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Heavy-duty truck orders in January hit highest monthly levels in nearly 12 years

February 5, 2018

ACT, FTR report best month for net new orders since March 2006.

By DC Velocity Staff

New orders for heavy-duty trucks soared in January to their highest monthly levels since March 2006 as carriers and lessors emboldened by a red-hot freight market and higher rates placed their bets on thousands of units of supply, according to preliminary data from the industry’s top two trackers of commercial fleet activity.

FTR reported that net new orders-new orders minus cancellations-climbed to 47,200 units in January, up 28 percent from December and 116 percent from January 2017. ACT Research reported net new orders of 48,700 units. Adjusted for seasonal factors, orders came in at 42,400 units, a seasonally adjusted gain of 41 percent over December, and 107 percent year-over-year. Most of the new units are expected to replace older equipment.

Based on estimates from its very preliminary February data, ACT forecast the backlog of Class 8 orders at more than 159,000 units, the highest backlog volume since May 2015.

Order activity is being stimulated by a growing supply-demand imbalance as years of tight capacity, which are being exacerbated by the impact of the Electronic Logging Device (ELD) mandate, which took effect Dec. 18, and by tighter federal food transport compliance standards which have knocked many owner-operators, long a major source of food hauling, out of the market.

The surge in orders in the 2006 period came amid strong demand from residential and commercial real estate development, as well as a buying frenzy to get ahead of stringent federal environment regulations on truck engines that took effect January 1, 2007. The 2006 period marked the last hurrah before a freight recession would take hold later that year. The downturn would last for about a decade, with blips of strong activity in between.

Jonathan Starks, FTR’s chief operating officer, said in an e-mail today that the firm will not know until mid-month when the orders of rigs placed in January would be delivered.

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