Cautionary Flags for USA Trucking Aftermarket Print
Friday, June 10, 2016 01:42 PM

Cautionary Flags for USA Trucking Aftermarket
New Truck Sales Down, Tonnage Down, Used Truck Prices Down

Although some indicators are trending towards good news for truck service and parts, a key ATA (American Trucking Association) indicator for health of the over-the-road truck aftermarket is sending signal for caution. 

In its May 24 release the American Trucking Associations’ seasonally adjusted (SA) For-Hire Truck Tonnage decreased 2.1% from April, following a 4.4% drop During March. In April, the index equaled 134.8, down from 137.6 in March. The all-time high was 144 in February. 

“After having an abnormally large seasonally adjusted gain in February, tonnage fell in April, in addition to the large drop in March, “said ATA Chief Economist Bob Costello. “There is still an inventory correction transpiring throughout the supply chain that will keep a lid on truck freight volumes in the near term. As a result, we are likely still to experience lackluster tonnage numbers in the next few months.” 

ATA estimates the number of Class 8 trucks used for business purposes, excluding government and farm, around 2.4 million.

Diesel Progress Magazine reported that Class 8 truck production is expected to drop to 75% of the 320,000 build in 2015 which was considered strong. It says that the 25% drop is in response to declining freight demand and freight rates along with “the highest used truck inventory in 15 years.”

According to NADA Used Car Guide commercial truck analyst, Chris Visser, "As in the auction and wholesale lanes, depreciation in the retail channel moderated going into the second quarter. Three to five-year old sleeper tractors lost about 3 percent of their value from February to March, and we estimate another similar loss from March to April."

Visser went on to say, "High-volume 2011 to 2013 model year trucks lost approximately 5 percent of their value from February to March. We also predict a similar drop from March to April. Retail pricing continues to decrease, and perhaps as a result, buyers are entering the market in incrementally greater numbers."

Falling used truck prices may bring some buyers into the market. However, in recent down turns in shipping, NARSA members reported that their customers were parking tractors rather than replacing them. The ATA says that 67% of U.S. freight by weight moves by truck.