Here we are at the beginning of the fourth quarter of the year. I asked the HDT Editorial Advisory Board for their thoughts on how business is going, and what’s ahead for the quarter and heading into 2020.
How’s the Trucking Business?
Steve Rush, president of the small New Jersey-based tanker fleet Carbon Express, says September was a welcome change from the summer doldrums. “My instincts and longtime experience in the tank truck segment tells me that the past two summer seasons were almost the same or exactly what they used to be like decades ago – in short, you never knew what was coming from the middle of June to the middle of September…. we have been down since the middle of June, but September is off the chart with no signs of a let-up. I am seeing it and hearing it from other tank truckers as well. So in short the fourth quarter is shaping up to be a good one.”
While things aren’t quite so rosy for Joyce Brenny, CEO of Minnesota-based open-deck and specialized carrier Brenny Transportation, she says, “We have seen things picking up, a slight increase in rates over last two months.”
However, she adds, “I have never, in 30+ years of trucking, dealt with driver shortage and rate pressure! Where is the money to keep paying these drivers supposed to come from? The industry had one good year, now it’s back to fighting to stay alive! Why are we playing the ‘let’s make a deal’ rate game with customers again?”
John Elliott, CEO of Michigan-based expedited carrier Load One, cites "slightly improved freight volumes," but notes that “pricing [is] still very depressed in the spot market, while costs like insurance keep climbing.”
In fact, insurance rate increases “have been the talk of the town,” says David Heller, director of safety and policy for the Truckload Carriers Association. Brenny agrees, nothing that “insurance costs have increased along with most everything.”
Ralph LoPriore, with Gary Merlino Construction in Seattle, says “for the first time we feel we have the average age of fleet where we need to be; in a sense we are caught up on replacing an aging fleet from the downturn. However, he says, “we are currently down significantly in concrete sales from last year.”
Looking ahead to 2020, Brenny is grateful that her company is nearly debt-free. “We plan to do what we always do, spend money to make money – have the nicest trucks on the road, pay the best pay and benefits, and pull the handle!”
Yes, it’s always a gamble, she notes, and they overshot expectations this year. “Never would have thought it would have turned this fast! Again, a lesson on when things appear too good, they usually are!”
One benefit of business not being so crazy is it lets you slow down and focus on fundamentals. “My personal mission and goal for 2020 is to get back to the basics and live our mission, ‘Grand Champions of Customer Service.’” Brenny says. “We will hire team members who are driven to serve and hope paying forward will net the results we need. I am going to start looking for a bigger location for my company, regardless. When I am brave, my team members are more confident, and their confidence moves us forward!”
TCA's Heller says full implementation of ELDs “places industry all on the same level playing field… With everyone operating in one compliant environment, I can reduce the number of drivers using equipment that can be manipulated to a certain degree.
“Coinciding with ELDs will be the changes that stem from it. Hours of service, detention-based inquiries and easing the shipper/carrier relationship are benefits that industry will take from this improved compliance device.”
Heller says with mandatory ELDs comes a data explosion, not to mention other technological advances that also begin to generate more and more information. “Inevitably, questions are beginning to arise about who owns that data and what elements of privacy go with it.”
Another thing to look for this quarter from the regulatory standpoint, he says, is the Federal Motor Carrier Safety Association’s new Drug and Alcohol Clearinghouse. Registration is supposed to open in October, with use of the database required come January.
The proposed changes to hours of service, Heller says, “represent a massive change to an industry that craves flexibility yet doesn’t fully grant drivers the ability to achieve it to its fullest. Questions will surround this issue, he says, such as:
- Why merely a three-hour pause?
- Will customers insist drivers use the three-hour break to hide detention?
- What actions, if any, is FMCSA prepared to take for enforcement of those shippers/receivers who may “coerce” drivers to using that break rather than expedite loading or unloading?
Steve Rush is concerned about hours of service changes, too. “If in my opinion they go with the wild and crazy option of letting the driver decide to use the split sleeper berth or off duty, the downward spiral of the rates will scare everyone and bankrupt many. Safety will be compromised and the ability to attract new people to our industry will continue to be a challenge.”