Suppliers forecast slowdown in trucking

March 23, 2007
Falling freight volume, high fuel prices, and depressed sales of new trucks are all indications that the trucking industry will struggle through a rough patch this year

LOUISVILLE, KY. Falling freight volume, high fuel prices, and depressed sales of new trucks are all indications that the trucking industry will struggle through a rough patch this year, according to forecasts made by Bendix Commercial Vehicle Systems and Peterbilt Motors Co. executives.

Joe McAleese, president & CEO of Bendix, said increased softness in the overall U.S. economy, primarily from a slowdown in housing construction, is being felt throughout the trucking industry. “Tonnage is down and there’s weakness in equipment utilization,” he said here during a press conference at the Mid America Trucking Show. “That’s creating a softness in the aftermarket, on top of a major decline in new truck builds. We expect new truck sales will be down 48% in 2007.”

General economic weakness in the second half of 2006 continued into the first part of 2007, he added, so demand for freight remains weak. Consequently, he doesn’t expect to see as strong a recovery as originally forecast for either freight volumes or new truck sales in the second half of 2007.

High fuel prices will also continue to have a huge impact on trucking, added Bill Jackson, Peterbilt’s new gm. In the 1990s, he said, fuel prices fell to 75 cents a gallon, but by 2000 they’d climbed to $1.50 a gallon. Now they are at $2.70 per gallon.

All of those factors combined, with a continuing shortage of OTR drivers, are changing truck-buying dynamics, he added.

“Because of high fuel prices, the sales growth of aerodynamic-model tractors continues to get stronger,” Jackson said. He noted that in 2004 23% of the Class 8s Peterbilt sold were aerodynamic models; by 2006 that number climbed to 30%. It is expected to reach 40% by the end of 2007.

Jackson added that he is noticing a rise in Class 6 truck sales as fleets are getting into more regionalized freight with less weight per shipment. “Fleets are using more medium-duty models so they can form a larger potential pool of drivers—ones that don’t need commercial drivers licenses.”

“We’re also seeing more regionalized freight – that’s an increase in Class 6 truck sales,” Jackson said. “Fleets are also using more medium-duty models so they can form a larger potential pool of drivers, ones who don’t need commercial driver’s licenses.”

To comment on this article, write to Sean Kilcarr at [email protected]

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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