Welcome to the WHAT THE TRUCK?!? Newsletter presented by Transfix. In this issue, market’s downward spiral; HBO highlights how trucking is broken for drivers; White House announces measures to fix a fragile market.
Spot market slide continues
Free fall — National dry van spot rates inclusive of fuel continue on the downward slope that started in early February. The market is now down 54 cents from the all-time high it reached back in January.
Bloodbath — FreightWaves founder and CEO Craig Fuller recently penned this article where he states, “We think another sharp, painful downturn in the U.S. truckload market is imminent, and it could be as bad as 2019.” Among the many lists of reasons for his market call is an unprecedented number of new entrants into the market, dwindling freight volumes, elevated fuel costs and warehouses that are being snapped by the back end of the bullwhip. Don’t think we’re already in a freight recession? This article may change your mind.
War, fuel and spending — With fuel prices surging by $1.50 during the same time as the market downturn, inflation curbing consumer spending, and the knock-on effects from the war in Ukraine, running a truck just got much more difficult and expensive in ’22. How do you get ahead of it? Use market intelligence like SONAR to plan lanes accordingly and keep those tires turning before volumes dry up even further.
In addition, Fuller has been crushing these market breakdowns on Twitter, and I highly recommend you follow him for this excellent info.
HBO does trucking
Shining a light — On the most recent episode of “Last Week Tonight” hosted by John Oliver, HBO took a look at some of the conditions that plague today’s truckers. Oliver hit on how drivers are paid (by the mile, not hourly), how employment is classified and predatory lease-purchase programs.
“A fundamental lack of value is placed on their time that clearly needs to be addressed.” — John Oliver, host of HBO’s “Last Week Tonight”
Predatory lending — Western Express was highlighted on the program as a carrier exploiting drivers via its lease purchase program. According to a trucking company exec whom Oliver cited, only 5%-10% of drivers end up paying off their lease-to-own agreement. Western Express has recently contended with lawsuits over lease purchase programs and wage payments.
Who cares? — While Oliver didn’t say anything those of us in the industry don’t already know, what is important is the attention mainstream exposure brings to these issues. Transportation Secretary Pete Buttigieg recently addressed some of the concerns that the program raised. Buttigieg told Yahoo Finance, “Nobody pays for wasting a truck driver’s time except the trucker themselves. … We can take steps on our side too [by making things like parking] more available.”
Trucking hits the White House
Biden on trucking — President Joe Biden hit the White House lawn Monday to address some of the progress his administration feels it has made in regard to trucking employment. John Gallagher reports, “The Biden administration emphasized progress on several recent initiatives aimed at getting more people into trucking jobs, but the potential for a freight recession threatens to undermine some of that progress, at least in the short term.” The White House facts sheet on trucking notes “a 112 percent increase in CDL processing in January and February 2022 compared to January and February 2021. States have issued more than 876,000 CDLs since January 2021.” In addition, it touted that over 100 employers have joined the 90 Day Trucking Apprenticeship Challenge.
The good — I was pleasantly surprised to see port truckers and associations being invited to this. When the Biden admin announced FLOW, I was critical of the lack of carrier representation and was concerned only megas would be invited to this conversation. It is also nice to see Secretary Pete take as many public stances on freight and trucking as he has.
The bad — Very little of what was presented by Biden addressed long-standing issues that drivers face. Why is retention such a dirty word and why do we lack focus on it? This is an industry with 90%-plus turnover, yet the call to action is to recruit new drivers. Bringing in record numbers of CDLs and trimming safety regulations in order to increase the driver pool is not a solution for retention. In fact, what it’s most likely to do is further depress rates, causing trucks to leave the market. If we keep pouring drivers through the same colander year after year, we shouldn’t be surprised when 10% or less remain.
Prophetic
Soothsayin’ — I’m not sayin’ Elon took Petersen’s advice to buy Twitter, but the timing is uncanny. Engadget reports, “Tesla and SpaceX CEO Elon Musk now owns 9.2 percent of Twitter after purchasing $2.89 billion in stock.” Not only that, but he’s been appointed to the board as well. What kind of changes will Musk bring to his favorite social media platform? Looks like the controversial subject of an edit button is atop his agenda. Speaking of twitter, I’m very active on there too. Jump here to follow. Be sure to say hi, I’ll follow back!
Semi-excited — Meanwhile, there’s been a Tesla Semi sighting over at Giga Texas. Electrek reports, “On April 7th, Tesla is going to hold an event at Gigafactory Texas in Austin called ‘Cyber Rodeo.’” Will the Semi just be a prop at the event or will we finally get some real news on a street date?
WTT this week
Wednesday — We’re hitting on the home goods supply chain; unusual freight; what the data is saying about demand; more logistics groups banding together to support Ukraine; mental health; and the latest in news and markets.
With special guests Chad Carleton, COO at Everything Kitchens; Jagan Reddy, co-founder of Semicab; Steven Tittle, owner-operator at Gateway OT; and Frazer Kinsley, co-founder at Kinsley Partners.
Friday — Get ready for the truth behind LTL pricing; how to ship your conference and event goods; how to accelerate your sales funnel; and this week’s good and bad news.
With special guests Curtis Garrett, vice president of pricing and carrier relations at Recon Logistics; Brett Suma, CEO at Loadsmith; Dan Deigan, owner at High-Performance Logistics Sales; and Rob Bussey, national account manager at BWS Logistics.
Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn and Facebook, or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.
Now on demand
Freight’s biggest challenges in Q2
How truckers are winning with side hustles
Biggest issue ocean shippers will face in Q2
What is it? — We asked Flexport COO Sanne Manders what the biggest challenge ocean shippers will face in Q2 is. He says all eyes are on the International Longshore and Warehouse Union contract and delays in ocean shipping that still have goods taking over 100 days to arrive. Btw, love the EATDRAYLOVE shirt. Take a listen.
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One love,
Dooner
