Summary

The brutal numbers displayed in the NADA Nov. '09 report of ever-declining used truck values!  The markets now value a 3-year old truck at 45% less than its market value of just ten months ago!  

You can read the latest NADA Commercial Truck Market Update via this link:
http://www.nada.com/B2B/home/home.asp

Analysis


As I stated much earlier in the still-continuing death spiral of used truck values, and here repeat with emphasis: There's hardly any trucking company, publicly or privately owned, properly recognizing these declining asset values (now, a Most Inconvenient Truth) by boosting their depreciation expense lines impacting income statements and balance sheets.
 
During the first five months of this year, and needing no help from the treacherously soft freight marketplace, the free-fall of used truck values alone fundamentally wiped out the tangible net worths expressed on the balance sheets of many small- and medium-sized trucking companies. We wonder what the IRS would say if this year truckers used these and other valid market statistics to record one-time expenses (aka, "marked to market" adjustments) so to report larger pre-tax losses and to recapture prior-paid Federal income taxes?
 
The implications here are many, and not one of them is pleasant, neither for truckers, nor shippers, nor lenders, nor new-truck manufacturers and dealers.
 
All this underscores another of my thoughts: At the moment truckers need Grief Counseling as much or more than they need financing alternatives.
 
Anyone following Commercial Vehicle Group, Freightliner – Daimler Trucks North America, Navistar, PACCAR, Volvo & Volvo Finance, CIT, Financial Federal Credit, GE Capital, Arkansas Best Corp., Celadon Group, Con-Way, Covenant Transportation, Knight Transportation, Marten Transport, Old Dominion Freight Line, P.A.M. Transportation, Rush Enterprises, Ryder System, Saia, Travel Centers of America, USA Truck or Werner Enterprises should keep this in mind.
 
And used truck values, will do nothing but fall faster and further when YRCW’s jumbo fleet eventually arrives at the down-hill auction yard to which it continues sliding!
 
I invite your comments …
 

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.