Today's Pickup: strong used truck prices, trailer orders; Philly heats up

 Philadelphia's Independence Hall in a snowstorm. ( Photo: Wikimedia Commons )

Philadelphia's Independence Hall in a snowstorm. (Photo: Wikimedia Commons)

Good day,

According to ACT Research, in February Class 8 used prices rose 3% year-over-year, but were down 2% from January, while average mileage was flat compared to last February and the average age was lower on a year-over-year basis. “Dealers are reporting that used truck sales have strengthened,” said Steve Tam, Vice President at ACT Research.

Trailer orders are growing at historically robust rates: “Dry vans and reefers were off sequentially; flatbeds had the best monthly gain,” said Frank Maly, Director, CV Transportation Analysis and Research at ACT Research. He continued, “On a y/y basis, eight of the ten trailer categories were up, with liquid tank orders more than double last year. Total industry net volume was up 27% y/y. The saga of strong freight demand, tight capacity, and industry backlogs that, on average, stretch through September, continued to support order strength.”

Did you know?

Trucker employment is growing, adding almost 19,000 jobs over the past year. There were 1.47 million U.S. truckers in February 2018, up 1.4 percent from the same month a year earlier, according to seasonally adjusted Bureau of Labor Statistics data.

Quotable:

“I’ve been charged by the president and secretary to look at regulations from top to bottom. I can’t change the law, but I can look at regulations. ELDs may not be the issue here. The issue may be hours of service.”

-Ray Martinez, Chief Administrator of FMCSA

In other news:

How California taught China how to sell electric cars

California wants 5 million emission-free cars on the road by 2030. China, with a far larger population, wants 7 million electric vehicles by 2025. Both California and China are using cap-and-trade to get there. (Bloomberg)

Canadian National stock is at a 52-week low

Canadian National Railway is sitting at 52-week lows due to current operational challenges, firing of the CEO, and the growing risk of an international trade war. (Seeking Alpha)

Arizona’s governor suspends Uber’s self-driving cars from roads

Arizona Gov. Doug Ducey on Monday ordered Uber Technologies Inc. to suspend testing autonomous vehicles on public roadways in the state. (Wall Street Journal)

Silt from Hurricane Harvey still affecting Houston tanker traffic

“We still have some shoaling spots as an aftermath of Hurricane Harvey that has reduced water draft at some places to 41 feet,” said Bill Diehl, president of the Greater Houston Port Bureau. “This continues to impact vessel movement and will impact oil exports.” (Hellenic Shipping News)

Traders betting heavily against Tesla’s junk bonds

“While equity short sellers continue to hang around, shorts in the most liquid TSLA bond have made a tidy profit so far in 2018,” Sam Pierson, director, securities finance, at IHS Markit said in a Monday note. “They have not covered to lock in the profit, suggesting that they think the credit will continue to deteriorate.” (CNBC)

Final Thoughts:

Rejected loads outbound from Philadelphia, as measured by FreightWaves’ Turndown Rate Index (TRI), are shooting up, increasing from 17% in mid February to 28.5% this week. According to DAT, in Philadelphia loads currently outnumber trucks by more than a factor of 3.

A string of severe winter storms in March made it undesirable for carriers to position their trucks in the Philadelphia market (and expensive for shippers to send shipments into the city). Eventually, freight started piling up, and now there’s a mismatch, creating favorable conditions for carriers leaving the city. 

Hammer down everyone!

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