This data is reinforced by ACT Research Co.’s October used sales report, which found that used Class 8 truck metrics continued to be mixed, and volumes shrank 3% month-over-month (m/m) despite longer term comparisons being stable, with volumes down a mere 1% year-over-year (y/y), and the past nine months flat relative to the same period in 2014.
“ACT expects the year-to-date (YTD) mileage numbers, now 9% lower than 2014, to remain low, as the industry continues to work its way through the supply of underutilized trucks from the 2008-2010 economic downturn and as new truck buyers shorten their trade cycles,” said Steve Tam, ACT’s vice president—commercial vehicle sector. “Conversely, the average age of U.S. Class 8 used trucks sold in October could not have been more mixed. Age fell to 90 months, a 3% m/m improvement. Compared to October 2014, trucks were 2% older, while age remained relatively flat YTD. Additionally, average prices climbed 4% m/m, holding onto a 1% YTD gain for the third consecutive month.”
“It should be noted that the ‘softening market’ is mostly in reference to Class 8 sales,” points out Eugene Tangney, vice president and global product manager of asset management for Ryder Trucks, “and trailers are still doing well in the market.”
That being said, tractors are the biggest driver in the market so they get a lot of attention. After an elongated time where the market price was being driven by a lack of supply, it has caught demand. Simultaneously, we are seeing a dip in demand.
Among the most common reasons for both the increase in supply, and dip in demand are the driver shortage, freight volumes declining, costs, and fears associated with “new technology” units, and fewer “pre-technology” units available in the market.
“With a softening in the used vehicle market, it’s becoming harder and less profitable for fleet owners to dispose of their own vehicles when it comes time to retire them out of their fleet and/or upgrade to newer vehicle technology,” Tangney concluded.