The U.S. manufacturing sector relies heavily on commercial trucks to haul goods from one end of the supply chain to the next. Without these trucks, the U.S. manufacturing industry would fall flat. Both work hand in hand, and when the trucking industry is doing well, so is the manufacturing industry.
Over the last year, we've seen many companies promise to bring more manufacturing jobs back to the U.S. and industry researchers, and analysts predict the trucking industry to grow by 3.4% in 2018. Will these predictions ring true and what does it mean for commercial truck finance providers? To better understand these predictions let's take a look at 2017's numbers.
Over the last year, we've seen many companies promise to bring more manufacturing jobs back to the U.S. and industry researchers, and analysts predict the trucking industry to grow by 3.4% in 2018. Will these predictions ring true and what does it mean for commercial truck finance providers? To better understand these predictions let's take a look at 2017's numbers.
Commercial Trucking Finance in 2018
With a boom in demand, that means that there will be more buyers, and financiers will have their work cut out for them to keep up, which is a good problem. Commercial trucks come in a variety of shapes and sizes, but a few are more popular than the rest.
2017 saw an increase in demand for commercial trucks and trailers, both setting records in December 2017. According to EDA, a leading industry research firm, these are the most popular truck types from 2017:
EQUIPMENT TYPE UNITS BUYERS
Class 8 Truck 849,681 252,705
Mechanic 171,994 161,832
Class 7 Truck 92,711 38,064
Class 6 Truck 64,438 34,300
Svc Vehicle Body 9,763 4,989
Class 5 Truck 1,452 852
Bus 454 200
Class 4 Truck 439 303
Class 3 Truck 167 152
Class 2 Truck 137 106
Class 8 trucks are by far the most popular option for most companies, and in 2018, financiers will have a profitable year helping buyers secure the vehicles they need to build up their fleet.
Class 8 Trucks Set a Record
Analysts at ACT, a leading research firm, note that orders for Class 8 trucks in North America rose to a new 37-month high in December 2017. More and more manufacturers and logistics companies are seeking vehicles to haul their goods across the country and borders, and Class 8 trucks offer a flexible option for them while also being able to tow heavy loads.
Trailers Faired Well Too
The trailers that store the goods trucks haul also experienced a boost in orders due to the increased demand. Research firm FTR reported that trailer orders rose to 47,000 in the month of December 2017, which is the most orders in one month ahead of the previous record held by October of 2014.
The Electronic Logging Device (ELD) mandate goes into effect this year and is forcing drivers to spend less time behind the wheel, requiring they take two full days off after a 50-hour week. With this new mandate, carriers are required to install the ELD on all of their vehicles and tighten their workload, so drivers don't over exhaust themselves each week.
Looking Beyond 2018
Even with these new regulations, commercial trucking will remain a prominent component of logistics. With a boost in manufacturing, the demand for commercial trucking will continue to rise as over 70% of all U.S. freight moved across the country is by trucks. If analyst predictions hold true, 2018 could be a successful year all around for carriers and financiers.
