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Title: Freight Truck Orders Plummeted 48% in January
Source: Wall Street Journal
URL Source: http://www.wsj.com/articles/freight ... lunge-48-in-january-1454520365
Published: Feb 4, 2016
Author: Brian Baskin
Post Date: 2016-02-04 10:28:02 by Stoner
Keywords: None
Views: 181

Orders for new big rigs plunged in January, as trucking companies eyeing weak shipping demand held back from investing in fleets.

Just 18,200 new trucks were ordered last month, down 48% from a year earlier and marking the second-lowest monthly total since 2012, ACT Research said Wednesday. The data dashed equipment makers’ hopes that relatively strong December orders would carry over into the new year.

Instead, trucking companies are canceling expansion plans and postponing trade-ins for their older vehicles. They fear that new trucks will sit idle if lower-than-expected retail sales over the holidays and signs of contraction in the manufacturing sector translate into a sluggish freight market this year.

“When truckers make money they tend to invest in their fleets,” said Kenny Vieth, president of ACT. Last year “a lot of these guys were looking ahead and saying it would be a great year. That’s not the same situation this year.” top logistics news

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On Tuesday, USA Truck Inc., a truckload carrier based in Van Buren, Ark., said it operated nearly 400 fewer trucks in the fourth quarter compared with the previous year. Knight Transportation Inc. said last week it would stop expanding its fleet, and Swift Transportation Co. , the largest truckload carrier, said in October it wouldn't add to the number of vehicles it operates.

ACT expects manufacturers to produce 250,000 new trucks this year, down over 20% from 2015. Production is likely to be only slightly higher than the number needed to replace older trucks leaving service, meaning few companies will expand their fleets, Mr. Vieth said.

Truck manufacturers have laid off workers and cut back production to match the decline in orders. Last week, Paccar Inc., which sells heavy-duty trucks under the Peterbilt and Kenworth brands, reported a 12% decline in fourth-quarter profits, which fell below analyst estimates.

The company said it expects sales to bounce back from recent lows as dealers have made progress in working through abnormally high inventories of unsold trucks.

But, but, didn't Obunghole just tell us the economy was fine ?

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