Heavy-Duty Orders Soar 90%

This story appears in the May 31 print edition of Transport Topics.

New orders for heavy-duty trucks soared about 90% in April, compared with the same month a year ago, two independent research firms reported.

ACT Research, Columbus, Ind., said North American orders for new Class 8s in April totaled 14,826 units, up 91% from 7,784 last year.

FTR Associates, Nashville, Ind., reported on May 20 that its calculations showed that new Class 8 orders totaled 14,308 units in April, an 86.8% gain from the 7,660 ordered in April 2009. FTR also said orders in the United States totaled 9,708 in April, a 50.1% increase.

“Not only did April’s overall order volume surprise on the high side, there were a number of features that suggested April’s volume had staying power,” Kenny Vieth, senior analyst for ACT Research, told Transport Topics. He added that the orders were distributed among all truck manufacturers and showed growth in the United States, Canada and Mexico, as well as orders for export.

Through the first four months of 2010, customers have ordered 40,500 new Class 8s in North America, more than 30% above the same period last year, ACT Research said.

The company that its figures indicated that net orders for heavy-duty vehicles continued to strengthen month-to-month.

ACT Research also said that the new trucks are expected to be delivered throughout the rest of the year, suggesting that companies are beginning to place orders for new, more expensive 2010 engines that comply with revised federal emission standards.

“It looks like May will be the same, so that could be a good indication that the market is strengthening, basically a quarter earlier than we expected,” Eric Starks, president of FTR Associates, told TT.

FTR said orders have averaged more than 11,000 over the past nine months, well above the average of about 8,000 between December 2008 and July this year.

“There are a number of issues driving our positive outlook,” ACT Research’s Vieth said. “Trucker comments support the notion that the supply-demand equilibrium is turning in their favor, suggesting rising profits.”

Two truck manufacturers said they are optimistic about the order numbers, but several truck dealers were more cautious.

“April clearly marked the beginning of the rebound for premium Class 8 truck orders at Freightliner, with exponentially stronger activity in May,” Brian Cota, Freightliner’s vice president of sales, told TT. Freightliner is a unit of Daimler Trucks North America.

Navistar Inc., which builds International Trucks and MaxxForce engines, also was optimistic.

“The April figures do show upward momentum,” Navistar spokesman Roy Wiley told TT. The April numbers, he said, do not include recent large orders from J.B Hunt Transport Services Inc., Lowell, Ark., or Boyd Bros. Transportation Inc., Clayton, Ala. (5-24. p. 4).

However, truck dealers were not nearly as sanguine.

“I have talked with a lot of dealers, and with an exception of a large company or two, there’s not been a lot of sales or orders,” Duane Kyrish, dealer principal of Longhorn International Trucks Ltd., based in Austin, Texas, and with nine locations, told TT.

Kyrish, International’s board member for American Truck Dealers, said that dealers in his area don’t expect a significant increase in new truck orders until 2011.

W. Marvin Rush, chairman of Rush Enterprises Inc., New Braunfels, Texas, was equally pessimistic.

“Fleets are fixing their old trucks, not buying new ones, and consequently, we have the oldest fleet in history,” Rush told TT. “We have received quite a few orders recently but nowhere near prerecession rates.”

Rush Enterprises is the largest Peterbilt dealer in the country and recently moved into selling International trucks.

“We haven’t seen anything quite like the order numbers in those two reports,” said Jack McDevitt Jr., CEO of McDevitt Trucks, Manchester, N.H.

“We’ve been getting a fair amount of quote activity in the past 60 days, but getting the customers to pull the trigger is very frustrating,” McDevitt said.

Starks, of FTR Associates, explained why OEMs and dealers could have different views of the market in new truck orders.

“Typically, some of these larger orders go through the manufacturers in national accounts and the dealers wouldn’t see it now, though they may [eventually] be delivered through the dealers,” Starks said.