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ACT Research For-Hire Trucking Index: Supply-Demand Balance Improves

August 29, 2018, 07:00 AM
Filed Under: Trucking

The latest ACT Research For-Hire Trucking Index showed an increase in the supply-demand balance, rising to 58.0 seasonally-adjusted in July, from a 54.0 reading in June.

“Both freight volumes and rates improved in July from June on a seasonally adjusted basis. However, capacity growth also picked up, keeping the July supply/demand balance less tight than the 2017/2018 average. We see a gradual balancing taking place as the industry responds to strong demand,” said Tim Denoyer, ACT Research’s Vice President and Senior Analyst.

As part of this month’s survey, ACT Research queried fleets about their load turndowns, asking whether they are seeing more, less or the same number.

“Results were split evenly overall, with a slight advantage in the ‘same’ column,” Denoyer commented.  “As one respondent put it, ‘We turn down so many loads for lack of capacity it is nearly impossible to keep track (and) it has been this way for nearly a year now.’”

The July fleet purchase intentions reading indicated an uptick in equipment demand, with 62 percent of respondents planning to buy trucks in the next three months. ACT Research believes the increase is related to the record order cycle of the past year starting to be built in greater numbers. Over the past 12 months, the buying index has averaged a strong 58 percent reading, on a seasonally-adjusted basis.

Used Truck Prices Fell 1% M/M in July

The average price of total used Class 8 trucks in July was virtually flat, down 1 percent, on a month-over-month basis, but fared better when compared to July 2017, according to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research. The report also indicated used Class 8 same dealer sales volumes rose 12 percent year-over-year, while average mileage was unchanged and average age declined 5 percent when compared to the previous July. When compared shorter term, same dealer sales volumes fell 7 percent month-over-month in July, their weakest month so far this year.

“Dealers are reporting that the used truck market is strong,” said Steve Tam, Vice President at ACT Research. “Dealers are having a hard time finding used trucks to sell, which is supporting used truck prices. The strong market has also been a boon to finance companies actively looking to finance used trucks.”

Individual market segments yielded mixed results last month.

“Retail and auction markets declined 9 percent and 5 percent, respectively, on a month-over-month basis in July, while sales via the wholesale channel recorded a 1 percent month-over-month gain,” Tam explained. “However, when compared longer term, the retail and wholesale markets show year-over-year increases of 18 percent and 3 percent, respectively, but the auction channel was down 10 percent compared to July 2017.”

The report from ACT provides data on the average selling price, miles, and age based on a sample of industry data. In addition, the report provides the average selling price for top-selling Class 8 models for each of the major truck OEMs – Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo).

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