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Home » Big rig orders came in light in January; intermodal shows modest gains for quarter, year
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Big rig orders came in light in January; intermodal shows modest gains for quarter, year

February 4, 2016
DC Velocity Staff
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Net orders for heavy-duty trucks are expected to total 18,062 units in January, a 35-percent decline from strong December results and a discouraging start to the year, according to preliminary data released yesterday by consultancy FTR.

Net orders, which are new orders minus cancellations, fell sharply in January from the 27,000 units ordered in the prior month, FTR said. Net orders have been below 20,000 units for five of the past eight months, FTR said.

Orders in 2014, a strong year across the board, totaled 376,000 units. Net orders last year fell to 284,000 units. If January 2016 results were annualized, net orders for the year would total 217,000 units, according to FTR data.

"It is not looking to be a strong year. However, the fundamentals for freight and demand for truck services should hold up well enough to keep the market at replacement levels," said Jonathan Starks, FTR's chief operating officer, in a statement. For the pace of fleet replacement to remain intact, "we would expect to see orders improve as we get into the spring months and fleets finalize their plans for 2016 expenditures," Starks said.

Separately, the Intermodal Association of North America (IANA) said the industry made overall gains in the fourth quarter and full year, as increases in domestic container traffic offset pronounced weakness in trailer volumes and a flat international container market. In the quarter, the domestic container segment grew by 5.2 percent over the year-earlier period, IANA said. International shipments fell 0.6 percent due to elevated inventory levels, which discouraged new orders and shipping, and slower import growth. Fourth- quarter trailer volumes dropped 15.0 percent year-over-year. For the quarter, overall volumes were 0.3 percent higher than the year earlier, IANA said.

For the year, total intermodal traffic rose 2.8 percent, as a 5.1-percent increase in domestic container traffic neutralized a 6-percent drop in trailer volumes. International container traffic rose 2.8 percent, IANA said.

"All things considered, intermodal performed well for the year," said Joni Casey, president and CEO of IANA. "Even as fuel prices were dropping, domestic container volumes were picking up. This smoothed variations across segments, especially in the fourth quarter."

The seven highest-density traffic corridors, which account for two-thirds of total intermodal volume, fell 0.2 percent in the fourth quarter compared with small industry gains, according to IANA data. The intra-Southeast corridor led with a 9.7-percent increase, reflecting the strength of both international and domestic container traffic in that lane. By contrast, the South Central-Southwest corridor volumes decreased by an equal amount, IANA said.

Intermodal marketing companies (IMC), which arrange for movements via highway and rail, showed strong gains in highway volumes, up 11.4 percent in the quarter and 9.5 percent for the year, IANA said. By contrast, intermodal rail loads handled by IMCs were flat in the quarter and up 2.3 percent for the year. The dramatic decline in diesel fuel prices was a key factor in stimulating demand for highway services and a corresponding weakness in rail intermodal. High diesel prices will generally drive truck traffic to more fuel-efficient rail alternatives.

Transportation Trucking Rail Truckload Less-than-Truckload Vehicle & Trailer Equipment & Services
KEYWORDS FTR Intermodal Association of North America (IANA)
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