Today’s Pickup: small carriers have 30% better retention than megas, spread is widening

Good day,

This morning Ashley Coker reported on Driver iQ’s latest recruitment and retention survey, which confirmed something that many of us at FreightWaves suspected. It turns out that the so-called ‘driver shortage’ has more to do with workers’ unwillingness to drive over the road for mega-carriers—because of quality of life and pay are top concerns—than with an actual lack of truckers. 

Three year old used truck prices have stayed firm despite record new truck orders, suggesting that even as mega carriers take advantage of the Trump tax cut and historically high contract and spot rates to turn over their fleets, there are more than enough small fleets and independent operators to buy up their old trucks. 

Did you know?

According to Driver iQ Co-President Lana Batts, in the last quarter there was a 30% difference between the turnover rates of the large and small carriers, with a downward trend for smaller carriers and an upward trend for large carriers.

Quotable:

“The Tour de France is a thrilling challenge for our team, and we’re proud to once again serve as the event’s official transport provider.”

-Luis Gomez, managing director–transport, XPO Logistics Europe

In other news:

Truckers looking to haul in more profits

Carriers are raising rates and investing in new equipment as a monthslong rally in transportation demand gives them the upper hand in setting prices with shippers. (Wall Street Journal)

Tesla asks suppliers for cash back to help turn a profit

Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously, an appeal that reflects the auto maker’s urgency to sustain operations during a critical production period. (Wall Street Journal)

Carriers announce price rises as peak season looms and rates falter

Container shipping freight rates in the major east-west trades look set to decline next week, according to today’s Shanghai Containerised Freight Index (SCFI). (The LoadStar)

Trade tensions threaten global economic growth, G-20 cautions

Global growth remains robust and many emerging-market countries are better prepared to face crises, but risks to the world economy have increased, finance ministers and central bankers from the Group of 20 nations said in a statement published at the end of their two-day summit in Buenos Aires. (Bloomberg)

Energy giants opening natural gas spigots, fueling profit rise

The world’s largest oil companies are pumping more natural gas than ever before, helping to spur a rise in profits while sating rising global demand for fuels that can mitigate global greenhouse gas emissions. (Reuters)

Final Thoughts:

Is it almost lights out for Tesla? It’s been a weird month for Elon Musk, who accused a heroic British diver involved in the rescue of the Thai soccer team of being a pedophile during a Twitter meltdown and later apologized. Now the Wall Street Journal is reporting that Tesla is asking its suppliers for cash back in a desperate bid to turn a profit. Musk has already burned bridges with Wall Street by arrogantly refusing to answer analysts’ questions on earnings calls, and has repeatedly stated that the beleaguered carmaker would not return to capital markets this year to raise cash. It’s just as well, because Tesla’s 5.3% junk bond is currently trading at 90 cts on the dollar, a yield that could make another debt issuance prohibitively expensive. 

At this point it probably goes without saying, but I don’t think we’ll see a Tesla Semi next year. 

Hammer down everyone!

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