Anyone who has been in the trucking industry for a number of years knows that it is a cyclical business affected by the national economy, federal mandates and changes in technology. Sometimes, when we know that federal laws will add layers (translated: changes that add cost) to fleet businesses, we are better able to guess what the future might be.
But predicting the future in this business is a lost cause. The best we can do is to look at the trends of the past and guess which trends will continue and what will their impact be going forward, or which will fade—like interest in ethanol, which our columnist John Martin thinks is on the wane—and leave us looking for other solutions.
The year-end trends in 2013 provide some interesting perspectives. In the second half of this year, during the autumn order season, trailers kicked off with an impressive 43% month-over-month net order gain. New trailer builds usually signal an increase in shipping—always an indicator of economic growth. Total net orders were 24,900 units. The year-over-year comparison was less robust, but still a solid 6% increase.
“Improvement in orders was widespread in October, as seven of ten trailer categories were positive month-over-month, with most of those posting solid double-digit gains,” said Frank Maly, director—CV transportation analysis and research at ACT. “Cancellations were low, which continues to indicate both an absence of speculative orders in the backlog as well as a confirmation that trailers on the order-board are truly needed.”
As expected from the preliminary report, Classes 5 to 8 orders were strong in October. This updated status of the North America commercial vehicle market was included in the State of the Industry report, recently released by ACT.
“October brought a sharp move upward from the prevailing order trend for Class 8. Given that market conditions are good but not great, it is premature to say that trend will continue through November and December,” said Kenny Vieth, president and senior analyst at ACT Research Co. LLC.
“For medium-duty, October is typically the peak month for orders and this month’s results did not disappoint. Class 5 saw its best order month in five years, and Classes 6-7 orders were the second best this year,” he added.
Then there is the natural gas (NG) as an alternative fuel trend, which bears watching. It might be safe to assume that a fundamental change in fuels for heavy-duty transportation is on the horizon. The dramatic decline in the price of natural gas has created an opportunity for significant costs savings for truck operators, even with today’s limited, very expensive product offerings. However, a major concern is the viability of these savings long-term. Will the supply and price of NG remain positive and highly competitive against other fuels? Where do emissions regulations fit into the equation? Will NG fueling infrastructure be available?
Ah, the excitement of trying to figure out what the new year will bring. If you would like more detailed information on these and other trends, check out the ACT Research website.
