There was a sense of optimism in the air at the Mid-America Trucking Show in Louisville, Kentucky.
There was a sense of optimism in the air at the Mid-America Trucking Show in Louisville, Kentucky, last week. As truck makers and suppliers made their presentations to the trucking press, many said thanks to solid economic indicators, truck orders are higher than they would have predicted just three to six months ago.
Joe McAleese, president and CEO of Bendix Commercial Vehicle Systems, showed off a red-yellow-green stoplight type chart highlighting economic statistics, and it was largely green — but there were some yellow and even red items.
"We've seen a significant increase in Class 8 demand," he told reporters. "Three months ago, I would have said I'd expect this year to be down 5 or 10% in truck build, but today I'm expecting it to be up 5% over last year. We've seen this interesting change in dynamics in a very mixed environment. Overall I think the economy has turned for us in the trucking industry and we're looking forward to a very good 2017."
Kenworth, which reported a record Class 8 market share for 2016 of 15.1%, estimates 2017 to be a 190,000- to 220,000-unit market, and says current indications are that it will be on the high side of that.
"We're seeing more activity," said Kenworth General Manager Mike Dozier. "If you backed up three to six months, I think there wasn't quite the level of optimism that there is now."
Sister Paccar company Peterbilt also predicted the North American Class 8 truck build for 2017 will be somewhere between 190,000 and 220,000 units, with much of that strength coming from the vocational segment. Both Kenworth and Peterbilt noted a strong construction environment is expected to drive sales in that segment, as well as the energy sector being on the cusp of a resurgence.
Mack also reported improved market share and says it's closing in on its goal of 10% share in Class 8, predicting a market of 215,000 units in 2017 compared to 243,000 in 2016. "All in all, not a bad market," said John Walsh, vice president of marketing.
However, ACT Research's commercial vehicle industry seminar in Columbus, Indiana, held just prior to MATS, left the transportation analysts with investment advisory firm Stifel feeling somewhat cautious.
"Despite the recent improvement in equipment orders the past few months that have caused both us and ACT to increase near-term forecasts," they said in an email report to investors summarizing the conference, "we left with a bit of an uneasy feeling that there could easily be a mid-year lull in orders, given that the large fleets are not buying much equipment, and given the lack of increases in freight rates that would typically coincide with a period of sustained strength in equipment orders."
Some of the driving factors behind an increase in orders, according to Stifel's report from ACT, are: