DALLAS — Trucking companies are increasing their bets on the U.S. economy picking up speed.
Old Dominion Freight Line and Knight Transportation are ordering hundreds of vehicles to keep up with freight demand. They're part of an industrywide push that's propelling sales of big rigs to an eight-year high, buoying trucking stocks and raising pay for drivers, who are in short supply.
"Freight is up, availability of trucking assets is tight," said Sandy Cutler, chief executive officer of Eaton Corp., whose products include truck transmissions. Truckers "are feeling more comfortable ordering increased assets."
Rising cargo rates are giving truckers confidence to expand fleets and replace tractors averaging a near-record age of 9.6 years. While first-quarter U.S. economic growth came to a near standstill, gross domestic product is expected to expand 2.5 percent this year, according to the median forecast of 94 economists surveyed by Bloomberg, topping 2013's 1.9 percent rise, and accelerate to a 3.1 percent rate next year.
Even with winter storms disrupting highway travel, first- quarter truckload shipping volumes rose 4.9 percent and rates climbed 1.2 percent, according to consultant FTR Associates. North American truckers placed net orders for 90,289 large trucks in the three months ended in March, 35 percent more than a year earlier and the fastest such pace since early 2006.
"We've been waiting for a year like this to come back for a few years," Cutler said in an April 29 interview from Eaton's U.S. headquarters in Cleveland. "This appears to be the year it's coming back."
Eaton raised its 2014 forecast for North American truck output by 5.7 percent to 280,000 units. That was among the highest annual totals projected by seven truck and equipment manufacturers, based on data compiled by Bloomberg. Their average prediction is for an 11 percent gain over 2013.