DETROIT (Reuters) - North American orders for Class 8 semi-trucks jumped more than 76 percent in February as trucking companies rushed to add capacity in a tight U.S. freight market, FTR, a company that tracks the industry, said on Sunday.
Preliminary orders in the United States, Canada and Mexico for the big rigs that haul freight along North American highways hit 40,200 trucks, up from 22,886 in February 2017, the second consecutive month that orders exceeded 40,000 units.
“The capacity crunch is transforming into a capacity crisis and many fleets of all sizes, in all markets, across the country are scrambling to add trucks as fast as they can,” Don Ake, FTR vice president of commercial vehicles, said in a statement.
Many rail and truck freight customers are grappling with how to defend their profit margins as transportation costs climb at nearly double the inflation rate.
FTR said the ongoing crunch in U.S. freight capacity appears to be exacerbated by a federal mandate that truck firms switch to electronic logs (ELDs) from paper logs, which into effect in December.
With few exceptions, vehicle operators have until April 1 to comply with the ELD mandate.
Experts have predicted many smaller trucking outfits that have fudged the books in order to stay profitable in a low-margin industry will close up shop, benefiting larger companies and driving up demand for new vehicles.
“It looks like fleets held back some orders from the fourth quarter to see if freight growth would continue and if ELDs were final,” Ake said. “Now that the environment is more certain, the orders have been pouring in.”
February orders were “sturdy across the board for all markets and truck types,” FTR said.
Full-year 2017 orders for Class 8 trucks came in at 290,000 units compared with 164,000 in 2016. The United States is by far the largest market in North America.
Reporting by Nick Carey; Editing by Jeffrey Benkoe