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Volume 17 • Issue 2 • February 20151.877.gets.uta • www.uta.org
Used Truck AssociationChartered May 16, 1988
Published by the Used Truck Association325 Country Club Drive, Suite A
Stockbridge, GA 30281
SHARE YOUR nEwSwith the UTA Industry Watch.Send submissions, ideas and comments to:UTA Industry Watch Editors Brad and Deb Scheppc/o Grace Management 325 Country Club Drive, Suite AStockbridge, GA 30281 Phone: 877-GETS-UTA (877-438-7882)Fax: [email protected]
Table of ContentsBoard News and Views .......................2
Quips & Quotes .......................................2
Industry Events Calendar .......................3
The Brooks Group Sales Tip of the Month ........................3
Face to Face with Amanda Kent ..................................... 4
Predictions for 2015 from Women In Trucking ............................5
NADA Update .................................. 6-8
Risk Insights........................................... 9
Industry News Briefs .................... 10-11
UTA’s Board Tours Peterbilt Plant ... 12
2014 Convention Photos ................... 13
From Where We Sit ........................... 14
The UTA… Members Supporting Members!
Driven to Distraction at Work by Screen Addiction
Are you ever distracted at work? Do emails, smart phones, and using the Internet sometimes eat up
more time than they should, affecting your ability to really focus? If so, you may be suffering from a new malady of our times, “screen addiction.”
Well we’re here to help. In the next two issues of Industry Watch we’ll be featuring excerpts from the new best-selling book, Driven to Distraction at Work: How to Focus and Be More Productive. We’re reading this book now. (Yes, we forced ourselves not to let other things distract us so we could do that). In our opinion, this book is truly a game and life changer. The author, Edward M. Hallowell, MD, is considered one of the world’s leading experts on ADD, and ADHD. But in this book he also discuss a new “disease,” ADT, or Attention Deficit Trait.
Screen Addiction is just one of six workplace distractions that Hallowell discusses. But, because it’s so pervasive, with no slowdown in sight, we’re focusing on it here.
In this month’s excerpt, Dr. Hallowell describes screen addiction, and next month he offers simple steps for dealing with it. If you read these articles, you may just find that you can increase your effectiveness at work, and maybe at home as well.
What exactly is screen addiction?by Edward M. Hallowell, MD
You might become a habitual watcher of television or listen to radio for hours on end, but those are a one-way stream; you absorb what the broadcast sends you, but you don’t broadcast back. Our digital devices, on the other hand, are two way; we join the online world in ways that we can’t with radio or television. The internet allows us to live in a digital universe where we can do everything from start a business to fall in love. We can buy and sell, chat, seduce, interview, plan a garden, set up a mar riage, buy a house, find a spouse, get an advanced degree, or mount a political campaign.
It’s easy to get hooked on certain online activities. Hundreds of websites exactly resemble a casino onscreen. You put down your credit card and, voilà, you’re in your own private Las Vegas. You can win or lose just as much, just as fast. Dopamine floods your brain, just as it would in a real casino. You can do the same with sex, online shopping, and just about any addictive or compulsive activity that does not require your actual, physical presence.
The situation gets even dicier. A person can develop an addiction without falling prey to any of the well-known addictive activities like gambling, sex, or spending. A person can simply become addicted to the feeling of being online. Biologically speaking, the same dopamine circuitry that is activated in traditional addictions now is activated simply by spending too much time online.
I’ve interviewed many people with this problem. They talk of their need to be online because it gives them a freewheeling state of mind where anything goes and nothing is shut down. They talk about craving it when they can’t have it and about feeling irritable and jittery on flights that don’t offer Wi-Fi. They admit to losing relationships and jobs due to their inability to control their craving. They describe the feeling of being online as a kind of anesthesia that eases the pain of everyday life.
Reprinted by permission of Harvard Business Review Press. Excerpted and adapted from Driven to Distraction at Work: How to Focus and Be More Productive. Copyright 2015 Edward M. Hallowell, MD. All rights reserved.
UTA Industry Watch
2 www.UTA.orgFebruary 2015
Board News and Views
http://www.uta.org/directory
governing boArd:
President ..................... Rick Clark
vice President.....Mike Thurston
Treasurer ............Brock Frederick
Secretary ........Angelique Pierce
President emeritus ........................... Marty Crawford
CoMMiTTee ChAirPerSonS:
Affiliates & benefits ..Craig Kendall
Convention ....................Hal Dickson Bryan Haupt
dealer group ............Mike Thurston Mike Roney
elections ................. Mike McColgan
Finance .................... Brock Frederick
Marketing .............Angelique Pierce Amanda Kent
Medium duty .............. Amy Shahan
Membership ............. John Cosgrove
Training ..............................Ken Kosic Amanda Kent
UTA Jerome nerman Family Foundation Scholarship ........................................ Jay Burgess Craig Kendall
Website .................Angelique Pierce Mike Thurston
Wreaths Across America .....Ken Kosic
2015 boArd oF direCTorS
When people talk, listen completely. Most people never listen.
~Ernest Hemingway
Your Used Truck Association, Moving Forward!
Let’s talk about two UTA Committees—Scholarship and Affiliates—and where the UTA could use your help in 2015.
Scholarship CommitteeThe UTA gives ten $5,000 scholarships each year to ten deserving young people to further their educations.
Jay Burgess is the Chairman of the Scholarship Committee. Jay has done a great job with this Committee building on the work Tim Ronan and others started. I am the Co-Chair of the Scholarship Committee.
The UTA Scholarship Committee oversees obtaining applications from young people who apply for scholarships from the UTA Scholarship Fund. The Committee sends the applications to Johnson Community College’s Business Department for an impartial review. They then select the 10 most-deserving candidates.
In 2015, the UTA will award one of these scholarships to a deserving young person who wants to be a service technician! This a great opportunity for the UTA to help our industry add more service technicians.
The Scholarship Committee also works to raise money for the UTA Scholarship Fund itself. In June, we will hold the UTA Scholarship Golf Tournament in Kansas City to raise money for the fund. Stay tuned for more information on this great event.
Thank you to everyone who has contributed to the UTA Scholarship Fund, and to everyone who has recommended candidates to receive UTA Scholarships.
If you want to be on the Scholarship Committee or you have ideas for the Committee, let Jay or me know. If you want to make a donation to the Scholarship Fund, please also let us know. The UTA Scholarship Fund demonstrates the UTA is taking a leadership role in helping young people further their educations and grow our industry.
Affiliates CommitteeI also chair the UTA Affiliates Committee and I need your help. We need more UTA Affiliates to offer discounts and programs to UTA members to help you save money and run your businesses better.
The UTA Affiliates Committee works with our industry partners to offer UTA members discounts to help you be more successful. To see the UTA Affiliate programs, go the UTA website, www.uta.org, and go to the Affiliates tab.
We are updating the Affiliates program to offer more and better products and services for UTA members.
The requirements to be a UTA Affiliate are: ■ The company must have at least one person who is a UTA member. ■ The company offering a UTA Affiliates program needs to offer a discount that someone who is not a UTA Member cannot get.
The UTA has some great Affiliates offerings and we need more.
We need help identifying companies to approach about UTA Affiliates programs. If you have suggestions, or if you want to be on the Affiliates Committee, let me know.
If you have any suggestions at all, or if you just want to help the UTA’s Scholarship Committee, or the Affiliates Committee, we need to hear from you.
My UTA email is [email protected] and my work email is [email protected]. My direct office line is 865-251-4771.
Thank you, and have a GREAT 2015!
Craig Kendall, Chair, UTA Affiliates Committee Co-Chair Scholarship Committee [email protected]
UTA Industry Watch
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Industry Events CalendarFEbrUArY
16-17 • Selling for Success, UTA Sponsored TrainingCourtyard Atlanta Airport North/Virginia Avenue Atlanta, GAwww.uta.org
MArCh
4-6 • The Work Truck Show 2015Indiana Convention Center • Indianapolis, INhttp://www.ntea.com/worktruckshow/index.aspx?id=938
26-28 • Mid-America Trucking Show 2015Kentucky Expo Center • Louisville, KY www.truckingshow.com
APrIL
14-17 • NAFA Institute & ExpoOrange County Convention Center • Orlando, FLwww.nafainstitute.org
MAY
1-2 • Midwest Pride In Your Ride Truck & Tractor ShowTri State Raceway • Earlville, IAwww.midwestprideinyourride.org
7-9 • 4rd Annual East Coast Truckers JamboreeKenly 95 Truckstop • I-95 Exit 106, Kenly, NC http://kenly95.com/east-coast-truckers-jamboree
18-19 • Selling for Success, UTA Sponsored TrainingCourtyard Houston Kingwood • Houston, TXwww.uta.org
28-30 • ATHS National Show & ConventionYork Expo Center • York, PAwww.aths.org
JUNE
5-7 • Wheel Jam Truck Show 2015South Dakota State Fairgrounds • Huron, SDwww.wheeljam.com/index.html
Powerful sales managers know that it’s not always what you say that’s important. What is important is how you say it.
JULY
9-11 • Walcott Trucker’s Jamboree755 W Iowa 80 Rd, I-80, Exit 284 • Walcott, IA www.truckersjamboree.com
20-21 • Selling for Success, UTA Sponsored TrainingSpringHill Suites Chicago O’Hare • Chicago, ILwww.uta.org
24-25 • Expedite Expo 2015Roberts Convention Center • Wilmington, OHwww.expediteexpo.com
AUGUST
27-29 • The Great American Trucking Show (GATS)Dallas Convention Center • Dallas, TX www.gatsonline.com
oCTobEr
5-6 • Selling for Success, UTA Sponsored TrainingCourtyard Denver Airport • Denver, COwww.uta.org
NOVEMbER
4-7 • 16th Annual UTA ConventionGaylord Texan Resort & Convention Center • Dallas, TXwww.uta.org
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Amanda KentAmanda looks back at the record-breaking Southern Company sale with Adesa Atlanta in 2007, and being recruited by Manheim to manage their national growth in truck auctions.
Even her advice to younger people just starting out in the industry is people based. “Be a sponge!” she said. “Find the ‘elder’ folks in the industry and pick their brains for all the history of the industry, back when they did everything by hand and worked on the trucks themselves. Take that process information and mesh it with the great technology available today to get the most efficient process obtainable. Collaborate with as many people in different parts of the industry as possible and listen, listen, listen…”
We asked Amanda what challenges she sees ahead for UTA. “Finding facilities to hold the convention,” she laughed. “We are growing by leaps and bounds, thanks to the founders’ visions that continue to feed into UTA. The convention sessions, vendor expo, and training opportunities have become phenomenally packed full of needed continued education material, so I expect the convention attendance to continue to skyrocket.”
When Amanda is not at work, she and her husband are busy with their “growing” family. They have four children of their own, two daughters-in-law, and four “grand-angels” ranging in age from four months to four years. Their three oldest children are settled success-fully into their careers, and the youngest one just started his Plebe year at the Naval Academy. “I’m a proud Navy mom,” Amanda exclaimed, “GO Navy!” She loves to read and learn and can spend many quiet early morning hours with a cup of coffee and her iPad. She is very active in both the Pilot Club of Haralson County-Pilot International and in her faith community. “I plan to run in my first marathon this year, the Marine Corps marathon in Washington, D.C., in October.” Amanda promises to share the full report of that experience at the next UTA convention in November! n
Amanda Kent, Marketing Representative for Freedom Truck Finance has
volunteered to serve as co-chair for both the UTA Marketing and Training committees for 2015. She joined UTA in 2005 when she worked as the Office Manager/Commercial Account Manager for Adesa Atlanta in Newnan, GA. That was actually Amanda’s first paid job in the trucking industry, although trucks were a part of her life even as a young child. “My grandfather drove a produce truck and had a pretty sizable garden,” she said. “My dad has been in construction/building all of my life.” So, it’s safe to say that trucks and heavy equipment have always been the backdrop for Amanda’s life story.
Freedom Truck Finance is a young company, and Amanda is proud to be in a position to help the company grow. She calls being invited to join Freedom Truck Finance in its infancy an opportunity to be a “molding influence in the company.” Of course, before she joined the new firm in April 2014, she’d already held positions with other truck companies. As mentioned, she started her life in the industry
with Adesa Atlanta. In 2008 she moved to Manheim Specialty Auction. There she served as National Heavy Truck Manager. “We built the Manheim Truck Auction to a footprint of 13 auctions across the U.S.” she said. In 2012, after a lay off with Manheim, Amanda worked as an independent consultant to Online Auction. The company was in the process of building a robust platform that can be branded to suit sizeable fleets.
Amanda loves the approach Freedom Truck Finance takes to helping people finance and purchase trucks. “Freedom Truck Finance is a sub-prime lender, which does not base approvals on credit score,” she explained. “We base our approval on common sense. Each deal is looked at on an individual basis, and our common sense approach means that if the deal makes sense, we’ll absolutely approve it.” It turns out Amanda loves the finance part of the business. When we asked what she wished she knew earlier in her career, she said, “How fun the finance side of the industry is! I started in remarketing at the auction level and just had no idea how finance helped support the industry as a whole.”
As Amanda answered our questions, it became increasingly clear that she simply loves people. Answer after answer went to her passion for interacting and sharing with others. Her answer to her favorite part of her current job was simple, “I love the people,” she said. “I love being able to visit with them, listen to their experiences in business, getting to know them and their families.” Helping them to be successful by providing a valuable service that helps them buy and sell more trucks was at the very top of her list.
Her proudest moments in her career are also people centered. “Looking back, I have to say that I have lots of moments with customers that make me smile,” Amanda said. “The people who fed into me and taught me how to not only grow my own career but to do the same with others will forever live in my heart.” As for her more tangible achievements,
UTA Industry Watch
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Predictions for 2015 from Women In Truckingby Ellen Voie
As we ring in a new year, it’s time to consider 2015 and the positive and
negative challenges we face as an industry. While many of these are beyond our control (oil prices!), there are some that beg for change in both attitude and current practices.
Let’s look at some top issues for 2015 and how we can end the year in a better position for 2016.
The capacity crunch is a reality. Professional drivers aren’t as easy to find as they were in the distant past. What can this industry do to ease the pain? First, expand the driver pool by looking outside current demographics. Of course we need to recruit more women, but what about finding ways for immigrants to become professional drivers? Maybe this means accepting workers who speak other languages such as Spanish or French, to possibly even include sign language. (Just an idea!)
Should we consider older workers and make the job less physically demanding and more about driving than loading, cranking, thumping, chaining, or other activities that might create a physically limiting position? While we’re on the subject of age, what about those ages 18 to 21 who are looking for work?
We usually think of a career as a professional driver as one that separates a driver from his or her family for extended time periods. Maybe we need to rethink that as well. Are there more ways to keep drivers closer to home? Maybe more of a Pony Express type operation would spread the distance between two or more drivers who could be home nightly.
What about job sharing? Could a summer worker (golf courses, water parks, boat rentals) be cross-trained to drive only during the winter months? Would carriers allow part-time drivers? What about all those school bus drivers who have summers off?
Our attitudes have been a limiting factor for entry-level drivers as well. As a society, we often devalue careers in the trades. Many of us want our children to go to college instead of technical school. When will we finally understand that welders, electricians, plumbers, and skilled tradespeople have jobs that can’t be easily outsourced? This holds true for professional drivers (who are skilled workers!). You can’t operate a truck from overseas (at least not yet).
When will we start teaching our teenagers the value of blue-collar jobs that might not mean a desk job, but that will probably involve computers in some capacity? Just look at the newer trucks and check out the technology! Maybe we should consider the European model of education that directs teens into technical or academic careers before high school. Training is based on aptitude and skill and is better suited to the intended career outcome.
Moving to equipment challenges, truck cab designs will become more driver-focused and ergonomically adaptable. As more women enter the industry, the equipment will need to better accommodate a broader range of sizes. Adaptability will be impor-tant, especially for husband-wife teams. However, creating a tractor-trailer that is safer, more economical, and more comfort-able is the goal. Steps, seats, steering wheels, seat belts, and other parts of the cab will allow a wider range of body sizes so no one is prohibited from driving a truck due to his or her size.
One very positive effect of the capacity issue is the attention shippers are giving carriers in order to get their products delivered. Trucking companies are starting to rate their customers on dock time and driver friendliness, and the “bad” ones are suffering from either higher rates or fewer carrier options. When shippers and receivers start valuing a driver’s time and respecting them as individuals, we all benefit. Watch for more positive interactions at the loading dock in the future.
Perhaps the non-trucking public will finally begin to understand the importance of that eighteen-wheeler on the road beside them.
Instead of pointing at trucks as smoke spewing, pavement-wrecking behemoths operated by overtired and over-stimulated drivers, maybe they will start to understand how that gallon of milk actually gets to the store shelves.
Once the drivers, carriers, and the entire industry gain the respect of those outside of the industry (including regulators), many of our driver capacity issues will lessen. These changes won’t all occur in the coming year, but we can move toward addressing these challenges in 2015 and end the year better positioned for 2016. n
Ellen Voie President/CEO of Women In Trucking, Inc.
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SummarySleeper tractors with less than 500,000 miles are depreciating at a mildly accelerated rate, due most likely to the increased supply of trades. The Peterbilt 587 and Freightliner Cascadia led the 3-year-old market in 2014, outperforming the industry average. A recovery appears to be underway for most segments of the medium duty market. Retail sales volume is stable, with little change from 2013 to 2014. Wholesale volume was up incrementally in that period. Expect stable to mildly downward pricing in upcoming months as the supply of trades accelerates.
Sleeper Tractors – retailSleeper tractors were down across-the-board in December, with the month’s result of $56,866 representing a decrease of $2,893 (or 4.8 percent) month-over-month. However, year-over-year results were favorable, with December 2014 up $2,670 (or 4.9 percent) over December 2013.
Mileage was mildly lower than November, at 487,865 – a 9,581 (or 1.9 percent) decrease. The decline from December 2013 was more notable, at 40,183 (or 7.6 percent). See “Average Retail Price and Mileage” graph for detail.
Trucks with under 400,000 miles performed well this month, generally recovering from November. However, taking a longer view, trucks in this cohort actually lost proportionally more of their value than the market overall in the 4th quarter. Specifically, these trucks lost 5.7 percent of their value in the 4th quarter vs. the 3rd, compared to 2.8 percent for the Class 8 market as a whole. Narrowing our focus even more, trucks with 200-399,000 miles were hit the hardest, losing 8.0 percent of their value in this period.
A larger supply is the likely factor behind depreciation of lower-mileage trucks. In the 3rd quarter, the sub-400K cohort represented 33.6 percent of trucks reported sold. In the 4th quarter, the proportion increased to 37.3 percent. This supply increase is mild, but could be enough to explain the incrementally-greater rate of depreciation for this group. To be clear, though, supply of low-mileage trucks is merely going from very tight to somewhat more available, and the supply/demand relationship will continue to favor high pricing even through the upcoming wave of trade-ins in the 1st half of the year. See “Retail Sales Volume by Mileage Range” graph for detail.
Sleeper Tractors – WholesaleWholesale pricing was also generally down in December, with the month’s result of $37,724 representing a decrease of $7,805 (or 17.1 percent) month-over-month. As in the retail channel, however, year-over-year results were favorable, with this December up $6,946 (or 18.4 percent) over December 2013.
Mileage was up month-over-month, which partially explains the price decline. December’s average of 604,169 was 84,246 (or 16.2 percent) higher than November, but 39,456 (or 6.1 percent) lower than December 2013. A greater proportion of International ProStars was the other major factor. In December, this model represented a full 53.5 percent of our Class 8 database, impacting averages. Excluding the ProStar, the market overall depreciated 7.1 percent month-over month, as opposed to 17.1 percent with the ProStar. See “Average Wholesale Price and Mileage” and “Model Year 2012-2010 Average Wholesale Pricing” graphs for detail.
NADA Update Chris Visser, Senior Analyst and Product Manager, Commercial TrucksTwitter: @NADAUsedCarGde
400,000
430,000
460,000
490,000
520,000
550,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
Jan-‐13
Feb
Mar
Apr
May
Jun Jul
Aug
Sep
Oct
Nov
Dec
Jan-‐14
Feb
Mar
Apr
May
Jun Jul
Aug
Sep
Oct
Nov
Dec
Mileage
Price
Period
Average Retail Price and Mileage: All Sleeper Tractors Under 1M Miles
Price
Mileage
Source: ATD/NADA
0
50
100
150
200
250
300
350
Jan-‐13
Feb
Mar
Apr
May
Jun Jul
Aug
Sep
Oct
Nov
Dec
Jan-‐14
Feb
Mar
Apr
May
Jun Jul
Aug
Sep
Oct
Nov
Dec
Retail Sales Volume by Mileage Range (Sleeper Tractors)
2 per. Mov. Avg.(200-‐299K)
2 per. Mov. Avg.(300-‐399K)
2 per. Mov. Avg.(400-‐499K)
2 per. Mov. Avg.(500-‐599K)
2 per. Mov. Avg.(600-‐699K)
2 per. Mov. Avg.(700-‐799K)
400000
450000
500000
550000
600000
650000
700000
750000
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Jan-‐13 Feb Mar
Apr
May
Jun Jul Aug
Sep Oct
Nov
Dec
Jan-‐14 Feb Mar
Apr
May
Jun Jul Aug
Sep Oct
Nov
Dec
Average Wholesale Price and Mileage: All Sleeper Tractors Under 1M Miles
2 per. Mov. Avg.(Price)
2 per. Mov. Avg.(Mileage)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
Jan-‐14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Model Year 2012-‐2010 Average Wholesale Pricing with/without ProStar Not Adjusted for Mileage
ProStar % of Cohort
Cohort Avg. Price
Cohort Avg. Price Ex. ProStar
ProStar Avg. Price
Source: ATD/NADA
UTA Industry Watch
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In December, the average 4-7 year-old cabover sold wholesale for $15,480 and had 118,090 miles. Pricing was down by $333 (or 2.1 percent) month-over-month, but up by an impressive $3,938 (or 34.1 percent) year-over-year. Mileage was 36,883 (or 23.8 percent) lower month-over-month, and 4,133 (or 3.6 percent) higher year-over-year. See cabover graph for detail.
Volume is the changing factor in this segment. The first 3 quarters of 2014 saw an extremely low number of 4-7 year-old cabovers sold, but the 4th quarter came back on-line with a whopping 80.0 percent increase vs. the 3rd quarter. Year-over-year, the 4th quarter was 12.5 percent ahead of same-period 2013.
Stable pricing on higher volume suggests improved demand. With three months of this behavior on the books, we’re ready to call it a trend.
Medium duty—Class 4 ConventionalsLighter-GVW conventionals had a solid December following a weak October and November. 2014 overall was a stronger year for this segment, returning average pricing 12.2 percent higher with similar mileage. Year-over-year volume was similar if we ignore an outlier month in 2013. We view this segment as mildly recovering.
In December our 4-7 year-old benchmark group brought an average of $16,082 – a substantial $3,293 (or 25.7 percent) increase over November, and a $3,348 (or 26.3 percent) increase over December 2013. Average mileage was 112,033 – 15,749 (or 12.3 percent) lower than November, and 10,413 (or 10.2 percent) higher than December 2013. See Class 4 graph for detail.
October and November now look more like anomalies that were outside the mildly upward trend for this cohort.
Supply patterns are following a trend similar to the retail channel, with trucks in the 300-500,000 mile range becoming more available. The trend started earlier than in the retail channel, with the supply of trucks in this mileage range representing 20.5 percent of our database in the 1st quarter, moving up to 45.6 percent in the 4th.
The wholesale market can be predictive of trends in the retail market, since auctions and dealer-to-dealer trades are a major source of retail inventory. As such, the increase in lower-mileage trucks sold whole-sale suggests we should expect mildly downward pressure on pricing in upcoming months.
Competitive Comparison – 3-Year-old Sleeper Tractors (retail)Individual models performed similarly to last month, with the Peterbilt 587 the only model to show notable movement. This truck returned retail pricing 8.2 percent ahead of last month, due mainly to 16.7 percent lower average mileage.
Generally, the 587 and Freightliner Cascadia led the market in 2014, losing only 3.6 percent of their value from the 1st quarter to the 4th, compared to the industry average of 7.6 percent. The Volvo 730/780 is on par with these two models, although the 730/780’s typically higher level of spec is a bit of an asterisk.
The Peterbilt 386 finished the year strongly. That model returned the most volatility in pricing in 2014, with low sales volume the main factor behind the swings.
The Kenworth T660 saw the greatest change in positioning in 2014, starting out the year extremely strong, and then falling in the 2nd half to return pricing similar to the industry average. This model returned the second-highest depreciation of any model in this cohort, losing 16.3 percent of its value from the 1st quarter to the 4th. The number of T600’s sold through wholesale channels greatly increased in the 3rd quarter, which may have influenced retail pricing.
The International ProStar consistently performed slightly more than 25 percent below the market average for the year, losing 16.5 percent of its value from the 1st quarter to the 4th. All but 3 2012 ProStars reported sold were equipped with the MaxxForce.
See “Average Retail Selling Price of 3-Year-Old Sleeper Tractors” graph for detail.
Medium duty – Class 3-4 CaboversThe cabover market continues to look better and better, with pricing for 4-7 year-old trucks stable month-over-month, and the 4th quarter finishing strong in terms of volume. NADA continued on page 8
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NADA continued from page 7
www.nada.com/b2b
Reprinted with permission from the ATD/NADA Official Commercial Truck Guide®
Medium duty – Class 6 ConventionalsClass 6 conventionals closed out 2014 on a high note, with the average wholesale price of a 4-7 year-old unit coming in at $20,206. This figure is $2,936 (or 16.9 percent) higher than November, and $2,435 (or 13.6 percent) higher than December, 2013.
Looking at the year as a whole, 2014 outperformed 2013 by a wide margin. The 12-month average for calendar year 2014 was $20,688 - $5,163 (or 33.3 percent) higher than 2013. Mileage was 10.2 percent lower in 2014, which would only partially account for the higher pricing. See Class 6 graph for detail.
Volume was the only measure to decrease in more recent periods. December 2014’s total for this cohort was 26 – 2 more than November, and identical to December 2013. 2014 overall substantially underper-formed 2013, though, with 2014’s 12-month average coming in at 16.0 – a decrease of 25.7 units (or 61.6 percent) vs. calendar-year 2013. This substantial decline is partially explained by the fact that the model year range used in 2014 (2008-2011) includes two low-production years, while the range used in 2013 (2007-2010) only includes one. Still, if demand had been higher, we would have seen greater volume in 2014. Overall, though, the final two months of 2014 were moderately strong in volume.
Pricing late in the year was notably higher than same-period 2013, pointing to greater demand. Economic conditions will continue to trend upwards for at least the next few quarters, strengthening the supply/demand relationship. Now is probably not a bad time to consider participating more heavily in this segment.
Sales volumeFollowing a weak November, December’s retail sales per rooftop came back to 5.9 trucks, right at the full-year average, and putting 2014 identical to 2013. It is increasingly clear that current market conditions support retail sales at about the 6.0 level, with external factors such as political uncertainty and severe weather applying temporary downward pressure, and seasonal buying patterns applying temporary upward pressure. See “Average Number of Used Trucks Sold” graph for detail.
On the wholesale side, NADA collected a total of 40,273 auction and dealer-to-dealer sales records in 2014, up from 39,179 in 2013, for a 1,094 (or 2.8 percent) increase. We had predicted an increase of 5 percent early last year, so we were slightly optimistic. In the post-recession years, volume has been limited by supply, not demand. See “Total Wholesale Sales Reported to NADA” graph for detail.
outlookDepreciation will be slightly more notable in the first half of 2015 due to increased supply. However, movement will be mild, and pricing will be only slightly off historic highs. The proportionally-higher price of new trucks has caused a permanent shift in dynamics supporting increased demand.
Be sure to read our blog twice each week for real-time updates on this and other market data, at www.nada.com/b2b. n
UTA Industry Watch
9www.UTA.org February 2015
Risk InsightsTougher Truck Emission Standards Strengthens Dealers Need for Error & Omissions Insurance
In 1974 the first federal emission limits were introduced, gradually tightening
over the years with current mandatory emission standards for heavy-duty engines phased-in over the period from 2007-2010. For truck models year 2007 and later the emission standards included very stringent limits for PM (particulate matter) and NOx (nitrogen oxides). These standards are also set to tighten even further in 2017.
As emission regulations continue to expand, it becomes increasingly important that used truck dealers do what they can to ensure that the vehicles they sell meet the required standards. It’s also prudent in the event a dealer unknowingly sells a truck that does not meet emission regulations, that there is coverage for any errors or omissions should he or she face a lawsuit by a buyer claiming the truck’s condition was misrepresented and needs repairs to meet the standards.
We spoke to Benji Pavelka of J&B Truck and Trailers Sales about this very issue. Benji opened his independent truck dealership in Corpus Christi, Texas in 2001, starting out as a one-person shop. Today he has nearly 20 employees working for him and a second location in Houston, Texas. J&B carries eight trailer lines with its principle business focused on oil-related truck sales.
“In the last 15 years, and particularly in 2007, government regulations for emission standards became more restrictive,” confirmed Benji. “What this has done for used truck dealers is put greater liability on us when purchasing a truck from an individual, auction or from any other vehicle source. As part of our process, we have set trade terms and conditions—a checklist with certain specifications—we go through to make sure everything is in order before accepting a vehicle, including confirmation on whether the DPF (diesel particulate filter) is new, when it was last cleaned and its maintenance schedule. The problem, however, lies with the fact that individuals can dispose of the DPF and bypass the computer that tests for emissions without your knowledge. This could present serious problems. If, for example, you take a vehicle on trade that unbeknownst to you was altered and you then sell the truck, as a dealer you would be held responsible if the end user encounters a problem and must repair the vehicle.”
In fact, Benji ran into a problem involving a truck he took on trade from an OEM dealer. While making some minor repairs to the truck, which he knew were needed before accepting it, the engine light kept coming on. He took the truck to an OEM dealer to check the problem. Like most independent dealers, J&B doesn’t have the technology and manpower to do extensive repair work and to test for emissions. Further investigation by the OEM dealer discovered that someone had removed the DPF, bypassing the emission on the truck.
“This is something you can’t physically see, you have to get into the vehicle and also have the computer equipment to test it,” explained Benji. The cost to repair the truck was $13,000, which Benji was able to negotiate down and after repairs sell the truck, which was now emission-compliant. Fortunately, for Benji he hadn’t sold the truck prior to discovering the issue. If he had sold it, there would have been a potential errors and omissions situation if the buyer down the road encountered an issue. “If the engine light had stayed off during the time it took to sell the vehicle, and later appeared once it was sold, we would have had a claim and been responsible for the damages. It’s something we are very aware of and one of the reasons we carry Dealers Errors & Omissions (E&O) insurance.”
Dealers E&O insurance is designed to cover your business when sued for professional errors—real or perceived. It protects you in
the event you’re sued by a client accusing you of mistakes, errors, careless conduct, or faulty products. It will cover your expenses that arise from a lawsuit. These include:
■ Attorney fees. This could add up to a lot of money and be quite costly.
■ Court costs. Includes filing documents with the court or using a court reporter at a deposition.
■ Administrative costs. Includes the costs to ship, process, and make changes to documents as they are shared between the parties involved.
■ Settlements. If you settle out of court, as is done in many cases, you still have to pay the plaintiff.
■ Judgment amounts. If the case goes to trial and you lose, the court will issue a judgment, or you’ll risk a judgment lien being placed on the assets of your business.
E&O insurance is usually provided on a “claims-made” basis, meaning the claim must be made during the policy period. For coverage to apply, the act, error or omission must occur during the policy period, or, if the policy provides “retroactive coverage,” prior to the policy period.
Having an insurance advisor who specializes in insuring used truck dealers is critical, as E&O insurance policies are customized for the type of industry or professional they are protecting. Understanding what types of exposures you face enables the right policy to be placed along with the proper limits and deductible.
BOLT Insurance each month provides UTA members with insights into the various exposures and risks they face. If you have a story you’d like to share with BOLT Insurance, please contact Brian Lawlor at 860-777-2671. n
As emission regulations continue to expand, it becomes increasingly more important that used truck dealers do what they can to ensure that the vehicles they sell meet the required standards. It’s also prudent in the event a dealer unknowingly sells a truck that does not meet emission regulations, that there is coverage for any errors or omissions.
UTA Industry Watch
10 www.UTA.orgFebruary 2015
Tight Capacity Slowing Freight: TCPSeparately, TCP tackled the issue of a capacity crunch, asking whether the size of the crunch was being overstated. If stories of a capacity crunch are true, is freight being left on shippers’ docks?
TCP’s research found that nearly three-quarters of carriers said they thought they were sitting on shipper stock. TCP noted this lack of capacity came at a time the industry is facing growing volumes, and a lack or shortage of qualified drivers. Also TCP said rising costs and lowered driver and truck efficiency due to HOS regulations are also contributing to the problem.
TCP’s recent survey also found that in every category, carriers expect to renegotiate accessorials. “More than any other accessorial, 68 percent of carriers expect to renegotiate detention times. This is almost double the number from a year ago,” the company noted.
Trailer Market “blazing Hot”: FTr The year 2014 was a banner one for the trailer market, and as FTR recently reported, the last quarter capped off the year spectacularly. December’s Class 8 net orders topped 40,000 once again, with preliminary data showing sales came in at 45,500. December was the third straight month sales topped 40,000. For the year as a whole, FTR estimates trailer sales at over 360,000 units. That’s good enough to make 2014 “by far the best order year ever,” according to FTR.
“The trailer market is blazing hot as fleets continue to lock-up future build slots in anticipation of a strong freight environment this year,” said Don Ake, FTR’s Vice President of Commercial Vehicles. “Fleets are placing orders for vans and flatbeds out through the end of the year. Manufacturing capacity is still tight, however several OEMs have plans to increase build rates during the year.” n
Classes 5-8 Demand Ends Year on a High: ACTACT Research’s numbers, while preliminary at the time of this writing, were also very positive. The market research company reported demand for commer-cial vehicles was “healthy” in December, with 65,700 total NA Classes 5-8 orders booked. This represents a jump of 41 percent from December of 2014. ACT said Class 5 to 8 total orders for 2013 totaled 602,300 units—an average of more than 50,000 orders per month.
At 43,900, Class 8 net orders were good enough to make the month the fourth best on record, “bringing the full year order total to just over 380,000 units,” said Kenny Vieth, ACT’s President and Senior Analyst. As has been the case throughout 2014, strength in order activity is “symptomatic of converging trends that are favorable to demand, including stronger economic activity, lingering pent-up demand, sizeable fuel economy gains, and rising carrier profitability.” Vieth added.
December’s Class 5-7 orders were strong enough to make the month the second strongest order month cycle to date. “December’s medium duty orders rose 44 percent compared to last December. In 2014, Classes 5-7 net orders totaled 222,200 units, up 12 percent compared to 2013,” Vieth said. n
Industry News BriefsDiesel Drops and Freight Increases boost November’s TCI FTR’s Trucking Conditions Index for November rose due to drops in diesel fuel costs, as well as freight increases for the holiday season.
The reading came in at 8.98. (The TCI summarizes industry metrics from a number of sources; readings above zero mean the environment is “positive” for truckers.)
As long as fuel prices continue to drop the TCI will benefit FTR said. Strong freight volumes from a good holiday shopping season also helped. FTR expects the index to remain in a ‘normal’ range for a tight trucking market throughout 2015, with readings in the 8-9 point range.
“Trucking capacity will increase somewhat in 2015 as truck utilization falls under the influence of the 34-hour restart provision suspension,” the company noted. The January issue of FTR’s Trucking Update, provides details.
“With a new year comes new issues to deal with, but the old ones haven’t gone away,” said Jonathan Starks, FTR’s Director of Transportation Analysis. “Or have they? Diesel fuel prices have dropped nearly 20 percent over the last year, and nearly all of that drop has occurred over the last six months. After a year that started with severe weather, which kept truck capacity limited until summer, December brought welcome relief as the congressional budget bill removed one of the restrictions keeping driver productivity down. Finally, an economic recovery that couldn’t seem to gain any traction rebounded in the second quarter and then accelerated in the third quarter, hitting 5 percent in Q3—a level not achieved since 2003, and the strongest two quarters of growth this recovery.
“The drop in diesel prices is a dramatic change in the operating environment for carriers after a four-year span in which fuel prices were nearly stagnant. This drop is the single biggest contributor to November’s improvement in the TCI and is expected to continue to push the TCI higher when the December results are in. Conversely, carriers will take a hit to margins when fuel costs inevitably rise. It remains to be seen if the drop in fuel costs will benefit rate negotia-tions in early 2015.” n
“Recent changes in Hours of Service have made detention times a hot button on driver efficiency and equipment efficiency. Unfortunately, it looks like larger carriers are expecting to re-negotiate more than their smaller competitors,” said TCP’s Lana Batts.
Carrier are using fewer broker freight services, which is another trend. TCP found 76 percent of carriers said they intended to use less broker freight. “This is a logical fallout from tighter capacity and rising rates, and a consistent trend since the end of the great recession,” TCP’s Richard Mikes said. n
UTA Industry Watch
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NTSb’s Most Wanted List Highlights Trucking Concerns
Each year, the National Transportation Safety Board issues a list of its advocacy priorities, or what it calls its most wanted list.
Distracted DrivingSeveral of the items on this list pertain to trucking. Heading the list is distracted driving, a problem that, of course, is of great concern to the transportation industry as a whole. “Distraction can take many forms,” NTSB noted in its recent report. “In 2013, the AAA Foundation for Traffic Safety reported that more than two out of three drivers indicated that they talked on a cell phone while driving within the past 30 days. More than one of three drivers admitted to reading a text message or e-mail while driving, and more than one of four drivers admitted to typing or sending a text or e-mail. In addition, the AAA Foundation reports that hands-free is not risk-free. A driver’s level of cognitive distraction is about equal whether using a hands-free or hand-held cell phone. Even voice-based systems may not eliminate distraction, and may have unintended effects on traffic safety.”
PEDs (Portable Electronic Devices), which are a leading cause of driver distraction, are not going anywhere. “We anticipate that distraction will continue to be a problem until regulators, industry, and the public embrace the concept of distraction-free transporta-tion,” NTSB advised.
Substance ImpairmentAnother trucking-related issue NTSB highlighted was “substance impairment.” NTSB noted that a 2013 AAA Foundation for Traffic Safety survey found 13 percent of drivers said they thought that they had driven close to or over the legal blood alcohol concentration (BAC) limit in the previous year. The Centers for Disease Control and Prevention has said drivers make about 112 million alcohol impaired trips each year.
And according to the National Highway Traffic Safety Administration, the proportion of fatally injured drivers with drugs in their system jumped from 13 percent to 18 percent between 2005 and 2009. In 2012, 10.3 million people reported driving under the influence of illicit drugs in the past year.
Since 2000, almost 160,000 people have died in motor vehicle crashes involving impaired drivers. And the problem of impairment is not limited to highways, NTSB noted in a release regarding its report. (Note: figures for truck drivers were not separated out.)
Commercial Trucking SafetySeparately, NTSB called for strengthening safety in the trucking industry. “We rely on commercial trucks to deliver food and goods to our local grocery stores, medical supplies to our pharmacies and hospitals, and packages to our loved ones. But because of their sheer size, weight and physical properties, commercial trucks introduce a disproportionate hazard to passenger vehicle occupants in a crash.
The safety of the commercial trucking industry gained national media attention on June 7, 2014 when comedian Tracy Morgan was critically injured and another passenger died in a crash involving a commercial truck. The limousine bus in which they were traveling was struck by a truck-tractor and semitrailer combination vehicle.
While it was the uncommon involvement of a celebrity that focused attention on this crash, commercial truck crashes are anything but rare. The NTSB is presently investigating a crash in which a tractor-trailer crossed a median and collided with a motor coach in Orland, California, on April 10, 2014 that took 10 lives and injured 40 others. Also in 2014, the NTSB completed the investigation of the collapse of a span of the Skagit River Bridge in Mount Vernon, Washington, due to a high-load strike by a commercial truck. In addition, NTSB completed its investigation into a truck-train collision in Rosedale, Maryland, resulting in the derailment of a freight train, a post-crash fire, and a subsequent explosion.
Improving the safety of truck operations will not only save lives, but improve the public’s confidence in this vital, and visible, industry.” n
UTA Industry Watch
12 www.UTA.orgFebruary 2015
UTA’s Board Tours Peterbilt Plant
Part of the UTA’s mission is to promote education in our industry. We’ve done this not only through our training programs for retail salespeople and used truck managers, but
also through events for the UTA board. For example, some OEMs offered to open up their factories, whether they were engine plants or chassis assembly plants, for an hour or two of product training.
On Thursday, January 22nd, the day before the UTA Board’s annual business meeting, the Peterbilt Motor Company invited the Board to dinner, followed by a plant tour in Denton, Texas on Friday. The plant tour was extraordi-nary and quite educational for us all. Whether you have previously gone on a plant tour, or if it was your first time, it was remarkable and a great learning experience for everyone.
I would like to thank Anthony Gansle from Peterbilt for his efforts in arranging this expedition. It was a large under-taking. I’m looking forward to Anthony applying his organiza-tional skills again as a member of our Convention Committee for 2015.
Peterbilt Motor Company’s tagline is “Class Pays” and that philosophy came through loud and clear for the UTA Board of Directors. Peterbilt put on a first-class educational show for all of us from Thursday night right through Friday. Several people from Peterbilt made this all happen. A special thanks to Robert Woodall – Assistant General Manager, Director of Sales and Marketing for his support.
On behalf of the Used Truck Association, I would personally like to thank all of the people from Peterbilt for extending their time, effort, hospitality, and sponsorship, and becoming part of the Used Truck Association’s used truck family. We are all honored that you’ve chosen to become so involved with the Used Truck Association.
Thank you,
Rick Clark
UTA Industry Watch
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UTA Industry Watch
14 www.UTA.orgFebruary 2015
From Where We Sit
Deb and Brad Schepp [email protected]
One of the very best things about being writers is that we have the privilege to keep learning, and that’s a gift. Every day we find ourselves immersed in interesting thoughts that other writers share. We follow trends so that we can keep up to date with new things that happen, and we get to talk to all types of interesting people who know all types of things we can learn about. We’ve never worked on any project that hasn’t left some trace of itself behind with us. Our heads are filled with many tidbits of absolutely no importance.
Those would be the things that didn’t age well once the book or article was published, the opinions of individuals we later came to distrust, and the truths further research proved untrue. Still those tidbits are in here, if only to remind us that not all information is knowledge or leads to wisdom. Still, every now and again, we come across a piece of work that speaks so directly to one of us or the other that we find ourselves forever altered for having learned about it. That’s how we felt when earlier this month Brad discovered Driven to Distraction at Work: How to Focus and Be More Productive by Edward M. Hallowell, MD.
Brad has been so overcome by the work Dr. Hallowell has done that he has drastically changed his information gathering tactics. Oh, he’s still the most amazing researcher I’ve ever known, but that smart phone doesn’t seem to be permanently attached to his palm anymore! It’s rubbing off on both of us, and it’s actually quite satisfying to know that we don’t need to be connected to everything in the world at every moment of every day. It’s okay if the smart phone spends the night sitting on the dresser across the bedroom and not on the bedside stand. If the world really needed us in the middle of the night, we’d find out, but there’s really no need to check in on it when a brief waking period interrupts the night in the wee hours. If you have to get up from a nice warm bed to trudge across the cold floor and grab the blasted device (I mean, of course, that vital piece of electronic equipment) it only seems reasonable that you’d choose to roll over and go back to sleep instead.
Now in the form of full disclosure, Brad and I have been writing about living online since before we called it the “Internet.” We love all the information, connection, and experiences we can find online. We’ve reclaimed old friendships, solved mechanical problems in the house, and found good medical advice by using the resources on the Internet. We’ve stayed in touch with people we’d probably have fallen away from decades ago since it’s so easy to send an email, post on Facebook, or share a snapshot on Instagram. This isn’t about bashing the tools that have come our way in the 21st century. But, it is about finding the balance between using those tools and reframing our lives into something that runs at warp speed all the time and every day. Just like all other tools: Use it well and the Internet is priceless; use it poorly and you’ve lost a lot more than you’ve gained. We wouldn’t use an axe to try to drive a nail, and a hammer won’t split the firewood. Each in its own time and own place has value, but humans have long ago determined what those right times and right places are.
This became increasingly apparent to us while we watched the terrible terrorist attack in Paris in January. The whole world watched as the French police and military personnel tracked down the perpetrators and brought them to justice. Did anyone doubt they would be found? It didn’t seem likely they’d be able to escape when all of Paris, all of France, and all the world was filled with people dedicated to catching them. On the day the chase was unfolding, I had four hours during
which I had no choice but to work. That work was happening in front of a computer screen. That computer is connected to the Internet. Sure, I did my best to concentrate, but I’m not going to lie. I found it impossible not to check the news for updates.
I was actually proud of myself that I only checked the news four times; four times in four hours! Not much to brag about when you stop to think about it. On that last check-in, I realized that what I was actually expecting was that this whole complex scenario would have been resolved in the 60
minutes since I last checked for news. Sixty minutes seems hardly enough time for one of the greatest police actions in history. Sixty minutes is enough time to catch the bad guy, have the trial, and go out for cocktails only if you’re watching TV. What did this say about my own productivity that day? Too embarrassing. What does it say about my expectations for life unfolding? Very unrealistic. So, it’s not surprising that I did not produce my best work that day. Maybe that was a day when many people in the developed world were as productive as possible. This I could understand. But, where oh where did the expectation come from that life should resolve itself that quickly simply because I expected it to? I know better than that.
If people like your editors— who have lived in both the world before the Internet and the world since—can have this much trouble controlling the impulse to always have everything answered the instant we question, what will the future be like for those who are growing up now? You know; the ones who have been tethered to smart technology in a world where they cannot remember not having instant access to everything? I don’t have the answers, but I do find gratification in knowing that Dr. Hallowell is pondering the question. It’s reassuring to know that others with educations that we don’t have are taking on the task to help us all navigate these tools in better ways, making them more useful
and less intrusive. We can all do with a little down time when we’re not connected to everything else. Sure, we might miss a news flash or two, but we’ll catch up. In the meantime, resetting our expecta-tions to the true ways of life may just improve the way we look at our hours, our days, and our lives. Maybe we’ll all readjust our unrealistic expectations. At least that’s what we’re thinking right now from where we sit.
