John's Blog

No Economic Excuses

John Blodgett

John Blodgett

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

Merry Christmas and Happy New Year

John Blodgett

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.

If you don’t start outlining your goals for HDAW you risk leaving Las Vegas wishing you had spent more time preparing

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

Longest Day: Good time to look at the long and the short of the aftermarket


As I write this column, we just finished the longest day of the year (I mean daylight hours, not a bad day which doesn’t seem to want to end) June 21. Not quite the midpoint of the year, but close, so maybe it is a good time to review what we (MacKay & Company) know so far about the aftermarket for 2017. I do understand that by the time you are reading this it is likely August and Jordan Spieth has already won the British Open. 

Let’s start with our Fleet Utilization Index. Each quarter we measure fleet vehicle utilization rates for over 700 fleets of various sizes and vocations. Obviously, fleets’ equipment usage has a direct impact on the aftermarket for parts and service. First quarter utilization came in at a record high and the forecast by the fleets for the second and third quarters was also very strong.


We also have an Aftermarket Index of component suppliers’ sales to OES and independent channels. Preliminary numbers through May have the parts sales for these participants up 3.5% year-to-date compared to last year. Canada is up 7.8%. Sales to Independent channels are outperforming OES in both markets. Both markets (U.S. and Canada) were down last year compared to 2015.  Commercial break- If you would like to join Index – let me know. Now back to the column.

Monthly, we also survey several truck dealers and independent parts distributors each month about their aftermarket parts sales. Our survey respondents in May for both channels were up between 4% and 5% year-to-date compared to 2016. 


Bob Dieli, our economist and frequent contributor to this column, has a short term economic outlook tool called Enhanced Aggregate Spread (EAS). I won’t enlighten or bore you (depending on interest level for economic forecasting) on the details now, but basically Bob takes four real economic measurement, combines them in an Index and pushes it out nine months — turns out to be a good short term indicator of economic activity. At present, it is showing positive economic activity out into the first quarter of 2018. EAS is also a good leading indicator for our measurement of trucking economy called Truckable Economic Activity (TEA®). Currently all sectors of TEA® are at or above levels measured last year. 

Now is the time to take advantage of a good market and make hay
— John Blodgett

Retail sales are forecast to be down this year, but while retail sales can be an indication of economic health, they don’t truly impact the aftermarket of the current year.

Our forecast for 2017 aftermarket in January of this year was for the market to be up 1.5% over 2016. At present, that looks light, but time will tell. We do complete our major update and forecast in July, so stay tuned. 

In summary, most indications are positive and the short term outlook is positive, business and consumer confidence is good and forecast capital spending by corporations is expected to be up. Now is the time to take advantage of a good market and make hay (or better yet money). Turn off the radio and TV talking heads (and twitter account if you have one) and focus on what you can control – your business. 


Truck Parts & Service July, 2017 Article by John Blodgett


Are your automated systems customer friendly?

In the last couple months between work and personal business, I have needed to contact a number of companies for various things. This has meant interfacing with company voicemail and websites, with good and, unfortunately, far too many not so good experiences.

I am all in favor of automated voice systems/websites where you can access information you need as long as two requirements are met: 1) efficient (if you need to go through 10 levels of questions- probably not efficient) and 2) effective (if system cuts you off- probably not effective). When working correctly, it helps speed up results, allows you to access data 24/7 and you don’t have to play phone tag.  However, I think you should always have the option of speaking with someone in person.

Most good companies spend lots of time and money to ensure that people who interface with customers in person or over the telephone are trained on proper customer interactions including the most effective way to get the customer the information they need — be it to sell a part, resolve an issue or get them to the correct person to answer a question.

We all rely on some type of automated system to communicate with our customers. But, I am not sure we are spending enough time making sure they are working effectively and more importantly, not making customers upset. In part, I think those who set up these systems are not orientated to thinking about the customer experience.

I have interfaced with companies’ automated telephone systems that indicate they will take verbal or key punched answers to questions, only to find out that they do not take verbal responses and cut you off as you are key punching your responses.  I recently called someone back who had left me a message. I got their voicemail, left a message and then the system gave me a message that the person to whom I left a message no longer worked there! Really? – they just called me 20 minutes ago. Turned out the message was for the previous employee associated with that line.

The other day, I was logging into a website and needed to set up a password. I was prompted to have at least 8 characters, a combination of letters, numbers and a symbol in my password. I attempted the password several times and the system repeatedly told me my password did not meet the requirements. I assumed I had misread the instructions or fat fingered my password, but after trying again, it still didn’t work.  I called the company (waited 20 minutes), explained the situation, provided my proposed password and was told, “Oh, you can’t have three numbers in a row.”  I told him the instructions did not say that – he said, “Yes, we need to change that.” He stayed on the line as I attempted it again; still didn’t work. He then said, “I forgot, you can’t use ‘!’ as a symbol.” I replied, “The instructions did not give me any restrictions.” He said, “Yes we need to change that”. I wonder if they ever changed it.

Since most of us don’t typically ever use our own customer interface automated systems, they tend not to get the review they probably need. Do they operate the way they should? Are they helping or hurting our image with the customer? So, if you have never or not in a while called your company or attempted to use your company’s online systems, I would suggest you see how they work or don’t. Hopefully, you won’t be surprised.

- Truck Parts & Service April, 2017 Article by John Blodgett