As Australia’s truck market heads for a record high water mark in terms of volume this year our counterparts across the Pacific are also tracking for a massive record, which would be a lot higher if demand for trucks, wasn’t massively outstripping supply.
The backlog of truck orders in the US is reported to be approaching 281,000 units, yes you read that correctly, 281,000. Truck makers are building trucks at a record rate and delivered 29,300 heavy-duty trucks in the US in August, up 31 per cent on August 2017. However fleets ordered a record 53,100 heavy trucks during August, leaving a deficit of 23,800 units, underlining that massive backlog which is up 193 per cent on this time last year. The lack of enough new trucks to meet the booming freight demand in the US has left freight companies scrambling to secure new vehicles and the wait time for new trucks is now longer than ever
Daimler Trucks North America for instance is reporting that it has sold out of trucks for the rest of this year in America and for the first half of 2019 as well.
The US trailer market is also running hot with orders of 38,200 trailers in August up an extraordinary 104 per cent over the same period last year and this level of activity is expected to last well into 2019.
Strong economic growth in the USA over the last three to five years is one of the key factors driving demand along with full employment levels and more freight than there are trucks to haul it.
As well as that new higher technology trucks which offer better fuel economy and lower overall running costs are also driving the replacement demand.
The shortages of trucks and trailers as well as the seemingly universal shortage of and diesel mechanics are driving higher load prices in the USA with spot rates having risen 30 per cent compared with August 2017.
As one analyst observed, when trucking companies are making a lot of money, they buy new equipment to offset taxes.
While the industry is booming there could be some speed humps on the road ahead that could slow the robust truck market, including the long-term impact of tariffs on steel and aluminium from China under Donald Trump’s trade policies.
The Trump administration has placed tariffs on an additional $US 200 billion worth of Chinese imports that will take effect this week and continue at 10 per cent through to the end of the year.
Some analysts are saying that tariffs are the biggest risk to the U.S. economy with consumers having to cover rising costs of goods associated with higher tariffs, which will affect discretionary spending.
One question some are asking, is if goods shipments are being pulled-forward to get in ahead of tariffs, what will happen to freight volumes post-tariff.
For now, the outlook is positive and experts are saying the US economy has the potential to run strong deep into 2019.