Gaskins: The first quarter of 2022 saw record prices for used tractors and exceptionally high spot freight rates. Equipment was scarce, and shipping was plentiful. The first quarter of 2023 was the opposite. Used trucks are down more than 45% in value, inventory is growing daily, and spot prices are roughly below the average cost of operating a tractor-trailer combination.
Barlow: In 2023, we expect our rental fleet to grow at a higher-than-normal rate, reflecting growth from leases signed last year as equipment begins to come in. We continue to see good lease activity but we now have about a 9- to 11-month backlog due to long OEM lead times, so we expect to deliver the equipment under the leases we sign today in 2024.
Visha: Last year was pretty consistent. The used truck market began showing decline starting in the fourth quarter of last year, and has continued over the past eight months. As freight demand declined, charter activity also declined. Our customers are becoming more cautious and conservative about the future. We’ve been getting a lot of intelligence that the allocations are not going to end in 2023 and that there will be allocations from the OEMs in terms of how many trucks we can buy in 2024. Additionally, we’re starting to see people thinking about 2027 and 2027. They are trying to develop a strategy that will allow them to replace as much of their internal combustion engine fleet as possible before emissions standards change and there are serious increases in the price of a truck.
Ken: With lower spot freight rates, overall rental truck usage has declined from record highs in 2022. We expect rental usage to normalize at levels similar to historical averages.
Lager: We believe capacity will shrink over the remainder of 2023 as the economy and shipping markets improve.
Hollinger: We’re hearing that the use of rentals in fleets is starting to decline. Despite the market’s resilience, it will be difficult to predict exactly what will happen for the remainder of 2023.
Brodeur: We have seen rental prices decline, although they are still higher than pre-pandemic levels. This is a result of improved availability of new trucks. Going forward, we expect more of the same. No matter what happens with economic conditions, rental companies and leasing companies need to replace old trucks. As OEM capacity constraints improve, we expect to see steady demand.
Trenin: Total shipment volumes decreased due to lower real retail sales and continued emptying of inventories. Spot rates have fallen again, with some forecasters suggesting they have bottomed out, prompting small carriers to either leave the market or move to larger fleets. Large fleets are protected by strong balance sheets resulting from two years of record profit margins, but contract freight volumes are starting to see a significant decline, and contract prices are also falling. Economic headwinds will drag the trucking industry down and create a greater risk of a sales slowdown in the second half of 2023, but existing pent-up demand remains plentiful and continues to drive sales. Due to this factor, 2023 looks strong for OEMs.
