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May Tonnage Index Bodes Well For Used Truck Demand

trucks.com report points to evidence of a stabilizing used truck market, although further gains are still needed. The greatest strength appeared among medium-duty crew cabs and heavy-duty sleeps.

Rising Demand for Freight Services

On Tuesday, June 20, the American Trucking Associations (ATA) released its For-Hire Truck Tonnage index for May. This metric addresses overall demand for freight services across the country.  The May index is up a healthy 6.5 percent from April’s. Also, year-over-year gains stand at 4.8 percent, which represents the most significant year-over-year gain since November of last year. A graph in the Commercial Carrier Journal (CCJ) illustrates the relative strength of the recent increases.

ATA’s chief economist says the improvement in the index is consistent with reports he received from various fleets. A recent report from FTR also provides evidence of improvement in freight demand, particularly in the industrial sector. FTR COO Jonathan Starks said the research firm’s expectation of heightened freight demand in 2017 are being realized.

Freight Rates Drive Demand

Also, contract and spot freight rates are up. In fact, Starks asserts that early June spot market demand is up approximately 50 percent compared to the same period in 2016. Over the longer term, stabilizing spot rates increase the confidence level of prospective truck buyers. An increase in spot freight rates helps the pre-owned market due to their impact on owner-operators who often purchase used vehicles. Better contract rates drive demand from mid-sized and larger fleets.

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