“Our usual customers are companies in the freight hauling sector—both private carriers and for-hire operators. Once we leave the various transportation applications, we see a lot of activity in agriculture and construction, in addition to service operations, for example landscapers, that come to us for equipment,” said John Diez, senior vice president of Asset Management at Ryder Systems. He’s the man responsible for moving his company’s equipment into secondary applications—the used truck market.
The cost of a used piece of equipment can be substantially less than that of a new unit, but that has changed in recent years. Zach Bourn, director of used equipment for PACCAR Financial, said, “By buying late model trucks and trailers, fleets can conserve their cash flows since they don’t have to come up with as large of a down payment as they would buying new equipment. However, used truck prices, along with prices for new units, have increased between 15% and 25% over the last three years.”
Often just as important as price is the availability of a used piece of equipment. If a fleet earns a new three-year contract that requires some additional equipment, used equipment can often immediately provide the truck or trucks needed to meet a business opportunity at an affordable price. Steve Clough, president of Arrow Truck Sales, said, “There are several motivations that we see among our fleet customers. First is the availability of used vehicles versus new. There are times when a fleet has an opportunity to increase its business and can’t handle the long lead time for new vehicles. It needs to get something quicker so it dips into the used truck market. At other times it might simply be lower price.”
Some research into the used truck market may be a good idea for any fleet manager looking to add to his fleet. Darry Stuart, president and CEO of DWS Fleet Services, said, “If you’re running local, maybe a couple hundred miles a day, a used truck with 500,000 miles on the odometer is not going to hurt you.” So, depending on your operation, he believes the purchase of used heavy-duty trucks, tractors or trailers might be an affordable method of responding to an immediate need for additional equipment. But what can you do to maximize your chance of finding vehicles that are likely to provide reliable service for a sufficiently long period of time?
A truck’s history
Is past maintenance a consideration? Sure, but maybe not quite as important as one might think. Stuart said, “The hard parts of a truck are rather maintenance-free, and there’s not a lot of maintenance required under the dash. You really can’t buy or sell a truck today without decent brakes or tires, and we all know how far an engine and transmission will run. In particular, when it comes to the engine, you’re going to get 500,000 or 600,000 miles out of it whether it had frequent oil changes or not, but people today who run trucks generally change the oil in their engines. A fleet may change it at 35,000 miles or maybe 50,000 or even at 75,000 miles. In all reality, the difference between a 35,000 mile-maintained engine and a 75,000 mile-maintained engine is very little. The chances are that either engine will wear out after about the same amount of the miles. When talking about being maintained versus not maintained, there’s not a lot you can’t tell after a five-minute walk around.”
Arrow’s Clough said, “There’s no question that, as vehicles age, they will need more repairs than when they were new. Before adding used equipment, fleet managers need to make sure that they don’t get themselves into a situation where their maintenance department is not able to handle the volume of necessary repairs. Shop capacity must be considered.”
Stuart cautions, “Many fleets trade trailers after seven years. There’s still a lot of service life left after seven years, but just about any time you buy a used trailer it will cost as much as $2,500 to put it into a serviceable condition. Many need brakes, tires and drums because most people run trailers until they are about exhausted.”
Searching for specs
If you’ve decided to consider the purchase of used equipment to fill a need and you don’t have a fleet or trusted dealer “down the street” with some trucks available that you know have been properly cared for, you’re going to have to do some shopping. And the best place to do that shopping is from your own desk. Stuart says, “The Internet has changed the way used trucks are purchased. If you do a search using common specs, you’ll find many trucks available from which choose. Most large fleets are actually in the business of selling their used equipment.”
Some fleets have actually created affiliated used truck companies to dispose of their excess equipment. For example, Dad’s Truck and Trailer Sales is an affiliate of Doug Andrus Distributing, the largest trucking company in the state of Idaho and operating throughout the U.S. and Canada. The company began selling its used equipment through Dad’s Truck and Trailer Sales 15 years ago. Since then, the sales outlet has developed a reputation for providing quality, well-maintained equipment at reasonable prices. Anyone can browse through the equipment the company has to offer by going to dadstrucksales.com.
Doug Andrus Distributing is certainly not the only fleet using the Internet to bring its used equipment to market. Anderson Trucking Service Inc., based in St. Cloud, Minn., has an active website presenting its used equipment (atsinc.com). The company describes its fleet as being one of the youngest on the road and claims that many of its used trucks, semis and trailers are available within a few years of their release dates. Like other fleets, they sometimes purchase equipment for a short-term project and then find it to be excess. Included in the used equipment currently displayed on its website are heavy-duty trucks from Freightliner, Volvo and Peterbilt, but those nameplates are constantly changing.
As one quickly realizes, used trucks are readily available from private owners and can be found in magazines or by searching the Internet. While it is possible to find commercial trucks for sale by individuals that are in excellent running order, there are obvious drawbacks to this approach. Few fleet managers are willing to purchase a used vehicle that comes with no guarantee, sight unseen. That being the case, the best situation anyone can hope for is that a potential deal can be made with a local fleet. This might require only a short trip to check out the equipment. If that works out, consider yourself lucky. It’s more likely, however, that you will need to make several trips before you find a suitable piece of equipment. Considering a purchase from a private owner located remotely will likely result in an overnight trip, which may or may not prove to be successful.
The off-lease option
National and even many local leasing companies offer fleets looking for used equipment another option. Ryder Systems’ Diez said, “We always tell our customers that they should buy a vehicle from Ryder because of the quality of the vehicle that they will receive. We rely on our reputation in the marketplace to help us sell our vehicles. We look to the quality of our vehicles to actually sell themselves and encourage buyers to look at vehicle history, which we report to each of our customers. Our typical holding pattern for equipment is five to seven years, depending on the mileage. Currently, we have about 4,000 trucks for sale in the U.S. We stand behind what we say and provide a 30-day powertrain warranty for all of our power equipment.”
Like other large leasing companies, Ryder operates multiple used truck sales outlets across the country. It also offers a very user-friendly website (usedtrucks.ryder.com) devoted to the sale of its used equipment. Diez said, “Each of our North American sale sites can sell inventory out of any of our locations. If we have the right vehicle for you anywhere in North America, we can get it to you. You might be in Seattle and find a vehicle with specifications you need in Miami; we can connect those two and provide you with the vehicle you need. We routinely provide specifications that are common to Ryder, plus you can have access to vehicle maintenance records. This is not common in the industry.”
The company also provides its customers access to various financing options, as well as extended warranty programs for as long as a year. Diez said, ”Our customers are all looking for a good value for the money they have to spend. For a truck that’s going on the market, our standard procedure is to use a multipoint inspection that exceeds the DOT compliance requirements that we go through. We also repair any cosmetic problems the truck might have.”
A nationwide business
Based in Kansan City, Mo., Arrow Truck Sales has been in the used truck business for over 60 years and now operates out of 16 locations across U.S., plus one in Toronto. Arrow’s president, Steve Clough, said that a couple of years ago, many fleets were buying large quantities of used equipment. At that time, the motivation was a combination of low price and the fact that they could get as many as 150 trucks with exactly the same specs. While large quantities of trucks in the four-year-old range with matching specs are not nearly as available now as they were then, if fleets want 30, 40 or even 50 relatively young trucks with the same specs, they can probably still find them either at auction or through an operation like Arrow.
While Arrow is strictly a sales organization, it makes certain that all of its trucks are in a condition to be certified to DOT requirements. The company also offers a no-charge, no-deductible 30-day warranty that covers the engine, transmission and rear axle on all qualifying trucks 2004 and newer. On qualifying 2007 and newer trucks, it even covers the ECM, turbocharger and radiator. Extended warranties also are available through National Truck Protection, an independent provider of warranty and service contracts to the trucking industry.
Consider an auction
Equipment auctions play a big role in the used truck arena. And if you think big is better, there is little doubt that Ritchie Brothers Auctioneers is the biggest; the company operates 40 auction houses in 10 countries and handles both used and unused equipment. Go to rbauction.com to get an idea of the extent of the firm’s available inventory and how you can bid even if you’re not able to personally attend an auction.
Ritchie Brothers provides detailed equipment information and close-up photos of all its equipment on its website. A buyer can also inspect, test and compare equipment—or have a technician do it—at the auction site before the auction. The company identifies and arranges for the release of any liens or encumbrances on the equipment it offers for sale. If it is not able to deliver a clear title, it will offer the buyer a full refund of the purchase price.
There is keen competition, however, for late model trucks. PACCAR’s Bourn said, “In 2008 and 2009, during the height of the economic downturn, fleets bought few new units, making the current supply of late model, low-mileage trucks very tight. Fleets and truck operators looking to buy used models throughout the year will find a lot of competition for low mileage, high-content aerodynamic trucks.”
Be open to change
Arrow’s Steve Clough suggests, “Some fleets confine themselves to the use of older specs and are not willing to try new technology. For example, used truck customers should be open to the use of automated transmissions. More and more of the used equipment coming onto the market has automated transmissions because that’s what the big fleets have been buying for quite a few years.”
Bourn said, “For truck buyers not accustomed to the newest engine emissions technology, getting a used truck with a 2007 emissions standard compliant engine might be an easier step. And in order to make the process easier for the buyer, truck sellers will likely take all model year 2008 and newer equipment and clean the diesel particulate filter (or perform a check of the emissions system) prior to re-marketing. They also may provide some sort of warranty provided by a third party to put buyers at ease.”
Clearly, there are many options open to fleet managers in the market for used equipment. Good equipment is available, but remember some this advice from Stuart: “There was a time when you could get a used truck with low mileage inexpensively. That’s not the way it is today. Even at auctions, prices are high. It’s definitely not the same as it was 10 years ago.”
7 Ways to keep your cool in today’s hot used equipment market
Mark Hunsley would love to sell you a good used tank trailer. But there’s probably no hotter piece of equipment in the heavy-duty vehicle market.
“Demand is high, especially in the energy market for crude oil and sand trailers,” says Hunsley, vice president of Polar Service Centers. The company, a division of tank manufacturer Polar Corp., is a national network of factory-owned parts and service locations, and its inventory of used tank trailers is among the largest in the country.
“When you locate a tank trailer that meets your specs and application, slow down,” Hunsley says. “Focus on condition, not age. A well-built, well-maintained tank trailer can be productive and dependable for years. I see trailers that have been in service for 25 years or more.” Hunsley explains what to look for in a used tank trailer:
1. OEM: In general, the better brands produce a more highly engineered, precision-assembled tank. “In the case of Polar, we have a pipe bender to reduce welds. Tooling, robotic cells, automation and 3D modeling also improve the quality of product,” Hunsley says. “Smaller or foreign manufacturers may not have those capabilities.”
2. Stainless to the ground: Are the running gear and other components made of stainless steel? Painted carbon steel is more susceptible to corrosion.
3. Suspension: The condition of the suspension can affect the durability of the tank. And despite the weight and complexity, air-ride is kinder and gentler to the tank.
4. Welds: Consistent, uniform welds are a sign of a quality manufacturing job (and original work, not a repair). “When you have better fit-ups, you get less stresses in the welds and the components will last longer,” Hunsley says.
5. Joints: Does the piping contain welded joints or is it a continuous run of pipe that was bent at the factory? When it comes to trailer plumbing, the fewer joints the better.
6. Seller or previous owner: What kind of reputation do they have? Who performed the latest HM-183 inspection? Regardless of where you acquire your trailer, it’s important to know who you’re doing business with.
