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Printer Friendly Version April 2004 A Newport Communications Service since 1970 |
Trailer Sales Trends
Three-year slide in annual trailer shipments ended last year, says Peter Toja, president, Economic Planning Associates. Company's latest survey puts '03 domestic trailer shipments at 138,230, up 25.9% from '02. Van trailer shipments totaled 101,100, up 32.8%. Non-van shipments were 37,130, up 6.9%. 4th quarter van shipments were 34,500, up 5.3% from the same period a year ago; non-vans totaled 10,450, up 18.8%.
Toja says growth should continue this year with expanding economy, greater traffic flows & improvements in trucking revenues & profitability. Low interest rates, moderate inflation & tax incentives should also boost trailer sales. An aging fleet will intensify replacement pressures through '04 & '05. Contact: (631) 864-4900.
Upturn in truck sales plus low trailer build in 2001/2002 will drive above average trailer sales over the next few years, say analysts at Fulcrum Global Partners. Trailer sales move with tractor sales & Fulcrum expects a Class 8 "super cycle" with sales boosted by normal replacements, an aging fleet, economic recovery, new environmental regs, and new hours of service rules. Not every trailer purchase involves a tractor purchase, they note, but there's a high correlation between tractor & dry van orders.
Wabash raises trailer prices 3.5 - 6%. Trailer pricing has decreased or been stable for past 3 years but manufacturers are at the point where they have to pass along rising materials costs, says Wabash President/CEO William Graebel. "The trucking industry has become very adept at managing their cost increases, including fuel, with their customers," he says. "Unfortunately, Wabash National is now facing similar circumstances." Other manufacturers are expected to follow suit. Market analysts don't expect it to significantly impact sales.
Truck Sales Trends
Jan. Class 5-7 truck production was up 6.2% from a year ago but N. American net orders were down 13.9%, the weakest since June '03, according to Merrill Lynch. Analysts say drop could be "payback" following some large orders placed late last year. But retail sales continue to outpace production, keeping inventories at 2.1x retail sales vs. the 2.6x average. Backlog is up 25% from a year ago. Production forecast: 215,000, up 10% from last year.
Volvo Trucks N. America to add 2nd shift at its Dublin, Va., plant starting May 17. Production of Volvo VNs will go from 73 to 112/day; VHD production to stay at 6/day. Scott Kress, sales & marketing sr. vp., says customer and dealer VN orders have been "very robust" over the last several months.
"The demand is being driven by rising fleet utilization, which is putting a lot of stress on the older trucks many fleets are running," he says. "The average age of trucks in service is now about 7.3 years. By increasing our production, we are letting our customer know that Volvo intends to deliver trucks in a timely way, avoiding the excessive delivery times the industry experienced during the late 1990s."
Peterbilt is increasing production at both of its heavy truck plants, says Dan Sobic, general mgr. & Paccar vp. "As the trucking economy continues to improve and freight volume is strong, customers are returning to market to replace aging equipment & add new units to handle volume." The workforce, he says, will be increased as needed.
Jan. worldwide Volvo truck sales were up 11% from a year ago; Mack Trucks up 5%, Renault Trucks up 4%, Volvo Trucks up 19%. "Generally, we have had a highly satisfactory start on the year from our 3 brands," says Volvo Group President/CEO Leif Johansson. "This is particularly the case in North & South America." He added that the Asian market continues to be very strong, driven by development in the Middle East.
Despite lower industry sales last year, Mack maintained its leadership in the construction market, says President/CEO Paul Vikner. "There's no doubt that '03 was a challenging year for heavy truck makers & for our customers in the construction industries, but we saw encouraging signs of strength in the economy as a whole in the 4th quarter, which we expect will lead to renewed activity in construction & better conditions for our customers, especially in the concrete industry, this year." According to R.L. Polk registration data, Mack's MR model was the No. 1 selling Class 8 low cabover in the U.S. last year. Its Granite was the No. 1 selling Class 8 conventional straight truck.
Freight Trends
American Trucking Assns.' seasonally adjusted Truck Tonnage Index for Jan. was 2.3% below December's all-time high. Unadjusted index fell 3.1% month-to-month but was up 0.4% from Jan. '03. ATA used different estimating techniques for the Jan. number, which Chief Economist Bob Costello says is a much better indication of freight volumes. He also blamed much of the Jan. drop on bad weather.
Transportation Services Index, published by the U.S. DOT's Bureau of Transportation Statistic, rose 2.9% from Nov. to Dec., reaching a record 120.2. Overall TSI, including passenger transportation, was 118.5, up 1%. New monthly measure serves as a leading indicator of future economic growth, & Dec. results "give us a clear indication of how much the strength of the transportation sector mirrors the strength or our economy," says Transportation Secretary Norman Mineta. TSI freight measures include for-hire trucking & parcel services, freight railroad services, inland waterway traffic, pipeline movements & air freight.
Freight coming through TransCore's load posting & matching services in Feb. was up 118% from a year ago. Growth of exception freight (freight not booked directly between brokers & carriers or shippers) is attributed to economic improvement & tightening capacity. Feb. postings were up 18% from Jan., picking up from the seasonal slowdown that started in Nov. Looking to May, the best combinations of high freight volumes & favorable inbound/outbound load ratios have traditionally come from Ohio, Illinois, Pennsylvania, Indiana, Tennessee, Michigan, Arkansas & Alabama.
New Business
International Truck & Engine's new military business operation launches its first new vehicles. SmarTruck III, built in collaboration with the U.S. Army's National Automotive Center, has state-of-the-art communications & detection systems, improved fuel economy, more armor protection. A commercial version, the International Commercial Utility Vehicle, can be modified for a variety of applications, including homeland security. Both use the International VT275 4.5-liter diesel engine with a hybrid hydraulic launch assist for power at startup & better fuel economy.
Kenworth targets both small & large shops with new versions of its PremierCare Connect maintenance management systems. PremierCare Connect Professional for small to mid-size fleets includes inventory control, preventive maintenance scheduling, work orders, repair order invoicing, counter sales invoicing & web-based training. Connect Enterprise for larger fleets has advanced functions like multi-currency, support for multiple business units, integration with other software systems, bar code scanners & on-site training.
Penske Truck Leasing's new Precision Plus fleet management system, offered to lease customers, includes web-based access to performance date like vehicle start/stop reports, mpg performance, vehicle location, accident reconstruction, paperless fuel tax reporting, driver logs & driver communications. Monthly rates start at $55.
Modine to provide power train cooling systems for all International heavy, medium & Blue Diamond trucks starting in '07. Company will also provide engine cooling, heating & A/C systems for the Blue Diamond low-cab forward models due out in '05.
Consolidate Metco gets 3-year contract to supply wheel hubs & brake drums to Walker Transportation. ConMet PreSet hubs will be standard on Walker tank trailers; CastLite drums will be offered as an option.
Ward Trucking signs contract to buy 500 International trucks by '07. Initial order includes International 9200i model 6x4 sleepers & 8600 6x4 daycab tractors, both with Cummins engines, and International 4400 mid cab 4x2 tractors & 4300 trucks with International engines. Smithway Motor Xpress orders 215 International 9400i models.
LINCedge Over the Road program to offer fuel card membership & fleet management services to companies with Class 7 & 8 trucks. Fleet 1st offering referral & collision repair management services to trucks involved in accidents. President Bill Hinchcliffe says nationwide network is made up of shops specializing in different types of repairs, including DuPont AOQ-Commercial shops.
Expansion
Caterpillar Remanufacturing Services expands its business to offer reman services to OE manufacturers in the automotive & industrial products industries and the defense industry. Company will continue to be the exclusive provider of Caterpillar reman products distributed through worldwide Caterpillar dealers.
International gutted its Huntsville, Ala., plant "to a dirt floor" then rebuilt it to get ready for the new VT 275 diesel engine, says Donna Miller, plant mgr. 20 Integrated Quality Assurance stations verify product specifications during assembly, 79 assembly operations have been automated. Parts inventory & freight costs are reduced by using a nearby 3rd-party logistics center to consolidate inbound shipments & make plant deliveries as needed throughout the day.
Autocar adds new parts distribution center in Reno, Nev; names Mike Mueller mgr. Heil Environmental forms Parts Central network of distributors & parts/service centers offering Heil Certified OEM Parts and Parts Inc. Aftermarket Parts by Heil.
EaglePicher Horizon Batteries to open facility in Grove, Okla. J&J Truck Bodies & Trailers launches Quick Turn Program offering aluminum or steel dump bodies mounted in 15 working days.
Alliances & Acquisitions
Ryder System completes $145 million purchase of Ruan Leasing, subsidiary of Ruan Transportation Management Systems. Sale included 6,400 vehicles, 37 of Ruan's 111 service locations, 500 customers & contract maintenance agreements covering 1,700 vehicles. Ruan's supply chain, logistics and dedicated contract carriage businesses were not included in the transaction. The combined network will operate under the Ryder name.
Penske Truck Leasing sells Leaseway Auto Carrier to Performance Logistics Group. Fleetline Products buys Hogebuilt Inc. ACS buys Truckload Management Services.
Fleet One to provide private label program credit card & billing services program for commercial fleet customers of WILCOHESS. Fleet One & Petroleum Card Services sign alliance giving PCS merchants access to the ProFleet card powered by Fleet One.
TransCore to offer CompuNet credit reports through its DAT Partners & DAT Connect web sites. CB Acquisitions buys assets of The Carnegie Body Co. Carnegie filed Chapter 11 last May. New company formed by CB will retain the Carnegie name. Richard Sippola is president.
Financials
Navistar International posts $23 million fiscal 1st quarter loss on $1.9 billion revenue vs. a $99 million loss on $1.6 billion a year earlier. Manufacturing gross margin for the quarter, which ended Jan. 31, was 12% -- more than double the same period last year. Worldwide shipments of Class 8 trucks totaled 7,800 units vs. 6,100; Class 6-7, 9,900 units vs. 7,700; parts sales, $266 million vs. $238 million; shipments of diesel engines to other OEMs, 74,500 vs. 63,300 units. Navistar Chairman/President/CEO Daniel Ustian said firm expects to be "solidly profitable" for the year.
Community
International will raise money for Paws With a Cause program by selling rides in a replica No. 10 Ford Power Stroke Diesel race truck at NASCAR Craftsman Truck Series races. Paws With a Cause sponsors assistance dogs for people with disabilities.
5 Freightliner Coronado trucks to transport cars & equipment for Chip Ganassi Racing with Felix Sabates during the '04 NASCAR Nextel Cup Racing Season.
Associations
Paccar Chairman/CEO Mark Pigott to keynote 41st Annual American Truck Dealers Convention & Expo, April 17-19, Seattle. Other featured speakers: ATD Chairman Stuart Hollingshead, National Automobile Dealers Assn. Chairman Charley Smith; futurist Bob Treadway & leadership expert Dave Anderson. Contact: (703) 760-7562.
International Trucking Show returns to Anaheim Convention Center Sept. 23-25, managed by the California Trucking Assn. CTA looking to boost attendance with educational seminars, special promotions, on-floor events & 7 p.m. closing time. Show proceeds will fund industry legislative & regulatory advocacy, driver improvement & training, education & industry image campaigns. Contact: (800) 809-8839 or www.intltruckshow.com.
Honors
Paccar named to Wall Street Journal's 2003 Honor Roll, which recognizes companies that earned straight-A ratings, ranked on the 5-year average compound annual total returns through '03. To be considered, companies also had to be in the top 20% of firms evaluated for the past 1, 3, 5 & 10 years. Paccar was ranked 12th of the 1,000 largest publicly traded companies in the U.S., based on its 30.3% 5-year annualized shareholder return and other financial return thresholds. Only 17 companies made the Honor Roll.
Paccar wins first-ever International Stevie Award for Best Multinational Company and was a finalist in the best overall company & best facility categories. The "Stevies" were created to honor & generate public recognition of companies and businesses worldwide. 67 recipients were selected from 500 nominees representing more than 30 countries. Paccar was cited for its focus on quality products, cost controls & innovative use of technology.
People
Tom Cellitti to vp/general mgr., International Medium Truck Vehicle Center. He is succeeded as vp, International Bus Vehicle Center by Michael Cancelliere, former vp, N. American sales. Michael Cross, vp, Cummins' Fleetguard Emissions Solutions named a corporate officer.
Todd Manson to vp-aftermarket sales, Webb Wheel Products, from international parts director/national sales mgr., Paccar Parts. Marian Zincke to heavy duty marketing director, Jacobs Vehicle Systems, from marketing program director, MRM Partners.
John Millsap to vp, Ridewell Corp., from south central regional sales mgr. Greg Reimmuth to heavy duty aftermarket product mgr., Delco Remy, from product development mgr., Wix Global Filtration.
Gordon Virginski to sales/marketing director, Hadley Products. Melinda Riley to marketing mgr., FleetPride, from marketing director, Franchise Concepts. Dan Bassford to president, Sanford Rose Associates' Greensboro office, from parts sales director, Volvo Trucks N. America.
Ron Froese to mgr., truck OEM business development, Holland USA, from mgr., dealer business performance development, N. American Institute, Volvo Trucks N. America. Chuck Jeary to technical sales/service representative, Holland USA, from warranty & technical services mgr., Holland Canada.
Christopher Barruss to president, Truckload Carriers Assn., from president/CEO, Tennessee Trucking Assn. Retiring: Frank McDonald, vp/general mgr., Cummins Heavy Duty Engine Business. Died: Merit Truck Parts Founder Edward Goldberg, 90. Robert Sorum, engineering vp, Hadley Products.
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