The trucking industry is jazzed about 2018.
Freight demand is rising, rates are soaring and truck sales are at their best level in years.
“We don’t see anything on the horizon that says we are going to have a weakening economy,” Kyle Quinn, general manager of Peterbilt, told Trucks.com.
Peterbilt is forecasting that sales in the industry’s heaviest weight class will be in the range of 235,000 to 265,000 vehicles in the U.S. and Canada this year. That would be the third-best year ever for sales of trucks in the heaviest Class 8 weight segment.
Freight volume is at record levels, driven in part by the growth of e-commerce.
“Carrier rates are increasing, and orders and retail sales of Class 8 trucks are increasing,” Quinn said.
Peterbilt’s fleet customers have seen their contract and spot rates jump significantly in 2018, he said, which is creating “more demand than they have supply at this point.”
A shortage of drivers is keeping some companies from expanding their fleets. Instead, the majority have been focused on replacing trucks over the last two quarters, he said.
“What we hear over and over from every fleet customer is that if they could acquire new drivers and bring them in, they would expand,” Quinn said. “And some are expanding, but it’s a small percentage of their total fleet.”
Freight tonnage in January jumped 8.8 percent compared with the same period a year ago, according to the American Trucking Associations’ For-Hire Truck Tonnage Index. The amount of freight hauled in January increased 2 percent after dipping slightly — 0.3 percent — in December.
“With the economy strong, the drivers of truck freight solid, and the inventory cycle in favor of motor carriers, I expect freight tonnage to remain robust in the months ahead,” said Bob Costello, the ATA’s chief economist.
ATA calculates its tonnage index based on surveys from its members. In January, the index equaled 106.9, up 0.4 percent from 106.5 in December.
The increased demand for hauling goods has pushed trucking rates higher. While spot market rates have stepped back from recent highs, they are still well above last year.
Demand for spot truckload freight “set new records in January,” increasing 65 percent compared with the same month a year earlier, according to DAT Solutions, which tracks freight and rates. It jumped 28 percent from December.
In January, dry van spot rates were $2.26 per mile, up 59 cents compared with the same time period a year earlier, setting an all-time record, DAT said. Rates rose 15 cents from December.
The rates for refrigerated trailers were $2.66 per mile, an increase of 71 cents from a year earlier. It was an 18-cent month-over-month increase.
Flatbed rates were $2.39 per mile in January, up 47 cents year-over-year. This was a 7-cent increase compared with December.
Spot market rates have started slipping in February but remain above 2017 levels.
The healthy economy combined with new tax policy that is encouraging motor carriers to make large equipment investments, fueling semi-tractor and trailer sales, analysts said.
North American Class 8 truck orders in January rose to the second highest level ever since March 2006, ACT Research said Tuesday.
Manufacturers received orders for more than 49,100 trucks last month. That’s a 121 percent increase from the same month a year earlier, ACT said.
FTR Transportation Intelligence, another trucking industry consulting firm, estimated that manufacturers posted orders for 47,200 Class 8 trucks last month, a 116 percent increase from the same month a year earlier.
Trailer order estimates were 39,100 last month, making it the “best January on record,” said Frank Maly, ACT’s director of commercial vehicle transportation analysis and research.
Orders were up 22 percent in January compared with the same month a year earlier, but dropped 15 percent compared with December.
“Tight trucking capacity and solid freight rates are supporting both fleet needs and investment ability,” Maly said.
Orders for refrigerated trailers set an “all-time monthly record,” Maly said, up 250 percent compared with last January.
Trailer orders for January were 39,800, a 21 percent increase compared with the same month a year earlier when orders were 32,800, according to FTR.
“Carriers continue to add trailers as a way to increase total productivity,” said Don Ake, vice president of commercial vehicles of FTR. “Overall business confidence is surging due to tax reform, and it’s making a hot market even hotter.”