Key Bridge Collapse, Skyrocketing Cargo Theft + Advice on Buying Used Trucks | Ep 5

Caroline: [00:00:00] Welcome to This Week in Trucking, the podcast that tells you what you need to know about the trucking market for the week in 30 minutes or less.

Caroline: We’re going to be talking about diesel prices, freight market trends, and the top stories that trucking business owners need to know. Hey, Gurvir, how’s it going?

Gurvir: It’s been going pretty well. How about you? How’s your week been?

Caroline: It’s been good recovering from the Mid America Truck Show. It was awesome.

Gurvir: We both attended it. 

Gurvir: A good time ever for me as well. What do you think about the show?

Caroline: Yeah, it wasn’t at all what I was expecting. I’m not really sure what I was expecting being newer to this industry. It was really amazing to see, to have a reminder of just how diverse the industry is and talking to people and their businesses and realizing that you can create any niche. in this industry and make it work as a business.

Gurvir: Yeah, that’s true. That’s true. The industry is very diverse and I think you get to [00:01:00] see that. The part that I liked is that, I’m based in Maryland. You’re in Michigan in Maryland. There’s not a lot of trucking.

Caroline: Right.

Gurvir: just being able to go to Kentucky at, to the show, to be able to see people from all over the country come in and just be around the industry.

Gurvir: I think just getting to know the industry, getting to know the drivers, the different partners, the different vendors I think that was just really cool. I think just being in touch with the industry and reality. 

Caroline: You know what else I love about truckers is that they will not lie to you. They will tell you exactly how they feel, exactly what they think. They are not worried about, not that they’re not kind, nice people, but they’re not gonna sugarcoat anything for you.

Gurvir: yeah. That’s I absolutely agree. They’ll tell you, I’m not using this thing, man. Yeah. They’ll be very straightforward to you.

Caroline: Yes.

Gurvir: Which is really good. I think especially if you’re trying to get product feedback, you’re trying to develop new things. I think it’s good to get like very straightforward answers. That’s absolutely true. Actually. I didn’t think about that.

Caroline: A hundred percent. A hundred percent.

Gurvir: [00:02:00] Who’d you meet? Did you meet any cool people? I met the Mother Trucker guy. We met a lot of our partners, Speedway, TA a lot of celebrities there, the trucking celebrities. But yeah did you guys, did you meet anyone interesting?

Caroline: Definitely met a lot of interesting people. I think a highlight for me was meeting some of the women who are leaders in the industry and who are leading groups of people to make a difference. For women in the industry in different ways. So I met people from real women in trucking. They’re doing a lot of advocacy around making the industry a safer, more welcoming place for women.

Caroline: She trucking, which is helping women, business owners start and run successful trucking operations. I met a spokesperson from the African American women’s association and trucking. which so just a lot of cool work being done to improve the atmosphere and environment, the business environment really for [00:03:00] everyone.

Caroline: But particularly for women who have been historically underrepresented in the trucking market. So that was definitely a big highlight learning about all of their work. And again, learning about how people approach the business and the industry in different ways. So one part for advocacy, one part for business and consulting with people to help them run their businesses better.

Caroline: Another, the African American Women’s Association and Trucking, they do a lot in compliance. So they go to all the FMCSAs events and they help communicate what is coming out about compliance for their members. So just a lot of really cool people doing a lot of cool things.

Gurvir: Yeah. I would suggest if you haven’t been to some of these shows and you’re trying to learn, you’re trying to get better at your business learn what are some new things that you can do, definitely attend. I think there’s a lot of learning that takes place. There was some, I think what do they call events in terms of educating people on TMSs.

Gurvir: I think FMCSA were doing events on [00:04:00] double brokering and Fraud prevention and cargo theft and all these interesting things. So I think it’s a great space to learn and see what’s happening in the industry.

Caroline: Totally. Totally. I think if you’re thinking about starting a trucking business, start there. Don’t just focus on what you can get online on YouTube, on Facebook groups. Those are all good sources of information or can be good sources of information, but actually being there in person with people talking about their businesses and learning how to run a business or start a business and do it really well.

Caroline: You can learn a lot by just going a weekend to one of those shows.

Gurvir: Yeah, no, totally. So yeah that, that was a fun weekend. Hopefully we do more of those and to meet more and more people. It was good to see some of our customers there as well. So yeah, that was pretty exciting.

Caroline: Yeah, for sure.

Gurvir: Let’s see, what do we have in trucking?

Caroline: Let’s get into it. Let’s get into it. We have a current average diesel price of 4. 05. This is pretty in line with where we were yesterday and a week ago. It’s come down a little bit since last [00:05:00] month and definitely come down a lot since this time last year. We’re about 18 cents lower than where we were last year for diesel prices.

Caroline: So this is a good sign. I think it’s been Steady over the last 30 days, more or less. So this is good when there’s not big fluctuations in the price, it makes it a little bit easier to run a business that depends so much on fuel cost and diesel prices.

Gurvir: yeah, totally. Again, diesel is something that’s, again, we talk about this a lot. It’s one of the largest expenses for owner operators and fleets. and a big savings from last year. But but it’s hovering around there, right? Somewhere around that 405, 403, 401. I think it was a few weeks of decline and now it’s creeping up just a little bit. But then I think my expectation and for this year is it’s not going to go up drastically. So it’ll keep hovering around here. Hopefully we can make our way down, 4 in terms of, the national average.

Caroline: Definitely. And if you’re looking for states [00:06:00] with lower prices, this week we’re looking at Oklahoma, Texas, Missouri, Mississippi, and Kansas. So those Gulf states, Oklahoma, Texas, Mississippi, those are really the places where you’re going to find the best prices. least expensive diesel, mostly because it’s coming in through that area.

Caroline: That’s where a lot of diesel is produced. And then we’ve got a couple of states in the Midwest, Kansas and Missouri that are down in prices as well. And of course the states to avoid are always the states to avoid when fueling up California, Washington, Pennsylvania, DC, and New York.

Gurvir: Yep. so yeah, feel from those cheap states while

Caroline: Definitely. Definitely when you can. So what’s happening in the freight market is. Are we doing any better than where we were a month ago? Cause I know in February, we really didn’t have good news to share.

Gurvir: Yeah. January was a really good start. A pump fake people thought, Hey, I think we’re on our way to recovery. Things are going to continue to get better and better generally because january is really slow. But February [00:07:00] got worse. Rejection rates in January were above 5%.

Gurvir: Now we’re hovering around 3. 8. actually February was under five as well. March currently we’re at 3. 8. It does not feel like the recovery is here or things are getting better. So a couple of positives in March are that the produce season is starting. I think that will push the rates up spring Easter.

Gurvir: All these things will probably push up the rates a little bit. We’ll probably go back to 5 percent rejection rate, which indicates which is a good indicator for spot market rates. But a lot of the capacity is still not leaving the industry. I think for the first time we saw a net positive. That means we actually saw a small increase in total new MCs. But March is it’s okay. It’s worse than January. It’s closer to that February. But I think things should pick up just a little bit soon when April starts. But overall, yeah, March has not been great.

Gurvir: February was not great. I think we’re looking at still looking at Mid of this year when things start turning back up let’s see how this year plays out. There was no change in, in, in rates, not much of a change in [00:08:00] that national truckload index. It, last week it was 228, this week it’s 228. They’re not going down, but they’re staying stable. I think if you look at the DAT trends we just saw like a 1 percent increase in load posts. From last week to this week and van loads increased by 0. 9%. Spot rates went down by 0. 2%. So not a huge change. If you look at the overall DAT trend lines very much like February.

Gurvir: So yeah, let’s see what happens in April. 

Caroline: Holding steady. One thing I learned from MATS again, how diverse this industry is and how specialized people can become. Just because the industry and the rates are down on a whole, on in general, doesn’t necessarily mean that they’re down for everyone. So definitely go in and look at some of the pro talks that were recorded at MATS because I’m pretty sure they’re making them available to everyone.

Caroline: And see if you can learn what you could do to specialize.

Gurvir: totally. I’ll share a personal story. Before going to mats I was like, Hey, this, we’ve had like almost [00:09:00] a year and a half, two years of a really tough economy specifically for trucking. And as a founder you feel that pressure. Like for me, like going to the mat show. Just seeing the industry, I felt much more resilient. Hey, look, this industry is going to come back up. People are very positive. Of course, there’s a lot of people that are struggling and things are not looking very good or they haven’t been very good for the last year and a half. But just overall the energy and the that a lot of the trucking, owner operators and fleets have is just good, it makes you feel like, Hey, look, the industry is going to come back. just on a slow recovery period. And you’re right. Not everybody is struggling. A lot of people have dedicated contract freight rates. They’re doing well, they’re doing okay. Considering, the downturn that we’ve had. So yeah, always try to diversify your loads that you get, don’t depend on spot market only or load boards, try to definitely, hit up local shippers and try to get that dedicated freight.

Gurvir: It’ll always, take you through this downturn period. So that was definitely a good learning that I got out of that show.

Caroline: Definitely. All right. Top stories this week. I have one that comes to us from Freight [00:10:00] Waves that the numbers for Q4 of last year in cargo theft came out and cargo theft spiked by 68 percent year over year in Q4 of last year. All right. mostly led by food and beverage freight being stolen. So the numbers coming out about cargo theft are not great.

Caroline: Cargo theft, again, is up 68 percent compared with 2022. That’s according to CargoNet. And during the third quarter of 2023, cargo thefts were up by 57 percent year over year. So this was not good. a huge shock and surprise from Q3, but definitely a trend for 2023. It’s currently at a 10 year high, cargo theft is, so that is just astounding.

Caroline: It sounds like the fraudsters who are committing this cargo theft. They’re using stolen motor carrier operating authorities or logistics broker [00:11:00] identities to obtain the freight and then misdirect it to another location. A lot of this has to do with identity theft fictitious pickups, double brokering scams, all of that is related to this surge in cargo theft.

Caroline: And the kind of freight that is most targeted is food and beverage, electronics, household goods, those kinds of things that are relatively easy to steal and then sell on the black market. California, Texas, Florida, Georgia, and Kentucky are the hotspots for this cargo theft, and some of the reasons behind Why this cargo theft is so prevalent is that there doesn’t seem to be a lot of specific rules for warehouses or logistics centers that require them to ask for the truck driver’s information and verify the identity of the driver.

Caroline: So that can be A driver of this cargo theft. FMCSA is saying that they’re developing a [00:12:00] new modernized registration system that will hopefully have more security and tamp down on this cargo theft and that they are taking other measures, but we know how slow the FMCSA is to implement change. It’s a huge organization, huge agency managing an enormous market.

Caroline: And. industry, and so it’s hard to move quickly. So I know that you have known a lot of people recently to be affected by cargo theft.

Gurvir: my dad, but yeah, this is, as soon as you were sharing this story, I was like, yeah, I remember, someone stealing a load of beer out of his truck. So I guess someone had a good weekend.

Caroline: Yeah.

Gurvir: yeah, but but yeah, this has been on a rise. I think one thing immediately that I want to say is don’t leave your truck unattended,

Caroline: For sure.

Gurvir: I think immediate thing and actionable item that I can share with you is that these things do happen. So if you’re parking your truck somewhere. if it’s for an hour, two hours, you feel like you’re going to be, you’re going to go grab that, food you’re going to come back, you’re going to go to your home and you’re going to come back in an [00:13:00] hour or two hours, you’re going to take a quick shower. It’s only two hours. Nothing’s going to happen. There are people sitting sometimes in certain areas that watch, right? Hey, if the trucks are

Caroline: Totally.

Gurvir: Same thing happened, with my dad, he still drives, came back, parked near his house, went to go get a shower. Literally, he was back in two hours and noticed that somebody had, broken the seal and took like few cases of beer. If he was an hour, two hours, three hours late, it probably would have came back and stolen the whole load. Luckily only, I think 60 or 70 cases got stolen. So definitely don’t leave your truck on unattended. Try to find secured parking lots that are fenced. I think these are some just actionable items that you can take away. But yeah, this is on the rise, I think, and people are coming up with creative ways to cargo theft.

Caroline: Totally. One thing that I noticed about this article, though, is that it focuses a lot on the brokers and shippers who obviously are, affected by this trend, but it focused a lot on the fraud coming from motor carriers that are [00:14:00] impersonating legitimate motor carriers or freight brokers. I do think, though, that this is affecting drivers.

Caroline: just as much who are really vulnerable, like you said, to, if they’re out on the road alone, even if they’re in their truck, if what you have in your trailer is valuable enough, you can be put in some danger if someone wants to take it.

Gurvir: yeah, totally. Think that’s part of it. So you’re right. I think if you break this down I think there’s cargo thefts that is occurring from acquiring existing MCs, picking up load and just plainly just dealing, cargo or taking some of the cargo off and only delivering partial of the load. There’s probably some fraud that’s happening where people are just outright stealing loads with unattended trucks. So it’s probably across the board. It’d be interesting to see which one, which segment is seeing a rise. but yeah, brokers have to deal with this a lot, but it also affects owner operators and small carriers. If you’re getting like a lot of cargo thefts and claims, your insurance is probably going to go up. So it does [00:15:00] increase operating costs at some point in the future. Speaker 1 So it does

Caroline: A hundred percent,

Gurvir: right? And you have a deductible, right? So in, in my dad’s case, if they sold beer worth up to 800 bucks, your deductibles, that’s a thousand dollars.

So that 800 is lost directly to your pocket. So the insurance won’t even cover it because you have to pay a thousand dollar deductible.

So in those cases, yeah, I think it also affects the owner-operators and small carriers. I

Caroline: And I think too, something important to note here is that Brokers and shippers are really aware of this right now and have been for the last year or so. Particularly, we’ve seen an enormous surge in, in freight scams. throughout the industry. And so your customers as an owner operator or small fleet manager, your customers are doing more and more due diligence on who they work with.

Caroline: And there are things that you can do to help legitimize your business. So we’ll leave a link to the blog that we wrote about that in [00:16:00] the description here, so that people can go and check that out and see what they can do to make their business look super professional and check all the right boxes that freight brokers are looking for.

Gurvir: think that makes a lot of sense. Yeah. But yeah, definitely be aware of cargo theft. It’s a real thing and it’s happening a lot. So definitely don’t leave your trucks unattended. locks don’t help too sometimes, right? They’ll break the lock, right? But it does help, right? So I’m not saying don’t use locks to use it, but they still have ways to break those.

Gurvir: So find a secured lot when you’re on a load, I would say just don’t leave it unattended,

Caroline: Definitely. All right, Gurvir, what is the story that you’re bringing to us today?

Gurvir: Yeah the story that I want to bring is unfortunately, there was an incident that occurred just two days ago. In Baltimore, the Francis Scott Key Bridge in Baltimore, I think on Tuesday collapsed due to a ship that essentially, hit the bridge. The immediate impact was that the Port of Baltimore was closed to all of the inbound and outbound vessel traffic. And it’s probably going to continue to affect a lot of inbound. And outbound traffic [00:17:00] for the next few weeks. I think some of the reports were estimating at least 107 vessels will be affected that would have to be rerouted. Baltimore port is not very big, but it’s still, has significant volumes come through.

Gurvir: I think it does about 80 billion annually in total freight that moves through the

Gurvir: I think there’s going to be some impact on the port of Baltimore. Interestingly, I think in Maryland, most of the freight is regional. So a lot of the freight that leaves the port mostly stays within Maryland, like about 36 percent stays in Maryland.

Gurvir: 22 percent goes to Pennsylvania and another 15 goes to Virginia. So it’s a lot of regional freight. But but yeah, for the next few months, you’re going to see some implications logistical implications and some economic implications. Not sure where the traffic would be rerouted to maybe Delaware, New Jersey ports, Virginia. I’m sure it’ll have some impact on the West coast but just an unfortunate incident that that occurred over the last two days.

Caroline: Completely tragic. Yeah, there’s still not a lot known about why it happened from what I can tell. [00:18:00] People were reporting on it all day yesterday, hour by hour. There were different news stories coming out and really all saying the same thing. It is, does raise a lot of questions around safety and infrastructure.

And, to, one extent it was a good thing if it had to happen that it happened at one in the morning because there wasn’t a ton of traffic on it. But it’s all the same, just a really horribly tragic thing that happened because we know that at least six people lost their lives on that.

Caroline: Yeah, just really horrible thing to have happen and scary to look at. Scary to watch something, a such an important piece of transportation infrastructure crumble so quickly.

Gurvir: Yeah. And it’s not, too far from here. It’s in. It’s just crazy to think that, sometimes, you look at ports, they have these tugboats that sort of. you into the port and there’s, the sort of ensure that you’re on the right path. And these kind of incidents don’t happen in this case that didn’t happen.

Caroline: Yeah.

Gurvir: we don’t know exactly what was the reason. What was the [00:19:00] cause of this? I’m sure the investigation is going to come out, which is very unfortunate. I know. Biden came out and said they’re gonna, federal government’s gonna pay to rebuild it. So that’s good news. It’s good to see that the federal government is stepping in and trying to help as much as they can. So yeah just an unfortunate incident from the last two days.

Caroline: Definitely. Definitely. All right, let’s go to some questions. Every week we grab some questions from Facebook groups about trucking. We grab comments, advice, and we talk about it every week. So the first one I have here is someone saying that they have a couple of trucks for sale. So let’s see what they’re.

Caroline: What they’re selling. I have two international pro star for sale, 45, 000 for both. Let me know if you are interested. One is a 2015 and another one is a 2016. Both have Cummins engines and they are 10 speed manual inbox for more details. So my question to you, Grevier [00:20:00] is, would you consider buying these trucks seems like a really great price for a couple of trucks, but they are pretty old. Eight years old. One is nine years old. What do you think about buying trucks this old?

Gurvir: I think it depends on the use case. If you’re running a lot of local and regional. I think it probably makes sense for port use, you generally see a lot of older trucks at ports. Cause you know, their radius is only like 150, 200 miles. If you’re running over the road I wouldn’t suggest it. I think you probably want to have, a little bit of a newer truck. Also the price point seems higher. Yeah. I don’t know how many mileage, miles do they have all those things. I think miles are probably the most important in knowing the price. But it seems just off of just looking at the price.

It just seems a little bit higher. But yeah, I think it all depends on your use case. I, but I think if you’re doing over the road, you’re doing long runs. Try to have a New York truck. You don’t want to be constantly breaking down and be in shops because being in a mechanic shop, repair [00:21:00] shop, or. Having a roadside service on the road is very expensive that really bleeds your profits. So you want to have a good equipment so that you never break down. But maybe something like this could work for regional and local freight. Also if you’re trying to sell trucks, I think there is a market for it outside of the U.S. 

A lot of our trucks are sent to Mexico older trucks. I had someone, buy my friend’s truck and he took 10 trucks to Mexico for a decent price. So maybe that could be something that, this person could look into, right? If you can’t sell trucks in the U S maybe you can get a fair price outside somewhere like Mexico. Also, trucks are very cheap in Canada. It’s interesting to see is there oversupply of trucks?

And wherever there is, you’re going to see cheaper trucks. So if you are trying to buy trucks, I don’t know, look into Canada as well. I’ve heard that there’s an oversupply of trucks. There’s, the trucks are a little bit cheaper in Canada. Again, you would have to do your research and find out how do you buy a truck in Canada, bring it over to the U. S. But sometimes these markets can affect, and sometimes you can get a, A big savings just because you’re buying the same exact truck in Canada versus the U S just [00:22:00] because of oversupply in certain areas.

I’m sure that’s also possible in the U S as well. Certain markets, Texas versus Maryland could have an oversupply of trucks can get cheaper trucks in certain areas. But yeah part of your question, try to get a newer truck if you’re running over the road and a lot of miles. Yeah.

Caroline: Definitely. It seems like Canada would be a good place to buy a truck, too, because it seems that the weather conditions in Canada are a lot harsher, and so people probably want newer trucks more often.

Gurvir: Yeah.

Caroline: Whereas, if you’re not driving, obviously in the Midwest and Northeast, the weather can get pretty, pretty crazy.

Gurvir: totally.

Caroline: Seems like if you’re buying from Canada, you’re getting something pretty good quality, pretty hearty.

Gurvir: Also like buying trucks from larger fleets, they take care of their trucks, they do regular maintenance, and they usually sometimes, some fleets get rid of their trucks every three years or four years.

Get a four year old truck, maintained they give you new tires, everything’s, done on the truck, new brakes you can get a fair value for it as well.

[00:23:00] So definitely look into these larger fleets like Prime and stuff. And I think they sometimes have good deals but essentially whoever’s, whoever has more trucks and oversupply of trucks, you’re going to be able to get a good deal. 

Caroline: Definitely. Probably more than two for 45, 000 But definitely worth the investment so that you’re not breaking down every other day.

Gurvir: totally.

Caroline: all right. One last question. We have someone here who wants to know, can someone with the knowledge, please tell me what the rates are from Chicago to Laredo and back.

Caroline: And this made me think, huh? Okay. How would you figure out what the rates are for any lane?

Gurvir: Yeah. No, that’s a good question. I usually look to DAT for this deity is one of the largest load boards out there that a lot of in ton of data. And they have a product called data DAT IQ, I believe. And they can essentially give you rates, they can give you spot rates.

So if you are a carrier booking a spot load from a broker, what you should be getting but they can also give you contract rates. So if you’re trying to quote a shipper, [00:24:00] right? Let’s say you found a local shipper in Chicago. And they need, five trucks a month or five loads to be covered.

And what rates should you give? You don’t want to be giving them random rates. You want to be informed and you want to know the market. DAT is a great tool. You can look there and see, look, Hey, the contract rate for this lane is 2 a mile. Or is it 3 a miles or 4 a mile? But DAT is a great tool to see what’s the spot market rate.

What’s the contract rate, contract rate is always going to be a little bit higher than the spot because there’s a broker margin in there. But I would suggest DAT because rates change on a weekly basis. So a great tool like DAT helps a lot. I would say it does cost a little bit more, but but it helps you in quoting lanes and making sure that you’re getting the right price.

Caroline: Definitely worth the investment in D. A. T. Just know that it’s not magical information of people with the knowledge, right? There are sources of the information out there that you can get, and you don’t need to have any specific skill or knowledge to be able to access that.

Gurvir: no totally. It’s hard [00:25:00] to know the rates, right? Even I have no idea what the rate is. I’ve never ran that lane. But yeah, these things change on a week to week basis. So having good, reliable data sources and where you can go trusted sites I think that’s really helpful.

Caroline: For sure. Alright, with that, we will close out for the week. Thanks so much for joining us for this week in Trucking, and we will see you next time.

Gurvir: Thank you everyone. Drive safe.