Freight and heavy vehicle demand strong, ACT reports

Freight and heavy vehicle demand strong, ACT reports

New numbers from ACT Research show strength of both freight demand and heavy vehicle demand, the company shared.

According to Kenny Vieth, ACT’s president and senior analyst, two charts seen above from ACT’s North American Commercial Vehicle Outlook show promising numbers. “The Total Business Inventory-to-Sales ratio bounced off the bottom in May, but remained well below the recent range in this era of multiple sales channels, showing that at May’s sales rate, it would take $150 billion of inventory accumulation to bring the ratio to the low end of its recent range, and suggesting a good pipeline for freight,” Vieth said. “Add to that the steamships that are piling up on both coasts and there is a strong case to be made for continued strength in freight activity into the end of the year and beyond.

“The second chart shows the just-completed accounting of the publicly traded truckload carriers’ performance in Q2 of 2021,” he continued. “With the freight pipeline filled, the commercial vehicle industry unable to accelerate vehicle production, and seasonal considerations, fleet profitability should continue rising into year’s end and start 2022 on a very strong footing. While our first chart serves as a proxy for strong freight demand, the relationship between carrier profits and heavy vehicle demand are both obvious and irrefutable. The questions that remain are the speed at which fleets overcome driver capacity constraints and the speed at which vehicle production rises once current supply-chain constraints are overcome.

“Medium-duty, heavy-duty and trailer backlogs are essentially filled through 2021 and well into 2022, with BL/BU ratios well above traditional ranges and inventories below traditional thresholds,” he added. “As has been the case since the start of the year, supply-chain constraints, rather than fleet/consumer demand, are the primary driver of how many vehicles will be produced in 2021.”

You May Also Like

Class 8 orders strong in February

Even when seasonally adjusted, ACT says preliminary order numbers for February are up 5% over January.

ACT-Class-8-Feb-truck-orders

According to the latest numbers from ACT Research, preliminary North America Class 8 net orders were 27,700 units, up 600 units from January and 16% from a year ago. With the fourth-largest seasonal factor of the year at 8%, seasonal adjustment reduces February’s Class 8 intake to 25,600 units, up 5% from January.

“Weak freight and carrier profitability fundamentals, and large carriers guiding to lower capex in 2024, would imply pressure in U.S. tractor, the North American Class 8 market’s largest segment,” said Kenny Vieth, ACT’s president and senior analyst. “While we do not yet have the underlying detail for February order volumes, Class 8 demand continuing at high levels again this month suggests that U.S. buyers continue as strong market participants.”

Kenworth delivers 15-liter natural gas-powered truck to UPS

The truck is equipped with the Cummins X15N, which Kenworth says will meet CARB and EPA Requirements for both 2024 and 2027.

Kenworth-delivers-CNG-truck-to-UPS
ACT Research: 2024 could see trucking recovery

Despite trucking demand remaining weak, ACT Research says imports and international data indicate positive trends in 2024.

ACT-for-hire-index-Jan-24
Navistar progressing toward autonomous hub-to-hub transport

Autonomous truck testing is underway, and the company expects customer pilots to be delivered later this year.

Navistar-Autonomous-partnership-Plus-international-truck
FTR Trucking Conditions Index falls in December

FTR says the drop was mostly due to higher capital cost and a deterioration in freight rates, a trend that could stretch into 2024.

FTR-TCI-december-2023

Other Posts

Scania reports 2023 growth in sales, progress on sustainability

The company says sales and performance are increasing as they move toward the goal of electrification, but there are challenges along the way.

SCANIA-Logo-vector
Fullbay: Repair shop sales and labor rates rose in 2023

A new report shows that counter sales and labor rates rose significantly in 2023 from the previous year.

Fullbay-TMC
ACT Research: Trailer orders dip as cancellations climb

Preliminary data for net trailer orders in January seems to follow a continued softening trend, according to ACT Research.

ACT-Research-Trailer-Net-Orders-down-Cancellations-up-Jan-2024
Good News! Parts, labor costs fell slightly Q4 2023

Decisiv, TMC Benchmarking Report shows trend reversal from previous quarter.

Decisiv-TMC-Benchmarking-Report-1400