Inventory levels in all segments of the trucking market were up year over year in March, putting pressure on dealers.
Asking and auction values for used heavy-duty, medium-duty and semitrailer trucks were also down across the board, according to figures from analyst firm Sandhills Global.
The inventory surplus presents a problem for dealers trying to offload aging equipment. Shipments are also down, which reduces demand for equipment. Tonnage shipped fell by 1.7% in 2023 and is on track to continue decreasing throughout the year, according to equipment advisory company Alta Group.
Analysts at William Blair also reported in March the industry should expect a 16% decrease in Class 8 truck production through the end of the year, though growth might occur in 2025 and 2026.
Jim Ryan, equipment lease and finance manager at Sandhills, told Equipment Finance News that he expects truck inventory to continue to rise.
“I don’t think anything is going to change the rest of this year,” Ryan said, adding that he expects repossessions and lease returns to continue to “surge.”
Ryan said that he expects to see more “influx of inventory” in the medium-duty segment, as lease returns and repossessions continue.
“The biggest driver of that is the box truck market, those are just in flux now, and inventory is going to see huge jumps probably for the next few months,” he said. And then obviously, as that goes, the values go down as well.”
Heavy-duty inventory
- Inventory levels of Class 8 heavy-duty trucks increased 14.38% YoY in March.
- Asking values for this category — which includes day cabs and sleeper trucks — dropped 16.49% YoY and are trending down, Sandhills reported.
- Auction values were down 19.47% YoY and are also trending down.
Surplus in used semitrailers
- Inventory levels were up 44.83% YoY and more than 5% month over month.
- Asking values were down 21.94% YoY for March, “following consecutive months of increases,” Sandhills reported..
- Auction values were down 22.88% YoY in March.
Medium-duty inventory
- Used inventory continued to climb, which is hampering auction and asking values, Sandhills’ report stated. Inventory levels for the segment were up 37.46% YoY in March.
- Asking values were down 12.62% YoY.
- Auction values declined 12.37% YoY.
Older equipment selling outside U.S.
Ryan said he doesn’t expect a downturn in lease returns or repossessions to take effect until “maybe next year,” which will push up inventory rates and drive down values further.
“Eventually we’re going to get to the point where you’re not seeing the influx of repos,” Ryan said.
He noted that since the beginning of this year, Sandhills has seen more Class 8 units offloaded to Mexican buyers offering cash, which is one way to flush aging inventory out of the U.S. market.
“We have seen an influx of late-model units moving down into Central America, South America [and] Mexico in bulk,” Ryan said. He added that this trend may be “something to definitely watch” in coming months.
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, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.
