Point of oversaturation in the trucking industry?

Discussion in 'Ask An Owner Operator' started by TylerHarris96, Aug 27, 2018.

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  1. Final Drive

    Final Drive Road Train Member

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    Well we all need to get together and vote for the right direction..
     
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  3. Midwest Trucker

    Midwest Trucker Road Train Member

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    It’s a collective combination of experience, gut, and a lot of studying what’s happening in the country.

    I follow politics and the economy extremely closely. Not necessarily what the news is saying but what really is going on that is never reported on.

    There are your normal reports like the weekly DAT report, the Cass freight index, and typical fleet owner and overdrive for owner ops mag. However, most reports and expert data is 3 to 6 months behind what is really going on today. If you run the spot market, that is probably your best pulse on the economy that one can have. Look at load volumes, look at the volume of trucks. Check different lanes and see what is being offered as far as highest posted rates go. Look on the weekends and see if there is still high demand or if it’s quiet. Look after hours and see if brokers are still clamoring to move freight. Drive to your local KW dealer and see if the lot is empty of trucks. Go renew your plates and see if there is 5 guys in front of you all applying for new authorities. Pay attention to how difficult it is to find owner ops, how difficult it is to find local drivers. How many are being sucked up by local dump truck outfits. Look at how many new truck orders there are. July had a new record 55,000 new class 8’s when July is typically a slow month. Look into wage growth, consumer confidence, unemployment, workforce participation, new unemployment filings, inflation, interest rate hikes, retail sales. What is Steve Munchin saying? Wilbur Ross? What is the President REALLY doing not what the media says. Follow the tariff war, H2 visas, and so on. Follow companies on the stock market, those investors, the big ones that matter, know wth they are doing. 2015, 2016, and early 2017 were bad for trucking, but things started taking off and look at xpo for example. You will see it start climbing, you will see it on the spot market. This late summer slow down made the freight market lose around 30 cents per mile, yet volume was still thru the roof, this means there is prob 100k more trucks on the road then this time last year. Look at short holiday weeks and how that affects rates. Right now it doesn’t affect much at all, but say this past new year it still affected it very much greatly. It gives insight into the supply/demand and where it’s at in regards to an equilibrium.

    That’s really off the top of my head but just dive in and notice changes, notice trends, be observant. This all helps develop your gut and then over years adds to your experience and predictability of what will happen. 2013 and 2014 were good, then bad as I said, now followed by a year to year and a half of boom times. Part of that is a perfect storm of ELD, herd already thinned, and booming economy. Like I said in my first post eventually even if things continue great, there will be such a glut of trucks rates will recede. What you don’t want is a perfect storm the opposite way of truck glut, slowing economy, and reg changes that increase tonnage per truck. That would be doomsday just the opposite of the boom that’s happening now.

    Moral of the story is get it while you can, don’t over extend yourself, stack your money up, and be ready for the next hard times. They WILL come and if you can bridge the gap from good, to bad, back to good then you will be a real deal trucker.

    Good luck!
     
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  5. m16ty

    m16ty Road Train Member

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    If he knew that with certainty, he wouldn’t be trucking, he’d be sitting on the beach counting his money.

    He’s probably right though, but there is a chance it could be 6 months, could be 2 years. It’s just the same cycle that has been going on as long as there have been trucks.
     
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  6. roadtech

    roadtech Medium Load Member

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    It's a fact of capitalism that we have up and down cycles with the economy. It will never continually go up forever or down there's "runs" in both directions ,how long no one knows for sure ,but as stated here by other posters there are determining factors to how long it will go in one direction ,not counting things like war,stock market crashes,new technology etc. The driver shortage and ELD mandate is a perfect storm for lessening capacity in a strong economy and driving up rates. The driver shortage is real due to many factors also. The average driver is in his mid 50's ,millennials never really went into trucking. You will rarely see a young driver get out of a truck ,maybe a 30 something year old ,but many drivers are in their 40's,50's,60's and older.I know a driver who is 76 and is a cross country car hauler.Almost every company I know is short drivers and has equipment sitting. Wages still haven't kept up with other trades and professions but they are starting to creep up .Some companies will pay very well for an experienced driver with a clean record. I was offered $2500 a week by a company to haul cars in
    Very nice equipment recently, that was one way from the East coast to the Midwest . The load payed $10,000 and the driver made 25% and went to 30% in a year. The company just signed a 5 year deal and was adding more trucks .If more companies paid like that more people would enter the industry. If the Mega trucking companies get their way and flood the industry with foreign drivers like they want to ,to fill there trucks with low wage workers it will definitely hurt the industry,and help to suppress rates and wages and flood the market with more trucks .
    One thing I will say is there will never be an over saturation of good,professional,experienced drivers with a
    Strong work ethic,clean driving record and background and great positive attitude .Whether owner operator or driver , If you can become that driver you will never want for work.
     
  7. Buckeye 60

    Buckeye 60 Road Train Member

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    this current economic boom was caused mainly by the tax cuts and the cutting of regulations and general vast improvement in general buisness climate so I think it will last longer than a year ... the 179 deduction for buisness will lead to expansion and improvement and replacement of buisness property. ... to save on taxes ..... I think we should have a few years unless the dems win the president in 2020 ...... on the trucking side of things the only thing that bothers me is the influx of foreign drivers that probably will happen. . the18 year old experiment will hopefully fail I think most 18 year Olds will not be able to handle life on the road. ...... but that opens up a whole new pool of drivers for the mega mills to exploit if it does get approved. it's going to be a lot harder to recruit for companies because there are plenty of jobs out there and they are good jobs with high pay
     
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  8. DSK333

    DSK333 Road Train Member

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    The megas hire young drivers almost exclusively. I see it every single day in more than half of the entire nation.
     
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  9. Buckeye 60

    Buckeye 60 Road Train Member

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    that's going to be the kicker if this 18 yr old thing goes through they will be trained by people who need more training themselves . if you think it's hard to get fuel now just wait
     
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  10. Midnightrider909

    Midnightrider909 Road Train Member

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    I would rather have American 18-year-olds driving trucks then a bunch of guys from Croatia and Somalia.
     
  11. DSK333

    DSK333 Road Train Member

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    I agree. One shouldn't be eligible to hold a CDL unless they're a natural born citizen. First generation immigrants should be barred.
     
  12. Ridgeline

    Ridgeline Road Train Member

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    So midnight, you turned to Rutherford to get your answers when you were clueless?

    He is just as clueless.

    He is OK for some info, but his operation is not like all of ours. He makes more money shilling for products on his show than he seems to be with his little trucking operation.
     
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  13. Midnightrider909

    Midnightrider909 Road Train Member

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    I never was clueless, at least not since I took Economics and learned about supply and demand. There are a number of factors that indicate rates are going to stay high or get even higher. Forcing ELD’s on trucking has resulted in the reduced capacity. Trump has demonized immigrants and has made it harder for Mega-carriers to import cheap labor. Truck drivers are getting older and younger people don’t want to enter their profession which means the value of a drivers labor is going to increase over time just through attrition with retirement. KR has an entertaining show but he’s not my sole source of information.
     
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