Demand in the trucking industry increased significantly in the latter part of 2011. Caught by surprise, manufacturers were unable to meet this unexpected demand of the trucking industry, but began to augment their capacity to meet the anticipated demand in 2012. However the expected level of orders from the industry failed to materialize, believed to be a short-term glitch.
In the wake of the recent elections a high level of uncertainty still exists about the economy, but underlying market fundamentals and positive trends in the trucking industry auger well. Freight levels continue to be positive, and end-user customers and carriers remain profitable, all of which portend well for the trucking industry. Additionally, the Class 8 fleet is now of an average age approaching 6.7 years, the all-time high, and the size of the average fleet is way below the 2007 peak which suggests a positive demand in the forthcoming year.
The last few years have witnessed striking advances in new truck technology which has significantly impacted the way trucking industry operators buy, manage and operate their equipment. In combination with rising maintenance and fuel costs these advances are creating awareness in the trucking industry of the difference between ‘economic obsolescence’ and ‘functional obsolescence’.
Following the traditional convention, trucks like goods in general, become functionally obsolete when they are no longer able to perform in the manner for which they were originally designed. Most companies in the trucking industry have so far managed fleets lifecycles according to this convention, which is to run their trucks to almost functional obsolescence. Technologically advanced trucks of today are designed to clock over a million miles but that does not suggest that it makes economic sense or that a fleet operator should do it.