Regardless of the nature of the leader of a business (reckless or not), a good succession plan needs to be put in place and communicated.
We have completed the first
quarter of 2018. This initial
three months of the year
are a trade show bonanza
for the trucking industry. It starts with
HDAD/HDAW in January, followed by
an alphabet soup of shows and conferences:
TMC (part of ATA), NTEA, TCA,
MATS and ATD (part of NADA). I would
spell them all out, but I only get one page
for this column.
As one of the people who attends
many of them, I am always impressed
by the work the vehicle and component
manufacturers and other suppliers put
into making these shows a success. The
coordination of getting booths to different
cities (must be some good for-hire
carriers) and staffing them with talented,
knowledgeable professionals is always
I noticed many new booths this
year or booths upgraded to the point I
thought they were new. There was more
technology incorporated into booths,
such as large video displays (Truck-Lite
had a large screen to display their Road
Ready trailer telematics product), educational
product displays (Dana displayed
old and new driveshaft designs), more
fun (WABCO’s truck driving simulator)
and the always popular bars and deep,
padded carpet (Great Dane, Hendrickson
There were new products and
suppliers, including new aerodynamic
trailer products (Michelin was one),
predictive analytics firms and Cummins’
display of electric-powered tractors.
Also, if you haven’t seen it yet, look
online at Shell and AirFlow Truck
Company’s Starship futuristic-looking
truck (which drives on the road today).
It is even cooler in person — I would
like to see it moving down the road with
a STEMCO Trailer Tail deployed, which
would make an impressive profile.
NTEA and TMC had a considerable
number of presentations on new technologies
and products with reviews from
fleets that are actually testing all types of
new products. At NTEA — primarily a
show focused on work trucks — it was
impressive to see some new products
focus on reducing idling time, as well
as Hino’s new Class 7 and 8 trucks. At
TMC, Hyliion HE Drive Axle won the
2018 Jim Windsor Technical Achievement
Award with its fuel-saving electric
drive-axle system, which was very
impressive and not the only one being
promoted at TMC.
Most of the shows I attended this first
quarter reported record participation
by suppliers and participants, another
indication of the positive economic environment
we are enjoying in the trucking
industry. Certainly, the mood of the
vendors and attendees also seemed to be
There are more trade shows and
industry events with a variety of letters
coming up after the first quarter, such
as ACT, GATS, NTPC, IAA and AAPEX,
all with different focuses and themes but
with many similar vendors. Granted you
can get some insights on most of these
products from the various trade publications
and websites (I would recommend
Truck Parts & Service), but I don’t think
you get the same value as talking with a
company representative and seeing actual
So if you have been staying home the
first three months of the year to enjoy
Nor’easters or Arizona and Virginia’s
road to the Final Four, time to get out
and find a trade show.
Mackay&Co TPS, April 2018, Article by John Blodgett
As the last mile has gotten shorter, we’ve seen a shift to lighter-duty vehicles. Today’s consumers receive their purchases delivered at their doorstep delivered by smaller vehicles. Items are often shipped individually as they are in stock, resulting in more, smaller shipments instead of larger bulk deliveries. An increase in the number of individual, urban deliveries also leans toward lighter-duty for both parking and maneuverability.
Our purchased goods are lighter. The television I had delivered back in 2002 weighed nearly 200 pounds while the same size screen I purchased in 2010 weighed only 50 pounds. That same television takes up one-quarter of the space as the old one. Both trends point to a shift to light-duty.
The last warehouse in the supply chain is now closer to the consumer than ever before -- I have two Amazon warehouses within 10 miles of my house to accommodate same-day shipping. Consumers are also demanding more of their food from local sources, with some having food delivered to their homes. Delivery of time-sensitive products leads to shorter routes and often smaller loads.
There are many reasons to downsize to a lighter-duty truck. Companies are looking to cut the cost of overhead using more fuel-efficient vehicles – ‘right sizing’ to its primary application. The ability to analyze usage or delivery data and optimize routes have all contributed to efficiencies allowing companies to spec only those vehicles that are necessary. Some companies desire less engine maintenance complexity and expense and may shift to gasoline powered vehicles over diesel. Often this means going to a lighter-duty truck.
These are a few reasons that point to a diminishing need for larger trucks and have driven the demand for lighter vehicles higher. With online purchases steadily growing, this trend is likely to continue for the foreseeable future.
A quick analysis of Ward’s Retail Sales data backs up these trends with some data. Examining the last fifteen years of Ward’s light duty retail sales illustrates this shift quite well. In 2002, retail sales of
Class 3 trucks accounted for 20% of the total Class 3-8 truck sales. In 2017, Class 3 represents 43%. Total Class 3-5 was 35% of Class 3-8 trucks sold in 2002, now it is closing in on 60%.
Not surprisingly, the same trend is seen in parts demand. Using our MacKay & Company DataMac® Light-Duty Database, I graphed out the aftermarket parts demand of Class 3–5 trucks for the last ten years. Aftermarket parts demand in 2017 for Class 3 trucks is 281% the demand of 2007. Class 5 trucks’ 2017 aftermarket parts demand is 313% of 2007 demand. Class 4, conversely, decreased 13% over the same time period. No surprise, more trucks = more parts opportunity.
Of course, this article is heavily slanted toward package delivery and there will always be a need for trucks that are used for tasks that require auxiliary power via PTO, haul or tow heavy loads necessitating a larger, more powerful truck. But the days of ‘always buy more than you need’ appear to be dwindling as there is no denying the data that some companies have made and will continue to shift to lighter vehicles in their fleets.
Mackay&Co TPS, February 2018, Article by Lynn Buck
As we enter a new year (2018 for those of you keeping track) most firms have or, maybe a little belated, are now determining what their goals are for the year. This is the same for the heavy-duty aftermarket as it is for any industry.
We are currently (as of January) in the 103-consecutive month of economic expansion for the U.S. economy since the end of the recession in June of 2009. Obviously, all those months were not easy going, many portions of the economic recovery and expansion were very weak and for some sectors, such as fracking and oil drilling, there have been some high highs and some low lows.
The economy during this expansion has dealt with exchange rate issues, burdensome government regulations, a slowing economy in China, economic slowdowns in Europe, outright recession in Brazil and other factors. Not that everything is peachy keen (good) across the world, there is still Dennis Rodman’s friend in North Korea, but globally on whole, things are good.
As of December 8, unemployment is at 4.1%, a 17 year low in the U.S. People that had fallen off all records for unemployment are coming back to work and many of those working are seeing their incomes increased, which bodes well for consumer spending. Trucking payrolls grew by 1,800 in November, imports are up – which means good activity at the nation’s ports – and consumer and business confidence are at record high levels.
MacKay & Company tracks fleet utilization and it has been very strong for the first three quarters 2017. Parts sales for aftermarket component manufacturers and their distributors have been consistently up in 2017 over 2016. TEA® (Truckable Economic Activity), a MacKay & Company report on the trucking economy, has not been this positive since before the recession.
Bob Dieli, the MacKay & Company economist, has a short term economic tool called Enhanced Aggregate Spread and it is currently showing a good economy out past mid-year. (See Bob for details.)
So, if you are somebody who is responsible for obtaining sales goals, this would not be a good time to throw in the excuse of the economy for slow sales or anticipated underperforming to target goals. Not being able to meet customer demands, competition, accidently running over a customer’s dog, may all still work, but blaming a bad economy likely won’t work in 2018. If you still think the economy is bad here – contact someone in Brazil for some level setting.
Our current forecast for the aftermarket (soon to be updated in January) is up slightly compared to a strong 2017, but my guess is when we get fourth quarter fleet utilization, our outlook for 2018 will be more robust.
These are the good old times (unless you are certain politicians or newscasters) that we will be referring to during the next recession (not if, but when and hopefully many years from now). So, enjoy and get excited to attack the opportunities. I think most people would agree it is more fun trying to keep up with customer demands vs. trying to keep your doors open, although both can be exhausting.
Mackay&Co TPS, December 2017, Article by John Blodgett
It is actually the middle of October as I write this column and there hasn't been a whiff of winter weather yet in Chicago, although it does seem like the Cubs have hibernated.
So why bring up the holidays? Because they will soon be upon us and soon after that is the Heavy Duty Aftermarket Week (HDAW) in Las Vegas from Jan. 22-25, 2018. This is the preeminent conference on the heavy duty aftermarket in North America. It is run by a combination of associations whose primary focus is the heavy-duty aftermarket.
If you are a distributor of heavy-duty aftermarket parts and/or service and haven't attended this conference in the past, I highly recommend you consider it this year. It is an excellent way to network with other distributors, get one-on-one time with suppliers and enjoy interesting and educational presentations. If you are a supplier, it is likely the best bang for the buck to get in front of the people who are on the front lines of the independent aftermarket.
The primary reason I am writing this column now is to start you thinking about what you want out of this conference. It seems that everyone is extremely busy these days, mainly because business is good, but if you don't start outlining your goals for HDAW you risk leaving Las Vegas wishing you had spent more time preparing for this conference.
Quite often we hear that young people don’t want to work on trucks or off-highway equipment — that they don’t want to get dirty. Theon seems to relish this type of fun (I don’t think he considers it work).
If you are a distributor, start laying out the topics you want to discuss with each individual supplier you want to meet with at the one-on-one meetings. If you start that list now, you are not likely to forget to address the important items. Talk to your employees about their perspective on what needs to be addressed or brought up -they may have a different take.
Also think about what new suppliers it might make sense to meet with this year, if only to better educate yourself on possible new products or suppliers.
Finally, think about who from your organization you want to attend.
There are a lot of heads with gray hair and no hair at this conference (just the men) - not that there is anything wrong with that -but are there younger members on your team that would benefit from this conference? If so, get them signed up
If you are a supplier, you probably have already started thinking about the key messages or themes you want to get across to current and potential distributors. If you haven't started, get started, if you have started, start finalizing.
Determine what and who should be in your booth. Determine how you are going to differentiate your company from your peers and competitors. What are you going to discuss in your one on-one meetings? Will the distributors you meet with be able to remember your message? Will there be anything new from what you told them last year?
Finally, a shameless plug. If you are planning to attend HDAW, get in to town one day earlier and attend HDAD (Heavy Duty Aftermarket Dialogue) on Monday, Jan 22, 2018. It is a one-day conference sponsored by MacKay & Company and the Heavy Duty Manufacturers Association (HDMA) and it includes speakers and panels with distributor, dealer and fleet representatives discussing the pressing issues impacting the heavy-duty aftermarket. You can find more information at either organization's website.
Truck Parts & Service, November 2017, Article by John Blodgett
Interview with Dieli, HDAD & DataMac Mexico