Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3: I'm Joe wasn't.
Speaker 4: Thal and I'm Tracy Alloway.
Speaker 2: It's been too long since we've done a trucking episode.
Speaker 2: This is just an objective fact that we need to
Speaker 2: get out of the way.
Speaker 4: It is time. I mean, to be fair, to be fair,
Speaker 4: I think we've both written about trucking in the Aulot's
Speaker 4: newsletter recently. I think back in January you started to
Speaker 4: get some of the freight and logistics companies talking about
Speaker 4: maybe they were starting to see an upturn and looking
Speaker 4: at some share prices. Since then, so I've got look
Speaker 4: up night Swift at the moment.
Speaker 3: What's the tigger?
Speaker 4: It's k n X Okay KNX night Swift. You know JB.
Speaker 4: Hof But night Swift is a little bit more dramatic.
Speaker 4: I mean since January of this year.
Speaker 3: No, it's a great run.
Speaker 4: It's had a great run. So I think the trucking
Speaker 4: rebound it seems to be here.
Speaker 3: It seems to be here.
Speaker 5: You know.
Speaker 2: The problem with going like a long time. I mean,
Speaker 2: as you mentioned, we do write about it, so it's
Speaker 2: not like we're ignorant. But the one of the things
Speaker 2: that we learned when we did a lot of trucking episodes,
Speaker 2: particularly in the years after the pandemic, was like when
Speaker 2: we talk about like the business cycle, you know, it's
Speaker 2: like these multi year cycles. When truckers talk about the cycle,
Speaker 2: there might be like eight up and down cycles within
Speaker 2: one boom or within one recession. Just extraordinary cyclical business.
Speaker 5: Right.
Speaker 4: So, if we or hopefully anyone else have learned one
Speaker 4: thing from the truck episodes, it is that this is
Speaker 4: such an incredibly cyclical industry. And the standard explanation is
Speaker 4: that you have these really low barriers to entry for
Speaker 4: owner operators and trucks, and so as soon as trucking
Speaker 4: rates start to go up, everyone decides to become a trucker. Yah,
Speaker 4: the market gets flooded, it over expands, and then inevitably
Speaker 4: rates start to come down, and then you have a
Speaker 4: bunch of independent owner operators who start to go bust,
Speaker 4: and then capacity comes out and the whole cycle can
Speaker 4: begin again.
Speaker 2: True, it seems real boom bust. And you mentioned the
Speaker 2: share prices of night Swift and JB.
Speaker 3: Hunt. But another way to look at it.
Speaker 2: I'm just looking at the Internet Truck Stop Van Rate
Speaker 2: Index just a sort of basic measure of how much
Speaker 2: it costs to move. That was in December of last year,
Speaker 2: is like a dollar ninety four. I guess that's probably
Speaker 2: per mile, and now it's up to it broke three.
Speaker 2: It came down a little bit, so just by measuring
Speaker 2: the cost of trucking, it's clearly gone up.
Speaker 3: So we need to figure out.
Speaker 4: What's Sorry, I'm just looking at this night chart again,
Speaker 4: the night Swift chart. You know they've outperformed META this year.
Speaker 3: That's amazing. I know, look at JB. Hunt. I think
Speaker 3: it's you and that was like almost a double Yeah, yeah.
Speaker 4: Forget about AI. The money apparently is in trucking.
Speaker 3: Well, how are for real? House?
Speaker 4: Is how the cycle starts?
Speaker 5: Right?
Speaker 4: How do you just start saying the money is in
Speaker 4: trucking and then everyone gets.
Speaker 2: How are the turbines getting to the data centers?
Speaker 3: How are all like?
Speaker 1: Right?
Speaker 2: Like, we know that there is a lot of demand
Speaker 2: for physical goods as part of this AI story, and
Speaker 2: the physical goods have to get to the data center
Speaker 2: somehows right?
Speaker 3: I think this is part of the story.
Speaker 4: This is the question. Is this the sort of same
Speaker 4: rebound that we've seen before, or is there maybe something
Speaker 4: more structural that's happening here. We've also had some recent
Speaker 4: developments with like the actual supply of truck dumps right,
Speaker 4: which is also something that clearly impacts capacity. So there's
Speaker 4: a lot to talk about.
Speaker 2: There's a lot to talk about. It's time to revisit
Speaker 2: the trucking market. We have a guest that we've never
Speaker 2: had on before, but someone really like someone I've known
Speaker 2: from the internet for a while, who really knows the
Speaker 2: space very well. We're gonna be speaking with Red Lustilow.
Speaker 2: He is the chief marketing officer at Truck Parking Club
Speaker 2: and so read thank you so much for coming on out.
Speaker 5: Lots, Joe Tracy, thanks for having me. Joe. I got
Speaker 5: to give you credit, man. I said you weren't going
Speaker 5: to do it, but you did it and you said
Speaker 5: my name right, So.
Speaker 2: Congratulations, thank you. All right, test cleared for this episode. Actually,
Speaker 2: what do you get? Who are you? What's your background?
Speaker 2: What's the Truck Parking Club and all that? Why are
Speaker 2: we talking to you?
Speaker 5: Yeah? Sure, so, I'm My name is Red Lusblow. I
Speaker 5: have been in freight my entire career, which at this
Speaker 5: point is a feels like a long and short ten
Speaker 5: years at the same time. Started out of college at
Speaker 5: a freight brokerage Echo It's a large, large freight brokerage,
Speaker 5: Top five freight brokerage. Then spent some time at a
Speaker 5: technology company called Trimble, did my own thing for a bit.
Speaker 5: That's where I encountered you on the the interwebs, probably
Speaker 5: three or four years ago, just kind of stirring the
Speaker 5: pod on Twitter. And then I joined Truck Parking Club
Speaker 5: about three years ago and really have been focused on
Speaker 5: truck parking for the last three years, which we can
Speaker 5: talk about because that's a trending topic as well. But yeah,
Speaker 5: I mean I've been I've been in freight my whole career,
Speaker 5: and I'm I'm a freight guy and I now live
Speaker 5: in Chattanooga, which is William has been dubbed freight Alley
Speaker 5: by Craig Fuller, and yeah, so I'm I'm in it man.
Speaker 4: It's the parking thing is really interesting here because if
Speaker 4: you think about a truck or freight rebound, you think
Speaker 4: about things actually moving. Yeah, right, But I'm curious, from
Speaker 4: your perspective, does a rebound look like more trucks actually
Speaker 4: having to stop and find parking, like desperately circling for
Speaker 4: a place I don't know, around a data center or
Speaker 4: something like that and trying to find space. Like is
Speaker 4: a healthy trucking market? What does that look like to
Speaker 4: a company that is in the truck parking space?
Speaker 5: Yeah? Sure, So you know, naturally as demand increases, we'll
Speaker 5: see see more trucks on the road. You Tracy, you
Speaker 5: kind of talked about a number of the trending topics
Speaker 5: ahead of this, you know, and you talked about the
Speaker 5: cyclical nature of trucking and the barrier to entry, if
Speaker 5: you will. So there's it's a very multivariate market, and
Speaker 5: truck parking is one of those things that structurally it's
Speaker 5: very difficult to construct new capacity because it's very limited
Speaker 5: in where you can do it, it's expensive, many municipalities
Speaker 5: don't want it, and so there's a bunch of structure
Speaker 5: reasons why it's difficult to quickly increase the supply and
Speaker 5: the traditional sense. And what we've done is really just
Speaker 5: leveraged existing space. So there's millions of truck parking spaces
Speaker 5: across the US that are on private property, and we've
Speaker 5: just built a network a marketplace to tap into that.
Speaker 5: So we go to owners, we say, hey, you can
Speaker 5: make some money parking trucks comes on our app. Drivers
Speaker 5: use their app find parking on private property and pay
Speaker 5: the owners. So Airbnb sort of style.
Speaker 3: Yeah, that's what I'm just going to say.
Speaker 2: It sounds like a twenty tens era sharing economy sort
Speaker 2: of thing.
Speaker 5: Let it makes sense, exactly exactly. And here's another thing
Speaker 5: about trucking is trucking is from a tech standpoint, is
Speaker 5: always behind right, and so we're you know, when you
Speaker 5: operate in the physical world and you're in as it
Speaker 5: fragmented a market, is trucking is I mean, there's nearly
Speaker 5: a million trucking companies and most of them are you know,
Speaker 5: the long tails really really small, less than ten drucks.
Speaker 5: It's slow moving and it's slow to adopt technology, and
Speaker 5: that's always been the case. And so we're really scaling
Speaker 5: and we've we've really done this at an interesting time because,
Speaker 5: like Tracy said, I mean, coming out of COVID, the
Speaker 5: market was hot, Freight rates were through the roof. Supply
Speaker 5: flooded the market because there was indeed a very low
Speaker 5: barriered entry, and a lot has happened as a result
Speaker 5: of that, and technology has really flooded the market too,
Speaker 5: I would say, over that same period. Yeah, and so
Speaker 5: there's a lot, there's a lot. I mean, there's a
Speaker 5: lot to talk about. So I guess you guys tell
Speaker 5: me where you want to start.
Speaker 2: Yeah, well here, I mean, let's start with like maybe
Speaker 2: the really simple question, and then we'll drill down even
Speaker 2: further based on how you answer it. But like, big picture,
Speaker 2: this surge that we've seen over the last two or
Speaker 2: three quarters, whether we're looking at stock prices or maybe
Speaker 2: more importantly rates, like decompose the drivers, the forces that
Speaker 2: have pushed these lines higher.
Speaker 5: Yeah, I mean, so coming out of COVID, you know,
Speaker 5: starting in mid basically mid twenty twenty two, mid to
Speaker 5: late twenty twenty two, we saw rates fall and we
Speaker 5: were in essentially a three plus year lull, and most
Speaker 5: folks were saying, most of the talking heads were saying
Speaker 5: that demand returning was the only thing that was going
Speaker 5: to drive rates up, like that was going to be
Speaker 5: the only thing. But what we've seen in really the
Speaker 5: last you know, since the new administration took office, we've
Speaker 5: seen a massive kind of crackdown on English language proficiency,
Speaker 5: on non domiciled CDLs, and there's been as a result,
Speaker 5: a lot of capacity has kind of structurally been chopped
Speaker 5: out of the market, and so supply has really dwindled.
Speaker 5: And man to complicate things, there's also been in the
Speaker 5: last couple months a Supreme Court ruling Montgomery case, which,
Speaker 5: you know, historically freight brokers who move I think on
Speaker 5: average about thirty percent of freight volumes, if I'm not mistaken,
Speaker 5: freight brokers, which are you know, a critical component to
Speaker 5: the kind of the freight ecosystem, have historically not been
Speaker 5: liable or have not been held liable for carriers negligence
Speaker 5: or carriers accidents, right, And now that's in question. And
Speaker 5: so there's been so many kind of structural things that
Speaker 5: are really pushing capacity out of the market and also
Speaker 5: making certain types of capacity come at a premium. Right,
Speaker 5: Like safety ratings all of a sudden might matter at
Speaker 5: carriers now because brokers might be you know, there's more
Speaker 5: scrutiny on broker's selection of carriers. And so there's there's
Speaker 5: so many kind of like supply things that are affecting
Speaker 5: the rates and that are kind of structurally affecting the
Speaker 5: barrier to entry so that next time there is a
Speaker 5: demand spike and you are seeing demand spikes and pockets
Speaker 5: of the market. Right, Like Joe, you talked about data centers, right,
Speaker 5: flatbed has been booming and data centers have a lot
Speaker 5: in construction has a lot to do with that. But
Speaker 5: when you if you really were to have like a
Speaker 5: COVID level event where like there was unprecedented demand, I'm
Speaker 5: not sure the market could bring on as much new
Speaker 5: capacity as it did like it did during COVID because
Speaker 5: there are, you know, fundamental changes to the barrier to entry,
Speaker 5: and the government is really really put a lot of
Speaker 5: or is working to I guess I should say put
Speaker 5: a lot of barriers in to prevent bad actors coming in,
Speaker 5: mostly if you were to kind of look at it
Speaker 5: from their perspective. So, yeah, I want to talk.
Speaker 4: More about the barriers. But just before then, I'm really
Speaker 4: interested in the supply versus demand question. Are there any
Speaker 4: empirical things that you can look at to show that
Speaker 4: capacity is coming out of the market. I'm thinking, for instance,
Speaker 4: people used to look at like the spot versus the
Speaker 4: contracted rate right as one indication of capacity, and that
Speaker 4: started flipping earlier in the year is that, for instance,
Speaker 4: an indication that capacity is really getting limited.
Speaker 5: The data guys will look at the spread between spot
Speaker 5: and contract rates. I'll give you an anecdote.
Speaker 4: Yes, okay, I love it.
Speaker 5: That's essentially me saying I'm not the biggest data guy.
Speaker 5: But anyway, anecdote. So, I have a buddy who owns
Speaker 5: a trucking company. He's Ukrainian descent, immigrated here from Ukraine,
Speaker 5: I think you know, over a decade ago, and many
Speaker 5: of his drivers were also craining. And this is a
Speaker 5: common story you hear in trucking. There's a many Trucking
Speaker 5: is a very rich ecosystem, full of every nationality you
Speaker 5: can possibly imagine. And they've got their own little network
Speaker 5: of companies, and they've got their own network of drivers.
Speaker 5: They bring people from their home country. And there's a
Speaker 5: lot of scrutiny on these folks right now, I should add,
Speaker 5: right because many of them have non domiciled CDLs, which
Speaker 5: is a certain type of CDL, and there's been a
Speaker 5: lot of scrutiny on those. So many of these folks
Speaker 5: have those CDLs. But despite that, and despite what people
Speaker 5: are saying about domicile CDLs, there's still some really good companies,
Speaker 5: and in my days I work with a lot of them,
Speaker 5: so I'm still friends with a lot of them. So
Speaker 5: I was talking to my buddy's Ukrainian guy, and he's like,
Speaker 5: look this no nomiciled CDL rolling means I have to
Speaker 5: get rid of all of my drivers. I have to
Speaker 5: find all new drivers, and of course that means I
Speaker 5: can't hire people who are in my network, many of
Speaker 5: whom have non nomiciled CDLs. So this is a serious
Speaker 5: thing for many of these companies and in many of
Speaker 5: these companies. So the ones that really do kind of
Speaker 5: run in the spot market, right, they're they're the you know,
Speaker 5: the five six, seven, one two three truck carriers, which is,
Speaker 5: like I said, the vast majority of the total amount
Speaker 5: of companies. I mean, there's hundreds of thousands of these folks,
Speaker 5: and they're structurally at a major disadvantage, one because of
Speaker 5: not domicile CDLs, but also two because of English language proficiency,
Speaker 5: which has been another thing the government has really focused on.
Speaker 5: The DOT I should say, under Sean Duffy has really
Speaker 5: been focusing on, which is you know, it started from
Speaker 5: a very natural standpoint. It's like if you can't read
Speaker 5: the signs, how can you operate eighty thousand pounds vehicle safely? Okay, fair,
Speaker 5: But naturally that's also kind of pushed people out of
Speaker 5: the market too. And you hear the same thing. I mean,
Speaker 5: I hear the same thing every day from my friends
Speaker 5: who own fleets or who are drivers. It's things are
Speaker 5: tough for them right now, and hiring drivers is difficult
Speaker 5: right now, and historically it's been Another big issue is
Speaker 5: driver turnover. I'd bring it up more issues, more rabbit holes.
Speaker 5: Driver turnover is you know, at some fleets it's over
Speaker 5: one hundred percent a year. It's crazy. It's crazy what
Speaker 5: goes on in some of these fleets. And when you
Speaker 5: kind of shrink the supply of drivers, that becomes even crazier.
Speaker 5: So naturally that'll mean, you know, better pay for drivers
Speaker 5: who kind of fit the profile that companies are looking for.
Speaker 5: But it's just kind of more pot stirring, if you will,
Speaker 5: that's just further complicating the situation.
Speaker 4: There are so many rabbit holes that you have already
Speaker 4: thrown out. But just going back to one, explain the
Speaker 4: non domiciled CDL issue to me, because it sounds like,
Speaker 4: again I'm not a CDL expert, but just based on
Speaker 4: the name alone, if I have a non domiciled CDL, like,
Speaker 4: couldn't I eventually turn that into a normal domiciled CDL.
Speaker 5: That is a great question that I am not the
Speaker 5: best person to answer. I will be honest about the
Speaker 5: legality of the CDLs. I think what started all of
Speaker 5: this was Joe, you probably and Tracy maybe you do too.
Speaker 5: But you know, there's a group on Twitter that we
Speaker 5: lovingly call ourselves freight ps. Right, it's like this little
Speaker 5: kind of freight ecosystem. And for the last I would
Speaker 5: say two plus years, there's been a growing group of
Speaker 5: people that have been really looking into like, who are
Speaker 5: these companies that have flooded the market, who are the drivers?
Speaker 5: What types of CDLs do they have? And one of
Speaker 5: the most tangible things that I remember was, it was
Speaker 5: probably a year ago people started to discover that a
Speaker 5: lot of CDLs were issued to people with something called
Speaker 5: no name given as their first name right literally on.
Speaker 4: The seems a little bit suspious.
Speaker 5: Literally on their license it says like no name given.
Speaker 5: And so I think that kind of like people started
Speaker 5: to discover this, and also you also had many trucking
Speaker 5: companies being registered at like there was like two hundred
Speaker 5: trucking companies registered to like an apartment in you know,
Speaker 5: Signal Hill, California, or like shared in Wyoming, there's like
Speaker 5: six hundred trucking companies registered to a PO box. And
Speaker 5: so that really kind of started people looking at this,
Speaker 5: and then the non dom celled CDL thing really started
Speaker 5: to take off, you know, when Sean Duffy and the
Speaker 5: dot started, I believe in June of twenty twenty five,
Speaker 5: really kind of honing in on you know, English language
Speaker 5: proficiency and non domme celled CDLs. But I believe non
Speaker 5: doma cell CDLs have been around since the mid eighties,
Speaker 5: and there's and it's not necessarily like obviously it's not
Speaker 5: unlawful or else they wouldn't be issuing them. But I
Speaker 5: think there was a lot of scrutiny put on certain
Speaker 5: states that were just had massive spikes in the issue
Speaker 5: in sub CDLs, like California and Minnesota, I believe were
Speaker 5: the two kind of biggest in New York were some
Speaker 5: of the bigger examples where you know, historically they'd been
Speaker 5: issuing you know, X amount of CDLs per year and
Speaker 5: then all of a sudden, out of nowhere right around COVID.
Speaker 5: It was like ten x right, and all the while,
Speaker 5: you know that all that all happened in years past
Speaker 5: and nobody really looked at it. But then in the
Speaker 5: last year everyone's been like, Okay, what's really going on there,
Speaker 5: And so that's kind of what's led to the scrutiny,
Speaker 5: if you will.
Speaker 2: So someone with a non dumb CDL has taken a
Speaker 2: test in the US, or at least in theory, someone
Speaker 2: with a non dumb CDL, it's not like they're just like, oh, yeah,
Speaker 2: I took a test back.
Speaker 5: So nonymoicill CDLs are for people who are foreign nationals
Speaker 5: who are not nomiciled here but are legally allowed to work. Yeah, right,
Speaker 5: and so if they have the legal authorization to work,
Speaker 5: sure then they can. Then then they can go and
Speaker 5: get a non domiciled CDL.
Speaker 2: But just to establish the CDL part, let's just say
Speaker 2: in theory. In theory, in theory, the non dumb CDL
Speaker 2: is not someone who's like, oh, I got my trucking
Speaker 2: license in Ukraine and then I moved to the United
Speaker 2: States and I'm truck In theory, the non dumb CDL
Speaker 2: is someone who.
Speaker 5: Moved here in theory rights.
Speaker 2: Well, when you see a really big spike in the
Speaker 2: number of issuance of non down CDLs that are way
Speaker 2: out of historical proportion, the question that might arise for
Speaker 2: regulators is perhaps the quality of the CDL et cetera. Like,
Speaker 2: that's sort of what this source of concern would be.
Speaker 5: And to go down another rabbit hole, there's been a
Speaker 5: lot of eyeballs on CDL schools. Yea, yeah, there's some
Speaker 5: you know, you remember that guy Nick Shirley or whatever,
Speaker 5: like the Leering Center in Minnesota.
Speaker 3: It's like, you guys, Yeah, truckers have the same.
Speaker 5: Yeah, same thing. Okay, there's lots of suspect CDL schools,
Speaker 5: lots of suspect curriculums, lots of suspect trainings. They've essentially
Speaker 5: been handing out CDLs like candy.
Speaker 3: It would seem no, no, this makes a lot of sense.
Speaker 5: I know.
Speaker 2: Obviously the administration, Sean Duffy, the Secretary of Transportation, they've
Speaker 2: talked a lot about this, et cetera, Like, Okay, how
Speaker 2: many of these drivers are actually safe and did a
Speaker 2: proper education, et cetera. Yeah, But from your perspective to
Speaker 2: the people that you talk to, it's basically like, no,
Speaker 2: this is more than just tweets. This is not just oh,
Speaker 2: we're looking into this, et cetera. You think there's a clear,
Speaker 2: like on the ground effect from this is real?
Speaker 5: Oh, one hundred percent. And I hear it every day
Speaker 5: from my friends who own trucking comp Yeah, one hundred percent. Okay,
Speaker 5: And it's been much harder to you know, capacity has
Speaker 5: been much tighter. You talk to freight brokers, you know
Speaker 5: what used to be. You know, rates have gone up
Speaker 5: and it's harder to find trucks. So got it. There's
Speaker 5: only a couple sources for that right now.
Speaker 4: I guess what I'm getting at with the domiciled versus
Speaker 4: non domiciled CDL thing is, would you expect this to
Speaker 4: be a temporary blip as the administration, you know, scrutinizes
Speaker 4: some of these foreign drivers, but eventually they I don't know,
Speaker 4: like maybe they have to go back to school and
Speaker 4: get relicnsed again and then they come back on stream.
Speaker 4: Or is this like a permanent cut in driver capacity
Speaker 4: in your mind?
Speaker 5: Well, I think if I'm not mistaken, the government in
Speaker 5: March of this year said that essentially non domiciled CDLs,
Speaker 5: it's not going to be as easy to renew them, okay,
Speaker 5: and so naturally they'll start to expire and there will
Speaker 5: be less of them over time. And I mean, who knows,
Speaker 5: you know, obviously we can't get a crystal ball out
Speaker 5: and see, you know, what's going to happen in the
Speaker 5: next election. So who the heck knows what another administration
Speaker 5: might do or might be able to do. Who knows
Speaker 5: how permanent any of this is. I man, anyone's guess
Speaker 5: is as good as mine on that.
Speaker 2: It occurs to me that there are sort of two
Speaker 2: interlinked things that strike me is interesting. So let's say, okay,
Speaker 2: you have the Ukrainian owned trucking company and a lot
Speaker 2: of non Ukrainian drivers. And then to your point, though
Speaker 2: you know they're part of a broader network, they might
Speaker 2: network with Ukrainian freight brokers, et cetera, et cetera. And
Speaker 2: now you have the Supreme Court ruling which for the
Speaker 2: first time opens the door to the possibility of the broker,
Speaker 2: who traditionally wasn't held liable, would be the carrier if
Speaker 2: there's a major accident caused by them. So it feels
Speaker 2: to me like this combination like you could literally obliterate
Speaker 2: like sort of like whole networks, Like we think of
Speaker 2: the network as the driver the truck, et cetera. But
Speaker 2: the network is also the sort of the capacity is
Speaker 2: the ecosystem itself.
Speaker 5: So structurally, this is if this continues down the path
Speaker 5: it's on right now, and a lot of the pundits,
Speaker 5: you know, the legal experts, I know, I could name
Speaker 5: a couple have said in the last day that if
Speaker 5: this all keeps going down this path, this is a
Speaker 5: serious structural issue for the freight brokerage business model. And
Speaker 5: if the freight brokerage business model is in trouble, then
Speaker 5: naturally that means that the long tail of trucking companies
Speaker 5: who primarily get their freight from freight brokers, they're in
Speaker 5: trouble too. And so, you know, historically, freight brokers have
Speaker 5: had to have processes to audit the cares they set
Speaker 5: up and audit the carriers they give freight too, and
Speaker 5: each one has kind of had their own process for that,
Speaker 5: and that's evolved, and there's been a lot of technology
Speaker 5: that's gone into the vetting and compliance side of freight brokerage.
Speaker 5: In the last couple of years, mainly because another thing
Speaker 5: we haven't talked about, which is the whole rabbit hole,
Speaker 5: is cargo theft. Cargo theft has been through the roof
Speaker 5: since COVID, and there's been a kind of a huge
Speaker 5: amount of criminal element, like large criminal elements that have
Speaker 5: come in and are doing everything from spoofing carriers pretending
Speaker 5: to be carriers, to setting up fraudulent entities, acting like
Speaker 5: a normal carrier for a while, then figuring out where
Speaker 5: the good freight is, stealing that and then disappearing.
Speaker 4: Oh wow, I thought you just meant someone like kicking
Speaker 4: up bid off the back of the truck or something.
Speaker 5: Oh no, no, no, Like I'm talking like mafia type
Speaker 5: stuff like crime rings. And that's exploded in the last
Speaker 5: couple of years. And so as a result of that,
Speaker 5: freight brokers have been much more scrutinous of who they're hiring.
Speaker 5: And now, you know, safety, which is kind of the
Speaker 5: element we're talking about here with regard to the Supreme
Speaker 5: Court ruling, is like, okay, what's a safe carrier?
Speaker 2: Right?
Speaker 5: And and so far brokers have really kind of relied
Speaker 5: on the FMCSA's rating, right, it's satisfactory, conditional or not rated, right,
Speaker 5: And so traditionally it's like, Okay, I hired a satisfactory carrier.
Speaker 5: It says on the FMCSA's website they're satisfactory. That must
Speaker 5: mean something. Therefore they're good, and I'm going to hire them,
Speaker 5: and they go like there. Recently they were Cige Robinson
Speaker 5: was involved in a case where they hired a carrier
Speaker 5: that was satisfactory, that had done like two hundred plus
Speaker 5: loads for them, and then was involved in a wreck.
Speaker 5: And now they're facing like a six hundred million dollar judgment, right,
Speaker 5: and they're appealing it naturally, But if that, I mean,
Speaker 5: if that holds true, like the freight broker business model
Speaker 5: is going to be in serious trouble because the government's
Speaker 5: not really telling them like clearly, okay, this is a
Speaker 5: safe carrier, this is the vetting standard, use this. If
Speaker 5: you do this, you're covered, right, They're not really doing that.
Speaker 5: There's a lot of there's a lot of kind of
Speaker 5: grayer around this, and that's that's naturally going to cause
Speaker 5: a lot of problems for freight brokers. And like I said,
Speaker 5: the vast majority of these small carriers, and there's hundreds
Speaker 5: of thousands of these companies they get their freight from
Speaker 5: freight brokers because they can't go it's difficult for them
Speaker 5: to go get direct customers. It's traditionally like if I'm
Speaker 5: a one truck operator and I walk into Craft Hinds,
Speaker 5: Craft Highs is going to be like yo, like I'm
Speaker 5: not giving you freight. I'm going to give freight to
Speaker 5: the broker who can give me a thousand trucks or
Speaker 5: you know, night Swift, who can give me ten thousand
Speaker 5: trucks yright. So it's just a very it's a very
Speaker 5: difficult time.
Speaker 3: Yeah, this is tracy.
Speaker 2: What I think, like, maybe we need to broaden our
Speaker 2: conception of what capacity means because we think of it
Speaker 2: as drivers, we think of it as trucks, et cetera.
Speaker 2: But if there is a small carrier and it's ten
Speaker 2: trucks and ten drivers, if they can't really like plug
Speaker 2: into a network that they know, and then that is
Speaker 2: is that even capacity.
Speaker 4: I'm looking at a headline right now from I guess
Speaker 4: this is a stat from Roadmaster Group, but they're saying
Speaker 4: cargo theft jumped sixty scent last year. That just came
Speaker 4: out three hours ago. And also there's a New York
Speaker 4: Times headline saying nearly eleven thousand bottles of bourbon were
Speaker 4: stolen from a Philadelphia warehouse as a result of coordinated
Speaker 4: cargo thing.
Speaker 2: It's funny because you and I both just assumed that
Speaker 2: when you said cargo thing, like you know, like a
Speaker 2: good fellas.
Speaker 4: Like that's as far as my criminal ambitions can strut.
Speaker 2: And then the truck drivers like, please beat me up, right,
Speaker 2: do you remember that? Like, please beat me up so
Speaker 2: that my own blunch does not think that I stole it.
Speaker 5: But much they've targeted Guy Fieri, Guy Fieri had greats stolen,
Speaker 5: Like all these celebrities in the last year have like
Speaker 5: seemingly come out with liquor brands, and they're all being
Speaker 5: targeted to like I think shacks like range Rover got
Speaker 5: stolen off a car hauler. Like there's there's been all
Speaker 5: sorts of crazy stuff, but I mean all jokes aside,
Speaker 5: like it is crazy. It is crazy what's going on,
Speaker 5: and seemingly it's only getting worse despite all the scrutiny
Speaker 5: and all the tech that's been kind of brought in.
Speaker 5: But Tracy, you did kind of mention something interesting or
Speaker 5: maybe it was Joe kind of the different types of capacity, right,
Speaker 5: like one thing that I'm thinking a lot about, And
Speaker 5: I'm not a freight broker anymore, so I'm slightly removed.
Speaker 5: Although I did do it for many years, Historically, there's
Speaker 5: not really been it. Freate's really a commodity, and there's
Speaker 5: you know, one carrier versus the other might ask you
Speaker 5: for more money, but you don't really have a good
Speaker 5: reason to pay carrier A much more than carrier B.
Speaker 5: You know, some situations might be like Okay, you know, yeah,
Speaker 5: I'll give you a couple hundred extra bucks because I
Speaker 5: know I trust you, and that's worth it.
Speaker 4: It's pretty much the same service, right, Like you expect
Speaker 4: the stuff to go from one place to another.
Speaker 5: Yeah, yeah, it's in traditionally has been viewed as a commodity.
Speaker 5: But like now that there's this kind of extra scrutiny
Speaker 5: on the broker's vetting process and the hiring process, like
Speaker 5: there might start to be a kind of strata of
Speaker 5: carriers where like they've got the best ratings, they're the
Speaker 5: safest operators, Like they're able to fetch a premium, and
Speaker 5: brokers might be like, shoot, like I have to pay
Speaker 5: them more because I need to check these boxes so
Speaker 5: that if they get into wreck, God forbid, I'm as
Speaker 5: covered as I possibly can be in the event that
Speaker 5: some you know, billboard attorney tries to sue me for
Speaker 5: six hundred million dollars.
Speaker 4: Yeah, that's really interesting. So like you could start to
Speaker 4: see more I guess diversification come into the market more
Speaker 4: like stratification on rates, people paying a premium for certain
Speaker 4: services or trust.
Speaker 5: I think that would make sense to me if that
Speaker 5: if that happened, I think that would make sense. The
Speaker 5: jury's out on if that'll happen, but that makes sense
Speaker 5: to me.
Speaker 4: The other thing I want to ask about is just
Speaker 4: how do people feel about becoming truckers at this particular moment.
Speaker 4: So rates are up, it seems like the money's there,
Speaker 4: or at least there's more money there than there used
Speaker 4: to be a few years ago. But at the same time,
Speaker 4: we still hear complaints about it's a tough life. You're
Speaker 4: on the road all the time, the hours are insane,
Speaker 4: like maybe you're waiting hours at a port to pick
Speaker 4: up a line. Parking, hard to find parking.
Speaker 5: Clearly, there's a lot to say here. There's to say here,
Speaker 5: And it's actually interesting because I did just run. You
Speaker 5: know at Trap Parking that we run a survey of
Speaker 5: all of our driver based basically every week, and I
Speaker 5: happened a couple of weeks ago to do a survey
Speaker 5: basically just about like driver's opinions on the state of
Speaker 5: the industry, Right, would you recommend this job to a friend?
Speaker 5: Like how do you feel about trucking? And anecdotally, I
Speaker 5: can say that in my discussions with my driver friends,
Speaker 5: like it seems like morales at an all time low.
Speaker 5: That's just the anecdotal what I hear from people. But structurally,
Speaker 5: I mean, or what I see kind of in these
Speaker 5: surveys is like like there's a strong sense of nostalgia
Speaker 5: in trucking, Like it was much better then than it
Speaker 5: is now. Right. You look at like the seventies and
Speaker 5: eighties when you had Smoking the Bandit movies like that,
Speaker 5: truckers were like cow Yeah, truckers were cowboys, right, or
Speaker 5: explorers or frontiersmen, right, and they were respected and it
Speaker 5: was something that was a desire. It was kind of
Speaker 5: the last kind of frontier, Right, You're out on the
Speaker 5: road kind of figuring it out. And now it seems,
Speaker 5: for whatever reason that that kind of ethos has been damaged,
Speaker 5: and you hear kind of a lot of just kind
Speaker 5: of like a morning of the industry when you talk
Speaker 5: to drivers, and like this manifests itself. Like if you
Speaker 5: go to a truck stop and you just kind of
Speaker 5: pulled random drivers, I guarantee you that if you ask them,
Speaker 5: you know, we're things better in the past than they
Speaker 5: are now. And maybe this is just a human thing
Speaker 5: to a degree. Perhaps, So this isn't like a scientific
Speaker 5: study by any means, but like there is a strong
Speaker 5: sense that things were better in the past, and I
Speaker 5: think there's a lot of reasons for that. So you know,
Speaker 5: technology for the driver is a bad word traditionally, Yeah, okay,
Speaker 5: because technology for the driver has meant surveillance. It's meant
Speaker 5: in cab cameras surveilling their every move for viability reasons.
Speaker 5: It's meant speed limitters, it's meant electronic logging devices, which
Speaker 5: severely limits their freedom to operate as they see fit
Speaker 5: on the road. So it's all of these things that
Speaker 5: have kind of like constrained them, right, And if you
Speaker 5: think about traditional trucking as freedom on the road, like this,
Speaker 5: these are all anti freedom things, right, And so if
Speaker 5: the traditional trucker is looking for a job that gives
Speaker 5: them freedom. They're not finding that as much anymore. And
Speaker 5: so technology has had a bad rap. And I tend
Speaker 5: to agree with the driver on that, Like there's all
Speaker 5: sorts of reasons why all of those things are useful,
Speaker 5: but like I can understand why they would feel that way.
Speaker 2: Yeah, right, if we start from the premise, then it's
Speaker 2: already going to be a different a lifestyle sacrifice. And
Speaker 2: you're like, well, okay, it's a lifestyle sacrifice, but there's
Speaker 2: a paycheck, and everyone makes a lifestyle sacrifice paycheck.
Speaker 5: But if it.
Speaker 2: Turned out that it's like in the past, it was
Speaker 2: a lifestyle sacrifice plus a paycheck, plus a certain culture
Speaker 2: of freedom and the sort of maybe yeah, just like
Speaker 2: all the like the sort of and then it's just like, no,
Speaker 2: it's no longer that just the lifestyle sacrifice for the paycheck.
Speaker 3: Then that's a different equation.
Speaker 4: The other thing is just on the technology front, is
Speaker 4: for years now we've been hearing that, you know, self
Speaker 4: driving trucks are coming down the line. So I imagine
Speaker 4: if you're a young person thinking about getting a CDL,
Speaker 4: maybe you're no longer looking at it as a viable
Speaker 4: long term career.
Speaker 5: Yeah, I mean, autonomous is very interesting. It's anyone's guess
Speaker 5: how long that's going to take to really reach significant
Speaker 5: levels of adoption. I know there are many companies currently
Speaker 5: operating autonomous lanes, mostly in Texas, and we do talk
Speaker 5: to these companies because, you know, one thing people ask
Speaker 5: is like, okay, like if all the trucks are autonomous,
Speaker 5: like do they even need to park? Like does your
Speaker 5: business still exist? And so we have a whole one
Speaker 5: there's still trailers. Trailers need to be staged.
Speaker 4: Yeah, they still have to park, right, they must.
Speaker 5: To Yeah, and people forget that there's name.
Speaker 4: People are suggesting that they'll just keep driving forever, like
Speaker 4: they never need to stop. Basically yeah, okay, I see
Speaker 4: all right.
Speaker 5: And they're like, okay, you know, and I've got my
Speaker 5: whole reasons why that's actually not the case. And we're
Speaker 5: actually kind of in deep conversations with the autonomous companies
Speaker 5: because autonomous trucks need reliable staging and they need to
Speaker 5: be able to plug into a network to know that
Speaker 5: if I arrive at this location, I'm going to have
Speaker 5: a spot and truck stops and rest areas do not
Speaker 5: provide that level of surety at all. Yeah, right, Like,
Speaker 5: I honestly do think that of all the trending topics
Speaker 5: that we've talked about, like a lot of them are
Speaker 5: really kind of like billboard levels things shocking like guy theories,
Speaker 5: tequila gets stolen, right, like cargo theft.
Speaker 4: Like not the mayor of flavor too right.
Speaker 5: And but parking is really actually, I mean, it is
Speaker 5: one of the top issues when you talk to drivers,
Speaker 5: like if not the.
Speaker 4: Topic a quality of life issue is what you're saying, right.
Speaker 5: It's unbelievable. Well, it's a quality of life issue, but
Speaker 5: it's also a pay issue, like a significant pay issue.
Speaker 5: And let me let me explain. I hint to that
Speaker 5: ELEDS so electronic blogging devices in twenty seventeen, it was
Speaker 5: either twenty seventeen or twenty eighteen, I can't I can't
Speaker 5: remember now, but the government mandated every truck must have
Speaker 5: an electronic logging device. So drivers are allowed to operate
Speaker 5: fourteen hours a day, eleven of which they're allowed to drive, okay,
Speaker 5: And there's no moving that around. And if you go
Speaker 5: over that eleven hours, you're in trouble. It's going to
Speaker 5: hurt your record, it might increase your insurance premiums, it'll
Speaker 5: cost you money. It's a problem, right, you do not
Speaker 5: want to do that. And so naturally, what that means
Speaker 5: is the driver's day is very rigid. You know, I
Speaker 5: was driving to work this morning on I seventy five
Speaker 5: in northern Georgia. There's a rest area I pass every day,
Speaker 5: and every day there's trucks lining the exit ramp of
Speaker 5: the rest area, like on the highway. And how those
Speaker 5: trucks end up there is they've got two hours left
Speaker 5: on their clock. It's five pm. Like they're rolling down
Speaker 5: the highway. They're trying to go as far as they
Speaker 5: can because they're paid by the mile right and they
Speaker 5: don't get that time back if they lose it, and
Speaker 5: they're trying to get as close to their destination as possible.
Speaker 5: And what that means is, naturally there's a trade off
Speaker 5: every single day that every driver makes who's driving over
Speaker 5: the road. It's like, Okay, I could park now, but
Speaker 5: I've got four hours left, right, Yeah, I could park
Speaker 5: now and take a spot at the truck stop that's
Speaker 5: open because it's three pm and nobody's parked yet. Or
Speaker 5: I could keep going down the highway, go before more
Speaker 5: hours and end up in the middle of Atlanta at
Speaker 5: eight pm and with nowhere to go, right, And so
Speaker 5: there's there's a serious cost associated with losing those four hours, right,
Speaker 5: and four hours is a bit of an egregious like
Speaker 5: that does happen every single day. But even if it's
Speaker 5: at one hour, right, if you think about the cost
Speaker 5: operated truck, if you think about how many miles you're
Speaker 5: able to drive in an hour, like, and then you
Speaker 5: multiply that across an entire year for a driver, or
Speaker 5: for a fleet, you multiply that across their entire all
Speaker 5: of their drivers, like, and the cost and the productivity
Speaker 5: lost go sky high, really really quickly. And historically there's
Speaker 5: been not really much fleets for drivers could do about that, right,
Speaker 5: And not only is it a pay issue, but it
Speaker 5: is a quality of life issue to your point, Tracy, Like,
Speaker 5: you guys live in New York City. I don't know
Speaker 5: if you have cars, but parking in New York City
Speaker 5: not the easiest place to park in the country, to
Speaker 5: put it mildly right, and naturally that will mean you know,
Speaker 5: if I'm coming into New York and I want to
Speaker 5: go to a Knicks game and it's two hours before, Like,
Speaker 5: I gotta be methodical about Okay, here, I'm gonna go here,
Speaker 5: I'm gonna park there. I'm gonna get there then and
Speaker 5: if that's too much of a pain, I'm not gonna
Speaker 5: go right, I'm not gonna go do that thing. But
Speaker 5: when you live in rural you know, Georgia, you don't
Speaker 5: think anything about where you're gonna park, like, oh yeah,
Speaker 5: I'll be fine, Like I'm just gonna go right there.
Speaker 5: I got a place to park. And what truck drivers,
Speaker 5: like my analogy is like truck drivers, every single day
Speaker 5: is like being in New York City in the Super Bowl,
Speaker 5: the World Series, the NBA Finals, the NHL Finals are
Speaker 5: all there on the same day and there's nowhere to
Speaker 5: park at all, and you have to go and it's
Speaker 5: going to be a total it's going to cause you
Speaker 5: lots of stress. You're gonna be like, what the heck
Speaker 5: am I going to do? Right? And that's every single day.
Speaker 4: Okay, But explain this because America has a lot of roads,
Speaker 4: it's got a lot of highways, a lot of interstates.
Speaker 4: Where are all the park Like, why do we seem
Speaker 4: to have a shortage maybe it's not even a shortage,
Speaker 4: Maybe it's misplanning of resting areas for trucks.
Speaker 6: Why the scarcity, because it's very the traditional places to park,
Speaker 6: which are rest areas which are built by the state
Speaker 6: or the federal government, and truck stops, and those can
Speaker 6: only go in so many places.
Speaker 5: Right, Loves and Ta and Pilot like, they would love
Speaker 5: to build more locations, but it's not like you can
Speaker 5: just put them anywhere, right, there's only so many interstate
Speaker 5: exits where it's appropriate to put a truck stop in
Speaker 5: economical because they're super expensive, right, And then rest areas
Speaker 5: are very very expensive to build, Like if you look
Speaker 5: at some of these projects that the government funds, it's
Speaker 5: like sometimes it's as much as two to three hundred
Speaker 5: thousand dollars per space. By the time a project is done,
Speaker 5: it takes years to complete, and so structurally it's very different.
Speaker 5: It's just difficult to build capacity. And you know, between
Speaker 5: rest areas and truck stops, there's about seven hundred thousand
Speaker 5: spaces provided by these traditional sources. But there's millions of
Speaker 5: trucks on the road, right, and millions of them need
Speaker 5: a place to park on a daily basis, and so
Speaker 5: naturally what you see is if you talk to any
Speaker 5: driver five pm every day, the truck stops full. Like
Speaker 5: I talked to an honor operator yesterday who's parked with us.
Speaker 5: So basically what we enable them to do is fire
Speaker 5: up their phone, find a place to park, basically no
Speaker 5: matter what, any time of day and essentially almost any
Speaker 5: city at this point. And what the difference that makes
Speaker 5: for a driver. Let me explain. So I talked to
Speaker 5: an honor operator yesterday. He's parked with us fifty six
Speaker 5: times in the last year, and he's spent like obviously
Speaker 5: he's spending his own hardered money on that, but he's
Speaker 5: not just doing that and operating the same way that
Speaker 5: he would if he were just parking to the truck stop.
Speaker 5: He's thinking like, okay, Like I'm going into Denver, and
Speaker 5: Denver is a hard place to park. It's going to
Speaker 5: be seven pm by the time I get there. I
Speaker 5: have to deliver at three in the morning in the
Speaker 5: middle of Denver. I'm going to pay twenty five bucks
Speaker 5: or thirty bucks or forty bucks to park a mile
Speaker 5: from my warehouse versus parking thirty miles away at the
Speaker 5: truck stop and having to negotiate the hours of service
Speaker 5: requirements to be able to go and leave. And so
Speaker 5: that money he's spending is position He's positioning himself properly
Speaker 5: next to his delivery. He can be there on time,
Speaker 5: he doesn't have to fight traffic, he's the first one there,
Speaker 5: he gets empty, and that surety just offers him much
Speaker 5: more reliable planning, right, and that just means that just
Speaker 5: means his life is easier, right, It's less stressful. He's
Speaker 5: not driving into New York during the World Series every
Speaker 5: single day, and that's just an anecdote from a driver, right.
Speaker 2: So the key thing, though, just under stand this is
Speaker 2: a big function of this is the fact that drivers
Speaker 2: get paid by the mile and not the hour. And
Speaker 2: so if in the ideal world you have eleven hours
Speaker 2: on the road, eleven hours were allowed to be behind
Speaker 2: the wheel, you're going sixty miles an hour, maybe on
Speaker 2: average you cover six hundred and sixty miles in a day,
Speaker 2: that's a good.
Speaker 3: Day or something like that.
Speaker 2: If three hours of those are spent waiting in line
Speaker 2: for something by the side of the road because you're
Speaker 2: not sure if there's going to be parking when you
Speaker 2: hit the eleventh hour. That's three hours of your day.
Speaker 2: They're not getting paid.
Speaker 5: That's three hours gone.
Speaker 2: That's three hours of behind the road time that clocks
Speaker 2: to your that goes to your maximum.
Speaker 3: That is not compensated.
Speaker 5: Yeah, yeah, that's not compensated. And the fleet loses those
Speaker 5: productive asset hours too, right, Like there's layers to this
Speaker 5: and then all of aus you know, you multiply that
Speaker 5: across the entire trucking market and that's like a serious
Speaker 5: kind of like throughput issue for the supply chain. Yeah, Like,
Speaker 5: I can't emphasize this enough. Like still to this day,
Speaker 5: most people in the industry do not think oh they
Speaker 5: just think, oh, well, this is a problem. We all
Speaker 5: agree this is the problem. What are we going to do?
Speaker 5: Oh well, we need to wait around for the government
Speaker 5: to allocate enough money and build enough spaces to fix
Speaker 5: this problem. And that's just not going to happen if
Speaker 5: we're honest with ourselves, and it makes sense, the government
Speaker 5: should be investing in this critical infrastructure. It's needed. Great,
Speaker 5: do it get as much as we can. The drivers
Speaker 5: need it, the more of the merrier. But all the
Speaker 5: while we're adding you know, sometimes one thy fifteen hundred
Speaker 5: new spaces to our network a week, right, a week cool.
Speaker 5: And so we're at like, you know, near ninety thousand,
Speaker 5: and we're adding more spaces in a week than truck
Speaker 5: stops build an entire year. Right, And we're already have
Speaker 5: a larger more spaces than the largest truck stop chain, right.
Speaker 5: And soon we'll have more than all of them combined.
Speaker 5: And soon we'll have more than all of the public
Speaker 5: infrastructure combined. And that's going to just fundamentally reshape how
Speaker 5: drivers and fleet are able to operate. And that might
Speaker 5: sound hyperbolic to people who don't think about this like
Speaker 5: I do, but it is a very meaningful change to
Speaker 5: just the life of a driver. It just really is.
Speaker 5: And just to the pro TiVo a fleet, the drivers
Speaker 5: pay the driver's help, like, it touches turnover, it touches
Speaker 5: cargo safety, it touches all of kind of the hot
Speaker 5: topics we've talked about, Like, it's all connected to this,
Speaker 5: It's all connected. So I'm getting fired up, guys, I'm
Speaker 5: getting fired up.
Speaker 4: Yeah, we talked a lot about the supply side of
Speaker 4: the industry. Can we just discuss demand a little bit more? Like, Yeah,
Speaker 4: on a basic level, what are you seeing from your network,
Speaker 4: Are you seeing pockets where things are really hot right now, where,
Speaker 4: for instance, data centers are being constructed and things like that.
Speaker 5: Yes, you know, the components of the data centers are
Speaker 5: obviously incredibly expensive. You're talking turbines, you're talking obviously GPUs
Speaker 5: and all that super super expensive and naturally targets for theft.
Speaker 5: And so we've had direct conversations with folks building data
Speaker 5: centers and are actively working on projects to kind of
Speaker 5: help them plan. Okay, we're going to stage here, we're
Speaker 5: going to stay here, like we need locations here, and
Speaker 5: so we're actively working on that right now. So to
Speaker 5: answer your question directly, yes, yes, of course we are
Speaker 5: seeing we are seeing pockets of demand and we are
Speaker 5: seeing you know, it's it's it's interesting because we're just
Speaker 5: kind of like this. So it's hard to tell like
Speaker 5: what's seasonal and what's not when you're just kind of
Speaker 5: like this. No matter what, you know, maybe in two years,
Speaker 5: like we'll be able to like have much more. Okay,
Speaker 5: this is like this season, this is that season. But yeah,
Speaker 5: I mean the short answer your question is yes.
Speaker 2: All right, read loose to Thank you so much for
Speaker 2: coming on Odd lot. For all the trucking episodes we've done,
Speaker 2: we've actually learned quite a bit more on this one.
Speaker 2: So really appreciate you taking your time.
Speaker 5: Yeah, I appreciate you. Joe and Tracy. You guys are
Speaker 5: you guys are killing it? Joe, your Twitter game is strong, man.
Speaker 5: I I love following you. I always smash like but
Speaker 5: thanks thanks for having me on. I really appreciate it.
Speaker 4: Thanks so much for you.
Speaker 5: Thanks guys.
Speaker 2: Tracy, I'm so glad we did that episode. There's so
Speaker 2: many interesting so much interesting texture. Maybe is the word
Speaker 2: to the trucking market that is easy to not really
Speaker 2: observe if you're just looking at very simple metrics like
Speaker 2: line going up or how much physical capacity.
Speaker 5: There is in a day.
Speaker 4: Yeah, I mean it seems like a lot has changed. Yeah,
Speaker 4: for sure. It does seem like some of the things
Speaker 4: we talked about are more structural than cyclical.
Speaker 5: Right.
Speaker 4: I mean, again, who knows what the next administration is
Speaker 4: going to do, But for instance, the Supreme Court ruling
Speaker 4: saying that brokers can be held liable for dangerous halls
Speaker 4: and things like that, that would appear to be something
Speaker 4: that's going to stick around and possibly affect the industry
Speaker 4: for years to come.
Speaker 2: No, it seems like a really big deal and Red
Speaker 2: put it really well, it's like okay, like maybe there's
Speaker 2: fewer brokerages in the future, et cetera. But then it's like, okay,
Speaker 2: you might have drivers and carriers. It's capacity, right, maybe
Speaker 2: it's even safe, well trained, very fluent in English capacity,
Speaker 2: but it might not have the scale to sort of
Speaker 2: plug into whatever that sort of new network or ecosystem
Speaker 2: looks like in world with fewer brokers.
Speaker 3: Is it really capacity then at that point?
Speaker 4: And then it also means that the freight brokerage game
Speaker 4: isn't always going to be a race to the bottom,
Speaker 4: which I'm sure there's going to be a broker firm
Speaker 4: out there who complains, but like the impression you get
Speaker 4: is a little bit like you.
Speaker 2: Know, yeah, And also I think you know, one of
Speaker 2: the things that we both observed when we started doing
Speaker 2: trucking episodes is why is there still so much humans
Speaker 2: in the middle Because it's not a fungible market in
Speaker 2: the classic sense that it's very adosyncratic, kind of like
Speaker 2: the corporate bond market. Is the analogy that we use
Speaker 2: if we have to get even more gradations of safety ratings.
Speaker 2: By the way, the FMCSA, he said that term, and
Speaker 2: so I wanted to tell people what it was, the
Speaker 2: Federal Motor Carrier Safety Administration. So it's like, if we
Speaker 2: need like more gradations of safety ratings for the existing
Speaker 2: brokerages to feel comfortable with them, I'm going to Having
Speaker 2: thought about this for five minutes, I will now weigh
Speaker 2: in on policy. It would be probably helpful if there
Speaker 2: was one rating where it said, if the broker goes
Speaker 2: with this rating, they are clear in terms of these
Speaker 2: sort of nuclear settlements and these nuclear lawsuits, et cetera
Speaker 2: that could destroy a whole company. It probably would be
Speaker 2: good to have, like, at least on your part, a
Speaker 2: clear box that you can check that establishes that you've
Speaker 2: done the right thing.
Speaker 4: Credit ratings for freight brokers.
Speaker 2: Yeah, and it's like if you you know, it's like
Speaker 2: there are other there are various ways to get in trouble,
Speaker 2: but if you get the Triple A carrier, then if
Speaker 2: the broker goes with the Triple A carrier, at least
Speaker 2: on that level, they've done their due diligence.
Speaker 4: Nothing bad can ever happen today. Ratings. All right, shall
Speaker 4: we leave it there, Let's leave it there. This has
Speaker 4: been another episode of the Odd Thoughts podcast. I'm Tracy Alloway.
Speaker 4: You can follow me at Tracy Alloway and.
Speaker 2: I'm Joe Wisenthalia. You can follow me at the Stalwart.
Speaker 2: Follow our producers Carmen Rodriguez at Kerman armand dash Ol
Speaker 2: Bennett at Dashbod, Kelbrooks at Kelbrooks and Kevin Lozano at
Speaker 2: Kevin Lloyd Lisano. And for more odd loads content, go
Speaker 2: to Bloomberg dot com slash odd lots, where have the
Speaker 2: Daily newsletterned all of our episodes and you can shout
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