Efficiency Enterprises, Inc. 2107 Laurel Bush Road, Suite 209, Bel Air, MD 21015

Commercial Truck Production Delay: Expected Through 2023?

The production of Class 8 trucks is showing some signs of improvement, but freight truck production won’t truly rebound until well into 2023, most experts are saying. COVID 19 has caused an assortment of issues in the OEM markets, and these issues have been further compounded as new variants have cropped up all over the world, leading to further shutdowns and labor shortages. The demand for Class 8 trucks and freight trailers has not gone down; quite the contrary, it has grown significantly. However, the industry has never fully recovered from the original COVID 19 lockdowns, and new lockdowns and infection rates of the Delta and Omicron variants have continued to put the OEMs further and further behind.

Labor and Parts Shortages

Despite the demand, many OEMs have had to place significant caps on the orders, as the fulfillment of orders has been difficult for the previous years. Many companies had to resort to laying off and furloughing employees at the start of the pandemic, and many of those employees have not returned. Don Ake, FTR Vice President of Commercial Vehicles, stated that “suppliers need workers desperately.” While there are shortages in truck components, specifically semiconductors, improving the supply of parts will not necessarily lead to drastically improved production. Ake continues by stating, “even if the semiconductor issue was solved on the Class 8 side, you still wouldn’t be able to get up to maximum production.” Labor shortages are affecting many industries across the globe, and freight truck production is no less a victim of this than any other industry.

The lack of parts, specifically semiconductors, is still a major issue, though. Countries like Malaysia and Japan, major producers of the vital component, have experienced new lockdown protocols and have been ravaged by intense infection rates of the newer COVID variants. Further compounding the issue is the fact that semiconductor production focused more so on household goods as trucks were taken off the road with new national and state limitations on travel. With both production of the necessary components down, and with the reallocating of where the parts go, this has led OEMs to begin making ‘red tag units’, trucks and trailers made without certain components. However, even with some of these corners being cut, the production of trucks is still running at a deficit of over ten thousand, with trailers only doing slightly better.

Optimism for 2023

There is some reason for optimism on the horizon, though. FTR projects that nearly two hundred and seventy-five thousand Class 8 trucks will hit the market this year, possibly rising to three hundred and thirty-five thousand. 2023 should see the largest increase in production, with estimates of Class 8 trucks breaking three hundred and fifty thousand and higher. Again, Ake speculates that “this is going to keep the OEM build rates elevated into 2023 and maybe into 2024.” He clarifies, though, that, “we’re in catch-up mode and we’re going to be in catch-up mode for a while.”

Despite the labor shortages and the bottle-necking of production caused by a lack of components, there is reason to be hopeful for the future of freight production. After all, the decrease in production that the industry has seen over the last couple of years is not from lack of demand, but rather from lack of production ability. As the component industries start producing at their usual rates, and as workers begin to return to the industry, the demand to get Class 8 trucks and trailers on the roads will be staggering. Most industry experts are pointing to some time into 2023 as the point where these shortages will be fixed.

Looking for a solution to your fleet shortage? Let Efficiency Enterprises help as your fleet management partner! Contact us

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Boost Your Fleet Management Solution With These 6 Steps

Regardless of the size of the business, managing a fleet of trucks can be both stressful and complex. From fuel costs to truck maintenance, hiring the right staff, and training them, fleet managers have an unenviable job. Fortunately, technological advances are rapidly starting to make the process a lot easier. Below are a few tips on how to boost your fleet management solution.

1. Choose the best vehicles for the company’s needs

This is one of the most important tasks of a fleet manager. Depending on the type of industry that your firm operates in, procuring the right type of vehicles that best meet operational needs can make or break the business.

From strictly adhering to maintenance requirements to determining optimum vehicle replacement cycles and carefully considering disposal options can all have a major impact on the fleet management program’s success or failure.

Another important consideration here is vehicle reliability. It’s of little use if truck B costs $10 000 less than vehicle A but the direct and indirect costs of breakdowns will amount to three times that.

2. Optimize schedules and fleet delivery routes

Routes that are properly planned will undoubtedly increase customer satisfaction rates. It is crucial to provide your customers with accurate estimates for delivery times and small appointment windows. Efficiently planning delivery routes can help to shorten delivery times and will improve driver safety because there will be no need for them to rush. Ultimately this will also have a positive impact on accident rates.

3. Have an open-door policy

The fleet manager is a core part of any successful equipment and vehicle management program. His or her knowledge helps to keep track of issues and trends that might affect not only clients but also internal departments of the company. That is one of the biggest reasons why the fleet manager should always make time to listen to what drivers, clients, and other stakeholders have to say.

4. Control spending professionally

One of a fleet manager’s most important duties is to ensure the optimum use of the capital the company has available. Factors that can have a major impact on the firm’s success include:

  • Deciding whether to buy, lease, or rent vehicles based on sound financial criteria
  • Ensuring that the company gets the best financing rates
  • Taking into account tax incentives and other tax implications when making financial      decisions
  • Negotiating the best possible prices
  • Taking into account resale values and operating costs when making purchasing decisions
  • Planning for the firm’s future operational needs

5. Use technology to plan truck sizes and routes

New technologies such as GPS tracking can help drivers to arrive at their destination safely and efficiently. With proper route planning, they will be able to avoid roads with weight limits, low bridges, and heavy traffic. Drivers will also have access to live information about road closures and detours so they can choose the best alternative route. All of these can play a major role in driver safety and customer satisfaction rates.

6. Encourage safe driving habits and improve the performance of your drivers

Regular driver training is another crucial responsibility of fleet management. The aim here is to improve safety standards and efficiency. Focus on issues such as reducing fuel costs and eliminating bad driver behaviors like excessive idling, hard braking, and speeding. Probably the best way to do this is to make it very personal. Keep track of those drivers who might need training in specific aspects of the job and make sure they get the training they need.

7. Reward positive driver behavior

Another good idea is to have an incentive program in place that rewards drivers for positive behavior. With modern technology, it’s very easy to keep track of issues such as speed fines, delivery times, accidents, etc. If the company rewards those drivers who perform best in these areas it will motivate other drivers to improve. In the end, it will reduce costs, improve customer satisfaction, and benefit the whole fleet’s efficiency.

Want to discuss more fleet management solutions for your business? Let Efficiency help! Contact us.

Sources:

https://www.mixtelematics.com/blog/11-tips-for-improving-truck-fleet-management
https://www.mixtelematics.com/5-ways-to-make-your-fleet-more-efficient
https://info.rastrac.com/blog/improve-fleet-management-operations
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