WEBVTT - The Trucking Episode: Why the Industry Is Such a Mess 0:00:10.920 --> 0:00:14.680 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:14.760 --> 0:00:19.680 I'm Joe Wisntal and I'm Tracy Halloway. So, Tracy, we've 0:00:19.760 --> 0:00:24.720 obviously been talking a ton on this show about supply chain, 0:00:24.760 --> 0:00:28.760 bottlenext logistics and so forth. Probably you know, we've talked 0:00:28.800 --> 0:00:30.639 about all of it, but had a We've had a 0:00:30.640 --> 0:00:34.760 pretty emphasis on ships vessels, this sort of like international 0:00:34.840 --> 0:00:38.720 freight aspect of global supply chains. I think that's right, 0:00:38.760 --> 0:00:42.040 although I feel like we're getting more and more specialized. 0:00:42.080 --> 0:00:45.479 So we started with container shipping and then we got 0:00:45.560 --> 0:00:49.360 into break book a little bit on our previous episode, 0:00:49.640 --> 0:00:53.360 and we're thinking about doing a barge episode. Now we 0:00:53.440 --> 0:00:59.040 haven't gone into I guess like land transport, but it does. 0:00:59.200 --> 0:01:02.080 It does feel like like we're working our way through 0:01:02.120 --> 0:01:04.400 all the different modes of transport. Like I wonder if 0:01:04.400 --> 0:01:06.120 we're gonna end up doing a sort of odd lots 0:01:06.160 --> 0:01:10.000 of coraical episode at some point, like the wackiest modes 0:01:10.040 --> 0:01:12.479 of moving goods. Yeah, I mean, we got that's that's 0:01:12.520 --> 0:01:15.000 the way to do. It's zoom outgo global and then 0:01:15.080 --> 0:01:18.640 start to drill down to all of the different nootion crannies. 0:01:19.000 --> 0:01:21.280 But as you mentioned we did a sort of the 0:01:21.280 --> 0:01:24.920 bulk shipping episode a couple of weeks ago, and uh, 0:01:24.959 --> 0:01:27.160 at the end we're like, Okay, we gotta go trucking next, 0:01:27.680 --> 0:01:29.800 and to now it's time for now, we gotta talk 0:01:29.800 --> 0:01:34.560 about tripping alright, the truck driving episode. It's time has come. 0:01:35.319 --> 0:01:38.319 I cannot contain my enthusiasm for this episode because I 0:01:38.319 --> 0:01:41.640 think I mentioned this before, but one of my dream 0:01:41.720 --> 0:01:43.640 jobs that I used to fantasize about was being a 0:01:43.680 --> 0:01:47.400 truck driver. I think, like, I'm sure I have a 0:01:47.520 --> 0:01:50.720 romanticized notion of what it is. And obviously part of 0:01:50.760 --> 0:01:55.680 our conversation is going to be about how difficult driving 0:01:55.760 --> 0:01:58.440 and the job actually is for those doing it on 0:01:58.440 --> 0:02:01.040 a day to day basis. But I have a personal 0:02:01.080 --> 0:02:04.240 interest in this industry and I'm really curious to hear 0:02:04.600 --> 0:02:08.240 what exactly is going on at the moment. I also 0:02:08.360 --> 0:02:12.120 have a personal romanticized interest, not because I ever aspired 0:02:12.120 --> 0:02:14.240 to be a truck driver per se, but I'm a 0:02:14.280 --> 0:02:16.880 big fan of country music and there's you know, lots 0:02:16.880 --> 0:02:19.400 of songs about truck driving. And I was a huge 0:02:19.400 --> 0:02:22.440 fan as a kid of that movie Convoy, which also 0:02:22.480 --> 0:02:25.600 has a great soundtrack of song about truck driving six 0:02:25.680 --> 0:02:28.080 Days on the Road, another good song. So I'm also 0:02:28.160 --> 0:02:31.480 very interested in as UM and I'm very excited for 0:02:31.520 --> 0:02:34.880 these episodes. So after we did that last episode, we're like, 0:02:34.919 --> 0:02:38.560 we gotta do the truck driving episode. Today's guest. Multiple 0:02:38.639 --> 0:02:41.240 people reached out and said, you gotta get on this guy. 0:02:41.560 --> 0:02:45.520 He's the obvious next one for it. Yeah, and I 0:02:45.520 --> 0:02:47.680 think it's gonna be interesting. I mean, one of the 0:02:47.680 --> 0:02:50.799 reasons let's come up is because we hear these reports 0:02:51.000 --> 0:02:54.720 of a shortage in truck drivers, which is again feeding 0:02:54.720 --> 0:02:57.280 into the supply chain issues that we've been discussing on 0:02:57.320 --> 0:03:00.359 all thoughts for the past year now. But there's a 0:03:00.360 --> 0:03:04.079 big question mark over whether or not that's actually happening. 0:03:04.080 --> 0:03:06.240 And again to to that point about you and I 0:03:06.280 --> 0:03:10.959 both romanticizing the job, like there's a disconnect. There isn't 0:03:11.000 --> 0:03:14.280 there if there is indeed a shortage, and yet people 0:03:14.320 --> 0:03:16.600 like you and I are thinking, oh, it'd be nice 0:03:16.600 --> 0:03:18.600 to drive a truck around and you know, have an 0:03:18.600 --> 0:03:21.760 opportunity to eat junk food and listen to country music 0:03:21.840 --> 0:03:25.880 and and be like Chris Christofferson and Ally McGraw and convoy. 0:03:26.560 --> 0:03:30.040 Something's going on. So I'm really interested by this dynamic 0:03:30.160 --> 0:03:34.000 and I'm looking forward to this conversation exactly right. So, 0:03:34.080 --> 0:03:36.080 as I mentioned, everyone said, you've got to reach out 0:03:36.160 --> 0:03:38.760 to this guest, so I'm very excited. We're gonna be 0:03:38.760 --> 0:03:42.080 speaking with Craig Fuller. He is the founder and CEO 0:03:42.320 --> 0:03:45.640 of Freight Waves, which which is kind of like the 0:03:45.680 --> 0:03:51.040 Bloomberg Terminal for transport, could be said. They cover transport 0:03:51.040 --> 0:03:54.440 from a news perspective, they also have data all that stuff, 0:03:54.760 --> 0:03:57.880 and he is going to tell us all about domestic 0:03:57.880 --> 0:04:00.280 truck industry and how stuff gets around at or it's 0:04:00.360 --> 0:04:02.600 unloaded from the ports. So Craig, thank you very much 0:04:02.600 --> 0:04:06.800 for joining us. Hey, Joe Tracy, great to be here. Craig, 0:04:07.080 --> 0:04:11.120 so excited to talk to um. Obviously, there's lots to cover, 0:04:11.320 --> 0:04:12.920 and of course we're going to get into all of 0:04:12.960 --> 0:04:16.039 the supply chain messes that we're seeing right now. But 0:04:16.320 --> 0:04:18.400 as always, you know, it sort of helps, and I 0:04:18.480 --> 0:04:23.320 think it's especially true in trucking to talk about what 0:04:23.360 --> 0:04:27.239 the pre crisis environment looked like, because if I recall 0:04:27.320 --> 0:04:29.839 from seeing the reporting, there was a lot of like 0:04:30.040 --> 0:04:33.440 very intense boom and bus cycles just in the last 0:04:33.480 --> 0:04:37.560 few years leading up to periods where it is very good, 0:04:37.560 --> 0:04:40.720 periods where it was weak. How would you describe the 0:04:40.800 --> 0:04:46.080 sort of health of the industry pre crisis. Yeah, So 0:04:46.120 --> 0:04:49.120 this is an industry that runs on very thin margins. 0:04:49.560 --> 0:04:53.680 So if you take the industry average in terms of profitability, 0:04:53.680 --> 0:04:57.239 typically and in a good year the industry will generate 0:04:57.480 --> 0:05:01.600 three cross profits. And so it is not an industry 0:05:01.640 --> 0:05:05.839 that is typically very profitable. There's a lot of there's 0:05:05.960 --> 0:05:08.600 very very few barriers of entry, uh. And it's a 0:05:08.640 --> 0:05:13.120 very cychnical industry. And so it's and there's reasons of 0:05:13.400 --> 0:05:17.520 when the market is good where costs go up significantly 0:05:17.560 --> 0:05:19.919 because the input costs go up. Uh. And when the 0:05:19.960 --> 0:05:24.000 market is really bad, obviously revenue you know, drives up 0:05:24.000 --> 0:05:27.320 when the economy drives its sputtering. And so because of 0:05:27.360 --> 0:05:30.720 all those reasons, it's a very cychnical industry. And so, 0:05:30.760 --> 0:05:34.440 as you mentioned, over the fast past five years, we've 0:05:34.440 --> 0:05:39.000 had two freight recessions uh in the past five years, 0:05:39.200 --> 0:05:42.320 and two big boom cycles and that was pre COVID. 0:05:42.440 --> 0:05:45.160 So you have fuel costs that are big input colls, 0:05:45.320 --> 0:05:47.200 you have labor costs that are big input costs. You 0:05:47.240 --> 0:05:52.480 have driver turnover that's a massive issue for the industry. Uh. 0:05:52.560 --> 0:05:55.599 You have a regulatory environment which continues to be more 0:05:55.920 --> 0:05:59.720 and more restrictive on home you can hire. And then 0:05:59.720 --> 0:06:03.280 you have a whole set of liabilities that the trucking 0:06:03.320 --> 0:06:07.600 companies have to accept because of you know, the way 0:06:07.640 --> 0:06:11.960 that that they manage their drivers and a responsible for them. 0:06:12.000 --> 0:06:14.839 So those drivers up in an accident, Uh, those trucking 0:06:14.880 --> 0:06:18.440 companies can be sued for tens of thirty millions of dollars. 0:06:18.440 --> 0:06:21.000 And so it's an industry that has a lot of 0:06:21.279 --> 0:06:24.880 structural challenges, but it has no bearers of entry. So 0:06:24.960 --> 0:06:28.800 anytime you see the market become really strong, like every 0:06:28.880 --> 0:06:34.240 other commodity market, there's a massive, massive boom cycle. Uh, 0:06:34.279 --> 0:06:38.880 and then when the economy slows down because you've overbuilt 0:06:38.880 --> 0:06:41.920 the capacity, the market crashes. So when you say there's 0:06:41.920 --> 0:06:46.120 no barrier to entry, could you maybe describe what that 0:06:46.160 --> 0:06:50.000 means exactly in practice and what the players in the 0:06:50.040 --> 0:06:53.200 trucking market actually are at the moment, Like, are there 0:06:53.200 --> 0:06:56.800 are a few companies that dominate this form of transport 0:06:57.000 --> 0:07:00.200 in the US, And are there also smaller players that 0:07:00.360 --> 0:07:03.360 might be enticed into it at times when they can 0:07:03.400 --> 0:07:06.480 get paid a lot of money for doing it. Yes, 0:07:06.560 --> 0:07:09.920 so the market is incredibly fragmented. So I know you 0:07:09.920 --> 0:07:12.640 guys have done a lot of shows on the global 0:07:12.640 --> 0:07:18.560 shipping market. The differences between global shipping and trucking is 0:07:18.600 --> 0:07:22.760 that ten if you take a top ten shipping carriers, 0:07:23.120 --> 0:07:28.120 they represent of the capacity. So it's a very concentrated market. 0:07:28.320 --> 0:07:31.000 In trucking, it's completely different. If you take the top 0:07:31.040 --> 0:07:34.760 ten trucking companies, you'll come up with about twelve of 0:07:34.800 --> 0:07:39.680 the total capacity. So there's no LIKESK equivalent none. So 0:07:39.800 --> 0:07:43.360 like the largest asset based trucking company is a company 0:07:43.360 --> 0:07:46.400 called night Swift out of Phoenix, Arizona, but it does 0:07:46.440 --> 0:07:49.200 about five and a half six billion dollars in revenue 0:07:49.840 --> 0:07:53.080 on an industry that does about eight billions. So if 0:07:53.080 --> 0:07:55.960 you sort of look at look at it, it's it 0:07:56.080 --> 0:08:00.720 is a very very fragmented market. Uh. And for those reasons, 0:08:00.800 --> 0:08:04.560 you have a lot of independent decision makers out uh 0:08:04.880 --> 0:08:07.680 driving a lot of the issues in the market. And 0:08:07.760 --> 0:08:10.040 so Tracy, if you wanted to go start a trucking company, 0:08:10.520 --> 0:08:12.600 you could do that today. You would go buy a truck, 0:08:12.680 --> 0:08:14.720 you would get a CDL and then you would be 0:08:14.760 --> 0:08:17.520 off to the races. There's very little that you would 0:08:17.520 --> 0:08:20.640 have to do beyond that, and so, uh, it's an 0:08:20.680 --> 0:08:25.040 industry that allows people who are looking for a level 0:08:25.080 --> 0:08:27.640 of independence and who want to own a company to 0:08:27.720 --> 0:08:31.280 go start a trucking company. Um. The challenges is that 0:08:31.400 --> 0:08:35.280 oftentimes those people don't have strong business acumen or experience, 0:08:35.679 --> 0:08:37.720 and so you have this massive boom bust cycle. I 0:08:37.760 --> 0:08:40.880 was just looking at the number of new trucking companies 0:08:40.880 --> 0:08:42.920 that entered the industry in the last thirty days, and 0:08:42.960 --> 0:08:47.560 we had eleven thousand new trucking companies that entered the 0:08:47.600 --> 0:08:51.320 industry within the past month. Okay, that's okay. Now I 0:08:51.360 --> 0:08:53.160 feel like I want to just like do an episode 0:08:53.240 --> 0:08:56.400 on this alone, but actually I want to follow up 0:08:56.400 --> 0:09:00.000 on this point. So let's say Tracy followed her dream 0:08:59.800 --> 0:09:02.200 and wanted to be a trucker and all she would 0:09:02.200 --> 0:09:05.960 have to do is buy a truck, get a driver's license, 0:09:06.040 --> 0:09:08.960 and cheese in business. The obvious. The other question is 0:09:08.960 --> 0:09:11.960 is there a plug in plane network that allows her 0:09:12.000 --> 0:09:14.560 to immediately get jobs? Like what is the process? So 0:09:14.559 --> 0:09:17.120 of eleventh, obviously it can't be too much of a 0:09:17.160 --> 0:09:20.960 relationship based business where you need to have connections. If 0:09:20.960 --> 0:09:23.800 eleven thousand companies. I have to imagine many of them 0:09:23.840 --> 0:09:26.800 extremely small, maybe one or two people connenter. So when 0:09:26.840 --> 0:09:29.960 you someone starts one of these companies, is there just 0:09:30.000 --> 0:09:32.360 some sort of automatic way where they can start bidding 0:09:32.360 --> 0:09:36.920 for jobs. Yeah. It's essentially like selling e commerce on 0:09:36.920 --> 0:09:40.160 the internet. And so there are what they call loadboards 0:09:40.160 --> 0:09:44.000 which work a lot like Craigslist, where I can take transactions. 0:09:44.040 --> 0:09:46.319 Think of it, you know, probably the best analogy is 0:09:46.320 --> 0:09:49.720 almost like an internet dating site like match dot com, 0:09:49.960 --> 0:09:56.160 where buyers of capacity, so brokers, freight brokers are essentially 0:09:56.200 --> 0:10:00.400 posting loads uh and then the trucking come but easy. 0:10:00.440 --> 0:10:04.240 The tracy and this example would be looking for loads 0:10:04.520 --> 0:10:07.400 wherever she wants to go uh for a load that 0:10:07.559 --> 0:10:11.160 meets her uh, you know what she's looking for uh 0:10:11.200 --> 0:10:13.720 and pays her what she wants to get paid. She 0:10:13.760 --> 0:10:17.120 would take those loads uh and be able to fulfill 0:10:17.120 --> 0:10:20.839 those orders. So that's a loadboard marketplace typically ran by 0:10:20.840 --> 0:10:25.720 brokers uh. And then over time she would get a 0:10:25.720 --> 0:10:29.600 couple of really close shipper relationships. And shippers and our 0:10:30.400 --> 0:10:34.200 h lexicon are the people that move that buy freight services. 0:10:34.240 --> 0:10:37.080 So these are the walmarts and the png s and 0:10:37.120 --> 0:10:39.960 the amazons that are a buying capacity in the market. 0:10:40.440 --> 0:10:43.240 And so over time, if Tracy really wanted to get 0:10:43.280 --> 0:10:47.000 out of the sort of low inside of the market, 0:10:47.600 --> 0:10:50.240 the spot side of the market, she would move into 0:10:50.280 --> 0:10:54.480 developing close relationships with one or two really good shippers 0:10:54.520 --> 0:10:58.000 that can keep her trucks moving at all times. And 0:10:58.040 --> 0:11:01.400 so typically when you start in the industry, you're either 0:11:01.400 --> 0:11:04.079 going to start as a truck driver as an employee driver, 0:11:04.200 --> 0:11:06.560 so you go work for a trucking company doesn't require 0:11:06.600 --> 0:11:09.079 you to go buy a truck. You would have become 0:11:09.080 --> 0:11:12.080 in the other path, has become an owner operator and 0:11:12.120 --> 0:11:15.360 signed up under a trucking authority. So a big trucking 0:11:15.440 --> 0:11:19.160 company would contract you and you would be contracted to 0:11:19.360 --> 0:11:22.720 them and they would help find loads for you. And 0:11:22.840 --> 0:11:28.080 now we have this sort of digital marketplaces that are 0:11:28.160 --> 0:11:33.280 both the traditional load boards or electronic apps where you 0:11:33.320 --> 0:11:36.079 can just download it like an Uber and if you're 0:11:36.080 --> 0:11:38.040 an Uber driver, you can get loads from that app. 0:11:38.080 --> 0:11:41.720 It's a very similar set of marketplaces and trucking where 0:11:41.760 --> 0:11:45.120 you can find orders that will allow you to keep moving. 0:11:45.200 --> 0:11:48.880 So effectively, Tracy, you know, if you decided you want 0:11:48.880 --> 0:11:52.360 to become a started trucking company. Within a couple of weeks, 0:11:52.440 --> 0:11:54.400 you could have a truck, you could have your cd 0:11:54.640 --> 0:11:57.120 L and you would be off to the races. And 0:11:57.960 --> 0:12:00.760 in this market probably making two d thousand dollars a 0:12:00.840 --> 0:12:04.239 year in gross revenue and your cost of good sold 0:12:04.360 --> 0:12:07.120 or you're operating costs to be about a hundreds and thousands, 0:12:07.120 --> 0:12:10.680 so you would make in profit today about a hundred thousand. 0:12:10.800 --> 0:12:14.040 Now here's the challenge the market if it collapses, and 0:12:14.120 --> 0:12:15.719 it will at some point. This is a boom and 0:12:15.760 --> 0:12:18.679 bus cycle. So at some point you would go from 0:12:18.720 --> 0:12:24.120 making two hundred thousand to probably uh in revenue to 0:12:24.280 --> 0:12:27.320 about eighty thousand, and your operating costs would say consistent, 0:12:27.440 --> 0:12:29.400 so you would actually end up losing. And that's what 0:12:29.440 --> 0:12:32.640 causes this bankruptcy cycle that we see a lot. So 0:12:32.760 --> 0:12:36.200 I have so many questions, but I mean, number one, 0:12:36.320 --> 0:12:41.400 this idea of drivers choosing a load or a route 0:12:41.440 --> 0:12:43.280 that they want to take. It reminds me a lot 0:12:43.360 --> 0:12:47.320 of the way airline pilots bid for individual schedules, like 0:12:47.360 --> 0:12:51.240 typically at the airline that actually employs them, but they 0:12:51.280 --> 0:12:53.360 do kind of have the system where they can choose 0:12:53.800 --> 0:12:56.320 where they want to go. And then I guess my 0:12:56.480 --> 0:13:00.719 big question based on that is is there actually a 0:13:00.800 --> 0:13:05.319 trucker shortage? If we have eleven thousand new trucking companies 0:13:05.640 --> 0:13:11.120 being created, it seems like things are moving. It seems 0:13:11.200 --> 0:13:14.920 like truck drivers have some flexibility in the routes that 0:13:14.960 --> 0:13:18.680 they're choosing to take. I guess I'm curious, like, is 0:13:18.679 --> 0:13:23.000 it an actual shortage or our truck drivers just avoiding 0:13:23.679 --> 0:13:29.080 certain routes or certain types of work in the market. Tracy, 0:13:29.120 --> 0:13:33.120 I'm so glad you asked this question because oftentimes people 0:13:33.200 --> 0:13:37.440 talk about a quote unquote driver shortage without really exploring 0:13:37.480 --> 0:13:39.480 what that means. And so I don't like the word 0:13:39.559 --> 0:13:43.079 driver shortage because it's it's a term that is actually 0:13:43.559 --> 0:13:46.520 doesn't really explain much in terms of what's actually taking place. 0:13:46.559 --> 0:13:50.679 And so the way I think of the industry constructs 0:13:50.720 --> 0:13:55.880 are a driver shortage is really a truck, a trucking company, 0:13:56.000 --> 0:13:59.240 a fleet that doesn't have a driver. They have a truck, 0:13:59.240 --> 0:14:00.960 but they don't have a drive before that truck. That's 0:14:00.960 --> 0:14:03.560 a driver shortage the way we would describe it at 0:14:03.559 --> 0:14:07.200 freight waves. And then you have capacity shortages, which is 0:14:07.400 --> 0:14:11.280 which are imbalances between supply and demand. Now you can 0:14:11.320 --> 0:14:14.280 have a driver shortage and a capacity shortage at the 0:14:14.320 --> 0:14:17.760 same time. So a fleet or across the entire industry, 0:14:17.880 --> 0:14:21.200 you can have driver shortages so we have more trucks 0:14:21.240 --> 0:14:24.160 than we do drivers to drive them. That does happen 0:14:24.720 --> 0:14:28.400 um and then you can also have capacity shortages, which 0:14:28.440 --> 0:14:31.920 means there's more freight demand than there are trucks to 0:14:32.560 --> 0:14:36.560 haul it, or you can have a capacity glut at 0:14:36.640 --> 0:14:39.160 the same time. So so if you think about it 0:14:39.160 --> 0:14:43.680 from the perspective of what's happening right now, is there 0:14:43.760 --> 0:14:47.600 is a capacity shortage because the demand is so high. 0:14:47.680 --> 0:14:51.120 And so just using the term driver shortage at times 0:14:51.240 --> 0:14:54.040 doesn't really describe what's happening. Because back in two thousand 0:14:54.120 --> 0:14:59.600 nineteen we had a capacity glut, but some trucking companies 0:14:59.640 --> 0:15:02.920 have uh didn't have drivers to fulfill the trucks, but 0:15:02.960 --> 0:15:05.320 they didn't need to because there wasn't enough freight to 0:15:05.440 --> 0:15:09.520 actually create demand on those trucks. I have a sort 0:15:09.520 --> 0:15:12.520 of very quick question, and it just again goes back 0:15:12.560 --> 0:15:16.560 to Tracy's company that she's going to launch. Are there 0:15:16.600 --> 0:15:21.480 actually trucks for sale? Yeah, so there's a used market 0:15:21.920 --> 0:15:24.600 now you can't today get a new truck. So the 0:15:24.680 --> 0:15:27.800 issue is that this is an asset. So the other 0:15:27.880 --> 0:15:31.720 thing creates real economic issues for trucking companies typically that 0:15:31.800 --> 0:15:34.360 own assets. If you think about owning assets, if you 0:15:34.360 --> 0:15:38.320 own a building or a warehouse, you're gonna that asset 0:15:38.440 --> 0:15:42.720 over time should appreciate and over time, uh, you're gonna 0:15:42.720 --> 0:15:44.840 hold onto that for thirty years. Even in the shipping 0:15:44.880 --> 0:15:48.080 industries you guys have covered, those ships have life cycles 0:15:48.080 --> 0:15:50.440 of twenty to thirty years. And so if I go 0:15:51.000 --> 0:15:54.680 buy a ship, I'm able to operate that ship for 0:15:54.720 --> 0:15:57.960 thirty years. In trucking, I'm only going to be able 0:15:58.000 --> 0:16:01.480 to operate that truck for three years. Uh. And so 0:16:02.080 --> 0:16:04.160 so really, as I run that truck and put as 0:16:04.160 --> 0:16:06.680 many miles as I can, there is a secondary market 0:16:06.760 --> 0:16:09.320 for that uh. And so typically what happens is the 0:16:09.400 --> 0:16:13.520 larger fleets or the owner operators that run nationwide will 0:16:13.600 --> 0:16:16.080 end up running the truck for three years, and after 0:16:16.440 --> 0:16:19.160 the three year cycle, they will end up selling it 0:16:19.200 --> 0:16:22.320 into a secondary market, which will end up going to 0:16:22.920 --> 0:16:26.440 more localized operations support operators, people that don't have as 0:16:26.480 --> 0:16:29.800 strenuous sort of over the road long haul demands. And 0:16:29.840 --> 0:16:33.400 so because of that, the trucking companies have to go 0:16:33.440 --> 0:16:35.760 out and buy new trucks every three you know, they're 0:16:35.760 --> 0:16:39.080 constantly buying new equipment. So you have this really big 0:16:39.120 --> 0:16:43.160 issue where the you know, trucks don't hold their value 0:16:43.240 --> 0:16:46.200 so based on what cycle or in in terms of 0:16:46.200 --> 0:16:48.800 boom or bust, depends on how well they do, and 0:16:48.800 --> 0:16:52.360 so that's a pretty significant issue. But right now, use 0:16:52.440 --> 0:16:55.520 trucks have gone up about in the last three months. 0:16:56.000 --> 0:16:59.040 So it's good if you own equipment and you can 0:16:59.080 --> 0:17:02.280 sell that equipment. If you have too many trucks and 0:17:02.320 --> 0:17:05.119 not enough drivers, you're you're doing quite well because your 0:17:05.160 --> 0:17:08.280 balance sheets have really really improved, and so we're actually 0:17:08.280 --> 0:17:10.200 seeing a lot of that. But ordering a new truck 0:17:10.240 --> 0:17:13.159 here about nine months out to get it. If you 0:17:13.280 --> 0:17:16.240 ordered a truck today, it would take you approximately nine 0:17:16.280 --> 0:17:18.800 months to get it, and that is assuming that they 0:17:18.840 --> 0:17:21.040 will even take your order. Right now, a lot of 0:17:21.040 --> 0:17:22.840 the O. E. M s are not actually accepting new 0:17:22.880 --> 0:17:27.520 truck orders. Just going back to truckers for a second, 0:17:27.560 --> 0:17:30.000 because you know, my new trucking company, we obviously care 0:17:30.040 --> 0:17:32.920 about the equipment, but we care very much about our 0:17:33.480 --> 0:17:37.280 human capital as well. But my understanding is that there's 0:17:37.320 --> 0:17:41.119 a lot of turnover among drivers too, So you know, 0:17:41.480 --> 0:17:45.800 trucks might get worn out after three years. Drivers might 0:17:46.040 --> 0:17:49.040 get worn out in even less time and leave the 0:17:49.080 --> 0:17:55.040 industry altogether. Could you maybe describe how desirable is being 0:17:55.080 --> 0:17:59.439 a truck driver as an occupation at the moment. So 0:17:59.560 --> 0:18:01.119 Joe and I talked about how we both have a 0:18:01.200 --> 0:18:04.440 sort of romanticized view of it, could you maybe um 0:18:04.480 --> 0:18:06.760 tell us what it's really like and how it stacks 0:18:06.840 --> 0:18:09.800 up against the money that you're actually being paid to 0:18:09.960 --> 0:18:14.480 do it at the moment. The realities are quite different 0:18:14.560 --> 0:18:17.359 than your romanticized view of the industry. It is a 0:18:17.440 --> 0:18:20.560 tough job. So if you're an owner operator, you will 0:18:20.640 --> 0:18:23.280 make in this market because the demand is so high, 0:18:23.600 --> 0:18:25.560 you would do quite well. You know, you probably wouldn't 0:18:25.600 --> 0:18:29.080 have a hundred thousand dollars as a employee driver. You're 0:18:29.080 --> 0:18:32.040 probably going to be making about fifty five to sixty 0:18:32.080 --> 0:18:35.720 thou dollars as an employee driver per year, and you're 0:18:35.760 --> 0:18:38.200 gonna be paid on a per mile basis. Um you're 0:18:38.200 --> 0:18:41.760 gonna you're gonna run your truck or drive or work 0:18:42.240 --> 0:18:45.240 about fifty six hours on a given week, so it's 0:18:45.240 --> 0:18:48.600 not a forty hour week. You're actually working fifty six hours. 0:18:48.600 --> 0:18:52.600 But here's the reality is you're not at home every 0:18:52.640 --> 0:18:55.359 single night. The vast majority of the drivers, you're actually 0:18:55.400 --> 0:18:58.520 out and so while you may not be on duty 0:18:59.280 --> 0:19:01.240 that you know, the six hours in a given week, 0:19:01.720 --> 0:19:04.280 you're you're still at a truck stop. You know, you're 0:19:04.320 --> 0:19:07.120 still dealing with sort of being out over the road. 0:19:07.160 --> 0:19:09.359 So it's it's really it creates a lot of strain 0:19:09.440 --> 0:19:12.760 on families. Uh, it creates a lot of strain on people. 0:19:12.760 --> 0:19:15.639 It takes a special kind of person to want a 0:19:15.720 --> 0:19:17.760 life where they're out in the road. It's it's a 0:19:17.840 --> 0:19:20.080 job that's very dangerous. It's one of the most dangerous 0:19:20.160 --> 0:19:24.280 jobs in America. It's a job that has very high 0:19:24.400 --> 0:19:28.639 occupational issues in terms of health. You're sitting in a 0:19:28.680 --> 0:19:31.159 truck for a you know, you're driving for eleven hours 0:19:31.200 --> 0:19:35.119 a day, you're sitting, which you know, drivers have high 0:19:35.240 --> 0:19:39.720 incidents of obesity and diabetes. So it's not a great lifestyle. 0:19:40.119 --> 0:19:43.679 Uh and uh. For all of those reasons, it's not 0:19:43.760 --> 0:19:47.679 a desirable job for for a large percent of the population. 0:19:47.800 --> 0:19:52.000 And the Unfortunately, the industry salaries have not kept up 0:19:52.040 --> 0:19:55.879 with a lot of the competitive industries which they compete 0:19:55.920 --> 0:20:01.120 for labor like warehousing, construction, other types of industries which 0:20:01.160 --> 0:20:19.240 tend to pull the same labor of course, so I'm 0:20:19.240 --> 0:20:22.840 curious like on this, like what were there and you 0:20:22.880 --> 0:20:26.119 alluded to this at the very beginning the workplace trends, 0:20:26.200 --> 0:20:29.959 But what was the trajectory of sort of people entering 0:20:30.480 --> 0:20:33.800 the workforce making their careers as truck drivers. And then 0:20:33.960 --> 0:20:37.840 in this particular spike, has there been any like um 0:20:38.000 --> 0:20:41.240 pay dynamic or any increase in wage that has perhaps 0:20:41.320 --> 0:20:44.240 brought people off the sidelines either to get back into 0:20:44.320 --> 0:20:47.000 trucking or to get their c d L. Yeah, so 0:20:47.080 --> 0:20:50.159 let's let's talk about two things. One is there's effectively 0:20:50.200 --> 0:20:54.600 two separate markets between the employee driver market, which is 0:20:54.640 --> 0:20:57.640 someone who goes and gets a job at a trucking company, 0:20:57.960 --> 0:21:01.359 which is actually seen a three there's three percent less 0:21:01.440 --> 0:21:06.399 truck drivers today that work for fleets then there were 0:21:07.480 --> 0:21:09.919 pre COVID, so we actually lost three percent of the 0:21:09.920 --> 0:21:14.640 industry that the driving force of employees. And then we've 0:21:14.680 --> 0:21:18.520 seen an increase in eleven thousand trucking companies in the 0:21:18.600 --> 0:21:22.600 last month. Those are not employees, those are essentially fleet 0:21:22.640 --> 0:21:25.960 operators that are in that So we've seen some a 0:21:26.000 --> 0:21:28.040 lot of growth in the owner operated market of the 0:21:28.040 --> 0:21:30.040 spot market because they can make a lot more money. 0:21:30.440 --> 0:21:35.280 And we've seen a shortage in the UH employee drivers 0:21:35.480 --> 0:21:39.040 UM and so turnover typically in a trucking companies a 0:21:39.119 --> 0:21:42.840 hundred and fifteen because a lot of people end enter 0:21:42.920 --> 0:21:45.320 the industry but don't really know what they're getting into. 0:21:45.440 --> 0:21:48.120 They have this sort of I don't you know. Tracy 0:21:48.240 --> 0:21:50.479 has this sort of idolized view of how great this 0:21:50.560 --> 0:21:53.639 is going to be, and she enters the industry. She 0:21:53.720 --> 0:21:57.320 goes to a trucking school and is excited about her 0:21:57.320 --> 0:21:59.840 career for the first couple of weeks and then realizes 0:22:00.119 --> 0:22:03.520 just how tough UH it really is to be a 0:22:03.520 --> 0:22:06.240 truck driver, and so she ends up quitting and deciding 0:22:06.320 --> 0:22:08.199 it's not a great job for her, and so she 0:22:08.359 --> 0:22:10.959 ends up going to work at a at a warehouse 0:22:11.080 --> 0:22:13.880 or ends up going to do construction where she can 0:22:13.920 --> 0:22:17.440 make today more money than she can be for it 0:22:17.520 --> 0:22:19.080 can be a truck driver. And so there's just a 0:22:19.119 --> 0:22:21.800 lot of structural issues that are there just for the 0:22:22.000 --> 0:22:24.800 how long H is truck driving school? How long would 0:22:24.840 --> 0:22:27.480 it take an average person to go from never having 0:22:27.560 --> 0:22:31.919 driven a truck to being UH licensed UH six to 0:22:32.000 --> 0:22:34.560 eight weeks um and it depends. And this is in 0:22:34.600 --> 0:22:37.640 a in a COVID world, truck and schools have shut down. 0:22:37.680 --> 0:22:40.000 So this is the other issue is that if you 0:22:40.160 --> 0:22:42.119 sort of look at it, a lot of states didn't 0:22:43.040 --> 0:22:47.000 treat trucking as a critical job or a truck driving 0:22:47.000 --> 0:22:49.679 schools is a critical job. So they were basically a 0:22:49.680 --> 0:22:52.080 lot of them were mandated to be shut down. And 0:22:52.160 --> 0:22:54.960 so a large percent of the people that enter the 0:22:55.000 --> 0:22:59.399 industry that become employee drivers enter through the truck driving schools. 0:22:59.440 --> 0:23:02.080 When we lost twenty percent of them and even the 0:23:02.119 --> 0:23:07.639 ones that did have survived were actually shut down for 0:23:07.800 --> 0:23:10.040 months a couple of months, and so there was this 0:23:10.080 --> 0:23:15.040 big shortage of bringing new people into the industry, uh 0:23:15.320 --> 0:23:17.280