Home Truck Parts Truck orders hit nine-month high despite falling truck tonnage

Truck orders hit nine-month high despite falling truck tonnage

Class 8 truck orders reached a nine-month high in July, ACT Research reported this week, buoyed by a 1.2 percent month-over-month increase in U.S. retail sales last month.

The strong sales month also occurred despite a 5.1 percent drop in truck tonnage in July, according to American Trucking Associations (ATA) seasonally adjusted for-hire truck tonnage index. The index had previously surged by 8.9 percent in June, ATA says.

ACT Research says July’s truck orders also were helped by an increase in industrial production and strong housing activity. The company says the economy is still operating at pre-pandemic levels but is bouncing back strong.

“It is fascinating that the economy can contract 9.5 percent in Q2 and there is an almost-immediate trucking capacity shortage pushing spot freight rates to a two-year high,” says Kenny Vieth, ACT Research’s president and senior analyst. “At the heart of this paradoxical situation is driver capacity. The economic downturn in April was so sharp that drivers were furloughed in droves as trucks were parked.”

By commercial vehicle segment, Vieth says the “rebound in carriers’ fortunes has been a positive for the front-end of the demand spectrum.” In addition to the Class 8 nine-month high, medium-duty orders, which did not swoon as sharply through the shutdown, fell slightly in July though “seasonal adjustment lifts them to a five-month high,” Vieth says.

ATA Chief Economist Bob Costello attributes July’s tonnage drop to a few factors.

“It is likely that tonnage was down because many fleets didn’t have the capacity to take advantage of stronger retail freight volumes. Therefore, much of that overflow freight moved to the spot market, which did increase in July,” he says. “Other ATA data shows that for-hire truckload fleets are operating 3 percent fewer trucks this summer than a year earlier, so it can be difficult to take on a significant amount of additional freight. Also, while retail volumes have snapped back strongly, manufacturing output and international trade freight is lagging well behind.”

Despite July’s decline, the index was 3.3 percent above the recent low in May, ATA reports.

Compared with July 2019, ATA says its seasonally adjusted index contracted 8.3 percent, the fourth straight year-over-year decline. Year-to-date, compared with the same period in 2019, tonnage is down 3.2 percent. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 112.9 in July, 2.5 percent below the June level (115.8), ATA says.

Don’t Miss A Story! Get the TPS Daily newsletter.

Credit: Source link


Please enter your comment!
Please enter your name here

Must Read

B.C. suspends another carrier after truck strikes overpass – Truck News

The B.C. Ministry of Transportation suspended a carrier after one of its...

ECONOMIC TRUCKING TRENDS: Trailer orders weaken, but trucking conditions improving – Truck News

The trucking market continues to improve, with the Trucking Conditions Index returning...

[Trends ] Commercial Truck Fleet Insurance Market Growth Drivers | PICC, Progressive Corporation, Ping An – Economica

Commercial Truck Fleet Insurance Market Growth Drivers | PICC, Progressive Corporation, Ping An  Economica Credit: Source link

Behind the wheel of Lion’s nimble, powerful Class 8 electric truck – Truck News

I recently had the opportunity to get behind the wheel of Lion...

Canadian government engages with CDC to clarify new U.S. dog import rules – Truck News

The Canadian Food Inspection Agency (CFIA) says it has been engaging with...