The Fleet Business Authority
Issue link: http://heavydutytrucking.epubxp.com/i/221397
HOTLINE there, in Santiago and Saltillo, which have built a combined 400,000 units. Presently it builds 52% of all Class 4 to Class 8 trucks manufactured there, and 58% of trucks exported. Kürschner says he sees ample opportunity for growth, but not at any price. Rather he's aiming for "sustainable profitability" in the coming years, adding that in 2014 truck sales should be solid. A challenge is that a substantial portion of the trucks in operation in Mexico are 20 years old, or even older. It's essentially a two-tier market, one part populated by fleets that would be at home anywhere else in North America, the other part a very long way behind. That, however, means opportunity for Daimler, Kürschner said. Volvo Trucks North America also sees it as an opportunity. The company announced it would pursue a Trucking's Most Respected Business Report Daimler does lead the beverage industry where the Freightliner M2 106 holds a 65% market share. goal of having 15% of the Mexican Class 8 truck market share by 2015. Year to date, Volvo has captured 7% of the Mexican new truck Class 8 market, and 10% for Class 8 trucks using fifth wheels. The company unveiled the Mack Vision for the country's on-highway market and the availability of its I-Shift automated transmission in Mexico. The company is not considering manufacturing operations in Mexico, Matthew Walsh, managing director of Volvo Trucks North America in Mexico, told reporters in a briefing before the show. Walsh said 25,000 new trucks are expected to be sold in Mexico this year, with 8,000 used trucks being imported from the United States. Volvo also is selling used trucks in Mexico through its dealer network. Walsh pointed out that the Mexican government is focusing on getting those older trucks off the road by offering a tax voucher toward the price of a newer truck, similar to the U.S. Cash for Clunkers car program a few years ago. Volvo says 80% of its Mexican sales are these "scrapping certificate" sales. By January 2018 the Mexican government is expected to enforce U.S. EPA 2010 emissions standards, and soon after that, tighten emissions standards for used trucks that are sold in the country, leading to additional opportunities. – Evan Lockridge, Senior Contributing Editor, and Rolf Lockwood, Executive Contributing Editor State of Freight: Steady growth, capacity tightening R egulatory shocks such as the recent change in hours-ofservice regulations are tough on trucking, but they do tend to lead to the ability of fleets to raise rates. If the Federal Motor Carrier Safety Administration actually promulgates the kind of regulations they say they want to, the industry can expect more shocks, perhaps a batch of them by the end of 2014. That was a key point made by Noël Perry, managing director and senior consultant with FTR, in the company's "State of Freight" conference call last month. "Additional hires are going to be required by FMCSA changes," he said. "If federal agencies do what they say they're going to do, by the third quarter of 2015, we will need to hire another 160,000 drivers." Some of the regulations have been pushed back from their original timeline thanks to the government shutdown and other factors, 22 HDT • DECEMBER 2013 but don't expect them to go away. "The threat has been pushed out, but magnified," Perry said. "Truck safety is a very popular political idea in this country. It's not going to go away." "If we get a large surge, prices will raise dramatically." – Noël Perry, FTR The trucking industry is already at relatively high levels of capacity utilization, he said, but the industry has increasingly been operating with a smaller margin for error. Fleets are operating leaner, and have been successful at matching trucks to capacity. "The good news is, we're able to operate at relatively low cost," he said. "The bad news is, we're taking a lot of the surge capacity out of the industry. If we get a large surge, prices will raise dramatically." Of course, higher rates are a good-news/bad-news type scenario – bad for shippers, maybe not so bad for fleets. Pricing did move up this summer with implementation of the new hours of service, but so far, "there's no evidence of a stampede." Truck driving isn't a particularly attractive job for many, Perry said, and it gets just a little bit harder every year to hire people. Beyond that, however, he said, "the short term issue is the ability of the hiring apparatus, the pipeline, to expand. When we get a shock to the industry they fall behind [in hiring]. The question is to what extent will the FMCSA promulgate the kind of regulations they say they want to? If they do, the industry will have a shock and will fall behind" in hiring, leading to even tighter capacity. – Deborah Lockridge, Editor in Chief www.truckinginfo.com