Put Our 2024 Study in Your “Cart” and Utilize Our E-Commerce Data to Plan Your Next Online Move
We recently read on LinkedIn that “manufacturers need to make their inventory and pricing readily available to distributors with an eCommerce website” and thought for a moment that LinkedIn had AI connected directly to our Newsletter as we are getting ready to dive into the world of E-Commerce once again.
Following three studies that we published every two years for the last six years, it is time to take another examination of this parts channel. Expectations, offerings and current needs are changing as the parts market recovered from the pandemic, experienced substantial price increases and navigated through an uncertain economic landscape.
Has the growth and penetration of fleets’ parts purchasing through online channels increased since 2021? Expectations were that at least a 2-point growth level would be seen in 2024 — did this occur? How can suppliers make the customer’s online experience better? More efficient? Are new online sources being tapped in search of the needed part and the desired price? Have price increases played a role in online parts purchasing practices?
We have a detailed prospectus available for your review. It is KEY to get in on this Study early so your specific questions/topics can be included in our fleet and distribution channel surveys.
For more information, please contact John Blodgett or call 630-916-6110.
Mr. Powell Has Three Problems
by Dr. Robert Dieli
We were recently asked by one of our esteemed clients when we thought the Federal Open Market Committee [FOMC] would start cutting the Federal Funds rate target. Our answer was the title of this piece.
What follows is why we replied that way.
The chart below shows us the conditions under which Mr. Powell, the Chair of the Federal Reserve Board, and the final authority on where the Federal Funds Rate target will be set, will be pondering his three problems.
Problem number one is the presence and location of the red dots on the chart. For those of you who don’t speak “bond”, an inverted yield curve is the condition where you are paid a higher rate of interest for a short-term security than you would be for a long-term security. Currently, you will get more interest from the 6-Month Treasury Bill (5.43%) than you would from the 10-Year Treasury note (4.45%). The relative scarcity of red dots is your first indication that this is not the normal state of affairs. But their location, immediately in front of the last four recessions, is a warning that time is of the essence if Mr. Powell is to keep his pledge of not letting the economy slide into a full-fledged downturn.
So, Mr. Powell’s first problem is to decide on when and how to make the red dots go away.
Mr. Powell’s second problem is one of his own making. And that was his choice of an inflation metric, the Core PCE, that is not behaving the way he had hoped it would. Namely, that the year-over-year percent change in the Core PCE would be quickly approaching the 2% target that was chosen at the outset of this policy exercise. The reasons why the Core PCE is not behaving as expected have mostly to do with the level and trend of shelter prices which respond to changes in monetary policy with a long lag.
All of which goes back to the first problem: how and when to make the red dots go away. Mr. Powell would like to do that sooner rather than later, but he is constrained by how he set his victory conditions.
Mr. Powell’s third problem is one that every Fed Chair faces every day: How to communicate changes in policy without unbalancing the financial markets.
And by unbalancing we mean preventing both the bond and the stock market from becoming one-way trades. That is some jargon relating to the condition where everyone is buying, or everyone is selling at the same time. This is extremely dangerous because it leads to the types of excess that have created a great deal of collateral damage.
The next FOMC policy announcement will come on the afternoon of June 12th. Between now and then you can expect to see several FOMC members on the tape floating ideas about what the next policy move should be. Pay close attention to any comments by Federal Reserve Board members or one of the four voting regional bank Presidents. That is what the stock and bond traders will be doing. What those policy options are will tell us how many of Mr. Powell’s problems might be addressed, and possibly even solved, over the next several months.
For more information, please contact John Blodgett or call 630-916-6110.
With 30% of the Medium and Heavy Duty Service Outsourced, How Can More Share Be Gained? What Are Fleets Looking For in a Service Provider?
Our extensive Study is underway! With hundreds of fleets expected to provide input, a thorough look into the service side of the business will be the result.
With fleets, we will dive into who is completing the service. What is the future outsourcing expectation? What shop hours and wait times are deemed acceptable? What are the top concerns of outsourcing? How far are fleets willing to travel for specific services? Specifically relating to trailers, what service is completed in-house versus outsourced? How much are fleets utilizing mobile service providers and for what services?
Looking at service activities that are completed by fleets, are service techs receiving the needed training? What diagnostic tools are currently being used? What additional tools are needed? What new technologies are service techs trained on?
With service providers, we will explore the number of service bays, hours of operation, service mix with customers, extent of mobile maintenance services relating to distance travelled, technicians dedicated to mobile service, services offered through mobile service. We will additionally address technicians’ training and more.
So, yes, we are looking into Service at the ground level which allows subscribers the data and information to make adjustments in their own service offerings, develop new strategies and to support techs within fleets.
Want to learn more (and yes, there is more!), please contact John Blodgett or call 630-916-6110.
2023, A Good Year for Lubricant Usage in Construction Equipment?
MacKay & Company announces the release of our 2023 U.S. Lubricant Market Report focusing on Construction Equipment.
Our report profiles seven primary lubricant categories: engine oil, hydraulic fluid, gear oil, coolant, transmission fluid, and diesel exhaust fluid (DEF). Excluding diesel exhaust fluid (DEF), the total market demand for lubricants reflects the usage changes and finishes the year with a -1.5% change. With DEF included, total demand is up by over 3%.
Brian Van Camp, data analyst and report author states “Over the last two years, fleets have been replacing equipment they were unable to retire due to the pandemic and supply chain issues. These machines include emission systems not required on the older units which in turn, leads to an increase in the demand for DEF.”
Along with various industries profiled, the DataMac® Lube service segments the U.S. market by several key categories including fleet size, region, vocation, distribution channels, points of service, and brands used. Surveys with equipment operators and companies are conducted annually to capture up-to-date fleet behaviors as they pertain to the total market, measured in millions of gallons.
Additional markets covered include agricultural equipment, medium-heavy duty truck, and light-duty vehicle segments.
For more information, please contact John Blodgett or call 630-916-6110.
We Are On The Stage And At Shows Over The Next Few Months
May 15
Travis Kokenes presented at TSEI in Chicago
May 20-23
John Blodgett will attend ACT in Las Vegas
May 23
Molly MacKay Zacker will be presenting at Northwood University’s Heavy Duty & Commercial 101
July 14
John Blodgett will be presenting at Northwood University’s Heavy Duty Leadership 2.0
For more information, please contact John Blodgett or call 630-916-6110.