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Trucking Shortage on Its Way Out

Trucking Shortage on Its Way Out

Monday, October 15th, 2018

Reports are swirling that the trucking business’ boom could be plateauing. According to the Wall Street Journal, orders for big rigs eased back last month, after a tight market that had many companies thinking creatively to gain access to truck drivers and trucks for their fleet. There has been a 19 percent drop in truck orders from August’s record of 53,069; however, the demand remains high, with orders up 90 percent in comparison with September of 2017.

Demand for trucks and drivers remains high, with orders up 90 percent in comparison with September of 2017

The news of this settling comes after two record-setting months that show 42,800 new Class 8 trucks ordered for fleets. These heavy-duty trucks are the ones that haul goods long distances, and the data on the use of these trucks comes from ACT Research, the news source relays.

Kenny Vieth, President, ACT Research“You can’t continue to have record order months,” President of Columbus, Indiana-based ACT Kenny Vieth shared. “The expectation would be that we could continue to see orders in the 40,000-unit range through the end of the year, but… it’s unlikely that we’re going to revisit an order number with a 5-handle.”

An increase in U.S. shipping demand has relayed into a rapid spike in freight rates and the need to find available trucks. The sum total of this sequence is that orders have grown throughout this year. Now, there is a declination in the pursuit of shipments on trucks—there was a 12 percent dip from August to September, the news outlet shares. In addition to these statistics, there was a 1.8 percent dip in the American Trucking Association's for-hire truck tonnage index from July to August, but there was a 4.5 percent year-over-year gain—the smallest increase in 13 months.

Drew McElroy, Chief Executive, Transfix“September was not as acutely painful as June or July were,” for shippers looking for trucking capacity, according to Chief Executive of Transfix, Drew McElroy. “I think there was a certain amount of tapering or just, ‘Let’s wait and see.’”

Fleets have ordered over 500,000 new trucks over the past year to combat the stressful trucking situation, WSJ shares.

Derek Leathers, Chief Executive, Werner Enterprises“Orders are not builds, and builds will be far below what the order rate is,” Derek Leathers, Chief Executive of Werner Enterprises, said. “More importantly, out of the actual builds that take place, you need more trucks today to do the exact same number of miles you did a year ago. Because shorter length of haul means more percentage of your day spent loading or unloading… and less time actually moving freight.”

Will the trucking strain continue to devolve or will there be another spike in trucking shipments as we near the holidays? Deli Market News will keep you updated with the latest.