Q&A
OUR PARTS LIST IS EXHAUSTIVE
electronics and gaming, which were a huge draw on chips, that demand in those particular areas has eased off. And as a result, there are more for us on the commercial vehicle side. So, that’s actually holding us right now, and the fact that there’s some slowness in the economy and some of those consumer areas.
STN: What is DTNA and TBB’s current outlook on order backlogs?
O’Leary: Yeah, I mean, our backlog and again, I’m not talking about school buses—we can get you the figures on that—but the backlog has been super strong. A, before all the chips stuff got solved because fleets wanted more vehicles because they had a lot of business. They had great spot rates at play, they had a sweet spot from an operating perspective that they weren’t in, they were aging up. And so now even though the spot rate has dropped, and other things have kind of come into play to kind of tamp down some of their overall situation. [Fleeet owners] are still not in the operating zone that they want to be in from an average age of equipment. So, again, there is still very strong demand. On the truck side, especially. We’ve had basically zero cancellations. There is just a lot of demand still out there. Even in Mexico, Australia and other places where we operate, they would still like to get thousands of more trucks. So, for the time being, you know, we’re good. Now we know that we’re in a very cyclical industry, and that could change tomorrow. It just takes one announce- ment from some economist or some big major cancellation from a fleet, and then the whole avalanche starts. We’re keeping [tabs], trying to make sure we understand what’s going on. But for the foreseeable future, it looks pretty good.
STN: New vehicle price increases put a big drain on the industry over the
past year. With supply chain and inflation forecasts improving, will some of those hikes abate? Or are high prices here to stay?
O’Leary: The reason for the big price increases was that basically every
Auto-jet is the #1 choice for school bus exhaust systems, with more than 30,000 parts in stock for fast shipping. We also have custom fabrication to cover all makes and models dating back to 1970.
auto-jet.com 800-247-5391
input into manufacturing had gone up significantly. Whether it was the labor of the people, the average price of per-hour labor. Whether it was the benefits and things like that, that we’re paying people as a percentage of that labor,. Whether it’s the parts that we’re getting from suppliers and all that. Obviously, inflation was a big thing. And everybody understood what that was. Inflation has leveled off, you know, it’s not rising anymore. But it has not gone backwards. To people thinking, oh, there’s going to be price reductions or things like that, potentially, if the prices of inputs start going backwards. Just take labor, for example. What you pay people per hour to build a bus or to build an engine or to build any component that goes into it, typically, their wages are not going to be cut with some kind of pass along to us that we then pass along to the customer. There are some parts, like fuel cost delivery, that go into it. And I think the average delivery price per vehicle that moves up and down, depending on what the markets doing for diesel fuel. But in general, I think the prices are where they are for the time being. And again, I think that the increases for this year, are far more modest than they’ve been the last couple years, which is reflective of this this new state of leveled off inflation.
STN: Thank you. ● 20 School Transportation News • JUNE 2023
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68
