Market Rate Index/Analysis

We have had under capacity before. Think de-regulation and more recent 2003-04. It's not hard to fill the equipment need,it's still sitting on the dealers and carriers lots. Most figures come from the "pool" of large carriers. What these reports ignore,because it doesn't fit into the rosy picture of more money,is that while these carriers have dropped otr truck capacity they have increased the inter-modal. JB Hunt has cut the otr almost in half since 2006,yet the inter-modal has doubled. As far as the large carriers brokering,they always have. I'm sure that you know you can "broker"excess contract freight with no broker authority. The mega carriers have always done this with the smaller(compared to them)carriers. The push to the outside carriers has worked well while freight has been in decline but doesn't work as well when it rises. Take CHR. With the decline in freight their net ratio increased. They were able to keep a higher percentage with less cost. Right now the larger carriers have the ability to increase 15-20% just by more efficient utilization of current equipment. 1800-2000 miles per week(7 days) became more the norm as freight slowed. There is much that can be picked up from that alone.

 

BBB, I questioned the data due to first hand knowledge of the artifacts, along with a suspect source with established motivation to skew statistics to attract subscribers. But then I tend to see the worst in things.

However, I don't disagree much with your prediction. I read the B section of the WSJ every morning. All sectors are ramping up production to meet renewed demand. Some more than others. I don't pay as much attention to building starts and manufacturing as a guy like you with a flatbed might. But I do watch the news about commodities that I haul more closely, which tend to be things people eat.

Historically, deep recessions are followed by a decade of recovery and growth. IMO that started last year. I don't believe that rates will "skyrocket" or that there will be huge constraints on available trucks. I do believe that if you stay on top of the news and put your truck in the right place, you will make better money with less effort than you did over the past year or two at least.

And as much fun as I have busting your balls about the CSA topic, I'm seeing a further separation of the market with every month that goes by. IMO that will be a bigger factor on the spot market we play in, than it will ever be in the contracts arena. Small carriers don't have the big bucks to reorganize and buy their way past a risky safety score like the mega-carriers do.

 

It would be interesting to hear how opinions have changed in the last 2 months since this thread ran.

 

Small carriers don't have the big bucks to reorganize and buy their way past a risky safety score like the mega-carriers do.

Can you explain this statement please? There are supposed to be checks in place to prevent a carrier from folding tonite and reopening tomorrow......is that what you mean?

Or are you referring to multiple divisions under multiple DOT numbers? My ex carrier had that, 4 divisions and 5 DOT #s. He advertised the 5th number but didn't run any freight under it so it stayed clean for customer inquiries..... He also played coconut shells with his Canadian division numbers.

 

I say more of the same, just bouncing around the bottom. But I don't get out much! BBB must have an opinion.

 

All of the above, but mainly the latter. There is tighter scrutiny on attempts to "cleanse" a bad carrier. However, with enough money, complexity, and size, I am certain it would be easier to get away with it somehow.