Ryder's Q3 beats, and its fleet chief sees growth — not an EPA '27 pre-buy

Ryder System's third-quarter earnings sent its stock up 10.49% to $265.53, and on the analyst call the company's message was that fleets are preparing for the EPA 2027 emissions rules without panic-buying trucks, according to FreightWaves on Oct. 22.

CEO John Diez said Ryder is not seeing "pre-buy surge activity" ahead of EPA '27. Tom Havens, president of the Fleet Management Solutions segment, said fleets should expect price increases in 2027 but that there was no significant prebuy in the quarter. The EPA's amendment process for the rule includes noncompliance penalties and changes to diesel exhaust fluid "deratement" — the power cuts trucks suffer when DEF systems fault.

Demand signals were strong. Rental utilization hit 77%, up from 70% a year earlier, though still below the post-COVID peak of 81.6% in the second quarter of 2022. Analyst Jeffrey Kauffman of Citizens JMP noted fleet size is below historic norms for tractors, and Diez said he is "confident we can grow that fleet," adding that Ryder is already bringing in equipment.

Used-truck values kept climbing. Ryder sold 5,100 used vehicles in the quarter, up from 4,900 a year ago, with used tractor prices up 19% year over year and used truck prices up 5%. Used-vehicle inventory stood at 7,300 units — the low end of Ryder's 7,000-unit target range — down from 8,500 a year ago. Retail buyers took 61% of used sales, up from 54% a year ago, and Ryder expects that share to cross 70% in 2027. The company raised its full-year used-vehicle gain projection to $50 million to $60 million, up from a $40 million forecast earlier this year.

Revenue grew in every segment: Fleet Management Solutions up 10%, Supply Chain Solutions up 9% and Dedicated Transportation Solutions up 6%. Earnings before taxes rose 21% in fleet management and 7% in supply chain, while dedicated fell 5% on lower operating revenue and a prior-year workers' compensation benefit. On driver pay, Dedicated and Supply Chain president John Sensing described "mid to single digit" wage increases in certain regions, with annual CPI openers and driver wage indices in contracts, and noted that 80% of Ryder's jobs get drivers home every day or every night.