PHOENIX. The health of the nation’s economy is improving, and with that, so are the fortunes of the country’s commercial truck dealers. That was the message that American Truck Dealers chairman Kyle Treadway delivered to attendees at the 48th annual ATD Convention and Expo this weekend at the Phoenix Convention Center here.
Treadway highlighted a number of factors that he said indicate that commercial truck retailing is improving. Among these are rising freight volumes, rising demand for used trucks that is pushing up prices, an improving market for parts and service businesses, a steadying of rental and leasing utilization rates that have defied normal seasonal declines, and rising new-truck orders.
“It’s appropriate that we’re meeting in Phoenix — the city named after a mythical bird that rises from the ashes to begin life anew,” said Treadway in his remarks. “Our industry has taken many punches. In addition to the economic downturn, we’ve had to weather a series of regulatory changes that magnified the ups and downs of our already cyclical business.”
Going along with the rising freight volumes are rate increases, Treadway said, “giving our customers breathing room and the ability to generate profits.”
Used truck demand and the lack of used trucks coming out of the downturn are driving up prices, with the average retail price up almost 20% in 2010, Treadway said. And the longer replacement cycles seen during the Great Recession have also resulted in the parts and service business improving. “Our customers’ extended replacement cycles finally met the reality of deferred maintenance,” noted Treadway.
Rental and leasing dealers are now seeing utilization rates at 90%, Treadway pointed out, and new-truck orders continue to increase. This all points to the continued improvement of the industry, he added.
“The economic recovery is not a sure thing, and could be easily derailed by volatile fuel prices, an unpredictable regulatory environment, international political upheaval and global disasters,” Treadway said. “We need to rebuild inventories, shore up our cash flow, review wage rates and sell some trucks.”