Used Truck and Trailer Sales Break Records in 2010
Today, Trucker to Trucker focuses on the used truck market's record breaking performance in 2010:
Used truck sales in 201o beat out 2009 according to data released by registration record keepers. Overall, in the United States, commercial vehicle registrations in Classes 3 thru' 8 increased 21.7% over the prior year. This represents a used truck and trailer sale record of 672,000 vehicles and equipment units. 2010 is the very first year that used commercial vehicle sales broke through the 600,000 unit level. Overall, used commercial vehicle sales accounted for 65% of the commercial vehicle market.
The 2010 record looks set to be beaten in 2011, providing there are sufficient units available on the market to begin with. The trucking business has picked up substantially as the economic recovery started making itself felt last year. Currently, the trucking industry is massively under capacity, with shippers already finding it difficult to source carriers to supply all of their logistical needs. TheShippers Condition Index reported a negative index for February 2011, which is an extremely rare event - the SCI provides shippers with an indication as to how favorably their shipping needs will be met, and currently they are struggling to find enough carriers to meet demand.
Demand for trucking capacity is feeding into used sale prices slowly because there is a massive surplus of equipment which is only now being cleared out of inventories. As the recession bit into budgets, a lot of companies either dumped surplus equipment onto the market to generate some additional cash and cut down on overheads, or they extended working life of old equipment and deferred replacement decisions. As the excess stock is being depleted, used truck buyers are going to find it increasingly difficult to buy equipment at the low prices we saw throughout the market last year. Even so, with business booming and trucker demand soaring, even paying higher equipment prices is going to make sound financial sense because of the higher freight prices which shippers will be required to pay as demand heats up.
Of all the classes of commercial equipment, Class 8 vehicles registered the biggest rise in commercial vehicle sales and registrations. Class 8 commercial vehicles alone saw an increase in 47% over 2009. Large fleet operators are the biggest potential source of "new" used equipment coming to market in 2011, as they now seek to replace equipment which they had previously deferred in 2010. What is desperately required above equipment however, are the drivers for them.
But that is a post for another day.
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