Speaker 1: These sees Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stinovic on Bloomberg Radio. So we got a great read
Speaker 1: of the economy and an important part of our economy,
Speaker 1: and that is the group that kind of moves everything around.
Speaker 1: We did it in December. We wanted to have our
Speaker 1: next guest back for an update, and we're talking about
Speaker 1: the trucking industry. Yeah, very please step back with us
Speaker 1: once again. Melissa Foreman, president at Triumph Pay, joining us
Speaker 1: via zoom from Dallas, Texas. To remind everyone, Triumph Pay
Speaker 1: is a payment platform. What it does is it connects brokers,
Speaker 1: shippers and carriers. It's a division of t b K
Speaker 1: Bank SSB member fd I C and part of the
Speaker 1: publicly traded Triumph Financial got about one point five billion
Speaker 1: dollar market cap. Melissa, good to have you with us.
Speaker 1: How are you? I'm good, Carol and Tim, how are
Speaker 1: you guys? Would you for having me back? We're doing
Speaker 1: pretty well. So we last spoke to you towards the
Speaker 1: end of the year last year, and I'm just wondering
Speaker 1: how things are going now and how things have changed
Speaker 1: since then. Yeah, I think you know what what we
Speaker 1: talked about last time. Is that we didn't see the
Speaker 1: seasonal peak that we typically do in in October, November,
Speaker 1: December into the holidays and things kind of we're starting
Speaker 1: to hit the bottom. What we've seen on our side
Speaker 1: in that time frame, you know, through the beginning of
Speaker 1: January in December is it's starting to feel like it's
Speaker 1: flattening a little bit. So the average voice prices seem
Speaker 1: to stabilize UM and so I we hope we don't
Speaker 1: have a crystal ball, but we hope that it will
Speaker 1: hold fast and we'll start seeing things pick back up
Speaker 1: here um in the next month or two, but down
Speaker 1: from a year ago. Like how is the best metric here?
Speaker 1: I always feel like because of the pandemic, everything is
Speaker 1: so a little bit foggy. So do you compare it
Speaker 1: to pre pandemic levels kind of where we are? We
Speaker 1: do so, yes, when you look at pre pandemic levels
Speaker 1: and I can't quote exactly, you know, this week where
Speaker 1: they're at, but um, what an average invoice price for
Speaker 1: a spot market over the road trucker's invoice would be
Speaker 1: around sixte UM. So now we're seeing that right around
Speaker 1: two thousand and fifty UM, which is far better than
Speaker 1: than what we saw pre pandemic, but certainly not as
Speaker 1: good as that, you know, the peaks that we hit
Speaker 1: a year or so ago when it was hitting. So
Speaker 1: it feels like it's it's rough, um. But again, what
Speaker 1: we have to remember is what's changed since pre pandemic
Speaker 1: is the cost of fuel, the cost of equipment, the
Speaker 1: cost of financing with the federate increases and all those
Speaker 1: hikes and how they impact driver's ability to operate their business.
Speaker 1: So it has become more expensive for them to operate
Speaker 1: their business than it was pre pandemic um. And so
Speaker 1: you know, I certainly can't imagine that we could get
Speaker 1: much lower than the two dollars you know, two dollars
Speaker 1: per per mile um for a driver carrier to even
Speaker 1: be able to operate. What about when it comes to
Speaker 1: supply of drivers and carriers, is it still is it
Speaker 1: still difficult? Are you still having trouble finding people? There?
Speaker 1: There are and and a lot of that. You know,
Speaker 1: the reasons differ right from from season the season and
Speaker 1: what's happening in the industry. And you know, right now
Speaker 1: there's there's a lot of drivers that are saying, I'm
Speaker 1: going to park my truck, I'm not going to operate
Speaker 1: at a loss, and so they're able to to park it,
Speaker 1: put it on the fence, and and go do something
Speaker 1: else while they waited out. And so you see a
Speaker 1: lot of authorities coming out of the market. Um. And
Speaker 1: then as soon as things pick back up, you'll start
Speaker 1: to see them come back in. That sounds that sounds
Speaker 1: inflationary to me. That sounds exactly like what the FETE
Speaker 1: is worried about. Mm hmm. It is so how much
Speaker 1: more would would people have to pay in order to
Speaker 1: get these drivers off the sidelines? And how do we
Speaker 1: see those higher payments actually, uh go, you know, trickle
Speaker 1: into the economy in terms of higher prices for us,
Speaker 1: which again is what the FETE is worried about. Yeah. Absolutely,
Speaker 1: So you know, when you look at their cost to operate,
Speaker 1: you know, trucking companies historically have made you know, a
Speaker 1: ten to fifteen eighteen on a on a good year
Speaker 1: percent margin um. Right now they're running at at zero
Speaker 1: or three to five percent margins for the smaller guys,
Speaker 1: and so we just need to be able to make
Speaker 1: money again, right, They need to be able to be profitable,
Speaker 1: They need to be able to operate their businesses, um,
Speaker 1: and so the all the inflationary cost increases for equipment
Speaker 1: and fuel, ETCeteras is really what's what's causing them to
Speaker 1: have these issues? And so how do we fix that? Right?
Speaker 1: We've got to get to feel the cost of fuel down.
Speaker 1: I got to get how do you make money on
Speaker 1: if you're getting two dollars per mile your operational cost?
Speaker 1: How do you how do the trucker make money? Help
Speaker 1: me understand the math here, Yeah, I mean, you know,
Speaker 1: the majority of that is going towards fuel and the
Speaker 1: equipment and and the cost of the drivers you know,
Speaker 1: salary and so. Um, it's difficult again like right now
Speaker 1: is you know three five eight percent margins are are
Speaker 1: push and so it's difficult to make money. And that's
Speaker 1: why you see a lot of carriers coming out. I
Speaker 1: want to talk autonomous trucks with you. Once again, we're
Speaker 1: not seeing them on the roads, you know, despite the
Speaker 1: fact that Tesla, well we do see it. I mean
Speaker 1: a couple of those, but I mean they're not widespread
Speaker 1: by any means right now. How do you think about
Speaker 1: autonomous trucks in your work? And to what extent should
Speaker 1: should we think about them as consumers? And should drivers
Speaker 1: think about being replaced. Yeah, again, m as I said
Speaker 1: last time, we're a long ways out. No no difference. Um,
Speaker 1: I don't. I don't think we're anywhere close to having
Speaker 1: drivers on the road. Are autonomous trucks on the road
Speaker 1: without drivers and they're controlling them. Um. There are certainly
Speaker 1: applications for point to point pick up such importance and
Speaker 1: such where you can have UM equipment do that, but
Speaker 1: that's because you don't have the variables of the open road.
Speaker 1: Our drivers are phenomenal and navigating our interstates, are infrastructure
Speaker 1: in the state that it's in, and dealing with other people,
Speaker 1: and and and not only is that they face with
Speaker 1: you know, fifty ft trailer behind them that's fully loaded.
Speaker 1: And so will there be an application someday that allows
Speaker 1: us to alleviate a driver shortage, Yes, But then there
Speaker 1: it's going to create other opportunities. You know, somebody is
Speaker 1: going to be and I imagine, you know, behind a
Speaker 1: joystick on a computer game, you know, helping navigate these
Speaker 1: trucks through the city, And it's just going to change
Speaker 1: the way we see things. But I don't see it
Speaker 1: taking trucks off the road completely. It's one of the
Speaker 1: things we talked to Robotic right truck trucking specifically with
Speaker 1: the Amazon with Cathy would recently, Hey, what you are
Speaker 1: seeing Melissa from UM Truckers. What does it tell you
Speaker 1: about the economy right now? Is it a little bit
Speaker 1: up in the air? Is the glass more half full?
Speaker 1: Is a glass more half empty? Well? I think I
Speaker 1: think I saw the report that GP was up a
Speaker 1: little bit in the last report. UM. We do see,
Speaker 1: you know, folks have shifted their spending UM to more
Speaker 1: experiences than than consumer products. Again, we talked about that
Speaker 1: UM a couple of months ago, and you know, I
Speaker 1: feel like it's it's it feels to me that it's stabilizing.
Speaker 1: We're starting to see some you know, orders go up
Speaker 1: a little bit to bring UM product across you know,
Speaker 1: import products and into our warehouses, and so you're starting
Speaker 1: to see some signs of that coming back. UM. But
Speaker 1: I think it's too it's too early to tell right
Speaker 1: now is to how deep we're going to go or
Speaker 1: or when it's gonna turn that corner. But you say recession,
Speaker 1: it feels that way. Okay, Okay, So what about the
Speaker 1: questions sort of a different way when it comes to
Speaker 1: just inflation, because speaking to you and understanding the shortage
Speaker 1: is understanding that drivers are going on the sidelines because
Speaker 1: they can't make money. Uh, do you feel like uh,
Speaker 1: the FED? And I know, I know we're not talking
Speaker 1: you know, federal reserve policy here, but that's what we
Speaker 1: talked about last week. So do you feel like the
Speaker 1: FED is is I don't want to ask you if
Speaker 1: they're making the right decision, but do you think does
Speaker 1: it seem like to you inflation is coming down? You know,
Speaker 1: I could not answer that question, Tim, I don't know
Speaker 1: enough about the financing side of it and and how
Speaker 1: all those lovers that can be pulled affect. But what
Speaker 1: about trust from you? So for Triumph Pay, we we
Speaker 1: feel like and for the industry, while there are some
Speaker 1: slowing and it has been some some slowing that's happening,
Speaker 1: we feel like it's it's flattened out. And so from
Speaker 1: the view that we have UM, it starts to feel
Speaker 1: like things are are leveling right and we're going to
Speaker 1: start to see some more normalization in the industry. But
Speaker 1: looking at that lens from you know, four to six
Speaker 1: week view is too short to be able to make
Speaker 1: a call. And so we could we have seen, you know,
Speaker 1: average and voice prices fluctuate from from week to week
Speaker 1: pretty substantially um from all the different indicators, you know,
Speaker 1: different things that happen in the industry, whether it's weather
Speaker 1: related or inflationary related, and so it's it's just a
Speaker 1: very volatile market. And you know, we will continue to
Speaker 1: be here and support carriers through through the process and
Speaker 1: brokers through the process that we can make sure that
Speaker 1: their businesses are ready right to address that vall Chile.
Speaker 1: And that's what Triumph paid us, all right. Melissa Foreman,
Speaker 1: president of Try and Pay, joining us via zoom from Dallas,
Speaker 1: Texas with a check on the trucking industry