The Meter Produced By: Andy Vering - With Input From: John Seymour, ASA - Taylor & Martin
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The Meter
Transportation (Trucking) Update (3-1-2021)
Produced By: Andy Vering
With Input From:
John Seymour, ASA
The first two months of 2021 were like most The auction side of Taylor and Martin has seen very
predicted. Most believed that we would maintain the strong demand with higher-than-expected values.
strength we had in Q4 of 2020 to carry over and help Late model, low mile trucks are bringing 15%-20%
produce a strong 2021. So far so good, the big premium and late model vans and reefers are even
question is how long will it last? higher. As expected, they are getting harder to find.
With delivery dates pushed back to 2022 most can’t
Currently the spot rates remain high indicating the afford to sell and take advantage of the premium in
availability of loads. The used truck and trailer values the seller's market, which is further limiting the used
remain high with the available inventory low. Drivers options on the market.
are in high demand and pay is increasing in most
cases. Truck and trailer orders/sales are still above This in turn has given a boost to mid-life aged
predictions. Everything seems to be in place for a equipment. Higher mileage and tier II equipment has
great year in the world of trucking and in the used also seen stronger auction values with buyers
truck market. needing equipment to get them by until new arrives.
Wanting to take advantage of the higher rates has
January 2021 was the 6th consecutive month for a driven some to buy brands or specs they are not
year over year increase in 20ft containers at the Port accustomed to.
of LA. As of mid February, up to 60 container ships
were anchored up outside of the Port of LA. Hard The auctions seem to see the changes in the market
evidence that consumer spending for goods is still good or bad very early. Dealers, for example, will not
strong and will help hold up the demand for trucking lower asking costs on used equipment just because
Introduction and should continue for some time to build up
warehouse inventory. On the flip side, exports
continue to lag imports.
values have lowered at the auctions. Most want to
have those prices validated for an extended amount
of time before making changes to asking prices. A lot
of times they will begin taking lower offers before
The service industry has shown very slow growth adjusting advertised prices. We will keep an eye on
even with the roll out of the vaccine. By summer they the auction prices going forward and looking for
are expecting to have the vaccine available to those first signs of change.
everyone and hopefully that will give people the
confidence to begin traveling and spending money on We feel the same as most on how 2021 is shaping up.
services. Until that happens, goods will remain the A big factor driving the upward trend in the market is
popular choice for people to spend money on and the classic supply and demand. How long this will last
will continue to boost the trucking industry. will depend on how long it will take to fill new orders
and to repopulate the used market. I don’t see any
Supply chain problems have continued to slow the major changes through Q2 or Q3 but as always, we
rebuild of our new inventory. Now that many will be monitoring values and looking for indications
manufacturers are up and running at pre-pandemic of a balancing of the market. As we all know, the
levels, they are still hampered by distribution issues. market’s upward trend unfortunately won’t last
This will ultimately add to the amount of time it will forever.
take to get the truck and trailer inventory back in
balance with demand. Until it does expect less than I think that you will find some of the following charts
normal depreciation on trucks and trailers, especially interesting and hopefully useful. Let’s start with the
fleet trucks, vans, and refrigerated trailers. Class 8 Tractors.
30,000
US Mo nthly Prod
USA Class "8" Sales (Counts Sourced from "The Truck Paper",
48 Mo Rolling Ave
WardsAuto.com)
25,000
20,000
Volume
15,000
10,000
5,000
0
4/ 000
5/ 002
3/ 003
4/ 005
5/ 007
3/ 008
4/ 010
5/ 012
3/ 013
4/ 015
5/ 017
3/ 018
0
6/ 000
/2 0
9/ 001
2/ 001
7/ 002
/2 2
/2 3
8/ 004
1/ 004
6/ 005
/2 5
9/ 006
2/ 006
7/ 007
/2 7
/2 8
8/ 009
1/ 009
6/ 010
/2 0
9/ 011
2/ 011
7/ 012
/2 2
/2 3
8/ 014
1/ 014
11 2015
/2 5
9/ 016
2/ 016
7/ 017
/2 7
/2 8
8/ 019
1/ 019
11 2020
/2 0
02
11 200
12 200
10 200
11 200
12 200
10 200
11 201
12 201
10 201
6/ 01
12 201
10 201
6/ 02
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1/
Historical By Month
As stated, each time before, the chart above shows historical trends that tend to repeat themselves. (Disclaimer: past activity does not necessarily indicate future activity.)
What are the data points and trends telling us now? (Some of my comments are units sold and now again in 9/2019 with 28,258 units sold. This 48MRA Cycle high:
repetitive, and may be found in previous newsletters, but again repeating a notable point (12/2019) 18,923, which is a new all-time high. As expected with the pandemic we have
makes it more likely to be remembered.) dipped in totals sales down to (5/2020) 9,165. Lowest it has been since 10/2010.
1: Trucking typically runs in a 7 to 8-year cycle [peak to peak OR trough to trough]. As long 4: Actual Class 8 purchases have been down since the year end Dec 2019 of 23,119 to
as the new sales volume is above the 48MRA, the trend suggests we would see higher averaging 15,271 for the year in 2020 with the low at 9,165 in May. We are currently at
builds and values should erode more slowly. In time I feel we will get above and stay 19,038 for 48MMR and as production increases sales will follow until we reach the
above the 48MMR but we will have to stabilize production to do so. Glitches in the supply trucking industries demands.
chain have limited production effecting sales totals.
5: Since the drawdown (~20%-30%) from July 2015 to July 2017, tractor prices had
2: Historical needs have grown from slightly lower than 15,000 Class 8 tractors per month improved significantly, up until 2019. 2019 was a tough year at the auction level of trade.
(in the 2000’s) to about 17,500-18,000 Class 8 tractors per month now. Currently, the 2020 showed marked improvement, and 2021 so far has continued to trend strong. Lack
48MRA is 17,606. Monthly sales have been on the rise since May and just leveled off in of production has sent buyers to look for used to fill the void until production is back to
Oct at 18,774 compared to 19,126 in Sept. Peaked in Dec at 21,412. Strong demand and replacement levels.
the time it will take to build up our warehouse inventory sales should remain strong
through most of 2021. 6: The class 8 truck orders have been on the rise since June of 2020. Since June the
numbers have be up Y/Y by 50%. With the supply chain not being as reliable as needed to
3: U.S. Sales ONLY: The 48MRA is the rolling average of all tractors 48 months old or maximize production it is going to take longer for orders to be filled and trades
newer. The 48MRA bottomed in 2/2011 (7-year low) with the 48MRA at 9,712. The introduced on the secondary market creating below average deprecation through the
previous 48MRA high was recorded in 5/2007 at an average of 18,678 (we are now above first half of the year at least.
the high in 2007), which was six months after the actual monthly sales peaked in 12/2006,
when 26,462 units were sold. We marked a peak for monthly sales in 6/2015 with 25,3692016's F/L's Sold at T&M Auction (2020)
$45,000
$40,000
$40,000
$34,195 $33,031
$35,000 $40,000 $29,156 $30,114 $29,994 $32,455 $32,022
$26,767 $28,228
$30,000 $25,865 $25,771 $26,672
$25,000 $28,544 $27,493 $27,976
$25,937 $26,390
$20,000 $25,195 $25,222 $27,678
$23,797 $26,139
$15,000
$10,000
$5,000 Average YTD Ave Price Mo
$0
Jan-20 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
The above new chart 2020 monthly sales prices: To be fair we only sold 7 2016 Cascadia's in January and 199 in
March. We have maintained the higher than YTD average through Feb 2021. In the year 2020 we sold 880 total
2016 Cascadia125s for an average of $27,976. In Jan 2021 we sold 15 averaging $37,333 and in Feb we sold 75
averaging $40,060.True Value Guide Quantities of 2016 model year trucks.
Here are total actual sales of the Freightliner Cascadia (Fleet) and the O/O Spec’d Petes and KWs. Both are below to trendline, but the Fleet
truck values have held strong with the extremely high volumes . O/O Spec’d trucks generally don’t trade hands with the frequency that fleet
tractors do but their auction values do correlate with auction values of the fleet trucks even with the volume differences.
$80,000 F/L FLD120, C120, CL120,CA125's Pete 379/389& KW W900L
2 11
$70,000 9
Linear (F/L FLD120, C120, CL 120, CA125's ) Linear (Pete 379/389& KW W900L)
7 5
17
$60,000
11
84
135 8
$50,000
37
40 12
9
179 158 10
$40,000 30 165
86 50 25 178
33
58 876
$30,000 81 108 127
146 53 127 279
147
270
$20,000 12 13
34 83 89 67 160
116 174 100
$10,000
T&M Sales: Quantities of 4 Year Old Slpr Tractors
e.g. 2021 Sales: 2017 Model Year
$0
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21ytd$80,000 F'L INE R CA12 5 (Fl eet) KW W900L & P et e 379/389
$72,000 $73,136
$70,000 $64,694
L inear (F 'LIN ER CA125 ( Fleet)) L inear (KW W9 00L & Pete 379/3 89)
$61,500
$59,868
$60,000 $62,864 $61,100
$52,237
$50,375 $57,813
$50,000 $45,009
$43,589
$47,494 $43,150
$38,004 $38,150 $41,930
$37,840 $48,135
$40,000 $36,224
$29,995 $33,844 $40,946
$37,562 $42,258 $39,420
$27,880
$30,000 $26,136 $32,925 $32,116
$24,146 $24,488
$21,949 $23,015 $22,780 $29,721
$18,868 $25,635 $27,658
$20,000 $23,815 $22,263
$17,932 $22,191 $17,930
$17,228
$10,000
T&M Sales: Prices of 4 Year Old Slpr Tractors
e.g. 2021 Sales: 2017 Model Year
$0
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21ytd
Above are T&M Sales by average annual prices. [As usual, I have combined the Peterbilt 379/389 and Kenworth W900L tractors since both generally
considered to be spec’d as Owner-Operator (O/O) tractors.]
Not a lot of O/O moving their equipment at auction so far this year. In general O/O are not rotating trucks on a 5-6 years cycle as larger fleets do. You
can see the drastic rise of FL’s sold and yet values have held stronger than could be expected. It is a good sign to see volume as high as it is in 2020 at
831 so far without a large dip in values. We sold 577 FL from Jan-June with dispersals and bankruptcies, the second half of the year has been higher
values and more of an average volume.
The trends (red and purple lines) over time have been higher, but the price declines (green & blue lines) are clearly evident (2001-2003 & 2008-2011 &
2015-2017 & 2019). Remember, RCN is up (from material costs, EPA requirements, technology and safety/comfort improvements); additionally,
inflation is included in the sale prices, thus the upward trend line.What is available to the marketplace today? (Feb 22, 2021) See chart below. [Sleeper Tractors] The inventory listed on Truck Paper is 47.57% of Aug 2020 and 39.26% of Feb of last year. The
available tractors advertised on Truck Paper has been cut in half over the last 6 months. This has contributed greatly to the higher than normal values being bought at auction. The demand is
strong, and supply is low. (For Now) The “high count” years are typically for trade-ins or end of lease units. Low counts for 2019’s and 2020’s indicate that most units are typically in the first
lessee/owner’s hands. Most 2021’s and 2022’s new tractors are carryovers at dealerships.
1200
1000
800
FL Evo/ CA125/126 SLP
International LT/ProStar
600
Kenworth T680/660
Peterbilt 386/579
400
Volvo VNL64T760/670
200
0
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
22-Feb-21 Sleeper Tractors For Sale On TruckPaper.com: February 22, 2021 Ave. Age 2015.96
Make 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Total % of Total % of Prev
FL Evo/ CA125/126 SLP 56 122 78 251 575 897 1015 450 300 138 3,882 43.071% 70.05%
International LT/ProStar 24 43 24 103 158 354 324 226 122 40 1,418 15.733% 57.88%
Kenworth T680/660 237 33 39 50 163 560 339 173 40 26 1,660 18.418% 71.92%
Peterbilt 386/579 48 36 97 62 161 280 250 172 92 40 1,238 13.736% 68.93%
Volvo VNL64T760/670 195 25 18 62 36 85 141 115 60 78 815 9.042% 73.42%
Year 560 259 256 528 1,093 2,176 2,069 1,136 614 322 9,013 100.000% 68.24%
22-Feb-21
39.26% of Feb 20202019 vs 2020 Class 8 Orders:
I added this chart to show how strong the demand for new trucks has been over the last year. It shows supply chain disruptions are
causing lack of production, which ultimately causes further delivery time delays. Looking at the previous chart and combining it with
this one it shows the demand and lack of availability for new and used tractors.
Note: These are gross orders not net. Actual orders and production numbers will differ. Counts sourced from Transport Topics.
Class 8 Orders
60,000
51,900 50,900
50,000
40,100
40,000
32,042
30,000
2020
21,965
19,901 20,500 19,648 2019
20,000 17,531 17,190 17,594
15,548 14,668 15,626
12,322
10,442 10,013 10,733
15,841
10,000 14,243 7,211
4,105 12,916
6,735
-
Jan Feb Mar April May June July Aug Sept Oct Nov Dec
2020Additional Factors Retail “For Sale” counts (total: 9,013). Lowest advertised total we have seen since we started keeping track. It shows the strength of the overall trucking market and more clarification on how much demand is out there. We will keep an eye on this. Once more orders are filled and trades accepted the for-sale totals will begin to rise, and it will be an early indicator of when this market will ease. Additional factors to consider for a bias (positive or negative) The Crude Oil Industry is improving slowly. Experts predict the WTI prices to hover between 50-55 a barrel. Well numbers are up slightly but still well below 2019 numbers. The uncertainty of how COVID will continue to effect spending on services keeps this industry hamstrung. Building Activity (Home, Office, etc.): The housing market remains strong. Many believe this will last all of 2021. Lack of inventory and more and more new buyers are still trying to take advantage of the low rates and improve upon their work from home spaces. Drivers: I don’t think I ever need to update this section. Shortage! The CDL Drug and Alcohol Clearinghouse’s new regs along with stimulus money has prevented any major growth in available drivers even with majority of companies increasing pay. Looks like it will be an ongoing problem. Ports: The ports have had overpopulation issues over the last few months. In early February, the port of Los Angeles indicated they had 27 ships anchored offshore waiting for a slot to open. COVID related labor issues are a major concern going forward. Construction activity has been slowly increasing. Early predictions are for a strong year ramping up in summer with continued growth into 2022. Still expect a few factors that will be challenges such as labor, material costs, and supply chain delays. Politics: Another round of stimulus will continue to boost the sales of goods. The public’s response to the vaccine will determine the strength and speed of the recovery of the service sector. Lots of back and forth on the infrastructure bill. In the end it sounds like it will move forward just a matter of how long until it is put into effect. Steel: The pricing on steel and aluminum continues to rise and will affect production and RCNs. Worldwide shortages will take a while to correct and a wide range of industries that potentially could be affected.
• Some sectors of the trailers have • Heavy haul trailers: Demand is
continued to be in high demand stable, per conversations with
and look to remain strong thru dealers & manufacturers. RCN
at least Q2. is stable for now but the
• Ag trailers: Demand is still upcoming rise in steel prices
soft/weak due to ag commodity will influence that soon.
(grain, fiber & livestock) prices Infrastructure bill would
and seasonal use. provide a boost.
• Chemical tank trailers: Stable • Dry vans and reefers: Vans and
Pricing - good used equipment reefers continue to be strong
in the secondary market is in with no real signs of slowing
very limited supply. Lesser soon. I have been hearing
quality trailers (e.g. out of test) multiple reports that all new
Trailers are readily available. orders if even taken, are 2022
delivery dates.
• Pneumatic trailers: Steady
demand for large capacity • Trailer orders hit 54,200 in
trailers. 1040s still struggling. October - third highest in
Slow oil industry has hurt the history. Oct. 2019 orders were at
small cubes. 31,786. Jan 2021 orders are at
29,100. Demand is still there but
• Flatbeds and drop decks: Flats with delivery dates out close to
and drop values have slowly a year many are reluctant to
begun to pick up steam. Not a extend spending to that degree.
lot of volume has been moving • Overall, the trailer market is still
at auction. Manufacturing and
production beginning to rise has looking good. Having strong
led to strong load rates and a sales and orders indicate buyers
rise in demand. Should maintain are having more long-term
normal to less than normal confidence in our economy.
depreciation going forward.T&M Auction Results:
Tracking 5 Yr, 10 Yr & 15 Yr Old A/R Dry Vans
Five, ten and fifteen-year old Dry Vans sales (Taylor & Martin Auctions) are charted below:
As you can see auction values on vans are up from 2019 and have climbed month over month since May. We have seen as much as a 50% premium on 2017-
2020 vans at auction the last 8 Months. 2021 has started off even stronger for late model vans. We have not seen huge quantities but what we have sold have
been very high. On Feb 25th we sold 2 2020 Utility 4000dx vans for $35,000 a piece plus 5% buyers' premium.
T&M Auction Results: Tracking 5 Yr, 10 Yr & 15 Yr Old A/R Dry Vans
$25,000 5 Year Prices 10 Year Prices 15 Year Prices
$23,000
Li near (5 Year Prices) Li near (10 Year Prices ) Li near (15 Year Prices )
$20,250
$20,000
$18,250
$17,700 $17,733
$16,669
$18,153
$17,562 $15,694
$15,000 $12,617
Ave Price
$12,509 $13,033
$11,609 $11,841 $13,742
$10,630 $13,075 $9,961
$10,460 $9,459
$9,052
$10,000 $8,491 $7,973
$7,699
$8,537 $6,823 $6,939 $8,758 $7,708
$6,280 $5,240 $5,350
$5,728 $8,061
$5,120 $5,015 $6,992
$4,595
$5,000 $4,200 $4,483 $3,947
$3,857 $3,363 $3,162 $3,718
$2,927 $3,385 $5,445
$4,333 $4,863
$3,788 $4,178 $4,172
$2,923 $2,838 $3,327 $3,748
$3,250
$2,971 $2,700
$1,708 $1,703
$0
2001 02 03 04 05 06 07 08 09 2010 11 12 13 14 15 16 17 18 19 2020 21ytdFive and ten-year old Refrigerated Trailer sales
(Taylor & Martin Auctions) are charted below:
Reefers: Both Five-Year-Old & Ten-Year-Old (2010). Reefers have begun 2021 on the rise as well. Keep in mid we have a small sample so far but what has been
available is bringing strong numbers. With the delivery dates out until 2022 I would expect high demand for used reefers for at least the next few months.
All 53 Ft Reefers
5 Yr Reefer Sal es (2015) 10 Yr Reefer Sales (2010) Li near (5 Yr Reefer Sal es (2015)) Li near (10 Yr Reefer Sal es (2010))
$50,000
$45,000 $44,500
$40,000
$35,000
$27,336
$30,000 $25,811
$22,776
Ave Price
$22,371 $20,675 $21,292
$25,000 $19,889 $19,748
$20,000 $24,778 $25,835
$21,845 $19,508 $12,571 $12,959 $21,837
$15,000 $19,131 $10,317 $11,411
$9,471 $7,713$17,660 $8,673 $12,944
$10,000
$11,532
$5,000 $9,007 $9,480 $9,231 $8,798
$6,731
$5,689
$0 $5,893
2006 07 08 09 2010 11 12 13 14 15 16 17 18 19 20 21ytdFive and ten-year old Composite Flatbed sales (Taylor & Martin Auctions) are charted below:
Combo Flatbeds (Alum/Steel Composite) have continued to show significant weakness, when compared to 2018. To date, limited five or ten-year-old combo flats have been sold
by T&M in 2020. The above chart was not updated for the 5-year-old flatbeds, due to the lack of material data. I did have to use some 2009’s and adjust for my 10 year numbers.
The flatbed market had recovered from the 2015-2017 pullback. Actual sales numbers (2019) were very low. Considering previously mentioned cautions, and the current number
of flatbeds offered in the retail market, this segment is showing significant stress as well. Load rates have improved and started a small growth in the flatbed market but it still
has a long way to go.
The flatbed values have slowly begun to rise. The below graph is hampered by lack of sales in these particular model years. Looking at sales of different years, values would be
below trendline and holding steady. We have limited sales data so far this year, but with speaking to dealers, they are seeing an increase in demand for flatbeds.
Composite (Alum/Steel) 48 Ft Flatbeds 5 Year P rices
$20,000
10 Year Prices
$17,570
$18,000
$16,600 $15,917
$15,950 Linear (5 Year Prices)
$16,000 $17,433
$16,492 $15,680
$16,166 Linear (10 Year Prices)
$14,000
$12,500 $11,917 $11,900
$12,000
$10,750 $10,250
$11,687
Ave Price
$9,764 $12,393
$10,000 $11,000
$9,850 $8,650 $8,750
$8,000 $7,825
$8,650 $8,875 $8,750 $8,500
$7,781
$6,000 $7,239
$4,492
$4,000 $5,183
$2,000
$0
2006 07 08 09 10 11 12 13 14 15 16 17 18 19 2020John Seymour’s thoughts on
Agricultural equipment,
“filling the Ag Hopper” in The Meter!
Changes are coming in agriculture. Markets seem to be reacting positively post-election, weather is harsh dropping frigid
temperatures, ample snowfall across the U.S. and agricultural equipment manufacturers are focused upon more efficient,
top-of-the-line products.
Ag Week notes Fendt has been field testing their Beloit, KS produced Fendt (AGCO) Momentum planter in the deep soils of
the Red River Valley. Adjusting its South American introductory model to North American refinements it is catching some
attention. Even in a pandemic, farmers are willing to try new equipment if it shows promise of efficiencies to production or
cost. This model’s goal is “zero compaction” or “pinch rows”. Sensors automatically reduce tire pressures upon field entry,
leveling link arms maintain optimum seed depth under changing conditions across the field and even while fully loaded
with seed and liquid fertilizer.
John Deere is ramping up its R&D as well to the tune of over $1.7 billion dollars a year. Autonomy is complimenting new
technology investments and precision and big data are the elements linking them for the end users to achieve desired field
results. The U.K. division has been refining the role of drones and autonomous machinery. Today’s tractors are already
collecting the data needed to help fully autonomous tractors become a reality in the fields where they work today.
Hydraulics may lose out to electric motors for more precise control and artificial intelligence is not far behind that change.
Drone swarms are already in test fields, returning to mobile hives and repowering 30-minute fly times to cover up to 30-
mile radius mapping treatment and application areas. Future innovations are happening in American fields now.
The global agricultural equipment market size is expected to grow at an 8% plus annual rate over the next 25 years.
Continued yield demands to meet growing food needs are a key driving factor to this growth. U.S. new sale 48 Month
Rolling Average volumes for 4WD Agricultural Tractors had a 15% Q4 and finally positive Yr.over-Yr. comparison, though not
as strong as 2014-15 yet showing good improvement. Per AEM the 5 Year Rolling average for year-over-year new sales of
U.S. Combines is also strengthening. Availability is key word… stand in line for a good 4WD 200Hp+ tractor online or in-
person, even pre-DEF good condition tractors. Dealer inventories under some pressure on new or used, finally use that tax
depreciation credit! Farm auctions have stayed strong even under Covid-19, good condition has a premium despite
geographics vs. new cost. Most classes of ag equipment anticipated up slightly in 2021.
U.S. corn exports commitments from China hit record highs for 2020-2021 marketing year of nearly 2.1 million tons.
Rebuilding their swine herds back will most likely encourage this positive market movement into 2022 vs. the Chinese
record high domestic corn market pricing. Other neighbors have not yet joined-in at such demand levels for contracting
U.S. grains mainly due to COVID-19 impacts. Despite greater degrees of farm economy uncertainty in 2020, trade relations
appear to be a higher priority of the new administration and farm commodities are forecasted to improve overall.
Production expenses forecasted to remain low such as interest rates and energy-related inputs, while feed costs are
anticipated to increase. Land and rents are anticipated to remain steady with improved price outlook. Key points to note
are that government payments are anticipated to reduce in coming years driving down net farm income. Volatile and
uncertain times in a fragile sector which is highly affected by trade policies and the weather. My prior comments noted
lenders still have concerns for cash flow positions, liquidity and depleted working capital going into 2021.
Look for rural infrastructure projects to help move products to the ports, more affordable rural America health costs and
cautious trade relationship rebuilding after the COVID-19 focus. Times are changing in Ag.
John L. Seymour, ASA Senior AppraiserYou can also read
