(Reuters) - Orders of the heavy-duty trucks that move America’s freight rose 50 percent in August compared to the same period a year ago, fueled by strong freight volumes, according to preliminary figures released on Wednesday by a firm that tracks the sector.
According to FTR Intel, orders of Class 8 trucks, at 20,700 units, jumped 14 percent in August above July levels and 50 percent higher than the same period in 2016.
August marks the third consecutive month of rising truck orders after U.S. heavy-duty truck orders surged 79 percent in July and rose 38 percent in June following a surprising drop in May. [L1N1KP0VT][L1N1JW1U4]
“Freight continues to show some impressive growth,” said Don Ake, Vice President of Commercial Vehicles at FTR. “This has created capacity tightness in some regions which is expected to spread to more areas as economic growth expands.”
Ake also said it appears May’s 16,500 orders will be the low point for the year and orders are expected to climb in September leading into the fourth quarter.
Commercial truck makers endured weak sales and high retail inventories during 2016. This year, analysts predict higher orders for trucks and an even better 2018.
The growth in 2018 could be fueled by a federal mandate that truck firms switch to electronic logs (ELDs) from paper logs in December 2017. Experts predict many smaller truck firms that fudge the books in order to stay profitable in a low-margin industry will close up shop.
That is expected to boost truck orders by larger fleet owners next year.
“The capacity crunch will be exacerbated by the ELD mandate, spurring demand for trucks and trailers in 2018,” Ake said.
Reporting by Eric M. Johnson in Seattle; editing by Grant McCool