Manufacturers and research groups discuss mixed signals from trucking industry and possible recession
Spencer Webster, president of Red Classic, a Charlotte, North Carolina-based subsidiary of Coca-Cola Consolidated and the largest independent bottler of Coca-Cola in the United States, recently accepted the keys to a Mack® model Anthem by Jonathan Randall, Mack Trucks’ senior vice president of sales and business operations. The Mack Anthem model is the 1,000th road vehicle purchased by Red Classic from Mack Trucks. Webster accepted the vehicle at a special celebratory event at Mack’s Lehigh Valley Operations (LVO), based in Macungie, Pennsylvania, where all Mack Class 8 models for North America and export are assembled.
Happy fall, The equipment today readers, or if you have just returned from bauma in Munich and are stuck in multilingual mode: Frölicher Herbst!
33rd the annual iteration of the world’s largest construction and mining equipment trade show featured sustainability innovations, huge ‘wow-factor’ equipment and machinery with fuel source options alternatives. Notable new products included Hyundai’s prototype HW155H hydrogen excavator, two Manitowoc Grove cranes, the GMK5150XL and GMK5120L, and two all-new Takeuchi excavators, the TB350R and TB395W.
After three long years and a six-month delay due to lingering certainties surrounding the COVID-19 pandemic, attendees’ excitement at Bauma was palpable. Looking inside the international construction equipment industry also gave me a unique perspective. I’ve had productive and meaningful conversations with committed manufacturers concerned about the labor shortage in the United States, both for skilled trades like construction and trucking and for roles that require higher education. , such as OEM engineering.
A few weeks before my flight to Munich, the Heavy Duty Manufacturers Association (HDMA) and MacKay and Company, a leading management consulting and marketing research firm for the commercial trucking, construction and agricultural equipment industries , reported in a monthly webinar on Sept. 28 that labor remains the biggest impediment to growth in the commercial vehicle segment. However, the same statistics also offer optimism – a reduced risk of a US recession. During an economic downturn, companies typically aren’t looking to hire as much, according to MacKay and Company.
“Unless we’ve entered a magic mystery cycle where we have a recession with rising employment,” joked Bob Dieli, MacKay and Company economist and president and founder of RDLB, Inc., a company economic research and management consulting firm based in Lombard, Illinois.
Truck drivers, technicians and manufacturing employees looking to die Treppe hinaufallen – climbing the career ladder by securing promotions – will have a good opportunity to do so in 2023.
At a recent Mack Trucks event in Bethlehem, Pennsylvania, Jonathan Randall, Mack’s senior vice president of sales and operations, reiterated that the trucking industry looks strong through 2023.
“Oil prices are high, but they are falling. Interest rates are rising. GDP is down. Still, all other indicators, at least from the trucking industry, remain quite positive,” Randall said, explaining that the U.S. economy indicates it is heading for a slowdown. “However, at the same time, we find ourselves in an unprecedented level of demand for commercial trucks. … Manufacturing orders are rising and the unemployment rate remains low.
Noting that the labor market is extremely tight and continues to be one of the main challenges for the trucking industry, particularly in the manufacture of new trucks, Randall said the pent-up and continued demand for Mack trucks is incredibly high. Randall expects demand for new Mack trucks for 2023 to be even stronger due to a backlog and the average age of tractor fleets. For the past two years, production hasn’t been able to keep up with demand, Randall said, and replacement cycles are longer due to the difficulty of just meeting truck replacement demand.
Thus, the industry foresees strong demand in the near future, despite the impending economic downturn. Additionally, due to pent-up and future demand for new trucks, any downturn in the truck order market won’t match the downturn in the economy — it won’t be a 1:1 ratio, according to Randall.
A report released by Freight Transportation Research Associates, Inc. (FTR) on Oct. 5 found North American Class 8 preliminary net orders for September soared to 56,500 units, the most on record in a single month. . Order activity in September was up 169% month-over-month and 102% year-over-year. Over the past 12 months, North American Class 8 orders total 254,000 units.
“Due to the limited availability of new equipment, fleets have not been able to phase out aging equipment over the past two years,” said Charles Roth, FTR commercial vehicle analyst. “As a result, we expect replacement demand to remain elevated throughout 2023.”
Difficulty obtaining new trucks due to the backlog, tight labor market and supply chain challenges also led to an increase in used truck sales. According to the latest version of State of the Industry: US Class 3-8 Used Trucks, published by ACT Research, sales of used Class 8 trucks were up 29% month over month. The increase in buying and driving used trucks leads to more maintenance work and parts replacement. Gott se Dank (Thank goodness) that October 2-8 was National Technician Appreciation Week then! The American Trucking Associations (ATA) and the ATA’s Technology & Maintenance Council (TMC) sponsored National Technician Appreciation Week, on the heels of the 2022 ATA TMC Fall Meeting in Cleveland, Ohio, and its TMC SuperTech skills competition for professional commercial vehicle technicians.
If more fleets are made up of used trucks these days, they will need talented technicians to service them. Congratulations to these workers who von seiner Hände Arbeit leben, or “to live from the work of one’s own hands”. Until December bleibt gesund (stay healthy).