Unveiling Spot Market Trends & New Bill to Combat Predatory Towing | Ep 4

Caroline: 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’re going to talk about diesel prices, freight market trends, and the top stories that trucking business owners need to know.

Caroline: How’s it going, Gurvir? How’s your day going?

Gurvir: Day’s pretty well. It’s March, the weather is getting better. are coming out, people are enjoying, outside. And so that’s always good to see, but yeah, the week’s going good. And the day’s going good.

Caroline: Maybe that’s happening for you in Maryland. It snowed last night here in Michigan. The weather is not getting much better, but it will. It will, slowly but surely.

Caroline: All right, let’s talk about diesel prices today. The national average diesel price is $4 and 2 cents, more like $4 and 3 cents. And yesterday it was 4. 035. So we are coming down from yesterday and last week. We’re also down from last [00:01:00] month by about 0. 07. So this is good news.

Caroline: This is always good news when diesel prices are coming down because it just means that truckers get better bottom line and get that extra cents added to every mile. Definitely better than where we were last year, which was 4 and 31 cents. So this is good news. Hopefully this is trending downward. We saw a good low diesel price at the end of January and coming into February and then it shot back up. So hopefully this is trending back down,

Gurvir: Yeah. Fuel prices are falling. Like you said, they’ve come down about 7 cents. And I think this is a third straight week of decline. There’s some stability in the market in the diesel markets. I think we will continue to see diesel prices come down. They went up in Jan, January just because of what was going on. But I think with some stability, I think we’ll continue to come down. I think the interesting thing is that America, U. S. will continue to increase how many barrels. They’re producing [00:02:00] this year.

I think we’re going to continue to break records and I think we should see fuel prices much lower.

It’s also the election year. A lot of interesting things happen. So this is a good thing, market. It hasn’t been that good. And we’ll talk about that soon,

Gurvir: Diesel prices falling fuel prices are keeping some pressure off of it.

Caroline: Yeah. The lowest diesel prices in the country can be found, no surprise here, in the Gulf states, Oklahoma, Texas, Mississippi, and a little bit in the Midwest in Kansas and Nebraska. The top five states with the highest diesel price are Always the main culprits, California, Washington, Pennsylvania, D. C. and New York. People already know in this industry that if you’re down toward the Gulf states, it’s time to fuel up. And if you’re up on the East Coast or out in California, you want to try and find a better price, another state where you can fill up if possible.

Gurvir: Personally, I was going to say it’s I would rather pay the government a little bit late, the [00:03:00] IFTA rather than paying it on the pump this is a mechanism to, just get a few bucks. In your pocket for cash flow and this could add up, right? So even though fueling in New York and south will cancel out somewhat, with ifta I would say, yeah, choose the lower states with lower taxes. I think you can get a few hundred dollars in your pocket for those few months. and that’s, could be your slush fund for repairs, maintenance. And there’s so many

Gurvir: That happened in, in trucking. So just pay if that at the quarter, it’s all good.

Caroline: Yeah. Yeah. All right. Tell us what is happening in the freight market.

Gurvir: Yeah, so freight market January was a good start. We’re like, okay, look, is this a a head fake? But market was pretty decent in January. We saw a lot of positive signs, but February it got a little bit worse. And then We’re not off to a great start in March either. So just to give you some figures dry van spot rates were 2.

Gurvir: 15 in January. In February, it dropped to 2. 06. And now in March, they’re at 2. 01,

Caroline: Yikes.

Gurvir: so it’s been trending down. So we’re going upwards from December to January. January is always usually the slow month. So everybody was surprised. Hey, look, this is a [00:04:00] pretty decent January. We going to start recovering from here on? But then I think we dipped in February and March. So still not quite there. I think we still saw a lot of capacity exiting but the numbers are trending downwards, but I think they’re not going to get much worse, but we’re just hoping to start picking up. Flatbed was the only one that sort of stayed flat.

So January was two 47 a mile. February is 2 48 and then March is also 2 48. Reef has reefer has also come down somewhat. So January was 2, 2 57. February was 2 42, and then now March is 2 35. So produce season is starting. That’s a good thing. And if we’re paying attention to some of the industry experts, believing that, the freight market has bottomed out.

And we could stay stabilized towards the end of this year. I think everybody was thinking it’s mid this year. But now people are just trying to be safe and say, look, it’s going to take us a few more months to for the market to stabilize and arrive, they’re also expecting more balanced freight market conditions. And small increases throughout 2024. But they’re also predicting, [00:05:00] Hey, look, it’s going to be towards the end of this year, not mid of this year. But let’s see how things pan out. But the exciting thing is from March the produce season starts and that’s going to affect the rate.

So you’re going to see a small bump upwards.

Caroline: Yeah. Yeah. We should see that just based on seasonality. I think. We got a little overly excited in the trucking industry in general in January when we saw those rates come up and It turns out that a lot of that was just pressure from bad weather conditions, right? People didn’t want to be driving and so you see rates go up and that often happens when there’s bad weather so we got a little excited and said oh, is this the start of the return of better rates.

Not so much. So big snow storms make a big difference.

Gurvir: Totally. And I know, you’ve talked about seasonality a lot. So just a quick one on one seasonality. The quiet season is usually January to March.

And the produce season usually starts around end of March and it goes towards, up to July and then there’s peak season from August to October where you’re just preparing for holiday back [00:06:00] to school, a consumer demand and all that stuff. And then there’s holiday season from November to December, right? So we are in the quiet season, and we’re slowly coming out. Produce season is kicking off.

Caroline: Yep. Yep. All right. So speaking of the freight market, the story that I’m bringing this week is coming from a From overdrive will spot rates respond to rising demand? Basically, the situation of spot rates right now, like we just said, is that they have largely been flat, if not have gone down a little bit.

We saw in dryvans, it’s gone down a little bit. In flatbeds, it’s staying pretty flat. Load post activity on load board. So this information was coming from the truck stop load board, but that increased only by 1. 6 percent in the last week and the total volume was just 2 percent below the same week last year.

So the volumes are pretty [00:07:00] flat and have been pretty flat since since 2023. But they are below the average, the five year average by 34%. So the last couple of years have been pretty rough around this time compared to the other years. This is how we know we’re in a down market. We know that we’re going to keep experiencing that down market for a couple of years and then swing back up.

The good news is that truck postings fell significantly on the spot market. So we had a fall of almost eight percent. And that means that there are fewer trucks being posted on the load board that are accepting loads, and that should move spot rates up eventually, depending on other market factors as well.

But if you have less supply of trucks in the market, then you have more competition to book those trucks, and rates should go up. That is good news, hopefully projecting into the future that we should see at least [00:08:00] a slight increase in spot rates because there’s just less capacity on the roads.

Gurvir: Yeah. I know this is only looking at five years. I know that there’s more freight today than 2000. 18 to 19 percent more.

Caroline: Wow.

Gurvir: I don’t remember the exact figure but you don’t feel that because of all the capacity that has entered into the space also five years. Does include the COVID lows and also the COVID highs and then the lows again, right? After and post COVID. So essentially this might not tell exact story. Like people might think, Hey, look, is the industry shrinking? Absolutely. No, like the industry is actually growing every year. Every year it grows.

There’s more money being spent on freight but obviously the five years, the last five years have been an anomaly. So yeah this does looking at the pre and post COVID story, we do have less freed, but looking at, if you go back to 2018 and 19, there’s more free today than the 18 yeah, it might not feel that way. But, but there’s definitely more free and things are [00:09:00] trending the in the right direction. I know February, March, things don’t look very good, but I think with the produce season kickoff and also the election year, again, a lot of interesting things happen. I think we’re gonna. We are seeing positive signs and I think we’ll continue to see these improvements.

Caroline: Yeah. And I always say, when people are complaining about how bad rates are or how much capacity there is, it’s true that on a general trend, The trucking market is in a down cycle. However, and there are a lot of people going out of business, right? Because of poor planning, because of bad luck, because of a lot of different, a lot of different decisions that they made in the last couple of years.

And still, it’s not terrible for everyone. It’s not bad for everyone right now. People who invested their time and money in getting a flatbed. For example, two years ago or a year ago, they’re not doing too poorly right now. That’s been a really resilient type of equipment to have over the last couple of years.

Yes, it has gone down, [00:10:00] but if you know how to operate a flatbed, you’re probably doing okay still. And so it, there’s so many different factors. Just because the market is down doesn’t mean you necessarily have to be down. It could be that in. Your local area, there’s a shipper that cropped up in and you were able to make a deal with, that person.

You knew them personally, or you got connected to them somehow. Those kinds of strategic moves that you could make as a business owner are not always tightly connected to what’s happening in the general market.

Gurvir: And it’s hard, right? Like my dad recently switched from reefer to drive in, he had been driving reefer for almost 10 plus years and he switched, because he was just tired of the waiting time. So reefer wait times are really long

And he just wanted to, tone it down and go to drive in. And then last few days he was like, Hey, should I go back to reefer? But it’s hard, right? Like you

The other equipment starts seeming like, Hey, they’re doing much better. So should I

Caroline: Yeah.

Gurvir: And those are things that are hard, it’s hard to manage and you’ve got to give it a few months to see, Hey, look, and also tracking the data is important, right?

Gurvir: Like whenever I talk to him, he doesn’t track data. I think a [00:11:00] lot of truckers don’t. So I try to tell him, Hey, look, reefers in January, I told him reefers doing much better. Like right now, looking at the data in February and March, I might not suggest to him like, Hey, look, you should go back and just stick with dry, man. too old for a flatbed. He’s not gonna be able to get out there and put a

Caroline: Sure.

Gurvir: yeah, I think continuously tracking these things and let the data drive your decision making is definitely the key. Yeah, I think that makes a lot of sense.

Caroline: When you see it on an upward trend, though, I think it’s, be in tune with that. Obviously it’s always going to be a risk, whatever you decide to do, right? But staying with what you’re doing is also a risk. So I think people don’t always it’s easy and comfortable to stick with what you’ve always done and operate how you’ve always operated because it seems like the safest thing, but it’s not always.

You’re taking a risk by not making changes. Right?

Gurvir: Yeah, I think, yeah, I think definitely looking at the data and that’s what we’re going to be bringing on this podcast. Hey, what does the data tell us? How are the rates doing? And slowly we’ll continue to bring more and more data so that trucking companies and truckers can make those decisions.

Caroline: Absolutely. All right. What do you got for us [00:12:00] this week?

Gurvir: This week I think we discussed the towing reform. A few weeks back, so Florida DeSantis is expected to sign a towing reform in Florida, where counties are going to be required to set maximum towing rates and then the operators have to itemize all the fees. So that’s a good thing. So there’s a federal conversation that was starting and Florida is actually planning to sign this into a law. And it’s related to like towing and storing of trucks. 

Caroline: Yeah.

Gurvir: what are the maximum fees that you can charge? What are the requirements regarding removal of vehicles? What are the requirements regarding liens and notices of times people would just leave their truck at the yard or towing companies would keep it and they would just. And now they’re the owners of the truck regardless of how much loan is left on the truck. So this is a really good thing.

We’re expecting some other States to follow, but this is a good thing for truckers because I think this sort of thing was happening for many years. And hopefully, we can put an end to this predatory practice. The second story that I want to bring was. Container [00:13:00] shipments from China to Mexico skyrocketed in January, but not just like by a few percentages, almost 60% if you compare this to last.

Caroline: Wow.

Gurvir: Yeah. Some people are saying that this could be because China is trying to avoid all of the tariffs. And they’re rerouting the freight into Mexico and then just trucking the freight into the U. S. I think people will analyze this and see, Hey, does this whole story make sense or not? But essentially in January 2023 yeah. There were about 73, 000 containers that came and came through Mexico. This year they were all almost 117, 000. So you can see almost a 60 percent increase.

Caroline: Wow.

Gurvir: but let’s see exactly what that is. But could mean more cross border freight for a lot of truckers and a lot more activity. I know there’s a lot more activity already happening at the, at the border. Yeah. Big fulfillment centers and warehouses to bring free from Mexico into the U S and have a full supply chain in Texas. So that’s a really good thing. I think you’re going to see a lot of boom in the next coming years. Overall, I think Mexico is the number one [00:14:00] trading partner of us. So you’re going to see that activity increase. And I think it’s a good thing, you hedge your trade into these different countries. And I rely on one country. I think we relied on a lot on China. So I think Mexico is becoming that big partner for us. So I think good things for trucking overall.

Caroline: Yeah, absolutely. We’ll do some research on what you need if you are going to be crossing the border and taking freight from one country to the next, because I know that there are some special requirements that people need that businesses need to be able to do that. I also think that it could take some pressure off of ports, so that might be a Good thing for folks who are used to going into ports and seeing those really long wait times.

Maybe that relieves a little bit of that pressure. But hopefully not so much that there’s less opportunity in those areas. But I suppose if you’re at the port in L. A., it’s not so much of a stretch to go down to the border and a fulfillment center to get freight. The other thing that people,

Gurvir: I think it’s a interesting niche that you should look at. Like we can look into it somewhat, but even truckers out there should look into it.

Usually there’s specialized companies that go into Mexico and bring the freight and then you pick it up from there and take it to, to the final destination. But yeah, that could be interesting with the booming activity. That could be an interesting area for some people to look into.

Caroline: Could be some really interesting opportunity for folks on the other side of the border as well. So that could cause some conflict. We might see some more of those jobs going to, to Mexico in the trucking industry, which is, would be interesting and maybe not such a good thing for folks in the U.S. But yeah, some interesting developments and we’ll keep an eye on it to see what happens. We’ll do some research and publish something on our blog about how you can get permitted to do some cross border and international freight activity. All right, we got some questions this time from our website chat.

For folks who don’t know, you can always go to bobtail.com and [00:16:00] chat to us on that chat window. Believe it or not, I am the person that responds to that. My team and I respond to those and we’re the real humans behind that chat window. Come on over and ask any questions that you have, or just pop on over and say hi.

You can also send your questions to hello at bobtail. com. But last week we got a great question from Jim. Who asked, what states do not allow parking on interstate? Highway ramps. I actually did not know that it was allowed in any states at all, but it turns out that this is actually really different between states.

One, the rules around who can park on those ramps and when you can do it. And the rules differ from county to county, from state to state. And so it can be really confusing question to answer. For the trucking industry for someone who’s driving OTR because you’re not asking can I do it in Kent County in Michigan You’re asking what [00:17:00] states allow it and what don’t so I’m curious before I jump into the research we did on this gravure, what has been your Experience with this running a trucking company

Gurvir: Oh, man, hopefully I don’t get this wrong. Never been like, I think from my experience, there never been like a comprehensive list of hey, these states allow, parking, don’t, I think you just have to follow the signage. The on the streets and the roads and the highways and I think that’s probably a better indicator of who allows it or not.

I know on local and counties and cities. I think sometimes you see open spaces and you can park right? And there’s not signage that says you can’t park here. I would think it’s something along those lines. But yeah, I’m not sure if each state has a particular Okay. Hey, you can park on highways or not. I think, by the way, you’re right. I think every state is different. State to state. But yeah, I’m not sure actually. So I would love to hear what do you have on this?

Caroline: So it turns out that this is a very difficult question to answer and no one has answered it completely [00:18:00] online. And so we are actually working on a full report on this to post on our blog of what we’ve found state by state. It turns out that Some states prohibit it completely.

Other states allow it unless signs indicate otherwise. Generally, it is understood to be an unsafe practice overall. So the sort of main line by FMCSA and safety organizations in trucking is Don’t do it or avoid it as much as you can. That’s a lot easier said than done, though, when you are on the road and can’t find parking, because truck parking is a huge problem in this industry.

There’s not enough spaces for the number of trucks that are out on the road. And it, sometimes, you don’t really have much of a choice but to park illegally, especially with the limits on truck parking. Combined with hours of service regulation when those two meet and so in all practicality. Sometimes you just can’t avoid it.

So where is [00:19:00] it completely permitted and what without unless signs indicate otherwise. And where is it completely prohibited? There are some states like Alabama that do allow it generally. Again, you have to look at signage, but generally they allow it. As well as Arkansas I believe Texas is one of those as well.

But there are other states, California, where it’s generally prohibited Colorado as well, where it’s prohibited, and Florida. Most of the states on the East Coast as well, it’s generally prohibited. We’re going to be publishing a whole list of states and what we found on each state and the sources of that information on our blog.

So go there, subscribe to our blog, and get that information so that you can just look it up. It should be a pretty easy tool to use. You’re just going to go to the state that you’re in and be able to see what we were able to find on that, on those rules.

Gurvir: And I think I would say be very careful if you do find some states that allow parking. I think insurance guidelines are structured [00:20:00] differently. You can’t be leaving your truck unattended or, a lot that is not fenced. I think they have whole again, you got to read through your policy. If a freight theft is on the rise and it does happen, right? I think one yeah, A few weeks back, my dad’s load was getting stolen, they stole a couple of cases of beer. It is a common thing and

Caroline: right.

Gurvir: that, hey, look, if there’s a truck parked, it’s unattended, it’s just sitting there. just open the doors and check what’s in the back, right? And we can take a few cases out and that could be done within a few minutes. So you want to be very careful and want to read through your policies.

Caroline: That’s a really good point. There are policies where if you’re not in fenced in lot and you get freight stolen or equipment stolen, that, that’s not necessarily covered by your insurance. Really good idea to, to look at your policy and also just be really cautious and protect yourself.

Absolutely. All right. Next question came from Bo, a great question about hours of service [00:21:00] regulation. So he said, good afternoon. Question, is the 34 hour reset mandatory on a short haul exemption? I am looking at your FAQ on the 34 hour reset, but it does not mention the short haul exemption. So great question, Bo.

Thank you for that. We looked into it and found a great resource on the FMCSA website that is a really handy summary of hours of service regulation. Basically it gives you the 11 hour driving limit, 14 hour driving limit. 30 minute driving break guidelines and in a really handy table. So we’ll share that.

The short haul exemption does exist for drivers operating within a 150 mile radius of the normal work reporting location. And in that case, the driver does not Cannot still exceed a maximum duty period of 14 hours, but drivers using the short haul exemption must report and return to normal work reporting location [00:22:00] within 14 consecutive hours and stay within that 150 air mile radius of the work reporting location.

So the air mile radius is a key word there, so make sure you understand exactly. Where you’re going to be and whether or not you’re within that radius. It’s not always driving miles So make sure that you understand what that means, but there is indeed a an exemption for short haul routes

Gurvir: yeah, no, that’s pretty good. Yeah, that’s almost a 300 mile range that you can from your home base that you can drive in. I also don’t think the short haul exemption or the short haul carriers need an LLD. I think there’s an exemption

As well. Look into that as well. I’m very sure again, I’m not 100 percent sure, but I’m like, very sure that you also don’t need an ELD if you are coming back to your home base every day.

Again, air miles are take the, take your home base and draw a straight line.

I think like up to New Jersey I think is 150 miles and then up to Richmond. It’s a pretty big circle.

Caroline: Yeah some good opportunity there. All right Thank you so much for joining us for this week [00:23:00] in trucking. Thanks for joining me again Gurvir. I’ll see you next week

Gurvir: Awesome. Thank you everyone. And let us know what we should talk about. If you have some great suggestions and tips and what we should cover, let us know in the comments and yeah, have a great day and drive safe.