A gangbusters year marked by soaring freight rates and frenzied order and sales activity for equipment ended on a soft note, as December saw reported declines in both truck tonnage and trailer orders. It had to happen eventually, but some may feel cheated that the industry didn’t get to close out this otherwise stellar year on a high note.
Worse, our nation’s leaders are doing little to inspire confidence about the road ahead.
After a year when hauling freight was a great business to be in — regardless of whether you owned, drove, manufactured or sold the trucks and trailers — it was arguably fair to expect a cool-down as 2018 drew to a close. After all, everyone had been pretty busy.
Plus, it still was a record-setting year. According to American Trucking Associations’ monthly truck tonnage index, 2018 closed out on a 20-year high — and that’s in spite of a decline in December. While ATA Chief Economist Bob Costello described 2018 as a “banner year,” he noted that there are indications that the economy overall — and the trucking industry in particular — are, in his words, “moderating.”
There’s evidence of this in last month’s trailer-ordering numbers, too, even if the overall story was similar; a decline for the month but a record year. Ordering activity declined 40% in December, but that wasn’t enough to spoil a year when total orders topped 400,000 units.
Experts noted that after such a robust year, many fleets have simply staked their claim to what they expect to need long term. Others may be holding off due to the realization that manufacturers won’t have available build slots for a while. After all, their factories will have a record year’s worth of orders to fulfill.
While workers in those factories had plenty to keep them busy as 2019 got underway, many government employees were still either sitting at home or working without pay, as the longest partial government shutdown in history was — as of our press deadline — dragging on. (Jan. 25 update: Bill passed to end shutdown, fund government through Feb. 15.) There were some hopeful indications that lawmakers were nearing a compromise that could end the stalemate, but with the bitter divisions present on Capitol Hill these days, optimism should be cautious, at best. And that’s a shame, because despite the soft landing in December, most industry watchers are forecasting a good year ahead for trucking. But the longer this shutdown continues, the weaker businesses’ and consumers’ outlooks may grow. Let’s hope our nation’s leaders can come together and end this stalemate for the good of those affected, and the country as a whole.
