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May 22, 2017 3:15 AM, EDT

Auctions Move Variety of Truck Types; More Buying Activity Shifting Online

Taylor & Martin

The used equipment sold at modern truck auctions includes much more than older models on their final legs. Today’s auctions move a wide range of equipment ages and types for a diverse set of buyers and sellers.

Auctioneers’ lots are often full of late models, as well as trucks built a decade or more ago that remain highly coveted by some due to their simplicity compared with the more complex emission controls of newer vehicles.

And now, thanks to the internet, buying or selling a truck doesn’t require companies to go out of their way to attend an auction, allowing them to save time and money on a purchase or make more money on a sale.

While companies Transport Topics interviewed weren’t able to say precisely how big the Class 8 and vocational truck auction market is, one estimate shows it’s pretty sizable. Between 50,000 and 75,000 trucks move through auctions annually, according to ACT Research, a commercial vehicle industry data provider that tracks the auction market.

One auction company, Taylor & Martin, said it has been averaging about 10,000 pieces of equipment per year, though not all the equipment it moves are Class 8 and vocational trucks.

So who are the buyers and sellers of these trucks? Many different people, said Mike McMahon, strategic accounts sales manager at Ritchie Bros. Auctioneers. Sellers include fleets, finance companies, truck dealers and even truck manufacturers looking to remarket their equipment. And buyers are just as varied.

The buyer side has evolved over the past few years, including for Ritchie Bros., he said. “We’re really tailored with a lot of our offerings to be driving to those end-user buyers,” McMahon said, noting these include small and midsize truck fleets and owner-operators.

However, these aren’t the only purchasers at truck auctions, said Steve Tam, vice president at ACT Research. The majority of buyers on the auction side are actually truck dealers, “so it’s not a truck sale,” he said. “Rather, it’s just a repositioning of the equipment to get it closer to the end customer who is going to use it.”

Tam estimates about half to maybe 60% of truck auction purchases are made by dealers. The rest are end users, he said, with the typical buyer the small fleet with a handful of trucks, owner- operators and even those in the agricultural sector needing a truck or two for their farm.

Some trucking fleets have found auctions to be extremely valuable to help them sell trucks.

One such company is Tri-State Motor Transit. The Arizona-based carrier, which operates a fleet of about 300 trucks, has sold about 60 rigs at heavy-duty truck auctions the past couple of years, according to Frank Larance, director of asset utilization.

“If you get the right auction partner, they can be alongside of you and help not only with selling those units where you have them, so you’re not incurring a tremendous amount of repositioning, but they can also help you get the most dollar for your asset,” he said.

Auction companies can provide information on what’s happening in the truck auction marketplace, including what is or is not selling, and they can help you relocate your equipment so you can get a pre­mium price, Larance said.

For instance, there may be a specific make or model that sells better in one region than another, and while repositioning may cost you more upfront as a seller, the end result could mean walking away with more money.

Although sellers might not make as much compared with a retail sales price, auctions can make the process much easier than trying to sell used trucks on your own, Larance said.

While many buyers are purchasing late models at truck auctions, there is still heavy interest in older models.

“Your pre-emissions vehicles, especially your long hood with classic styling, still holds a premium, especially if they have a strong mechanical history and low miles,” said Stacy Tracy, national director of sales at Taylor & Martin.

He said one reason these pre-2007 models command premium prices is probably the ease of upkeep.

And for trucks from before the 2000 model year, prices are what Tam called “ridiculously high.”

That’s because the Federal Motor Carrier Safety Administration’s electronic logging device rule, which takes effect Dec. 18, does not require ELDs for trucks manufactured before the 2000 model year.

“Anecdotally, I’ve seen values that are probably 30% above average for equipment of that vintage since some folks got wind of what the [ELD] requirement is,” Tam said. He noted that such trucks are in short supply but are sought by owner-operators who don’t want to put ELDs in their trucks.

At the same time, there is growing acceptance and increasing value for trucks built after manufacturers began installing emissions aftertreatment technology on new truck engines a decade ago to meet federal emissions requirements.

“I think we’ve kind of moved past some of the customer apprehensions about buying equipment that was post-2007 or 2008,” said McMahon, of Ritchie Bros.

Supplies of these vehicles, however, aren’t as plentiful as in the past.

If you are looking for specialty trucks but don’t want a new one, auctions also can help you find them in places where you can quickly put them to use, Tri-State’s Larance said. When buying trucks, he said, it’s fairly easy to find non-Class 8 equipment, ranging from shop trucks to other utility vehicles, in locations where you need them.

In addition, buyers at truck auctions, he said, seem be get- ting over concerns about “specification-based” technologies such as automated transmissions, 6×2 axle configurations, single wide-base tires on rear axles and even 13-liter engines.

What is really driving the truck auction market is a big supply of later-model tractors, especially those in the 2011-2013 model years, said Paul Blalock, vice president of sales at Iron Planet, the online auction company that also owns Truck Planet, an auction service dedicated to trucks.

“There is just a flood of trucks in the marketplace,” Blalock said, which has contributed to sliding prices, at least for later models. “I think there is going to need to be some further clearing out of these [late-model] trucks and more flushing out for the prices to climb back,” he said.

While it’s debatable if the emergence of exclusively online services, such as Truck Planet, and the addition of online services by traditional auctioneers, such as Ritchie Bros. and Taylor & Martin and others, has helped or hurt truck auction values, there is little doubt the internet has changed the way truck auctions do business.

“The internet has made more educated buyers and sellers. The idea of value is open to all,” said Taylor & Martin’s Tracy. “They definitely are more educated in the ideas and knowledge of what an item should cost or what the value of an item is.”

ACT Research’s Tam said he believes the internet has been one of the most significant changes the auction industry has had to deal with.

“Before the advent of the internet, auctions largely all occurred at geocentric models,” he said. “You weren’t going to relocate a truck across the country or maybe even just across a few states, you were going to try and sell it locally.”

The internet — not just online auctions but also online advertising — has “dramatically leveled the playing field,” giving mostly buyers, as well as sellers, great visibility into equipment that’s available and a lot more choices, Tam said.

Amir Avneri, sourcing manager for grocery chain Albertsons Cos., said that just three years ago, the company ran its own “primitive- type auctions,” in which it would solicit bids for a certain lot of trucks. But he moved to Iron Planet because he said he was able to get better prices for equipment. He estimated he’s moved about 500 trucks this way over the past 18 months to three years.

“You don’t have to take your truck to some place hundreds of miles away to sell it,” Avneri said. “To us, the business model of Iron Planet turned out to be the best one for us.”

Iron Planet’s Blalock said that 10 years ago, buying or selling a truck on the internet might have been thought of as a risky transaction, but now “it’s a natural.” He emphasized there is still a place for live, in-person auctions.

“The live auctions will never go away,” he said, “but as far as transacting large, late model trucks, they will continue and grow on the internet from what we see.”