Due to the rising Mississippi River Blue Book attendees have asked questions regarding any implications this may have during our time in New Orleans. We have stayed on top of the situation and were provided the following statement that assures us there will be no impact on the Truck Blue Book Conference.
New Orleans is not subject to the type of river and tributary flooding seen along other parts of the Mississippi River due to the extensive water diversion systems that guide high river waters away from New Orleans and lower Mississippi River Valley communities.
Located in St. Charles Parish, 28 miles from New Orleans, the Bonnet Carre Spillway is a structure that diverts water from the Mississippi River into Lake Pontchartrain then to the Gulf of Mexico, thus allowing high waters to bypass New Orleans. The structure has a design capacity of 250,000 cubic feet per second, the equivalent of roughly 1,870,000 gallons of water per second. This strategy was last implemented in 2008 and the Army Corps tested the system April 5, 2011.
Monday, May 9 the Army Corps of Engineers opened 28 of the 350 Bonnet Carre Spillway bays. Bays are individual sections of the structure that allow for water to flow from the river into Lake Pontchartrain. Tuesday, May 10 the Army Corps opened 44 more bays. 72 of the 350 bays are now open and diverting water from the Mississippi River.
Supplemental tactics such as activating the Morganza Floodway, another diversion structure located 35 miles northwest of Baton Rouge, can provide additional layers of protection if needed.
Activation of the spillway is unnoticeable to visitors in New Orleans, and creates no disruption to daily life of residents, businesses or tourism.
We look forward to seeing you next week, please travel safe.
Wednesday, May 11, 2011
Friday, January 7, 2011
A Metric from 2008 worth Paying Attention To
By Guest Columnist Armada Executive Intelligence
Remember 2008 when oil prices hit a recorded high of $147 a barrel? There was a metric that was circulated then that has resurfaced, and we think it is important to keep in the back of your mind. The most conservative view of gasoline prices suggests that a penny increase in the price of gasoline at the pump costs US consumers and businesses $4 million a day (per penny). We did the math, and the current situation would look like this for the last three months alone: starting with a regular price per gallon of $2.72 on Gasbuddy.com on September 22nd and working through to roughly $3.00 a gallon on December 22nd, business and consumer would have diverted $7.968 billion in spending from other types of purchases to fuel cost-related expenditures. Of course, there are some skeptics that don’t believe this math works in a real sense – and there are just as many that will tell us that the impact is much worse than this (because of the impact of consumer psychology on spending practices). We believe the impact to be somewhere in between on a street level basis. As we think back to 2008 and the relative impacts across the board, it did have a material effect on consumer spending. The situation is starting to capture more international headlines – and is something to factor into risk analyses for January. The Truck Blue Book® is working to bring subscribers a full daily economic update, from our partners at Armada Corporate Intelligence.
*Armada Executive Intelligence Brief is an online information service, published electronically by Armada Corporate Intelligence. It is prepared by Armada CI. The publisher has taken all reasonable steps to verify the accuracy of the content of this information. Armada Corporate Intelligence shall not be responsible for any errors or omissions.
By Guest Columnist Armada Executive Intelligence
Remember 2008 when oil prices hit a recorded high of $147 a barrel? There was a metric that was circulated then that has resurfaced, and we think it is important to keep in the back of your mind. The most conservative view of gasoline prices suggests that a penny increase in the price of gasoline at the pump costs US consumers and businesses $4 million a day (per penny). We did the math, and the current situation would look like this for the last three months alone: starting with a regular price per gallon of $2.72 on Gasbuddy.com on September 22nd and working through to roughly $3.00 a gallon on December 22nd, business and consumer would have diverted $7.968 billion in spending from other types of purchases to fuel cost-related expenditures. Of course, there are some skeptics that don’t believe this math works in a real sense – and there are just as many that will tell us that the impact is much worse than this (because of the impact of consumer psychology on spending practices). We believe the impact to be somewhere in between on a street level basis. As we think back to 2008 and the relative impacts across the board, it did have a material effect on consumer spending. The situation is starting to capture more international headlines – and is something to factor into risk analyses for January. The Truck Blue Book® is working to bring subscribers a full daily economic update, from our partners at Armada Corporate Intelligence.
*Armada Executive Intelligence Brief is an online information service, published electronically by Armada Corporate Intelligence. It is prepared by Armada CI. The publisher has taken all reasonable steps to verify the accuracy of the content of this information. Armada Corporate Intelligence shall not be responsible for any errors or omissions.
Friday, May 14, 2010
Truck Conference Economic Outlook
I sat in on the economic track of programming at the Truck Blue Book Conference a couple of weeks ago. I personally got to hear five very engaging, informative presentations. Today I want to talk about the opening general session, and the two speakers from Daimler. They covered the past, present, and theoretical future in two very concise presentations.
Rich Simons, President of Daimler Trucks Remarketing Corp., started off the day with his pick-me-up message, "It's not too bad!" which was perhaps not as upbeat as he meant it to be. Of course his point was entirely valid—2009 was one of the worst years ever, but things are already improving: the U.S. economy showed 5.6% growth in the last quarter of 2009, and more moderate, but steady growth in early 2010.
According to Simons, freight transport is projected to grow 5% in 2010, and 4% in 2011. Owner-operators and fleet owners who have been holding on in the lean times will need to replace their aging trucks soon, and they are likely to buy used when they do. In a way, things can only go up from here, and those dealers, manufacturers, and operators who survived the worst of the downturn are now in a good position to prosper.
Simon's presentation transitioned seamlessly into David Hames'. Daimler's General Manager of Marketing and Strategy took the podium to talk about what the future holds for the new truck market. Since the recovery of used truck prices is a precursor to the demand for new trucks (a sort of trickle-down effect, I guess), this was a sensible followup. I got a good overview of the industry from this presentation.
Hames talked about trends to watch in 2010. He particularly focused on some perceptions—rumors, if you will—about how the trucking industry is "changing." For instance: Is the owner-operator market really dead? And is the industry really trending toward smaller engines, shorter hauls? And what's the future of alternative fuels?
The answers are No, Too soon to tell, and Who knows? According to Hames, owner-operators are the same percentage of the market they have been for the past 10 years, however their demographic is changing slightly. More minorities and family networks are operating in the market.
The question of short vs long hauls, large vs medium bore engines, and diesel vs alternative fuels are really sort of a big complicated thought-problem that hinges on rising fuel prices. When I had lunch with Terry Williams the day before the conference, we talked about the long/short haul trends and I asked whether he thought railroads might start to pick up some of the long-haul freight. He said that was a question on a lot of people's minds, and he had tried to get a guest speaker from one of the local railroads (we have a lot of them in Kansas City) but the guest backed out at the last minute.
According to Hames, he hasn't seen much of a trend from long- to short-haul…yet. What he has seen, and both Terry Williams and guest speaker Bryan Haupt echoed this observation, is a trending away from the long-and-tall model of truck body toward the aerodynamic model. The aerodynamics get better fuel mileage. However, there is no significant rush toward buying smaller trucks. The bigger engines (14L+) haul bigger loads, last longer, and command higher resale prices.
That trend will probably hold steady for a bit longer, because recent advances in selective catalytic reduction (SRC) technology have almost eliminated the loss of fuel efficiency caused by in-cylinder emissions reduction methods. Hames specifically mentioned Detroit Diesel's BlueTec Emissions Technology, as having increased fuel economy to pre-EGR levels.
That bit of intel alone seemed to sum up the mood of the speakers and their audiences in the economic track. They don't know what's going to happen next, and they're grasping at any fragment of good news that might help them hang on a little longer. It occurred to me that trucking is a supportive, one might even say dependent, industry. The freight business caters to manufacturers and retailers, and when production goes down, as it has the last few years, truckers and dealers have no other avenues to fall back on.
When you add on top of that, the squeeze of rising fuel prices and tighter environmental regulations, it's no wonder that fleet owners, and the dealers that supply them, are just hanging on for dear life.
In my next post, I want to talk about Bryan Haupt's presentation on the used truck dealer's viewpoint, and Keith Prather, who elaborated on the trends described by our opening speakers.
Rich Simons, President of Daimler Trucks Remarketing Corp., started off the day with his pick-me-up message, "It's not too bad!" which was perhaps not as upbeat as he meant it to be. Of course his point was entirely valid—2009 was one of the worst years ever, but things are already improving: the U.S. economy showed 5.6% growth in the last quarter of 2009, and more moderate, but steady growth in early 2010.
According to Simons, freight transport is projected to grow 5% in 2010, and 4% in 2011. Owner-operators and fleet owners who have been holding on in the lean times will need to replace their aging trucks soon, and they are likely to buy used when they do. In a way, things can only go up from here, and those dealers, manufacturers, and operators who survived the worst of the downturn are now in a good position to prosper.
Simon's presentation transitioned seamlessly into David Hames'. Daimler's General Manager of Marketing and Strategy took the podium to talk about what the future holds for the new truck market. Since the recovery of used truck prices is a precursor to the demand for new trucks (a sort of trickle-down effect, I guess), this was a sensible followup. I got a good overview of the industry from this presentation.
Hames talked about trends to watch in 2010. He particularly focused on some perceptions—rumors, if you will—about how the trucking industry is "changing." For instance: Is the owner-operator market really dead? And is the industry really trending toward smaller engines, shorter hauls? And what's the future of alternative fuels?
The answers are No, Too soon to tell, and Who knows? According to Hames, owner-operators are the same percentage of the market they have been for the past 10 years, however their demographic is changing slightly. More minorities and family networks are operating in the market.
The question of short vs long hauls, large vs medium bore engines, and diesel vs alternative fuels are really sort of a big complicated thought-problem that hinges on rising fuel prices. When I had lunch with Terry Williams the day before the conference, we talked about the long/short haul trends and I asked whether he thought railroads might start to pick up some of the long-haul freight. He said that was a question on a lot of people's minds, and he had tried to get a guest speaker from one of the local railroads (we have a lot of them in Kansas City) but the guest backed out at the last minute.
According to Hames, he hasn't seen much of a trend from long- to short-haul…yet. What he has seen, and both Terry Williams and guest speaker Bryan Haupt echoed this observation, is a trending away from the long-and-tall model of truck body toward the aerodynamic model. The aerodynamics get better fuel mileage. However, there is no significant rush toward buying smaller trucks. The bigger engines (14L+) haul bigger loads, last longer, and command higher resale prices.
That trend will probably hold steady for a bit longer, because recent advances in selective catalytic reduction (SRC) technology have almost eliminated the loss of fuel efficiency caused by in-cylinder emissions reduction methods. Hames specifically mentioned Detroit Diesel's BlueTec Emissions Technology, as having increased fuel economy to pre-EGR levels.
That bit of intel alone seemed to sum up the mood of the speakers and their audiences in the economic track. They don't know what's going to happen next, and they're grasping at any fragment of good news that might help them hang on a little longer. It occurred to me that trucking is a supportive, one might even say dependent, industry. The freight business caters to manufacturers and retailers, and when production goes down, as it has the last few years, truckers and dealers have no other avenues to fall back on.
When you add on top of that, the squeeze of rising fuel prices and tighter environmental regulations, it's no wonder that fleet owners, and the dealers that supply them, are just hanging on for dear life.
In my next post, I want to talk about Bryan Haupt's presentation on the used truck dealer's viewpoint, and Keith Prather, who elaborated on the trends described by our opening speakers.
Monday, April 26, 2010
2010 Truck Conference Overview
When Terry Williams asked me to attend the Truck Blue Book conference and do some blogging about it, he seemed to worry I'd be bored. "You can wander if you want to," he said. "You can start out in one program and then move into another track if you get bored or tired or whatever."
I fully expected to be bored. I had zippo knowledge of the trucking industry, and I couldn't imagine what I might have to say, as an outsider, that would be of interest to a tight-knit group of professionals who already knew each other and their business.
I was not bored. I was fascinated, amused, outraged and occasionally frightened (Keith Prather's economic forecast was mildly terrifying), but I was definitely not bored.
Mostly, though, I was enlightened. You know how sometimes you know something, but you don't understand it until somebody comes along and points out the obvious? That's the way I was with trucks. Generally trucks don't exist on my radar unless I'm trying to pass one on the highway.
I mean, I kind of knew, because I am very keen on the local foods movement, that the variety of fresh produce available in every grocery store is only there because some trucker made a long haul from California or Florida or Mexico over the past three days. And I knew, from working at Wal-Mart while I was in college, that big-box stores have strict windows of time in which merchandise must be delivered, which puts a logistics strain on truckers, especially the smaller owner-operators.
What I didn't comprehend, because I never thought about it, was how integral the trucking industry is to the lifestyle that I enjoy, as an American consumer. I've heard it said that "trucks are the backbone of America" but I dismissed it as a slogan of the industry. It is that, but it is also a bit of reality that should be drilled into American schoolchildren, along with the four basic food groups (yes, I know they don't teach that anymore, and they should).
Since I'm a bit of a foodie, I'm frequently appalled at the divorce people have from their food's origins. Farmers get no respect from your average pre-packaged, single-serving, fast-fooding American. Even though I grew up on the edge of farm country, at my high school the Future Farmers of America students were perceived as hicks: unsophisticated and obsolete. Most of the kids in my school were headed for college, for office jobs and hefty student loans. Vocational training was considered a taint.
At the Truck conference I heard complaints about a similar attitude toward the trucking industry. Trucks aren't portrayed favorably in popular media. They are noisy and smelly, they pollute the air and can wipe out a Prius in a single skid. Plus, everybody knows truck drivers are sleep-deprived and cooking their books. In short, mamas don't want their babies to grow up to be truckers.
Bryan Haupt, in his excellent presentation about the challenges facing used-truck dealers, conceded that trucking has historically been a mom-and-pop operation. But he also made a solid case for change—it's necessary, and it's coming.
Shipping is no longer merely coast-to-coast, it's continent-to-continent, often within a matter of days. Highly sophisticated third-party-logistics companies facilitate who takes what load where and when, and those high-tech 3PL's make it possible for the small owner-operators to stay in business under those tight deadlines. So trucking involves not only driving a rig, but maintaining a fleet (even if it's only 1-2 trucks), managing debt and profit on that fleet, getting the trucks where they need to be to pick up and deliver, and coordinating all of that with two sets of customers—one on either end of the haul. Gives me a headache just thinking about it! And people think trucking is just a roughneck job? Gimme a break.
On top of the day-to-day concerns, the American trucking industry is fighting the two-headed snake of rising oil prices and tightening environmental regulations. According to some estimates, worldwide oil production may peak as soon as 2012, followed by massive shortages in 2015. Trucks have to get more fuel-efficient in the short-term, and be open to alternative fuels in the not-very-long term. Meanwhile, emission-control regulations of the past decade have consistently reduced fuel efficiency. I did hear some interesting things about selective catalytic reduction (SCR) from David Hames at Daimler, but that's a subject for another post, and in any case it's more an immediate cost layout, rather than an immediate solution, for truckers and dealers.
I guess the feeling I mostly took away from the conference was a sort of hopeful desperation. It was thick in the conference rooms. These guys (and gals) are on the cusp of big changes, and no one can guess what they will be. I heard guest economist Keith Prather talk about foreign competition, potential oil shortages, and the unpredictable impact of natural disasters, like the bad hurricane season we're supposed to have this summer. Couple that with the certainty of rising diesel prices, aging fleets, tighter government regulations, and increased demand, it's easy to feel cautious, apprehensive, ambitious, maybe even a bit panicked.
But certainly not bored.
I fully expected to be bored. I had zippo knowledge of the trucking industry, and I couldn't imagine what I might have to say, as an outsider, that would be of interest to a tight-knit group of professionals who already knew each other and their business.
I was not bored. I was fascinated, amused, outraged and occasionally frightened (Keith Prather's economic forecast was mildly terrifying), but I was definitely not bored.
Mostly, though, I was enlightened. You know how sometimes you know something, but you don't understand it until somebody comes along and points out the obvious? That's the way I was with trucks. Generally trucks don't exist on my radar unless I'm trying to pass one on the highway.
I mean, I kind of knew, because I am very keen on the local foods movement, that the variety of fresh produce available in every grocery store is only there because some trucker made a long haul from California or Florida or Mexico over the past three days. And I knew, from working at Wal-Mart while I was in college, that big-box stores have strict windows of time in which merchandise must be delivered, which puts a logistics strain on truckers, especially the smaller owner-operators.
What I didn't comprehend, because I never thought about it, was how integral the trucking industry is to the lifestyle that I enjoy, as an American consumer. I've heard it said that "trucks are the backbone of America" but I dismissed it as a slogan of the industry. It is that, but it is also a bit of reality that should be drilled into American schoolchildren, along with the four basic food groups (yes, I know they don't teach that anymore, and they should).
Since I'm a bit of a foodie, I'm frequently appalled at the divorce people have from their food's origins. Farmers get no respect from your average pre-packaged, single-serving, fast-fooding American. Even though I grew up on the edge of farm country, at my high school the Future Farmers of America students were perceived as hicks: unsophisticated and obsolete. Most of the kids in my school were headed for college, for office jobs and hefty student loans. Vocational training was considered a taint.
At the Truck conference I heard complaints about a similar attitude toward the trucking industry. Trucks aren't portrayed favorably in popular media. They are noisy and smelly, they pollute the air and can wipe out a Prius in a single skid. Plus, everybody knows truck drivers are sleep-deprived and cooking their books. In short, mamas don't want their babies to grow up to be truckers.
Bryan Haupt, in his excellent presentation about the challenges facing used-truck dealers, conceded that trucking has historically been a mom-and-pop operation. But he also made a solid case for change—it's necessary, and it's coming.
Shipping is no longer merely coast-to-coast, it's continent-to-continent, often within a matter of days. Highly sophisticated third-party-logistics companies facilitate who takes what load where and when, and those high-tech 3PL's make it possible for the small owner-operators to stay in business under those tight deadlines. So trucking involves not only driving a rig, but maintaining a fleet (even if it's only 1-2 trucks), managing debt and profit on that fleet, getting the trucks where they need to be to pick up and deliver, and coordinating all of that with two sets of customers—one on either end of the haul. Gives me a headache just thinking about it! And people think trucking is just a roughneck job? Gimme a break.
On top of the day-to-day concerns, the American trucking industry is fighting the two-headed snake of rising oil prices and tightening environmental regulations. According to some estimates, worldwide oil production may peak as soon as 2012, followed by massive shortages in 2015. Trucks have to get more fuel-efficient in the short-term, and be open to alternative fuels in the not-very-long term. Meanwhile, emission-control regulations of the past decade have consistently reduced fuel efficiency. I did hear some interesting things about selective catalytic reduction (SCR) from David Hames at Daimler, but that's a subject for another post, and in any case it's more an immediate cost layout, rather than an immediate solution, for truckers and dealers.
I guess the feeling I mostly took away from the conference was a sort of hopeful desperation. It was thick in the conference rooms. These guys (and gals) are on the cusp of big changes, and no one can guess what they will be. I heard guest economist Keith Prather talk about foreign competition, potential oil shortages, and the unpredictable impact of natural disasters, like the bad hurricane season we're supposed to have this summer. Couple that with the certainty of rising diesel prices, aging fleets, tighter government regulations, and increased demand, it's easy to feel cautious, apprehensive, ambitious, maybe even a bit panicked.
But certainly not bored.
Monday, June 15, 2009
May's Decline
The May sales reports continue to arrive, often accompanied with a message that activity is picking up. But to date that activity is not translating into increased sales month over month. May has been the largest drop in monthly sales for 2009. BUT again it is very encouraging that activity remains and hopefully it is increasing.
2009 Month to Month Report Sales
January to February: 3% increase (not a typo)
February to March: 5% decrease
March to April: 4% decrease
April to May: 10% decrease
2009 vs 2008 Reported Sales
January down 43%
February down 22%
March down 38%
April down 36%
May down 43%
Used values continue to erode, no surprise, and to see the most current values visit www.truckbluebook.com
2009 Month to Month Report Sales
January to February: 3% increase (not a typo)
February to March: 5% decrease
March to April: 4% decrease
April to May: 10% decrease
2009 vs 2008 Reported Sales
January down 43%
February down 22%
March down 38%
April down 36%
May down 43%
Used values continue to erode, no surprise, and to see the most current values visit www.truckbluebook.com
Wednesday, June 10, 2009
An example for our Industry passes
This is written with great sadness as I have just learned Jim Sundy has passed away. Jenny and the family were with him and however sad I know the room was filled with abundant love for an amazing husband, dad and basically a helluva man. As Eddie Walker said, "over his years he contributed greatly to the used truck industry and to many of us, his contribution to our personal lives was immeasurable and will last forever."
I first met Jim, and Jenny in the fall of 2000 in Santa Fe, NM at my very first Truck Blue Book Workshop. For me it was a bit terrifying as I was about to run a meeting comprised of attendees that had more years of experience than I had years of living; 32. Yet there was Jim, never a word wasted, never a joke not to be told and over that weekend he allowed me in as a colleague. This Workshop rookie left that meeting with a whole lot more confidence and with a friend I affectionate ly called "The Professor".
Over the years The Professor and I would chat from time to time and see each other at Blue Book, UTA and dealer meetings. I nearly drove off the road in North Carolina when he got me to laughing so hard, I road tripped from Sarasota to Tampa due to flight delays with Jim and Jenny after a UTA meeting and when he retired from the Blue Book Advisory Council I got to make him happy as we surprised Jim and Jenny by having their kids join us for the meeting. All in all never once was there not a smile, a hug, a new joke, a lot of love and Jenny's gold sweater (which she later gave to me).
In conclusion I join Eddie's toast, “To a man that lived life to its fullest, loved a lot and never quit giving back. Truly a MAN’S MAN!
I first met Jim, and Jenny in the fall of 2000 in Santa Fe, NM at my very first Truck Blue Book Workshop. For me it was a bit terrifying as I was about to run a meeting comprised of attendees that had more years of experience than I had years of living; 32. Yet there was Jim, never a word wasted, never a joke not to be told and over that weekend he allowed me in as a colleague. This Workshop rookie left that meeting with a whole lot more confidence and with a friend I affectionate ly called "The Professor".
Over the years The Professor and I would chat from time to time and see each other at Blue Book, UTA and dealer meetings. I nearly drove off the road in North Carolina when he got me to laughing so hard, I road tripped from Sarasota to Tampa due to flight delays with Jim and Jenny after a UTA meeting and when he retired from the Blue Book Advisory Council I got to make him happy as we surprised Jim and Jenny by having their kids join us for the meeting. All in all never once was there not a smile, a hug, a new joke, a lot of love and Jenny's gold sweater (which she later gave to me).
In conclusion I join Eddie's toast, “To a man that lived life to its fullest, loved a lot and never quit giving back. Truly a MAN’S MAN!
Friday, February 6, 2009
2008 Sales Quantity by Single Dealer Locations reporting for each month
23 Dealers sold 0 - 24 Units
18 Dealers sold 25 - 50 Units
33 Dealers sold 50 - 99 units
35 Dealers sold 10 - 200 Units
17 Dealers sold 200+ units
As the 2009 Reports roll in I will continue to give updates.
As for values, as the month closes out the numbers will be tabulated. Some conversations I have had say values continue to fall. A few believe the second half of 2009 will be a comeback of sorts, so don't drop values much. But I think we all thought that about 2008... Used truck folks seem to always be an optimistic group, guess it comes from us having to 'turn lemons into lemonade, if not strawberries'.
No matter how the year goes for you (and I do hope steady or a lot better) if you have the means, please know there is someone, some family, some child that needs your help. Tightening times is no time to look inward.
23 Dealers sold 0 - 24 Units
18 Dealers sold 25 - 50 Units
33 Dealers sold 50 - 99 units
35 Dealers sold 10 - 200 Units
17 Dealers sold 200+ units
As the 2009 Reports roll in I will continue to give updates.
As for values, as the month closes out the numbers will be tabulated. Some conversations I have had say values continue to fall. A few believe the second half of 2009 will be a comeback of sorts, so don't drop values much. But I think we all thought that about 2008... Used truck folks seem to always be an optimistic group, guess it comes from us having to 'turn lemons into lemonade, if not strawberries'.
No matter how the year goes for you (and I do hope steady or a lot better) if you have the means, please know there is someone, some family, some child that needs your help. Tightening times is no time to look inward.
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