FIVE MORE TAKE-AWAYS FROM THE ATA CONVENTION
The American Trucking Associations (ATA) held its Management Conference & Exhibition in Philadelphia last week. Here’s a wrap-up of some of the news that got my attention.
The US economy is A-OK
The always anticipated economic outlook was rosy this year. ATA chief economist Bob Costello and IHS chief economist Nariman Behravesh agreed that the conditions for trucking companies should remain strong into 2016. While tonnage has softened, Costello attributed this to an inventory build-up that occurred when trucking capacity tightened and manufacturers were worried about getting their goods to market.
Tonnage should resume its growth once the inventory cycle is worked though, Costello predicted.
Consumer spending is robust and American households have deleverated, so that should continue, Behravesh added. Low gas prices have been equal to giving US households an annual tax break of about $1,000 a year.
The driver shortage isn’t going away
Bob Costello noted that the driver shortage is “as bad as ever” in the US. He projected the shortage of qualified drivers to grow from about 48,000 today to as much as 175,000 by 2024.
“If we get to 175,000, we’re in a bunch of trouble,” he said. “It will slow down the US economy.”
Driver pay in the US has been on the rise and it will have to continue climbing if the industry is to attract a sufficient number of qualified drivers, Costello noted.
You can read more from the economic session here.
Truck demand to remain strong
Demand for new trucks will likely slow next year, but not by much. Martin Daum, president and CEO of Daimler Trucks North America, indicated Class 8 truck orders in 2016 will likely fall somewhere between 2014’s really good numbers and 2015’s really, really, really good numbers.
While a decline is expected, Daum noted we’re coming off an extremely strong year.
This year will see 435,000 Classes 6-8 trucks sold into the NAFTA market, up 13.4% compared to 2014. A “normal year” represents about 375,000 units.
Daum warned us trucking journalists not to get too excitable if we see orders in the coming months that are well off last year’s totals. The industry saw “monster” orders last October and November, so even of order activity this year is as much as 50% lower, Daum pointed out it’s a healthier number.
Oh, and customers are continuing to order more Daimler trucks than any other brand. Daum pointed out DTNA’s NAFTA Classes 6-8 market share is 38.7%. In Canada, it owns 34.4% of the Classes 6-8 market and its US Class 8 market share sits at 39.5%.
You can read more about Daum’s outlook for 2016 here.
Mack looking to reinvent how trucks are serviced
In an ongoing effort to reduce downtime, both Mack and Volvo have recently announced the launch of Certified Uptime Centers. Mack was at ATA to give editors more detail about what this exactly entails.
It’s basically a certification program for dealers that take steps to improve customer uptime and throughput at their facilities. The traditional first-come, first-served model employed by truck dealers across the industry results in trucks needing quick fixes being queued up behind those requiring major repairs.
As a result, the average downtime for a truck needing just 3.5 hours of repair time is about four days, according to Mack Trucks North America president Stephen Roy. I was blown away by that number.
Certified Uptime Centers will have dedicated bays for jobs requiring minor repairs, which represents about 40-50% of all service events. These trucks will be quickly diagnosed and put through a dedicated bay and returned to the customer much faster under the new system, Mack officials said.
Which begs the question, won’t this extend downtime for the other half of customers, those requiring more in-depth work? Absolutely not, Roy said. He said the program has been piloted by more than 20 dealers and it resulted in greater efficiencies for all customers, thanks to improvements in overall workflow processes. Dedicated teams of technicians will still be there to service the bigger jobs. I think it’s going to be fascinating to see how this plays out when fully rolled out.
International will replace the PayStar with the HX
International will be introducing the new HX vocational series of trucks in February at World of Concrete, according to sr. v-p. Jeff Sass. This is a truck that was developed by Navistar, drawing on synergies that existed when it was building trucks with Caterpillar.
Cat, late this summer, announced it was bringing production of its vocational trucks in-house. This seems to me like an incredibly quick launch from Navistar, suggesting it was working on this truck and unwinding its Cat partnership for some time. The truck will be available for purchase by April 2016, Sass told me. The HX will feature a full line of options and configurations – SFA, SBA, long-nose, short-nose, 13L, 15L, you name it. Can’t wait to see this truck. How Cat-like will it look? Or will it be a different beast altogether? Something to look forward to during the too-cold, too-dark, overall-lousiest month of the year.
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