WEBVTT - Trucking Is Booming Again, And Drivers Aren't Happy About It 0:00:02.720 --> 0:00:16.360 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.560 --> 0:00:21.919 Hello and welcome to another episode of the Odd Lots podcast. 0:00:22.000 --> 0:00:23.120 I'm Joe wasn't. 0:00:22.880 --> 0:00:24.279 Thal and I'm Tracy Alloway. 0:00:24.480 --> 0:00:26.640 It's been too long since we've done a trucking episode. 0:00:26.680 --> 0:00:28.760 This is just an objective fact that we need to 0:00:28.760 --> 0:00:29.360 get out of the way. 0:00:29.480 --> 0:00:31.880 It is time. I mean, to be fair, to be fair, 0:00:32.120 --> 0:00:34.199 I think we've both written about trucking in the Aulot's 0:00:34.200 --> 0:00:37.360 newsletter recently. I think back in January you started to 0:00:37.400 --> 0:00:40.440 get some of the freight and logistics companies talking about 0:00:40.560 --> 0:00:45.360 maybe they were starting to see an upturn and looking 0:00:45.479 --> 0:00:49.040 at some share prices. Since then, so I've got look 0:00:49.120 --> 0:00:51.199 up night Swift at the moment. 0:00:51.159 --> 0:00:51.840 What's the tigger? 0:00:52.520 --> 0:00:57.040 It's k n X Okay KNX night Swift. You know JB. 0:00:57.160 --> 0:00:59.240 Hof But night Swift is a little bit more dramatic. 0:01:00.280 --> 0:01:02.320 I mean since January of this year. 0:01:03.040 --> 0:01:04.040 No, it's a great run. 0:01:04.200 --> 0:01:06.920 It's had a great run. So I think the trucking 0:01:06.959 --> 0:01:09.039 rebound it seems to be here. 0:01:09.280 --> 0:01:10.039 It seems to be here. 0:01:10.080 --> 0:01:10.280 You know. 0:01:10.400 --> 0:01:12.520 The problem with going like a long time. I mean, 0:01:12.560 --> 0:01:14.160 as you mentioned, we do write about it, so it's 0:01:14.160 --> 0:01:16.319 not like we're ignorant. But the one of the things 0:01:16.319 --> 0:01:19.160 that we learned when we did a lot of trucking episodes, 0:01:19.200 --> 0:01:23.760 particularly in the years after the pandemic, was like when 0:01:23.800 --> 0:01:26.280 we talk about like the business cycle, you know, it's 0:01:26.319 --> 0:01:29.559 like these multi year cycles. When truckers talk about the cycle, 0:01:29.600 --> 0:01:32.279 there might be like eight up and down cycles within 0:01:32.360 --> 0:01:36.040 one boom or within one recession. Just extraordinary cyclical business. 0:01:36.120 --> 0:01:36.320 Right. 0:01:36.360 --> 0:01:39.479 So, if we or hopefully anyone else have learned one 0:01:39.560 --> 0:01:42.280 thing from the truck episodes, it is that this is 0:01:42.440 --> 0:01:46.720 such an incredibly cyclical industry. And the standard explanation is 0:01:46.720 --> 0:01:49.600 that you have these really low barriers to entry for 0:01:49.880 --> 0:01:52.520 owner operators and trucks, and so as soon as trucking 0:01:52.600 --> 0:01:56.720 rates start to go up, everyone decides to become a trucker. Yah, 0:01:56.800 --> 0:01:59.880 the market gets flooded, it over expands, and then inevitably 0:02:00.120 --> 0:02:01.720 rates start to come down, and then you have a 0:02:01.720 --> 0:02:04.880 bunch of independent owner operators who start to go bust, 0:02:04.880 --> 0:02:07.680 and then capacity comes out and the whole cycle can 0:02:07.840 --> 0:02:08.440 begin again. 0:02:08.720 --> 0:02:11.160 True, it seems real boom bust. And you mentioned the 0:02:11.160 --> 0:02:12.920 share prices of night Swift and JB. 0:02:13.040 --> 0:02:14.760 Hunt. But another way to look at it. 0:02:14.840 --> 0:02:17.840 I'm just looking at the Internet Truck Stop Van Rate 0:02:18.280 --> 0:02:21.320 Index just a sort of basic measure of how much 0:02:21.360 --> 0:02:25.480 it costs to move. That was in December of last year, 0:02:25.600 --> 0:02:28.080 is like a dollar ninety four. I guess that's probably 0:02:28.080 --> 0:02:30.480 per mile, and now it's up to it broke three. 0:02:30.720 --> 0:02:33.200 It came down a little bit, so just by measuring 0:02:33.240 --> 0:02:35.880 the cost of trucking, it's clearly gone up. 0:02:35.880 --> 0:02:36.680 So we need to figure out. 0:02:36.560 --> 0:02:39.280 What's Sorry, I'm just looking at this night chart again, 0:02:39.480 --> 0:02:42.359 the night Swift chart. You know they've outperformed META this year. 0:02:42.560 --> 0:02:44.919 That's amazing. I know, look at JB. Hunt. I think 0:02:44.919 --> 0:02:47.760 it's you and that was like almost a double Yeah, yeah. 0:02:47.840 --> 0:02:50.920 Forget about AI. The money apparently is in trucking. 0:02:51.080 --> 0:02:53.000 Well, how are for real? House? 0:02:53.120 --> 0:02:54.200 Is how the cycle starts? 0:02:54.320 --> 0:02:54.480 Right? 0:02:54.480 --> 0:02:55.799 How do you just start saying the money is in 0:02:55.880 --> 0:02:57.120 trucking and then everyone gets. 0:02:57.120 --> 0:02:59.720 How are the turbines getting to the data centers? 0:02:59.760 --> 0:03:00.880 How are all like? 0:03:01.120 --> 0:03:01.320 Right? 0:03:01.520 --> 0:03:04.639 Like, we know that there is a lot of demand 0:03:04.720 --> 0:03:07.440 for physical goods as part of this AI story, and 0:03:07.520 --> 0:03:09.680 the physical goods have to get to the data center 0:03:09.760 --> 0:03:10.320 somehows right? 0:03:10.440 --> 0:03:11.680 I think this is part of the story. 0:03:11.800 --> 0:03:13.720 This is the question. Is this the sort of same 0:03:13.840 --> 0:03:17.360 rebound that we've seen before, or is there maybe something 0:03:17.400 --> 0:03:20.760 more structural that's happening here. We've also had some recent 0:03:20.800 --> 0:03:24.880 developments with like the actual supply of truck dumps right, 0:03:24.960 --> 0:03:28.399 which is also something that clearly impacts capacity. So there's 0:03:28.400 --> 0:03:29.120 a lot to talk about. 0:03:29.200 --> 0:03:31.320 There's a lot to talk about. It's time to revisit 0:03:31.360 --> 0:03:33.120 the trucking market. We have a guest that we've never 0:03:33.200 --> 0:03:36.240 had on before, but someone really like someone I've known 0:03:36.280 --> 0:03:38.240 from the internet for a while, who really knows the 0:03:38.280 --> 0:03:40.920 space very well. We're gonna be speaking with Red Lustilow. 0:03:41.040 --> 0:03:44.920 He is the chief marketing officer at Truck Parking Club 0:03:45.040 --> 0:03:48.280 and so read thank you so much for coming on out. 0:03:48.080 --> 0:03:50.280 Lots, Joe Tracy, thanks for having me. Joe. I got 0:03:50.320 --> 0:03:52.080 to give you credit, man. I said you weren't going 0:03:52.120 --> 0:03:53.640 to do it, but you did it and you said 0:03:53.640 --> 0:03:54.520 my name right, So. 0:03:54.840 --> 0:04:00.880 Congratulations, thank you. All right, test cleared for this episode. Actually, 0:04:00.880 --> 0:04:03.720 what do you get? Who are you? What's your background? 0:04:03.800 --> 0:04:05.400 What's the Truck Parking Club and all that? Why are 0:04:05.440 --> 0:04:06.120 we talking to you? 0:04:06.520 --> 0:04:09.240 Yeah? Sure, so, I'm My name is Red Lusblow. I 0:04:09.440 --> 0:04:12.200 have been in freight my entire career, which at this 0:04:12.280 --> 0:04:16.080 point is a feels like a long and short ten 0:04:16.160 --> 0:04:18.480 years at the same time. Started out of college at 0:04:18.480 --> 0:04:21.440 a freight brokerage Echo It's a large, large freight brokerage, 0:04:21.480 --> 0:04:24.400 Top five freight brokerage. Then spent some time at a 0:04:24.400 --> 0:04:27.360 technology company called Trimble, did my own thing for a bit. 0:04:27.440 --> 0:04:31.080 That's where I encountered you on the the interwebs, probably 0:04:31.080 --> 0:04:33.599 three or four years ago, just kind of stirring the 0:04:33.600 --> 0:04:36.680 pod on Twitter. And then I joined Truck Parking Club 0:04:36.680 --> 0:04:40.640 about three years ago and really have been focused on 0:04:40.720 --> 0:04:43.400 truck parking for the last three years, which we can 0:04:43.440 --> 0:04:46.039 talk about because that's a trending topic as well. But yeah, 0:04:46.080 --> 0:04:48.400 I mean I've been I've been in freight my whole career, 0:04:48.560 --> 0:04:51.760 and I'm I'm a freight guy and I now live 0:04:51.800 --> 0:04:55.400 in Chattanooga, which is William has been dubbed freight Alley 0:04:55.640 --> 0:04:59.240 by Craig Fuller, and yeah, so I'm I'm in it man. 0:04:59.560 --> 0:05:02.760 It's the parking thing is really interesting here because if 0:05:02.760 --> 0:05:06.280 you think about a truck or freight rebound, you think 0:05:06.279 --> 0:05:09.720 about things actually moving. Yeah, right, But I'm curious, from 0:05:09.760 --> 0:05:14.360 your perspective, does a rebound look like more trucks actually 0:05:14.560 --> 0:05:19.120 having to stop and find parking, like desperately circling for 0:05:19.279 --> 0:05:21.599 a place I don't know, around a data center or 0:05:21.640 --> 0:05:24.839 something like that and trying to find space. Like is 0:05:24.880 --> 0:05:27.719 a healthy trucking market? What does that look like to 0:05:27.800 --> 0:05:30.360 a company that is in the truck parking space? 0:05:30.920 --> 0:05:34.240 Yeah? Sure, So you know, naturally as demand increases, we'll 0:05:34.279 --> 0:05:37.000 see see more trucks on the road. You Tracy, you 0:05:37.040 --> 0:05:39.160 kind of talked about a number of the trending topics 0:05:39.279 --> 0:05:40.880 ahead of this, you know, and you talked about the 0:05:40.880 --> 0:05:44.120 cyclical nature of trucking and the barrier to entry, if 0:05:44.120 --> 0:05:47.560 you will. So there's it's a very multivariate market, and 0:05:47.640 --> 0:05:50.680 truck parking is one of those things that structurally it's 0:05:50.800 --> 0:05:54.479 very difficult to construct new capacity because it's very limited 0:05:54.480 --> 0:05:58.280 in where you can do it, it's expensive, many municipalities 0:05:58.279 --> 0:06:01.120 don't want it, and so there's a bunch of structure 0:06:01.200 --> 0:06:05.200 reasons why it's difficult to quickly increase the supply and 0:06:05.240 --> 0:06:08.560 the traditional sense. And what we've done is really just 0:06:08.640 --> 0:06:12.680 leveraged existing space. So there's millions of truck parking spaces 0:06:12.680 --> 0:06:15.160 across the US that are on private property, and we've 0:06:15.200 --> 0:06:18.040 just built a network a marketplace to tap into that. 0:06:18.160 --> 0:06:19.720 So we go to owners, we say, hey, you can 0:06:19.760 --> 0:06:22.760 make some money parking trucks comes on our app. Drivers 0:06:22.839 --> 0:06:25.240 use their app find parking on private property and pay 0:06:25.279 --> 0:06:28.000 the owners. So Airbnb sort of style. 0:06:28.160 --> 0:06:29.680 Yeah, that's what I'm just going to say. 0:06:29.720 --> 0:06:33.080 It sounds like a twenty tens era sharing economy sort 0:06:33.080 --> 0:06:33.279 of thing. 0:06:33.360 --> 0:06:36.440 Let it makes sense, exactly exactly. And here's another thing 0:06:36.440 --> 0:06:39.120 about trucking is trucking is from a tech standpoint, is 0:06:39.240 --> 0:06:43.440 always behind right, and so we're you know, when you 0:06:43.480 --> 0:06:45.800 operate in the physical world and you're in as it 0:06:45.920 --> 0:06:49.719 fragmented a market, is trucking is I mean, there's nearly 0:06:49.760 --> 0:06:52.440 a million trucking companies and most of them are you know, 0:06:52.480 --> 0:06:55.680 the long tails really really small, less than ten drucks. 0:06:56.200 --> 0:06:59.400 It's slow moving and it's slow to adopt technology, and 0:06:59.440 --> 0:07:03.200 that's always been the case. And so we're really scaling 0:07:03.240 --> 0:07:05.440 and we've we've really done this at an interesting time because, 0:07:05.480 --> 0:07:08.440 like Tracy said, I mean, coming out of COVID, the 0:07:08.480 --> 0:07:12.120 market was hot, Freight rates were through the roof. Supply 0:07:12.280 --> 0:07:14.800 flooded the market because there was indeed a very low 0:07:14.840 --> 0:07:18.160 barriered entry, and a lot has happened as a result 0:07:18.200 --> 0:07:21.200 of that, and technology has really flooded the market too, 0:07:21.240 --> 0:07:23.480 I would say, over that same period. Yeah, and so 0:07:23.520 --> 0:07:24.720 there's a lot, there's a lot. I mean, there's a 0:07:24.760 --> 0:07:26.760 lot to talk about. So I guess you guys tell 0:07:26.760 --> 0:07:27.560 me where you want to start. 0:07:27.640 --> 0:07:29.600 Yeah, well here, I mean, let's start with like maybe 0:07:29.680 --> 0:07:33.560 the really simple question, and then we'll drill down even 0:07:33.640 --> 0:07:36.640 further based on how you answer it. But like, big picture, 0:07:37.360 --> 0:07:40.440 this surge that we've seen over the last two or 0:07:40.520 --> 0:07:43.880 three quarters, whether we're looking at stock prices or maybe 0:07:43.920 --> 0:07:49.400 more importantly rates, like decompose the drivers, the forces that 0:07:49.480 --> 0:07:50.600 have pushed these lines higher. 0:07:50.680 --> 0:07:52.560 Yeah, I mean, so coming out of COVID, you know, 0:07:52.600 --> 0:07:55.000 starting in mid basically mid twenty twenty two, mid to 0:07:55.080 --> 0:07:58.280 late twenty twenty two, we saw rates fall and we 0:07:58.280 --> 0:08:03.440 were in essentially a three plus year lull, and most 0:08:03.520 --> 0:08:06.520 folks were saying, most of the talking heads were saying 0:08:06.560 --> 0:08:09.920 that demand returning was the only thing that was going 0:08:09.960 --> 0:08:12.080 to drive rates up, like that was going to be 0:08:12.080 --> 0:08:14.400 the only thing. But what we've seen in really the 0:08:14.480 --> 0:08:18.480 last you know, since the new administration took office, we've 0:08:18.480 --> 0:08:22.520 seen a massive kind of crackdown on English language proficiency, 0:08:22.960 --> 0:08:27.080 on non domiciled CDLs, and there's been as a result, 0:08:27.520 --> 0:08:31.080 a lot of capacity has kind of structurally been chopped 0:08:31.120 --> 0:08:34.960 out of the market, and so supply has really dwindled. 0:08:35.000 --> 0:08:37.959 And man to complicate things, there's also been in the 0:08:38.040 --> 0:08:42.360 last couple months a Supreme Court ruling Montgomery case, which, 0:08:42.679 --> 0:08:45.600 you know, historically freight brokers who move I think on 0:08:45.679 --> 0:08:50.040 average about thirty percent of freight volumes, if I'm not mistaken, 0:08:50.480 --> 0:08:52.720 freight brokers, which are you know, a critical component to 0:08:52.720 --> 0:08:55.959 the kind of the freight ecosystem, have historically not been 0:08:56.040 --> 0:09:00.560 liable or have not been held liable for carriers negligence 0:09:00.640 --> 0:09:04.080 or carriers accidents, right, And now that's in question. And 0:09:04.160 --> 0:09:07.520 so there's been so many kind of structural things that 0:09:07.559 --> 0:09:11.880 are really pushing capacity out of the market and also 0:09:12.000 --> 0:09:15.480 making certain types of capacity come at a premium. Right, 0:09:15.600 --> 0:09:17.800 Like safety ratings all of a sudden might matter at 0:09:17.800 --> 0:09:20.720 carriers now because brokers might be you know, there's more 0:09:20.720 --> 0:09:24.079 scrutiny on broker's selection of carriers. And so there's there's 0:09:24.120 --> 0:09:27.600 so many kind of like supply things that are affecting 0:09:27.640 --> 0:09:29.880 the rates and that are kind of structurally affecting the 0:09:29.920 --> 0:09:32.440 barrier to entry so that next time there is a 0:09:32.440 --> 0:09:34.840 demand spike and you are seeing demand spikes and pockets 0:09:34.880 --> 0:09:38.559 of the market. Right, Like Joe, you talked about data centers, right, 0:09:38.720 --> 0:09:41.800 flatbed has been booming and data centers have a lot 0:09:41.800 --> 0:09:44.360 in construction has a lot to do with that. But 0:09:44.520 --> 0:09:46.200 when you if you really were to have like a 0:09:46.240 --> 0:09:49.920 COVID level event where like there was unprecedented demand, I'm 0:09:49.920 --> 0:09:52.679 not sure the market could bring on as much new 0:09:52.679 --> 0:09:55.360 capacity as it did like it did during COVID because 0:09:55.400 --> 0:09:59.000 there are, you know, fundamental changes to the barrier to entry, 0:09:59.120 --> 0:10:02.160 and the government is really really put a lot of 0:10:02.760 --> 0:10:04.840 or is working to I guess I should say put 0:10:04.880 --> 0:10:08.720 a lot of barriers in to prevent bad actors coming in, 0:10:08.840 --> 0:10:11.040 mostly if you were to kind of look at it 0:10:11.200 --> 0:10:13.480 from their perspective. So, yeah, I want to talk. 0:10:13.320 --> 0:10:16.200 More about the barriers. But just before then, I'm really 0:10:16.200 --> 0:10:19.920 interested in the supply versus demand question. Are there any 0:10:20.000 --> 0:10:23.480 empirical things that you can look at to show that 0:10:23.600 --> 0:10:26.600 capacity is coming out of the market. I'm thinking, for instance, 0:10:27.160 --> 0:10:29.320 people used to look at like the spot versus the 0:10:29.400 --> 0:10:33.040 contracted rate right as one indication of capacity, and that 0:10:33.320 --> 0:10:36.959 started flipping earlier in the year is that, for instance, 0:10:36.960 --> 0:10:39.559 an indication that capacity is really getting limited. 0:10:40.080 --> 0:10:42.920 The data guys will look at the spread between spot 0:10:42.920 --> 0:10:45.320 and contract rates. I'll give you an anecdote. 0:10:45.400 --> 0:10:46.560 Yes, okay, I love it. 0:10:46.720 --> 0:10:48.960 That's essentially me saying I'm not the biggest data guy. 0:10:49.200 --> 0:10:51.520 But anyway, anecdote. So, I have a buddy who owns 0:10:51.520 --> 0:10:55.760 a trucking company. He's Ukrainian descent, immigrated here from Ukraine, 0:10:56.080 --> 0:10:58.760 I think you know, over a decade ago, and many 0:10:58.840 --> 0:11:00.719 of his drivers were also craining. And this is a 0:11:00.720 --> 0:11:04.080 common story you hear in trucking. There's a many Trucking 0:11:04.160 --> 0:11:08.120 is a very rich ecosystem, full of every nationality you 0:11:08.120 --> 0:11:10.679 can possibly imagine. And they've got their own little network 0:11:10.720 --> 0:11:13.199 of companies, and they've got their own network of drivers. 0:11:13.440 --> 0:11:16.120 They bring people from their home country. And there's a 0:11:16.120 --> 0:11:18.120 lot of scrutiny on these folks right now, I should add, 0:11:18.240 --> 0:11:21.400 right because many of them have non domiciled CDLs, which 0:11:21.440 --> 0:11:24.160 is a certain type of CDL, and there's been a 0:11:24.200 --> 0:11:26.600 lot of scrutiny on those. So many of these folks 0:11:26.720 --> 0:11:29.920 have those CDLs. But despite that, and despite what people 0:11:29.920 --> 0:11:33.360 are saying about domicile CDLs, there's still some really good companies, 0:11:33.400 --> 0:11:35.000 and in my days I work with a lot of them, 0:11:35.040 --> 0:11:36.199 so I'm still friends with a lot of them. So 0:11:36.200 --> 0:11:39.000 I was talking to my buddy's Ukrainian guy, and he's like, 0:11:39.040 --> 0:11:42.079 look this no nomiciled CDL rolling means I have to 0:11:42.080 --> 0:11:44.720 get rid of all of my drivers. I have to 0:11:44.760 --> 0:11:47.880 find all new drivers, and of course that means I 0:11:47.920 --> 0:11:50.800 can't hire people who are in my network, many of 0:11:50.800 --> 0:11:55.480 whom have non nomiciled CDLs. So this is a serious 0:11:55.640 --> 0:11:59.440 thing for many of these companies and in many of 0:11:59.480 --> 0:12:01.880 these companies. So the ones that really do kind of 0:12:01.960 --> 0:12:05.400 run in the spot market, right, they're they're the you know, 0:12:05.440 --> 0:12:09.120 the five six, seven, one two three truck carriers, which is, 0:12:09.200 --> 0:12:12.400 like I said, the vast majority of the total amount 0:12:12.440 --> 0:12:15.080 of companies. I mean, there's hundreds of thousands of these folks, 0:12:15.080 --> 0:12:19.640 and they're structurally at a major disadvantage, one because of 0:12:19.960 --> 0:12:23.720 not domicile CDLs, but also two because of English language proficiency, 0:12:24.000 --> 0:12:26.440 which has been another thing the government has really focused on. 0:12:26.520 --> 0:12:28.600 The DOT I should say, under Sean Duffy has really 0:12:28.600 --> 0:12:31.320 been focusing on, which is you know, it started from 0:12:31.320 --> 0:12:34.320 a very natural standpoint. It's like if you can't read 0:12:34.320 --> 0:12:38.880 the signs, how can you operate eighty thousand pounds vehicle safely? Okay, fair, 0:12:39.360 --> 0:12:41.880 But naturally that's also kind of pushed people out of 0:12:41.880 --> 0:12:44.760 the market too. And you hear the same thing. I mean, 0:12:44.760 --> 0:12:46.800 I hear the same thing every day from my friends 0:12:47.080 --> 0:12:50.480 who own fleets or who are drivers. It's things are 0:12:50.600 --> 0:12:54.000 tough for them right now, and hiring drivers is difficult 0:12:54.120 --> 0:12:57.719 right now, and historically it's been Another big issue is 0:12:57.800 --> 0:13:01.480 driver turnover. I'd bring it up more issues, more rabbit holes. 0:13:01.840 --> 0:13:04.120 Driver turnover is you know, at some fleets it's over 0:13:04.160 --> 0:13:07.800 one hundred percent a year. It's crazy. It's crazy what 0:13:07.960 --> 0:13:10.680 goes on in some of these fleets. And when you 0:13:10.760 --> 0:13:13.560 kind of shrink the supply of drivers, that becomes even crazier. 0:13:13.600 --> 0:13:17.440 So naturally that'll mean, you know, better pay for drivers 0:13:17.480 --> 0:13:20.280 who kind of fit the profile that companies are looking for. 0:13:20.640 --> 0:13:23.360 But it's just kind of more pot stirring, if you will, 0:13:23.400 --> 0:13:25.640 that's just further complicating the situation. 0:13:41.520 --> 0:13:43.959 There are so many rabbit holes that you have already 0:13:43.960 --> 0:13:46.240 thrown out. But just going back to one, explain the 0:13:46.320 --> 0:13:49.920 non domiciled CDL issue to me, because it sounds like, 0:13:50.760 --> 0:13:53.240 again I'm not a CDL expert, but just based on 0:13:53.280 --> 0:13:56.400 the name alone, if I have a non domiciled CDL, like, 0:13:56.760 --> 0:14:02.160 couldn't I eventually turn that into a normal domiciled CDL. 0:14:02.800 --> 0:14:05.440 That is a great question that I am not the 0:14:05.480 --> 0:14:08.440 best person to answer. I will be honest about the 0:14:08.559 --> 0:14:11.760 legality of the CDLs. I think what started all of 0:14:11.760 --> 0:14:15.800 this was Joe, you probably and Tracy maybe you do too. 0:14:15.920 --> 0:14:18.080 But you know, there's a group on Twitter that we 0:14:18.160 --> 0:14:21.480 lovingly call ourselves freight ps. Right, it's like this little 0:14:21.520 --> 0:14:24.240 kind of freight ecosystem. And for the last I would 0:14:24.280 --> 0:14:27.720 say two plus years, there's been a growing group of 0:14:27.760 --> 0:14:31.400 people that have been really looking into like, who are 0:14:31.440 --> 0:14:34.640 these companies that have flooded the market, who are the drivers? 0:14:34.920 --> 0:14:38.000 What types of CDLs do they have? And one of 0:14:38.000 --> 0:14:42.160 the most tangible things that I remember was, it was 0:14:42.160 --> 0:14:45.920 probably a year ago people started to discover that a 0:14:46.000 --> 0:14:49.520 lot of CDLs were issued to people with something called 0:14:49.640 --> 0:14:53.560 no name given as their first name right literally on. 0:14:53.440 --> 0:14:55.160 The seems a little bit suspious. 0:14:55.200 --> 0:14:57.640 Literally on their license it says like no name given. 0:14:58.120 --> 0:15:00.720 And so I think that kind of like people started 0:15:00.720 --> 0:15:03.680 to discover this, and also you also had many trucking 0:15:03.680 --> 0:15:06.880 companies being registered at like there was like two hundred 0:15:06.880 --> 0:15:10.040 trucking companies registered to like an apartment in you know, 0:15:10.160 --> 0:15:13.680 Signal Hill, California, or like shared in Wyoming, there's like 0:15:13.760 --> 0:15:17.320 six hundred trucking companies registered to a PO box. And 0:15:17.360 --> 0:15:19.960 so that really kind of started people looking at this, 0:15:20.400 --> 0:15:23.560 and then the non dom celled CDL thing really started 0:15:23.600 --> 0:15:25.840 to take off, you know, when Sean Duffy and the 0:15:25.880 --> 0:15:29.120 dot started, I believe in June of twenty twenty five, 0:15:29.240 --> 0:15:31.800 really kind of honing in on you know, English language 0:15:31.800 --> 0:15:34.760 proficiency and non domme celled CDLs. But I believe non 0:15:34.760 --> 0:15:37.440 doma cell CDLs have been around since the mid eighties, 0:15:37.480 --> 0:15:40.600 and there's and it's not necessarily like obviously it's not 0:15:40.720 --> 0:15:43.680 unlawful or else they wouldn't be issuing them. But I 0:15:43.680 --> 0:15:46.400 think there was a lot of scrutiny put on certain 0:15:46.440 --> 0:15:50.600 states that were just had massive spikes in the issue 0:15:50.600 --> 0:15:53.960 in sub CDLs, like California and Minnesota, I believe were 0:15:53.960 --> 0:15:56.280 the two kind of biggest in New York were some 0:15:56.320 --> 0:15:59.240 of the bigger examples where you know, historically they'd been 0:15:59.240 --> 0:16:02.400 issuing you know, X amount of CDLs per year and 0:16:02.440 --> 0:16:05.440 then all of a sudden, out of nowhere right around COVID. 0:16:05.600 --> 0:16:08.440 It was like ten x right, and all the while, 0:16:08.800 --> 0:16:10.720 you know that all that all happened in years past 0:16:10.760 --> 0:16:12.320 and nobody really looked at it. But then in the 0:16:12.400 --> 0:16:15.120 last year everyone's been like, Okay, what's really going on there, 0:16:15.600 --> 0:16:18.480 And so that's kind of what's led to the scrutiny, 0:16:18.480 --> 0:16:18.920 if you will. 0:16:19.120 --> 0:16:22.200 So someone with a non dumb CDL has taken a 0:16:22.280 --> 0:16:25.640 test in the US, or at least in theory, someone 0:16:25.680 --> 0:16:29.560 with a non dumb CDL, it's not like they're just like, oh, yeah, 0:16:29.600 --> 0:16:30.400 I took a test back. 0:16:30.560 --> 0:16:33.800 So nonymoicill CDLs are for people who are foreign nationals 0:16:33.880 --> 0:16:37.720 who are not nomiciled here but are legally allowed to work. Yeah, right, 0:16:38.240 --> 0:16:40.640 and so if they have the legal authorization to work, 0:16:40.680 --> 0:16:42.800 sure then they can. Then then they can go and 0:16:42.800 --> 0:16:44.160 get a non domiciled CDL. 0:16:44.200 --> 0:16:47.600 But just to establish the CDL part, let's just say 0:16:47.680 --> 0:16:51.120 in theory. In theory, in theory, the non dumb CDL 0:16:51.240 --> 0:16:53.720 is not someone who's like, oh, I got my trucking 0:16:53.800 --> 0:16:56.240 license in Ukraine and then I moved to the United 0:16:56.280 --> 0:16:59.560 States and I'm truck In theory, the non dumb CDL 0:16:59.840 --> 0:17:00.520 is someone who. 0:17:00.400 --> 0:17:02.480 Moved here in theory rights. 0:17:02.560 --> 0:17:05.159 Well, when you see a really big spike in the 0:17:05.240 --> 0:17:09.040 number of issuance of non down CDLs that are way 0:17:09.040 --> 0:17:13.200 out of historical proportion, the question that might arise for 0:17:13.320 --> 0:17:18.240 regulators is perhaps the quality of the CDL et cetera. Like, 0:17:18.320 --> 0:17:20.600 that's sort of what this source of concern would be. 0:17:21.119 --> 0:17:23.159 And to go down another rabbit hole, there's been a 0:17:23.200 --> 0:17:26.800 lot of eyeballs on CDL schools. Yea, yeah, there's some 0:17:27.320 --> 0:17:29.440 you know, you remember that guy Nick Shirley or whatever, 0:17:29.520 --> 0:17:32.040 like the Leering Center in Minnesota. 0:17:32.240 --> 0:17:35.000 It's like, you guys, Yeah, truckers have the same. 0:17:34.960 --> 0:17:37.919 Yeah, same thing. Okay, there's lots of suspect CDL schools, 0:17:37.960 --> 0:17:41.200 lots of suspect curriculums, lots of suspect trainings. They've essentially 0:17:41.240 --> 0:17:42.960 been handing out CDLs like candy. 0:17:43.080 --> 0:17:45.520 It would seem no, no, this makes a lot of sense. 0:17:46.040 --> 0:17:46.280 I know. 0:17:46.480 --> 0:17:51.399 Obviously the administration, Sean Duffy, the Secretary of Transportation, they've 0:17:51.440 --> 0:17:54.600 talked a lot about this, et cetera, Like, Okay, how 0:17:54.600 --> 0:17:57.080 many of these drivers are actually safe and did a 0:17:57.119 --> 0:18:00.119 proper education, et cetera. Yeah, But from your perspective to 0:18:00.240 --> 0:18:02.720 the people that you talk to, it's basically like, no, 0:18:02.880 --> 0:18:06.160 this is more than just tweets. This is not just oh, 0:18:06.200 --> 0:18:09.119 we're looking into this, et cetera. You think there's a clear, 0:18:09.320 --> 0:18:12.200 like on the ground effect from this is real? 0:18:12.320 --> 0:18:15.200 Oh, one hundred percent. And I hear it every day 0:18:15.280 --> 0:18:18.480 from my friends who own trucking comp Yeah, one hundred percent. Okay, 0:18:18.520 --> 0:18:20.560 And it's been much harder to you know, capacity has 0:18:20.600 --> 0:18:22.560 been much tighter. You talk to freight brokers, you know 0:18:22.880 --> 0:18:25.199 what used to be. You know, rates have gone up 0:18:25.200 --> 0:18:28.040 and it's harder to find trucks. So got it. There's 0:18:28.080 --> 0:18:29.960 only a couple sources for that right now. 0:18:30.320 --> 0:18:32.720 I guess what I'm getting at with the domiciled versus 0:18:32.840 --> 0:18:36.679 non domiciled CDL thing is, would you expect this to 0:18:36.680 --> 0:18:40.240 be a temporary blip as the administration, you know, scrutinizes 0:18:40.280 --> 0:18:44.359 some of these foreign drivers, but eventually they I don't know, 0:18:44.480 --> 0:18:46.480 like maybe they have to go back to school and 0:18:46.480 --> 0:18:49.359 get relicnsed again and then they come back on stream. 0:18:49.480 --> 0:18:52.919 Or is this like a permanent cut in driver capacity 0:18:52.920 --> 0:18:53.480 in your mind? 0:18:53.960 --> 0:18:58.159 Well, I think if I'm not mistaken, the government in 0:18:58.359 --> 0:19:04.360 March of this year said that essentially non domiciled CDLs, 0:19:04.960 --> 0:19:07.440 it's not going to be as easy to renew them, okay, 0:19:07.560 --> 0:19:11.160 and so naturally they'll start to expire and there will 0:19:11.200 --> 0:19:14.520 be less of them over time. And I mean, who knows, 0:19:14.840 --> 0:19:17.080 you know, obviously we can't get a crystal ball out 0:19:17.080 --> 0:19:18.720 and see, you know, what's going to happen in the 0:19:18.760 --> 0:19:22.640 next election. So who the heck knows what another administration 0:19:22.880 --> 0:19:25.400 might do or might be able to do. Who knows 0:19:25.400 --> 0:19:28.840 how permanent any of this is. I man, anyone's guess 0:19:28.880 --> 0:19:29.720 is as good as mine on that. 0:19:30.080 --> 0:19:31.880 It occurs to me that there are sort of two 0:19:32.000 --> 0:19:37.119 interlinked things that strike me is interesting. So let's say, okay, 0:19:37.160 --> 0:19:41.800 you have the Ukrainian owned trucking company and a lot 0:19:41.840 --> 0:19:46.240 of non Ukrainian drivers. And then to your point, though 0:19:46.359 --> 0:19:49.520 you know they're part of a broader network, they might 0:19:49.640 --> 0:19:53.800 network with Ukrainian freight brokers, et cetera, et cetera. And 0:19:53.840 --> 0:19:57.000 now you have the Supreme Court ruling which for the 0:19:57.040 --> 0:20:01.600 first time opens the door to the possibility of the broker, 0:20:02.440 --> 0:20:05.359 who traditionally wasn't held liable, would be the carrier if 0:20:05.400 --> 0:20:08.399