December 4, 2023 • 37 mins
Episode 295: Join us as we take a look at how the trucking industry has evolved over the past couple of years with Charles Bowles Director of Commercial Truck OEM & Strategic Initiatives at Commercial Truck Trader. We'll explore trends in buying and selling trucks, including the pandemic's impact and current supply chain challenges. Discover changes in the sales environment, depreciation effects, and how dealerships are adapting.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
You're listening to the heavy duty parts report.
I'm your host, jamie Irvin, andthis is the place where we have
conversations that empowerheavy duty people.
If you look at the truckingindustry, over the last 12
months, we have seen a verydynamic, very challenging
situation in the industry.
(00:22):
There has been so many factorsthat are contributing to making
this really an unprecedentedyear in many ways.
I'm really excited about ourconversation today because we're
going to talk to someone who'sreally done some in depth
research on the trends, onwhat's happening in the trucking
industry, especially related tothe purchasing and selling of
new and used trucks and theimplications that has on the
(00:45):
industry.
Tune in at the end of ourconversation as well, because
there's some great bonus contentwhere our director, diana, cut
more, jumped on the call withCharles and I and we had an
extended discussion.
So if you want to really hearsome more great Information,
just make sure to listen to ourepisode, but also there's some
great bonus information for youat the conclusion of the episode
(01:07):
.
So let's introduce our guest.
My guest today is Charles bowls.
He's the director of commercialtruck OEM and strategic
initiatives of commercial trucktrader.
Charles was instrumental in thelaunch and growth of commercial
truck traders position in theindustry.
He works with top executives atsome of the world's largest
companies and often presents atnational events as a subject
(01:30):
matter expert for our industry.
Charles, welcome to the heavyduty parts report.
So very glad to have you here.
Speaker 2 (01:37):
Jamie, thanks for that introduction boy.
I sound a lot better than I am.
Speaker 1 (01:41):
Hey, you wrote the bio so I just have to read it.
So, charles, as I mentioned inthe intro, this has been a
challenging year.
It's been dynamic.
There's a lot going on in thetrucking industry right now as
we come to the close of twentytwenty three.
We're recording this right now,in mid November.
So how is the industry changedover the last twelve months and
(02:04):
what impact is that having onour industry, but maybe on the
north american society at large?
Speaker 2 (02:10):
That is such a broad question and I love talking
about this.
I talked to a lot of peopleabout it Dealers and
manufacturers.
We're seeing Changes that youknow I'm an old man and we're
seeing changes that we've neverseen before in the industry.
What I think the mostsignificant is the impact of
what the pandemic had in termsof how we get our goods and how
(02:32):
they're delivered.
I think that's a big one.
But also we've also seen a lotof supply chain challenges.
We've seen inventory challengesand we're just over the past
twelve months, which is what youjust refer to we're seeing A
tremendous bounce back ininventory on dealer lots.
On our site commercial trucktrailer we've seen inventory
grow forty eight point sixpercent Over the same period
(02:55):
last year, so a significantgrowth.
You know what they're still adearth of.
You know heavy duty, new A daycabs and sleepers, but we're
seeing a significant number ofused units come back on the lot.
Speaker 1 (03:09):
So what would you say ?
Is is driving that trend wherewe're seeing so many more used
vehicles on dealer lots.
Speaker 2 (03:18):
It's a couple of things.
One, sadly, is inflation andinterest rates.
Money is very expensive now.
So you know the small operatorsparticularly spot rates are
continuing to drop, are havingsome real chitin one.
Contract rates are dropping too.
So we're seeing a confluence ofa lot of challenges for very
small Owner operators.
(03:38):
But also we're finally seeing aramping up on the new side.
But they're all pre orders.
They barely hit a dealer lot.
You know these are ones thatBusiness has ordered six months,
eight months ago have finallycome in so they've been able to
get rid of some of their olderunits.
But you know that brings us tothat point that we're seeing a
lot of people hold on tovehicles a lot longer.
(04:00):
So you know that's really goodfor parts and finance.
We see a lot of vehicles thatare are much older than we've
seen coming into auction, comingin wholesale and even coming
into retail.
So that's really requiring alot of additional work on that,
back in on the parts, on theservice, to get them up to speed
(04:20):
so that they can then resellthem.
Speaker 1 (04:23):
So, if the supply chain is catching up on new
vehicles and the bigger fleetsare finally getting those ones
that they ordered as much as ayear ago, and we also see
everything going in the wrongdirection, right, inflation's
going up, spot rates andcontract rates are going down.
We've seen a lot of companiessmall ones going out of business
, some big ones, and all of asudden now all of this volume of
(04:45):
trucks shows up at all thesedealership lots.
What's the sales environmentlike right now is?
Is these dealerships justholding a lot of inventory, or
are a lot of these trucksselling quickly, like what's
going on there?
Speaker 2 (04:58):
That's such a complex question.
I was at the use truckassociations national convention
last week in San Antonio andwhat we're hearing is just just
all kinds of stuff across theboard.
You know, the biggest challengewe're facing right now is as
the inventory comes back.
We've got residual valuesproblems.
(05:20):
We've got people who boughthigh and ended up it's not worth
what they paid for it.
In some cases by the time theybring it back from the auction
they may be upside down on someof these.
So it's a real challenge.
I think what the smart dealersare figuring out is I need to
determine what my specificdemand is and go after that.
There's really not a lot ofspec buying right now,
(05:43):
particularly for use, becauseanything that sits on the lot is
likely to appreciate a littlebit more than it has.
So I don't think we've hit thebottom on depreciation.
But first, I'm not an economist, but I don't think we've hit
the bottom on depreciation andvaluations.
I think it's coming soon, butwe're seeing more of the
(06:04):
inventory come back to the deala lot.
The prices are going down butwe still see demand.
So it's kind of a weirddichotomy of different patterns
going on simultaneously.
Speaker 1 (06:18):
Yeah, and the other thing that people have to
remember is in these down cycles, it feels like everything is
down, but that's not always true.
There can be specific vocationswhere there's still demand and
things are actually going up.
And so, yes, it's true, overthe road, trucking and spot
rates and contract rates aredown.
So for that particular segment,which is a very large segment
(06:40):
of our industry, that's all down.
But there might be areas wherethere's trucks can be re-rigged
for different vocations and thenthere's demand there.
So you're right, it's neverjust a one-size-fits-all
situation.
You're exactly right.
Speaker 2 (06:55):
And what we've seen, regardless of the pandemic, is
dump trucks are like theenergizer bunny the demand just
never goes down.
I mean, it's just crazy how youknow the larger dump trucks,
sevens and eights they just thedemand is always there.
We're also seeing what I findinteresting on our site and one
(07:17):
of the interesting points aboutour site is we have, you know, a
little more than 3,000 dealerson the site.
You know with you know, severalhundred thousand vehicles at
any given time, but we have 2.2million visitors a month.
So we get an idea really ofwhat the demand looks like.
And what we're seeing is reallyinteresting.
Day cab interest is justexploding, the opposite of what
(07:40):
we're seeing on the sleeper side.
The past couple of months we'veseen sleepers kind of diminish
in demand.
But what we've seen is a realgrowth in day cabs and we
measure that by not the amountof inventory but when somebody
searches and they get you knowhow you, if it's commercial,
truck, trader, truck paper,wherever it is, and you see
search results.
When somebody then clicks on aspecific vehicle, that registers
(08:04):
increased intent and that'swhat we look at.
That's a vehicle detail pageview and we're seeing
significantly higher ones forday cabs than we have in a while
.
I mean it's 28% growth ininterest from September to
October, just in day cabs.
It's amazing.
Do you have any insight intothat?
I could certainly use it in myjob.
Speaker 1 (08:27):
Day cab yeah, why the interest in day cabs?
So I mean, obviously that is amove away from long haul
trucking, right?
So that tells me that there arepeople that are interested in
more regional truckingopportunities and so they're
looking to get equipment to beable to satisfy that need.
And so maybe that is areflection of look, the spot
(08:49):
rates are down, contract ratesare down on long haul trucking.
I'm now going to go after aspecific vocation in my regional
area and so now I don't need atruck with a sleeper, so I'm
going to look at something witha day cab.
From my perspective of being inthe industry, that's to me the
logic behind that tracks withthe activity.
Speaker 2 (09:07):
Well, I'm glad I'm going to use that.
Speaker 1 (09:09):
I'm going to steal that from you as a matter of
fact, you only have to give mecredit once or twice, and then
it's yours.
Speaker 2 (09:15):
You know that makes perfect sense when we're talking
about middle mile and last mile.
In terms of demand, we stillhave enormous demand right now
for the delivery sector, insmaller classes of vehicles
particularly.
You know that just has notabated and it just continues to
grow.
We're seeing, you know,everything from the low cab
forwards or cab overs to justthe conventional medium duty
(09:38):
trucks that they're used for boxtrucks or delivery trucks that
demand is continuing to grow aswe're seeing these big shifts in
how people are buying now.
Speaker 1 (09:48):
Yeah well, and the other thing too is long haul
trucking.
There's a lot of costassociated with that.
There's a lot of miles, a lotof maintenance, a lot of fuel,
different insurance needs.
There's also the differentregulations depending on what
state you're operating in.
So I could also see, if I was atrucker right now, saying, look
(10:08):
, if I can find a regionalopportunity where I have to do
less travel, maybe I make alittle less total but I spend a
lot less.
And so then in the net the netfor me is actually income for my
family.
I can see why that trend isgrowing, because that just makes
a lot of sense to me.
You know, the maintenance costsand the fuel and everything
(10:29):
associated with it is so highright now and there's just not
enough demand.
Like you say, the rates are alldown, so it's just everything's
in the wrong direction.
So to me that makes a lot ofsense why people are looking at
those additional opportunitiesto try to find ways of making
money Actually making money, notjust, you know, having revenue,
(10:49):
but then having costs that areexceeding that revenue.
That makes a lot of sense.
We're going to take a quickbreak.
We'll be right back.
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Today we're back from our break.
(11:53):
Before the break, charles, wewere kind of talking about the
volatility in the market intrucking, the way that the last
few months have gone.
There's so many pressures.
There's so many things that arehappening in the industry Spot
rates and contra rates, downcosts at all time high.
You were talking about some ofthe trends in used trucks and
(12:15):
where that's going.
But your organization has puttogether a comprehensive
consumer report I wanted to talkabout that.
You've released this report atCommercial Truck Trader.
I wanted to talk first of allabout the methodology you use to
collect the data.
Then we'll talk about the keyfindings in this report.
(12:36):
First of all, tell us a littlebit about what the report is and
talk a little bit about themethodology used to collect the
information.
Speaker 2 (12:43):
We collected the information from consumer
surveys on the site.
It's from the 2.2 millionaverage monthly visitors that
come to the site and choose totake part in the survey.
That gives us some information.
That way, it's a significantamount of information.
In addition to that, we canalso watch buyer behavior on the
(13:03):
site and that gives usadditional deep insights into it
.
It was interesting thetakeaways that we've gotten,
jamie.
It's so fundamentally differentthan what it was in 2019 in
some cases.
If you'd like, I can just sharea couple of the takeaways.
Speaker 1 (13:20):
Yeah, I was interested in that.
So you're collecting the datafrom the users on your site.
You've put together thisconsumer trends report.
So there were some veryspecific key takeaways, like you
say, that were significantlydifferent than in the years past
.
Let's talk a little bit aboutwhat those were.
Speaker 2 (13:38):
One of the ones that is so fundamentally different is
how buyers interact withdealerships.
Now it used to be that a buyerwould almost always go to a
dealership or almost alwayscontact the dealership by phone.
Now many, many buyers are doingmost of their research online,
(13:59):
whether it's at a dealershipwebsite or a third party website
like commercial truck trader.
But by the time a buyercontacts a dealer, they've
really gone down that salesfunnel.
That buyer journey is prettymuch cemented.
At that point They've talked tothree or four dealerships or
researched three or fourdealerships before they've
(14:20):
contacted the one they're goingto buy from.
What's different is that thetelephone, which used to be such
a large part of our businessjust a few years ago, is now
moved aside, and it really isemail.
Email is the way that many ofthe buyers like to interact with
a seller.
(14:41):
They prefer it even overtexting.
People are so concerned aboutthings like their problem.
We offer phone calls andtexting and so on, but people
are so concerned about theirprivacy, or they just don't want
the pressure of somebodycontacting them back, that they
use email as that form ofgetting that additional research
(15:01):
without actually having to havethat Direct 101 interaction.
That's so different than it wasjust several years ago.
It's not only in the Class 8.
It's really in the Class 3through 7.
We're seeing many, manyconversations discussions
formulated via email, wherethey'll talk about everything up
(15:26):
to the final price via emailand then they will actually
contact the dealership.
They're really looking for aconvenient and hassle-free way
of shopping and they want to doit on their own terms now, which
is such a change from the wayit was just several years ago.
Speaker 1 (15:41):
In 2019, I spent a lot of time talking about the
importance of building out theability to.
You want people to be able tofind, you, learn about.
You have all this content ondemand so that they can educate
themselves.
I pointed to a McKinsey studythat showed that B2B buyers were
(16:03):
progressively becoming morecomfortable buying larger and
larger dollar amounts via acomplete digital sales channel
with little to no in-personcommunication with the supplier.
And then the pandemic hit.
I think a lot of the peoplethat were holding on to the old
way were forced during thepandemic to do it differently.
(16:25):
I think a lot of them realizedthat there was a big upside to
doing it this way.
In some ways, I think thetrucking industry caught up to
where the rest of the world, butother industries had already
gotten to by 2019 during thepandemic.
This is no surprise to me.
I believe that most companiesthey are missing a lot of
(16:49):
opportunity by not creating thateasy to access information.
You have to provide people withall of the information they
need to evaluate their choicesand their decisions and make it
easy for them and make thatcontent on demand 24-7 so they
can practically binge watch itif they want to.
Then to your point, whenthey're ready to make a decision
(17:11):
, then they'll contact you.
By the time they've gottenthere, they're ready to buy and
they already have established arelationship with your brand and
your company, your dealership.
Whatever the case may be, thisis a huge opportunity for many,
many companies, both on the partside and on the service side
and on the truck side, to beable to transform the way they
(17:31):
do business.
One of the things I hear aboutfrom a lot of people is,
especially those that are verycomfortable with the traditional
way.
Is there worried about notbeing able to have as close of a
relationship with theircustomers because of this
perceived distance that thedigital sales channel creates?
That is not been my experience.
(17:52):
One of the most common thingsthat happens when I go to a
trade show and I meet someonethat I've been working with
online for maybe months or evenyears Is they like, give me a
hug.
You've created such a comfortlevel with that individual over
time that when you finally domeet in person, like they're
ready to like, they already havea relationship with you.
What's your experience been?
(18:13):
Does that resonate?
Speaker 2 (18:14):
with you.
Oh, very similarly.
And you know, given the hugsand stuff, I've kind of try to
stay away from those much, butyou're a really big guy, you can
probably push him away.
But since we've all started towork remotely in many situations
, you know, our relationshipsare now built via internet, via
Zoom, via all these othermethods, and what I've seen is
(18:39):
it really hasn't diminishedrelationships at all.
And I know from the work I doand I work a lot at the
manufacturer level that it isactually such a blessing to be
able to just hop on a call viaHangout and actually talk to
somebody and do business thatway.
So I think we're seeing itthroughout different parts of
(19:03):
the industry.
Now, in terms of a dealershipand how they interact with their
customers, one of the mostimportant things that we know
from empirical data is thatbuyers aren't just looking for
price.
Price is, you know, it'simportant to post a price, but
really they're also looking forthat parts and service and
(19:24):
really it's that maintenanceaspect, particularly on the used
side of the business, that'sreally important to a buyer.
Downtime is just money out ofthe pocket right away.
So you know when we see thebest practices at dealerships
when they're posting listingsfor units, they really focus in
(19:45):
on several things.
One you know the vocation orthe application or the job
associated with the vehicle.
Obviously that's how peoplesearch.
You know they search for.
They don't search by brand likeyou would think they do.
They don't search by makemodels so much.
Particularly up through classseven, in some cases class eight
they search for that job orthat application Dump truck for
(20:05):
sale near me, landscape body forsale, austin, texas, that way.
So in a lot of cases they'refocused on that first and
foremost.
But then the secondary thingsthey look for are finance and
parts, service and maintenance.
They're really critical andservice contracts are another
(20:26):
big part, particularly on theused side of the business, that
are really important to buyers.
So you mentioned something asecond ago that goes along with
this.
If you don't really have a goodpresence online and it doesn't
matter whether you're oncommercial truck trade or a
truck paper, wherever you are ifyou don't have that presence,
you're going to lose eight outof ten of those possible people
(20:48):
that are out there buying,because eight out of ten have
already established arelationship with you and you
didn't even know it with onlinelistings and they've chosen to
contact you after that.
So those are the people thathave made their decision and
gone to you.
If you don't post properlyonline, then you lose eight out
(21:09):
of ten of those potential buyers.
Speaker 1 (21:12):
Yeah, and my experience has been, you know,
in our consulting company wework with manufacturers and we
work with distributors anddealership groups.
My experience has been that youcan front load the relationship
building process that used tohave to happen after we
physically met.
Now you can front load thatbefore you ever meet them in
person and they can have thisrelationship and this desire to
(21:34):
do business with you becauseyou've done a great job of
showing them the value of whatyou're offering.
And then they finally do meetin person and they're ready to
do business.
So it front loads therelationship building, but it
also primes people to be readyto purchase and then you can do
more deals quicker, which isreally good for everyone at the
end of the day.
Speaker 2 (21:54):
That's such a good point.
And the old school way of notputting a lot of information or
not putting price and say, well,they'll call me and then I can
work into a program for them.
They're just not going to call.
When you put on a listing callfor price, what you're really
saying is don't call me, they'renot going to call.
And the same thing is true ifyou don't put information about
(22:18):
your parts and servicedepartment you know their hours,
the bays that you have.
All that information iscritical to these men and women
who are buying these vehiclesbecause this is their tool and
every day they don't have thattool is a day that they lose
money.
So when they're searching andlooking, researching through
that buying process, it iscritical to have that
(22:41):
information, additionalinformation other than simply
the information about the unit.
You want that parts and service, you want your hours, you want
all that and finance.
You want all that informationbecause that's how they're
searching for you.
Speaker 1 (22:54):
In one of the other key findings of the report, you
mentioned demographics.
How are demographics shiftingand what are the implications?
Speaker 2 (23:01):
I didn't think in my lifetime I would see that 33% of
the buyers on the site werewomen.
I just didn't think we'd getthere that fast.
I know there's a large numberof women who are over the road
and class 8 drivers, but anumber of them is now really
(23:23):
growing.
It's really great to seebecause it really changes the
whole complexion of the industry.
It becomes just more open,diverse, place, and I think
that's good for everybody.
That's one of the big ones.
Also, we're seeing in manycases not necessarily class 8,
(23:43):
but larger classes of vehicles.
People are buying for differentkinds of uses.
I'm not sure why somebody buysa Class 6 pickup truck, but
they'll buy one.
I live on a farm and I have aFord Maverick pickup like the
smallest pickup truck in theworld and, by the way, it took
me 10 and a half months to getthat thing.
(24:05):
When I ordered it it was thefirst new truck I ever got.
I paid $23,000 for it a yearand a half ago.
The residual on it now is like32.
I don't know what's going on.
It goes back to what we talkedabout in the first part of this
conversation is that the pricesare just doing this right now.
Speaker 1 (24:24):
Well, I live in Alberta and if you don't have an
F-250 or larger, you don't evenhave a truck, at their opinion.
Speaker 2 (24:33):
That is funny.
But it goes back to the otherpoint.
I do have a 1995 F-150.
It can still climb a tree, butit gets lighter every year
because the rust around thefender is just.
That's right.
Speaker 1 (24:46):
Talking about those demographic shifts, I think it's
very important.
At our company, we are focusedon human flourishing.
That's our goal.
It's like if heavy duty peopleflourish, then they take care of
society and then everybody wins.
To see this growth in havingwomen join the industry, that's
a wonderful thing, to your point.
(25:07):
We need more of that.
Do you think that?
Also because the demographicsare shifting and remember too,
we've got a lot of baby boomerswho are going to be hanging it
up really soon Do you think thatthat's having some implications
on the way people are buyingand how these trends are going?
Do you think that's part of thedriver behind it?
Speaker 2 (25:25):
Oh, absolutely.
As you start to look at thecomplexion of the buyers
nowadays, you see a dramaticchange.
Obviously you're seeing youngerbuyers, and younger buyers
bring with them a wholedifferent skill set and a whole
different way of looking at notonly how they buy vehicles but
what the professions they chooseto be a part of.
(25:47):
In the trucking space it's nodifferent.
We're seeing people that havechosen that.
It used to be many years agothat being an over-the-road
trucker was one of the lastthings you wanted to do, because
it was a very hard job.
You're away from home so longand it's physically demanding.
Those are much more comfortablenowadays.
(26:08):
The companies have gotten themessage that we need to treat
our drivers better.
You're seeing a lot of thosechanges which are bringing a
whole different type of personinto the industry.
It's so welcome because westill have our old school folks
like me and that's great.
But we also have younger, moresophisticated folks.
(26:31):
If you're not in the industry,don't realize how sophisticated
people who drive trucks arenowadays.
They have to be very adept atunderstanding computers.
They're away from home all thetime.
They're doing a lot of theirbusiness over computers.
Their entire dashboard now hasgot many components that are
computer-related and they justhave to understand all that.
(26:51):
It takes a special kind oftraining to get to that point.
We're seeing a higher level ofeducation in many cases.
We're also seeing a shift toactually more women in it.
We're seeing businessestreating them better because
they understand retention is socritical.
We saw, I guess, 2019 on somereal challenges getting people
(27:15):
to get into the trucking spaceas drivers, because that old
connotation of how difficult itis and how it's just a struggle
to do it is really not the caseanymore.
We're slowly seeing that change.
That's a very long answer,jamie, but I'm very excited
about seeing those changesbecause it's going to help us
(27:37):
grow, not only just in thisindustry but the nation as a
whole, because we'll have peoplewho are very good at this and
very good at logistics, verygood at moving things and
bringing all kinds of new ideasto the market.
Speaker 1 (27:51):
We've just scratched the surface of this year's
Consumer Report.
If people would like to gettheir hands on a copy of it,
what's the best way for them todo that?
Speaker 2 (27:58):
I have a very long URL.
Unfortunately it ispagescommercialtrucktradercom.
I'll say it one more time.
You may have to pause and goback and write this down
Commercialtrucktradercom All onelong word thing.
Speaker 1 (28:22):
Don't worry, make sure that the links are in the
show notes so people can just doone click and get right to that
Consumer Report.
You've been listening to theHeavy Duty Parts Report.
I'm your host, jamie Irvin.
We've been speaking withCharles Bowles, director of
Commercial Truck, oem andStrategic Initiatives at
Commercial Truck Trader.
To learn more about CommercialTruck Trader, visit
(28:43):
commercialtrucktradercom.
We'll also have that additionallink that'll take you directly
through to this year's ConsumerReport.
Charles, thank you so much forbeing on the Heavy Duty Parts
Report.
I really enjoyed ourconversation.
Speaker 2 (28:55):
Jamie, thank you.
I learned a lot from you today.
I've got to come back and justlisten to this.
Speaker 1 (29:08):
So our episode officially concluded.
But after we stop recording,diana, our podcast director came
on and we were discussing theseshifts in Demographics and we
wanted to give you a little bitof bonus content.
So, diana, welcome to theheavy-duty parts report.
Speaker 3 (29:24):
Thank you, Jamie.
Speaker 1 (29:25):
You just attended a show in Texas.
What was the show?
Speaker 3 (29:30):
So it was the women in trucking accelerate
conference.
It was in Dallas at the HiltonAnatole.
It was beautiful hotel and tomy knowledge that was the best
attended women in trucking showthat they've had so far.
Easily over a thousand womenwere there and that reminded me
of what you had just said,charles, that 33% of buyers are
(29:51):
women now, and that just made meso happy that I was there
networking with, I'm sure, someof those women, and that's such
a huge change.
So it kind of got me thinking.
There have been a few changesin the industry in the name of
efficiency that have made theindustry more accessible to
women.
Just a few that come to mindare power jacks and lift gates
(30:13):
and in the name of saving money,they've actually opened up the
trucking industry to women.
So that was really great tohear that that's being reflected
both on the driver and on thebuying side.
Speaker 2 (30:24):
Yeah, you know, diana , what's what's also Interesting
is how truck stops now have.
They have changed and evolve.
They have dog parks, they haveall kinds of Amenities that you
know.
You think about the grizzly oldguys that look like me that
we're doing this.
You know, before that's, that'sa whole different thing.
Now, I mean, they're so familyfriendly.
(30:45):
The truck stops of Nowadays arejust so different and just
there's.
They're so welcoming and Ithink that's also Been a
response to the fact that we'vegot a different type of driver.
Now We've got we've got peoplewho are family oriented, not
that the others weren't, but wehave those that are Women, are
(31:07):
demanding certain things.
We have younger millennials whoare demanding certain things.
So you're right, I mean, thethe shift is is always market
driven.
You know, nobody does thesethings just for the fun of it
and just say, hey, I think I'mgonna be good.
Maybe not all the time, butreally they are seeing, by
adding a dog park to a travelcenter, it changes and grows
(31:29):
their business significantly.
Speaker 3 (31:31):
You're absolutely right.
I mean, there are so manyhusband and wife teams out there
, people who are bringing theirdogs on the road and cats on the
road Although I don't thinkthat any truck stop has a cat
park yet I'll be interested.
Speaker 2 (31:43):
You know that goes back to that old expression.
How would we herd them intothat part?
You know you're so funny.
Speaker 3 (31:49):
Um, okay, and then, since we're talking about these
changing demographics, it alsobrought up something else to me,
which is that this move awayfrom the phone call in person
thing you kind of mentioned thatyou know, younger millennials
Sort of had a great time duringthe pandemic, which is that we
were relying on websites, onemail, unless on phone calls and
(32:12):
in person, to make transactions.
Now, like I'm almost 30, nowthat the younger millennials are
really coming up into Middlemanagement, into buying
positions, I don't see thattrend stopping anytime soon.
Speaker 2 (32:26):
Oh well, let me ask you a question.
Yes what is your phone numberfor your landline?
Speaker 3 (32:32):
I actually do have a landline.
I just set it up two days ago.
Speaker 2 (32:40):
You are such a rare creature, why?
Speaker 1 (32:42):
did you do that Just second, before she answers that
I just got rid of my landlineafter having one for like 20
years.
So okay, the world has flippedupside down now.
Speaker 3 (32:53):
But it's not a traditional landline, it's a
VoIP voiceover internet protocollandline.
Okay, and it cost me threedollars a month and I wanted it
Just because my mother liveswith me.
I wanted to have an actualphone that can ring and I
actually it came with like areal desk phone.
I'm having a great time.
Speaker 1 (33:16):
So you're just accommodating a baby boober,
though, with this decision right, it wasn't for your mom, you
wouldn't have done it.
Speaker 3 (33:21):
Yes, that's my only reason.
Speaker 1 (33:24):
Fair enough.
Speaker 3 (33:26):
And then there was something else that you and you
had mentioned, charles.
So my daughter's dad is a truckdriver, has been for almost 10
years, so I have personalexperience or sort of somewhat
personal, indirect personalexperience With the industry.
And when you said that theinterest in daycaps are
exploding and sleepers aredecreasing, you asked Jamie, why
(33:49):
do you think that's happening?
I had two thoughts on that.
Oh good specifically fromSeptember to October.
That was when the news ofyellow going out of business
really, like you know, permeatedthe the media, and Yellow had
something like 9% of the marketshare.
So I could definitely see howsome fleets are clamoring for
(34:11):
daycaps to try and take overtheir share of that LTL freight.
Do you think that that might bea reason?
Speaker 2 (34:18):
Yeah, that's really good observation and we hope
that they do, because if thosethings just push back into the
market, man that's going todepreciate and Decrease the
residual values on a lot ofvehicles and would just be in
that State for several moremonths trying to work out of it.
That's a really goodobservation, diana, and I agree
with you on that and then therewas another thing.
Speaker 3 (34:39):
So when my Daughter's dad was first getting into the
industry, he did some temp work,and yet there's there's very
little temp work happening onsleepers, right.
That doesn't really make sensefor those companies to use
contract labor.
That's not an owner operatorfor that.
So I'm wondering if, with theeconomy looking as dire as it is
(35:02):
, if More companies are going torely on that temp work for
their daycaps and they're tryingto Grab some used trucks in
order to rely on some cheaperlabor on their end, I wonder if
that could be a reason.
Speaker 2 (35:16):
That that could be as well.
I mean, yeah, I think that's agood question, yeah, I think
that I think that is apossibility.
And it's interesting when wetalk about the economy because,
although inflation is going upand and you know, interest is
just, you know, crazy right now,we still have so many people
buying and even though we sawthe reports, you know target
Walmart, I think their earningsreports are down.
(35:37):
They still, I think, beatexpectations, but we're down,
which reduce stock prices andthings.
We're still seeing a lot ofconfidence.
People have a lot of confidence.
You know, houses are still hardto get right now because two
reasons for that, you know.
One is there's just not a lotof supply, but the other side of
that is that people don't wantto sell because then if they
(35:58):
have to buy something, it costsmore.
Speaker 3 (36:00):
Yeah, that makes perfect sense.
Speaker 2 (36:02):
Yeah so, but overall, we still still see people going
out to dinner, we still seepeople buying clothes at Walmart
, we still see the Foodlinegrocery store or Publix or
whatever just has lots of peoplebuying stuff, and so it's.
It's kind of interesting howall of these things are, are so
different than what we normallythought of when we look At the
(36:23):
economy on a macro scale andit's I'm not sure you know what
to make of it other than we justride the wave.
Speaker 3 (36:32):
And something that Jamie, if you want to chime in
here, that Jamie always says isthe trucking industry is Is
somewhat resilient to whateverthe economy feels like this,
because people got to eat,people got to wear clothes, you
know.
Speaker 1 (36:46):
Yep, we're the backbone of society.
So, and especially on theindependent service side and
part side, that's a greatopportunity for us.
When we do go through downcycles, because people hang on
to equipment longer than theyhave to service and maintain it
More so then that creates moredemand on aftermarket products
and and on Independent servicechannels, so that can be very
(37:06):
good.
Oftentimes we start recoveringfrom a downturn in the economy
much faster than the generaleconomy at large.
Speaker 3 (37:13):
Yeah well, thank you guys for letting me put in my
two cents.
Speaker 2 (37:19):
And if you're a technician you've got all the
opportunity in the world rightnow in part service Industry.
I mean, they are claimingthat's.
One thing I heard at the usetruck Association meeting Last
week was that it's just so hardto get hold of technicians.
You guys out there, you weregold.
You're listening to the heavy duty parts report.
I'm your host, jamie Irvin, andthis is the place where we have
conversations that empowerheavy duty people.
If you look at the truckingindustry, over the last 12
months, we have seen a verydynamic, very challenging
situation in the industry.
(00:22):
There has been so many factorsthat are contributing to making
this really an unprecedentedyear in many ways.
I'm really excited about ourconversation today because we're
going to talk to someone who'sreally done some in depth
research on the trends, onwhat's happening in the trucking
industry, especially related tothe purchasing and selling of
new and used trucks and theimplications that has on the
(00:45):
industry.
Tune in at the end of ourconversation as well, because
there's some great bonus contentwhere our director, diana, cut
more, jumped on the call withCharles and I and we had an
extended discussion.
So if you want to really hearsome more great Information,
just make sure to listen to ourepisode, but also there's some
great bonus information for youat the conclusion of the episode
(01:07):
.
So let's introduce our guest.
My guest today is Charles bowls.
He's the director of commercialtruck OEM and strategic
initiatives of commercial trucktrader.
Charles was instrumental in thelaunch and growth of commercial
truck traders position in theindustry.
He works with top executives atsome of the world's largest
companies and often presents atnational events as a subject
(01:30):
matter expert for our industry.
Charles, welcome to the heavyduty parts report.
So very glad to have you here.
Speaker 2 (01:37):
Jamie, thanks for that introduction boy.
I sound a lot better than I am.
Speaker 1 (01:41):
Hey, you wrote the bio so I just have to read it.
So, charles, as I mentioned inthe intro, this has been a
challenging year.
It's been dynamic.
There's a lot going on in thetrucking industry right now as
we come to the close of twentytwenty three.
We're recording this right now,in mid November.
So how is the industry changedover the last twelve months and
(02:04):
what impact is that having onour industry, but maybe on the
north american society at large?
Speaker 2 (02:10):
That is such a broad question and I love talking
about this.
I talked to a lot of peopleabout it Dealers and
manufacturers.
We're seeing Changes that youknow I'm an old man and we're
seeing changes that we've neverseen before in the industry.
What I think the mostsignificant is the impact of
what the pandemic had in termsof how we get our goods and how
(02:32):
they're delivered.
I think that's a big one.
But also we've also seen a lotof supply chain challenges.
We've seen inventory challengesand we're just over the past
twelve months, which is what youjust refer to we're seeing A
tremendous bounce back ininventory on dealer lots.
On our site commercial trucktrailer we've seen inventory
grow forty eight point sixpercent Over the same period
(02:55):
last year, so a significantgrowth.
You know what they're still adearth of.
You know heavy duty, new A daycabs and sleepers, but we're
seeing a significant number ofused units come back on the lot.
Speaker 1 (03:09):
So what would you say ?
Is is driving that trend wherewe're seeing so many more used
vehicles on dealer lots.
Speaker 2 (03:18):
It's a couple of things.
One, sadly, is inflation andinterest rates.
Money is very expensive now.
So you know the small operatorsparticularly spot rates are
continuing to drop, are havingsome real chitin one.
Contract rates are dropping too.
So we're seeing a confluence ofa lot of challenges for very
small Owner operators.
(03:38):
But also we're finally seeing aramping up on the new side.
But they're all pre orders.
They barely hit a dealer lot.
You know these are ones thatBusiness has ordered six months,
eight months ago have finallycome in so they've been able to
get rid of some of their olderunits.
But you know that brings us tothat point that we're seeing a
lot of people hold on tovehicles a lot longer.
(04:00):
So you know that's really goodfor parts and finance.
We see a lot of vehicles thatare are much older than we've
seen coming into auction, comingin wholesale and even coming
into retail.
So that's really requiring alot of additional work on that,
back in on the parts, on theservice, to get them up to speed
(04:20):
so that they can then resellthem.
Speaker 1 (04:23):
So, if the supply chain is catching up on new
vehicles and the bigger fleetsare finally getting those ones
that they ordered as much as ayear ago, and we also see
everything going in the wrongdirection, right, inflation's
going up, spot rates andcontract rates are going down.
We've seen a lot of companiessmall ones going out of business
, some big ones, and all of asudden now all of this volume of
(04:45):
trucks shows up at all thesedealership lots.
What's the sales environmentlike right now is?
Is these dealerships justholding a lot of inventory, or
are a lot of these trucksselling quickly, like what's
going on there?
Speaker 2 (04:58):
That's such a complex question.
I was at the use truckassociations national convention
last week in San Antonio andwhat we're hearing is just just
all kinds of stuff across theboard.
You know, the biggest challengewe're facing right now is as
the inventory comes back.
We've got residual valuesproblems.
(05:20):
We've got people who boughthigh and ended up it's not worth
what they paid for it.
In some cases by the time theybring it back from the auction
they may be upside down on someof these.
So it's a real challenge.
I think what the smart dealersare figuring out is I need to
determine what my specificdemand is and go after that.
There's really not a lot ofspec buying right now,
(05:43):
particularly for use, becauseanything that sits on the lot is
likely to appreciate a littlebit more than it has.
So I don't think we've hit thebottom on depreciation.
But first, I'm not an economist, but I don't think we've hit
the bottom on depreciation andvaluations.
I think it's coming soon, butwe're seeing more of the
(06:04):
inventory come back to the deala lot.
The prices are going down butwe still see demand.
So it's kind of a weirddichotomy of different patterns
going on simultaneously.
Speaker 1 (06:18):
Yeah, and the other thing that people have to
remember is in these down cycles, it feels like everything is
down, but that's not always true.
There can be specific vocationswhere there's still demand and
things are actually going up.
And so, yes, it's true, overthe road, trucking and spot
rates and contract rates aredown.
So for that particular segment,which is a very large segment
(06:40):
of our industry, that's all down.
But there might be areas wherethere's trucks can be re-rigged
for different vocations and thenthere's demand there.
So you're right, it's neverjust a one-size-fits-all
situation.
You're exactly right.
Speaker 2 (06:55):
And what we've seen, regardless of the pandemic, is
dump trucks are like theenergizer bunny the demand just
never goes down.
I mean, it's just crazy how youknow the larger dump trucks,
sevens and eights they just thedemand is always there.
We're also seeing what I findinteresting on our site and one
(07:17):
of the interesting points aboutour site is we have, you know, a
little more than 3,000 dealerson the site.
You know with you know, severalhundred thousand vehicles at
any given time, but we have 2.2million visitors a month.
So we get an idea really ofwhat the demand looks like.
And what we're seeing is reallyinteresting.
Day cab interest is justexploding, the opposite of what
(07:40):
we're seeing on the sleeper side.
The past couple of months we'veseen sleepers kind of diminish
in demand.
But what we've seen is a realgrowth in day cabs and we
measure that by not the amountof inventory but when somebody
searches and they get you knowhow you, if it's commercial,
truck, trader, truck paper,wherever it is, and you see
search results.
When somebody then clicks on aspecific vehicle, that registers
(08:04):
increased intent and that'swhat we look at.
That's a vehicle detail pageview and we're seeing
significantly higher ones forday cabs than we have in a while
.
I mean it's 28% growth ininterest from September to
October, just in day cabs.
It's amazing.
Do you have any insight intothat?
I could certainly use it in myjob.
Speaker 1 (08:27):
Day cab yeah, why the interest in day cabs?
So I mean, obviously that is amove away from long haul
trucking, right?
So that tells me that there arepeople that are interested in
more regional truckingopportunities and so they're
looking to get equipment to beable to satisfy that need.
And so maybe that is areflection of look, the spot
(08:49):
rates are down, contract ratesare down on long haul trucking.
I'm now going to go after aspecific vocation in my regional
area and so now I don't need atruck with a sleeper, so I'm
going to look at something witha day cab.
From my perspective of being inthe industry, that's to me the
logic behind that tracks withthe activity.
Speaker 2 (09:07):
Well, I'm glad I'm going to use that.
Speaker 1 (09:09):
I'm going to steal that from you as a matter of
fact, you only have to give mecredit once or twice, and then
it's yours.
Speaker 2 (09:15):
You know that makes perfect sense when we're talking
about middle mile and last mile.
In terms of demand, we stillhave enormous demand right now
for the delivery sector, insmaller classes of vehicles
particularly.
You know that just has notabated and it just continues to
grow.
We're seeing, you know,everything from the low cab
forwards or cab overs to justthe conventional medium duty
(09:38):
trucks that they're used for boxtrucks or delivery trucks that
demand is continuing to grow aswe're seeing these big shifts in
how people are buying now.
Speaker 1 (09:48):
Yeah well, and the other thing too is long haul
trucking.
There's a lot of costassociated with that.
There's a lot of miles, a lotof maintenance, a lot of fuel,
different insurance needs.
There's also the differentregulations depending on what
state you're operating in.
So I could also see, if I was atrucker right now, saying, look
(10:08):
, if I can find a regionalopportunity where I have to do
less travel, maybe I make alittle less total but I spend a
lot less.
And so then in the net the netfor me is actually income for my
family.
I can see why that trend isgrowing, because that just makes
a lot of sense to me.
You know, the maintenance costsand the fuel and everything
(10:29):
associated with it is so highright now and there's just not
enough demand.
Like you say, the rates are alldown, so it's just everything's
in the wrong direction.
So to me that makes a lot ofsense why people are looking at
those additional opportunitiesto try to find ways of making
money Actually making money, notjust, you know, having revenue,
(10:49):
but then having costs that areexceeding that revenue.
That makes a lot of sense.
We're going to take a quickbreak.
We'll be right back.
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Today we're back from our break.
(11:53):
Before the break, charles, wewere kind of talking about the
volatility in the market intrucking, the way that the last
few months have gone.
There's so many pressures.
There's so many things that arehappening in the industry Spot
rates and contra rates, downcosts at all time high.
You were talking about some ofthe trends in used trucks and
(12:15):
where that's going.
But your organization has puttogether a comprehensive
consumer report I wanted to talkabout that.
You've released this report atCommercial Truck Trader.
I wanted to talk first of allabout the methodology you use to
collect the data.
Then we'll talk about the keyfindings in this report.
(12:36):
First of all, tell us a littlebit about what the report is and
talk a little bit about themethodology used to collect the
information.
Speaker 2 (12:43):
We collected the information from consumer
surveys on the site.
It's from the 2.2 millionaverage monthly visitors that
come to the site and choose totake part in the survey.
That gives us some information.
That way, it's a significantamount of information.
In addition to that, we canalso watch buyer behavior on the
(13:03):
site and that gives usadditional deep insights into it
.
It was interesting thetakeaways that we've gotten,
jamie.
It's so fundamentally differentthan what it was in 2019 in
some cases.
If you'd like, I can just sharea couple of the takeaways.
Speaker 1 (13:20):
Yeah, I was interested in that.
So you're collecting the datafrom the users on your site.
You've put together thisconsumer trends report.
So there were some veryspecific key takeaways, like you
say, that were significantlydifferent than in the years past
.
Let's talk a little bit aboutwhat those were.
Speaker 2 (13:38):
One of the ones that is so fundamentally different is
how buyers interact withdealerships.
Now it used to be that a buyerwould almost always go to a
dealership or almost alwayscontact the dealership by phone.
Now many, many buyers are doingmost of their research online,
(13:59):
whether it's at a dealershipwebsite or a third party website
like commercial truck trader.
But by the time a buyercontacts a dealer, they've
really gone down that salesfunnel.
That buyer journey is prettymuch cemented.
At that point They've talked tothree or four dealerships or
researched three or fourdealerships before they've
(14:20):
contacted the one they're goingto buy from.
What's different is that thetelephone, which used to be such
a large part of our businessjust a few years ago, is now
moved aside, and it really isemail.
Email is the way that many ofthe buyers like to interact with
a seller.
(14:41):
They prefer it even overtexting.
People are so concerned aboutthings like their problem.
We offer phone calls andtexting and so on, but people
are so concerned about theirprivacy, or they just don't want
the pressure of somebodycontacting them back, that they
use email as that form ofgetting that additional research
(15:01):
without actually having to havethat Direct 101 interaction.
That's so different than it wasjust several years ago.
It's not only in the Class 8.
It's really in the Class 3through 7.
We're seeing many, manyconversations discussions
formulated via email, wherethey'll talk about everything up
(15:26):
to the final price via emailand then they will actually
contact the dealership.
They're really looking for aconvenient and hassle-free way
of shopping and they want to doit on their own terms now, which
is such a change from the wayit was just several years ago.
Speaker 1 (15:41):
In 2019, I spent a lot of time talking about the
importance of building out theability to.
You want people to be able tofind, you, learn about.
You have all this content ondemand so that they can educate
themselves.
I pointed to a McKinsey studythat showed that B2B buyers were
(16:03):
progressively becoming morecomfortable buying larger and
larger dollar amounts via acomplete digital sales channel
with little to no in-personcommunication with the supplier.
And then the pandemic hit.
I think a lot of the peoplethat were holding on to the old
way were forced during thepandemic to do it differently.
(16:25):
I think a lot of them realizedthat there was a big upside to
doing it this way.
In some ways, I think thetrucking industry caught up to
where the rest of the world, butother industries had already
gotten to by 2019 during thepandemic.
This is no surprise to me.
I believe that most companiesthey are missing a lot of
(16:49):
opportunity by not creating thateasy to access information.
You have to provide people withall of the information they
need to evaluate their choicesand their decisions and make it
easy for them and make thatcontent on demand 24-7 so they
can practically binge watch itif they want to.
Then to your point, whenthey're ready to make a decision
(17:11):
, then they'll contact you.
By the time they've gottenthere, they're ready to buy and
they already have established arelationship with your brand and
your company, your dealership.
Whatever the case may be, thisis a huge opportunity for many,
many companies, both on the partside and on the service side
and on the truck side, to beable to transform the way they
(17:31):
do business.
One of the things I hear aboutfrom a lot of people is,
especially those that are verycomfortable with the traditional
way.
Is there worried about notbeing able to have as close of a
relationship with theircustomers because of this
perceived distance that thedigital sales channel creates?
That is not been my experience.
(17:52):
One of the most common thingsthat happens when I go to a
trade show and I meet someonethat I've been working with
online for maybe months or evenyears Is they like, give me a
hug.
You've created such a comfortlevel with that individual over
time that when you finally domeet in person, like they're
ready to like, they already havea relationship with you.
What's your experience been?
(18:13):
Does that resonate?
Speaker 2 (18:14):
with you.
Oh, very similarly.
And you know, given the hugsand stuff, I've kind of try to
stay away from those much, butyou're a really big guy, you can
probably push him away.
But since we've all started towork remotely in many situations
, you know, our relationshipsare now built via internet, via
Zoom, via all these othermethods, and what I've seen is
(18:39):
it really hasn't diminishedrelationships at all.
And I know from the work I doand I work a lot at the
manufacturer level that it isactually such a blessing to be
able to just hop on a call viaHangout and actually talk to
somebody and do business thatway.
So I think we're seeing itthroughout different parts of
(19:03):
the industry.
Now, in terms of a dealershipand how they interact with their
customers, one of the mostimportant things that we know
from empirical data is thatbuyers aren't just looking for
price.
Price is, you know, it'simportant to post a price, but
really they're also looking forthat parts and service and
(19:24):
really it's that maintenanceaspect, particularly on the used
side of the business, that'sreally important to a buyer.
Downtime is just money out ofthe pocket right away.
So you know when we see thebest practices at dealerships
when they're posting listingsfor units, they really focus in
(19:45):
on several things.
One you know the vocation orthe application or the job
associated with the vehicle.
Obviously that's how peoplesearch.
You know they search for.
They don't search by brand likeyou would think they do.
They don't search by makemodels so much.
Particularly up through classseven, in some cases class eight
they search for that job orthat application Dump truck for
(20:05):
sale near me, landscape body forsale, austin, texas, that way.
So in a lot of cases they'refocused on that first and
foremost.
But then the secondary thingsthey look for are finance and
parts, service and maintenance.
They're really critical andservice contracts are another
(20:26):
big part, particularly on theused side of the business, that
are really important to buyers.
So you mentioned something asecond ago that goes along with
this.
If you don't really have a goodpresence online and it doesn't
matter whether you're oncommercial truck trade or a
truck paper, wherever you are ifyou don't have that presence,
you're going to lose eight outof ten of those possible people
(20:48):
that are out there buying,because eight out of ten have
already established arelationship with you and you
didn't even know it with onlinelistings and they've chosen to
contact you after that.
So those are the people thathave made their decision and
gone to you.
If you don't post properlyonline, then you lose eight out
(21:09):
of ten of those potential buyers.
Speaker 1 (21:12):
Yeah, and my experience has been, you know,
in our consulting company wework with manufacturers and we
work with distributors anddealership groups.
My experience has been that youcan front load the relationship
building process that used tohave to happen after we
physically met.
Now you can front load thatbefore you ever meet them in
person and they can have thisrelationship and this desire to
(21:34):
do business with you becauseyou've done a great job of
showing them the value of whatyou're offering.
And then they finally do meetin person and they're ready to
do business.
So it front loads therelationship building, but it
also primes people to be readyto purchase and then you can do
more deals quicker, which isreally good for everyone at the
end of the day.
Speaker 2 (21:54):
That's such a good point.
And the old school way of notputting a lot of information or
not putting price and say, well,they'll call me and then I can
work into a program for them.
They're just not going to call.
When you put on a listing callfor price, what you're really
saying is don't call me, they'renot going to call.
And the same thing is true ifyou don't put information about
(22:18):
your parts and servicedepartment you know their hours,
the bays that you have.
All that information iscritical to these men and women
who are buying these vehiclesbecause this is their tool and
every day they don't have thattool is a day that they lose
money.
So when they're searching andlooking, researching through
that buying process, it iscritical to have that
(22:41):
information, additionalinformation other than simply
the information about the unit.
You want that parts and service, you want your hours, you want
all that and finance.
You want all that informationbecause that's how they're
searching for you.
Speaker 1 (22:54):
In one of the other key findings of the report, you
mentioned demographics.
How are demographics shiftingand what are the implications?
Speaker 2 (23:01):
I didn't think in my lifetime I would see that 33% of
the buyers on the site werewomen.
I just didn't think we'd getthere that fast.
I know there's a large numberof women who are over the road
and class 8 drivers, but anumber of them is now really
(23:23):
growing.
It's really great to seebecause it really changes the
whole complexion of the industry.
It becomes just more open,diverse, place, and I think
that's good for everybody.
That's one of the big ones.
Also, we're seeing in manycases not necessarily class 8,
(23:43):
but larger classes of vehicles.
People are buying for differentkinds of uses.
I'm not sure why somebody buysa Class 6 pickup truck, but
they'll buy one.
I live on a farm and I have aFord Maverick pickup like the
smallest pickup truck in theworld and, by the way, it took
me 10 and a half months to getthat thing.
(24:05):
When I ordered it it was thefirst new truck I ever got.
I paid $23,000 for it a yearand a half ago.
The residual on it now is like32.
I don't know what's going on.
It goes back to what we talkedabout in the first part of this
conversation is that the pricesare just doing this right now.
Speaker 1 (24:24):
Well, I live in Alberta and if you don't have an
F-250 or larger, you don't evenhave a truck, at their opinion.
Speaker 2 (24:33):
That is funny.
But it goes back to the otherpoint.
I do have a 1995 F-150.
It can still climb a tree, butit gets lighter every year
because the rust around thefender is just.
That's right.
Speaker 1 (24:46):
Talking about those demographic shifts, I think it's
very important.
At our company, we are focusedon human flourishing.
That's our goal.
It's like if heavy duty peopleflourish, then they take care of
society and then everybody wins.
To see this growth in havingwomen join the industry, that's
a wonderful thing, to your point.
(25:07):
We need more of that.
Do you think that?
Also because the demographicsare shifting and remember too,
we've got a lot of baby boomerswho are going to be hanging it
up really soon Do you think thatthat's having some implications
on the way people are buyingand how these trends are going?
Do you think that's part of thedriver behind it?
Speaker 2 (25:25):
Oh, absolutely.
As you start to look at thecomplexion of the buyers
nowadays, you see a dramaticchange.
Obviously you're seeing youngerbuyers, and younger buyers
bring with them a wholedifferent skill set and a whole
different way of looking at notonly how they buy vehicles but
what the professions they chooseto be a part of.
(25:47):
In the trucking space it's nodifferent.
We're seeing people that havechosen that.
It used to be many years agothat being an over-the-road
trucker was one of the lastthings you wanted to do, because
it was a very hard job.
You're away from home so longand it's physically demanding.
Those are much more comfortablenowadays.
(26:08):
The companies have gotten themessage that we need to treat
our drivers better.
You're seeing a lot of thosechanges which are bringing a
whole different type of personinto the industry.
It's so welcome because westill have our old school folks
like me and that's great.
But we also have younger, moresophisticated folks.
(26:31):
If you're not in the industry,don't realize how sophisticated
people who drive trucks arenowadays.
They have to be very adept atunderstanding computers.
They're away from home all thetime.
They're doing a lot of theirbusiness over computers.
Their entire dashboard now hasgot many components that are
computer-related and they justhave to understand all that.
(26:51):
It takes a special kind oftraining to get to that point.
We're seeing a higher level ofeducation in many cases.
We're also seeing a shift toactually more women in it.
We're seeing businessestreating them better because
they understand retention is socritical.
We saw, I guess, 2019 on somereal challenges getting people
(27:15):
to get into the trucking spaceas drivers, because that old
connotation of how difficult itis and how it's just a struggle
to do it is really not the caseanymore.
We're slowly seeing that change.
That's a very long answer,jamie, but I'm very excited
about seeing those changesbecause it's going to help us
(27:37):
grow, not only just in thisindustry but the nation as a
whole, because we'll have peoplewho are very good at this and
very good at logistics, verygood at moving things and
bringing all kinds of new ideasto the market.
Speaker 1 (27:51):
We've just scratched the surface of this year's
Consumer Report.
If people would like to gettheir hands on a copy of it,
what's the best way for them todo that?
Speaker 2 (27:58):
I have a very long URL.
Unfortunately it ispagescommercialtrucktradercom.
I'll say it one more time.
You may have to pause and goback and write this down
Commercialtrucktradercom All onelong word thing.
Speaker 1 (28:22):
Don't worry, make sure that the links are in the
show notes so people can just doone click and get right to that
Consumer Report.
You've been listening to theHeavy Duty Parts Report.
I'm your host, jamie Irvin.
We've been speaking withCharles Bowles, director of
Commercial Truck, oem andStrategic Initiatives at
Commercial Truck Trader.
To learn more about CommercialTruck Trader, visit
(28:43):
commercialtrucktradercom.
We'll also have that additionallink that'll take you directly
through to this year's ConsumerReport.
Charles, thank you so much forbeing on the Heavy Duty Parts
Report.
I really enjoyed ourconversation.
Speaker 2 (28:55):
Jamie, thank you.
I learned a lot from you today.
I've got to come back and justlisten to this.
Speaker 1 (29:08):
So our episode officially concluded.
But after we stop recording,diana, our podcast director came
on and we were discussing theseshifts in Demographics and we
wanted to give you a little bitof bonus content.
So, diana, welcome to theheavy-duty parts report.
Speaker 3 (29:24):
Thank you, Jamie.
Speaker 1 (29:25):
You just attended a show in Texas.
What was the show?
Speaker 3 (29:30):
So it was the women in trucking accelerate
conference.
It was in Dallas at the HiltonAnatole.
It was beautiful hotel and tomy knowledge that was the best
attended women in trucking showthat they've had so far.
Easily over a thousand womenwere there and that reminded me
of what you had just said,charles, that 33% of buyers are
(29:51):
women now, and that just made meso happy that I was there
networking with, I'm sure, someof those women, and that's such
a huge change.
So it kind of got me thinking.
There have been a few changesin the industry in the name of
efficiency that have made theindustry more accessible to
women.
Just a few that come to mindare power jacks and lift gates
(30:13):
and in the name of saving money,they've actually opened up the
trucking industry to women.
So that was really great tohear that that's being reflected
both on the driver and on thebuying side.
Speaker 2 (30:24):
Yeah, you know, diana , what's what's also Interesting
is how truck stops now have.
They have changed and evolve.
They have dog parks, they haveall kinds of Amenities that you
know.
You think about the grizzly oldguys that look like me that
we're doing this.
You know, before that's, that'sa whole different thing.
Now, I mean, they're so familyfriendly.
(30:45):
The truck stops of Nowadays arejust so different and just
there's.
They're so welcoming and Ithink that's also Been a
response to the fact that we'vegot a different type of driver.
Now We've got we've got peoplewho are family oriented, not
that the others weren't, but wehave those that are Women, are
(31:07):
demanding certain things.
We have younger millennials whoare demanding certain things.
So you're right, I mean, thethe shift is is always market
driven.
You know, nobody does thesethings just for the fun of it
and just say, hey, I think I'mgonna be good.
Maybe not all the time, butreally they are seeing, by
adding a dog park to a travelcenter, it changes and grows
(31:29):
their business significantly.
Speaker 3 (31:31):
You're absolutely right.
I mean, there are so manyhusband and wife teams out there
, people who are bringing theirdogs on the road and cats on the
road Although I don't thinkthat any truck stop has a cat
park yet I'll be interested.
Speaker 2 (31:43):
You know that goes back to that old expression.
How would we herd them intothat part?
You know you're so funny.
Speaker 3 (31:49):
Um, okay, and then, since we're talking about these
changing demographics, it alsobrought up something else to me,
which is that this move awayfrom the phone call in person
thing you kind of mentioned thatyou know, younger millennials
Sort of had a great time duringthe pandemic, which is that we
were relying on websites, onemail, unless on phone calls and
(32:12):
in person, to make transactions.
Now, like I'm almost 30, nowthat the younger millennials are
really coming up into Middlemanagement, into buying
positions, I don't see thattrend stopping anytime soon.
Speaker 2 (32:26):
Oh well, let me ask you a question.
Yes what is your phone numberfor your landline?
Speaker 3 (32:32):
I actually do have a landline.
I just set it up two days ago.
Speaker 2 (32:40):
You are such a rare creature, why?
Speaker 1 (32:42):
did you do that Just second, before she answers that
I just got rid of my landlineafter having one for like 20
years.
So okay, the world has flippedupside down now.
Speaker 3 (32:53):
But it's not a traditional landline, it's a
VoIP voiceover internet protocollandline.
Okay, and it cost me threedollars a month and I wanted it
Just because my mother liveswith me.
I wanted to have an actualphone that can ring and I
actually it came with like areal desk phone.
I'm having a great time.
Speaker 1 (33:16):
So you're just accommodating a baby boober,
though, with this decision right, it wasn't for your mom, you
wouldn't have done it.
Speaker 3 (33:21):
Yes, that's my only reason.
Speaker 1 (33:24):
Fair enough.
Speaker 3 (33:26):
And then there was something else that you and you
had mentioned, charles.
So my daughter's dad is a truckdriver, has been for almost 10
years, so I have personalexperience or sort of somewhat
personal, indirect personalexperience With the industry.
And when you said that theinterest in daycaps are
exploding and sleepers aredecreasing, you asked Jamie, why
(33:49):
do you think that's happening?
I had two thoughts on that.
Oh good specifically fromSeptember to October.
That was when the news ofyellow going out of business
really, like you know, permeatedthe the media, and Yellow had
something like 9% of the marketshare.
So I could definitely see howsome fleets are clamoring for
(34:11):
daycaps to try and take overtheir share of that LTL freight.
Do you think that that might bea reason?
Speaker 2 (34:18):
Yeah, that's really good observation and we hope
that they do, because if thosethings just push back into the
market, man that's going todepreciate and Decrease the
residual values on a lot ofvehicles and would just be in
that State for several moremonths trying to work out of it.
That's a really goodobservation, diana, and I agree
with you on that and then therewas another thing.
Speaker 3 (34:39):
So when my Daughter's dad was first getting into the
industry, he did some temp work,and yet there's there's very
little temp work happening onsleepers, right.
That doesn't really make sensefor those companies to use
contract labor.
That's not an owner operatorfor that.
So I'm wondering if, with theeconomy looking as dire as it is
(35:02):
, if More companies are going torely on that temp work for
their daycaps and they're tryingto Grab some used trucks in
order to rely on some cheaperlabor on their end, I wonder if
that could be a reason.
Speaker 2 (35:16):
That that could be as well.
I mean, yeah, I think that's agood question, yeah, I think
that I think that is apossibility.
And it's interesting when wetalk about the economy because,
although inflation is going upand and you know, interest is
just, you know, crazy right now,we still have so many people
buying and even though we sawthe reports, you know target
Walmart, I think their earningsreports are down.
(35:37):
They still, I think, beatexpectations, but we're down,
which reduce stock prices andthings.
We're still seeing a lot ofconfidence.
People have a lot of confidence.
You know, houses are still hardto get right now because two
reasons for that, you know.
One is there's just not a lotof supply, but the other side of
that is that people don't wantto sell because then if they
(35:58):
have to buy something, it costsmore.
Speaker 3 (36:00):
Yeah, that makes perfect sense.
Speaker 2 (36:02):
Yeah so, but overall, we still still see people going
out to dinner, we still seepeople buying clothes at Walmart
, we still see the Foodlinegrocery store or Publix or
whatever just has lots of peoplebuying stuff, and so it's.
It's kind of interesting howall of these things are, are so
different than what we normallythought of when we look At the
(36:23):
economy on a macro scale andit's I'm not sure you know what
to make of it other than we justride the wave.
Speaker 3 (36:32):
And something that Jamie, if you want to chime in
here, that Jamie always says isthe trucking industry is Is
somewhat resilient to whateverthe economy feels like this,
because people got to eat,people got to wear clothes, you
know.
Speaker 1 (36:46):
Yep, we're the backbone of society.
So, and especially on theindependent service side and
part side, that's a greatopportunity for us.
When we do go through downcycles, because people hang on
to equipment longer than theyhave to service and maintain it
More so then that creates moredemand on aftermarket products
and and on Independent servicechannels, so that can be very
(37:06):
good.
Oftentimes we start recoveringfrom a downturn in the economy
much faster than the generaleconomy at large.
Speaker 3 (37:13):
Yeah well, thank you guys for letting me put in my
two cents.
Speaker 2 (37:19):
And if you're a technician you've got all the
opportunity in the world rightnow in part service Industry.
I mean, they are claimingthat's.
One thing I heard at the usetruck Association meeting Last
week was that it's just so hardto get hold of technicians.
You guys out there, you weregold.
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