Odd Lots: Trucking Is Booming Again, And Drivers Aren't Happy About It
In the last year, freight companies have seen a significant upturn in the business. Volumes are up. Billing is up. And in addition to growing demand, we've also seen new constraints on the supply side
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Odd Lots: Trucking Is Booming Again, And Drivers Aren't Happy About It
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Show notes (from RSS)
In the last year, freight companies have seen a significant upturn in the business. Volumes are up. Billing is up. And in addition to growing demand, we've also seen new constraints on the supply side, with the administration cracking down on who is even allowed on the road. As we know, trucking is an especially cyclical industry, but is this current boom structurally different from past booms? Why is it that despite the boom, many of today's drivers are unhappy with the state of the industry? On this episode, we speak with Reed Loustalot, the chief marketing officer at the the Truck Parking Club, a company which aims to help drivers find parking, so that they're not using up valuable road hours just looking for a place to stop for the night. We talk about the crackdown on the supply side of the market, the rise of surveillance, and how a recent Supreme Court ruling could impair capacity even further.
Read more:Ship Pays $4 Million to Skip Line to Cross Panama CanalTrucking Stocks Fall on Legal Risk in Worst Month Since Tariffs
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Transcript
Bloomberg Audio Studios, Podcasts, radio News.
Hello and welcome to another episode of the Odd Lots podcast.
I'm Joe wasn't.
Thal and I'm Tracy Alloway.
It's been too long since we've done a trucking episode.
This is just an objective fact that we need to
get out of the way.
It is time. I mean, to be fair, to be fair,
I think we've both written about trucking in the Aulot's
newsletter recently. I think back in January you started to
get some of the freight and logistics companies talking about
maybe they were starting to see an upturn and looking
at some share prices. Since then, so I've got look
up night Swift at the moment.
What's the tigger?
It's k n X Okay KNX night Swift. You know JB.
Hof But night Swift is a little bit more dramatic.
I mean since January of this year.
No, it's a great run.
It's had a great run. So I think the trucking
rebound it seems to be here.
It seems to be here.
You know.
The problem with going like a long time. I mean,
as you mentioned, we do write about it, so it's
not like we're ignorant. But the one of the things
that we learned when we did a lot of trucking episodes,
particularly in the years after the pandemic, was like when
we talk about like the business cycle, you know, it's
like these multi year cycles. When truckers talk about the cycle,
there might be like eight up and down cycles within
one boom or within one recession. Just extraordinary cyclical business.
Right.
So, if we or hopefully anyone else have learned one
thing from the truck episodes, it is that this is
such an incredibly cyclical industry. And the standard explanation is
that you have these really low barriers to entry for
owner operators and trucks, and so as soon as trucking
rates start to go up, everyone decides to become a trucker. Yah,
the market gets flooded, it over expands, and then inevitably
rates start to come down, and then you have a
bunch of independent owner operators who start to go bust,
and then capacity comes out and the whole cycle can
begin again.
True, it seems real boom bust. And you mentioned the
share prices of night Swift and JB.
Hunt. But another way to look at it.
I'm just looking at the Internet Truck Stop Van Rate
Index just a sort of basic measure of how much
it costs to move. That was in December of last year,
is like a dollar ninety four. I guess that's probably
per mile, and now it's up to it broke three.
It came down a little bit, so just by measuring
the cost of trucking, it's clearly gone up.
So we need to figure out.
What's Sorry, I'm just looking at this night chart again,
the night Swift chart. You know they've outperformed META this year.
That's amazing. I know, look at JB. Hunt. I think
it's you and that was like almost a double Yeah, yeah.
Forget about AI. The money apparently is in trucking.
Well, how are for real? House?
Is how the cycle starts?
Right?
How do you just start saying the money is in
trucking and then everyone gets.
How are the turbines getting to the data centers?
How are all like?
Right?
Like, we know that there is a lot of demand
for physical goods as part of this AI story, and
the physical goods have to get to the data center
somehows right?
I think this is part of the story.
This is the question. Is this the sort of same
rebound that we've seen before, or is there maybe something
more structural that's happening here. We've also had some recent
developments with like the actual supply of truck dumps right,
which is also something that clearly impacts capacity. So there's
a lot to talk about.
There's a lot to talk about. It's time to revisit
the trucking market. We have a guest that we've never
had on before, but someone really like someone I've known
from the internet for a while, who really knows the
space very well. We're gonna be speaking with Red Lustilow.
He is the chief marketing officer at Truck Parking Club
and so read thank you so much for coming on out.
Lots, Joe Tracy, thanks for having me. Joe. I got
to give you credit, man. I said you weren't going
to do it, but you did it and you said
my name right, So.
Congratulations, thank you. All right, test cleared for this episode. Actually,
what do you get? Who are you? What's your background?
What's the Truck Parking Club and all that? Why are
we talking to you?
Yeah? Sure, so, I'm My name is Red Lusblow. I
have been in freight my entire career, which at this
point is a feels like a long and short ten
years at the same time. Started out of college at
a freight brokerage Echo It's a large, large freight brokerage,
Top five freight brokerage. Then spent some time at a
technology company called Trimble, did my own thing for a bit.
That's where I encountered you on the the interwebs, probably
three or four years ago, just kind of stirring the
pod on Twitter. And then I joined Truck Parking Club
about three years ago and really have been focused on
truck parking for the last three years, which we can
talk about because that's a trending topic as well. But yeah,
I mean I've been I've been in freight my whole career,
and I'm I'm a freight guy and I now live
in Chattanooga, which is William has been dubbed freight Alley
by Craig Fuller, and yeah, so I'm I'm in it man.
It's the parking thing is really interesting here because if
you think about a truck or freight rebound, you think
about things actually moving. Yeah, right, But I'm curious, from
your perspective, does a rebound look like more trucks actually
having to stop and find parking, like desperately circling for
a place I don't know, around a data center or
something like that and trying to find space. Like is
a healthy trucking market? What does that look like to
a company that is in the truck parking space?
Yeah? Sure, So you know, naturally as demand increases, we'll
see see more trucks on the road. You Tracy, you
kind of talked about a number of the trending topics
ahead of this, you know, and you talked about the
cyclical nature of trucking and the barrier to entry, if
you will. So there's it's a very multivariate market, and
truck parking is one of those things that structurally it's
very difficult to construct new capacity because it's very limited
in where you can do it, it's expensive, many municipalities
don't want it, and so there's a bunch of structure
reasons why it's difficult to quickly increase the supply and
the traditional sense. And what we've done is really just
leveraged existing space. So there's millions of truck parking spaces
across the US that are on private property, and we've
just built a network a marketplace to tap into that.
So we go to owners, we say, hey, you can
make some money parking trucks comes on our app. Drivers
use their app find parking on private property and pay
the owners. So Airbnb sort of style.
Yeah, that's what I'm just going to say.
It sounds like a twenty tens era sharing economy sort
of thing.
Let it makes sense, exactly exactly. And here's another thing
about trucking is trucking is from a tech standpoint, is
always behind right, and so we're you know, when you
operate in the physical world and you're in as it
fragmented a market, is trucking is I mean, there's nearly
a million trucking companies and most of them are you know,
the long tails really really small, less than ten drucks.
It's slow moving and it's slow to adopt technology, and
that's always been the case. And so we're really scaling
and we've we've really done this at an interesting time because,
like Tracy said, I mean, coming out of COVID, the
market was hot, Freight rates were through the roof. Supply
flooded the market because there was indeed a very low
barriered entry, and a lot has happened as a result
of that, and technology has really flooded the market too,
I would say, over that same period. Yeah, and so
there's a lot, there's a lot. I mean, there's a
lot to talk about. So I guess you guys tell
me where you want to start.
Yeah, well here, I mean, let's start with like maybe
the really simple question, and then we'll drill down even
further based on how you answer it. But like, big picture,
this surge that we've seen over the last two or
three quarters, whether we're looking at stock prices or maybe
more importantly rates, like decompose the drivers, the forces that
have pushed these lines higher.
Yeah, I mean, so coming out of COVID, you know,
starting in mid basically mid twenty twenty two, mid to
late twenty twenty two, we saw rates fall and we
were in essentially a three plus year lull, and most
folks were saying, most of the talking heads were saying
that demand returning was the only thing that was going
to drive rates up, like that was going to be
the only thing. But what we've seen in really the
last you know, since the new administration took office, we've
seen a massive kind of crackdown on English language proficiency,
on non domiciled CDLs, and there's been as a result,
a lot of capacity has kind of structurally been chopped
out of the market, and so supply has really dwindled.
And man to complicate things, there's also been in the
last couple months a Supreme Court ruling Montgomery case, which,
you know, historically freight brokers who move I think on
average about thirty percent of freight volumes, if I'm not mistaken,
freight brokers, which are you know, a critical component to
the kind of the freight ecosystem, have historically not been
liable or have not been held liable for carriers negligence
or carriers accidents, right, And now that's in question. And
so there's been so many kind of structural things that
are really pushing capacity out of the market and also
making certain types of capacity come at a premium. Right,
Like safety ratings all of a sudden might matter at
carriers now because brokers might be you know, there's more
scrutiny on broker's selection of carriers. And so there's there's
so many kind of like supply things that are affecting
the rates and that are kind of structurally affecting the
barrier to entry so that next time there is a
demand spike and you are seeing demand spikes and pockets
of the market. Right, Like Joe, you talked about data centers, right,
flatbed has been booming and data centers have a lot
in construction has a lot to do with that. But
when you if you really were to have like a
COVID level event where like there was unprecedented demand, I'm
not sure the market could bring on as much new
capacity as it did like it did during COVID because
there are, you know, fundamental changes to the barrier to entry,
and the government is really really put a lot of
or is working to I guess I should say put
a lot of barriers in to prevent bad actors coming in,
mostly if you were to kind of look at it
from their perspective. So, yeah, I want to talk.
More about the barriers. But just before then, I'm really
interested in the supply versus demand question. Are there any
empirical things that you can look at to show that
capacity is coming out of the market. I'm thinking, for instance,
people used to look at like the spot versus the
contracted rate right as one indication of capacity, and that
started flipping earlier in the year is that, for instance,
an indication that capacity is really getting limited.
The data guys will look at the spread between spot
and contract rates. I'll give you an anecdote.
Yes, okay, I love it.
That's essentially me saying I'm not the biggest data guy.
But anyway, anecdote. So, I have a buddy who owns
a trucking company. He's Ukrainian descent, immigrated here from Ukraine,
I think you know, over a decade ago, and many
of his drivers were also craining. And this is a
common story you hear in trucking. There's a many Trucking
is a very rich ecosystem, full of every nationality you
can possibly imagine. And they've got their own little network
of companies, and they've got their own network of drivers.
They bring people from their home country. And there's a
lot of scrutiny on these folks right now, I should add,
right because many of them have non domiciled CDLs, which
is a certain type of CDL, and there's been a
lot of scrutiny on those. So many of these folks
have those CDLs. But despite that, and despite what people
are saying about domicile CDLs, there's still some really good companies,
and in my days I work with a lot of them,
so I'm still friends with a lot of them. So
I was talking to my buddy's Ukrainian guy, and he's like,
look this no nomiciled CDL rolling means I have to
get rid of all of my drivers. I have to
find all new drivers, and of course that means I
can't hire people who are in my network, many of
whom have non nomiciled CDLs. So this is a serious
thing for many of these companies and in many of
these companies. So the ones that really do kind of
run in the spot market, right, they're they're the you know,
the five six, seven, one two three truck carriers, which is,
like I said, the vast majority of the total amount
of companies. I mean, there's hundreds of thousands of these folks,
and they're structurally at a major disadvantage, one because of
not domicile CDLs, but also two because of English language proficiency,
which has been another thing the government has really focused on.
The DOT I should say, under Sean Duffy has really
been focusing on, which is you know, it started from
a very natural standpoint. It's like if you can't read
the signs, how can you operate eighty thousand pounds vehicle safely? Okay, fair,
But naturally that's also kind of pushed people out of
the market too. And you hear the same thing. I mean,
I hear the same thing every day from my friends
who own fleets or who are drivers. It's things are
tough for them right now, and hiring drivers is difficult
right now, and historically it's been Another big issue is
driver turnover. I'd bring it up more issues, more rabbit holes.
Driver turnover is you know, at some fleets it's over
one hundred percent a year. It's crazy. It's crazy what
goes on in some of these fleets. And when you
kind of shrink the supply of drivers, that becomes even crazier.
So naturally that'll mean, you know, better pay for drivers
who kind of fit the profile that companies are looking for.
But it's just kind of more pot stirring, if you will,
that's just further complicating the situation.
There are so many rabbit holes that you have already
thrown out. But just going back to one, explain the
non domiciled CDL issue to me, because it sounds like,
again I'm not a CDL expert, but just based on
the name alone, if I have a non domiciled CDL, like,
couldn't I eventually turn that into a normal domiciled CDL.
That is a great question that I am not the
best person to answer. I will be honest about the
legality of the CDLs. I think what started all of
this was Joe, you probably and Tracy maybe you do too.
But you know, there's a group on Twitter that we
lovingly call ourselves freight ps. Right, it's like this little
kind of freight ecosystem. And for the last I would
say two plus years, there's been a growing group of
people that have been really looking into like, who are
these companies that have flooded the market, who are the drivers?
What types of CDLs do they have? And one of
the most tangible things that I remember was, it was
probably a year ago people started to discover that a
lot of CDLs were issued to people with something called
no name given as their first name right literally on.
The seems a little bit suspious.
Literally on their license it says like no name given.
And so I think that kind of like people started
to discover this, and also you also had many trucking
companies being registered at like there was like two hundred
trucking companies registered to like an apartment in you know,
Signal Hill, California, or like shared in Wyoming, there's like
six hundred trucking companies registered to a PO box. And
so that really kind of started people looking at this,
and then the non dom celled CDL thing really started
to take off, you know, when Sean Duffy and the
dot started, I believe in June of twenty twenty five,
really kind of honing in on you know, English language
proficiency and non domme celled CDLs. But I believe non
doma cell CDLs have been around since the mid eighties,
and there's and it's not necessarily like obviously it's not
unlawful or else they wouldn't be issuing them. But I
think there was a lot of scrutiny put on certain
states that were just had massive spikes in the issue
in sub CDLs, like California and Minnesota, I believe were
the two kind of biggest in New York were some
of the bigger examples where you know, historically they'd been
issuing you know, X amount of CDLs per year and
then all of a sudden, out of nowhere right around COVID.
It was like ten x right, and all the while,
you know that all that all happened in years past
and nobody really looked at it. But then in the
last year everyone's been like, Okay, what's really going on there,
And so that's kind of what's led to the scrutiny,
if you will.
So someone with a non dumb CDL has taken a
test in the US, or at least in theory, someone
with a non dumb CDL, it's not like they're just like, oh, yeah,
I took a test back.
So nonymoicill CDLs are for people who are foreign nationals
who are not nomiciled here but are legally allowed to work. Yeah, right,
and so if they have the legal authorization to work,
sure then they can. Then then they can go and
get a non domiciled CDL.
But just to establish the CDL part, let's just say
in theory. In theory, in theory, the non dumb CDL
is not someone who's like, oh, I got my trucking
license in Ukraine and then I moved to the United
States and I'm truck In theory, the non dumb CDL
is someone who.
Moved here in theory rights.
Well, when you see a really big spike in the
number of issuance of non down CDLs that are way
out of historical proportion, the question that might arise for
regulators is perhaps the quality of the CDL et cetera. Like,
that's sort of what this source of concern would be.
And to go down another rabbit hole, there's been a
lot of eyeballs on CDL schools. Yea, yeah, there's some
you know, you remember that guy Nick Shirley or whatever,
like the Leering Center in Minnesota.
It's like, you guys, Yeah, truckers have the same.
Yeah, same thing. Okay, there's lots of suspect CDL schools,
lots of suspect curriculums, lots of suspect trainings. They've essentially
been handing out CDLs like candy.
It would seem no, no, this makes a lot of sense.
I know.
Obviously the administration, Sean Duffy, the Secretary of Transportation, they've
talked a lot about this, et cetera, Like, Okay, how
many of these drivers are actually safe and did a
proper education, et cetera. Yeah, But from your perspective to
the people that you talk to, it's basically like, no,
this is more than just tweets. This is not just oh,
we're looking into this, et cetera. You think there's a clear,
like on the ground effect from this is real?
Oh, one hundred percent. And I hear it every day
from my friends who own trucking comp Yeah, one hundred percent. Okay,
And it's been much harder to you know, capacity has
been much tighter. You talk to freight brokers, you know
what used to be. You know, rates have gone up
and it's harder to find trucks. So got it. There's
only a couple sources for that right now.
I guess what I'm getting at with the domiciled versus
non domiciled CDL thing is, would you expect this to
be a temporary blip as the administration, you know, scrutinizes
some of these foreign drivers, but eventually they I don't know,
like maybe they have to go back to school and
get relicnsed again and then they come back on stream.
Or is this like a permanent cut in driver capacity
in your mind?
Well, I think if I'm not mistaken, the government in
March of this year said that essentially non domiciled CDLs,
it's not going to be as easy to renew them, okay,
and so naturally they'll start to expire and there will
be less of them over time. And I mean, who knows,
you know, obviously we can't get a crystal ball out
and see, you know, what's going to happen in the
next election. So who the heck knows what another administration
might do or might be able to do. Who knows
how permanent any of this is. I man, anyone's guess
is as good as mine on that.
It occurs to me that there are sort of two
interlinked things that strike me is interesting. So let's say, okay,
you have the Ukrainian owned trucking company and a lot
of non Ukrainian drivers. And then to your point, though
you know they're part of a broader network, they might
network with Ukrainian freight brokers, et cetera, et cetera. And
now you have the Supreme Court ruling which for the
first time opens the door to the possibility of the broker,
who traditionally wasn't held liable, would be the carrier if
there's a major accident caused by them. So it feels
to me like this combination like you could literally obliterate
like sort of like whole networks, Like we think of
the network as the driver the truck, et cetera. But
the network is also the sort of the capacity is
the ecosystem itself.
So structurally, this is if this continues down the path
it's on right now, and a lot of the pundits,
you know, the legal experts, I know, I could name
a couple have said in the last day that if
this all keeps going down this path, this is a
serious structural issue for the freight brokerage business model. And
if the freight brokerage business model is in trouble, then
naturally that means that the long tail of trucking companies
who primarily get their freight from freight brokers, they're in
trouble too. And so, you know, historically, freight brokers have
had to have processes to audit the cares they set
up and audit the carriers they give freight too, and
each one has kind of had their own process for that,
and that's evolved, and there's been a lot of technology
that's gone into the vetting and compliance side of freight brokerage.
In the last couple of years, mainly because another thing
we haven't talked about, which is the whole rabbit hole,
is cargo theft. Cargo theft has been through the roof
since COVID, and there's been a kind of a huge
amount of criminal element, like large criminal elements that have
come in and are doing everything from spoofing carriers pretending
to be carriers, to setting up fraudulent entities, acting like
a normal carrier for a while, then figuring out where
the good freight is, stealing that and then disappearing.
Oh wow, I thought you just meant someone like kicking
up bid off the back of the truck or something.
Oh no, no, no, Like I'm talking like mafia type
stuff like crime rings. And that's exploded in the last
couple of years. And so as a result of that,
freight brokers have been much more scrutinous of who they're hiring.
And now, you know, safety, which is kind of the
element we're talking about here with regard to the Supreme
Court ruling, is like, okay, what's a safe carrier?
Right?
And and so far brokers have really kind of relied
on the FMCSA's rating, right, it's satisfactory, conditional or not rated, right,
And so traditionally it's like, Okay, I hired a satisfactory carrier.
It says on the FMCSA's website they're satisfactory. That must
mean something. Therefore they're good, and I'm going to hire them,
and they go like there. Recently they were Cige Robinson
was involved in a case where they hired a carrier
that was satisfactory, that had done like two hundred plus
loads for them, and then was involved in a wreck.
And now they're facing like a six hundred million dollar judgment, right,
and they're appealing it naturally, But if that, I mean,
if that holds true, like the freight broker business model
is going to be in serious trouble because the government's
not really telling them like clearly, okay, this is a
safe carrier, this is the vetting standard, use this. If
you do this, you're covered, right, They're not really doing that.
There's a lot of there's a lot of kind of
grayer around this, and that's that's naturally going to cause
a lot of problems for freight brokers. And like I said,
the vast majority of these small carriers, and there's hundreds
of thousands of these companies they get their freight from
freight brokers because they can't go it's difficult for them
to go get direct customers. It's traditionally like if I'm
a one truck operator and I walk into Craft Hinds,
Craft Highs is going to be like yo, like I'm
not giving you freight. I'm going to give freight to
the broker who can give me a thousand trucks or
you know, night Swift, who can give me ten thousand
trucks yright. So it's just a very it's a very
difficult time.
Yeah, this is tracy.
What I think, like, maybe we need to broaden our
conception of what capacity means because we think of it
as drivers, we think of it as trucks, et cetera.
But if there is a small carrier and it's ten
trucks and ten drivers, if they can't really like plug
into a network that they know, and then that is
is that even capacity.
I'm looking at a headline right now from I guess
this is a stat from Roadmaster Group, but they're saying
cargo theft jumped sixty scent last year. That just came
out three hours ago. And also there's a New York
Times headline saying nearly eleven thousand bottles of bourbon were
stolen from a Philadelphia warehouse as a result of coordinated
cargo thing.
It's funny because you and I both just assumed that
when you said cargo thing, like you know, like a
good fellas.
Like that's as far as my criminal ambitions can strut.
And then the truck drivers like, please beat me up, right,
do you remember that? Like, please beat me up so
that my own blunch does not think that I stole it.
But much they've targeted Guy Fieri, Guy Fieri had greats stolen,
Like all these celebrities in the last year have like
seemingly come out with liquor brands, and they're all being
targeted to like I think shacks like range Rover got
stolen off a car hauler. Like there's there's been all
sorts of crazy stuff, but I mean all jokes aside,
like it is crazy. It is crazy what's going on,
and seemingly it's only getting worse despite all the scrutiny
and all the tech that's been kind of brought in.
But Tracy, you did kind of mention something interesting or
maybe it was Joe kind of the different types of capacity, right,
like one thing that I'm thinking a lot about, And
I'm not a freight broker anymore, so I'm slightly removed.
Although I did do it for many years, Historically, there's
not really been it. Freate's really a commodity, and there's
you know, one carrier versus the other might ask you
for more money, but you don't really have a good
reason to pay carrier A much more than carrier B.
You know, some situations might be like Okay, you know, yeah,
I'll give you a couple hundred extra bucks because I
know I trust you, and that's worth it.
It's pretty much the same service, right, Like you expect
the stuff to go from one place to another.
Yeah, yeah, it's in traditionally has been viewed as a commodity.
But like now that there's this kind of extra scrutiny
on the broker's vetting process and the hiring process, like
there might start to be a kind of strata of
carriers where like they've got the best ratings, they're the
safest operators, Like they're able to fetch a premium, and
brokers might be like, shoot, like I have to pay
them more because I need to check these boxes so
that if they get into wreck, God forbid, I'm as
covered as I possibly can be in the event that
some you know, billboard attorney tries to sue me for
six hundred million dollars.
Yeah, that's really interesting. So like you could start to
see more I guess diversification come into the market more
like stratification on rates, people paying a premium for certain
services or trust.
I think that would make sense to me if that
if that happened, I think that would make sense. The
jury's out on if that'll happen, but that makes sense
to me.
The other thing I want to ask about is just
how do people feel about becoming truckers at this particular moment.
So rates are up, it seems like the money's there,
or at least there's more money there than there used
to be a few years ago. But at the same time,
we still hear complaints about it's a tough life. You're
on the road all the time, the hours are insane,
like maybe you're waiting hours at a port to pick
up a line. Parking, hard to find parking.
Clearly, there's a lot to say here. There's to say here,
And it's actually interesting because I did just run. You
know at Trap Parking that we run a survey of
all of our driver based basically every week, and I
happened a couple of weeks ago to do a survey
basically just about like driver's opinions on the state of
the industry, Right, would you recommend this job to a friend?
Like how do you feel about trucking? And anecdotally, I
can say that in my discussions with my driver friends,
like it seems like morales at an all time low.
That's just the anecdotal what I hear from people. But structurally,
I mean, or what I see kind of in these
surveys is like like there's a strong sense of nostalgia
in trucking, Like it was much better then than it
is now. Right. You look at like the seventies and
eighties when you had Smoking the Bandit movies like that,
truckers were like cow Yeah, truckers were cowboys, right, or
explorers or frontiersmen, right, and they were respected and it
was something that was a desire. It was kind of
the last kind of frontier, Right, You're out on the
road kind of figuring it out. And now it seems,
for whatever reason that that kind of ethos has been damaged,
and you hear kind of a lot of just kind
of like a morning of the industry when you talk
to drivers, and like this manifests itself. Like if you
go to a truck stop and you just kind of
pulled random drivers, I guarantee you that if you ask them,
you know, we're things better in the past than they
are now. And maybe this is just a human thing
to a degree. Perhaps, So this isn't like a scientific
study by any means, but like there is a strong
sense that things were better in the past, and I
think there's a lot of reasons for that. So you know,
technology for the driver is a bad word traditionally, Yeah, okay,
because technology for the driver has meant surveillance. It's meant
in cab cameras surveilling their every move for viability reasons.
It's meant speed limitters, it's meant electronic logging devices, which
severely limits their freedom to operate as they see fit
on the road. So it's all of these things that
have kind of like constrained them, right, And if you
think about traditional trucking as freedom on the road, like this,
these are all anti freedom things, right, And so if
the traditional trucker is looking for a job that gives
them freedom. They're not finding that as much anymore. And
so technology has had a bad rap. And I tend
to agree with the driver on that, Like there's all
sorts of reasons why all of those things are useful,
but like I can understand why they would feel that way.
Yeah, right, if we start from the premise, then it's
already going to be a different a lifestyle sacrifice. And
you're like, well, okay, it's a lifestyle sacrifice, but there's
a paycheck, and everyone makes a lifestyle sacrifice paycheck.
But if it.
Turned out that it's like in the past, it was
a lifestyle sacrifice plus a paycheck, plus a certain culture
of freedom and the sort of maybe yeah, just like
all the like the sort of and then it's just like, no,
it's no longer that just the lifestyle sacrifice for the paycheck.
Then that's a different equation.
The other thing is just on the technology front, is
for years now we've been hearing that, you know, self
driving trucks are coming down the line. So I imagine
if you're a young person thinking about getting a CDL,
maybe you're no longer looking at it as a viable
long term career.
Yeah, I mean, autonomous is very interesting. It's anyone's guess
how long that's going to take to really reach significant
levels of adoption. I know there are many companies currently
operating autonomous lanes, mostly in Texas, and we do talk
to these companies because, you know, one thing people ask
is like, okay, like if all the trucks are autonomous,
like do they even need to park? Like does your
business still exist? And so we have a whole one
there's still trailers. Trailers need to be staged.
Yeah, they still have to park, right, they must.
To Yeah, and people forget that there's name.
People are suggesting that they'll just keep driving forever, like
they never need to stop. Basically yeah, okay, I see
all right.
And they're like, okay, you know, and I've got my
whole reasons why that's actually not the case. And we're
actually kind of in deep conversations with the autonomous companies
because autonomous trucks need reliable staging and they need to
be able to plug into a network to know that
if I arrive at this location, I'm going to have
a spot and truck stops and rest areas do not
provide that level of surety at all. Yeah, right, Like,
I honestly do think that of all the trending topics
that we've talked about, like a lot of them are
really kind of like billboard levels things shocking like guy theories,
tequila gets stolen, right, like cargo theft.
Like not the mayor of flavor too right.
And but parking is really actually, I mean, it is
one of the top issues when you talk to drivers,
like if not the.
Topic a quality of life issue is what you're saying, right.
It's unbelievable. Well, it's a quality of life issue, but
it's also a pay issue, like a significant pay issue.
And let me let me explain. I hint to that
ELEDS so electronic blogging devices in twenty seventeen, it was
either twenty seventeen or twenty eighteen, I can't I can't
remember now, but the government mandated every truck must have
an electronic logging device. So drivers are allowed to operate
fourteen hours a day, eleven of which they're allowed to drive, okay,
And there's no moving that around. And if you go
over that eleven hours, you're in trouble. It's going to
hurt your record, it might increase your insurance premiums, it'll
cost you money. It's a problem, right, you do not
want to do that. And so naturally, what that means
is the driver's day is very rigid. You know, I
was driving to work this morning on I seventy five
in northern Georgia. There's a rest area I pass every day,
and every day there's trucks lining the exit ramp of
the rest area, like on the highway. And how those
trucks end up there is they've got two hours left
on their clock. It's five pm. Like they're rolling down
the highway. They're trying to go as far as they
can because they're paid by the mile right and they
don't get that time back if they lose it, and
they're trying to get as close to their destination as possible.
And what that means is, naturally there's a trade off
every single day that every driver makes who's driving over
the road. It's like, Okay, I could park now, but
I've got four hours left, right, Yeah, I could park
now and take a spot at the truck stop that's
open because it's three pm and nobody's parked yet. Or
I could keep going down the highway, go before more
hours and end up in the middle of Atlanta at
eight pm and with nowhere to go, right, And so
there's there's a serious cost associated with losing those four hours, right,
and four hours is a bit of an egregious like
that does happen every single day. But even if it's
at one hour, right, if you think about the cost
operated truck, if you think about how many miles you're
able to drive in an hour, like, and then you
multiply that across an entire year for a driver, or
for a fleet, you multiply that across their entire all
of their drivers, like, and the cost and the productivity
lost go sky high, really really quickly. And historically there's
been not really much fleets for drivers could do about that, right,
And not only is it a pay issue, but it
is a quality of life issue to your point, Tracy, Like,
you guys live in New York City. I don't know
if you have cars, but parking in New York City
not the easiest place to park in the country, to
put it mildly right, and naturally that will mean you know,
if I'm coming into New York and I want to
go to a Knicks game and it's two hours before, Like,
I gotta be methodical about Okay, here, I'm gonna go here,
I'm gonna park there. I'm gonna get there then and
if that's too much of a pain, I'm not gonna
go right, I'm not gonna go do that thing. But
when you live in rural you know, Georgia, you don't
think anything about where you're gonna park, like, oh yeah,
I'll be fine, Like I'm just gonna go right there.
I got a place to park. And what truck drivers,
like my analogy is like truck drivers, every single day
is like being in New York City in the Super Bowl,
the World Series, the NBA Finals, the NHL Finals are
all there on the same day and there's nowhere to
park at all, and you have to go and it's
going to be a total it's going to cause you
lots of stress. You're gonna be like, what the heck
am I going to do? Right? And that's every single day.
Okay, But explain this because America has a lot of roads,
it's got a lot of highways, a lot of interstates.
Where are all the park Like, why do we seem
to have a shortage maybe it's not even a shortage,
Maybe it's misplanning of resting areas for trucks.
Why the scarcity, because it's very the traditional places to park,
which are rest areas which are built by the state
or the federal government, and truck stops, and those can
only go in so many places.
Right, Loves and Ta and Pilot like, they would love
to build more locations, but it's not like you can
just put them anywhere, right, there's only so many interstate
exits where it's appropriate to put a truck stop in
economical because they're super expensive, right, And then rest areas
are very very expensive to build, Like if you look
at some of these projects that the government funds, it's
like sometimes it's as much as two to three hundred
thousand dollars per space. By the time a project is done,
it takes years to complete, and so structurally it's very different.
It's just difficult to build capacity. And you know, between
rest areas and truck stops, there's about seven hundred thousand
spaces provided by these traditional sources. But there's millions of
trucks on the road, right, and millions of them need
a place to park on a daily basis, and so
naturally what you see is if you talk to any
driver five pm every day, the truck stops full. Like
I talked to an honor operator yesterday who's parked with us.
So basically what we enable them to do is fire
up their phone, find a place to park, basically no
matter what, any time of day and essentially almost any
city at this point. And what the difference that makes
for a driver. Let me explain. So I talked to
an honor operator yesterday. He's parked with us fifty six
times in the last year, and he's spent like obviously
he's spending his own hardered money on that, but he's
not just doing that and operating the same way that
he would if he were just parking to the truck stop.
He's thinking like, okay, Like I'm going into Denver, and
Denver is a hard place to park. It's going to
be seven pm by the time I get there. I
have to deliver at three in the morning in the
middle of Denver. I'm going to pay twenty five bucks
or thirty bucks or forty bucks to park a mile
from my warehouse versus parking thirty miles away at the
truck stop and having to negotiate the hours of service
requirements to be able to go and leave. And so
that money he's spending is position He's positioning himself properly
next to his delivery. He can be there on time,
he doesn't have to fight traffic, he's the first one there,
he gets empty, and that surety just offers him much
more reliable planning, right, and that just means that just
means his life is easier, right, It's less stressful. He's
not driving into New York during the World Series every
single day, and that's just an anecdote from a driver, right.
So the key thing, though, just under stand this is
a big function of this is the fact that drivers
get paid by the mile and not the hour. And
so if in the ideal world you have eleven hours
on the road, eleven hours were allowed to be behind
the wheel, you're going sixty miles an hour, maybe on
average you cover six hundred and sixty miles in a day,
that's a good.
Day or something like that.
If three hours of those are spent waiting in line
for something by the side of the road because you're
not sure if there's going to be parking when you
hit the eleventh hour. That's three hours of your day.
They're not getting paid.
That's three hours gone.
That's three hours of behind the road time that clocks
to your that goes to your maximum.
That is not compensated.
Yeah, yeah, that's not compensated. And the fleet loses those
productive asset hours too, right, Like there's layers to this
and then all of aus you know, you multiply that
across the entire trucking market and that's like a serious
kind of like throughput issue for the supply chain. Yeah, Like,
I can't emphasize this enough. Like still to this day,
most people in the industry do not think oh they
just think, oh, well, this is a problem. We all
agree this is the problem. What are we going to do?
Oh well, we need to wait around for the government
to allocate enough money and build enough spaces to fix
this problem. And that's just not going to happen if
we're honest with ourselves, and it makes sense, the government
should be investing in this critical infrastructure. It's needed. Great,
do it get as much as we can. The drivers
need it, the more of the merrier. But all the
while we're adding you know, sometimes one thy fifteen hundred
new spaces to our network a week, right, a week cool.
And so we're at like, you know, near ninety thousand,
and we're adding more spaces in a week than truck
stops build an entire year. Right, And we're already have
a larger more spaces than the largest truck stop chain, right.
And soon we'll have more than all of them combined.
And soon we'll have more than all of the public
infrastructure combined. And that's going to just fundamentally reshape how
drivers and fleet are able to operate. And that might
sound hyperbolic to people who don't think about this like
I do, but it is a very meaningful change to
just the life of a driver. It just really is.
And just to the pro TiVo a fleet, the drivers
pay the driver's help, like, it touches turnover, it touches
cargo safety, it touches all of kind of the hot
topics we've talked about, Like, it's all connected to this,
It's all connected. So I'm getting fired up, guys, I'm
getting fired up.
Yeah, we talked a lot about the supply side of
the industry. Can we just discuss demand a little bit more? Like, Yeah,
on a basic level, what are you seeing from your network,
Are you seeing pockets where things are really hot right now, where,
for instance, data centers are being constructed and things like that.
Yes, you know, the components of the data centers are
obviously incredibly expensive. You're talking turbines, you're talking obviously GPUs
and all that super super expensive and naturally targets for theft.
And so we've had direct conversations with folks building data
centers and are actively working on projects to kind of
help them plan. Okay, we're going to stage here, we're
going to stay here, like we need locations here, and
so we're actively working on that right now. So to
answer your question directly, yes, yes, of course we are
seeing we are seeing pockets of demand and we are
seeing you know, it's it's it's interesting because we're just
kind of like this. So it's hard to tell like
what's seasonal and what's not when you're just kind of
like this. No matter what, you know, maybe in two years,
like we'll be able to like have much more. Okay,
this is like this season, this is that season. But yeah,
I mean the short answer your question is yes.
All right, read loose to Thank you so much for
coming on Odd lot. For all the trucking episodes we've done,
we've actually learned quite a bit more on this one.
So really appreciate you taking your time.
Yeah, I appreciate you. Joe and Tracy. You guys are
you guys are killing it? Joe, your Twitter game is strong, man.
I I love following you. I always smash like but
thanks thanks for having me on. I really appreciate it.
Thanks so much for you.
Thanks guys.
Tracy, I'm so glad we did that episode. There's so
many interesting so much interesting texture. Maybe is the word
to the trucking market that is easy to not really
observe if you're just looking at very simple metrics like
line going up or how much physical capacity.
There is in a day.
Yeah, I mean it seems like a lot has changed. Yeah,
for sure. It does seem like some of the things
we talked about are more structural than cyclical.
Right.
I mean, again, who knows what the next administration is
going to do, But for instance, the Supreme Court ruling
saying that brokers can be held liable for dangerous halls
and things like that, that would appear to be something
that's going to stick around and possibly affect the industry
for years to come.
No, it seems like a really big deal and Red
put it really well, it's like okay, like maybe there's
fewer brokerages in the future, et cetera. But then it's like, okay,
you might have drivers and carriers. It's capacity, right, maybe
it's even safe, well trained, very fluent in English capacity,
but it might not have the scale to sort of
plug into whatever that sort of new network or ecosystem
looks like in world with fewer brokers.
Is it really capacity then at that point?
And then it also means that the freight brokerage game
isn't always going to be a race to the bottom,
which I'm sure there's going to be a broker firm
out there who complains, but like the impression you get
is a little bit like you.
Know, yeah, And also I think you know, one of
the things that we both observed when we started doing
trucking episodes is why is there still so much humans
in the middle Because it's not a fungible market in
the classic sense that it's very adosyncratic, kind of like
the corporate bond market. Is the analogy that we use
if we have to get even more gradations of safety ratings.
By the way, the FMCSA, he said that term, and
so I wanted to tell people what it was, the
Federal Motor Carrier Safety Administration. So it's like, if we
need like more gradations of safety ratings for the existing
brokerages to feel comfortable with them, I'm going to Having
thought about this for five minutes, I will now weigh
in on policy. It would be probably helpful if there
was one rating where it said, if the broker goes
with this rating, they are clear in terms of these
sort of nuclear settlements and these nuclear lawsuits, et cetera
that could destroy a whole company. It probably would be
good to have, like, at least on your part, a
clear box that you can check that establishes that you've
done the right thing.
Credit ratings for freight brokers.
Yeah, and it's like if you you know, it's like
there are other there are various ways to get in trouble,
but if you get the Triple A carrier, then if
the broker goes with the Triple A carrier, at least
on that level, they've done their due diligence.
Nothing bad can ever happen today. Ratings. All right, shall
we leave it there, Let's leave it there. This has
been another episode of the Odd Thoughts podcast. I'm Tracy Alloway.
You can follow me at Tracy Alloway and.
I'm Joe Wisenthalia. You can follow me at the Stalwart.
Follow our producers Carmen Rodriguez at Kerman armand dash Ol
Bennett at Dashbod, Kelbrooks at Kelbrooks and Kevin Lozano at
Kevin Lloyd Lisano. And for more odd loads content, go
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In