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June 20, 2019 12:30 PM, EDT

Rising Class 8 Sales in May Signal Demand Alive and Well

American Central Transport truck American Central Trucking initially planned to replace 95 vehicles in 2019 but may have to increase that by a few more trucks. (HaulACT via YouTube)

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U.S. retail sales of heavy-duty trucks kept up momentum in May, pushing into the 20,000-plus territory for the 10th time over the past year, WardsAutomotive.com reported.

Sales surged to 24,424, compared with 19,195 in May of last year. The other sub-20,000 month out of the past 12 was February with 19,858 units sold. Sales year-to-date climbed 25.6% to 111,332, according to Ward’s.

Done Ake, vice president, commercial vehicles, FTR

Ake

“It’s a very consistent sales pattern that shows that fleets needed more trucks,” said Don Ake, who is the vice president, commercial vehicles, for research firm FTR.

All truck makers posted year-over-year gains.

“From a production and sales standpoint, the market continues to operate very strongly. The question everybody has is how long will it continue,” Ake said.

FTR sees a decline in Class 8 sales coming in 2020 — with sales of 225,400 compared with its forecast of 276,700 for this year.

ACT Research forecasts Class 8 sales falling to 204,000 next year after reaching 273,000 this year.

“We think sales will peak here shortly,” said Steve Tam, vice president, ACT, citing declines in manufacturing and construction offset by retail sales.

ACT Research logo

Meanwhile, truck maker Freightliner sold 40.8% more trucks in May compared with a year earlier and remained the market leader. Sales of 8,517 earned it a 34.9% market share. Freightliner is a brand of Daimler Trucks North America.

Western Star, also a DTNA brand, pulled down a 2.8% share with 695 sales — a 19% improvement.

International Truck, a unit of Navistar Inc., increased sales by 30.3% to 3,168, notching a 13% share.

Drayage provider Roadrunner Intermodal Services, a unit of Roadrunner Transportation Systems Inc., recently added 60 new trucks to its fleet.

“Some of it was for growth in certain terminals, but overall, it was more of a replacement cycle,” said Curt Stoelting, CEO at Roadrunner Transportation. “With a newer fleet, we can provide, not only the drayage solutions, but other options such as longer haul. And it provides the right environment for our company drivers and the right modeling for our independent contractors.”

Roadrunner Intermodal operates trucks from Freightliner and International in its 750-truck fleet, 20% of which are driven by company drivers, he said.

Volvo Trucks North America saw sales climb 7.3% in May compared with a year earlier, reaching 2,722 and an 11.1% market share.

“Moving into 2020, we believe the market will soften, and we plan to monitor the situation, while continuing to deliver premium products that focus on safety and increase our customers’ uptime and efficiency,” said Magnus Koeck, VTNA’s vice president of marketing and brand management.

Mack Trucks sold 1,814 trucks, earning a 12.9% improvement and a 7.4% share.

“The fundamentals of the overall economy remain steady. The Class 8 industry also continues to work through a significant order backlog, which is helping maintain solid retail sales,” said Jonathan Randall, senior vice president of North American sales at Mack. VTNA and Mack are units of the Volvo Group.

One fleet now plans to add trucks after the driver market loosened up slightly in the second quarter, an executive there said. American Central Transport, a Kansas City, Mo.-based truckload carrier hauling primarily contract freight, operates 325 trucks from Kenworth Truck Co. and Freightliner. It initially planned to replace 95 vehicles in 2019.

Brian Matthews, American Central Transport's vice president, operations

Matthews

“We now are looking at maybe having to net-increase that by a few trucks if we continue to see the driver market be favorable,” said Brian Matthews, American Central Transport's vice president, operations. “We need the trucks sooner rather than later. If we can add the drivers, we feel confident enough that the freight will be there.”

Kenworth increased sales by 8.9% to 3,653 and claimed a 15% share. Peterbilt Motors Co. improved sales by 46.5% to 3,855, and a 15.8% share. Kenworth and Peterbilt are brands of Paccar Inc.

Jeff Cohen, chief operating officer at G&D Integrated, said by late summer, the company will have completed a five-year truck replacement plan and expects to grow its fleet more this year.

“There are still enough attractive business opportunities for us that we will grow as fast as we can effectively bring on quality drivers,” Cohen said. “We have invested considerable effort in our driver recruiting programs and those are definitely achieving traction.”

Morton, Ill.-based G&D provides domestic transportation, freight brokerage, contract logistics and supply chain services to a variety of industries from 20 facilities across North America.

The other avenue for fleet growth is acquisitions, he added. In 2017, G&D acquired the tanker business of Bell Enterprises Inc. to expand into hauling bulk products. “We are anticipating we are going to close a second acquisition by the fall of this year,” Cohen said.