Trucking companies accelerated big-rig orders for the fourth consecutive month, bolstered by strong manufacturing activity and an improving freight market.
In September North American carriers ordered 22,100 Class 8 trucks, the heavy-duty vehicles used to haul freight long distances, according to a preliminary report from freight transport analysts FTR. That was a 7% improvement compared with August and a 62% boost from the same period in 2016.
The numbers reflect a modest but continued recovery in the Class-8 market compared with last year, analysts say. In 2016 freight demand suffered as manufacturers and retailers worked through excess inventory, “and the equipment market reflected that,” said Don Ake, FTR’s vice president of commercial vehicles.
But big-rig orders have been going up since May, as small and medium-size trucking firms expand their fleets, said Steve Tam, vice president at ACT Research, which reported similar numbers. The biggest order bump typically comes in October and November, when big carriers make their plans to buy or trade in vehicles.
In recent months freight pricing has improved, after a long stretch of stubbornly low rates when a glut of vehicles gave carriers little leverage with shippers.
“We currently model a roughly 3% increase in freight rates next year, which also should support a generally robust pricing environment for all of transports given the outsized nature of the trucking market,”Barclays freight analysts said in a research note this week.
Shipper demand is also improving. American ports took in near-record volumes of cargo in July, as retailers stocked up on inventory ahead of the holiday season and manufacturers also imported more parts. U.S. factory-sector activity hit a 13-year high last month, according to the Institute for Supply Management.
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Most carriers believe “there’s a nascent freight recovery under way,” Mr. Tam said. “The gains haven’t been huge but they’re long expected and now moving in the right direction.”
