Good day,
Used truck prices in June were changed little month-over-month, but posted a 15% increase over June 2017, according to ACT Research. The data is part of ACT’s State of the Industry: U.S. Classes 3-8 Used Trucks report, released yesterday.
ACT said used Class 8 same dealer sales volumes rose 13% year-over-year, while average mileage fell 1% and average age declined 2% when compared to the previous June. This correlates to what Ryder Systems said on its second-quarter earnings call on Wednesday. Ryder CEO Robert Sanchez said customers are turning to newer used truck models because of the backlog for new vehicles, that is driving up prices a little this year for those vehicles.
FreightWaves’ SONAR data is indicating a similar trend, with the average price of a 3-year-old used truck now at $62,654, up about $6,000 from the end of January. A 4-year-old truck is selling for an average of $51,714 and 5-year-old trucks are priced at an average of $40,750.
“Dealers are reporting that used truck sales are very strong, which is good news for dealers, OEMs, finance companies and truckers trading for new trucks,” said Steve Tam, vice president at ACT Research. “The problem is the used truck market is so strong that truck dealers are struggling to find enough trucks to cover the demand they have. As the year progresses, an increasing supply, due to increasing new truck sales, along with a softening in demand will likely lead to slowing price appreciation.”
Used truck sales via auction jumped 23% month-over-month, offsetting declines in both retail (5%) and wholesale (25%) sales. Year-over-year increases are more favorable, with the auction market up 41% and retail up 23%. Wholesale, year-over-year, is down 18%.
Did you know?
FreightWaves’ SONAR data has found that in the first half of 2018, 83% of the trucks associated with port activity in Long Beach and Los Angeles have remained in Southern California in the first 48 hours after port pickups, suggesting containers are remaining local before being broken down and distributed to final destinations.
Quotable:
“We are always open to best practices driving for shareholder value, and I am very confident we are on the right track. We will pursue a balanced plan and we’ll produce great results for our shareholders.”
– James Squires, Norfolk Southern CEO, responding to analysts’ questions on whether the company should adopt management practices such as reducing headcount and hump yards, similar to what CSX has done
In other news:
Let the good times roll into 2019
Barring trade disruptions, economic growth should continue into 2019, says ATA Chief Economist Bob Costello. (Transport Topics)
Cyberattack knocks out Cosco’s systems
A cyberattack that struck Cosco’s Long Beach operations has spread to its UK operations. (The Loadstar)
Blockchain is the real deal
While there has been more talk than action on the blockchain front, that is quickly changing as companies are rolling out real-world products using the technology. (Bloomberg)
Trucking strike in India reaches 6th day
A nationwide strike by truck drivers in India entered its 6th day in protest of high diesel fuel prices, toll taxes and insurance costs. (The Hans India)
Slotting in trucks to improve warehouse turn time
Smaller facility yards in Europe has led to the creation of a time-slotted dock system, helping trucks get in and out faster. (Inbound Logistics)
Final Thoughts
The record volumes of new Class 8 truck orders is affecting the used truck and rental markets, as both Ryder and Rush Enterprises reported in their earnings reports. Rush said it sold 18% more used trucks in the second quarter year-over-year and expects used sales to continue strong for the remained of the year due to the long lead time for new truck deliveries. Ryder echoed those thoughts, adding that it took delivery of 900 fewer trucks than it expected in the second and believes it will also see 900 fewer trucks in the third quarter as well. Ryder also said it is seeing growth in interest for “newer used trucks” as fleets look to get their hands on any vehicle they can right now.
Hammer down everyone!
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