COLUMBUS, Ind. — A freight recession is possible and a rate recession is likely, ACT Research said in a new monthly report focusing on the future of the U.S. trucking industry.
The report covers the truckload, intermodal, LTL and last mile sectors.
“Truckload spot rates are set to soften further because of tractor capacity additions, pulling the contract rate market down by mid-year. LTL rates will be most resilient and continue to rise due to the unique dynamics in that market, but TL and intermodal rates are heading lower,” said Tim Denoyer, ACT Research’s vice president and senior analyst.
Dry van rates, net fuel, fell 15% year-over-year in the first quarter and are likely to drop 20% year-over-year in the coming months, Denover said.
Freight growth has slowed materially, and it’s not just timing effects from shippers positioning around tariff threats. The headwinds to for-hire freight volumes in 2019 include tariffs, tighter financial conditions, the industrial slowdown, housing and auto softness, and fast private fleet growth, he said.
“While this presents risk of a freight recession in 2019, we do expect the U..S consumer to keep volumes growing, just very slowly,” Denover said. “Critically, this slowdown in freight is happening just as truckload capacity is accelerating. After growing less than freight for most of last year, truckload capacity has accelerated to 7% year-over-year growth in early 2019. We think this is the key story behind lower spot rates and why the pricing pendulum is starting to swing to the shipper.”
ACT’s Freight Forecast also includes a last mile section, which argues changing supply chains are beginning to impact equipment purchasing, though the Class 8 tractor sleeper is having quite a strong cycle.
ACT Research is a publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets.
More information can be found at .
Used truck volumes fall 14% month-over-month in May
COLUMBUS, Ind. — Preliminary used Class 8 volumes (same dealer sales) fell 14% month-over-month in May, the second consecutive sequential drop, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research. Additionally, the report indicated that longer-term comparisons yielded a 22% decline compared to May 2018, as well as a year-to-date drop of 16%.
Other data released in ACT’s preliminary report included year-over-year comparisons for May 2019, which showed that average prices rose 5%, while average miles shed 1%, and average age increased 7%.
“A spring slowdown is not uncommon, and sales generally increase a bit in the summer, but with the headwinds in the freight market, that is unlikely,” said Steve Tam, vice president at ACT Research. “Those who watch the industry closely have been expecting the strong pricing environment to soften this year, and based on preliminary May data, it appears as though that transition may have started.”
Tam said in the context of lower unit sales and rising inventory levels, the slowing price appreciation is a strong indication that demand for used trucks in waning. Given a similar story in the freight market, the development makes sense.
ACT’s Classes 3-8 Used Truck Report 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).
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasting services for the North American and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. More information can be found at www.actresearch.net.
For more information about ACT’s Used Truck reports, visit .
T.J. O’Connor named chief operating officer of YRC Worldwide
OVERLAND PARK, Kan. — YRC Worldwide has promoted T.J. O’Connor to chief operating officer effective immediately. O’Connor will report to YRC Worldwide Chief Executive Officer Darren Hawkins and will continue to serve as president of YRC Freight.
“T.J. has a strong track record of delivering operational results throughout his career at Roadway Express, Reddaway and YRC Freight,” Hawkins said. “With our network optimization initiative, combined with the recently ratified five-year labor agreement that offers new operational flexibilities, this is the time to bring T.J. into the role of COO. His new position will help us drive performance objectives through enterprise-wide process improvement and accountability initiatives at all of our coast-to-coast terminal locations.”
“This is a great opportunity to lead our terminal-based field teams as we collectively focus on service improvements and achieving operational efficiencies while operating with the highest degree of safety,” O’Connor said. “Throughout my three-and-a-half-decade career in the less-than-truckload industry, I have worked closely with many of our field employees. I’ve seen their dedication and commitment firsthand. I look forward to working with the Holland, New Penn, Reddaway and YRC Freight teams in this new role.”
The YRC Worldwide COO position recently held by Darren Hawkins has been vacant since Hawkins was named CEO of YRC Worldwide in April 2018. As referenced during the YRC Worldwide May 8, 2019, first quarter earnings call, Scott Ware was named chief network officer of YRC Worldwide. Ware leads the YRC Worldwide network solutions, linehaul and property teams.
T.J. O’Connor has over three-and-a-half decades of experience in the transportation industry. His career in transportation began at Roadway Express. O’Connor assumed positions of increasing responsibility at Roadway Express, ultimately being named Western Division vice president. O’Connor went on to be named president of Bestway Express and then president of Reddaway. He became president of YRC Freight in January 2018.
O’Connor supports advancements in the transportation industry by serving on the board of directors of SMC3, a provider of data, technology and education as an integrated solution to the freight transportation community. He also provides leadership via community service. He has served as a member of The Robert W. Franz Leadership Cabinet of the Providence Cancer Center, a world-recognized organization engaged in the fight against cancer. O’Connor has served in various committee leadership roles for the California Trucking Association, Oregon Trucking Associations and the American Trucking Associations.
May Class 8 truck sales total 24,424, a 1.7% gain over April
There were ups and oops when Wards Intelligence released data on the sale of new Class 8 trucks in May.
On the up side, 2019 marked the first time since the boom year of 2006 that total Class 8 sales topped the 100,000 mark after only five months of the year as May sales were up 27.2% over the same month last year.
On the oops side, the month-over-month gain of 1.7% followed more significant month-over-month gains of 15% in March and 5.2% in April.
In all, there were 24,424 Class 8 trucks sold in May, bringing the yearly total to 111,332 compared with 88,674 after five months in 2018, a 25.6% bump.
Four of the seven nameplates posted month-over-month gains in May topped by Western Star (24.6%) and Volvo (23.8%).
All seven were up when compared with May 2018, led by Peterbilt (46.5%) and Freightliner (40.8).
Year-to-date, International has the largest increase (36.2%) followed by Freightliner (34.3%).