Want more data points reinforcing the strength in U.S. trucking? Here's another.
Net "Class 8," or heavy-duty, truck orders—defined as firm orders minus cancellations--rose to 42,224 units in June, according to consultancy ACT Research. On a seasonally adjusted basis, it is the highest monthly net order volume since March 2006, the consultancy said yesterday. It came during what is typically one of the year's weakest months, and is the fourth month so far this year that net orders surpassed 40,000 units, ACT said.
The Class 5-7, or medium-duty market, which includes vehicles like large package delivery vans, rose in June to a three-month high, ACT said. The strength in the medium-duty segment was also reminiscent of 2006 activity, according to the firm.
Today's new trucks appeal to fleets and drivers because they offer top-tier technologies and excellent fuel economy, the latter being of greater importance with the relentless rise in diesel fuel costs, according to Kenny Vieth. In addition, new truck purchases will help truckers offset the bite of what will likely be an elevated 2018 tax bill as carriers will report higher profits due to stronger demand and higher freight rates, Vieth said today.
In a tight market for qualified drivers, fleets will find it harder to compete for labor unless they can make the latest equipment available, he added.
Yet as has been the case for many years, virtually all of the new equipment will replace existing rigs rather than add to existing fleet sizes. The main reason is the lack of drivers, at least in the for-hire category, Vieth said. According to employment data tracked by the U.S. Bureau of Labor Statistics (BLS), 17,000 for-hire drivers were added through June, following a relatively paltry 9,000 driver jobs that were added in all of 2017. The BLS data does not capture driver hiring data from private fleets.
"From that data, we can infer that if there are for-hire fleets that are growing capacity this year relative to freight growth, they are likely doing it at another fleet's expense," Vieth said in an e-mail.
As for private fleets, Vieth said anecdotal evidence suggests that they are growing their operations to reduce their exposure to the rapid rise in for hire cartage costs. The company has no practical way of measuring the growth of private fleet capacity, he added.