Despite the previously reported improvement in September’s heavy duty orders, even stronger production during the month weighed on backlogs, which contracted for a fifth consecutive month. “Backlogs typically decline in September. When we seasonally adjust the data, the Class 8 backlog actually rose slightly from August,” said Kenny Vieth, ACT Research’s President and Senior Analyst. He continued, “The month’s smaller backlog along with stronger production reduced the Class 8 backlog/build ratio to 78 days, the skinniest backlog cushion for the industry since late 2013.”

September’s lower Class 8 backlog/build ratio was predominantly driven by an increased build rate. “The Class 8 build rate rose to 1,208 units per day, the strongest rate of production in nearly two years.” noted Vieth. He continued, “Through year to date, Class 8 build is up 4.5% compared to the same period last year.”

ACT Research has also been tracking the impact of the recent hurricanes on freight. Analysis of previous hurricanes suggest that there is a 3-4 month pop in freight following the storms before volumes return to the pre-storm trend. “Given the timing, the hurricane surge and the seasonal fall freight peak are lining up into the end of 2017,” said Vieth. He continued, “Freight and rate data clearly show the convergence of improving economic activity, hurricanes, and ELD adoption on trucking industry capacity relative to freight activity.”