By: Jack Porter, “The Trucking Activist” & Managing Director TPP
I want to thank all those that supported the most recent TCA Convention – Truckload 2020: Orlando. This industry gets in your blood, and the people are the best! This was on full disclosure during this past week. Having the unique pleasure to share the stage with TCA Profitability Program (TPP) Consultant Shepard Dunn and FreightWaves’ Dean during Monday’s panel discussion, I was acutely aware of the current market we find ourselves in today. The current talk on the Coronavirus has basically created a huge pause in the market.
The fear of the unknown of this virus is only adding to the further unknowns the industry is tackling. The capacity of trucks seems to be dwindling with financial failures; carriers just quitting business; the low number of new units purchased in 2019 and on order now; plus the plummeting used truck values. Then there are the challenges of insurance costs, and accident settlements, with a meteoric rise from historical trends. The driving community is still challenged with the average age growing, and the entry level ages being challenged due to the lifestyle and earnings power. The current drivers are still figuring out the ELD and reduction of personal choice for their best health habits.
The customers are in the market with a flood of RFP’s. Why not? They see the same reporting of the future capacity moving toward 2018 levels and the challenges that brought to the market. They want to lock in dependable capacity mainly coming from those well known, proven carriers from the past or current suppliers. The brokers seem to be grasping for their position in the supply chain legitimacy. Thus making for a very chaotic period for long term agreements and better, long term partnerships during the paused market.
In the coming months, it seems we should be prepared for complete uncertainty. I feel very confident that when the pause is released, and business gets back to some semblance of normal (not a word you note very often in trucking), the new button will be fast forward. Also, not very good for the market. As noted during my panel, the trucking cycles, peak to trough, would be about three years. The trucking rate recession in 2016 to the wild exuberance of 2018, then to now 2020 has been about three years. Really hard to build your supply to meet demand leaps and troughs like these.
I’m ready to engage my clients on the trucking side in figuring this out and will employ the vast array of data to help reach equitable and profitable decisions during this pause in the business.
Thanks again to all the members and friends at TCA’s annual convention last week; it was great to catch up with you.
Best of luck to Dennis in his new role as TCA chairman, and to Josh, you did a great job!