Updated lubrication report to include Class 2-5 trucks

MacKay & Company has published its most recent DataMac Lubrication report, which has been updated to include information for the 2023 Class 2-5 light- and medium-duty truck markets.

MacKay & Company states its DataMac service measures demand in millions of gallons and subscribers are able to access detailed splits across several categories including: vocation (business classification), fleet size, distribution channel (where parts are purchased), point of service, regional demand and vehicle class. In 2023, when combining all fluids, Class 3 vehicles in total top the list for gallons consumed.

Lubricants measured include engine oil, diesel exhaust fluid, coolant, transmission fluid, gear oil and fuel additives.  Each segment includes access to an annual report with additional details such as average price paid, forecasted demand, and other topics surveyed throughout the year.

Based on hundreds of surveyed fleet responses, updated operating populations, and annual miles traveled, MacKay & Company says lubricant demand increased by 3% last year over 2022. 

“When we look at the distribution channels ranked by annual demand, it’s a much tighter race between channels for places 2 through 5 than seen in years past. The list includes both independent and OE service channels. After comparing brands by lube type, it is evident which brands are the most popular within each of the channels and who is picking up or losing share,” says Brian Vancamp, data analyst.

Additionally, the company says the service also measures demand and preference for more than 70 individual brands as identified by survey respondents.  The report includes a summary of the largest brand shifts, both up and down, compared to the previous year and detailed by lubricant type.

DataMac Lube is an annual report and online application offered by MacKay & Company for the light-duty truck, medium- and heavy-duty truck, construction equipment and agriculture segments.

For more information, contact us.

A mid-year aftermarket update

We are in the sixth month of the year, which means we have a good chunk of data on how the year is trending.

Earlier this year at Heavy Duty Aftermarket Dialogue (HDAD), we forecast the 2024 parts aftermarket to be up 4.3% compared to 2023, including, as in recent years, a sizable contribution from price increases.

In fact, three of the 4.3 points are the impact of price — lower than the last few years, but still above the average seen in last 30 years. So, with no price impact, the forecast for parts sales is up 1.3%.

We will update this forecast again in early August, and included in our forecast will be what has happened this year.

One reference point is our component manufacturers’ Aftermarket Index. Each month, 20 companies provide us with their aftermarket sales to distribution points. Through April, the index is down 3.3% compared to last year. Independent channels are faring a bit worse than truck dealers, but both are down. This is one reference point and accounts for about 10% of total parts aftermarket.

Another MacKay & Company report, DataPulse Plus, profiles the monthly business activity of dealers, independent parts distributors and fleets. Looking at parts sales for truck dealers and independent parts distributors, year-to-date through April, truck dealers are down 1.5% and independent distributors are basically flat. Fleets report revenue miles are down 1.4% year-to-date.

Published quarterly, DataPulse highlights fleet utilization; utilization is down slightly in Q1 compared to Q4 of 2023. Fleets also are forecasting a little more fall off in the second quarter. 

Our economist, Dr. Robert Dieli, continues to tell us we are recession-eligible, as many of the signs for a recession in the forecast are still prevalent. (Note: The pandemic seems to have put some funk in the timing of many precursor indicators.)

So, where will we be in August and when we update the forecast?

We still have a couple more months of data points to collect, and we will be completing pricing surveys with folks in the industry to understand how price has impacted the first six months and will impact the outlook for balance of year.

At this point, our best estimate is a slight downward revision for the year, but no significant changes. 

Keep in mind that our forecast is for total U.S. — all hard part products. It certainly doesn’t mean for your products or your region, or that you can’t outperform our forecast and the economy.

John Blodgett has worked for MacKay & Company for more than 20 years and is currently vice president of sales and marketing, responsible for client contact for single- and multi-client projects. He can be reached at john.blodgett@mackayco.com.

MacKay & Company data shows trucking employment continues to trend downward

By Bob Dieli

In early February, the Bureau of Labor Statistics (BLS) released benchmark revisions to its database on payroll employment going back to 2021. Of greatest interest to us were the changes made to the truck transportation employment (TTE) component of total non-farm payrolls.

As you can see on the chart below, the latest edition of this series (red bars) was revised downward by about 33,000 people compared to the figures (blue line) that had been previously reported. The details on which sectors of the industry were most revised will not be available for another month.

Of special note was the fact not only is the high for this expansion smaller than previously reported, it was shown to have occurred in July of 2022, six months sooner than the previous reading of January 2023.

The black bar on the chart marks the month in which the effects of the bankruptcy of Yellow Freight was picked up by the BLS. Note the decline is about the same in both series. The track of employment growth since that event shows a slight upward trend in the current version, whereas it had been flat in the old series.

This chart will look familiar to those of you who have attended a MacKay & Company presentation. We use this chart as part of our set of monthly monitors of both the trucking economy and the business cycle.

As you can see on the chart, the downturns in trucking employment have been an important source of information about the likelihood and timing of a downturn in the general economy. The current count of 17 months through January 2024 is the longest on the chart. And while there have been instances of declines in hiring reversing without a cycle peak, none of those instances involve drops of the magnitude we have seen in the past year.

The flattening of the hiring trend in trucking over the course of 2022 and its decline in 2023 are very much in line with what we have seen in the trucking economy as a whole. The chart below tracks both the rate of growth of Truckable Economic Activity (TEA) and TTE.

As you see, the rise and fall of TTE growth is roughly coincident with the rise and fall of TEA growth.

Our preliminary read of TEA in the final quarter of 2024 suggests a slight improvement from the pace we saw through most of the year. But the signal we are getting from TTE suggests the likelihood of significant improvement in TEA growth in the near term is quite low.

We will have more details on this in the next edition of the TEA newsletter which will be out in early March.