Shipping and Logistics
Heavy Duty Truck Orders 'Hefty' in October
Written by Sandy Williams
November 7, 2018
Class 8 truck orders rose in October, reaching 43,000 units for the 10th best month ever. Orders were up 2 percent from September and 19 percent from a year ago. Robust freight volumes have kept truck capacity utilization tight, driving stronger build rates for new vehicles.
“October is traditionally the start of the next year’s order season, so to see strong numbers now is not surprising,” said Don Ake, vice president of commercial vehicles at research firm FTR Transportation Intelligence. “But ordering for 2019 began in July with back-to-back record months. For orders to still be this hefty in October after that is remarkable.
“Fleets want to make sure they have access to new trucks as the growing economy continues to stretch capacity. They continue to place a record number of orders to ensure they will have the trucks needed if freight levels keep growing.”
Ake says that monthly order rates above 40,000 for Class 8 trucks are historically rare, but have occurred eight times in 2018. FTR expects order activity to fall off as available build slots in 2019 are filled.
ACT Research reports that 440,700 orders for heavy duty trucks were placed in the first 10 months of 2018, a jump of 95 percent year-over-year. The heavy order rate has caused an increase in backlogs and manufacturers, pushing delivery for some vehicles into late 2019.
Kenny Vieth, ACT president and senior researcher, says trade tariffs may impact freight demand in 2019 by continuing to drive up the cost of imports and consumer prices, potentially weakening economic growth.
ACT expects freight growth to slow to 2.5 percent in 2019 from 5.9 percent growth in 2018.
Metals processor and distributor Ryerson Holding noted that the Class 8 truck market has been particularly strong for the company. “It looks like 2018 build rates are going to finish up 20 percent-plus and the forecast going into 2019 is for increased build rates even over the 2018 rates. So, that market in particular, which has long visibility in terms of the lead times, looks encouraging,” said Kevin Richardson, President South-East Region, during Ryerson’s Q3 2018 earnings call.
Sandy Williams
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