Industry Outlook

Industry Outlook: What's Driving Truck Sales?

By Brandon Baxter - Staff Writer
Posted Jun 21st 2024 8:00AM

Wanna know what’s going on within the expedite industry, or with trucking overall? Then tune in to Industry Outlook, presented by Expediters Online and Expediter Services. Join our host, Brandon Baxter, as he engages with folks-in-the-know who will bring their knowledge, ideas, and expertise to the forefront of the trucking industry in 2024 and beyond.

In today's installment👇👇, Brandon and Expediter Services' Danny Vernon discuss what's going on with national truck sales and more on today’s installment of Industry Outlook.


Brandon Baxter: Welcome to Industry Outlook presented by Expediters Online and Expediter Services. I'm your host, Brandon Baxter.
My guest today is Danny Vernon. He's the director of Truck Sales and Finance with Expediter Services.
Danny, thanks so much for joining me on the show today. How are you?

Danny Vernon: I'm doing well. Thanks for having me.

BB: Absolutely. Absolutely.
Now, I know just before we got started we were talking about the heat.
I'm in Cleveland, working from a home studio and it is about 93-94 degrees right now, I think with the heat index they're calling it close to 101.
How are you feeling in Southaven right now?

DV: It's overcast and in the eighties. But if that sun was out, that would be definitely back up in the nineties real quick.

BB: right up there too. Now, does it get as swelteringly hot and muggy, there as it does here?

DV: Absolutely.

BB: Ok.

DV: Absolutely. It's awful.

BB: I'm sorry, I don't want to send it your way, but I definitely want it to get out of here, you know, as quickly as possible.

DV: All right. Sure thing.

BB: But Danny, I wanted to have you on today, I wanted to discuss, you know, really truck sales, which is, which is your thing, and, and we'll get into the finance stuff too.
But, as far as what you're seeing since you've been in this industry, what are the latest trends that you, that, you know, that you've been seeing in regards to truck sales lately?

DV: Well, I mean, you know, truck sales are declining, you know, I mean, there was that report out in Naples saying, you know, 13% you know, obviously, you know, that's, you know, just, there's not, you know, demand is decreased for one thing and inventory is increased because, you know, a lot of the OEMs are, you know, back building trucks since COVID.
So, you know, they're putting new trucks out in the marketplace and fleets are upgrading. So they're taking that old equipment out...

BB: what is it, maybe that you're doing right versus what they're doing and maybe we can't say right versus wrong necessarily. But what is it that you're finding that's working for you versus maybe what's not working on the general scope of things? Does that make sense?

DV: yeah, it does.
I mean, you know, we're not set up like a dealer, you know, we're not here just to sell trucks.
but, you know, for what the difference, big difference in what we're doing, we're not acting like a dealer either.
So, you know, we're not trying to make money on the sale of the truck. We're trying to create capacity for the motor carrier.
When the motor carrier has equipment and operators to carry the freight, they're making money.
So if we meet their capacity needs, you know, then, then our, our income is derived on operating those trucks at the motor carrier.
So if the motor carrier benefits and we benefit and then the owner benefits that's that three-legged stool.
So it's gonna stand up, stay straight. One of those legs fall off, it's unstable. So that's what I tell people.

BB: Yeah.

DV: So it's really a good...
So, I mean, you know, that's what we do out there in the marketplace.
When we finance somebody into a truck, they're not out there just, we didn't just sell them a truck, we didn't just finance them a truck, we're there joined at the hip and we, we, the way it's set up, we're not successful unless they're successful. So we're, we're there to support them and it really works well.
That's the difference really when you're talking about between us and just a normal dealership, bank type finance and sale.

BB: In your opinion, just from what you've seen, just again, speaking in general scope of things, do you see, do you see things turning around in truck sales anytime soon? I mean, let's just say across the board, you know, ES not withstanding,

DV: I mean, I've been in, in quite a while and, you know, these things are in cycles, you know, and, and so, yeah, it's gonna come back around.
I mean, you know, I don't know, you know, near future it's hard to say we got election year coming up, you know, a lot of people are holding back because of that but, you know, I think, in general, overall, especially in our side of it, the expedite side, it's been looking pretty strong.
You know, it's gonna depend on the freight market, you know, the freight markets determine the sales, really, you know, so that's going to create the demand for the equipment and then, you know, draw the people in to operate trucks at the motor carriers, you know.

BB: you mentioned, you know, the, the Transport Topics article that was posted out here about a month ago and it, and it kind of, you know, hinged on 13% decline in April, you know, have you seen that, or how have you seen that really affect ES in any way? You know, from your perspective?

DV: Well, you know, because of our business model and the way we're set up, we're a little unique in how we do, do business and truck sales and financing especially, so it really hasn't affected us that much.
I mean, we're doing great this year.

BB: How do you measure that? I mean, your, your, your old, your old product moves out, the new stuff comes in and then you've got, you know, drivers that are with your company that sign on as owner operators and if you don't mind, kind of speak to that model a little bit so people have a better understanding.

DV: Yeah. So I mean, we have opportunities for ownership and we work with some premier motor carriers in the industry to provide capacity to them.
So we have access to equipment and financing and we're able to place drivers into an ownership position through our Path to Ownership program, so they can basically come in and drive one of our trucks and our fleet operate it, get comfortable at the motor carrier and if they're producing the revenue to support ownership and the cash flow looks good, we'll finance them.
We're able to use their experience to approve them and, you know, it's not so much based on a, it's based on the relationship instead of based on credit and down payment, so we're a different type of lender. It's a nontraditional type lending situation.
We're seeing lenders, you know, wanting 20, 30, to 40% down sometimes depending on, you know, the situation where a truck prices, new price is getting around $200,000 range, you know, that's out of reach for most people you know, they're also requiring a lot of experience and good credit.
So, you know, as you know, there's a lot of good professional drivers out there in the marketplace that are driving trucks, they know what they're doing and know how to operate a business, but they might not have that down payment so we can assist, you know, and getting them into that into an owner situation.

BB: Fantastic. Well, Danny, I I definitely appreciate you taking some time out of your day to join me.
I can see that you're in an air conditioned office. I hope you enjoy that.
I think I'm gonna take a, take a few minutes and splash some cold water on my face.
But thank you again so much for joining me, Danny.

And this has been Industry Outlook presented by Expediters Online and Expediter Services.
I've been your host, Brandon Baxter.

Until next time.

For more information on Expediter Services and the programs they have contact them today!
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(877) 349-9303