If the economy improves and more freight hits the marketplace, will there be enough trucks to haul it?
Sales of new Class 8 trucks have slipped in the U.S. in recent years, falling below 100,000 in 2009.
Kenny Lund, vice president of support operations for truck broker Allen Lund Co., La Canada, Calif., said there are about 1.8 million Class 8 trucks registered in the country, and it has been estimated that 250,000 new trucks need to be produced each year to replenish that fleet.
“We know there are less trucks available in the market place,” Lund said.
“If we see a big increase in freight, it’s going to take a while to ramp up. What we’re concerned with is that when the economy improves there’s going to be a big capacity gap, especially with refrigerated trucks.”
Mike Laws, director of logistics for Edinburg, Texas-based Frontera Logistics, said carriers are keeping their trucks longer.
“That’s the message we’re getting,” Laws said. “They’re not buying new trucks because they don’t know what the future holds. They don’t have any confidence to go out and sign up for half a million dollars worth of truck payments.”
In addition to the weak economy, carriers might be scared off by the price tag of new trucks. New Environmental Protection Agency standards for diesel engines took effect in January. Along with the new standards comes a higher price because emissions control technology adds thousands of dollars to the base price of a new truck.
Laws said he will keep an eye on capacity.
“I don’t think it’s going to happen in 2010 or even the first half of 2011, but as we recover it’s something that bears watching,” he said. “We’ve heard that a lot of carriers are going out of business or have pared things back.”
Kerry Byrne, executive vice president of Total Quality Logistics, Cincinnati, said in late February that capacity already has tightened considerably this year.
“Things are changing, sooner than most probably expected,” he said. “That will trigger an increase in rates this year, though I can’t predict the level or the timing.”