IRVINE, Calif. (Mar. 7, 2005) — The truck cycle is playing out and it’s only the proverbial tip of the iceberg in terms of order flow, say market analysts Jeff Kauffman & Salvatore Vitale, Fulcrum Global Partners.

The North American industry is at the front end of a three-year equipment super-cycle, they say. Estimated truck build at its peak is 310,000 trucks & 270,000 trailers. Improving economy brings higher industrial production, inventory replenishment and freight tonnage.

Since 9-11, most companies — including those in transportation and heavy equipment — have been stockpiling cash and improving balance sheets, the analysts note. As the U.S. economy shifts from stagnation to growth, there could be pressure to put these higher-than-normal cash balances to work.

New U.S. hours-of-service rules, when they are re-finalized, will push fleets to add more equipment and raise driver wages, but truck capacity is so tight that carriers should be able to pass on the cost in ’04, say Kauffman & Vitale. But look for “the tightest squeeze on the qualified truck driver market in 20 years.”

The analysts add that Class 8 utilization in the U.S. was 89.5 percent versus 86 percent a year earlier. The Biggest gain: Construction-mining-refuse, where utilization rose 20.1 points. Agriculture was up 11.5 points, while class 8 utilization for private fleets was about the same as last year.

— from Heavy Duty Trucking