1.877.gets.uta • www.uta.org Volume 15 • Issue 11 • November 2013

Used Truck Association Chartered May 16, 1988 Published by the Used Truck Association Ronnie 325 Country Club Drive, Suite A Stockbridge, GA 30281 Jordan Table of Contents 2013 hen Ronnie Jordan was a boy his grandfather gave him some sage advice. “Go out and Board News and Views...... 2 Wdo it on your own,” he told Ronnie. In his colorful way, Grandpa pointed to his dog. Quips & Quotes...... 2 He told young Ronnie, “You see that dog?” he said. “That’s the smartest dog I’ve ever seen, and I didn’t teach him a thing.” The boy took this lesson to heart and set out to make his own way in Face to Face the world. In 1987 he started his truck business, Jordan Truck Sales, Inc., in Carrollton, GA. His with Doug Carmichael...... 4 first location was his own home, and he started out with just two trucks. Today he employs more New Members...... 6-7 than 50 people, including several members of his own family. Of course, according to Ronnie, Industry Events Calendar...... 8 every one of his employees is part of the family. “Our success is definitely due to our employees,” Ronnie says. NADA Update: Retail Volume Drops; Getting Ronnie to talk about himself and what he has achieved throughout his long career is a Record Prices Continue...... 10-13 little like trying to convince a bird to walk. You can try, but you’re going to have a struggle on your hands! When asked about his earning the Truck Blue Book “Independent Used Truck The Brooks Group Dealer of the Year” award in 2005, he turned back toward his team. “I have some of the best Sales Tip of the Month...... 13 employees in the country,” he said. “Some have been here 25 years. They are very loyal.” He Medium Duty Corner...... 13 credits his success in life to his faith, his family, and his employees. Still, loyal and devoted Industry News Briefs...... 14-16 employees don’t just happen. That is definitely a two-way relationship, and Ronnie has a way of making the people in his life feel important. From Where We Sit...... 18 “Surrounding myself with people who are smarter than me,” was his reply, delivered with a The UTA… chuckle when asked to elaborate on his successful career. Beyond his formal training at West Members Supporting Members! Georgia Technical College, Ronnie said his greatest training came from “hard work.” Now that’s something Ronnie has never been afraid of. Of course no one works harder than the person who owns his own company, so all of Ronnie’s early dedication to work has served him well. “You need to have a good business plan and stick with it,” he said. “A good solid business plan is essential no matter who you are, whether you are cutting holes out of doughnuts, building airplanes, or selling trucks.” He started his business with three distinct vows, only two of which he has kept. His first was to never wear a suit to work. “I’ve kept that one,” he said. He also vowed to never have a computer. “I lied about that one,” he explained. The last was probably the most important of them all. He vowed to never have a time clock in his operation. He’s lived up to this last one with SHARE YOUR news devotion. “Everyone is on salary here,” he explained. “The janitor is on salary.” with the UTA Industry Watch. Of course, when a person loves his work as much as Send submissions, ideas and Ronnie does, it’s easy to look at that good life and see as comments to: much fun as it is work. Surrounded by his wife of more UTA Industry Watch Editors than 41 years, Debra, and their sons who also work in the business, every day at work is a great mix of Brad and Deb Schepp and Jay Burgess challenge and family. That sounds just about right for c/o Grace Management Ronnie. He remembers his mom telling him that as a 325 Country Club Drive, Suite A child all he wanted to do was play with trucks! “And at Stockbridge, GA 30281 59 years old, I’m still playing with trucks,” he said. Phone: 877-GETS-UTA (877-438-7882) Working hard in an industry he loves surrounded by the Fax: 770-454-0029 family he treasures and the employees he is devoted to, [email protected] sounds like a lifetime of achievement by any standard. n

UTA Industry Watch 2013 Board Board News and Views of Directors “The Times, They Are A Changing” http://www.uta.org/directory hange. Love it, hate it, embrace it, resist it, it’s coming whether you like it or not. Our IT Cdepartment recently told me I had to replace my Blackberry with a new iPhone, because governing board: the Blackberry is no longer supported. Now this would be good news to most people but I dreaded the change. I knew my Blackberry inside and out, did not want to give up the mini keyboard, President...... Rick Clark and was hesitant to learn a new device. Now that I’ve had the iPhone for a few weeks I have to Vice President...... Ken Kosic admit I really like it, although I do miss the Blackberry keyboard. The change to the phone was fairly painless, and the time I spent worrying about learning the new device was unwarranted. Treasurer...... Tom Pfeiler This was a simple thing, but it is instructive in that we often worry needlessly about something new. Usually, if we approach change with an open mind, it is not that bad. Secretary...... Sheri Aaberg Some of us older UTA members remember a more innocent time when there was only AM and President Emeritus FM radio, three major networks, perhaps a PBS channel, and maybe a couple of local channels ...... Marty Crawford on television. The only way to communicate was by rotary-dial landline phones. Now there are thousands of channels on cable and satellite radio and TV, there’s a huge amount of entertainment available on the internet, and there are more ways to communicate than we can count. There are hundreds of different devices including flat screen TVs, smartphones, tablets, and even new Google Comt m it ee Chairpersons: glasses that access the internet, and connect us to each other and to the world. It seems like these devices are obsolete every six months, and it’s almost impossible to keep up with all the technological Affiliates &B enefits.... Bryan Boyd changes we face. And what a game changer the internet has been. While it is difficult to imagine how we survived without the internet just a couple of decades ago, we’ve probably barely scratched Convention...... Sheri Aaberg the surface in how we can use the internet to improve our work processes. & Rick Clark There has been no lack of change in the Used Truck Industry. Consider these changes just in the UTA Jerome Nerman Family last 20 years: Foundation Scholarship ■■ Automatic and auto shift transmissions ...... Tim Ronan, Jay Burgess ■■ Computer systems monitoring almost every function in a truck & Brock Frederick ■■ New emission systems (think DPF and SCR) to comply with government regulations And these are just some of the new developments in truck technology over this period. On top Elections...... George Barnett of this we operate in a marketplace that is highly competitive. This is due to a lack of late-model used trucks caused by low manufacturing from 2009 through 2011, and fleets holding onto their Marketing...... Rick Clark trucks longer. And, of course, the internet is a big part of our lives in the trucking industry. Ten years ago who would have thought we’d be using tools like Twitter, Facebook, LinkedIn, UTA. Medium Duty...... Amy Shahan org forums, or social media in general, to help sell trucks? For that matter, who even knew what social media was ten years ago? Now these tools are indispensable to many in the industry. Membership...... John Cosgrove, Kenny Doonan & Bryan Boyd Yes, the times they are a changing, but your UTA is here to help you navigate these changes. Training videos on the latest truck technologies are available on the UTA website. We’ve had Training...... Ken Kosic workshops at the annual conventions on social media and other emerging topics, and will & Brock Frederick continue to hold these at future conventions. UTA’s Industry Watch newsletter is always full of information to help you remain on top of the latest trends and technologies. An article about the Dealer Group...... Mike Thurston MaxxForce 13 powered Navistar tractors in a recent newsletter, for example, provided critical & Bobby Williams information about an issue that affects nearly all in our industry. So try to be open to and embrace change because, as much as we may want to, we can’t stop it. UTA.org Website...... Bobby Williams Also, keep in mind that most of your colleagues are having as much trouble as you are in keeping up with all this technology. Finally, please let a UTA Board member know if there is an issue you would like to see addressed. We’ll do our best to gather accurate and timely informa- tion so that UTA members stay a step ahead of the competition.

Selling is our No. 1 job. Never get George Barnett Election Committee away from selling a lot of [email protected] merchandise personally. The more you sell the more you learn. ~James Cash Penney

2 November 2013 www.UTA.org A Better way to sell your used vehicles.

We’ll inspect it, list it, and sell it for a fair price in 30 days. With thousands of global buyers at each weekly online auction, you will get a quick sale and a good price at TruckPlanet.com. Fast. Easy. Better.

Tell us about the vehicle you have to sell and we’ll provide a free estimate of what your vehicle will bring at auction. Contact Paul Blalock at 863-838-7844. UTA Industry Watch

Doug Carmichael

ou have to show up, suit up, and Over the years, Doug looks back on his “Ygive 100 percent every day,” was career in terms of the wonderful people he’s the answer Doug Carmichael gave for two come to know. “The things I have learned separate but related questions. That is his from the guys who have gone before me and strongest advice to younger people just the friendships I have formed over the years starting their careers, and it’s also the key to are the things that life is all about,” he said. his own successful career. Following his own He noted that the used truck industry is full advice has served Doug Carmichael, of “great people.” Doug credits Ken Kosic, Jr. Managing Partner of Transport Enterprise with offering him one of his own favorite Leasing, LLC in Chattanooga, TN, very well resources, the book Who Moved My Cheese? over the years. Doug started in the trucking by Spencer Johnson. He said that reading industry as an owner/operator in 1981. After this book really helped him learn to think four years behind the wheel, he opened his more creatively about his job and business. own trucking company, which he then ran “We are in an ever-changing world and for nearly a decade. When he decided it was industry,” he said. “What worked in 1985 time to look for another spot in the trans- does not do as well today. What will work in portation industry, he began selling trucks 2020, we do not know yet.” Doug went on to in the summer of 1994. He ran his own advise younger people just starting out to business for about four more years, and then remember this. “All I can assure you of is joined Southland in Memphis, that change is coming,” he said. “If you TN as the used truck manager. In 2000, he cannot adapt to it, you will be left behind.” and his family moved to Atlanta, GA where That’s exactly where his, “show up, suit up, Doug opened a used truck store for Truck and give 100 percent every day” adage comes Country of Dubuque, IA. Three years later, into play. With that type of determination Covenant Transport approached Doug to and drive, success is likely in this industry. sell their used trucks, and 10 years later, “Do not worry about the monetary rewards,” Doug still enjoys a great working relation- he said. “If you do what you are supposed to ship with that company. and treat everyone like you want to be treated, Transport Enterprise Leasing, LLC includes you will be successful in this industry.” That five different divisions. The company sounds like great advice in any industry, and handles the following types of business: advice that has resulted in a happy and 1) Leases used equipment to small fleets successful journey for Doug and his family. 2) Operates a lease-purchase program for He and his wife of 23 years, Tammy, enjoy Covenant Transport Group their four grown children. Outside of work 3) Offers lease-purchase programs for other and his family, Doug’s greatest passion is carriers hunting. “I am only about a month away 4) Operates a retail trailer rental fleet from returning for the second time to hunt in Africa,” he told us. In the fall he enjoys spending 5) Buys and sells used equipment for several carriers. as much time as possible hunting deer. n “The bulk of the work is done by a group of great associates who work tirelessly every day,” explained Doug. “I just make sure the train stays on the track.”

4 November 2013 www.UTA.org

UTA Industry Watch It’s always a treat to welcome new members to the Used Truck Association. Each month we profile our new members in this newsletter. New members have the opportunity to complete a bio and send a photo so our current members can learn more about you. We hope to learn not just how to reach you, but what you enjoy about the work you do, why you joined the UTA, New and what gets your gears going as a person. So please return your questionnaire so your fellow UTA members can get to know you! Members If you’d like a copy of the new member brochure handed out at the convention, please contact David Grace at [email protected] or 770-389-6528 ext. 404.

Steven Anderson, President Andrew Jeanor, Sales Manager Brian Lawlor, SR VP Strategic Mid America Truck Equip. Andy Mohr Truck Center, Inc. Accounts and Programs P.O. Box 217 1301 S. Holt Rd. BOLT Insurance.com Belleville, KS 66935 Indianapolis, IN 46241 10 Waterside Drive, Suite 202 (785) 527-2293 (w) www.andymohrtruckcenter.com Farmington, CT 06032 (785) 527-2293 (c) (317) 244-6811 (w) www.boltinsurance.com [email protected] (317) 270-2928 (c) (860) 777-2671 (w) [email protected] [email protected] The year 2000 brought jubilation as fears of It was an Holly Clark, Administrator of a worldwide computer meltdown (or worse) unseasonably Accounts Receivable never came to pass, but Andy Jeanor had his warm early Fall Gateway Management Services DBA/ own reason for celebrating. That was the year morning when Premium 2000+ Warranties he entered the truck business as a Lease we spoke with 190 Charlois Blvd., Suite 200B Purchase Manager for a trucking company. Brian Lawlor, Winston Salem, NC 27052 Change is always challenging and that’s one who’s an www.premium2000.com reason why Andy joined the UTA. He’s insurance (336) 354-1258 (w) hoping members will share suggestions for professional, (336) 813-3340 (c) keeping up in ever-changing markets. but as you’ll [email protected] see much more Andy says “the people” is the part of his job than that. Holly just started in that he likes best. But should he ever leave our business in 2011, Brian started trucking, you might find Andy working in Brian and his wife Mary at and has remained working in the sports, as he likes “the team idea and their son Brian Jr.’s wedding. with the same reaching one common goal.” commercial company since then. insurance business in 1980, and has served She’s hoping to gain the needs of repair shops, salvage shops, “a broader knowledge truckers, and dealers over the years. He’s of the trucking Josh Krueckeberg, Owner now focusing more on working with the industry, and Global Virtual Auctions used trucking industry, at the suggestion of networking 55W. 500N the UTA’s own Eddie Walker. So Brian’s opportunities,” Decatur, IN 46733 striving to learn everything he can about through her UTA membership. The people, (855) 724-7100 (w) the unique needs of used truck dealers, she says, are the best part of her job, and [email protected] particularly in the areas of property and the fact that “every day is something new; casualty insurance. there is never a dull moment. “ While Brian’s certainly knowledgeable and When we asked Holly what she’d like to do Kory Larson, Senior Vice President enthusiastic about what he does for a if she wasn’t in the truck business, her The Larson Group living, he’s just as passionate about his answer inspired wanderlust. “If I was not in 3026 N. Mulroy Road other interests­—especially ballroom the trucking business I would love to be a Strafford, MO 65757 dancing. He and his wife Mary started professional traveler. I would love to travel www.tlgtrucks.com taking lessons when their oldest daughter the world to experience and see new (417) 829-6789 (w) got married. “It’s one of the few things we things,” she said. (417) 861-1298 (c) ever learned to do together,” Brian said. [email protected] “She’s better than I am, but when we dance Holly’s interests outside of work include is the only time I get to lead.” cooking, football (she’s a Cleveland Browns fan), and, not surprisingly, travel. So far Brian had some advice for husbands looking she’s traveled throughout the U.S., Canada, to give their wives a special treat. “Surprise Mexico, and Europe. your wife on Valentine’s Day or another special occasion with lessons at Arthur Murray or a similar place. I recommend private lessons to start.”

6 November 2013 www.UTA.org UTA Industry Watch Thanks to These Generous Sponsors Gary Mott, Vice President the UTA Held The Best Convention in the Industry Fleet Lease Disposal, Inc. …AGAIN 1515 N. Congress Ave. • Arrow Truck Sales, Inc. Delray Beach, FL 33445 • CAG Truck Capital/FairvilleTrucks.com www.fleetlease.com • Coldiron Companies, Inc. (561) 266-8709 (w) • Commercial Truck Trader [email protected] • TruckPlanet/Asset Appraisal Services • Daimler Trucks Remarketing • International Used Truck Centers Robert Mulholland, New & Used Sales Manager • Mack Premium Certified & Volvo Premium Certified Rush Truck Centers • Manheim 5175 West Beaver Street • National Truck Protection • Team Drive-Away, Inc. Jacksonville, FL 32254 • The Truck Blue Book www.rushtruckcenters.com • TruckGuard (904) 265-2315 (w) • TruckMovers.com, Inc. (909) 810-8888 (c) • Vehicle Inspection Systems [email protected] • ACT Research Co., LLC Robert started in the truck business in 2002, in Medium Duty sales. • ATD/NADA Official Commercial Truck Guide • Bennett DriveAway He’s joined the UTA to boost his knowledge of the industry, and • Black Book form new business relationships. The “people,” he says, are the best • , Inc. part of his job. • DEKRA Automotive and Commercial Vehicle Services Robert was a Certified Financial Planner for 10 years before getting • EPG Insurance, Inc. into the used truck business. When he’s not at work he enjoys golf, • FSX Equipment, Inc. and spending time with his family. • Get Recovery, Inc. • Indiana Truck Auction • J & J DriveAway • Michelin North America Danny Noteis, Account Manager • NextTruck R & M Sales & Equipment • Premium 2000+ Warranty 514 S. Kansas Ave. • RoadRunner DriveAway, LLC Olathe, KS 66061 • Triple G Drive-Away (913) 449-8143 (w) • TruckCenter.com (913) 449-8143 (c) • /Fleet Owner [email protected] • Balboa Capital Corporation • Commercial Vehicle Resource Center • Commercial Vehicle Roadside Assistance • DSI Solutions Steve Schwartz, Used Equipment Sales Mgr­–Eastern Region • Eaton Corporation/Roadranger Marketing Financial Corp. • ENGS Commercial Finance Company 5 Stanwyck Road • First Generation Mount Laurel, NJ 08054 • HTAEW.com (856) 313-1665 • Idealease of North America, Inc. [email protected] • Insurance Auto Auctions • National Inspection Services • Pyle Equipment Auctions Kelly Tenedini, Sales • R. L. Polk & Company Rush Enterprises, Inc. • RigDig • Rock & Dirt 2120 Atlanta Rd., SE • Russ Darrow Leasing Company Smyrna, GA 30080 • SOARR www.rushenterprises.com • The Truckers Choice (678) 718-3007 (w) • Transport Topics Publishing Group (404) 932-5174 (c) • Truck & Trailer Access [email protected] • Truck Paper • Vocon Auctions • American Truck Protection Nathan Whitaker, New Truck Regional Manager • Ameritruck MCH Kenworth-Durham • Best Used Trucks 3600 Interworth Drive • Bruckner Truck Sales • Hess Auctioneers Durham, NC 27704 • Hino Motor Sales, U.S.A. Inc. www.mhctruck.com • Mitsubishi Fuso Truck of America (919) 682-5481 (w) • My Little Salesman (336) 212-9553 (c) • Rush Enterprises, Inc. [email protected] • Vanguard Trucks www.UTA.org November 2013 7 UTA Industry Watch Industry Events Calendar

DECemBER APRIL 4-6 • 2013 ATA Executive Summit Irving, TX 10-12 • Truck World 2014 Four Seasons Resort & Club Dallas at Las Colinas Toronto, Canada www.trucking.org/Events.aspx International Centre www.truckworld.ca Happy New Year! 2014 JUNE 28 • East Coast Large Cars JANUARY Truck Show 2014 Augusta, NJ 31-February 1 • Mid-West Truck Show & 37 Plains Road Convention 2014 www.eclcannualtruckshow.com/ Peoria, IL Peoria Civic Center, Halls A-D www.midwesttruckers.com JULY

MARCH 10-12 • Walcott Trucker’s 5-7 • The Work Truck Show 2014 Jamboree Indianapolis, IN Walcott , IA Indiana Convention Center Truckstop www.ntea.com/worktruckshow/index www.iowa80truckstop.com/ trucker-jamboree

27-29 • Mid-America Trucking Show 2014 Louisville, KY Kentucky Fair & Exposition Center www.truckingshow.com

Coming in January… 2013 Convention Recap!

8 November 2013 www.UTA.org

UTA Industry Watch Retail Volume Drops; Record Prices Continue Chris Visser, Senior Analyst and Product Manager, Commercial Trucks

Summary Average Retail Price and Mileage -­‐ All Sleeper Tractors Under 1M Miles $60,000 580000 Retail sleeper tractor pricing was just off the record high despite an Price unexpected drop in volume. Wholesale sleeper tractor pricing increased, Mileage 560000 $55,000 as did volume through that channel. In general, a decline in the number 540000 of newest, highest-priced trucks sold defined the September marketplace. $50,000 520000

500000 Sleeper Tractors – Retail $45,000 480000

The big story in this segment was the steep and unexpected drop in $40,000 460000

sales volume. September came in at 5.0 trucks retailed per rooftop, a 440000 decrease of 1.1 trucks (or 18 percent) month-over-month and 0.7 trucks $35,000 420000 (or 12.3 percent) year-over-year. A combination of trepidation over the Source: ATD/NADA $30,000 400000 government shutdown, two fewer selling days than last year, and Jul Jul Jul Jul Sep Sep Sep Sep Sep Nov Nov Nov Nov Mar Mar Mar Mar May May May May May

- most importantly - increasing reluctance to ante up for high-priced Jan-­‐10 Jan-­‐11 Jan-­‐12 Jan-­‐13 iron were the likely factors. See the “Average Number of Used Truck Sold per Rooftop” graph for detail. Average Retail Price by Model Year -­‐ All Sleeper Tractors Under 1M Miles Adjusted for Mileage $100,000 Average Number of Used Trucks Sold per Roo8op (NADA Repor;ng Dealers) 2006 8 $90,000 2007 7 $80,000 2008 $70,000 2009 6 $60,000 2010 5 $50,000 2011 4 $40,000 Retail 3 $30,000 Wholesale $20,000 2 $10,000 1 Source: NADA Source: ATD/NADA $0 0 Jan-­‐09 Mar May Jul Nov Jan-­‐10 Mar May Jul Nov Jan-­‐11 Mar May Jul Nov Jan-­‐12 Mar May Jul Nov Jan-­‐13 Mar May Jul Sep Sep Sep Sep Sep Jul Jul Jul Mar May Sep Nov Mar May Sep Nov Mar May Sep Jan-­‐11 Jan-­‐12 Jan-­‐13

Interestingly, 2009s and 2010s were most responsible for September’s Buyers who have been away from the market for three or more years volume decline. However, pricing did not drop off at all for these will likely be surprised at how much the average sleeper tractor has model years. This behavior suggests buyer hesitation has not reached a increased in price. The steep run-up in pricing that started with the mass critical enough to move the market. See the “Monthly Retail economic recovery in late 2009 has resulted in selling prices that are Sales Volume by Model Year” graph for detail. 27 percent higher in September of this year than in September of 2010. Unfortunately for buyers, this value increase has largely been limited Monthly Retail Sales Volume by Model Year: to the under-600,000 mile cohort, which means the trade-in the buyer Sleeper Tractors Under 1M Miles brings to the table will likely have depreciated proportionally more 500 than the newer truck he’s looking at. Regardless, if he wants the truck, 450 2 per. Mov. Avg.(2006) 400 2 per. Mov. Avg.(2007) he’ll have to ante up for it, since the low build rate of 2008-2011 model 2 per. Mov. Avg.(2008) 350 year trucks ensures a limited supply, and new trucks are more 2 per. Mov. Avg.(2009) expensive than any time in recent history. 300 2 per. Mov. Avg.(2010) 250 2 per. Mov. Avg.(2011) In terms of specific numbers, the average sleeper tractor retailed in 200 September for $53,626 - $464 (or 0.9 percent) lower month-over-month, 150 and $4886 (or 9.1 percent) higher year-over-year. This average tractor 100 had 537,968 miles–388 (or 0.07 percent) more than August, and 11,591 50 0 (or 2.1 percent) fewer than last September. This tractor was 78 months Source: ATD/NADA Jul Jul Jul Sep Sep Sep Sep Sep Sep Nov Nov Nov Nov Mar Mar Mar May May May May old–one month older than August, and two months older than last May Jan-­‐11 Jan-­‐12 September. See the “Average Retail Price and Mileage” graph for detail. Jan-­‐13 Average mileage has declined from its peak in mid-2012, and has Sleeper Tractors – Wholesale remained at the 530K level since the second quarter of this year. The decrease in mileage ran concurrently with a younger mix of trucks sold. In contrast to the retail channel, the wholesale channel saw a notable The 2009 and 2010 model years took over from the 2007 model year in increase in sales volume. NADA collected 3974 wholesale data points volume in April, resulting in both the decrease in mileage and the in September–745 (or 18.7 percent) more than August, and 1338 (or increase in average pricing. Through September, pricing for these newer 33.7 percent) more than September of 2012. No single segment is model years was stable to upwards, with 2010s showing particular responsible for the volume increase, although sleeper tractors of all strength. See the “Average Retail Price by Model Year” graph for detail. mileage ranges have increasingly been sold through wholesale

10 November 2013 www.UTA.org UTA Industry Watch Retail Volume Drops; Record Prices Continue Chris Visser, Senior Analyst and Product Manager, Commercial Trucks

Total Wholesale Sales Reported to NADA newer trucks have absorbed the bulk of their depreciation, and in the 6000 case of 2009s, have actually gained value since the first quarter. These 2010 Total: 42,320 2011 Total: 29,282 2012 Total: 34,275 positive wholesale trends are one reason why we maintain a strong 5000 long-term outlook for used truck pricing. 4000 Class 8 Construction Trucks 3000 With most private and some public construction up year-over-year 2000 through August, we would expect increased demand for construction

1000 vehicles. Through September, we have seen multi-month upward Sources: ATD/NADA and Auc2onNet movement in five-year-old and newer trucks. 0 Jan-­‐10 Mar May Sep Nov Jan-­‐11 Mar May Sep Nov Jan-­‐12 Mar May Sep Nov Jan-­‐13 Mar May Sep Jul Jul Jul Jul Jul The 2009 model year is the newest for which we have a statistically meaningful volume of data. As you can see from the “Average Retail + Wholesale Price of Construction Trucks” graph, 2009s appear to have channels. This minor shift is most likely due simply to the fact that moved upwards substantially over the past two months. In reality, an iron is increasingly easier to move at wholesale pricing. See the “Total outsized number of trucks with high-dollar equipment-particularly Wholesale Sales Reported to NADA” graph for detail. mixers-artificially inflated results to a moderate extent in that period. As such, the real upward movement is not quite as dramatic. Still, In terms of specific figures, the average sleeper tractor wholesaled in removing those trucks from the equation still shows undeniable September for $32,303 - $1415 (or 4.4 percent) more than August, and upward movement. $606 (or 1.8 percent) less than last September. Mileage was 654,805– 294 (or 0.04 percent) lower than August, and 22,053 (or 3.4 percent) Average Retail + Wholesale Price of Construc7on Trucks by Model Year higher than last September. Age was 80 months–one month newer Adjusted for Mileage than August, and five months newer than last September. See the $120,000 “Average Wholesale Price and Mileage” graph for detail. $100,000 Average Wholesale Price and Mileage: All Sleeper Tractors Under 1M Miles $80,000 $45,000 750000

$40,000 700000 $60,000 $35,000 650000 $40,000 $30,000 3 per. Mov. Avg.(2006) 3 per. Mov. Avg.(2007) $25,000 600000 $20,000 3 per. Mov. Avg.(2008) Sources: ATD/NADA and Auc2onNet $20,000 550000 3 per. Mov. Avg.(2009) $0 $15,000 500000 Jul Jul Feb Mar Apr May Jun Aug Sep Oct Nov Dec Feb Mar Apr May Jun Aug Sep $10,000 Jan-­‐12 Jan-­‐13 2 per. Mov. Avg.(Price) 450000 $5,000 Source: ATD/NADA 2 per. Mov. Avg.(Mileage) $0 400000 As for even newer trucks, the little data we do have for them shows Jul Jul Jul Jul strength. We would not be surprised to see some short-term moderation Sep Sep Sep Sep Sep Sep Sep Sep Nov Nov Nov Nov Nov Nov Mar Mar Mar Mar May May May May May May May May Jan-­‐10 Jan-­‐11 Jan-­‐12 Jan-­‐13 in pricing due to seasonality and the lingering effects of the government shutdown. Overall, though, a sustained market improvement for trucks Looking more closely at specific age and mileage groups, trucks with with remaining useful life is likely underway. less than 600,000 miles have generally been increasing in value since the second quarter of this year (see “Average Wholesale Selling Price Model vs. Model Competitive Comparison by Mileage Range” graph for detail). In terms of age, five-year-old and The 2010 model year has returned the most upward price movement in the retail channel recently, so we will revisit that cohort this month. Average Wholesale Selling Price by Mileage Range (Sleeper Tractors) As with last month, data volume constraints for this model year $50,000 required us to limit the number of models included, as well as limit $45,000 the time period to 2013 only. $40,000 2010s on average increased moderately over last month, coming in at $35,000 $65,291-$674 (or 1.0 percent) higher. Average mileage for 2010s was $30,000 463,423–22,382 (or 4.6 percent) lower than last month. The higher $25,000 average pricing is partially attributable to the lower average mileage, $20,000 although most individual trucks increased month-over-month on a $15,000 2 per. Mov. Avg.(500-­‐599K) mileage-adjusted basis. Most trucks of this model year will remain $10,000 2 per. Mov. Avg.(600-­‐699K) below the 600,000 mile point for another 12 months, making them a $5,000 2 per. Mov. Avg.(700-­‐799K) 2 per. Mov. Avg.(800-­‐899K) Source: ATD/NADA and Auc1onNet solid investment now. $0 Jul Jul 2 3 Jun Jun Oct Apr Apr Feb Feb Feb Sep Sep Sep Dec Dec Aug Aug Nov Nov Mar Mar May May May Jan-­‐1 Jan-­‐1 NADA continued on page 12 www.UTA.org November 2013 11 UTA Industry Watch NADA continued from page 11

The 386 maintains its position at the top of this group, followed closely by the Volvo VNL64T 730/780, and then the Freightliner Cascadia and Kenworth T660, which have performed very similarly in recent months. The Peterbilt 387 performed under the average for the second straight month, while the Volvo VNL64T 630/670 recovered slightly. But the big story is the International ProStar. ISX-equipped ProStars are clearly appreciating, well on their way back toward competitive positioning. MaxxForce-equipped trucks are still a challenge, but even those units have likely turned the corner away from depreciation. See the “Retail Selling Price of 2010 Models” graphs for detail.

Sources: ATD/NADA and AuctionNet

Source: ATD/NADA

Retail Selling Price of 2010 Models Adjusted for Mileage

Cabovers continue to depreciate on a mileage-adjusted basis, coming in at $10,918 in September on mileage of 125,428. This pricing was $896 (or 8.2 percent) higher month-over-month, and a whopping $7171 (or 39.6 percent) lower compared to an unusually strong September, 2012. That month was an anomaly, marked by a small volume of trucks with much lower-than-average mileage. Generally, it is best to consider the market for over-100,000 mile cabovers satu- Source: ATD/NADA rated. See the “Average Wholesale Price and Mileage–4-7 Year-Old Class 3-4 Cabovers” graph for detail.

Medium Duty Cabovers and Conventionals There has been little change in the market environment for cabovers and conventionals. Both segments remain flat to downwards. Looking first at conventionals, Class 4s were down slightly in September, at $165 lower month-over-month, and $1386 (or 9.8 percent) lower year-over-year. Mileage came in at 108,265 in September–12,315 (or 10.2 percent) lower month-over-month, and 15,926 (or 14.7 percent) higher year-over-year. Trucks at this mileage level have been decreasing in value since the first quarter. See the “Average Wholesale Price and Mileage–4-7 Year-Old Class 4 Conventionals” graph for detail. Class 6s were up slightly, at $14,507-$428 higher month-over-month, and $1793 (or 12.4 percent) higher year-over-year. Mileage was 177,094 in September–20,892 (or 10.6 percent) lower than August, and 1,819 Overall, the medium-duty market is less dependent on the price of a (or 1.0 percent) lower than last September. Trucks in this mileage new truck than the Class 8 market. With new medium-duty trucks range have not moved appreciably, indicating little change in market reasonably priced compared to their Class 8 counterparts, there is less conditions over this period. See the “Average Wholesale Price and demand for low-mileage used trucks as a substitute for new. Further, Mileage–4-7 Year-Old Class 6 Conventionals” graph for detail. the medium- duty market is impacted by large-scale turn-ins by fleets and rental companies, ensuring an ample supply.

12 November 2013 www.UTA.org UTA Industry Watch

Sales Volume Last month, in perhaps our worst prediction ever, we wrote, “We do not expect notable movement in this measure in the near-term.” Retail “Tips You Can Count On” sales volume proceeded to drop 18 percent the following month for seemingly no reason. As noted earlier in this article, sticker shock may Light-duty trucks present only a few options become increasingly relevant going forward. At the same time, with the government shutdown behind us, we expect volume to return back (such as a two-wheel or four-wheel-drive, towards the trend after October. Remember that retail pricing remains additional trim levels, and different bed configu- extremely strong, as are wholesale volume and pricing. rations) that affect potential resale. Medium- Conclusion duty trucks, however, are substantially more Despite this month’s drop in retail volume, trucks with under 600,000 complex. There are dozens of options to sort miles continue to sell for record prices. The low returning supply of through that can impact resale values as much as newer model years combined with the high price of new trucks will continue to foster a supply/demand environment favoring high several thousand dollars per unit. pricing. The wholesale market remains strong in both volume and pricing, providing further support for a positive outlook. And, as fleets continue to short cycle their The construction market should continue to recover at a gradual pace, medium-duty trucks, a vehicle’s resale value with the upcoming winter months limiting upward movement in the becomes increasingly important to consider short term. Over the next few quarters, the minimal numbers of these trucks built new during the recession should provide upward pressure when the vehicle is purchased. A higher sale price on pricing. in the secondary market means lower deprecia- In the long view, the Executive and Legislative branches of our tion costs — and, consequently, lower total cost of government will continue to prioritize politics over economic ownership. strength. Despite this reality, the American economy will continue to gradually improve, and along with it the used truck market. n What to consider when spec’ing new units for resale purpose: 1. Engines Reprinted with permission from the ATD/ NADA Official Commercial Truck Guide® 2. Transmissions www.nada.com/b2b 3. Upfits 4. Color Choice 5. Alt-Fuel Technologies

While resale is a very important part of the lifecycle, it’s not the most important part. Instead, for any type of truck, but especially medium-duty applications, it’s most important to build the truck that’s right for the job for which it’s intended. Trucks are ultimately tools of the Tax time is fast approaching. intended trade; the chassis is there merely to Have that business provide mobility. When trucks are built to conversation with your ­perform their best, specifically in the areas of clients to discuss reliability, fuel economy, and driving ­experience; tax liabilities and there will always be a demand, and a ­market in opportunities for which to sell these trucks. additional sales to avoid Uncle Sam. Signed, ~ The Medium Duty Counselor

www.UTA.org November 2013 13 UTA Industry Watch Industry News Briefs

August’s Trucking Conditions Improve: FTR Things heated up for the trucking industry as the summer wore on. In August, “Trucking Conditions” were substantially better than in Planned Capacity Adds Still Conservative: TCP July, according to figures from FTR’s Trucking Conditions Index (TCI). August’s 9.52 score was a full point over July’s reading. (The TCI Actual order numbers may have increased, but expectations regarding summarizes industry metrics. A reading above zero suggests a positive the future remain cautious. Transport Capital Partners (TCP) most recent environment for truckers. Readings above 10 mean volumes, prices, quarterly Business Expectations Survey again found about two-thirds and margins “are likely to be in a solidly favorable range for trucking of carriers saying they plan to boost capacity. These numbers have companies.”) remained fairly constant since August 2010. But along with the good news FTR sounded a warning. August’s increase “The balance between freight and trucks remains tight. It seems we boosts the reading to an “expected peak level…before conditions must face up to the fact, early on, that drivers are truly a brake on truck deteriorate somewhat as the industry absorbs the impact of the Hours supply, as well as on truck orders,” noted Richard Mikes, TCP partner. of Service rule changes,” FTR noted in a release. For now, FTR feels While the percentage of carriers planning to boost capacity has remained truck fleet conditions will stabilize in 2014 until there’s more informa- about the same, steadily increasing numbers of carriers say they tion about FMCSA regulatory intentions for 2015. expect capacity additions of less than five percent. In February 2011, As with most parts of the economy, the outlook for the trucking industry that percentage stood at 22 percent; most recently it stood at 45 percent. for the rest of the year may be affected by the government shutdown. The smaller carriers are less optimistic than their larger counterparts. “Prior to the government shutdown on October 1st, economic and Twenty-three percent of larger carriers, TCP noted, plan to add more industry data was pointing to a possible uptick in demand as we head than six percent capacity, compared with only 15 percent of smaller into the final stretch of 2013,” said Jonathan Starks, FTR’s director of carriers. With smaller carriers also less optimistic about volumes, TCP transportation analysis. The shutdown finally ended on October 17th, doesn’t feel it’s surprising that they are less likely to add capacity. The but the fiscal consequences are still being tallied. smaller carriers may also be having more difficulty finding financing For more information on how to subscribe to FTR publications, email for expansion than their larger competitors. n [email protected]. or call (888) 988-1699 ext. 1. “Tight credit remains a challenge for a lot of businesses, particularly for truckers, and especially those not well positioned,” said Steven Dutro, TCP Partner. n September’s Class 5-8 Prelim. Orders Meet Expectations: ACT Navistar Reports Highest Order Tally Since December 2011 Class 8 Orders Jump 27 Percent Navistar, Inc. said it secured 5,900 Class 6-8 truck orders in September. After notching the second best month in nearly six years in August, That made September the best month for order receipts since December September’s Class 5-7 preliminary vehicle orders returned to previous 2011. Orders for the month included more than 2,100 medium-duty trucks levels, ACT recently reported. When final numbers come in, ACT with the Cummins ISB 6.7 liter engine, Navistar noted. expects Class 5-7 orders of 16,500 units (±5 percent). But ACT said Class 8 orders will rise over August’s tally, and that they were also “September orders marked Navistar’s highest monthly order intake for higher than August 2012’s levels. They should come in at 20,100 units Class 6/7 vehicles in almost two years, which strengthens our belief (±5 percent), ACT said. that the [Cummins ISB 6.7-liter engine] ISB will be the catalyst for improving our medium-duty business,” said Bill Kozek, Navistar “Based on ACT’s analysis, September is typically the second weakest president, North America Truck and Parts. “Many of our customers order month of the year for Class 8, so modest activity was expected,” asked us to add the ISB to our lineup, and we listened. With more than said ACT president Kenny Vieth. “September’s order volume was the 2,100 orders in the first 30 days, we’re optimistic this will be a winning best since May, and represents gains of 27 percent compared to last combination in the marketplace,” he added. n September, and to Q3’12. Seasonal adjustment boosts September’s Class 8 orders to 23,200 units/278,000 SAAR. In seasonally adjusted terms, September’s Class 8 order intake was the second best since January 2012.” Class 5-7 orders averaged 16,600 units per month over the past eight months. Compared to 2012, September’s orders were up 16 percent; they were up 20 percent for all of Q3. September is typically a better than average month for medium duty orders, so seasonal adjustment lowers September’s order intake to 16,100 units/193,200 SAAR, ACT noted. For more information, visit ACT’s website at www.actresearch.net. n

14 November 2013 www.UTA.org UTA Industry Watch

Volvo Trucks Offers More Freightliner: Fuel Efficient 2014 Engines Revised Sales App a announced that all of its “Virtual Showroom” model year 2014 engines will offer fuel Freightliner announced a newly efficiency improvements, thanks to enhanced app for iPads that it says will optimized and enhanced engines. The provide dealers with “easily accessible and interactive truck giant said that customers buying product information at the touch of their fingertips.” The app allows Volvo trucks equipped with 2014 Volvo D11, D13, or D16 engines will dealers to get in-depth information on every Freightliner model, and see an increase in fuel efficiency ranging from .5 to 2 percent. readily access product information and calculators. Naturally, better fuel efficiency will boost the return on investment for fleets and owner-operators. Freightliner envisions dealers may use the app in conjunction with customers. “The Freightliner Sales Tool app is a unique and powerful “Volvo trucks equipped with 2014 engine technology will deliver way for our dealer sales network to explore our products with substantial fuel efficiency benefits, while also providing the power and customers and feel confident they have the most current information performance customers expect from a Volvo powertrain,” said Göran to make informed business decisions,” said David Marx, Freightliner’s Nyberg, president of Volvo Trucks North American Sales & Marketing. brand development manager. One big reason why the engines are more fuel effiecient is that they The enhanced sales app is one of several apps from Freightliner. The include “multiple optimized or new engine components.” Volvo said company recently updated its consumer app “Freightliner Hauler these improvements include: Challenge: Journey to Homestead” game, which it says has been ■■ Low-friction cylinder improvements, including a redesigned piston downloaded more than 700,000 times. Its apps all include a dealer and liner developed with smoother surfaces locator for finding locations throughout the U.S. and Canada. ■■ A clutched air compressor, which completely disengages the clutch For more information, go to www.freightlinertrucks.com. n from the engine

■■ Advanced combustion technology of a new seven-hole injector offers better fuel atomization for a more even distribution of fuel within the cylinder, maximizing fuel efficiency and offering a greater savings for customers.

■■ A new crankcase ventilation system filters more oil from blowby gases before they leave the engine while improving engine backpres- sure for better performance. n

All-New Kenworth T880 Vocational Truck Now Available for Order In May’s Industry Update newsletter we announced that Kenworth had launched its new Kenworth T880™ vocational truck at the Mid-America Trucking Show in Louisville. Kenworth now says the truck can be ordered. “Skillfully designed and robustly engineered, the new Kenworth T880 builds upon Kenworth’s distinguished 90-year heritage of quality, innovation and technology to produce industry-leading, rugged and reliable vocational trucks,” Gary Moore, Kenworth general manager and PACCAR vice president said in May. To recap, highlighted features include: The T880 is for vocational ■■ A panoramic windshield for enhanced visibility applications such as dump, ■■ Quiet cab with its triple-sealed and robust doors mixer, refuse, and heavy haul. It complements ■■ Five-piece hood for easier and faster repairs Kenworth’s other vocational ■■ Air-assisted hydraulic clutch, complex reflector headlamps, “excellent” vehicles including the T800, maneuverability, and new lightweight, factory-installed lift axles T440, W900S and C500. Kenworth says it designed the T880 “with distinctively sculpted lines that form an evolutionary, but uniquely Kenworth look.” n

Industry News Briefs continued on page 16 www.UTA.org November 2013 15 UTA Industry Watch

Industry News Briefs continued from page 15

Rush adds Midwest Dealers, Lease Locations Rush Enterprises, Inc announced it has entered into agreements to buy assets of CIT, Inc., which does business as Chicago International Trucks; Mcgrenho L.L.C., which operates as Indy Truck Sales, and Indiana Mack Leasing, LLC; and the membership interests of Idealease of Chicago, LLC. Rush said the acquisitions include International commercial truck dealerships and Idealease commercial vehicle rental and leasing businesses in Carol Stream, Chicago; Grayslake; Huntley; Joliet; Kankakee, and Ottawa, Illinois; and Brazil, Gary and Indianapolis, Indiana. Rush said that all told these companies “had unaudited revenues of approximately $405 million,” in 2012. Rush expects to close the acquisition in the first quarter of 2014. “When complete, the acquisition will expand the Company’s contiguous network of Rush Truck Centers in the Midwest,” Rush added in a release. Although 2nd quarter earnings were down for Rush, the company has received a lot of positive press lately. For example, in an August profile of Rush, investor news- letter Seeking Alpha said that Rush Enterprises “may not be in a sexy, high-tech market, but it offers a lot of potential upside to long-term investors. Rush has averaged around 16 percent EPS growth over the past decade and is well-suited to experience strong growth over the next couple of years.” n

A D TE E H

T

E

V

A S NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV

16 November 2013 www.UTA.org UTA Industry Watch

www.UTA.org November 2013 17 UTA Industry Watch From Where We Sit

We have a new neighbor as of just yesterday! Don’t get us wrong, in years past, the local That’s when a minivan pulled into our dance studio always placed a ballerina or a tap driveway and delivered this year’s prize dancer along the path and everyone knew where scarecrow. Now, for those of you who have not that scarecrow came from. But, so many of been following along in this little column at our town’s youngsters grow up learning to the end of the newsletter, you may not know dance, because Dee teaches them, that this that we live in a tiny farming community seemed more like a point of pride than a nestled in a beautiful little valley in rural point of sales. Most of the scarecrows come Maryland. Our street, Main Street, is actually from groups like the Boy Scouts, Brownies, the Old National Road, once the country’s Little League, and there are always plenty of main route from the east coast to the west. Knights, the name of our schools’ sports That means that although our town is tiny, teams. These organizations come together to about 10,000 cars pass our house every day decorate our Main Street and enjoy a little loaded with drivers on their way to and from hubbub from their creative endeavors, not to jobs much closer to the city. gain new customers or members. Every year our town sponsors a scarecrow contest that pleases and It seems like more and more often people and groups are doing the delights travelers and townsfolk alike. Any one person, family, civic right things for some of the wrong reasons. We were raised to believe organization, or business can claim a scarecrow kit and decorate it any that the best giving comes anonymously. Doing good should be its way they want. Then the scarecrows get placed all along Main Street own reward. One day this summer, driving along I95, we stopped to and the community is invited to vote for a favorite. pay a toll. Having inadvertently gotten into the automated EZ Pass lane, we quickly scooted across the empty rows to find a cash toll This little autumn ritual has been going on for about five years, and our booth. Luckily there was a break in the traffic so that this didn’t cause yard is lucky enough to have one of the scarecrows propped happily in a problem. While waiting in line, we noticed that a man, just behind front of our house for the contest. On beautiful autumn days we watch our front passenger door, had made the same mistake. Now he and his families, couples, and dog-walkers saunter down the street evaluating big pickup truck were stuck, because he was unlucky enough to have this year’s entries, and then everyone gets to stop by Town Hall to vote goofed when our lane was already backed up, and no one seemed for their favorites. One year we were lucky enough to have a winner in willing to let him in. We got his attention and waved him to go on our yard. It was a scarecrow in the shape of a red Angry Bird, and it ahead of us. It never even occurred to us to make him sit there and was a crowd pleaser! This year we have the Lone Ranger. He’s cute, but suffer for the same mistake we’d just made. When we got through the he’s honestly, just between us, not a contender for the most favorite line to pay our toll, the toll-taker told us that the man in the white entry. As we strolled along yesterday, eying the competition, we pickup had paid our $8 toll! It’s an $8 toll for pancakes sake! We didn’t noticed something a little bit jarring about this year’s entries. do anything that heroic, but this man must have thought it extraordi- For the first time that we can remember, local businesses have begun nary. The point is that we just did what we’d been taught to do: We using their scarecrows as blatant advertisements! Now, we wouldn’t treated another the way we’d like to be treated. We never thought to squawk if the local expect a reward. paving company dressed Yes, most of the scarecrows this year are pretty cute and clever. We up their scarecrow as a were thrilled to see that our neighbors across the street, who have two cement worker and put preschool-aged boys, got the awesome Batman. That was just seren- their own branded dipity that placed the Dark Knight in the yard of two little hero- t-shirt on it. There’s a big worshipping guys. But the paving company and the electrician? Those push this year to get guys showed us that self-promotion is more important to them than homeowners to repair civic pride. It’s nearly impossible to open an Internet browser or stop damaged sidewalks, and by a website without having to deal with ads. TV networks have made these guys have been all it impossible to speed through commercials on shows they present over town with their On-Demand. We all know that ads make the world go round. But, trucks and their signs. having our annual scarecrow contest turn into a row full of blatant But, when one business advertisements seems to turn a fun and family friendly activity into a put a bale of hay at its commercial effort. As we all get ready to scarecrow’s feet and celebrate our winters holidays, it’s probably a stuck one of their signs good idea to stop and think about where in it…that seemed like a commerce ends and community involvement little too much self- begins. At least that’s the way it looks from promotion. Was this a where we sit. civic activity to add charm and promote community, or was the purpose of this endeavor primarily to gain some Deb and Brad Schepp free advertising? [email protected] This year’s favorite: “Captured by the Crows.”

18 November 2013 www.UTA.org