Rates are crashing and fuel to the moon!

Bank of America may claim that "truck demand" is near a floor, but anecdotally I'm not seeing it yet. Like a lot of you, with OTR rates being so bad, I've been hauling van loads in the 150mi to 300mi range for around $3.80 to $4.60 per mile. These to drops which at least have a chance of getting a back-haul (and more if it's to a black hole). But just in the last two weeks, spot market rates for even short hauls seem to have now fallen into the sub $3.00 range. I've pretty much just not been driving at all. My mother's house keeper makes more money than this...

 

This week appears to be the worst in a few months in Chicago outbound market. It must be that anticipated downslide towards the end of January. It is now 8:40 am and there's only 1000 loads in Chicago 100 mile radius. With this low volume, the strategy of waiting till the last moment to book the last minute freight is not too good now. Even the current snowy weather does not help matters. The low volume is the problem and will be for some time. Maybe that's for the better. If the rates, on average, drop below 2 dol per mile, it will have a catalytic effect on capacity, and those with the least overhead will be able to re-emerge stronger.
That should have been the case in 2020, during the Covid lock - downs. Instead, those who were about to inevitably sink, releasing their capacity, were bailed out by enormous PPPs and EIDL loans. It was not uncommon for an owner of one truck and trailer to obtain up to $150 000 in the bail out money.
We are talking about tens of thousands of such o/os. One can only imagine the amounts given to those who had fleets of 10 trucks or more... Had the capacity, at the time, been naturally adjusted by mere market forces, perhaps now, we wouldn't have to endure the more prolonged rate draught and abnormal equipment prices. Inflation is one thing, but new truck and trailer prices are mostly resulting from the opportunistic motives seen by the manufactures. Most of that money, that was supposed to be directed towards hardships resulted from the pandemic, instead, it was more or less directly used towards new or newer equipment acquisition. I vote for no more bail outs.

 

This month I only ran 6700 miles. Total of 7 trips. 2 weeks of work took 3 weeks to do. Loaded averaged $2.34 pm. $ 2.00 pm including D.H. Fuels right around .80 cpm. It’s so bad I bought Generic Peanut Butter, for the first time in my life, couldn’t afford the Jiffy.

 

SHUT IT DOWN

SHUT IT DOWN

SHUT IT DOWN

 

It's interesting the brokers have been REALLY quiet through all this gutter rate period.

 

It’s definitely gets worse by the week although I’m picking a load up Monday that’s 1200 miles posted at $2.33/mile. I offered $3/mile and after 2 hours broker called back and gave me the $3. January will be right at 11,000 miles averaging $2.74 loaded. It seems like the fuel discounts have all but disappeared. Fuel went up and discounts went down. I’m averaging $.15/mile more for fuel in January than December.

 

so broker gave the load at $3 or you took it for 2.33? Not sure

 

Yes that doesn’t read very clear. They accepted my $3

 

The weeks after Christmas and New Years felt like good old days. I just would post my truck and start answering non stop phone calls.
Booked $3800 on 750 miles MI to Upstate NY, $1400 on the way back (400 miles load, but deadheaded a lot), MI-VT-MA 1150 miles two days load $5000, $2400 850 miles back, MI-NY 600 miles $3500 , $1200 on the way back. All easy dry van loads.

Was expecting for everything to die out into the 4th week of January, but it happened during the 3rd. Booked MI-VT $2500 on 800 miles, then $1400 for 700 miles to IN (plus 150 miles deadhead,so 850 total), then $700 IN to MI and went home. This week was a bit better, $6200 on 2400 miles in 4 days.

I dispatch two other trucks and my brain is getting fried from making so many calls and trying to negotiate. I might just stay home for the next two months, or only drive 2-3 days per week.
Prices and loads availability are dropping every day. So many people I know are hurting right now. Heck one buddy called me on Sunday, saying he is sitting at the truck stop in GA with no money for fuel to get back to FL (he also owns two other trucks with team drivers in each, both trucks generating less than $6k per week). Another one has $7k in the bank account and that's it, that's basically one medium sized repair from being out of business.

I am still confident in myself to navigate through this, since all I have been doing during last 6 years is spot market and feel like a fish in the pond, but man, it's really sketchy out there and I really don't expect any market improvements till at least end of April.

 

Seems fuel is going back up again, at least here in Commiefornia. Was $4.85 on Sunday, today 5.39. Had to settle for a place I have on my app for 5.19