Heavy-duty trucks drive the wheels of the American economy. Whether it’s the apples in your local grocery store, the desk you’re sitting at or the massive turbine that generates electricity at your local power plant, nearly everything got to where you need it on the back of a truck. In fact, according to the American Trucking Association, nearly 71% of the freight tonnage moved in the U.S. goes on trucks.
With the economy in good shape, it might be tempting to assume that heavy-duty trucking is going to continue on an upward trajectory. But with the ongoing trade war with China showing no signs of slowing down, fears of a recession are causing many economists to urge caution. There’s never been a better time to examine the expectations or reality in the world of trucking, and determine how each of these will impact cost of ownership and the market for aftermarket parts and replacement parts.
At first glance, 2018 was a great year for truck manufacturers. Driven by industry leaders like Peterbilt and Volvo, trucks were flying off the production line. In fact, Class 8 truck orders crushed a 14-year-old record last year, and tonnage set a 20-year high. But a closer look at the reality is a bit more sobering, as despite the great year, it closed on a significant downslope, with orders dropping 24% from November to December.
Much of this was driven by uncertainty caused by global trade uncertainties. Tariffs on steel have raised production costs for diesel engines, cabs and virtually every other part of work trucks. And, while industry experts aren’t ready to tighten their belts and buckle down for a full-on recession, they are expecting slower growth.
How this slowdown will affect aftermarket parts manufacturers remains to be seen. On the one hand, fewer new trucks means more repairs and replacement parts for older rigs. On the other hand, owners may be trying to crank every last mile out of each part. At this point, expectations are unsure for parts and truck repair.
The consensus in the industry seems to call for about an 8% growth in big rigs in 2019, regardless of makes and models. But, when the entire industry is taken into account, there seems to be quite a bit more optimism. Medium-duty trucks, in particular, are expected to more than double in sales this year.
Partly driven by fuel economy, these smaller work trucks don’t offer the carrying capacity of their larger cousins, but are more useful in a world of growing regional distribution and the e-commerce that drives it. Additionally, as they don’t require a commercial driver’s license to operate, it’s easier to find drivers. This is a huge benefit as the industry continues to experience a shortage of qualified operators.
Another area of unexpected growth is in the Chinese market. While the Chinese auto industry has had a rough year, China’s truck market is expected to produce and sell more than one million heavy-duty trucks for the third consecutive year, making it the largest truck market in the world. What’s particularly noteworthy about this is that it is almost an entirely local industry. And while international players, including both OEMs and aftermarket and replacement parts manufacturers, have struggled to gain a foothold, the sheer size of the market offers opportunity.
The industry is also seeing technological shifts helping fleet owners lower operations costs by minimizing administrative workload. The rollout of the Electronic Logging Device mandate has made paper logs a thing of the past.
While the goal of this was to reduce errors and ensure Hours of Service compliance, it had the additional benefit of reducing the time fleet managers wasted combing through messy, inaccurate and incomplete paper logs. Instead DVIRs collect all the information required by law in one convenient location, both for law enforcement and for fleet managers looking for ways to improve their fleet allocation.
One thing is certain, even if the worst fears of recession turn out to be reality, the heavy-duty trucking industry is well-positioned to ride it out. Technological advances, things like telematics, and the corresponding predictive maintenance it provides, will continue to lower overall cost of ownership, as well as simplify fleet management. All makes and models going forward will include this technology as standard, as operators will demand it. After all, no one wants to risk a busted powertrain when the technology is available to help you avoid an inopportune breakdown.
Additionally, increases in aerodynamics and engine systems will improve fuel efficiency, further driving down the cost of operation. Coupled with the fact that demand has shown no sign of slowing, the freight industry looks to continue on course, full steam ahead.
No matter what the future brings for heavy-duty trucking, to make the most of your opportunities, you need to keep your vehicles in great shape. If you’re looking for replacement parts or repair service, or just someone who understands the challenges of trucking, visit your friends at Inland Truck Parts & Service today.