Caroline: Welcome to This Week in Trucking, the podcast that tells you what you need to know about the trucking market for the week.

Caroline: I’m Caroline, and today we’re talking about diesel prices, where you can find the hottest freight markets in the country, and we’re also going to talk about the big strike that’s happening right now in the ports. If you want to stay up to date on the trucking market and diesel prices and everything else that we talk about on our channel, make sure that you subscribe to our YouTube channel, subscribe on Spotify and Apple podcasts so that you never miss any of our updates.

Hey, if you had to guess what the number one, most profitable drive in market is. Right now, what would you say? And don’t look at a spotter, you have 

Gurvir: To just guess. [00:01:00] Alright Indianapolis or Indiana? 

Caroline: Okay close. Indianapolis is actually number 22, but you are warm because it’s actually close to Indiana. Saginaw, Michigan, which is where I grew up.  Saginaw, Michigan is the top, most profitable dry van market. And we’re going to share and show everybody where the hottest markets are. So we’ve got Saginaw at the very top, then San Diego. I thought you were going to guess somewhere in California. Cause that’s always a good guess. 

Gurvir: Yeah, I was about to say like Duluth, Minnesota or something, but I know that’s hot too, but but Saginaw, Michigan, huh? 

Caroline: And there are some markets around like Illinois, Indiana that are up on this list too. So Quincy, Illinois, Evansville, Indiana. So that’s one of the markets in Indiana, close to Indianapolis.

Those are up in the top 10. Got Duluth is number three. And then you always have LA and Ontario. California, those are always really good dry van markets. We’ve also got Las Vegas, [00:02:00] Nevada; Cape Girardeau Missouri; and Evansville, Indiana, like I already said, and Fargo North Dakota.

So those are the top 10. If you go to reefer markets, scattered all throughout Northern Midwest and West regions. So we’ve got Fargo, North Dakota; Rapid City, South Dakota, the Dakotas are really good right now. Nebraska is looking good. Sioux Falls, South Dakota as well. St. Cloud, Minneapolis, Twin Falls, Idaho. Minneapolis, Minnesota, Duluth, Green Bay, Wisconsin. Up here in Green Bay and Bismarck, North Dakota. Dakotas are looking really good for reefer. I wonder what the Dakotas are consuming this week that they need so many reefer trucks out there. 

Gurvir: Yeah, that’d be interesting. I should know this, but I’m not sure why is Dakota getting hot. If 

Caroline: If you haul reefer loads to or from the Dakotas, let us know. The flatbed top market is Evansville, Indiana. Indiana is actually a really good market for for flatbeds. Got three, [00:03:00] three of the top 10 markets in Indiana there.

Nashville, Tennessee; North Charleston, South Carolina. Memphis, Tennessee, Huntington, West Virginia, Louisville, Kentucky, Bloomington, Illinois, and Bowling Green, Kentucky. Really centered around that sort of Southern Midwest area, and then you’ve got some good markets also in the Southern states, Mississippi and Louisiana.

So that’s what we’re looking at for the top markets. This is based on the spotter index. Shout out to them, spotter. ai if you want real-time updates on the profitability of different markets of the top three. Equipment types check them out. They have really good information. 

Let’s move on and look at some updates to diesel prices in the country.

So this week on Monday, our price was actually for the total U. S. was slightly higher, but only about half a cent higher on the whole for the U. S. and prices actually dropped in East coast. West coast and California prices went up a little bit in the Midwest [00:04:00] Gulf coast and Rocky Mountain region.

But those are still the most affordable places to buy diesel. And actually, the Gulf coast on highway diesel fuel price is 321. Or was 321 on Monday. So pretty great prices in that area and really across the board for a diesel. This is always good news for our carriers out there. Who’s what? 25 percent of your operational budget is fuel.

That’s a big deal when diesel prices are maintained this low. 

Gurvir: Yeah, no, I think one thing is that diesel is sticking around like 3.54, 3.52 around here. That’s a good thing I think one of the things that has done well is diesel prices coming down this year. I think there’s absolutely no doubt and hopefully when the spot market comes up they stay down there, right?

And that would give us you know, the truckers and everyone a good margin, right? Maybe let’s dive into the freight market and see how we’re doing caroline. How does that sound? 

Caroline: Yeah, tell me about it. How did September shape up and what should we expect in October? 

Gurvir: September was not good.

September was not a good month. People were expecting freight waves. A lot of people were, even though there were some doubters that were saying, hey, look, are we going to start seeing rates start coming up? But we have not. September was not a good month. I think on 4 to 8%. From July the first week again of July was like a truly like a sneak peek.

I thought the market was back but guess what, we went up all the way to six and a half rejection rate that was really good again seven determines that it’s a really healthy market. We got to six and a half and then we dropped I think right now we’re probably covering around four, right?

So we’re back to where we were earlier this year even last year, right? So the freight market is not doing good. We were expecting that things would start coming back up and rates would get better and rejection rate would go up. But September has not shown that if we look at the DAT September we dropped about 2 cents on driving.

We ended at 1.98. So you can imagine. There’s an eight-cent difference per mile from July to September. [00:06:00] So we’ve just been coming down. 

Caroline: Yeah, we were not exactly excited about the spot markets in July and August. 

Gurvir: Yeah, I looked at July.

I was like, look, 2.06. Can we start going to 2.08 now? 2.10, 2.11, 2.12 and slowly start seeing these increases and increment increases. But we did not, we kept on coming down. It goes to show there’s still excess capacity. Yeah. In the trucking market. Now there’s a lot of unknowns, right?

So what does October hold for us? There is Helen, the storm that came, there’s a strike going out. Any disruptions can sometimes lead to rates going up. So that is something that we’re going to watch. We’ll talk about the ILA strike. And what could that do to potentially to trucking? But I think holiday season is here as well.

This is Q4, October, November, and December. We will see a better October. Okay. A better month than September. Hopefully October, things start picking up. 

One last thing I would say is that a good thing is that today marks the lowest spread between contract and spot which means that I think right now we’re at 43 cents.

That [00:07:00] difference is that 43 cents, which means once we hit 30 cents. That’s a healthy margin, a difference between a contract and a spot rate. That means we have returned to some normalcy in the market. I’ve been saying, we’re just getting closer and closer. Obviously we’re seeing a lot of things go up and down.

We’re seeing these fluctuations, but as time passes, we’re only getting closer and closer to market normalcy. And the one indication that we’re seeing today is that the spread between contract and spot is going down. Now that doesn’t mean the rates are going up because the contract rates are coming down also.

And the spot rates are coming up just a little bit today, like in the first few days of October, things are looking a little bit better. But let’s see what that data shows again. We just have to wait. At least the mid of October to see where are the rates this month.

So yeah, those are some freight updates. I wish I had some better news, but I’m sure all the carriers are feeling it. On the factoring side, we saw rates go down about 8 percent and hopefully, October is a better month. 

Caroline: Definitely let’s talk about the ILA port strike. So I’m going to give a little bit of a summary of what’s [00:08:00] going on here.

This comes from an article on Overdrive, so on October 1st, which was yesterday as the recording of this video, so Tuesday over 50, 000 members of the International Longshoremen’s Association or ILA went on strike across 36 facilities from Maine to Texas, affecting ports that handle over 40 percent of imports on the East and Gulf coasts.

This strike affects intermodal trucking as freight at ports stalled. East Coast ports handle huge amounts of the volume of electronics and auto parts, produce, beer and furniture that come into the U. S. The analysts and experts here are expecting pretty minimal short-term impacts on supply chains.

They say that shippers had already anticipated the strike and had been already preparing. So they were already importing goods earlier in the year, because they were anticipating strike. But that a prolonged strike, so if this thing lasts more than 2 or 3 weeks, then it could [00:09:00] create opportunities for truckers as freight is diverted to Canadian ports.

So obviously freight if all diverted to Canadian ports, it has to travel a longer distance on trucks, right? To get to where it needs to go. There was another expert FDRC CEO that said the major importers, they had already priced in the strike and assumed that it would last 2 weeks. And so that could disrupt transport markets if it goes any longer than that.

You’ve been in trucking for a while. The last time that a strike happened, a big strike happened at ports was a couple of years ago, I think, on the West Coast in general, what have you seen as the impact of something like this on a small carrier or owner operator? 

Gurvir: Yeah, the effects, I was trying to think about what kind of effects this would have it’s been some time since I’ve experienced last strike.

I think the last major strike was like a long time ago. I wasn’t around for it. It was 1977. But essentially, let’s break down, all these ports are not going to be able to service all these imports that are coming into the country and [00:10:00] they’re going to have to find other ways of getting into the country.

That’s just like the first response. And I’m sure some shippers and customers were anticipating this was going to happen. Like you said. What’s going to come through Canada? What’s going to come through Mexico and other ways, right? We already saw earlier this year, like a lot of Chinese manufacturers because of tariffs were pushing goods through Mexico.

Look, supply chains and these things have gotten much more sophisticated, right? Because of COVID and especially because of COVID, companies have invested a lot in solving these challenges. I’m not sure. Is it really easy to reroute traffic through Mexico or Canada?

And if that happens, you might see, like not much of a chain impact on trucking itself, but I don’t think the short term impact on trucking is much. I don’t think it’s net negative or net positive. But if you are a trucker at the port, obviously you’re going to be dried up for work. So there’s an impact here That’s what happened.

So if you’re running around ports and you’re going inside of ports and you’re getting you know, you’re 

Caroline: doing drayage 

Gurvir: Exactly, then obviously if you’re if you are in those ports, you will be affected right essentially there’s nothing again Nothing that’s being handled. But [00:11:00] long-term impact could be that hey, if things starts getting rerouted you could see spot rates go up as well, right?

I think so. My gut feeling is I don’t think we see much of a change in like over the road. Trucking the drayage trucking and port trucking, obviously there’s going to be an impact there. And generally any like bottlenecks in trucking or in supply chain usually push the rates up.

So my gut feeling is that the rates could go up as well in the next few months, especially if you have to truck these things in from Mexico or Canada or other ports, right? You’re just going to see a shift of demand. In the country, right? I think those are some things that could happen, but let’s see. I think let’s see how long the strike last I don’t know people are making bets on LinkedIn whether it’s over under six days or seven days Let’s see, but each day it’s costing five billion dollars 

Caroline: 50, 000 people.

Gurvir: Yeah, 

Caroline: That’s a lot of people that have different demands and different ideas of what they want out of this. They did say that the US maritime alliance has already agreed to 1 of their key demands, which is barring automation at [00:12:00] ports and they’ve offered a 50 percent pay increase.

Gurvir: It’s election year. You’re seeing this a month before election. Let’s see if President Biden intervenes in any way. I know he put out a statement that you know these corporations need to do better.

Caroline: They already agreed to a 50 percent pay increase. I think, what were they paying before? 

Gurvir: Yeah some of these companies made record profits during COVID but a lot of that is gone as well. 

Again, these things get very tricky and complex really quickly. I know a lot of shipping companies made a shit ton of money. But also know that the shipping rates also collapsed last year, right?

From all-time highs to all-time lows. But the workers play a pivotal role as well. Right? I think I saw one of the videos, during COVID, ports are open, you need all these goods to be coming in, and people are still working 

Let’s see what happens, right? Hopefully there’s a resolution soon. I know it it’s interesting, right? The economy is interesting. You will have to pay in some format, right? If there’s a block, [00:13:00] or there’s a, disruptions in any way. I do think a lot of the times it ends up translating into consumer cost, right?

Everybody keeps on pushing that cost on to the next person. And the consumer is the last person that’s going to pay for it, right? So it does hurt the consumer at some point because everybody just pushes those costs over to the person to the right, right? But let’s see what happens.

Hopefully, there’s a resolution soon. 

Caroline: Speaking of how to pay your employees a fair wage there was a great profile on Virk Express which is a trucking company out of California. And OverDrive did this great profile of them. We’re going to reach out to them and see if they want to come on this show.

If so, if you know them, let them know that we are looking for them and hoping that they will come on and so that we can learn from what they’re doing. They have a seven-truck reefer fleet. It’s based in Sacramento, California, and their main business strategy has been to pay. Fair wages and offer really amazing service and reliability to their customers.

So Sunny Virk and Sam Singh [00:14:00], they’re the founders of this company and the owners of this company. They used to be company drivers. They had some mixed experiences. It seems like driving for private fleets. Sometimes they really liked the work. And sometimes they really didn’t thought they were being treated really poorly.

One thing that he said that just resonated with me so much was, our rule is don’t scam anyone out of money, hell or high water, pay the drivers for what they’re doing. And I just thought that was a really cool quote from Sunny Virk. And it really resonated with how we think about our business at Bobtail.

That seems to me like that’s our number one rule too, is don’t scam anybody out of money. Do the service. Charge something that’s fair and transparent and just, give them a really good experience. And it sounds like that’s how they’ve built their carrier business, which is really cool.

They’ve grown organically by word of mouth. Drivers love working for them. They have drivers that earn anywhere from 70 to 120, 000 annually. And so it’s really cool to see a company building their business that way. 

Gurvir: Yeah it’s [00:15:00] cool to see, I, I noticed two things. One is obviously they love to invest in their employees, treat them really well, making sure their paychecks are there.

And these are just like basic things that any trucking company should be doing, but the market’s been challenging. I do see the other side where trucking companies start struggling, but I think there are two things, very interesting. One thing is they really take care of their employees. Second thing is they have a dedicated freight, which means they’re getting like.

They’re not getting this load board crap, crappy loads and stuff, having to renegotiate. They’re based in Sacramento, I think they got dedicated lanes into Utah or Idaho. I think I read that already. Yeah, they 

Caroline: It said they have about 80 percent of their lanes from Idaho and Northern California are dedicated lanes.

Gurvir: Yeah, basically their business is like on auto, right? Like you got dedicated freight as long as, and all you need at that point, if you have dedicated freight is like really good drivers, just take care of your people. And the business just does right. It does well. And it doesn’t have to be a hundred trucks.

It doesn’t have to be, crazy amount of numbers, right? I think they’re running just a few trucks, maybe 10 to 20. I don’t know the exact count, but 

Caroline: It’s just seven, actually. Seven reefer reefer trucks. Yeah, 

Gurvir:Aand this is running a really good, tight, [00:16:00] profitable operation and and just focusing on the right things.

I’m sure their safety is under control. Insurance is under control. They got dedicated freight. I’m sure they’re working less. And it’s a hard thing to do in trucking to be able to find dedicated freight. Once you do, you know that, hey, you’ve done something significant for your business and it’s you don’t got to be chasing those load words and negotiating it on every single Load and freight and that’s a good spot to be in.

And that’s something that everybody should aspire to like graduate to. Like, how do you go from a load board on to a dedicated freight and then you have a really stable business. 

Caroline: Yeah. And one thing that I noticed, a couple of things that I noticed that, that made me smile. One of them was that during the COVID 19 pandemic, they made a conscious effort not to do what a lot of trucking companies did, which was to raise the prices significantly on those dedicated lanes and for their customers. So they could have raised their prices a ton in that time because getting trucks was really expensive. All of our so so you’re your [00:17:00] alternative was going to be more expensive comparatively.

So what they did, they decided we’re not going to price gouge our customers, even though we could probably make a lot of money by doing that in these couple of months. We’re not going to do that. We’re going to say we’re going to give them a good deal and because we want to stick with them in the long run.

And that’s the kind of really good emotionally intelligent level-headed type of decision to make in that moment. Whereas I think a lot of people fell for the dollar signs in their eyes and really raised the prices and were to only take freight for a really high amount. And they were just trying to ride the wave as high as they possibly could decided not to do that.

And look at them. They’re still in business in October of 2024 doing really well. 

Gurvir: Yeah, and that’s because, the shipper acknowledged it’s, this is a relationship-based industry, right? Like I’m sure the shipper valued that or, these guys stuck around. They didn’t increase rates So they’re not being like really predatory and just even though the market rates are much higher.

They’re sticking to their rates and now, the shipper’s taking care of their partners and [00:18:00] making sure that even the rates are considerably low. They pay them fair rates so they can continue to run their operation. It’s a it’s a two-way relationship, right?

That’s really awesome to see. And that’s a lesson, right? If you get good rates during the boom and you have a direct and dedicated customer. Keep them happy, make sure the service is on point, make sure you’re fair on the rates don’t go with the swings, right? If you build a long-term business and a steady business, know that your customer will take care of you when spot rates also go down, right?

So I think that’s a big learning that if you ever get a dedicated freight, make sure that you’re fair on pricing and you’re able to take care of your customers because they will take care of you when things go down. 

Caroline: Yeah, 100%. Then the last thing that I thought just was really nice. They said that they often the these 2 business owners who are, business partners said that their decisions often involve heated debates, but they always align on what’s best for the company and the drivers and that just reminded me a lot of the C suite at Bobtail that sometimes we have there’s some heated debates in all of our meetings of whoever’s working [00:19:00] for Bobtail and at the end of the day, the question to answer is this better for our customers? Is this better for our employees? What’s the best way to go about here and just prioritizing that. 

Gurvir: Now heated debates are good, but as long as you think of us, you’re on one team and the goal is always singular to, achieve something, great and accomplish the goal together.

That’s how I learned a lot. I think you want to hear like opposite perspectives and sometimes we all learn from each other with that. But people are passionate and that’s good, right? People are passionate about problems and feel passionate about their viewpoints. Definitely those kinds of things are very important in pushing the business further because you don’t have all the right answers all the time, by yourself.

Caroline: To wrap up, I know that you mentioned the tropical storm that’s coming in. Do you want to talk a little bit about that? 

Gurvir: Yeah, I’ll talk about that a little bit, in terms of the tropical storm Helen generally hurricanes and storms lead to higher spot rates because of the capacity that just gets removed out of certain areas.

I think I believe the hardest hit areas right now are like North Carolina. And [00:20:00] a really hard hit and that capacity evaporates and you’re going to see a lot of rates go up around Virginia. And I think that’s an impact on direct impact on, on, on trucking, but hopefully those families and everybody that’s affected is safe, right?

That’s foremost, the most important thing. These storms are obviously, this year we talked about this on the podcast that the hurricane season is going to be pretty bad. I think there’s another one. It’s on its way as well. We just saw how but this is the worst hurricane season that we have seen, even though it makes trucking better, like in terms of rates and stuff, but we do understand there’s other side to this, which is like families and deaths and casualties and all that stuff, which is, prayers out to everybody that is being affected.

I know Asheville was hit really hard. But in terms of trucking we are gonna see that rates will go up in those affected areas. And obviously, with the destruction and everything, you’re going to see some level of activity with housing and stuff taken those in those areas as well.

But let’s there’s a lot of unknowns and things that are happening right now with the strike with the. With Helen and there’s another hurricane coming. Let’s see what [00:21:00] happens with the trucking market. And that’s the objective of the podcast. Like, how can we get more information and try to see here?

What’s going to happen to trucking market in the next 2 to 3 months? And a holiday season is here, October, November, December, October is going to be better than September. I feel good about October. Let’s see if it’s significantly better or not. But November and December obviously are going to be good months because of the holiday season.

I think more activity you’re going to see is in November. But yeah, let’s, we’ll keep watching on the hurricanes as well and see what kind of reporting we can get in terms of what is next. 

Caroline: Yeah, and we’re coming up on some of the busiest months in trucking and sometimes the most stressful part of the year.

So just make sure, as a business owner, as a driver, that you’re taking care of yourself, that you’re. Prioritizing your own safety, your own health and your own peace of mind. And we hope that this podcast gives you a little bit more information of how to make decisions better so that you can maybe relax a little bit and not relieve some of that stress that business owners feel, especially around this time of year.

Gurvir: Yeah. One last thing I would say is this holiday season, [00:22:00] UPS, FedEx, A lot of them are going to have contract freight for one and a half months or 45 days. Take advantage of that, if you know who’s, who, which brokers have those runs, whether it’s FedEx or through Coyote or UPS, it’d be good to get like a 45 day dedicated freight run and make good money before the year ends.

So if you know you have contacts, I know we’re helping some of our clients get those contracts. For about 45 days. It’s something as the year comes to an end, especially our dependable carriers. So look out for that. So if you don’t have any, if you have any contacts or no people that are in that space, definitely try to take advantage of that.

Other than that, have a good week. We’ll keep on coming with more episodes, give us feedback on how we can improve and what are some new topics that we can discuss. 

Caroline: We did get a comment from Lionel Sanders 8404 who asked us for another video with Victor from Big Vic TV. So hopefully we’ll be able to get him back on to keep talking box truck business, everything to do with box trucks.

Gurvir: Okay. Awesome. Awesome. Thank you so much everyone and have a great week and drive safe and be [00:23:00] safe out there.