Interview Synopsis

United Road Services – auto production ramp-up & competitive analysis

  • Credit
  • Industrials
  • North America

The ongoing microchip shortage that is stifling vehicle production is “probably going to be ongoing until late Q4, early Q1 2022”, we heard in a Forum Interview with a former regional manager at United Road Services Inc, which provides vehicle and heavy-haul transport services. The Interview also explored trucking capacity constraints and United Road's market positioning, among other topics.

Struggling with the effects of the COVID-19 pandemic, many smaller carriers are going out of business, which we were told bodes well for United Road as a larger player, as it enables the company to improve pricing and maintain margins. Throughout the driver shortage, United Road has also been creative in attracting drivers, such as with insurance offerings, which are typically high-cost and have been the undoing of many small operators. 

Although OEMs are currently maintaining low inventories, the specialist anticipates a demand bubble from the past two years will be seen in H1 2022. “Today, if they had the parts, they’d be running overtime, I know, because they want to hit their planned annual numbers for their shareholders to meet that demand,” the expert said. “I think once one connects with the other, it’s going to be like a bit of a double wave for a short amount of time, but it’s going to be backlogged.”

United Road also works with auction houses and used vehicle markets. A number of factors are changing the former, we heard, including COVID-19 accelerating the shift to online, big weather events and smaller fleets. “Used is hot right now because that’s the majority of what’s out there, but I can’t think of any other changes other than more of the white-glove service or the auctions getting away from double handling vehicles for the sake of running it down a traditional auction line.” 

Overall, the Interview suggests that United Road is well positioned to overcome the current macro challenges and maintain its margins. The company’s Haully app, which enables truck owners to find work, as well as its broad US footprint, are among its biggest differentiators. “With United Road, they’ve got a good safety rating, good insurance rating, they can piggyback on that and… build a little bit of extra capacity,” the specialist said. 

To access all the human insights in Third Bridge Forum’s United Road Services – auto production ramp-up & competitive analysis Interview, click here to view the full transcript. 

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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