Going against the grain

Of course they've been trending great for the last 3 years, they were at unsustainable lows previous to that. I'd like to hear your thoughts on adjusting to the economy when spot rates are below your operation costs? IMO, the only adjustment is to get lean enough that your savings will get you through to the upswing. You do that by laying off and either selling equipment at low market prices or mothballing it, if you get your insurance company to cancel the insurance on a unit without selling it. Your o/o's will be starving as well, looking for a better deal daily. The big companies,however, that rely on contracted freight rates will hurt less, though they'll be getting lean just like the small company due to decreased volume and margin. I'm not trying to be argumentative, but your position on the matter contradicts recent history.

 

US economic growth has everything to do with exports. I think companies like CAT would agree. The only way exports would not not matter is if we stop importing. Some of the growth like in housing, I would wager is linked to oil & NG, & I would bet that most of the higher end growth is in places like Texas & North Dakota. When oil starts to decline this time of year it shows that there is no market for it. It's coming up on driving season and oil has cracked the $90 threshold, if it continues the downward trend, so goes the false recovery. I was flatbed spot market as well, and one key state that I gauged, is at less than half of available loads that it was prior to the initial collapse, that's not good. I know I a pessimist, but we are no where near a real recovery, and we are skating on extremely thin ice.

 

"Now, in 2006, data like we are seeing today was coupled with record new truck orders. But that is not the case these days. Truck orders are for replacement and not increasing capacity. Who doesn't love to hear that?"

Again I'm a pessimist!! IMO I think O/O that base their future on partnering with large carriers are eventually going to be at the mercy of those large carriers. I have hauled for hundreds of brokers big and small so I'm not for or against large carriers/brokers. The trend I see is smaller brokerages selling off to or merging into bigger companies. This is bad for the same reason partnering with only them is bad, they will eventually control the market. IMO the reason why there is no huge truck purchase, is because mega carriers have a much better grasp and inside knowledge to what is actually going on in the markets they serve. Mega brokers will eventually fade as well as mega shippers are moving toward asset based companies to move freight. If mega brokers want to survive they will begin to purchase small trucking outfits, example would be Sammons & UTI. So the pessimist in me says although it's good that there is going to be a short term shortage, it will not be long standing and when the recovery is real mega carriers will gobble up trucks & available freight. But what's good BBB, if you can continue to grow, you could become the next Landstar or Sammons.

 

im new to the industry will have cdl in hand in 3 weeks and have a great attitude i ran a successful construction business for 10 yrs then went to work for a construction management company and am 37 yrs old and just plain ready to do something different and have always had love for big trucks since i was a kid and i am going to chase my dream of having a small fleet of trucks I need t learn this business and move forward and i pick up as much info from anyone willing to teach I want the truth and cold hard truth and I know some things just have to be learned the hard way but I try to eliminate as much of that as humanly possible thanks guys for listening to me and posting all this great information Josh

 

Pre collapse I saw freight rates around 10K loads available in my go to state, now they are at 4k-6k on good days. So I would say once those rates are around 7k-8k consistently we a starting a real recovery. Keep in mind I'm not saying that it's not impossible to make it now, or now isn't a good time to start, because it depends on the person starting. I'm just stating what I've seen since 2006 compared to today, and I think we have a few years to go before it gets great, or after my hiatus.

 

Not micro in my area, but in my go to gauge state. I check spot market by checking this one state, the reason is, I've followed this state for several years, I know it's peaks and valleys. This state has a great mix of flatbed freight, not like a California where one can be fooled during onion season, or the Dakotas when hay is moving. Truck to load ratios are often off because you may have 100 trucks(exaggerated) but only 1 ITS account. There isn't a real accurate way of calculating trucks in a specific area, other than going around and counting them, so I wouldn't use this as my indicator, but I would use it as a negotiating tactic if in my favor. Loads can be double posted as well or same load posted by many brokers, so this could throw off the ratio TR/LD. LTL is a good indicator, but for my example of 10K I excluded it. If your talking freight not economy, rail has no relevance to me what so ever as to how the spot market industry is doing. If your talking economy, well you saw what I think of that. lol

http://www.cnbc.com/id/47627947 More doom & gloom by a pessimist!!!!
http://www.cnbc.com/id/47634203