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ACT: Used Class 8 prices rise, trailer orders remain low

March 1, 2022
Used truck prices continue to rise from strong demand and tight supply, while OEMs continue to 'carefully' manage trailer orders, according to ACT Research data.

Used truck prices are continuing to benefit from strong demand and tight supply, according to ACT Research, which just reported average used truck prices are up more than 83% compared to January 2021, with average month-over-month prices 7% higher compared to December.

According to ACT’s latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks report, used Class 8 retail volumes (same dealer sales) were 15% lower month-over-month and are down 37% year-over-year. Average miles rose 2% month-over-month and 4% year-over-year, according to ACT, while average age was flat compared to December, but up 6% compared to last January.

“Used Class 8 same dealer retail sales volumes dwindled further in January. The sequential drop was the fifth straight decline, while sales have been weaker for the past seven months,” Steve Tam, ACT Research VP, said. “It is worth noting that sales typically fall in January and the magnitude of the drop aligned with expectations. Interestingly, the slowing in the secondary market belies recent developments in the new truck market.”

See also: Used Class 8s still feeling the force of clogged new truck market

Looking at the different sales channels for used Class 8 vehicles, Tam pointed out that near-term channel results moved in the same direction, but to widely varying degrees, with auction sales falling 86% month-over-month and wholesale activity slipping 10%. All three markets also experienced lower volumes compared to January 2021, he added.

“We believe that the industry will make progress clearing some of the supply-chain hurdles, allowing for moderate improvements in new truck production,” Tam advised. “The higher output should help increase the flow of equipment into the secondary market, helping to boost sales volume and alleviate some of the rampant price appreciation the market experienced in 2020 and 2021.

“Used truck prices will continue to benefit from strong demand and tight supply, though growth rates are likely to decline meaningfully, as freight-hauling capacity rebalances, and it is important to note that prices will be retreating from record highs and are not expected to collapse, but rather revert in an orderly manner toward the mean,” he added.

OEMs 'carefully' manage trailer orders

In January, net U.S. trailer orders of 26,595 units increased less than 1% from the previous month and were more than 15% lower compared to January 2021, ACT Research pointed out. Before accounting for cancellations, new orders of 28,000 units were down about 2% versus December, and almost 15% lower than the previous January, according to this month’s ACT Research’s State of the Industry: U.S. Trailer Report.

“The effort that OEMs have made to prevent untenable backlog growth through controlling order acceptance continues. That effort has been highly driven through dry vans and reefers,” said Frank Maly, director of CV Transportation Analysis and Research at ACT Research. “Expect the conservative order acceptance stance to continue for the near term; until meaningful production increases can be implemented, this will be status quo. Allocation of production between fleets and dealers will continue to be the norm, with dealers, and correspondingly their small to medium fleet customer base, likely more significantly challenged.”

Responding to the backlog-to-build ratio, Maly explained that a slight increase in backlog and a slight decrease in production rates have led to a slight increase in backlog-to-build at the close of January.

“The 8.3-month level for total trailers commits the industry into very early Q4 2022 at current build rates, and this is the highest level since last June,” Maly said. “We would expect this metric to remain stubbornly high, and it could also be approaching the Christmas timeframe sometime in Q2, projecting an early calendar-year 2022 sell-out.”

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