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JOC | Truckers Add Tractors as Demand Spikes

12.01.17 | William B. Cassidy, JOC

Available capacity at large truckload carriers remains tight, but there are signs truckers are slowly beginning to rebuild their fleets as the economy gains speed and they gain freight. Their ability to expand, however, remains limited by difficulty hiring truck drivers and relatively low returns on their assets, two factors trucking executives cite when asking for higher rates.

The JOC Truckload Capacity Index, based on actual truck counts at a group of large publicly owned trucking companies, rose from 78.8 in the second quarter to 79.3 in the third quarter. That is a small gain, but it is the third straight quarter-to-quarter increase for the index after four quarters of decline in 2016, when carriers were cutting fleets amid low freight demand.

However, the index, adjusted recently to reflect changes in financial reporting at one of the largest truckload carriers, shows the fleet size of the carrier group tracked by JOC is about 20 percent lower than in the fourth quarter of 2006. The index also shows truck counts at those carriers is now 7.3 percent above its level in the 2014 first quarter, the low point for the index.

The JOC index could gain some altitude in early to mid-2018. Two quarters of US economic growth topping 3 percent inspired a strong leap in Class 8 heavy tractor orders in October, with FTR and ACT Research both reporting a year-over-year increase in new Class 8 orders of about 160 percent. From September, Class 8 orders rose by more than 13,600 units.

That increase in part is an easy comparison from a depressed truck market a year ago. However, truck orders on average nearly doubled in the third quarter, rising 62 percent year over year, based on FTR data, from a 33 percent increase in the second quarter. Year to date, 221,500 trucks have been ordered, compared with 184,686 for all of 2016, FTR data show.

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