Dive Brief:
- Carriers ordered a record number of heavy-duty trucks in July 2018, according to preliminary data from ACT Research.
- Class 8 orders reached 52,400 in July, in "what is typically the weakest order intake month of the year," Steve Tam, ACT’s Vice President, said in a press release. Orders beat the previously held record of 52,194 in March 2006.
- July orders rose 24% from June, and were nearly three times the orders in July 2017.
Preliminary North America Class 8 net order data show the industry booked 52,400 units in July, setting a new all-time record in what is typically the weakest order intake month of the year.
— ACT Research (@actresearch) August 3, 2018
Dive Insight:
Despite the Cass Freight Index Report predicting the trucking industry had reached its short-term expansion limit, ACT's data on Class 8 truck orders appears to tell a different story of continued high demand.
Consumer spending climbed 0.4% in June, driving a need from shippers for more trucking services.
The supply-demand imbalance is creating higher transportation costs for shippers, many of which have cited freight or transportation "headwinds" in their earnings reports. Expenditures on freight have grown nearly 16% since last year, according to Cass, indicating shippers continue to spend more on transportation.
Shippers may see some short-term relief, as spot rates receded at the end of July. DAT reported national average van rates fell 3 cents the week of July 22 to 28. Prices in Memphis were down as much as 13 cents, and in Atlanta down 11 cents.
"These rates are just pennies lower than June's record highs, however," DAT said. "The spot freight market continues to be strong compared to historical averages."
The robust backlog could squeeze suppliers of truck parts and manufacturers as they ramp up production to fulfill carrier orders.
Boeing and Airbus are facing similar situations as they plan to deliver significantly more jets this new, challenging their supply chains to keep up with booming demand.
