This Editorial appears in the July 25 print edition of Transport Topics. Click here to subscribe today. Class 8 truck sales and orders have continued to outpace the expectations of analysts and company executives, creating a round of hiring at truck plants and a healthy backlog of orders that should keep the plants busy for months to come.
Analysts have now revised their truck sales forecasts at least a few times during 2011, and the volume is already leading to parts shortages for all of the major U.S. manufacturers.
To show just how strong the buying boom is, heavy-truck sales in June were 64.6% higher than they were in June 2010, and totaled close to 15,000.
For the year to date through June, Class 8 truck sales are now 46.3% higher than the year-ago numbers.
At the same time, truck orders are even higher. June’s intake exceeded 20,000 for the eighth straight month, and now totals some 143% higher than 2010’s results for the comparable period, according to analysts.
What is remarkable about this boom is that virtually everyone seems to agree that these new trucks are replacing old vehicles, and don’t represent any notable expansion of capacity by the nation’s fleets.
Now it is clear that some of this good news is the result of just how bad things were during the Great Recession, and shows how many fleets chose to keep their equipment longer than ever in order to preserve capital.
And while this new investment underlines how sure fleets seem to be that business is better, their lack of expansion clearly shows that freight levels aren’t booming.
This indicates a new level of maturity in the industry. Fleets are moving decisively to ensure they keep up with customer needs by investing in equipment, but are resisting the temptation to expand now, in hopes that business will grow tomorrow.
This discipline, however, will make it harder for trucking to meet the needs of shippers in the future if, as economists predict, the nation’s economy soon begins to expand at a healthier rate.
Truck OEMs and their major suppliers are already being pushed near their production limits, it seems, in the rush to refresh the nation’s Class 8 fleet.
And the manufacturers have mostly stated that they won’t invest heavily in new brick-and-mortar projects, because of the boom-and-bust nature of truck buying.
Carriers need to carefully weigh the risks and rewards in this situation, and neither order too many trucks to handle their loads nor order too few and find themselves without the means to meet future customer demand.
