U.S. truck orders signal recovery has legs

Orders for the Class 8 trucks that literally keep the economy in motion were “phenomenal” in October, according to FTR Associates.

FTR released preliminary data showing October 2014 North American Class 8 truck net orders at 45,795 units. That made October the second highest order month ever recorded, with orders rising 87 percent month-over-month and 76 percent year-over-year, FTR said.

Those orders mostly are for trucks that will be built and delivered in 2015, and underscores the economic confidence of the companies placing the orders. After two strong quarters of freight demand and higher rates, motor carriers are beginning to add capacity.

That’s good news for U.S. shippers having an increasingly hard time hiring trucks and paying more for them when they do. Large trucking companies, both truckload and less-than-truckload, still have capacity levels at least 15 percent lower than in 2006.

“The huge amount of orders was driven by several very large fleets placing orders to be built throughout 2015,” said Don Ake, FTR vice president of commercial vehicles.

“This is the result of the industry operating near full capacity and fleets having confidence that freight growth will remain strong for the entire year in 2015,” Ake said. “They want to lock in their orders now to guarantee future deliveries (of Class 8 trucks).”

ACT Research reported 46,200 Class 8 net orders in October. A number of trends are converging to drive “healthy order activity,” ACT President and Senior Analyst Kenny Vieth said, including pent-up demand among small and medium trucking companies.

He also cited superior new truck fuel economy, improved economic activity in key freight sectors and most important, rising freight rates and fleet profitability that allow companies to reinvest capital in equipment, both tractors and trailers, and in their drivers.