The ‘pulse’ of the truck market

Lucas Deal

June 15, 2017

When it comes to the new truck market, there may be no better indicator of future performance—and visualization of the market’s cyclical nature—than Commercial Carrier Journal’s (CCJ) MarketPulse survey.

CCJ’s MarketPulse is a monthly survey of fleet decision makers that seeks to uncover future buying plans among the North American carrier population. Responders must choose between four purchasing options: to increase the size of their fleet; decrease the size of their fleet, replace aging equipment but keep fleet size the same; or make no changes to their fleet.

In the survey data released this week, CCJ shows how those responses have fluctuated month-over-month for the last seven years.

For carriers with more than 100 power units, increasing fleet size and replacing aging equipment regularly battle for the most common response. The latter first eclipsed the former in August 2012—a period most dealers should remember as especially soft in the new truck market—and remained the preferred option for large carriers for nearly a year, peaking as the top response for 60.3 percent for large fleets in December 2012.

Fleet purchased sentiment ticked up the following month (corresponding with most fleets annual ordering habits) but unlike 2012 the increase was not short lived. By May 2013 the number of fleets planning to expand equaled the number planning to simply replace (43.1 percent apiece), and just four months after that, expansion took over the top spot in MarketPulse’s monthly survey, 47.0 to 42.4 percent, over replacement demand.

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Not surprisingly, the new truck order market boomed around this time. FTR reported preliminary September 2013 orders at 19,777 units, a 29 percent year-over-year increase, and the market hit a two-year order high a month later.

MarketPulse results and truck orders trended this way together for several months. Two-thirds of large fleets responding to CCJ’s March 2015 MarketPulse survey claimed they were looking to expand, and that sentiment was followed almost immediately by a string of huge sales months.

Unfortunately, the cliff came fast. By August replacement demand had regained its hold on the top of MarketPulse, and in November 2015 the number of fleets planning to expand barely exceeded those who planned to make no purchases (27.3 percent to 23.6 percent). A new year saw expansion make a brief rally before replacement demand again established itself as the survey’s top option in the latter half of the year.

But just as 2012 sales woes were followed by 2013 gains and 2014’s boom, MarketPulse data is once again hinting at a purchasing upswing among large fleets in 2017.

Nearly 38 percent of large-carrier responders to January’s survey are preparing to expand—an eight-month high—and in April the number of fleets expanding vs. replacing older vehicles was again even. Not coincidentally, April was the fifth straight month new truck orders eclipsed 20,000 units.

Small-fleet flexibility

CCJ’s MarketPulse also accepts responses from fleets with less than 100 power units, though these responses have much less correlation to the new truck marketplace. For example, during the record-breaking years of 2014 and 2015, adding new vehicles was identified as the top plan for small fleets just eight times. Conversely, the response to “make no change to our fleet” received more responses than adding vehicles four times, and the same number of responses twice.

The largest similarity between large and small fleets within MarketPulse results is that neither group has plans to contract.

In March and June of last year more than 10 percent of small-fleet responders to MarketPulse’s survey claimed they were considering reducing the size of their fleet. Those were the only two instances that number surpassed 10 percent among fleets of all sizes in the seven years of data available. The highest percentage of potential contractions among large fleets came at the same time, with 8.9 and 9.4 percent totals in March and April 2016. Those were the only months those totals surpassed 6 percent among large fleets, and helped create overall survey peaks of 9.8 and 9.0 percent totals for those months, respectively.

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