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New Class 8 truck sales drop to lowest point since February 2018

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New class 8 truck sales drop to lowest point since february 2018
A Kenworth W990 transported the Capitol Christmas tree to Washington. Kenworth had the largest increase in month-over-month sales. (Courtesy: JAMES EDWARD MILLS)

November sales of new Class 8 trucks dropped to the lowest point since February 2018, according to information received from Wards Data. According to Wards, manufacturers reported sales of 18,545 new trucks, a decline of 19.4% from October sales of 23,001. It was the second consecutive month of double-digit decline in sales as October sales were 18.6% under September numbers.

On a year-to-year basis, sales declined 12.9% from November 2018 sales of 21,302 trucks.

The declines are in line with the “substantial correction” in the 2020 market predicted in Transportation Digest, published by ACT Research in late November.

For months, orders for new Class 8 trucks have lagged far behind sales as OEMs continued to reduce their build backlogs. Stagnant freight rates, the potential for recession and uncertainty over trade disputes with China and other international partners have resulted in some trepidation among potential buyers.

Year-to-date sales of 253,266 have already eclipsed 2018 sales of 250,627 for the entire year. December sales will push the annual total higher and 2019 is already the second-best sales year of the century-to-date. It’s doubtful the total will reach the high-water mark of 284,008, established in 2006, given the current downward trend.

Of the individual OEMs, only Kenworth, Peterbilt and Western Star saw sales increases in November compared to October numbers. International sales dropped a whopping 72.4%, primarily due to fluctuations caused by delivery dates. October Class 8 sales were unusually high, followed by a lower than normal November. Volvo sales declined as well, dropping 32.0% from October and likely for the same reason. Mack sales dropped a more reasonable 3.2%

It will be interesting to see if December is, as is typical, one of the best sales months of the year or a continuation of the decline.

 

 

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1 Comment

1 Comment

  1. JohnS

    December 13, 2019 at 4:30 am

    Its hard to justify the costs these days in trucking. New trucks cost a lot, they don’t always create a more reliable investment as many times troubles occur more frequently with newer technologies that have yet to be proven. Yes, those issues could be covered under a warranty, but that doesn’t cover down time for a driver or make those truck payments. I myself got out of trucking and yet I do miss the road at times. But I do not miss the many negatives associated with trucking occurring these days. I don’t know how many do it these days with all the costs associated with being a owner operator or even a company driver.

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Business

Georgia seaports set new record cargo volumes in 2019

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Georgia seaports set new record cargo volumes in 2019
Georgia's seaports are reporting record cargo volumes that moved across their docks in the 2019 calendar year. (Courtesy: Georgia Port Authority)

SAVANNAH, Ga. — The amount of cargo moving through Georgia’s seaports reached record levels in the past year, in part because of continued growth fueled by larger ships traversing the expanded Panama Canal, the Georgia Ports Authority’s top executive said Jan. 28.

The state-operated ports in Savannah and Brunswick handled a total of 38.5 million tons of imports and exports in calendar 2019, the agency reported. That’s an increase of 4.3% compared to last year.

The number of cargo containers, large metal boxes used to ship goods from consumer electronics to frozen chickens, moving across the docks at the Port of Savannah also reached record highs last year. The port handled 4.6 million container units through December, up 5.6% from 2018.

Griff Lynch, the port authority’s executive director, attributed much of the 2019 growth to the expansion of the Panama Canal that opened nearly four years ago. He said shippers are still increasing the size of the vessels using the route, funneling more cargo to the East Coast.

“On the container side, I think it still comes down to the expansion of the canal,” Lynch said. “We’re still enjoying the fruits of that.”

Savannah is the fourth-busiest U.S. port for shipping containerized cargo, behind only the Port of New York and New Jersey, and the ports of Los Angeles and Long Beach, California.

The Army Corps of Engineers is overseeing a $973 million deepening of the shipping channel that connects Savannah’s port to the Atlantic Ocean to make room for the larger ships. Work on the projects second half began in September and is expected to be complete by the end of 2021.

A boost in automobile exports also helped to grow Georgia’s cargo volumes last year. GM and Volvo began exporting vehicles through Savannah last year, with Volvo also shipping cars through Brunswick. Overall, the ports moved more than 657,000 cars, trucks and tractors, up 2 percent from 2018.

Lynch said tariff increases last year during the U.S. trade war with China likely slowed the Georgia ports’ 2019 growth.

Now he expects Georgia to benefit after President Donald Trump signed the first part of a new U.S.-China trade agreement in which China has pledged to buy more U.S. agricultural products.

“We think that’s going to be a big deal for us,” Lynch said. “We’re already seeing it. Poultry is starting to move again, and that has been flat for several years.”

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ATA Truck Tonnage Index increased 3.3% in 2019

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Ata truck tonnage index increased 3.3% in 2019
After falling 3.4% in November 2019, the Truck Tonnage Index recovered in December, posting a 4% monthly increase. (courtesy: ATA)

ARLINGTON, Vir. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 3.3% in 2019, about half the annual gain in 2018 (6.7%). The increase was the tenth consecutive year in which the tonnage index has risen above the previous year.
The advanced SA For-Hire Truck Tonnage Index rose 4% in December after falling 3.4% in November. In December, the index equaled 118.2 (2015=100) compared with 113.6 in November.
“Last year was not a terrible year for for-hire truck tonnage, and despite the increase at the end of the year, 2019 was very uneven for the industry,” said ATA Chief Economist Bob Costello. “The overall annual gain masks the very choppy freight environment throughout the year, which made the market feel worse for many fleets. In December, strong housing starts helped advance the index forward.” It is important to note that ATA’s tonnage data is dominated by contract freight.
November’s reading was revised down slightly compared with the December 2019 data. In December 2018, the SA index rose 3%, which was preceded by a 2% year-over-year drop in November.
The not seasonally adjusted index, which represents the change in tonnage hauled by the fleets before seasonal adjustment, equaled 112.7 in December, 2% below the November level (115.1). In calculating the index, 100 represents the index from 2015.
Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

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ACT Research For-Hire Trucking Index: Rates slip amid strong holiday freight

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Act research for-hire trucking index: rates slip amid strong holiday freight
For-hire index rates slip, but signs of freight recovery in 2020 "encouraging" (©2020 FOTOSEARCH)

COLUMBUS, Ind. – The latest release of ACT’s For-Hire Trucking Index showed improvement in for-hire freight volumes and utilization. The data used in the Index included December. Respectively, the data indicated 55.5 and 52.3 diffusion index readings, both up four points from November on a seasonally adjusted basis. But even as for-hire capacity contracted again, the Freight Rates Index slid to 48.7 in December.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat level is 50.
Tim Denoyer, ACT Research’s Vice President and Senior Analyst commented, “We see encouraging signs that the freight downturn is in its late stages and the market will rebalance in 2020. However, the ongoing rate pressure, even as volumes ramped into the holidays, is symptomatic of ongoing excess industry capacity. Our survey respondents clearly get it, and reduced capacity for a sixth straight month, so we can pretty easily deduce that private fleet capacity additions through year-end 2019 are the main factor continuing to pressure for-hire rates.”
The ACT Freight Forecast provides forecasts for the direction of truck volumes and contract rates quarterly through 2020, with three years of annual forecasts for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months.
In 2019, the average accuracy of ACT’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide anticipated freight rates, helping businesses in transportation and logistics management plan with confidence.

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