Episode 8 This Week in Trucking

Competitive Rates Coming Out of Florida as Diesel Prices Decline

Gurvir and Caroline discuss freight market trends and the decline in diesel prices. Kicking off the produce season, good rates are coming out of Florida, but this also means rates when going into that state are knocked down badly! 

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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. We’ll talk about diesel prices, freight market trends, and the top stories for trucking business owners. We’ll also go over some listener questions at the end.

Hey Gurvir, how’s it going?

Gurvir: Doing pretty good this week. I’m happy about the diesel prices. So yeah,

Caroline: yeah, let’s get into that. So today’s national average diesel price is 3. 969, which is about four or five cents lower than where we were last week. That’s really good news. It’s come down from yesterday, also down from last month and down from a year ago today as well. So this is really good news for folks out there that need some relief from the market.

Gurvir: totally. Yeah, I think we’ve been talking about this for some time. I think diesel markets are stabilizing. What’s happening in the Middle [00:01:00] East didn’t really have much of an impact on prices. That’s a good thing. And a big drop. 0. 05, that’s huge. I think in a single week almost. I think this is one of the biggest drops.

I’m not sure what’s the record but, yeah, 0. 05 is huge. Usually we’ve seen like 0. 02 to 0. 03 changes, each week.

Caroline: Shout out to Michael who did note in a comment on one of our videos, he pointed out that there’s always a pretty predictable drop in diesel prices as summer approaches because the demand for heating fuels goes down. So diesel and heating fuels are really similar. And so obviously lower demand for a similar product is going to result in lower prices.

So very true, Michael. Good point on that one.

Gurvir: Yep let’s see. Hopefully, I called out that maybe we can hit the 3. 50s. Let’s see if things continue like this. Who knows? Hopefully we can see the diesel continue to come down.

Caroline: Yep, that would be great news for owner operators out there and trucking business owners. five states with the lowest average [00:02:00] diesel price this week, pretty much the same states here Oklahoma, Colorado, Texas, Missouri is new on this week and South Dakota. And the five highest average state fuel prices are the same culprits as always, California, Washington, Pennsylvania, New York, District of Columbia.

We’ll put them up there, but nothing’s changing around here, except that the prices pretty much on all of these states has come down in the last week. Really, wherever you’re fueling, it’s good news, but it is good to keep an eye out for the best prices. Most of the time people know that Midwest and the South are usually pretty good places to fuel and out West.

And on the East Coast are rougher places where you’re going to get way higher prices.

Gurvir: Yeah, totally. But yeah, this is really good news. I’m happy for the five cent decrease.

Caroline: Definitely. Tell me, Gurvir, that we have good news about the freight market this week. What do you have for us?

Gurvir: Freight market, just not a, not great news. I think things are still stable around from last week. Let’s [00:03:00] look at some national indexes truckload indexes by freight waves. The NTI, which just measures the overall rate per mile. Inclusive of fuel went up by one cent.

So that was about a 0. 45, a half a percent increase. The line haul rate also went up by one cent which is without fuel. And the the line haul to contract rate spread got a little bit bigger. Again, I think we discussed this last week that has to shorten for the market when the market improves, that margin that the brokers are keeping.

So that margin got bigger between contract rate and spot, which is not good. So we would want to see that come down. That gap needs to be narrower and it just got bigger by about six cents. If you look at the DAT trend lines, we’re still hovering around, that April month, there’s not a huge improvement.

I saw the trend lines on the second day of March and there was a big spike. And I got really happy when I saw like a 20 cent increase in rates. But that was just a fake one. I think after a few [00:04:00] days of March of May. I saw that the rates settled in because those rates, the data changes every day, right?

You have to go through some days of May to see where the rates are falling. But the drive in rate is at 1. 98. Last week we were at 1. 99 or so. For dryvan, flatbed is staying consistent around around 2. 52. And the reefer is Has gone up just a little just because of the produce season. So I think we’re gonna probably expect reefer prices to go up just because of the produce season But let’s see what happens with van and flatbed, but overall I think it’s There’s some tightness in the market due to produce season, but overall drive in and flatbed is the same as April.

Caroline: I know that you wanted to talk a little bit about the produce season and how that’s affecting rates on the load boards of what people are seeing. So what did you have, what story did you have to bring to us today about that and what’s driving these rates and where they’re going or not going?

Gurvir: [00:05:00] Yeah, specifically, Florida is very seasonal. I think a lot of truckers are aware of this. Just like about a month ago, my dad was hauling loads into Florida for 23, 2, 400 drive in rates. Going into florida because there’s nothing coming out and obviously when the produce kick the season kicks off the rates change I think today he was talking to somebody and they’re offering like 1600.

So you’ve seen like a drop going into Florida That’s because Florida’s picking up, there’s a good there’s a good chance that you’re gonna get a good rate coming out of florida And that is just because of the produce season. So you got the Mother’s Day You got overall produce season kicking off and the rejection rates are higher in Florida.

I think this is the highest that we’ve seen since 2022. But but yeah, Florida season has kicked off the produce season. And generally, this type of frayed produce season you have some strict regulations in terms of the temperature control, the trailers required and it’s It’s and sometimes, even interestingly, a lot of these produce shippers are in these remote areas.

Gurvir: It’s a very specialized trade. Only reefers would benefit from this, even though some dry events can also haul [00:06:00] some produce if you have vents in the trailers. But we’ve seen some rates jump in this week. So we saw a 58 percent jump the Florida to Chicago route we saw rates jump from almost 2100 to 3, 400.

That’s a pretty big jump, but this is all just due to the Florida season kicking off. The reason Mother Day’s affect this is also because most of the flowers come from South America into Florida. So that’s also adding to the produce season. But yeah it seems like Florida is doing really right now, but that also means you’re not getting the best rate going into Florida.

Maybe it cancels out in some ways. So

Caroline: Got it. So people can actually offer lower rates going into Florida because they know that a lot of people want to get down there for the good rates coming out. 

Gurvir: Right? Like people that are, because now you’re going to have a rush of people that want to go to Florida and pick up a backhaul or pick up a load out of Florida and brokers and carriers, they all understand this and guess what?

Gurvir: The rates drop. pretty quickly going into Florida because you have a lot of people that want to go to Florida and not enough rate.[00:07:00] 

Caroline: Is it a good idea as a business owner, if you’re booking your own loads, to try and create, generate some repeat business year after year coming out of Florida? So if you have a relationship with some local shippers or brokers down in that region, is that a good strategy to pursue so you can take advantage of that hike in rates?

Gurvir: Yeah, totally. A lot of the produce is, the rates are given by weight. First of all, just know that watermelon, potatoes, corn, tomatoes peppers, these are some of the main items that will come out of Florida. Yeah, and I think it’d be good to make a list of those brokers that are hauling these loads and these things and also shippers sometimes even produce shippers might even haul directly with carriers, right?

So definitely I think it’s important and I think you should as a carrier try to get some seasonal business out of this. Also, if you have a dry van, I would suggest get vents. So even sometimes depending on the weather and the time. Even dry vans can [00:08:00] haul Watermelons, you just need to have a venting system and it doesn’t cost much I think it’s probably two three hundred bucks Where they’ll put a vent in front of the trailer and also in the back of the trailer so that the air can cross Through the trailer, right?

So there’s you know enough circulation of air And that allows you to haul some produce items in a dry man Mainly just potatoes and watermelons and those kind of things So yeah,

Caroline: You’ve talked before about people that you know that are switching between reefer and dry van because they’re similar. Obviously you need to know a little bit more about reefer and how to fuel it and how to take care of it and it’s a little bit different, but it’s not as different as getting a flatbed. So what have you heard from your friends and acquaintances in the industry about better right now, reefer or dry van?

Gurvir: yeah, I think it just comes to personal preference. I think reefers have long wait times and drive ins don’t. Reefers, you have to maintain Temperature you want to make sure that you know You can’t spoil the load. You have to fuel the [00:09:00] reefer as well. So there’s extra maintenance and cost some people like Don’t like the, the stress of maintaining temperature.

What if you break down and it’s a product that needs to be kept at a certain temperature. Otherwise, it’s gonna, it’s gonna spoil. So it just comes down to, personal preference. I think a lot of younger folks want to, they’re okay with running reefers and they can take advantage of these rates right now, especially during the produce season.

But a lot of the older folks that I know just want to have a drive in, so they can just easily just breeze through the road and not be worried about, Temperatures and if they’re at home and the reefer yard is, the reefer truck is in the yard They don’t have to worry about the temperature whether it has a shutdown or not So I think all comes down to personal preference, but there’s pros and cons to both.

It’s just it’s more specialized freight So it’ll pay just a little bit more There’s also been times where reefer rates are equivalent to dry ban and in those cases, it just doesn’t matter but yeah, it all depends on the market and your personal preference

Caroline: And in that case, it’s better to have a dry van, right? Because it’s cheaper operate.

Gurvir: Yeah, it’s cheaper to operate, less [00:10:00] stress over temperature, less claims. Certain areas, like if you’re based in California are probably going to have, a lot of carriers run. If you’re located in a produce state, then it’s probably better to have a reefer. So that depends as well depending, where you’re based out of.

Caroline: Yeah, for sure. Speaking of specialized freight, there was a pretty scary incident earlier this week or last week, actually, on May 2nd on I 95 in Norfolk. Connecticut, a fuel truck and passenger vehicle collided. It caused a massive fire and thank goodness that there weren’t any serious injuries, but it did shut down the interstate and it did cause a lot of traffic jams and it also caused some structural damage to a bridge that now needs to be replaced. I 95 was back open as of Monday this week, but it does throw question some of the safety. regulations and things that people need to be [00:11:00] really aware of. So this week is actually kicking off an FMCSA event called Our Roads, Our Safety Week. It’s a campaign that also started on Monday and it’s meant to remind drivers to focus on safety by sharing resources and tips for drivers and carriers. And today, actually, as of recording this episode, there’s going to be a free transportation safety fair in D. C. I know you’re pretty close to D. C. Gurvir, and a lot of people are around you are in this industry. So wondering if you heard any news about that. But it’s it’s open to the public event.

So interested to know if anybody stopped by there who was in the area. and this is actually a precursor to Arguably more important, a week in trucking safety, which is the Commercial Vehicle Safety Alliance Road Check Inspection Blitz, which is a mouthful to say, now [00:12:00] that I say it out loud. That’s going to start on May 14th.

It’s going to run 72 hours, 14th, 15th, and 16th. And there’s one of the, they do these every so often. I believe it’s every year. It’s an annual event where it’s highlighting some really key safety and compliance issues that are really important the and the CVSA. So I’m curious, Gervere what have you heard about these events and what was your experience doing or dealing with these road check inspection blitz when you were a carrier?

Gurvir: Yeah, I’ll touch on the road check first. So big week, even though the focus is going to be on, drug and alcohol possession Make sure your truck is in a good condition, right? This is the time when they’ll check brakes, tires and all of these things. And you want to make sure you’re not really getting an out of service violation for your own company or for your company if you’re a driver, right?

So I would say definitely the dates, right? This is going to, and a lot of people actually take off [00:13:00] during the day. During this time as well. And, because of the D O T checks, because, they go pretty hard at inspecting your truck and why take the risk, right?

So decide for yourself whether you’re going to be running or you’re going to be sitting out during, these two, three days. But definitely make sure if you are running that you are make sure that the truck is in a good condition and you’ve checked everything, FMCSA’s annual our roads are safety week campaign started Monday. I’ve never attended these events. I think it’d be cool to go there and attend and see what this is about. But yeah I’m not too far. So maybe I should, try to should try to attend these events. Yeah,

Caroline: Keep an eye out for them, for sure. Yeah, I think it is really important. They have specific areas of compliance and safety that they’re focusing on during that blitz. But, they’re gonna check everything. You can get a violation or an out of service violation. Just, by not having everything in order. They are focusing on drug and alcohol and the drug and alcohol clearing house [00:14:00] compliance, but they are focusing on effective tractor protection systems. So this is something to definitely look into. Most of the time, the most common violations for vehicle maintenance are usually around tires. and then around brakes. But this tractor protection system is really important as well. So they want to make sure that they’re increasing awareness with drivers, motor carriers, technicians, and law enforcement around some specific components. So those include tractor protection valve, trailer supply valve, and the anti bleed back valve which are often overlooked in trip pre trip inspections and roadside inspections. To get all of these rights and make sure, and, Also, I think a lot of people do take it off. I would say, if you’re really confident though that you’re doing everything that you should be doing, don’t be afraid of inspections because having the more positive, good inspections you have on your record, the better that’ll make your safety record look really good. [00:15:00] It’s when you only have one inspection or a couple of inspections and they’re not that great. That’s actually worse

More inspections and having, a lot of good inspections. So it’s like you got to know where you stand and see whether or not you want to take that risk.

But I think it’s well worth it if you’re doing everything that you need to have in order.

Gurvir: yeah, totally get a truck wash, right? All these things add up, right? The cleaner the truck, the nicer it looks, making sure that you’re organized. You’re clean. It just goes to show that, hey, you know what you’re doing, right? And do it for the insurance costs. Look, this is one of the things that have a long term impact on your business.

Gurvir: Every out of service inspection. Just think of it as money. Anytime you get out of service violation, your insurance will look at it. And it’s going to make them think that, hey, you’re not a safe operation. And they’ll probably insure you. If you don’t have many out of violations, but out of service violations but think of it, you’re probably saving future dollars.

Gurvir: I know it’s always hard to think about what this would, cost me in the future but definitely this is an investment in yourself. It’s probably the single reason why a lot of companies go out, especially larger fleets. They just can’t maintain and keep their insurance costs low.

Caroline: Yeah, we actually did an event with a compliance expert, Sandeep Singh, of Deep Compliance, and we’ll link the of that event in the description, because that has a lot of really good compliance tips [00:01:00] and strategies to keep your insurance premiums low.

Gurvir: Yep, yep, definitely important. Awesome. What do we have next? We have some questions.

Caroline: Yeah, we have some questions from our Facebook group. So if you’re not already joined to our Facebook group, what are you doing? Join our Facebook group. It’s free. You can ask any questions you want and we will answer them here on the podcast and in the group itself. So we’ve got one from Debra. Why are companies saying that they need more drivers when they can’t keep the ones they have at home? This is got a little bit more of an explanation than from her partner who is a driver and he said that he is lucky to get 3, 000 miles in a week and normally it’s more around 2, 000 miles or even less. So this is a sort of age old debate in the trucking industry that there’s some, there’s a driver shortage and that we need more people with CDLs. we need to recruit drivers [00:02:00] and have a better recruitment strategy for drivers because it’s hard to get good drivers. But a lot of truck drivers out there are saying, there are a lot of us with our CDL. What are you talking about? There is no such thing as this shortage. It’s just a matter of having good working conditions. pay. These are the big issues. There’s actually not a shortage of drivers. So I’m wondering what your take is on this, Gervere. What do you think is going on here? Why are trucking companies saying that there’s a shortage and truck drivers saying, no, really there isn’t?

Gurvir: Yeah, I think there’s an interesting thing that I’ve been hearing about for the past several years, that there’s a driver shortage. I think there’s definitely, there might be a shortage of drivers. Of good drivers and qualified drivers, right? And I think that’s what the, that’s why companies hire.

Gurvir: So someone if a company saying they’re hiring, by the way, companies are always hiring for drivers. That’s because there’s a natural attrition in the industry. I think on average, each trucking company, like every driver gets replaced at some [00:03:00] point. Within a year, right?

Gurvir: And that is because of, there’s a lot of issues in the industry. You want a company just wants a safe driver, a driver that does not have any drug violations. There’s a clearinghouse requirement, making sure the industry is also flushing out any driver that has any drugs or, substance abuse issues.

Gurvir: So that’s filtering out a lot of the drivers. So I think the issue becomes, hey, do we have enough good drivers, right? And that’s what companies hire. I don’t think when companies saying that they’re hiring, it means that there’s a lot more demand. So I think hiring doesn’t equal demand. It’s just an opportunity for the companies to hire better drivers to get rid of the driver base that they don’t feel comfortable with, right?

Gurvir: That could be from a risk standpoint or any other standpoint. I don’t think there’s a driver shortage personally. I think we’re going, we had 80, 000 companies go out last year. I think there’s enough drivers especially in a recession. I don’t think anybody should be saying that we have we have a driver shortage.

Gurvir: But I think it’s just an opportunity for trucking companies and shippers and whoever’s hiring drivers for them to just hire better drivers and just do a clean house. But yeah, [00:04:00] I don’t think there’s a driver shortage.

Caroline: Yeah, I think you’re right. I, there’s plenty of people with their CDL, but that it’s a lot more complicated than that of what types of drivers are Companies are willing to recruit and hire,

And then I think there’s definitely a mismatch between how much value a driver brings to a company and how much they’re actually paid.

The wages get depressed, especially during a down cycle when you have a lot more drivers than loads that are, that you

And so now you have drivers competing for those jobs.

Gurvir: yeah, we’ll look at, for our next week’s episode, I’ll look at the labor statistics and just see what has been the job growth in this industry.

A good day to look at, sometimes I don’t want to look at like the MCs. Because and what are the companies going up or not?

I guess it’s a not a good way to judge whether there’s more companies now or less right? So because a lot of emcees are dormant, right? A lot of the emcees might show five trucks, but there’s no five [00:05:00] trucks on the road, right? So I think we’ll look at some data into this and see if we can get better information.

But yeah, I don’t know. Yeah, I think it’s just an opportunity for companies to hire better drivers. For lower pay as well, right? Maybe there’s a strategy, right? Like maybe they give such high pays during the COVID times and post COVID, right? And now it’s just a way to like cut cost, right?

Bring new drivers at a lower cost, but yeah, it could be a multitude of things.

People are hurting around us.

Caroline: Definitely. All right. Next question we have. Hi there. This is from Stephanie. I recently acquired a power only carrier, which is new for me. I typically dispatch box trucks. Curious on finding best options of routes outside of load boards. I’m curious. So I wonder, Gurvir, what advice do you have for someone who’s moving on from box trucks, going into power only, maybe moving into the semi business?

Gurvir: [00:06:00] Yeah. I mean given the tough economy, I would my suggestion would be try to lease a trailer for cheap, right? Maybe 400 bucks a month, 500, just find a trailer because the amount of opportunities that open up for you are immense, right? Like now you can actually pick up a load for any broker shipper.

And not be dealing with the constraint that you don’t have a trailer, right? That would be my suggestion. Like I somehow find a way to get a trailer, right? Whether just leasing a trailer, renting it on a weekly basis or something. And let’s say if you are doing a power only, the load choices are really low, right?

They’re small, right? The pool is not that big to do power only. I think some of the major carriers you can check with J. B. Hunt Amazon. I think Amazon is probably a big player where power only works a lot. So I think you would have to look for companies like that to, to get a lot of power only loads, but I think my suggestion would be, Hey, sometimes just get a trailer because the amount of possibilities that would open up and you being able to haul any load I think that would just open up much more, especially in a struggling recessionary economy right now, right?

Like you want to be able to make sure that you can [00:07:00] haul and pick up any load. You don’t want to be, you don’t want to be restricted by a trailer. And I think there’s some good options out there. You can, go to Facebook markets, but marketplace, I’m sure there’s a lot of people out there that can, that you can do some creative financing with and just pay like a monthly rent.

Someone that has a trailer that will be my suggestion so that you can maximize your revenue. Each month and it’s easier to dispatch loads when you have a trailer.

Caroline: Yeah, for sure. think I remember that one of our customers that’s been on a bunch of our events before is also a power only carrier. So if you have any comments about power only, definitely leave them down below for Stephanie to learn about. I also think, am I right in thinking that how to get routes outside of load boards actually starts on load boards?

So you start on load boards, you meet people, you meet customers through load boards, and then you have a relationship with those customers outside of load boards, and you can build repeat business away from load [00:08:00] boards and more into like dedicated routes and stuff those relationships. Am I right in that, explaining that kind of dynamic?

Gurvir: Yes somewhat. So Load brokers are load boards are a good way to meet brokers, right? It’s not direct trade But it’s a good way to build relationships with brokers get dedicated afraid even with brokers, right? A good starting point for a new Trucking companies always the load boards as you pick up loads always have you know a conversation beyond just that load Hey, where else are you guys shipping from?

How many loads do you have per week? Hey, do you guys need a dedicated truck? I’m available in Baltimore every week and I can do these loads for you Let’s pick up a price. The bad thing about that is, price is gonna change every week So it’s not like the price stays the same sometimes I think that’s where the things can start and Look, when you’re picking up loads out of Baltimore, you’re essentially going to shippers.

I would even go into the warehouse and have a conversation with people like, Hey Hey, you guys are using XYZ broker. Do you guys need any dedicated carriers, right? Every [00:09:00] opportunity for you is to create that conversation and see. Whether you’re delivering load at receivers and picking up as shippers find a way that you can get a direct freight from someone.

I think it’s harder to get direct contracts as a single truck, but I think at three to four to five trucks, I think it starts to make sense but a load board is a good way to start. I think at some point you should start transitioning out of load boards. I don’t think you can ever fully transition out of load boards, but at least make sure that 30, 40, 50 percent of your freight comes from direct contracts with shippers.

Caroline: Cool. All right. That was some great information. Thank you so much, Garveer, for joining me again this week for This Week in Trucking, and I’ll see you next time.

Gurvir: Awesome. Thank you. Drive safe, everyone.​