Ro / Ro Shipping

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Caterpillar and Deere are bellwethers for high-and-heavy ro / ro shipping. NurPhoto / Getty Images

Data centers powering high-and-heavy equipment growth

By Autumn Cafiero Giusti

Demand for equipment to support the buildout of data centers is driving production for high-and-heavy equipment makers Caterpillar and Deere, helping offset tariff costs and— for Deere— declines stemming from geopolitical uncertainty.

Caterpillar and Deere are key global manufacturers of high-and-heavy cargo and considered bellwether companies for the roll-on / roll-off( ro / ro) breakbulk shipping segment. Both US-based companies import some materials and parts, even though much of their equipment comes from domestic production and sourcing.

Farming industry pressures are taking a toll on agriculture equipment sales for Illinois-based Deere, but data centers, oil and gas expansions, and infrastructure projects are pushing up orders for heavy construction equipment.

Deere is projecting a 15 % to 20 % decline for farming equipment sales in the US and Canada, driven by higher manufacturing expenses and ongoing global uncertainty, including surging farming expenses stemming from the war in Iran, according to the company’ s latest earnings report. Year over year, sales for large agricultural equipment fell 14 % to $ 4.5 billion in its fiscal second quarter ending May 3.

“ Our baseline view remains that 2026 will represent the bottom of the ag cycle,” Senior VP and CFO Brent Norwood said during Deere’ s May 21 earnings call.

Deere saw some cost relief in the fiscal second quarter in the form of a $ 272 million refund on US import tariffs following the Supreme Court’ s ruling in February. Factoring in the refund and the ruling, Deere’ s tariff cost projections for 2026 remain unchanged at $ 1.2 billion, although the refund brings those costs down to about $ 900 million.

Deere lowered its tariff cost estimate for the year to $ 2.2 billion from $ 2.4 billion, down from the company’ s previous estimate of $ 2.6 billion.

As part of its long-term plan to get a handle on production expenses, Deere is pouring $ 20 billion into US manufacturing facilities over the next 10 years. The company started building Deere-designed excavators in North Carolina, following a $ 70 million investment to bring US-designed and-manufactured excavators to the market. Approximately 80 % of Deere’ s US equipment is produced at domestic manufacturing facilities, and about 75 % of those components are sourced from US suppliers.

Construction, meanwhile, is propping up Deere, with the company projecting a 5 % increase for equipment sales in the sector. Year over year, construction equipment sales rose 29 % to $ 3.8 billion in its second quarter.

Deere is riding a wave of new construction projects, supported by the data center boom, expansions in oil and gas, federal infrastructure investment, road projects, and warehouse construction. In that context, Norwood said Deere is increasing its year-over-year sales guide to up“ about 20 %.”

In the US and Canada, Deere’ s construction equipment orders have risen by over 60 % since November, reaching their highest level since April 2024; over 80 % of production slots are filled for the year, Norwood said, adding that data center construction is expected to top $ 100 billion in 2026, with additional double-digit growth into 2027.

The rise of generative AI and cloud computing is generating growth for Caterpillar, as the Illinois-based company is seeing greater demand for its equipment to support data center construction.

“ The broader data center industry has significantly increased its expectations for capital spending.”

Along with construction and mining equipment, Caterpillar manufactures engines and turbines needed to provide backup power to data centers, as well as the electrical infrastructure that supports these facilities.

“ Our largest customers and the broader data center industry have significantly increased their expectations for capital spending. That has translated to accelerated order rates for us,” Alex Kapper, Caterpillar’ s vice president for investor relations, said during the company’ s first-quarter earnings call April 30. Kapper said customers are committing to longer-term orders, including some well into 2028.

In part because of that demand, Caterpillar is projecting low double-digit sales growth for 2026, according to the company’ s first-quarter earnings report.

With growth across its primary business segments, Caterpillar’ s order backlog surged 79 % year over year to $ 63 billion in the first quarter.

Construction equipment sales saw the sharpest increase in the quarter, up 38 % to $ 7.2 billion year over year, while power and energy sales rose 22 % to $ 7 billion. Caterpillar’ s resource industries business, which includes mining equipment, grew 4 % to $ 3.8 billion in the first quarter.

email: autumn @ autumngiusti. com

38 Journal of Commerce | July 6, 2026 www. joc. com