Class 8 Truck Makers Apply the Brakes
The heavy-duty truck manufacturers are continuing to feel the heat of the decelerating US manufacturing sector. The surge in trucks coming onto the market late last year and the start of 2019 paired with slowing freight demand has created a glut in the freight market. ACT Research estimates that trucking companies have added roughly 6 percent more capacity this year. With that said, estimated truck orders for August increased slightly from July, but dropped 80 percent year-over-year. Estimates for sales have not yet come out but have remained strong in recent months. If fleets ramped up cancellations this past month, we could see a drop off in trucks coming into the market as well.
In Other News
Trade tensions and slower global growth are depressing freight volumes. Freight rates have fallen more than 20% from a record in June 2018, says St. Louis-based research firm Broughton Capital LLC. Trucking companies, in turn, are ordering fewer trucks.
OPEC’s crude production rose last month, the first increase since the group and its allies started a new round of output cutbacks at the start of the year to shore up a weak global market.
Tariffs on clothing and other imports from China went into effect on Sunday, escalating the trade war in a move expected to squarely hit consumers.
When we look at second-quarter earnings reported by large publicly traded motor carriers, the 2.1% GDP growth in the second quarter seems to portray a stronger volume environment than experienced by the trucking industry.
Oil prices rose more than 4% on Wednesday, boosted by a wider market pickup on positive news from China, after three days of losses due to fears about a weakening global economy.
A project to create an alternative freight route to the Panama Canal by connecting Asia and the US East Coast through a rail line joining Mexican ports on the Pacific and Gulf coasts is advancing, according to a report released by Mexico’s president.
Union Pacific Railroad has pulled back on plans to fine trucking companies for missed appointments at intermodal ramps after carriers and logistics providers protested the move, due to take effect this week.
The ethanol industry is suffering from weaker prices and oversupply as that pillar of the farm economy has been hurt by regulatory changes and the trade dispute with China.
Federal Reserve officials are gearing up to reduce interest rates at their next policy meeting in two weeks, most likely by a quarter-percentage point, as the trade war between the U.S. and China darkens the global economic outlook.
Chinese and American officials plan to hold trade talks in Washington in early October, a new attempt to tame a trade war that is rippling through the global economy and hurting business investment and confidence.
Early reports on Class 8 truck orders for the month of August show a modest increase compared to July, but as manufacturers open up slots for 2020, it seems that fleets are in no hurry to fill them.
Hurricane Dorian made landfall along the North Carolina coast early Friday as the region braced for more drenching rain, flash flooding and power outages while the storm worked its way north.
Employers added to payrolls at a steady pace and unemployment stayed historically low in August, suggesting the U.S. economy held firm during a month when a deepening global slowdown and faltering manufacturing activity stoked fears of a sharp U.S. slowdown.
Supply chain executives sketching out transportation budgets for 2020 have a difficult task ahead of them — mapping out a spending plan while economists, pricing analysts, and fleets classify the trucking market as everything from healthy to a bloodbath amid an uncertain United States economy.