Sign of a rapidly growing economy: Production backlog for Big Rigs Stretches into 2019

quote:

---

With freight demand red-hot, truck manufacturers expect to break records for orders this year, and deliveries will reach deep into next year


LINK to WSJ

Anyone ordering a new heavy-duty truck this summer will have wait until sometime next year to get it, assuming strained manufacturing supply chains hold together.

An unprecedented run of orders for big rigs has pushed the backlog at truck factories to nine months, according to industry analysts, the largest since early 2006, when truckers stocked up to get vehicles in place before tougher environmental restrictions would take effect. Typically the backlog is about five months for the truck industry’s manufacturers, analysts said.

“It is longer than it should be,” said Magnus Koeck, vice president of marketing for Volvo AB’s North America operation, where Class 8 truck orders this year soared to 25,000 from 11,000 during the first six months of 2017. “Of course we are not alone in this situation,” he said. “Everyone is in the same boat.”

North American freight-haulers ordered more than 300,000 Class 8 trucks in the first seven months of this year and are on track to order a record 450,000 of the heavy-duty vehicles for the full year, according to ACT Research. That would be the largest book since 2004, when orders reached 390,000, according to analysts.

---

A booming economy in the US (everywhere but Louisiana at least) has lead to massive demand for over the road freight shipments. This has increased demand for medium and heavy duty trucks. Everyone from Volvo to General Motors is increasing production of class 5-8 trucks to cash in on the demand. Orders for class 8 trucks in particular have exceeded production capacity, which has been a fortuitous windfall for Daimler Trucks, Volvo, PACCAR, and Navistar.

With the strong economic growth already stretching the logistics workforce very thin, you may have noticed 3PL companies scraping the barrel to find more truck drivers as well as an increase in the number of trucks on the road.