Tank truck carriers are outpacing the rest of the trucking industry, according to Bob Costello, chief economist for the American Trucking Associations. He delivered that optimistic economic assessment May 23 during the National Tank Truck Carriers 63rd Annual Conference in Baltimore MD.
In fact, tank truck activity is up around 20%, and the sector is in full economic recovery. "You guys are doing the best of anyone in the trucking industry, and I'm very happy to be here today to deliver that news," Costello said.
Tank truck carriers are benefiting from rising industrial production. Plastics production should grow by about 5% this year, and chemicals should be up about 4.5%. Food shipments should grow by around 6% over the next three years. More people are working, and payrolls are coming back.
"The employment picture isn't great yet, but it is pretty good right now," Costello said. "The US economy has recovered about 20% of lost jobs, and we are creating jobs in the private sector."
Capacity remains tight in the tank truck sector, and shippers are focused on making sure they have enough transportation to meet their needs, according to Kevin Sterling, senior vice-president BB&T Capital Markets. Tank truck carriers are only gradually increasing capacity, and rates are continuing to rise.
Dennis Slagle, president and CEO of Mack Trucks, said most of the truck buying right now is for replacement. Very few new truck purchases are going to fleet expansion. Still, truck orders have been strong, and manufacturers should build 230,000 to 240,000 Class 8 trucks for the North American market this year.
Tank trailer production also is growing, according to Theodore J Fick, president and CEO of Polar Corporation. He estimates that the industry will build around 8,950 tank trailers this year and 9,900 in 2012. About two-thirds of the production will be liquid cargo tanks. A significant number of the cargo tanks will be for fleet expansion especially for carriers involved in oil and gas production operations.