Truck sales did something in February they haven't done since 2014, according to the FTR consulting group.
North American class 8 orders for February were 40,200 units, according to FTR. That was what the consultant said was "much above expectations" and was in excess of 40,000 units for the second consecutive month. The last time the 40k mark was breached for two consecutive months was November and December 2014.
FTR said the February numbers were actually 15% less than January, which came in at 47,200. But the February numbers were up 76% year-on-year, according to FTR. More specific data will be released later this month to FTR clients.
In a prepared statement, Don Ake, FTR's vice president of commercial vehicles, called the class 8 market "red-hot." "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," he said in a prepared statement. He added that the ELD regulation is "exacerbating" the tight market.
“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 in his comments. "Now that the environment is more certain, the orders have been pouring in. This upturn looks strikingly similar to 2015, but is now expected to exceed it. Production is ramping up and should remain vibrant into next year.”
Ake, in a phone interview, said the ELD rule works to increases the sales of vehicles. Ake's view is that the tougher enforcement and transparency of the ELD rule inevitably leads to some percenage of drivers who had been exceeding the Hours of Service rule previously to cut back, since the hours driven past that limit would now be visible. "To make that up in the aggregate, you have to have more trucks," he said.
The precise amount that the ELD rule is leading to more trucks being purchased is hard to determine, Ake said. But he said it is working "in synergy" with the overall strong demand numbers for freight. If it were a down market, he said, "you might not even notice the impact of the ELD rule."
Ake said when FTR was doing its forecasts in recent months, the impact of the driver shortage on truck demand made the forecasters "wary." But there is an impact on truck purchases, he said: "If you had an abundant supply or drivers, what would be vehicle demand? It would be more."
The order book for trucks through 2018 looks strong, Ake said, but a worsening of the driver shortage could lead to some orders being cancelled later in the year if companies do not believe they will have personnel to operate the trucks. But otherwse, FTR's forecast is for continued strong demand throughout the year.