Where Can You Make the Most Money (PROFIT) in Trucking? | Ep 33

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, some big political changes, and changes in ways that brokers can Right reviews for carriers.

Caroline: If you want to stay up to date with everything trucking, we release a new podcast episode on YouTube, Spotify, and Apple podcasts every week. So make sure you subscribe on any one or all three of those channels. So you never miss an update. Hey, how’s it going?

Gurvir: Pretty good. It’s been a long time since we spoke. I see that you’re bringing all these other cool guests and I’ve been enjoying these podcasts. But no, it’s good to be back and doing the show. I feel like after four weeks or so.

Caroline: Yeah, it’s been a while. We have had some really cool interviews with other people. We’ll leave some links in the description with those, and we have even more coming out, but I have to say, I’ve missed these little weekly bi weekly updates that we do on the market. [00:01:00] I’m excited to look at some of the trends in trucking rates again.

Gurvir: Totally. Let’s get into it. Let’s see what’s going on in

Caroline: All right. So I have Spotter pulled up here. We’re looking at van, dry van rates profitability of different dry van markets. So the same ish story that we’ve been seeing the last couple of months, really the upper Northern Midwest, looking at places like Duluth and Michigan North Dakota, South Dakota, we have a couple of hot markets here in Illinois, but the best place for dry vans.

Caroline: Today is in California particularly Southern California. So we’re looking at San Diego, Los Angeles, Ontario, Fresno is also a good market as well as Las Vegas and Tucson, Arizona. If we look at reefer market, we have lots of really good markets here in the Midwest, as well as out West. So it looks like Flagstaff Arizona is the best.

Caroline: Then we go to Idaho. Twin Falls, [00:02:00] Fargo, North Dakota, Duluth, Minnesota, Green River, Wyoming, Salt Lake City, Utah, and Pendleton, Oregon, all are pretty good markets for reefers. And finally for flatbeds, the Midwest is really where it’s at. You have a couple of good markets out on the east coast southeast coast in Wilmington, North Carolina, as well as North Charleston, South Carolina.

Caroline: But other good markets are Saginaw, Michigan, and then we’ve got some great markets in Kentucky, Indiana, Tennessee, and Missouri. I also want to say M. O. is Montana, but it’s not. Montana is M. T. That’s always a confusing one for me.

Gurvir: MO is Missouri. , this is pretty good. I think the freight market overall look, I think last time I remember July was doing really good. Caroline, we reached almost a rejection rate of 6 percent and rates were doing really good the first week of July. And we all thought freight market is back.

Gurvir: And then we dipped we went down in August and September. Those were really two bad

Caroline: Those were

Gurvir: And then, yeah, those were rough months. And finally in [00:03:00] October we started seeing some increases. Let’s look at DAT. What is DAT load board saying? In in August we were at 2 a mile.

Gurvir: In September we dipped down to 1. 97. And finally in October we were up to 2. 02. And in November, we’re also roaming around 2. 02 flatbed, same story. We’re up to 2. 41 just a cent below October. And reefer we’re at 244. So reefer saw the highest bump. So in October, we’re at 239 in November, we’re at 244 a mile.

Gurvir: But all these are sort of an increases from like August to September, not really a good month for free in August, September. And we’re now resembling, the first few weeks of July. If you look at the freight waves and their rejection index, we’re finally over 6%. The last time we were over 6 percent was in the first two weeks of July during July 4th.

Gurvir: Obviously all of these things are pointing to that the freight market is getting tighter. And the capacity loss has been happening for the last few months. At Bobtail, seeing companies go out, I’m sure other carriers are [00:04:00] feeling that the pressures as well all the carriers that are not able to survive are are leaving the business, right?

Gurvir: As your balance sheet and bank accounts are getting dried up and and that is leading to higher rates. If you look at the rate increases from October to November. We are in October where 232 and the freight was reporting that we’re about down about 3 cents in terms of the national truckload index but the rejection rate continues to keep moving up.

Gurvir: So that’s a good sign that the market is tightening. We still have a little bit more capacity, but but yeah, slowly, surely, but the,

Caroline: slowly but

Gurvir: Getting there. Yeah things aren’t getting better.

Caroline: Yeah. That’s we’ll stay hopeful. That these rates continue this way and hopefully the recovery speeds up a bit because we could really use some higher rates. Thanks. Good news is that fuel costs are still far below where they were this time last year. So a year ago this week, we were looking at an average on highway diesel price of 83 cents [00:05:00] higher than where we’re at right now.

Caroline: And Monday, as of November 4th, we were at 350, 353. 6. So imagine 80 cents on top of that. We were in like four thirties last year. So

Gurvir: And if you, by the way,

Caroline: difference.

Gurvir: Totally. And by the way, if you look at the load posts, we’re up about 20. We’re about 20%, 19. 9. That’s as per DAT. So we’re seeing 20 percent more load posting. See and truck posting, which essentially is an indicator of capacity is down about 16 percent from last year, right?

Gurvir: So obviously, these are good signs. You’re seeing loads go up a little bit. And then you’re seeing capacity go down, obviously, with a combination like diesel coming down. That’s a huge help. I feel like that’s also slowed down the capacity exit this year. If the diesel was still high, if you imagine 80 cents higher, I would say you would see many more bankruptcies and you would see more carriers go out.

Gurvir: So diesel has been a savior for the last few months.

Caroline: Definitely. Definitely. All right. We had some very big news this week. What do you have [00:06:00] to say about the

Gurvir: Yeah. Of the election. Yeah. This is something that, you can’t miss, obviously elections were yesterday. The results And Trump wins. And one of the first things I want to discuss is what does that mean for trucking? One of the things that Trump has talked about, is that tariffs on the imported goods.

Gurvir: So any, anything that’s coming outside of the U. S., into the U. S., he wants to put tariffs, to promote manufacturing and U. S. companies. Specifically, I think he’s proposing, again let’s see what happens after he’s elected and what kind of, do these things materialize or not? But he is thinking about a tax on chinese goods of up to 60 percent.

Gurvir: That’s a huge increase and then 10 percent on other countries on all imported goods now what that could lead to if he does something like this what that could lead to is a pull forward in supply chain What that means is that if the tariffs are going into effect, six from months from today You And I am a manufacturer or I’m bringing goods from outside of the country.

Gurvir: I’m going to try to order as many items and goods before that deadline, right? What that does is it just [00:07:00] creates a lot of need for trucking and all these things just coming into the port. And that’s usually referred to as pull forward. You just want to pull forward all the inventory so that you can save that 60%.

Gurvir: And that is probably going to be the biggest immediate effect that you’ll see in trucking. If something like this does happen I think 60 percent is really high. I’m sure there’s some other economic effects of that. But what you could see in the short term is that trucking just does really well.

Gurvir: And that’s going to impact trucking and the rates are going to go up. 

Caroline: Yeah. Yeah. It sounds like that would be a relatively short answer. If you have, if you pull forward your inventory at some point to continue to sell and continue to do business, you have to get those goods either from somewhere else, or you have to start making them in the US. So what kinds of longer term impacts might that have?

Gurvir: I think long term, obviously, I think short term, it creates a big demand for trucking and warehousing and all these things. Long term, I think the goal is to bring manufacturing back to the US. We’re [00:08:00] seeing some, innovations in the on the tech side. I think even if manufacturing comes back, I think one of the things that I heard yesterday was that if manufacturing comes back to the US, they’re just gonna, deploy a lot of robots to do manufacturing.

Gurvir: It doesn’t necessarily mean you’re going to see more job creation. Because if you’re just employing people to create those products, which could be done, much cheaper in China and India. Bringing jobs back and manufacturing back could mean inflation, right? At the end of the day, the consumer gets hurt because those prices are just passed on to the consumer.

Gurvir: So I think the long term effects is you might see more manufacturing coming to Mexico, to Canada, to U. S. I’m talking about the next 10 to 15 years. You’re going to see a lot of robotics in, in, in the manufacturing where it’s just cheaper to have a robot build something than a person even compared to China but that does mean that the demand for trucking actually goes much higher because, Now you need to move raw goods unfinished goods, half finished goods.

Gurvir: So whereas right now you’re creating, actually, if you look at the U S we’re actually transporting a lot of finished goods, right? If [00:09:00] manufacturing comes back, you’re going to be finishing, you’re probably going to be transporting three or four loads behind that one product, cause you need to move all this raw materials and everything.

Gurvir: So the trucking demand actually goes up. So I’m pretty bullish on trucking for the next 15 years or so. Because we do need to, the political impact of, just having China as a trading partner and having a lot of manufacturing being done there. I know U S does want to separate ourselves from the dependence on China as our manufacturing hub.

Gurvir: If that does happen over the next 10, 15 years, you will see a lot of manufacturing come back and that just increases the demand for for trucking

Caroline: Yeah. Another perspective that I’ve heard on the economics of this is that if you, is that tariffs could actually hurt domestic manufacturing in some ways. So if you don’t have something that you’re able to make in the U. S., And it just becomes more expensive to import it, then that reduces actually the amount that you can produce in the United States or amount that you can just sell in the United States.

Caroline: The other thing was we’ve we’ve been [00:10:00] following A professor in logistics at Michigan State University and his name escapes me right now. But yes, Jason Miller. So he talks about how a lot of people think that the what happens in ports and what happens in imports has a huge effect on trucking when actually the data show that you’re saying, it’s actually the internal manufacturing index.

Caroline: Of the United States that affects it more than imports and exports that actually things coming into ports. Obviously, if you work in ports it affects it. But if you’re not, if you’re not doing trucking in and out of ports, then really the, those imports have a limited effect, unless you are operating nearby them.

Caroline: Whereas if you are able to increase manufacturing domestically, then you actually increase the amount of trucking that is needed.

Gurvir: that’s why we look at manufacturing in this from time to time, right? Hey, what’s the manufacturing

Caroline: What’s the manufacturing index? I think there’s still a really big question as to what the impact of those tariffs would be on domestic manufacturing. I don’t think that’s something that [00:11:00] people I think the answer to that is so much more complicated.

Caroline: We’re going to see if it does happen, we’ll see the effects of it. But predicting them is probably a fool’s game,

Gurvir: Yeah, I think you will see certain things go up and certain things come down. But these are things are hard to understand. I think even, obviously you need PhDs. You need economists that you work on

Caroline: We should have Dr. Miller here on the podcast. I’m going to invite him.

Gurvir: I think, yeah, as we get bigger and bigger, I’m sure, he’ll make his way out here.

Gurvir: But these are things that are hard to understand. You need professionals that really know how economy works. And with the effects of these things, people get this shit wrong all the time. They think, hey, this policy is going to work out X, Y, Z. Theoretically, it all sounds good. When it hits the economy, you can have a very different result.

Gurvir: Like we think, theoretically, by the way, tariffs would bring a lot of manufacturing back to the U S that’s going to create a pull forward. Like theoretically, yes, it’s probable that these things would happen. But you’re not definite that these things would happen, until they happen,

Caroline: And in which industries and which areas of the country, like your local area might not [00:12:00] be affected or it might be impacted negatively. It’s also super localized. That’s why we also always say that it doesn’t really matter for you as a business owner. At the end of the day, today, it doesn’t matter where the trucking industry is.

Caroline: You need to figure out what will work for your business and how you’re going to get the best loads for your business, regardless of what’s happening in the larger economy. Maybe you’re going to look to the larger economy for trends to see, to make big, bigger decisions about your business. But on a day to day basis, it’s about building really strong relationships with your customers, trying to get some of those direct shipper lanes.

Caroline: Diversifying the way that you get loads and then probably specializing in a type of freight or a type of equipment that you can just say, this is exactly what I do. This is the lane that I do. And really focusing in and zeroing in on that

Gurvir: Yeah, 100%. I, and one thing I would say is that, You can look at the macro stuff, right? It should not really dictate too much of your decision in your business. One of the things that Bobtail [00:13:00] we discussed, was that, Hey, I know the whole industry is going through a lot of pains, but we still have to find a way to provide service to our clients and grow, right?

Gurvir: It doesn’t mean that if everybody else is struggling, you have to struggle. You have to innovate. You have to get better. That means short, whatever happens in the macro economy, you as a trucking company owner, go get direct freight. I love the podcast that you did with Ed burns, really invest in. Doing what’s best for your business.

Gurvir: Sure. The politics, the economics, they’re going to do their thing. There’s so much that is in your control in your city where you can get direct shippers and just service the hell out of your shippers and just do a really good job. Amazing job. It’s you got to separate the macro versus, what you can deliver for your customers and ensure these things are correlated, but you have a lot more control over things that you can do in your business.

Gurvir: I would say, focus on that really quickly. What are some other things that might happen? Corporate taxes will come down. So if you own a business, obviously good for you, but we might see tax hikes somewhere, or he’s looking to make up for, tax cuts through tariffs, right?

Gurvir: You might see some truck parking issues that may get [00:14:00] resolved or not. Again, it’s all about if these things materialize. We might see some policy changes on autonomous trucking speed limiters engine emissions and some of the other things that are Related to trucking.

Gurvir: So we’ll keep an eye on it and see what sort of a policy changes occurs in the last next few months. But I would say at the end of the day, we have to focus on, what things can we control? But overall, I would say if manufacturing and if these things do play out, it is good for trucking.

Gurvir: You might just end up paying costs, overpaying for certain things elsewhere, right? Depending on things that are not being manufactured in the U. S. But let’s see how these things play out. I think that’s how we’ll find out.

Caroline: Yeah, I think one big lesson is that we know from any previous election, don’t count on political promises to help you with your business.

Gurvir: Yeah, you gotta, at the day, you gotta do it yourself, and there’s a lot of things under your control, and you got to get to work, if you want to build your business and get it up and running. I know you have a pretty good story. I will cover two small points.

Gurvir: I know these are pretty, pretty good points. 2 p. m. Today was the fed meeting where they were going to [00:15:00] deliver. Hey, what are we going to do with the interest cuts? While they’ve cut additional quarter percent, again, this is going to help manufacturing. I think we will start seeing some increases in manufacturing.

Gurvir: We did see an increase. From September to October, we still have some ways to work through that index, but as the interest rates come down, we will see that manufacturing industry will pick up right again. It’s lower cost of just doing everything. So that was a good news. Let’s see how many more interest cuts we see.

Gurvir: So that was really good news today. And that’s pretty much it. I said two stories, but I only have one actually. So the interest cut was the biggest one.

Caroline: I’ve got the second one. So speaking of making your own way in trucking and not, focusing on the things that are outside of your control. Something that is in your control, at least somewhat, is how you address negative reviews on your trucking business. So lots of news in the last couple of weeks about freight guard.

Caroline: This is a place where you can have you have reviews on trucking businesses negative reviews on these. These platforms, this kind of platform [00:16:00] like Carrier 411, they can really seriously harm the reputation of your business. And my internet is cutting out, so I don’t know if this is actually recording. I’m going to try and exit some of my,

Gurvir: I think I lost you there. I’m not sure if it was my connection or yours.

Caroline: I know, I think it’s mine. Ah, such a bummer. Yeah, I don’t know why this isn’t working. This actually happened to me a couple of times. I think it’s my internet. I think it’s my home internet connection that has been really bad lately. Okay, let me try it again because it looks like you’re unfrozen.

Gurvir: Okay.

Caroline: Okay. Speaking of things that are inside your control let’s talk about how to address negative reviews on Freight Guard. This comes from an article from Overdrive. They did a great guide on how to address reviews about your trucking business.

Caroline: Negative reviews on platforms like carrier 411 can be really dangerous for a small trucking business. For your reputation. It can impact the loads [00:17:00] that you have available to you. It will impact negotiations that you’re able to have with brokers and A new change went into effect a couple of weeks ago, where freight guard reports are becoming permanent after 72 hours.

Caroline: So action on these can be really important. important. If something has gone wrong with a broker and you want to contest some kind of bad review, you have to do it really quickly. So make sure that whatever email you have signed up with Carrier 411, you are checking regularly because you’re going to see those reviews come in.

Caroline: And if they are negative, you only have 72 hours after that review gets posted to contest it. What are some of the ways that you can do that? You should gather all of the evidence that you have about the situation and you should try to talk to the broker professionally about what happened and see if they’re willing to change it.

Caroline: This is actually something that we’ve dealt with too, because every company has to deal with this. If you get a [00:18:00] negative review, how do you deal with it? You talk to that person, you talk to that customer and you say, Hey, What happened? I’m so sorry. Let’s try to figure this out. A lot of the times this stuff just has to do with miscommunication and you can fix it, right?

Caroline: Now you want to avoid things like retaliation. You have to always remain really professional in these instances. If you come in really hot and angry on a bad review you’re not really going to, you’re not likely to convince them to change it for you. So you have to remain professional at all times and try to address it as quickly as you can.

Caroline: There are some instances where you might want to bring in a legal resource to deal with this. Although you would have to have a really good built up case in order to make it worth it to litigate it. Or. Or threaten litigation on it. So really the best thing that you can do is just check it early.

Caroline: Make sure you catch all of these things as soon as they happen and try to respond to it as professionally as [00:19:00] possible and try to convince them to change the review.

Gurvir: Yeah, this is a big issue. I think a lot of the times, when I was a carrier, I would get a freight guard report on carrier 411. And once I, one time I missed the deadline to just, put a comment or respond to certain things. But I do know that sometimes just brokers can use it to their advantage.

Gurvir: Look, the way the platform works, and I was able to, see a podcast last week of Darren Brewer, who actually runs carrier 411. And I And he does not, he was a very strong sort of had a voice, on this topic, like they do not allow any carriers to have an account, right? And I think out of the podcast, I learned that he built the product just for brokers.

Gurvir: It is a tool amongst the brokers where they can write comments and reviews on uncertain carriers. And that’s why the product, That’s why the product is good for brokers because they don’t allow carriers to

Caroline: To write reviews.

Gurvir: and write reviews, right? It’s really not a platform and his main clientele is brokers.

Gurvir: It’s not really a marketplace to for brokers and carriers to, comment on and leave reviews for each other. [00:20:00] And brokers like that a lot, right? They can really Dissect and see which cures they want to work with, which ones they don’t. But I think it creates because it’s very one sided.

Gurvir: It creates essentially a tool for brokers to use against the carriers, right? They can misuse the tool. And I do see that brokers do tend to misuse it, right? This tool. And and that’s what I think what carriers are mad about that. And it just you can really just destroy your business over overnight if somebody leaves a freight guard report.

Gurvir: So that is something that I don’t agree with the platform, right? Because it has real implications for carriers. And who’s verifying whether this information is true or not, right? It’s not unless freight guard report, talks to both the carrier and the broker and they’re verifying this information and stuff.

Gurvir: But literally, brokers can use this as a tool to just, leave a bad review on a carrier and they stop getting loads. A lot of the times we used to stop getting loads because, we had a freight guard report and after some time it would go away, right? If a freight guard report was two years old, suddenly, some brokers would start overlooking it.

Gurvir: But it was fresh. Um, brokers would really look at that and use that as a tool.

Caroline: I agree. What I don’t like about [00:21:00] this platform is that it’s very one sided. In a market like this, it creates this additional power dynamic between brokers and carriers. So brokers already have a really Much more power than carriers do right now in the industry because rates are so low. And so it’s just adding fuel to the fire of making it much, much harder to run a business and try to get business.

Caroline: This is one of the reasons, an additional reason that you might want to try and diversify how you’re getting loads. So we just talked to Ed Burns about this. We also have an upcoming episode with truckpedia. So Justin Liu from truckpedia, where we talk about this of how small carriers can set themselves up to get direct shipper loads because you can spread out the way that you get loads over many different sources so that if one falls, you have the other that you can lean on and vice versa, right?

Caroline: If you’re [00:22:00] only ever going on the load boards and you’re. A hundred percent dependent on load boards. That’s a dangerous position to be in this market.

Gurvir: Yeah. No, I think and it’s a, care for women’s a powerhouse, right? It’s such a sticky product for brokers. They have no sales team, no nothing. It’s such a small team and they’ve been able to build this massive business around, care, reporting and care reviews and doing freight guards and brokers really like the product.

Gurvir: And hence, they’ve been able to use this tool. But but yeah, it’s I don’t dethroning someone like Care 4 1 1 would be really tough. I know there’s tools like highway and other tools that are coming that are preventing the double brokering problem.

Gurvir: Our industry’s going through this whole fraud challenge, right? So it’s and sometimes we overdo it right? And really impacts carriers, right? And that’s a and that’s a difficult thing especially, during this difficult time as we’re recovering.

Caroline: Absolutely. All right. We do have a listener comment that we’re going to share. It’s a bit of a long one. So bear with me here. Someone commented on our last one of our videos about box truck [00:23:00] businesses. I have a 2007 box truck, excellent condition equipped with a full cabin and an Very good condition.

Caroline: I bought it and have not used it yet because I cannot leave my job right now. How can I operate it without driving it? The rest of his comment makes a little bit more sense. Are there companies that will trade with me? Or how can I get a contract with a logistics company where they will operate it and and take care of it, including a driver and everything, and then give me a salary?

Caroline: So my first reaction to this, I think, they’re a little bit lacking in clarity here because it’s hard to make your ideas really clear on a YouTube comment. We came back with there’s, there is, a spectrum of options that you can do when you’re starting your own trucking business, right?

Caroline: You can. Actually hire the driver yourself, set up your own business and get everything set up and maybe get a dispatcher and have your company set up that way, but then you have to run the company. Another option might be to rent the truck out to a local trucking [00:24:00] company that needs it.

Caroline: But at the end of the day, they’re really, I think this, And common is trying to get out I have this box truck. How can I make quote, unquote, passive income from it? And unfortunately, in trucking and honestly, really in any industry, but especially in trucking, there really is no such thing as passive income in this business.

Caroline: Even if you are renting your truck out to someone else who’s going to operate it, you have to be checking in with them. You have to make sure that it’s being taken care of. You have to you know, there are going to be things that you need to do and make sure that everything is set up properly.

Caroline: Everything is legal. Everything is good. And that you’re not going to ruin your reputation on some, decision you made to try and make quote unquote, passive income.

Gurvir: Totally. And if everybody could do that, then if it was this easy to make money, everybody would do it and just buy box trucks, then you would buy two, three, five, just give it to somebody and just earn income every month. Of

Caroline: I think a salary is a bit of a stretch. Like the most that you’re going to make profit on a box truck right [00:25:00] now, I don’t know, maybe a thousand dollars a month. Like it’s, but it’s not going to, it’s not going to be a big margin right now. If you have to pay a driver, you have to, remember that you have to pay for insurance.

Caroline: You have to pay for it. You have to pay for all of these things. You don’t just have to. A truck as an asset that’s going to make, that’s automatically going to save you money or make you money. Maybe that was true three years ago. Maybe you could make a really good profit margin off of it.

Caroline: And so that way you could get a, what he’s calling a salary. Now you can rent out Unused equipment to other companies, other local companies we can’t endorse any of those companies. You want to look up your, the reviews and everything. Probably want to talk to some people who have used it, who like it, but there are programs that do this.

Caroline: So fluid truck is one of them. Co op by rider. You also might get, in touch with the local carriers in your area and see if there’s anyone that could use a box truck and wants to rent it from you. So those are options, but at the end of the day, it’s your truck and you need to make sure that you do the [00:26:00] research, seek out those reviews because you want to make sure that whoever rents your truck is taking good care of it.

Gurvir: A hundred percent. A hundred percent. Yeah. There’s no such thing as passive the days if you start seeing something as passive, that’s a, a, a. Yeah. It’s, it is not gonna last. Those were days, those days were there in 2022 in 2021, but obviously we can tell

Caroline: Yeah. That’s why so many people entered the market, right?

Gurvir: And you don’t want that either. As a trucker, as owner operator. You want the stability, right? You just, you want, obviously you want the cyclical cycles here and there, but you don’t, the too much uncertainty up and down that creates a lot of issues. But things are getting better.

Gurvir: As my last note, we are going more towards the equilibrium. I think the inflection point is getting closer and closer. It’s just that we’re moving very slowly towards that, right? And we’re better. We’re in a better spot than last year. I think things will continue to get better. 2025 will be better.

Gurvir: But again, don’t expect a huge, boom in trucking. I think Jason Miller said he’s expecting 15 to 20 percent increases in spot rates by [00:27:00] Q2 of next year. So by around June right now we’re seeing DAT rates around 2 a mile. Maybe at that point we will start seeing rates around two 30 to 40.

Gurvir: So let’s see how the whole year goes. But I think we have still have about six months until we reach that period. But we’re hopeful. I’m positive. I think, again, I think it was going to be here by now already. But I think I might be off by six months. 

Caroline: All right. Thanks for joining me again, Gurveer. Good to have you back.

Gurvir: awesome. Thank you so much. Drive safe. Everyone be safe out on the roads.