Transportation inventories split, values down in January

Inventories in the transportation industry were split in January, but values in nearly all segments continue to drop.  

The gap between asking and auction prices continues to grow and will persist as the market works to flush older units out, Jim Ryan, equipment lease and finance manager at analyst firm Sandhills Global, told Equipment Finance News.  

“We typically see the auction fall first and then you see the asking or retail come shortly after that,” Ryan said.  

“We’re to pre-pandemic levels as far as inventory goes. These older units … they need to be flushed out the system,” Ryan said, noting that buyers, currently, are limited.  

The asking and auction values for used heavy-duty trucks, used semitrailers, and used medium-duty trucks all declined in the last month, according to Sandhills data.  

Heavy-duty truck inventory up from 2023, values down 

• January  inventory levels of used heavy-duty trucks increased 14.9%  year over year. Month over month, the inventory level dropped 5.5% and is now trending sideways.  
• Asking values for used heavy-duty trucks were down 19.2% YoY, mainly due to a continuing slide in sleeper truck values.  

• Auction values dropped 22.3% YoY. 

Same story with semitrailers   

• Inventory was up 54.6% YoY and essentially flat MoM. Used semitrailers inventory levels are trending up.  
• Asking values for used semitrailers were down 20.8% YoY in January.  
• Auction values were down 26% YoY, continuing a monthslong trend that began in mid-2022, according to Sandhills. 

Medium-duty truck inventory, values decline  

• Used medium-duty truck inventory levels dropped 3.4% MoM but rose 26.9% YoY. Inventory levels have been trending downward since mid-2022.  
• Asking values were down 13.8% YoY.  
• Auction values were down 15.2% YoY. Box trucks led the decline in both auction and asking values.  

Inventory to keep rising 

Inventory has “changed pretty dramatically,” and there has been more available to sell over the first quarter, Sean Walsh, vice president of finance and insurance at East Coast Peterbilt retailer The Pete Store, told EFN.  

“From a new truck inventory standpoint, we’re pretty excited about where we are and are going in the next four months,” he said.  

Leasing picks up  

Hadley Benton, executive vice president of Fort Lauderdale, Fla.-based specialty financing and fleet management firm Fleet Advantage, said his company is “seeing a stabilization of prices and so availability is less of a concern.”  

Getting into new trucks after the pandemic was a challenge, he added. 

“It’s still more about the cost to get the equipment,” he said. “The credit and interest rate environment is still a significant challenge.”   

Fleet Advantage is seeing increased interest in leasing, Benton said.  

“The cost of capital has gone up, which makes it more attractive to lease a heavy-duty asset as opposed to buying it right now, because you can put those capital dollars to work somewhere else much more efficiently than buying a depreciating asset like a truck,” he said.  

“2024 is going to be a lot more normal but it won’t be completely normal,” Benton said. “It’s certainly gotten easier to get equipment. That normalization of the supply chain will continue through 2025, and then it’s going to start to ramp up again.” Because of a tighter credit market, his firm has seen “a lot of increased interest” in unbundled lease agreements, he said.  

Registration is now open for Equipment Finance Connect, the nation’s only dealer-centric equipment lending and leasing event, which will take place May 5-7 in Nashville. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.