Service is Key to Winning Truck Sales in Tight Market

Published March 31, 2016



LAS VEGAS (March 31, 2016) - Data is key to understand the ebbs and flows of trucking, but the definition of what is measured is just as vital.

Bob Costello, chief economist and vice president of American Trucking Associations, told those gathered on the first day of the American Truck Dealers (ATD) Convention and Expo in Las Vegas that consumer spending, housing and employment all play into truck sales-but perhaps not in the way most in the trucking industry hope.

“You all want to know if they are buying trucks,” said Costello. “What I say is there's another layer out there. The split between truckload and less-than-truckload (LTL) is very large: 95 percent of the marketplace is truckload, 5 percent is LTL.”

Costello was part of the ATD Industry Roundtable, which focused on challenges and opportunities facing dealers. Although recent numbers on consumer spending, housing and other major economic factors that impact truck sales seem to indicate an overall economic upturn, that is not necessarily the case. The reason revolves around definitions on terms such as consumer spending. That spending drives a tremendous amount of dry van, dedicated and temperature-controlled truckload freight.

“[Consumer spending] doesn't mean we are spending our money in the same way that we used to,” Costello said of the traditional definition of consumer spending in brick-and-mortar stores. “We may be spending [more], but since 2000 online sales have increased 1,400 percent…. It's not just online sales that are changing. We spend more money on food and beverages at restaurants than we do at grocery stores.”

The result is that truck-freight volumes slowed. Other negative factors: a continuing shortage of drivers, a dip in the average miles trucks are driven per month and better fuel economy in today's trucks versus those built five years ago.

But Costello noted that as housing, job growth and other factors increase, trucking will eventually follow suit.

“I don't want to leave you with [bad news],” he said. “It's soft right now, but it won't always be.”

The roundtable discussion also included Ron Hall, vice president of equipment and fuel for C.R. England; Dave Meetre, fleet maintenance manager for Vulcan Materials Co.; and Paul Truman, president of Estenson Logistics and Truline Corp.

“For us we will order trucks when we get a contract signed,” said Truman. “Reliability has become very, very important to us and also the life cycle cost of the equipment, including purchase price and financing and through the life cycle.”

Hall, representing the largest truck consumer on the panel, discussed how his company asked for competing bids for purchase and broke down cost on everything from purchase price to fuel economy and maintenance.

All the industry executives on the panel discussed the importance of 24/7 maintenance, updates on repairs and other support.  

“Things are going to happen with a truck and [it's all about] how you deal with it,” said Meetre. “If something goes wrong with a truck, we've got to get it turned around, get the repairs made [and get it back in service].”

The 2016 ATD Convention & Expo ran concurrently with the NADA Convention. More than 25,000 new-car and -truck dealers and their managers, as well as dealers from over 30 countries, auto industry executives and exhibitor staff attended the convention in Las Vegas.

Founded in 1917, NADA will celebrate its 100-year anniversary during the 2017 NADA/ATD Convention & Expo in New Orleans, which will run from Jan. 26-29.

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