From the monthly archives: November, 2011

We are pleased to present below all posts archived in 'November, 2011'. If you still can't find what you are looking for, try using the search box.

Mileage and Age Revisited

The market has seen an interesting shift since the rebound in used truck prices began in late 2009. The average age of sleeper tractors sold in the wholesale channel has trended closer to that of trucks sold retail, while the mileage gap between the two channels has remained consistent.

Basically, older trucks that had sat dormant during the downturn are increasingly rare. Trucks now cycling through the wholesale market have been in more consistent use. Owners will continue to replace this iron with new (or newer) trucks as their financial position improves.

For reference, trucks sold retail brought an average of 74% more money than those sold wholesale during the period referenced in the graphs. If we look only at 2011, however, that gap drops to 56%. As I’ve outlined in previous blogs, price in the wholesale market has plateaued due to high mileage. So that retail to wholesale price gap shouldn’t shrink much more.

Stay tuned for further analysis of these dynamics in future blogs.

Pipelines and Oil Prices

I’ve mentioned the glut of oil at the Cushing, OK oil reserve a few times in the past. This glut is a main reason why the price gap between West Texas Intermediate (the domestic benchmark used to set oil futures prices at the Chicago Mercantile Exchange) and Brent (the European benchmark used to set prices at the InterContinental Exchange) began to increase in late 2010. As you may have heard, the new owner of a major pipeline running from the Gulf to Cushing is about to reverse the flow of crude in the pipeline. Imported oil that had been running from the Gulf to Cushing will be replaced with domestic oil running from Cushing to refineries in the Gulf. This is a major development for the following reasons: - The supply at Cushing will be greatly reduced, which would theoretically apply upward pressure to WTI prices. - US refineries will need to purchase less foreign oil, which would theoretically apply downward pressure to refined products (gas, diesel, etc). - The Keystone XL pipelin ...

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US Industry Continues Upward Trend

Industrial Production figures released yesterday show continued upward movement in all the segments relevant to trucking. October IP overall was up 0.7% vs. September. This figure represents a level 5.3% below the pre-recession 2007 average, but is up 3.9% from October, 2010. The critical automotive industry posted a 3.1% increase vs. last month. Unfortunately, just as the Japanese manufacturers returned to 100% production, flooding in Taiwan may have a slight to moderate negative impact on output for November. Consumer products were up overall, with durables (automotive products, furniture, appliances, etc.) up 2.1%. Nondurables (food, clothing, paper products, etc.) were flat. Looking at larger trends, specifically capacity utilization for the three stage-of-process groups, we see that output at the crude stage is 3.5% above its historical average. The primary and semifinished stage is 7.3% below the historic average, and the finished stage is 0.1% below. The increase at the crude level is encou ...

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Medium Duty Auction Performance

The first graph below traces performance of the Class 3-4 Cabover and Class 6 Conventional segments in the auction environment for each month of 2011. Data is adjusted for mileage. The second graph compares auction price of 3-6 year old trucks for the third quarter of 2011 vs. the third quarter of 2010. Trucks included are 2009-2006 model year for calendar year 2011, and 2008-2005 model year for calendar year 2010. Average mileage for each group is listed above its column. The graphs paint a mixed picture of each segment. We don’t see much movement in 2011, but year-over-year comparisons look favorable. Considering the higher mileage for both segments in the 2011 period, the higher selling prices are encouraging. The Class 3-4 Cabover segment plays mainly in the urban delivery market, which is heavily dependent on retail consumer activity. That activity has been flat to slightly improving, which could partially explain a price increase. The Class 6 Conventional segment is exposed to a much m ...

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November 2011 Commercial Truck Guidelines!

With the complete third quarter of 2011 in the database, now is a good time for a year-over-year review.

3rd Quarter 2011 vs. 3rd Quarter 2010 comparisons show retail and wholesale selling prices up dramatically and Dealer sales volume was the highest of the year in September.

Download the November 2011 Guidelines now to read on!

September Data Results

We have finalized our September retail database, and the results are below. The graphs should be self-explanatory.

Cliff’s Notes:
- The sleeper market overall continued its upward climb despite another hefty increase in average mileage.
- The age of the average sleeper tractor sold was 71 months.
- Four-year-old sleeper tractors continue to fluctuate in the mid-$60’s, this time down by about $900 as average mileage nears 500K.
- Sales per dealership hit their best month of the year.

Stay tuned for the complete analysis in the November GuideLines to be published late this week.