Editorial: Heavy-Duty Truck Orders Surge

New orders for heavy-duty trucks have skyrocketed in the first quarter of 2002, even though actual Class 8 truck sales have continued to lag behind last year’s anemic pace.

Statistics show that orders this year have almost doubled from 2001, including an almost 170% increase in March. Actual truck sales are down 18.9% for the year, including a 10.9% dip in March.

In fact, executives from the major truck builders report that virtually all production slots between now and October have now been allocated to buyers.

Unfortunately, the jump in orders is being driven by fleet executives rushing to beat the October deadline set by the Environmental Protection Agency for cleaner-burning engines to be under the hoods of all new trucks sold in this country.

By ordering their trucks now, buyers will be getting the old tried-and-true engines that fleets have become accustomed to and whose performance and fuel economy are well-known.

It’s not hard to understand why truckers would be leery of new engines, equipment that hasn’t been tested in the real world of highway speeds, stop-and-go traffic and steep grades. While their performance levels remain to be proven, the new models will cost more and be a little less fuel-efficient than the engines they replace, the manufacturers have said.

It would be better if the wave of new orders was being driven by a surge in demand from shippers eager to get new products on the shelves of the nation’s stories or manufacturers that need the parts to produce their products.

And because the truck makers say that the surge in orders is being driven by pre-buying ahead of the Oct. 1 engine deadline, they are for the most part not expanding their capacity by reopening mothballed assembly lines or plants.

Several analysts are warning that the truck makers will face an even worse sales environment once these pre-October trucks are sold, and the manufacturers don’t want to get caught in a bind by expanding capacity.

While several fleets reported recently that their fright business hasn’t increased significantly, Federal Reserve Chairman Alan Greenspan last week spoke with guarded optimism about the future.

Greenspan, speaking after the Fed held interest rates steady, said, “The odds are very strongly in favor” of “continued economic growth, resumption of profitability and capital investment.”

And we could all use that.

This story appeared in the April 22 print edition of Transport Topics. Subscribe today.