INDIANAPOLIS. Class 8 orders are expected to flatten out over the next four quarters as declining freight volumes reduce demand for freight hauling trucks, according to analysis conducted by FTR Associates.
Here at the firm’s 7th annual transportation conference, Eric Starks, FTR’s president, said some 250,000 Class 8 trucks should end up being built this year for the North American market, with 261,000 projected for 2012 and 276,000 for 2013. He added that trailer sales will also flatten out to a degree, topping 215,000 units in 2011, 230,000 in 2012 and 240,000 in 2013.+
See video of Starks' speech at the conference
“We expect to see a fairly flat [Class 8] market for the next four quarters as we don’t expect fleets to add fixed capacity to their operations,” Starks explained. “The underlying demand for Class 8 trucks and trailers as well, has weakened noticeably since May this year and pressure for more equipment over the next several quarters just isn’t there.”
He added, however, that there’s still significant truck production backlog at the moment, with the time between when equipment is ordered and when it’s delivered now at six months.
“So while there’s been a softening of freight demand over the last four to five months, truckers continue to show healthy profits, capacity remains tight, and thus we expect to see rates move higher,” Starks said.
Add in how old equipment is within the U.S. fleet and Starks said that’s why Class 8 orders should stay, even if they are not projected to grow significantly.
“Age is a huge, huge issue right now as the Class 8 fleet in the U.S. has aged over a year from 2006,” he noted. “We expect that equipment age will remain steady at a high level [9.5 years] before falling in 2013 – though it is the mileage accrued by the equipment, not necessarily it’s age, that will be the key.”
