I wrote to you here that in October trucking companies were ordering trucks at record lows, with not much hope for the 2017 economy. But starting in November orders for new heavy-duty trucks have surged, increasing every month. Jennifer Smith writes for The Wall Street Journal:
Many trucking companies trimmed fleets last year as truck capacity outweighed demand from shippers, driving down freight prices. In recent months the freight market has picked back up as manufacturing strengthened and businesses completed inventory adjustments, “so there is more freight to haul,” said Don Ake, FTR’s vice president of commercial vehicles.
February orders pushed the backlog of trucks ordered that haven’t yet been built past 100,000 units, Mr. Ake said
“Fleets feel confident placing orders out a few months and expect their business to be as good or better going out a few months,” he said.
Freight volumes and spot truckload rates have been improving in recent months. Nate Clayville, a corporate economist with Truckstop.com, said he expected rates to rise further by mid-2017, making it more of “a carriers’ market.”
February was the best month for heavy truck orders since late 2015, said Kenny Vieth, an analyst at ACT Research, which put out similar order numbers.
“2016 was just such a bad year for orders that 2017, even if it’s mediocre, is going to shine by comparison,” Mr. Vieth said.
While the February order numbers “on their own…do not excite,” Stifel analyst Michael Baudendistel said in a note, he added that the recent upswing was sufficient for the firm to increase its 2017 production estimate from 200,000 units to 215,00 units.
Read more here.
Latest posts by Dick Young (see all)
- How the Rolling Stones Amassed a Fortune Where Others Have Failed - May 24, 2019
- No Second-Guessing, No Deviation from Focus - May 17, 2019
- Avalanche! It Is Astonishing How Your Money will Pile Up - May 10, 2019