Those of us in the trucking industry maintain no doubts about the vast impact that our discipline has on modern infrastructure. In a society that’s very life force is the consistent and timely flow of goods, truckers form a substantial, if sometimes under-valued, portion of the essential workforce. By looking into the current state of a nation’s trucking industry we can obtain a number of key insights into the overall health of its economy. Trucking data provides inferences into current trends in a nation’s imports and exports, manufacturing, retail, distributions and beyond. That said, it is no wonder that the underwhelming performance of the American trucking industry throughout 2015 has been cause for concern amongst many of the Nation’s top Economists.
In 2014, the demand for class 8 trucks had been significantly greater than average, sparking optimistic projections for 2015, with many expecting orders to reach a decade high. The driver shortage became the primary industry concern, as an influx of retirees continued to leave many fleets in want of newcomer replacements. Industry stocks increased to unprecedented levels, and carriers couldn’t seem to order enough trucks to meet their projected demand. It was, in a sense, a crisis of abundance rather than infertility.
Unfortunately, with the arrival of the new year, came a disappointing lull in industry sales as well as an alarmingly low load-to-truck ratio, as reported by transportation data provider DAT, signifying a clear indication of supply exceeding demand.
In terms of specifics, 2015’s peak shipping period in November saw a 1.8/1 load-to-truck ratio compared with 2014’s outstanding 3.5/1 and 2013’s more typical 2.5/1. This year’s November figure is just the latest disappointment in what has been a steady decline since late 2014.
With ACT having lowered their estimate of overall 2015 class 8 sales to 328,000 and an increase of 8,500 additional inventory units from 2014, there is no immediate end in sight to the excess truck retail supply.
As previously alluded to, the current lull in load-to-truck ratio as well as the disappointing unit sales can be viewed as a telling indicator of the nation’s overall economic health. A decrease in load demand generally indicates weaker sales of products nation wide. It’s a basic chain of causation really. Shops get less sales and they end up ordering less loads. Less loads are ordered and less trucks are needed. Less trucks are needed so less trucks are manufactured, meanwhile the surplus units just sit waiting in inventory.
As members of the trucking industry it is important for us to take a holistic approach to the health of our trade and realize the vast interrelation between our own personal livelihood and the greater social and economic landscape. What happens to us impacts our nation as a whole and our respective fates ultimately depend upon each other. Here at Scout Logistics we will continue to provide further updates on the health of our industry and we hope that you continue to view us as a helpful and reliable source of vital information.