Asset operators: Favorable fuel spreads, weak truck prices

The current market outlook for operators of asset-based trucking carriers is mixed and highly dependent on each carrier’s customer portfolio. We cover those dynamics in our weekly Trucking Markets report; suffice it to say that refrigerated carriers handling fresh produce are in the most defensible position, while pneumatic, tank and flatbed carriers operating in the oilfields are most exposed to downside risk.

Apart from market dynamics, other factors affecting asset operators are also mixed. For the carriers reporting data to the TCA’s Trucking Profitability Program benchmarking group, insurance expense as a percentage of revenue ticked down slightly to 3.97%, retreating from the 4% level.

The news is even better on the fuel cost front – diesel rack prices are being suppressed by the chaos gripping global energy markets, while retailers are doggedly holding price. For carriers who levy fuel surcharges based on DOE assessments, the widening spread between those two prices is a positive. 

Used truck prices are more of a mixed bag, with prices for 3-, 4-, and 5-year old models moving somewhat independently of each other. Because prices for 3-year old trucks tend to lag the other models by a month or two, we think those asset prices will be flat to down in the near-term.