercial and aftermarket solutions, told Transport Topics the data probably meant fleets were unable to sell or were unwilling to scrap their unused vehicles, rather than representing any increased demand for trucking services.

“There doesn’t appear to be anything on the horizon that gives an inkling of things getting better in trucking,” Meteer said.

Other analysts doubted even the modest increase Polk reported.

“I think these numbers seem high, based on data we collect,” Bob Costello, chief economist of American Trucking Associations, told TT. “Year over year, the fleets were down 4.7% in June 2009 [from a year earlier]. I have to stress that these are Class 8 tractors only that we’re counting.” Polk’s data included buses and recreational vehicles.

Costello said that ATA’s economic team talks to fleets every month, asking whether they are growing or shrinking. They also make adjustments for fleets that go out of business.

“When you take this group as a whole, compared to the high point nine quarters ago, their fleets are 8.5% smaller than at that time,” Costello said.

Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., another transportation consultant, also said he thought Polk’s Class 8 figures were high.

“We regularly follow the financial statements of publicly traded fleets, which mirror the overall industry, and most of them are shrinking the size of their fleets in response to lower freight volumes,” Brady told TT. “It’s been a very substantial decrease in freight. They don’t need new trucks.”

He added that over-the-road fleets also were reducing employment, especially of drivers.

“I’ve got to believe private carriers are reducing the size of their fleets as well, because they are cutting employment and sales,” Brady added. “If they’re shrinking the size of their businesses, closing unprofitable stores, cutting inventory, I don’t know how they get an increase in truck population.”

Polk did report serious declines in new truck registrations for the first half of 2009, compared with last year, in every major weight category.

Polk said 24,623 new Class 8s were registered in the quarter and 45,470 during the first six months, down 33.1% from the first half of 2008.

The report said the registrations for Classes 3-8 combined dropped 40% in the quarter.

“May and June marked the first time since new commercial vehicles have been collected that two consecutive months have been below 25,000 units,” the report said.

Polk lowered its projection for Class 3-8 new vehicle registration to 332,000 vehicles for 2009, adding that if second-quarter trends continued, the 2009 total could drop to fewer than 300,000 units, the lowest in 18 years, and Class 8s, under 100,000.

“We haven’t seen those figures since 1991, when 326,800 new commercial vehicles were registered,” Meteer said. “What is troubling for us is that registrations for all classes of vehicles are weaker than what we thought they would be just 90 days ago.”

Eric Starks, president of transport research firm FTR Associates, Nashville, Ind., said the truck tally, if correct, “is bad news for both the original equipment manufacturers and the major fleets.”

“The main thing is that fleets are not shedding equipment that the industry needs to shed in order to get capacity in line with demand,” Starks told TT. “It highlights a continued problem of recovery going forward.”

He said that many in the industry believed that truckers were scrapping equipment at a much higher rate than Polk’s data showed.

“That is not good information for new truck manufacturers, because they want to see a much lower number of trucks on the road that would push sales of new vehicles,” Starks said.

“As for fleets, since they’re not going to get price relief by contraction, they’ll have to wait for freight to pick up to correct the imbalance in pricing, and that will take much longer,” Starks said.

In other data, 55,000 used Class 8 vehicles were newly registered in the quarter, a 3.2% increase over the same quarter last year.

Meteer said the reports on Class 6 data showed an even weaker segment.

“The second quarter is typically when we see the largest boost in new Class 6 registrations, a lot of them straight trucks bought by the major leasing companies to handle the summer moving season that begins on Memorial Day,” Meteer said.

“However, new registrations actually declined in this quarter, compared to the first quarter of the year, typically the slowest quarter,” he said. “This virtually has never happened.”