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December 29, 2021 10:00 AM, EST

2022 Will Feel Familiar for Equipment Sector

Equipment The assembly line at a Freightliner plant. (Daimler Trucks North America via YouTube)

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The year ahead promises to be a busy one for the equipment sector, as key trends such as used truck pricing and availability, parts sales, freight rates, truck electrification and new, more robust engine oils intermingle with challenging supply and demand conditions — including rising costs for raw materials — that are affecting orders for new trucks and trailers.

“It is important to note that next year also presents many great opportunities,” Dana Inc. Chairman and CEO James Kamsickas told Transport Topics. “I think we will find continued progress being made on driving sustainability throughout the supply base, and I’m hopeful that infrastructure development will stay at the forefront of the industry conversation.”

In 2022, he expects to see several medium-duty electrified trucks hitting the road, and, “new technologies to support Class 7 and 8 trucks will start to make electrification a broader reality in the heavy-duty segment, as well.”

Roeth

Roeth

Mike Roeth, executive director of the North American Council for Freight Efficiency, believes fleets pursuing electrification will begin to announce efforts outside of California — where much of the early growth has been centered — as utilities and local governments offer incentives and capabilities for projects.

“Regulations will continue to emerge on the state and national levels, primarily focused on zero emission solutions,” he said. “The ‘messy middle’ of alternative technologies will become even more obvious as near-zero solutions like natural gas and hybrid variants offer significant opportunities as this decadeslong scaling of zero-emission trucks takes place. This in some cases could be overwhelming as the industry is flooded with a plethora of opportunities.”

The newly publicly traded Daimler Truck, whose Freightliner brand is the Class 8 market leader in U.S. retail sales, recently forecast battery electric and fuel cell vehicles will account for up to 60% of its truck sales by 2030.

Many experts believe Class 8 U.S. retail sales will accelerate in 2022, when manufacturers are able to increase production of new trucks.

Meanwhile, the most important factors in used truck pricing in 2022 will be freight rates, availability of new trucks and the supply of trade-in vehicles, according to Chris Visser, commercial truck senior analyst at J.D. Power Valuation Services.

“Looking at returning used truck trades, there were about 30% more 2019 model-year trucks delivered than 2018 trucks, and 2019s will be four years old as of Jan. 1,” Visser said. “The market is currently absorbing every 2019 truck it can get its hands on, and at extremely high pricing, so we don’t see the higher build of that model year impacting used truck pricing in the first quarter of 2022 at least. So, new and used truck supplies point to a continuation of the seller’s market through at least the first half of 2022.”

Charles Willmott, principal of WillGo Transportation Consulting, forecast the 2021 global logistics crisis will spur widespread support in 2022 for revising size, weight and length restrictions on longer combination vehicle standards — to allow more universal use of doubles and triples — and to increase gross vehicle weight to 100,000 pounds from 80,000 pounds.

He added, “The integration of new smart trailer technologies will continue to gain momentum particularly among higher value carriers — temperature control, tanker, hazmat— with a focus on improving safety and loss prevention, asset management and utilization, and maintenance cost minimization.”

Willmott expects North American trailer production to climb in 2022 compared with 2021 to 275,000, rise again in 2023, then peak in 2024 at about 325,000 units — near 2015’s record level of nearly 350,000 — then fall back slightly in 2025.

Work in 2022 on new heavy-duty engine oils will continue, noted Jeffrey Harmening, team lead at the American Petroleum Institute.

The request for a new category from the Truck & Engine Manufacturers Association, he said, “was prompted by the anticipated 2027 implementation date for new heavy-duty on-highway regulations” from the California Air Resources Board and the U.S. Environmental Protection Agency to reduce emissions of oxides of nitrogen (NOx) more.

“For the near-term, this means that API CK-4 and API FA-4 [the current categories] will continue to serve the needs of the truck and engine makers going into the next category. For the longer term, however, drivers and fleets can expect more robust oils that provide improved oxidation performance and better wear capability, among other benefits,” he said.

And there is a desire for even lower XW-20 oils, Harmening said. “That is under consideration for the new category as FA-4 gives way to its future replacement as is currently envisioned.”

Companies including Jacobs Vehicle Systems and Eaton Corp. plan to highlight cylinder deactivation valve train technology as a means to save significant amounts of fuel by shutting off cylinders during periods of low-power demand.

Looking at the full year, economic experts at Wells Fargo said their base case is for U.S. economic growth of 4% in 2022, down from 2021’s rate of just above 5% — driven by consumer spending, including a shift to more spending on services.

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