Today’s Pickup: used truck prices rising quickly

Good day,

JD Power is reporting that used truck prices are firming up, and the service expects trades to accelerate in the coming months. The average price at auction for 2015 models rose 11.7% from a month earlier. “Demand has clearly picked up, but we still predict an accelerated volumes of trades in the upcoming months,” the report said. As a result, JD Power is sticking to its projected depreciation of 2% per month.

There are isolated inflationary pressures across the economy, in everything from trucking rates to labor costs, but an article from Bloomberg this morning insists that these flashing red indicators are still not accumulating to accelerate inflation in the consumer price index. 

Did you know?

Identity fraud has played a role in 10% of all cargo theft in recent years, with the average value of the load lost to fictitious pickup amounting to over $140,000 and impacting the industry at around $15 billion a year.

Quotable:

“Winter weather is behind us, the freight environment remains red-hot, and buyers are relatively optimistic about the economy, so expect more dealership traffic.”

-J.D. Power’s Used Truck Report

In other news:

Freight operators dismiss threat of digital startups

Established U.S. logistics firms like C.H. Robinson say digital-friendly freight startups that are drawing growing interest in Silicon Valley still lack the scale and customer relationships to threaten their share of the market. (Wall Street Journal)

California rules may make weed shippers report themselves to the Feds

Now that medical and adult-use recreational cannabis is legal, it’s a legit way to make a paycheck, and hitting the road with a trunk full of the devil’s lettuce is mostly cool. Cool, but complicated. (Wired)

High efficiency is boosting CSX stock

CSX Corp. (NYSE:CSX) did not have a great first quarter in terms of volume growth. However, the company massively cut costs and was able to grow the bottom line by more than 50%. (Seeking Alpha)

Hapag-Lloyd stays bullish despite loss-making first quarter

After sliding back into the red in the first three months of the year, and predicting a “tough” second quarter, Hapag-Lloyd is bullish about the prospects of a recovery in the second half. (The LoadStar)

No, the U.S. economy isn’t overheating

There are bottlenecks in nursing and transport labor and the price of some raw materials has risen; unemployment is near record lows and the number of unfilled jobs is at 6.5M. Still, these bottlenecks aren’t causing high inflation across the whole economy. (Bloomberg)

Final Thoughts:

Any discussion of the tight trucking market will inevitably get to the question of the ELD mandate sooner or later. It didn’t take long for FTR’s monthly trucking market webinar to do so late last week.

Jonathan Starks, FTR’s COO, said the company’s response to a recently-completed survey showed that 12% of the respondents said the ELD mandate had a severe impact on trucking capacity, and that 60% said there was a moderate impact. That wasn’t that much different in the severe category from a January survey, in which the severe number was 11%. The moderate number at that point was a little more than 50%, he said, and the minimal impact figure at that point was 34%. “So there was a little bit of a shift from minimal to moderate, but we’ve seen no significant change on those seeing a severe impact,” he said.

Hammer down everyone!

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