U.S. Class 8 Fleet Up 2.7%

By Jonathan S. Reiskin, Associate News Editor

The total U.S. heavy-duty truck fleet grew by 2.7% to 3.59 million vehicles in the second quarter compared with the same period a year ago, the highest rate of growth since mid-2007, R.L. Polk & Co. reported.

The number of trucks under registration was the largest stock of U.S. Class 8s since the second quarter of 2010, as fleet managers added new trucks sparingly and generally clung to their equipment.

Polk also reported that new Class 8s registered for the first time dropped 8.7% during the quarter to 47,080 trucks from 51,547 during the same time in 2012. The six-month heavy-duty decline for new Class 8s was 9.9% to 90,212 vehicles from 100,153.

Among all commercial vehicles, Classes 3-8, the 4.5% growth in second-quarter new registrations made up for the 4.4% contraction during the first quarter, making for first-half growth of 0.5% to 272,656 new trucks nationwide.

“Registrations are up slightly, then down slightly. Overall the market’s rather flat,” said Gary Meteer Sr., the Polk director in charge of commercial vehicle data.

Aggregate fleet size declined, year-over-year, for nine of 11 quarters from late 2009 to mid-2012, although the second-quarter result is the fourth straight gain for Class 8. While the purge of vehicles appears to have ended, Meteer still characterizes the market as one of replacement purchases, not expansion.

“We’re at a maintenance level now. There’s nothing on the horizon to suggest expansion is coming, but it is a decent level of business,” he said.

Polk aggregates and analyzes registration data from the 50 state motor vehicle administrations.

“There’s largely some stability in the marketplace, although we are seeing the typical summertime slump now,” said Steven Parker, president of the Baltimore-Potomac Truck Group, which sells Mack and Volvo trucks in Maryland and Virginia.

Parker, who represents Mack on the American Truck Dealers board of directors, disagreed with Meteer on projections.

“Barring any cataclysmic world events, I think we’ll see some pickup later in this quarter and in the fourth,” Parker said.

He noted that his over-the-road business — mainly with regional-haul, contract logistics carriers — is doing well, and the “long dormant” vocational business is awakening.

“Vocational orders typically come in during the third and fourth quarters for spring delivery,” Parker said. “We’ve seen renewed activity and interest in vocational sales.”

New North American truck orders have been growing this year compared with 2012, but they have not yet turned into sales.

Class 8 registrations have largely been consistent with U.S. retail sales, which have declined 12.5% through July.

The Polk report singled out the West as the brightest spot for new heavy-duty registrations, with first-half growth of 8.9%, year-over-year. Contraction in the rest of the country ranged from 12.5% to 13.1%.

“We are seeing a modest increase in Class 8 sales in our territory,” said Kyle Treadway, CEO of Kenworth Sales Co. and the immediate past chairman of ATD.

“While the trend is not consistent throughout the seven states where we operate our stores, there are some strong pockets of recovery. While energy, mining and agriculture industries appear profitable and actively turning their fleets, construction, flatbed and logging are not,” Treadway said.

“Regionally, there are strong differences as well — from the struggling Nevada economy to the booming Wyoming natural-gas fields,” he added.

Used trucks continue to be the most popular type of truck, Polk said. Not since 2008 has there been a quarter when new-truck deals topped used-truck transactions, Polk said.

Dayton, Ohio-based Jet Express is a truckload carrier that looks for opportunities among used vehicles, said Kevin Burch, the company’s president.

“Some carriers buy new and flip the trucks at 250,000 miles. We’re buying those because they still have some warranty coverage and they’re good deals,” Burch said.

A new heavy-duty tractor can run between $125,000 and $140,000, Burch said, so he prefers lightly used, especially since quality has improved.

“Today’s trucks are better made and lasting longer than ever,” he said.

In addition to his own business experience, Burch spends a lot of time with other fleet executives in his roles as a vice chairman of American Trucking Associations and a member of the board of directors of the Truckload Carriers Association.

“People with large and medium carriers are optimistic but cautious about moving ahead. You see two steps forward and two steps back, and they’re wondering whether to dive in or hold back.

“Because the trucks are better, I just see people holding onto them longer than ever before,” Burch said.

Meteer said his data show that while many trucks from before 2000 have been scrapped, the average age for a U.S. Class 8 vehicle still is 11 years.