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Commercial truck sales soar in October


Truck orders rose appreciably in October on a monthly and yearly basis.

Between slowdowns in consumer spending, rampant inflation, higher capacity among trucking fleets and negative job growth for truckers in September — highly unusual given the driver shortage — indications are swirling that a freight recession is either here or soon will be. But a buying binge of commercial trucks in October suggests that motor carriers still have the wind at their backs.

In October, orders for trailers nationwide totaled approximately 46,750 units, according to ACT Research. That's an 82% increase from September and up a remarkable 168% compared to the same month in 2021.

Jennifer McNealy, director of market research and publications at ACT Research, noted that trucking manufacturers have been flooded with order requests from both small and large carriers throughout 2022. Thus far, supply chain bottlenecks have created massive delays in terms of completing those orders. But conditions are improving.

"With the supply chain constraints improving for trailer manufacturers, as well as their increasing nimbleness in meeting and mitigating those challenges, OEMs are more comfortable accepting orders, and this month's preliminary data demonstrates that," McNealy explained.

During the height of the pandemic, when supply chain disruptions were at their worst, motor carriers faced a dilemma. Heavy consumer demand forced companies to purchase more trailers so they had the capacity to increase productivity. But manufacturers' inability to obtain the proper parts and materials needed for assembly prevented carriers from getting their trucks in a timely fashion. Even after lockdowns were lifted, supply chain challenges persisted, creating a near 15-month waiting period at one point last year before employers would receive their orders, FreightWaves reported, citing ACT data.

McNealy pointed out that manufacturers are in a much better place now.

"Demand remains strong," McNealy said, "with backlog-to-build ratios above the seven-month mark, on average, fleets needing trailers are getting in queue and staying there."

Used truck sales slip
When inventory for brand new trucks was low, fleets turned to pre-owned, causing prices to rise for used trucks. Enhanced availability of all-new trucks, evidenced by the growth in deliveries, may explain why sales for used trucks are down, falling 10% compared to September and 30% from 12 months ago, ACT Research reported separately. Yet they remain in high demand, with the average retail price for Class 3-8 used commercial trucks up 14% on a year-over-year basis.

While robust new and used truck sales serve as good news regarding where things stand for the trucking industry from an economic perspective — firms wouldn't be buying them if they didn't have a greater need for them — there are fears that the growth in capacity may lead to layoffs if the global recession worsens in 2023, which may reduce the amount of work that motor carriers have to spread around. Additionally, and rather ironically, motor carriers may also need to reduce the size of their labor forces to offset expenditures on more equipment if work dries up and revenue falls.

In the meantime, motor carriers remain cautiously optimistic that the economy's health will keep their wheels in motion.

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