On Monday afternoon at the 81st annual Truckload Carriers Association (TCA) Annual Conference in Las Vegas, program director Chris Henry moderated a panel entitled “The pulse of truckload: insights and predictions from TPP and FreightWaves.” TPP is the TCA Profitability Program, a working group of top-performing fleets that standardize and share operating and financial data for mutual benefit.
Panelists included: FreightWaves Chief Insight Officer Dean Croke; Jack Porter, the Managing Director of the TCA Profitability Program; and John Lyboldt, President of the TCA. Panelists introduced themselves by way of recounting their history in the industry.
Croke drove two million miles in the Australian Outback before running the Australian Trucking Association, a risk management consultancy, and then doing analytics for Omnitracs in the United States, all in order, he said, to help businesses make better decisions through data. Porter started in truck dealing, went into consulting, and then joined the TCA in 2003 before launching the association’s benchmarking and TPP in 2004. Lyboldt was in the operational and educational space in another industry and came to work for the TCA because he had a passion to build an organization that will help truckers build their businesses, “have their backs” and move the industry forward.
Croke began his presentation by recounting what has happened to freight markets in the past year – volumes have been relatively stable year-over-year with very much looser capacity, indicating that carriers have fewer choices than they had even last summer. Even Southern California markets like Los Angeles and Ontario, which were kept artificially hot by container traffic pulled forward to avoid tariffs, have begun cooling off.
“Capacity is rebalancing, and you see carriers deadheading to Yuma for lettuce or to Nogales for other kinds of refrigerated freight,” Croke observed.
Other data in the FreightWaves SONAR platform highlighted by Croke sliced up capacity by length of haul and equipment type: reefer carriers reject about three times as many loads as dry van carriers, although this could be related to a rash of severe winter weather affecting several regions, including the High Plains, Upper Midwest, Great Lakes and Northeast, which drove up the demand for freeze protection.
In terms of lengths of haul, Croke said that smaller fleets with 2010 EPA-compliant tractors were running their trucks faster to make same day deliveries on 600 mile lengths of haul.
“Smaller fleets are running faster and taking tweener freight at a 20 percent premium,” Croke said.
Shippers have caught on to the looseness in capacity and have acted accordingly; as tender rejections fell, shippers returned to their bad old ways and spiked wait times in the vast majority of freight markets across the country.
Porter said that 2018 was a rollercoaster of a year in freight and emphasized that “hope is not a strategy” when it comes to making business decisions in a volatile market.
“At the most successful fleets,” Porter says, “operations runs sales. Sales needs to know where the holes and opportunities are, and FreightWaves breaks that code for any sales group out there.”
Porter also said that detention and the lack of cooperation between shippers and carriers is not sustainable. Citing FreightWaves SONAR data, Porter said that the revelation that most drivers only spent 6.5 hours per day driving and generating revenue on average represented a huge opportunity cost for both the fleet and the driver.
One of the best insights that Porter shared was that the record truckload orders the industry saw in 2018 have less value as leading indicators of carrier sentiment than they once did. Carriers no longer make deposits to secure truck orders, so “they have no skin in the game,” Porter said. Those truck orders may never materialize, even though original equipment manufacturers have put the harshest penalties on unfulfilled or undelivered orders on dealers than they ever have before.
Porter also said that top performing fleets stay on top of their weekly numbers, and “pretty much know where their [operating ratios] are coming in week-by-week.”
Lyboldt said that the TCA was building an academy to help its members refresh and rediscover their passion for operational and financial disciplines including financial performance and analysis, human resource recruiting, safety and compliance, service and maintenance, fleet management, operations management, logistics and brokerage, business management, sales, systems and processes, leadership, and disciplines of execution.