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Trailer orders continue down swing, but trend not sign of problem

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ACT Research says year-to-date net orders through April were just over 80,000 units, down 37% from last year. (Courtesy: GREAT DANE))

The two major organizations that collect and analyze commercial vehicle data report that trailer orders remain subdued, but also indicate the lower numbers are not necessarily indicative of a problem.

ACT Research’s Frank Maly, director-CV transportation analysis and research, said that trailer industry net orders have eased meaningfully since November of 2018, as year-over-year-comparisons have now been in the red for the last five months, but that the order weakness is not indicative of fleets’ unwillingness to invest.

Don Ake, FTR vice president of commercial vehicles, said the low order level does not in any way reflect a softening of demand, but rather the fact that many large OEM’s have filled their order boards for 2019. Backlogs remain hefty, with robust production levels. Trailers orders for the past 12 months now total 364,000 units, he said.

“Year-to-date net orders through April were just over 80,000 units, down 37% from last year, but despite this, current orderboards still stretch to nearly year-end for the total industry,” Maly said. “Order weakness is more a symptom of OEM reticence to fully open 2020 orderboards than fleets’ unwillingness to invest, as we’re hearing of OEMs actively gathering ‘verbal commitments’ for the first half of 2020, with some orders reportedly being posted as ‘price pending’.”

Maly said softer new orders have been joined by higher cancellations in recent months, despite widespread implementation of cancellation penalties.

“However, trailer production continues at robust levels, with March of 2019 as the second highest production month in industry history,” he said. “ACT anticipates strong production levels through the remainder of this year, but see OEMs continuing to be challenged by component and material issues, as well as staffing.”

FTR reported preliminary trailer orders for April 2019 remained subdued for the second consecutive month coming in at 13,200 units, which is 40% below the same month in 2018.

“We expect the backlogs to remain very healthy, supporting continued high build rates,” Ake said. “Orders likely will stay at low volumes through the summer, or until OEMs open the 2020 order boards. OEMs have been cautious about taking longer-term orders due to uncertainty over future costs. Right now, the Chinese tariff situation is just adding to an already cloudy outlook.”

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Spot market truckload volumes disappoint in May; June called pivotal month

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The chart compares DAT spot market van volume and rates. (Courtesy: DAT SOLUTIONS)

PORTLAND, Ore. — Spot truckload freight volumes failed to meet expectations in May, said DAT Solutions, which operates the largest truckload freight marketplace in North America.

The number of full-truckload van loads moved on the spot market declined 12% in May compared to April, according to the DAT Truckload Volume Index. Van load counts were down 10% compared to May 2018. Van trailers haul approximately 70% of all truckload freight.

“Simply put, May was a disappointment in terms of load counts,” said DAT Senior Industry Analyst Mark Montague. “We’re accustomed to seeing higher volumes of retail goods, fresh produce, construction materials, and other seasonal spot truckload freight moving through supply chains at this time of year.”

Uncertainty over trade agreements and slumping imports from China seemed to dampen truckload demand. Record rainfalls, flooding, and tornadoes also hampered freight movements in many parts of the country.

Agriculture producers saw their supply chains disrupted by the weather, with many harvests ruined or delayed. As a result, refrigerated volumes declined 8.3% month over month and fell 12% year over year.

Flatbed load volume, which includes heavy machinery and construction material, dropped 9.3% month over month and 3.1% year over year.

Spot truckload rates continued to track well below last year’s record levels.

Compared to April, the national average spot van rate was virtually unchanged at $1.80 per mile, including a fuel surcharge. That’s 35 cents below the average for May 2018. The average reefer rate was $2.15 per mile, 1 cent higher than April and 38 cents lower than May 2018. The flatbed rate averaged $2.27 per mile, down 5 cents compared to April and 45 cents lower year over year.

“After a lackluster May, June is shaping up to be a pivotal month for trucking,” Montague said. “We will know soon whether the volumes we expected in May were simply delayed. If so, the pent-up demand could boost seasonal volumes at the close of Q2.”

The DAT Truckload Freight Volume Index is based on load counts and per-mile rates recorded in DAT RateView, with an average of 3 million freight moves per month. Spot market information is based on transactions arranged by third-party logistics (3PL) companies, while contract volumes and rates are arranged between shippers and carriers, with no intermediary.

DAT market trends and data insights are derived from 256 million annual freight matches and a database of $60 billion in annual market transactions. Related services include a comprehensive directory of companies with business history, credit, safety, insurance, and company reviews; broker transportation management software; authority, fuel tax, mileage, vehicle licensing, and registration services; and carrier onboarding.

 

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Tax Cuts and Jobs Act had positive impact on owner-operators

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Because of the Tax Cuts and Job Act, owner-operator taxable income increased 21% while actual tax liability increased only 12.6%, according to American Truck For Business Services. (©2019 FOTOSEARCH)

LAKEWOOD, Colo. — Preliminary data based on over 3,000 tax returns indicate that the Tax Cuts and Jobs Act had an overall positive impact on owner-operators in the trucking industry, according to American Truck For Business Services (ATBS).

ATBS has observed the following statistics related to how owner-operators fared on 2018 taxes.

First, the average owner-operator’s taxable adjusted gross income (AGI) went from $43,093 in 2017 to $52,180 in 2018.

This was an increase of $9,087 or 21%. The increase was predominantly related to a booming year in the transportation industry.

During the same time, the average owner-operator total tax liability went from $8,242 (2017) to $9,284 (2018). This was a much smaller increase of $1,042 or 12.6%.

The overall effective tax rate for owner-operators went from 19.1% (2017) to 17.8% (2018) or a reduction of 1.3%. The net result is that owner-operator taxable income increased 21% while actual tax liability increased only 12.6%.

Following are some of the specific reasons for the reduction in owner-operator tax liability.

  • 68% of ATBS owner-operator clients took advantage of the qualified business income education with an average of $6,235 being deducted from their tax liability. This was a new deduction for 2018 as a result of the Tax Cuts and Jobs Act.
  • The average client’s standard deduction went from $9,439 to $18,862. The number of drivers filing the standard deduction increased from 71% to 94%. The Tax Cuts and Jobs Act essentially doubled the standard deduction for most tax filers.
  • The average owner-operator depreciation deduction increased from $17,072 (2017) to $20,965 (2018). The significant increase in depreciation was a result of the Tax Cuts and Jobs Act allowing faster depreciation methods than prior years.

The only negative consequence of 2018 taxes was the number of drivers that paid the Affordable Care Act’s individual mandate penalty. In 2018, 28% of ATBS clients paid the penalty with an average penalty amount of $1,027. However, this mandate will no longer be in effect for 2019 taxes.

Overall, statistics from ATBS show that owner-operator clients enjoyed a mostly positive impact from the changes that came with the Tax Cuts and Jobs Act.

American Truck For Business Services is the largest tax, consulting and bookkeeping firm in the transportation industry with over 20 years of experience working with owner-operators and independent contractors.

For more information, visit .

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Mike Weindel appointed president of Dupré Logistics

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Dupré Logistics operates approximately 750 trucks, employs over 1,100 professional drivers, and has established a network of 10,000 preferred carriers for its Strategic Capacity Services group and Dupré operates from hubs near major metropolitan areas and serves all of the contiguous 48 states and parts of Canada and Mexico. (Courtesy: Dupré Logistics)

LAFAYETTE, La. — Mike Weindel has been appointed as president of Dupré Logistics effective June 1.

Reggie Dupré will continue to focus on his role as CEO, working closely with the entire executive team.

MIKE WEINDEL

“I have tremendous respect for Mike Weindel. He is being promoted to assure we live out our values, pursue our vision and deliver our mission as we continue to grow the company,” said Dupré said. “His leadership roles and experience in asset operations, human resources, risk management, dedicated and brokerage businesses have prepared him well to be a leader at Dupré Logistics.”

Weindel has more than 20 years’ experience in the transportation and logistics industry.

He joined Dupré Logistics in July 2016 as vice president of strategic capacity services.

Dupré said that Weindel’s strengths in team building, developing and promoting good leaders and building a high-performance, people-focused culture played important roles in the decision to appoint him as president of the company.

“Dupré Logistics’ motto of ‘always forward thinking’ along with our vision to become ‘the Ideal Place to Work’ has been an inspiration to me and goes to the core of who we are as a company. Working with and learning from Reggie and his great team has been a privilege,” Weindel said. “I am incredibly honored, humbled and energized to help lead the company into the next phase of forward thinking.”

For more information about Dupré Logistics, go to .

 

 

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