Mack Trucks: 'Significant upward pressure' on Class 8 orders

LOUISVILLE, KY. “Things continue to hum [and] everything is working in the economy,” noted Jonathan Randall, senior vice president of sales and marketing for Mack Trucks, and that’s putting what he dubbed “significant upward pressure” on Class 8 orders.

He explained during a press conference here at the Mid America Trucking Show that the U.S. economy continues to display “good momentum” in 2018 with 2.88% gross domestic product (GDP) growth expected this year compared to 2.3% in 2017. As a result, strong freight volumes, tight capacity, and rising freight rates have combined to generate a surge in Class 8 orders. Though Randall said Mack still expects Class 8 production to total 280,000 units this year, he stressed that number may go higher as orders increase from the long-haul sector and from fleets.

“January and February were two of the biggest Class 8 order intake months ever,” Randall added. “There has been an influx of 70-in. sleeper orders and daycab orders are now surpassing straight truck orders. It’s not just a replacement cycle [for older trucks]; we’re seeing growth [of fleets] as well.”

He also noted that in 2017, the over-the-road sector comprised 41% of Class 8 sales, but over the last five month rolling average, that’s increased to 48%.

Randall said Mack’s new highway tractor, the Anthem, is benefiting from that demand. Since it went into production in February, the OEM has built 500 Anthem models which are now either on dealer lots or in fleets.

But the company’s vocational products are seeing strong demand as well due to increased construction market activity. Randall explained that construction spending reached a record high of $1.25 trillion in 2017, which represents year-over-year growth of 2.6%, and contractors added 210,000 jobs in 2017, a 25% increase over 2016.

Yet though construction truck sales will continue to grow in 2018, Randal said the concern is how the demand for labor in both the construction and trucking sectors could lead to a shortage of workers. “The question is, ‘who is going to drive all of the trucks we are selling?’” he noted.

To meet the rising demand for trucks, Randall said Mack added 400 workers in January and is planning to increase its build capacity by 40% year-over-year. He added that while recently imposed steel and aluminum tariffs will “certainly have a negative impact on cost,” so far, all of Mack’s component suppliers are helping the OEM meet demand for new trucks. “There are challenges in our supply chain but nothing limiting us so far,” he said.

Roy Horton, Mack’s director of product strategy, also noted to reporters that automated manual transmissions (AMTs) and fully-automatic gearboxes are being spec’d at roughly a 90% average across all of the OEM’s truck models, including the Anthem, Pinnacle, Granite and TerraPro. “They are not just for highway; construction and refuse are spec’ing them too, and the numbers keep heading north,” he said.

A few other endeavors Mack highlight at its press event included:

• The deployment of a new process to more effectively capture “customer feedback” regarding their service experience. During the first year of using what the OEM called its new “Customer Experience Management” approach, Mack said it slashed by 50% the time it took to address outstanding customer service issues. As part of its new process, Mack uses digitally-distributed surveys to collect customer feedback regarding: communication during the repair process; total time required for a repair; the availability of parts; and the likelihood that the customer would recommend working with the service professional who assisted them. Dealers and the Mack uptime organization use that information to help identify “root causes” of any issues and improve processes. One of two surveys are triggered by the Mack ASIST web-based service management system: one for dealers launched in February 2017 and one for the OEM’s call center released in December 2017. The result has been a 40% improvement in response rate, driving improved operations, including an increase in dealership staffing and warranty training for sales representatives. As a result, an additional survey for the truck sales and delivery process is currently in development.
• The time to complete over-the-air (OTA) updates for engine, transmission, and aftertreatment systems via the company’s GuardDog Connect telematics system within the Mack Connect integrated intelligent software that now comes standard on all of the OEM’s truck models has been shaved down to 23 minutes, said Horton, and he expects “that will be improved upon further down the road.” Mack is also planning to add more components to its OTA offering over the next few years as well.
• The company also expanded its recently-launched Mack Trucks Configurator to include its new Anthem With the online tool, customers can “virtually” build and customize the Anthem model that best meets the unique needs of their business. Customers start by choosing a cab design – a day cab, a 48-inch sleeper or a 70-inch stand up sleeper. Once the cab is selected, the configurator takes customers through a range of options, including exterior and interior trim; engine, transmission and axle choices; as well as the uptime services and warranty options they prefer. The virtual truck is updated as choices are made and, when completed, a summary is shown, including a full-screen 360-degree view of the truck the customer has built as well as a brief spec overview. Customers can then print out their “virtual” truck and send directly to a local Mack dealer for additional information and quoting.