How Truckstop’s New Carrier Vetting Could Affect YOU | Ep 24

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. Today, we’re talking about diesel prices, where you can find the hottest trucking freight markets, and how truck stops new carrier vetting criteria could affect you.

Hey Gurvir, how’s it going? I’m 

Gurvir: doing pretty well and I’m in California this week, so Nice. Enjoying the weather out here, and just out here for work.

How’s your week going? 

Caroline: It’s good, it’s beautiful. 

Can you guess what was the on-highway average diesel price on Monday? 

Gurvir: Oh, I cheated this time, so I looked at the reports before. I know I was saying that the thought that came into my mind was, I was saying earlier this year, how close to 3.50 could we get?

And I think we’re getting closer and [00:01:00] closer 

I don’t think it’s going to last. It’s going to start going up at some point, but I think that number is what, 3.65 or three 

Caroline: 3.625 on Monday. So that is pretty much as good as it gets recently. Pretty much down across the board as compared to a week ago and a year ago, the only place where it’s Up from the last week is on the West Coast, so California and the rest of the West Coast is up only very slightly, though, so we’re looking really good with diesel prices.

And depending on what this freight market has for us, at least diesel prices aren’t going up, which is always a good thing for our carriers. 

Gurvir: Yeah. I was looking at the Bobtail Fuel Finder and I started seeing some fuel stops in Oklahoma and Midwest for 2. 86, 2. 90 and that’s obviously always a good sign.

We haven’t seen diesel in twos or high twos for a long time. So this is really good. And we’ll talk about the freight market, but at least diesel has been a good friend of [00:02:00] truckers this year. 

Caroline: For sure. So before we get into where the hot markets are today, what can you tell us about the freight market in general?

Gurvir: First week of July was pretty strong. Second week was strong. And then post-July, the second half, we took a dip. August has been slow, and September so far has been slow. Generally, August is always the slowest month in the second half, right? August is never a great month. So I don’t want to, look at August and anticipate that the whole year is going to look like this.

I personally think, good things are coming. And considering that August is generally the slowest month September has a slow start, but I think we’re gonna start seeing things pick off slowly. DAT right now is showing that we’ve taken a dip. I think the dry van rates are a 1.99 for this month.

But I think we’re gonna start seeing things pick up slowly. Rejection rate is at around 4%. Again, we need to get to seven for a healthy market, right? So for sure in the first week of July, we were at six and a half. So you saw the drop. But so far, [00:03:00] if you look at the market, you feel like it’s not improving but considering August being a slow month and September, just started I think we’re going to start seeing some increases there.

So I think this is the slowest that we’re going to be in the second half. 

A couple of other things. Before I close the chapter on on, on the freight market. So again, dry van rejection rate is at 3.96, flatbed is at 7, and reefer is at 9. So reefer is actually doing decent, holding off.

But a flatbed has fallen considerably. Overall Freightwaves has been very positive. I think the logistics manager index came out and they’re seeing some positive signs there. Port of LA and New Jersey, New York has been the busiest ever. So there’s a lot of really coming into the country.

Yeah. A lot of that stuff is like sitting around the ports. And the prediction is that the holiday season is going to be pretty big this year. So hopefully I think we’re going to start to see injection rates start going up and rates start going up. In terms of some anecdotal data, my dad saw some great hikes this week.

He’s been doing some local runs for 800, 900 and generally that’s a good sign [00:04:00] to see yeah, the rates going up or not. So hopefully we’ll see the data in the next two weeks, show some positive signs, but at least from hearing from the carriers on the road, I think they’re seeing some sort of an increase in spot rates.

Caroline: Yeah. And definitely comment if you’re listening and you have seen some movement in the freight market, or if you haven’t, comment, let us know what kind of rates are you getting. And what people should expect. So let’s take a look at some of the hottest markets. I’m looking at dry van here. We’re looking at the spotter index.

This shows us a profitability metric. So you can see here the profitability per hour. Of what you can make in these different markets for dry van, we’re looking mainly at Arizona and New Mexico as the hottest markets plus Duluth in Minnesota and Saginaw, Michigan, got Fargo, North Dakota as well.

So up here in the northern Midwest doing pretty well and those Southwestern states, you’ve got pretty good markets in Southern California as [00:05:00] well. And then if we head over to reefer quite a few hot markets here actually the same hottest market is Flagstaff, Arizona. So something’s going on in Flagstaff, Arizona.

If you know what that is, let us know in the comments, but Flagstaff is the hottest market for both reefer and dry van this week. Then you’ve got quite a few hot markets out here in the Northern Midwest as well, all the way out to South Dakota, North Dakota, and out West in Oregon. Washington, Oregon Idaho, Utah, Colorado, and California.

So lots of good opportunity for reefer and flatbed is the same story as the last couple of weeks, although it’s migrated northward. The hottest market today is in Lexington, Kentucky but the markets around Lexington, Kentucky into Illinois. Indiana, Ohio, Missouri, Tennessee and also Saginaw, Michigan is actually a pretty good market for a [00:06:00] flatbed this week.

I’m also looking at a couple of East Coast. Markets in North Carolina and South Carolina as well as in Pennsylvania. 

Gurvir: Yeah, overall, one thing I would like to say is that we actually saw an increase in capacity in August. People are saying this silent capacity is coming back into the market. Not sure what the drivers there are.

It could be people that were sitting out on the sidelines, operators, it could be bigger companies adding some more trucks, but that’s a good thing. People are saying that, it’s in the anticipation that how this is going to be related. Some people are adding a little bit more price. 

Caroline: So do you think that has anything to do with truck prices? Truck prices are really low right now. 

Gurvir: 100 percent. It’s the best time to get into trucking when the prices are really low. I think they’re going to go up basically. Yeah. There’s a tight correlation between spot rates and truck prices. As spot rates go up, truck prices go up as well.

o this is the best time to buy if you are looking to buy. Don’t buy too much. I would say but if you are looking to expand or get one or two trucks, this is probably the best time. 

Caroline: Definitely. Speaking of spot rates, [00:07:00] let’s talk about the Truckstop load board. So a story came out, I read this on Overdrive shout out to them. They always have the best news for owner-operators and small fleets. Truckstop load board launched a new feature for brokers to vet carriers. One of many carrier vetting processes or platforms out there that have sprung up in the fraud apocalypse, as many people are calling it, this enormous increase in fraud, both on the carrier and the broker side, I should say so it’s, not just carriers that need to get vetted. But this is big news. If you’re using the Truckstop load board, most carriers, a lot of times are very wary of tools like this because they usually use incomplete or seemingly arbitrary information to vet carriers. So this is what you have to know. On the truck stop load board, now carriers can be labeled as high, medium or low risk.

Caroline: Obviously you want to be labeled as low-risk. And there are [00:08:00] some things that I could find that determine what your risk level is on the truck stop load board. One is changing your contact information. So changing that can lead to a higher risk rating. I think the idea here is that sometimes people will sell MC numbers To people who want to book loads and those people who are buying those MCs and I’m putting it in quotations here.

So buying in quotations, because a lot of times they’re not actually legitimate transfers of MCs. They’re just casually hey, yeah, I’ll, if you send me a thousand dollars, I’ll let you use my MC or the other way around. I’ll give you 5, 000 dollars. If you let me use your MC.

And then if they change the phone number or the email, the main contact on the truck stop load board that has that same MC, then that could be a sign that’s something like that has happened, right? Unfortunately, as your trucking business grows, you might hire a dispatcher, and that might mean that the phone number that you’re going to use to book loads is going to [00:09:00] change.

So I’m not really sure how they’re differentiating between this, or the reason that people are changing the contact information, but just know that if you do change your contact information on the truck stop, load board, you could get marked as higher risk. Another issue that could make you higher risk is related to your physical address. We’ve talked about this quite a bit on other episodes with some of our guests, don’t use a P. O. box. Don’t use a virtual office. Use a real physical address for your company. That will make you look more legitimate. Even if it’s your home address, you should be using a real physical address instead of a P.O. box or a virtual office because you look like a scammer if you’re using a P. O. box or virtual office. And then there was another criteria that we were talking about a little bit earlier, Gurvir. Do you want to talk about IP behavior? 

Gurvir: Yeah, I’ll give some context, right? Coming from Bobchill, coming from the factoring world, where have we seen risk?

And I think it’s very similar to where Truckstop is seeing risk because, we’re both seeing sort of same [00:10:00] types of risks. One is that double-brokering and stealing someone’s identity. And you want to make sure that this is trusted, so all the things that you mentioned PO boxes, don’t use them, use a real address, using virtual addresses, you can sometimes look up how many companies are based in those certain virtual addresses.

And sometimes you’ll notice it’s 50 companies in one little building. And we all know that those are, virtual addresses, contact information being changed as a big one. It means either someone it’s a high. A risk flag because as a broker, I’m thinking that, look, did ownership change and now I don’t trust the new owner, right? Or who changed the information? It was somebody real that changed it. Or is this somebody actually pretending so they can get the read confirmation and pretend to be more like his carriers. That’s a big thing. And so P. O. box, address and the IP thing is international, right? We all get hit by international dispatchers.

A lot of this fraud actually occurred from outside of the U. S. It does occur within the US as well. So what are they doing? They’re blocking off any international access. So if you [00:11:00] have a dispatcher that you’re working with currently and he’s using your credentials for the load board but he’s accessing the load port from like Lithuania or like Pakistan or India or any of these countries that will label you as a high risk, right?

Immediately. Again, they’re just noticing who is accessing these load boards from outside of the country. So if you’re working with a dispatcher that’s offshore, I don’t know what to do, right? Maybe you should start working with those dispatchers, find someone on shore. But that could lead to a potential red flag.

And the horrible thing is this, once one of these sites label you as high risk, I don’t know what the process is to get to like a normal risk or, okay, or a green light that, hey, you’re a good carrier. And all these things are happening. Are new. They’re happening very fast.

A lot of us are not going to have an idea. And it’s going to take a lot of time to get out of that red list or like a fraud list. I can see how certain good carriers might get penalized for this. 

Caroline: Yeah, I was going to say, I would love to talk to someone at TruckStop about this, and learn from them, because I wasn’t [00:12:00] able to find a lot of information about this new system.

I can find a lot of sales information for brokers. What is it? 

Gurvir: Yeah, the reason they’re going to do that, they don’t do that, is because if they’re letting this information out, they’re telling the fraudsters exactly how, but again, it also hurts the, the good people. 

Caroline: Yeah, of course, like you’re not going to give away your algorithm, right?

But like you said, is there a process that if I’m, do I know if I’m labeled high risk? How would I know if I’m labeled high-risk? If I’m labeled high-risk, is there a way for me to, get vetted through a system that Truckstop has put in place. Can I get my dispatcher verified by Truckstop so that I can get off of that high-risk label.

Caroline: I just wonder, is Truckstop potentially putting themselves in a position where they’re going to lose a lot of legitimate carriers, and potentially lose some business over this, because maybe not as many carriers will be using their platform anymore. 

Gurvir: Banks have figured this out. I’m not sure why they’re not going towards this route.

I guess it’s a extra, step, but it’s, Hey, [00:13:00] you asked for ID, right? If I’m working with somebody, cause I think they’re not trying to go through that route, they’re trying everything like without requiring an ID. How can we figure out somebody’s fraudulent or not? I think it’s a tougher job because these things will keep evolving.

If I have a selfie detection and I’m uploading my driver’s license, I think that is the verified way of knowing whether you are this person or not. And I have to identify myself. 

Caroline: Maybe I have to identify myself every time. I change contact information, right?

If I’m changing contact information, if I’m changing phone numbers or anything, do I have to take a selfie and make sure it’s like actually me changing this information? It’s not really a technology issue. The technology is there. It might be a cost issue on Truckstop.

Like they just don’t want to invest the money in doing it. 

Gurvir: Yeah. Also it adds a whole step in getting verified and then losing some revenue. And some people might get pushback. I’m not going to give my ID. I’m not sure what the thinking there is, but that is one of the most effective ways to find out whether you are this person [00:14:00] that get their ID and have them do a self-verification.

Gurvir: So yeah, it works well for banks. 

Caroline: I also wanted to cover a listener question. Actually, we got a lot of comments on a recent video that we did with a, an OTR box truck carrier who came on and was very generous with his time and knowledge about the industry. He got into the game a couple of years ago and has learned a lot, and shared a lot of that with us and also shared all his numbers with us.

So definitely check that out. We’ll link it in the description if you didn’t catch that episode. But one of the listeners actually sent us a list of questions to our email hello@bobtail.com and Dylan was nice enough to answer all of them. It was a very long email, so I’m not going to read the whole thing, but it was very kind of Dylan to take the time to do all of that.

But one of the questions that they asked her was, what tips do you have for starting up as an owner operator box truck business? And I think his comments really apply pretty much [00:15:00] universally to any transportation business. And he had three points. One was that he said the best tip is to follow the rules and drive safe.

That trucking is one of the most regulated industries out there. And in his state of Texas, he said there are over 50,000 police. In Dallas, Texas alone. If any of them pull you over and give you a ticket for using your phone, your insurance will go up 50%. If you need, and you need to make sure that your truck is well maintained, don’t give anyone a reason to shut you down or affect your MC safety score.

So I thought that was awesome. A really great tip. He also said, don’t pay yourself all of the money. I see trucks on the road that have signs like 50, 60 cents per mile. Figure out what you’re comfortable paying yourself as the driver. And then put the rest away as the profit for your business to reinvest.

Also thought that was a great a great piece of advice. And then lastly, learn the hotspots of where you should be [00:16:00] picking up loads, and how to combine those loads. If you can combine partial loads to get across the country and make more money per hour. So all of these really good tips again, shout out to Dylan.

hanks so much for all that advice. Gurvir, you watched that episode. What did you think? 

Gurvir: I know his advice is spot on. Being personally experienced, I ran a trucking company before Bobtail. One of my weaknesses as a young entrepreneur was that I didn’t pay enough attention to safety.

It will come back to really hurt you a lot, right? When you’re getting those out of service violations and drivers are not paying attention, you’re not checking tires, you’re not paying attention to safety. It won’t hurt you right away. Your insurance will never go up the next week or two months. But when the renewal comes up, you’re going to be in a spot where insurance has gone up 50%.

And guess what? You can’t find insurance. You have no money for down payment. You have to scramble through a down payment and keep your business going. And those things do happen. Insurance companies will just give up at the time of your renewal. So I could not agree with that more.

I’ve been in that situation before, [00:17:00] where I didn’t pay enough attention to safety and compliance, and it comes back to haunt you. Your safety record is everything for you. If you want to survive long in this business, you want to go for years, then you have to be attached to compliance and safety. I would say worry about getting direct loads later.

Yeah. Just worry about the compliance and safety aspect first because that keeps your costs low, right? It does not matter if you’re hauling for Purdue Farms or Coke at $4 a mile. If you are paying three times more insurance than your other parties, right? Then it’s better to haul a broker free.

I know some carriers that are only paying 7, 000 a year, Caroline, for insurance. I also know people that are paying 30, 000 a year. That’s a big difference but it all comes down to safety and compliance I think that first advice is on point. 

Caroline: Yeah, definitely. I think there are two separate groups.

I’ve heard the question once, what’s the main thing that’s going to put me out of business as a carrier? And I think there are two groups here. One is if you’re a brand new carrier. Then maybe it’s getting loads or getting the right, getting a high enough cost per mile, [00:18:00] a rate per mile to cover your costs.

But that really only applies to people who are maybe in the first three to six months, maybe the first year, after you get through a year, the number one thing that’s going to put you out of business is fines and compliance, maybe fraud, but I would even say that compliance puts people out of business.

From what I hear from carriers, compliance puts people out of business way more often than anything else. 

Gurvir: A hundred percent. It’s mainly if your insurance says we’re not going to insure you anymore. I think it’s the number one thing. Given that it’s a decent market, right?

Obviously, if the market has tanked, then there’s other reasons. But even right now, people that are surviving this market have their insurance. Expenses are low, right? Their truck costs are low, their insurance costs are low. You gotta get that fixed cost of operating your business as low as possible.

And that’s really the key, right? Worry about the revenue later. There’s something that you can control immediately. For example, it’s easier to control safety than to shipper. It takes a lot of work to go [00:19:00] find a truck shipper. And truck loads and stuff, right? It’s a little bit easier. It’s something in your control to, hey, check in with your drivers every week.

When your truck comes in, you are doing the inspection. How do the tires look? It’s easier to do that in my thinking, right? Yeah, compliance and safety: make that a number one priority. 

Caroline: Whether or not someone books you on a load is outside of your control. You can do everything possible to show them that you’re a good carrier, to convince them to try and get your rate per mile as high as possible.

But if a broker doesn’t want to give you that load or a direct shipper doesn’t want to give you a contract, there’s not a ton that you can do about that. But what you’re saying, compliance is a hundred percent in your control.

Gurvir: It basically dictates your longevity. It’s like eating healthy when you’re younger, it’ll dictate how long you live in it.

If you want to go farther, you would definitely focus on those core things, right? And compliance means hiring good drivers, having a good interview process. It means a lot of different things and it [00:20:00] takes some time to really become an expert at it, right? Cause there’s so many ways that things can go wrong.

But yeah, compliance is safety number one in terms of, your longevity. 

Caroline: Awesome. All right. That wraps it up for the week. Thanks so much for joining me again, Gurvir. I hope everyone has a great week and improves, take something away from this episode to improve the profitability of their business.

Gurvir: Yeah. Awesome. Thank you everyone. Thank you for listening. Thank you for always, giving us some feedback. Keep the feedback coming. We’d love to hear from you. What topics do you guys want to hear? Comment, email. Yeah. Guests that we can bring on to the show. And stay safe out on the road, winter’s coming.

I think we’re going to see things improve in the next few months. But keep on keep on being safe out on the roads.