The Transportation Recession Spreads
by Wolf Richter
WolfStreet.com
February 4, 2016
Hope came unglued all over again.
In January, orders by trucking companies for Class 8 trucks – the big rigs that haul freight on North American highways – plunged 48% from a year ago, to 18,062 units.
The fiasco started in earnest in September. Since then, orders have become “unusually volatile,” as FTR, a transportation analysis and forecast provider, put it in its report. “Unusually volatile” means they are heading south in an unruly manner.
In 2014, orders for Class 8 trucks had reached 376,000 for the year. US truck makers were ecstatic. They cranked up production and hired people. Trucking companies were on cloud nine. Capacity was tight, rates soared. There was talk of driver shortages.
But in 2015, particularly in the last few months of the year, reality was sinking in: oversupply of trucks, weak demand from shippers, and therefore declining spot rates. In response, trucking companies slashed their orders for new equipment. For the year 2015, orders for Class 8 trucks plunged 24.5% to 284,000. “And now,” the report said, “2016 is starting off even weaker.”
The last few months have been crazy. In October, according to FTR, orders for Class 8 trucks plunged 45% year-over-year to 25,000, or a “still impressive” 324,000 orders for the last 12 months.
The Rest…HERE
