Happy New Year!
All of us at MacKay & Company wish you a wonderful, prosperous and exciting New Year!
HDAD 2025 : MONDAY, JANUARY 20th in Grapevine, TX
HDAD 2025 is weeks away and the lineup is jam-packed with insightful speakers, panelists and presenters! Details are included in the conference Agenda.
Registration remains open and discounts are still available.
A TWO-DAY FLASH SALE IS OCCURING TODAY AND TOMORROW!! For these TWO DAYS, the early bird discount will be applied to new registrations. Don’t miss out on this TWO-DAY SALE!! In addition, if you are a
MacKay & Company client, an additional special discount code can be applied.
For more information, please contact John Blodgett or Molly MacKay Zacker or call 630-916-6110.
The Economy
“The future ain’t what it used to be.” — Yogi Berra
Two events will be taking place in January that will make Mr. Berra’s observation come true.
The first will be the transition of the leadership of both the Executive and Congressional branches of government to the officials elected last November. The White House, the Senate and the House of Representatives will all be under the control of the Republican party.
The second will be the empanelment of a new voting roster on the Federal Open Market Committee [FOMC] of the Federal Reserve.
The result of those events will be a new policy dynamic on both the fiscal and monetary fronts, the outcome of which will have a significant impact on the trucking economy. Imports, Exports and Government sectors total 35.4% of Total Truckable Economic Activity [TEA] and we think these are the areas in the crosshairs of the new policy dynamic.
The vulnerability of the Import and Export components of TEA comes from the prospect of the promises made during the campaign to levy tariffs on a wide array of goods from a wide array of countries coming true. This will materially affect the volume of freight coming into the country. The additional complication is that our imposition of tariffs will certainly be met by retaliatory actions by the countries affected. This will influence our export activity and the volume of freight leaving our country.
The last time we had a trade war, our imposition of tariffs on Chinese steel led to their imposition of tariffs on our soybeans. Which, in turn, led to a shift in the global trade of soybeans with Argentina and Brazil gaining market share at our expense. Tariffs are the equivalent of a sales tax. They are paid to Customs at the point of entry by the importer.
Trade wars are never short and never without collateral damage. And, as you can see by the chart, they would involve 22% of the trucking economy.
The vulnerability of the construction segment of TEA comes from two different sources of uncertainty.
The first problem is the imbalance of supply and demand within the residential and nonresidential real estate markets.
On the residential side, there is a shortage of inventory for sale and mortgage rates have risen to levels that are adversely affecting affordability. In other words, we have little supply, and restrained demand. The FOMC had hoped that its recent cuts in the Federal Funds rate would cause long-term interest rates to drop, thereby facilitating purchases. Mortgage rates set a new high in December.
On the nonresidential side, the problem is quite different. There is a considerable overhang of unoccupied commercial real estate which includes both office and retail space. As a result, there is little reason to think that construction activity will improve even if interest rates come down.
The second problem is with the future track of interest rates. As we mentioned earlier, there will be a new roster of voting members of the FOMC. This happens every year at this time. The question is how this mix of members will come down on the issue of when and why the next move on the Funds rate target should take place.
The previous group of voting members had made the taming of inflation its primary policy goal. It might take a meeting or two for the policy priority of this new group to emerge. We will know more about this when Chair Powell speaks after the first meeting of the new FOMC at the end of the month. At his last press conference, he strongly hinted that there could be a pause in the pace at which interest rates are being lowered.
One thing, however, is certain: Yogi got it right.
Study is scheduled to be released this week!
We are wrapping up our 2024 E-Commerce Parts Purchasing Study; we have completed our survey work with both Operators and Distributor channels . With several new topics added this year, we are excited to share all the details with Study participants. Our report has a new look, more descriptive graphics highlighting all of our Study results.
If you are looking to better understand fleets’ online purchasing patterns, this is the report for you. We are diving into:
How much is purchased through online channels?
What parts are most frequently purchased online?
Why are fleets not purchasing parts online?
What sites are used to research parts?
Potential use of guest account, no login or registration required?
What website attributes are most important?
AND MORE!
Our 2024 Study marks the 4th extensive review of the e-commerce purchasing patterns for medium and heavy duty fleets. In 2021, 11% of parts purchasing was conducted through an online channel. When we began our research, we were interested to learn if fleet's’ online purchasing had grown over the past several years as predicted or were fleets charting a different course? We now know! We knew that convenience had been a driving force behind the use of e-commerce platforms; had this continued or was more in-person contact required? We now know!
We would be happy to further this conversation and share more details about our latest Study. For more information, please contact John Blodgett or Travis Kokenes or call 630-916-6110.
Proprietary research
New year….new perspectives? Are you in need of customer input from an unbiased third party? Need insights into a new market? Interested in testing the market with a new product but need data to back your decisions? Contemplating making an acquisition and need research and data to aid in your business plan development?
Our experienced team can help you with your research and data needs. Please reach out to John Blodgett for more information.
MacKay & Company honored for our longtime support of FFA
With every end user and distribution channel survey, we offer our respondents an incentive, either cash or a donation to a charity in an equivalent amount. For 25 years, MacKay & Company has offered Future Farmers of America as a charity option to our survey respondents.
We are pleased to have supported this meaningful organization for so many years and appreciate the recognition from The National FFA Foundation.
Is there a charity that you would like us to consider? Please let us know.
DataMac Truck Lube released, DataMac Ag Lube out next month
Tracking consumption of oil, transmission fluid, gear oil, coolant and additives is all detailed in our DataMac Lube reports. We dive into lubricant usage by vehicle class or equipment type, who completes the fluid replacement, where fluids are purchased. AND, preferred brand. Our DataMac Lube data is accessible through our online application, allowing you to cut the data to best meet your research needs.
Our latest DataMac Truck Lube was released in late Fall 2024 and DataMac Ag Lube will be available mid-February. Want a demonstration of the application or a detailed review of the Table Contents? Reach out to John Blodgett for more information.
We have decades of experience tracking parts replacement demand on Agriculture Equipment!
On an annual basis, MacKay & Company conducts an extensive examination of the maintenance practices of farm operators and measures farm field equipment parts replacement demand.
We examine parts replacement demand in the following equipment types, both self-propelled and pull behind:
Tractors - 5 horsepower sizes
Combines
Forage Harvesters, Mowers, Rakes, Windrowers
Chisel Plows, Disc Harrows, Field Cultivators
Corn Planters, Grain Drills, Bailers
Field Sprayers, Commercial Sprayers
Our report and online application provide you with the detailed data, looking at where parts are purchased, who is completing the service needed to maintain this equipment, what types of parts are utilized when servicing the equipment (non-genuine or genuine). We examine all this data in both units and dollars.
Is this a market of interest, would you like demonstration of this data? Reach out to John Blodgett for more information.