The freight industry is coming off some optimistic predictions by industry analysts, who have said that demand will continue a slow and steady rise over the next several years.
These predictions are coming true – despite a rough 2016 and a slow recovery last year, the freight industry has seen more orders and steadier demand so far this year. All signs point to this upswing continuing, and, combined with recent tax cuts, the increased demand provides a great opportunity.
Trucking companies have a lot to deal with right now – the growing driver shortage has continually presented problem and the switch to electronic logging devices is still causing issues.
But beyond these hardships, there’s the matter of trucking companies’ aging fleets. Lower-quality trucks can make a driver’s life harder and lead to more costs the carrier must recoup in some way. Now with more money left to reinvest in their own business and a forecast of rising freight rates, carriers seem content to upgrade their equipment.
January saw more orders in the Class 8 segment than expected, with numbers rocketing to levels unseen since March 2006. About 47,200 orders were received last month, marking a 116 percent jump from January 2017.
Jonathan Starks, chief operating officer at FTR Transportation Intelligence, said: “These levels were well above our already strong expectations and continue to indicate that the equipment markets are still reacting to the tight capacity in the truck marketplace.”
Orders even exceeded the heightened expectations of sellers, who expected to do better business thanks to soaring demand and a refined tax structure.
Top groups like Volvo, who dominate industry sales along with a few other big names, are projecting sales of about 280,000 in 2018, marking even more business for the heavy-duty sector.
While freight demand has increased, this isn’t solely due to economic optimism. Residential and commercial development have also played a big part, providing more incentive for carriers to refine their fleets and take advantage of all the potential business opportunities available to them.
Trucking has a lot going for it right now, even with the driver shortage and the ELD mandate causing carriers stress. But one glaring issue that still needs resolution is America’s infrastructure problems. Truckers and trucking managers still want the details of the president’s plan to overhaul the country’s aging roads and bridges.
A big campaign promise that got a lot of attention pre-election, the move to restore deteriorating infrastructure has moved much slower than many would’ve hoped. There are still big questions about where the funding will come from and when the upgrades will start.
While deteriorating roads and bridges make trips tougher than they should be, the freight industry will likely have to tough it out for a while longer, just as they’ve been doing for years now. Improved equipment may help offset the costs of this problem, though they can’t mitigate it completely.
U.S. infrastructure was rated a D+ in 2017 by the American Society of Civil Engineers.