Today’s Pickup: Used Class 8 prices post small gains in January

Good day,

Used Class 8 truck prices increased 2% year-over-year in January, but fell 3% over December 2017, according to latest data from ACT Research.

ACT has previously reported that sales for 2017 fell 1% compared to 2016 and the average price dropped 5% to $40,500.

“Dealers are reporting that there was a noticeable increase in used truck sales at the end of 2017 that appears to be more than the end of the year ‘buying trucks to avoid paying taxes’ often seen,” said Steve Tam, vice president at ACT Research. “Many dealers were happy to report more interest in late model aerodynamic sleepers than what was expected. Despite the good news regarding sales of these units, however, this segment continues to be oversupplied.”

The uncertainty from the used market has weighed on industry participants, including Ryder, which noted a 2 ½ year decline in pricing that has affected its earnings.

“There’s an oversupply of used trucks, and there aren’t enough buyers,” Robert Sanchez, chairman and CEO said at the recent Citi 2018 Industrials Conference. He noted that prices seemed to have stabilized late in 2017.

ACT’s Tam said the retail, wholesale and auction markets all posted gains in January.

“Wholesalers and used truck dealers are working harder to find used trucks and struggling to find those that are priced right, possibly a signal that supply of some used trucks is shrinking,” he said. “Given the expected strength of the new truck market in 2018, it is likely pricing pressure will resume in the latter half of the year.”

Did you know?

According to a posting on the FMCSA’s website, those who haul horses or other animals to shows and events, as well as people who haul cars, boats and similar items in a combination or vehicles or a vehicle weighing more than a gross weight of 26,001 pounds, must meet state licensing requirements which may or may not include a CDL and are exempt from the ELD rule.

Quotable:

“This is really positive news because it shows that U.S.-Canada trade-related cooperation has a life outside of NAFTA, that the Trump administration is willing to work on border management and competitiveness in the movement of goods.”

– Eric Miller, a trade consultant with Rideau Potomac Strategy Group, on a pilot program to pre-inspect cargo for Customs clearance at factories

In other news:

Shippers face sanctions for working with North Korea

The U.S. has sent out an advisory that targets shippers and any company that conducts business with North Korea as it seeks to ramp up pressure on the nation. (Wall Street Journal)

DHL watches Amazon closely

DHL Express is concerned about Amazon’s push into the logistics arena and is watching closely to see if it may start competing in domestic delivery. (The Loadstar)

U.S., Canada work to speed Customs clearance

U.S. and Canadian officials are working on a program that would “pre-inspect” cargo at factories for Customs clearance to speed the movement of goods. (Automotive News)

Air freight continues toward record highs

Global air freight continues to march toward record highs, growing nearly 9% in November with expectations of it remaining high in 2018. (Inbound Logistics)

FMCSA clarifies ELD rule for livestock haulers

FMCSA issued a clarification on whether haulers of livestock must comply with the ELD mandate and whether horse haulers need a CDL. (Transport Topics)

Final Thoughts

The U.S. and Canada are testing a program that would inspect certain cargo at factories and other locations to help speed the process of clearing Customs. The program shows that despite the difficult negotiations surrounding NAFTA, and the chance it still may be scrapped entirely, the countries are still working to smooth trade.

Hammer down everyone!

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