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    Home » Blog » GDP, contract, spot slide downhill
    News Trucking WHAT THE TRUCK?!?

    GDP, contract, spot slide downhill

    GDP now down with spot and contact rates
    DoonerBy DoonerApril 28, 2022No Comments6 Mins Read
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    Welcome to the WHAT THE TRUCK?!? Newsletter presented by Transfix. In this issue, economic headwinds hit trucking; driver survey on state of the industry; Nikolas hit the streets; close call in WA

    Contract follows spot

    SONAR

    Downtrend — Dry van spot rates inclusive of fuel shed another 8 cents this week and 89 cents since the market’s peak. What’s also worth noting is that contract rates are seeing the down pressure from spot as well.

    Twitter

    Other factors — Don’t look now but GDP dropped 1.4% in Q1. CNBC reports, “Consumer expenditures rose 2.7%, but that came amid a 7.8% increase in prices.” FreightWaves’ John Paul Hampstead writes, “On March 24, FreightWaves warned that the trucking industry was set up for another 2019-style bloodbath, based on sharply falling truckload spot rates, excess capacity in the small carrier side of the market, rising inventories, and softening consumer demand.” People may be paying more on retail goods but they’re getting less for the money … which also means less freight.

    Taking a break from posting my art work to share this amazing thread about lying in logistics. https://t.co/Gn2hZ6fjSf

    — Ryan Petersen (@typesfast) April 27, 2022
    Twitter

    Real talk — Amid all this contract and spot talk, a discussion broke out about the first rule of freight: Contracts mean nothing. Check out this thread to get caught up (Flexport’s Ryan Petersen recommends it after all). For those not in the know, contracts in freight are like at-will employment. You work together until one of you decides not to, and that decision is often driven by the dynamic between contract and spot rates. So why don’t carriers fight for binding contracts?

    As FreightWaves CEO and founder Craig Fuller tweeted: “There are 1m+ shippers in the US (companies that buy trucking services), 200k carriers (trucking companies), and 16k freight brokerage firms. The largest shipper has less than 1% marketshare and the largest surface freight company has about 2%.”

    Meanwhile in wait times— The Dude notes, “Seaports have added 24 minutes in wait time over the past two weeks but still can’t overtake food distributors on the SONAR Time Suck O’Meter.”

    What are drivers saying?

    Ingrid Brown

    State of Trucking — Back The Truck Up’s James “Rooster” Bowen broke down SmartHop’s latest The State of Independent Truckers and Small Fleets report. According to SmartHop, “This report is based on the results of a survey to 1,000 respondents, including owners of small fleets, those with small fleet drivers, and independent owner-operators.” 

    What is the sentiment of those small fleets? — 64.1% say that lack of stability from spot market rates would cause them to quit. That’s a hair below the top reason drivers quit: burnout from long hours (65.1%). Looking back at that spot market, with a decline in rates drivers have to work more hours to make the same money. That means stress levels are rising for drivers in areas that are becoming increasingly more challenging … which also means more turnover.

    Rooster’s advice — As a 14-year trucker, Rooster has been behind the wheel through good times and bad. His advice? “The pandemic put a brighter spotlight on truckers. We need to use the tools available to us in an attempt to better ourselves. Reducing stress and burnout, finding business partners to help mitigate the daily back office work, and using all the tech we have available to make driving and delivering safer and more profitable are important in the downturn we are facing now.”

    Lucky landing

    Washington State Department of Transportation

    In the drink — According to KOMO News, a collision on I-5 in Woodland, Washington, on Tuesday saw two semis get knocked down an embankment and into the river below. State troopers say speed and bad weather converged when a four-wheeler hydroplaned and crashed into a semi. Although one of the rigs caught on fire and the other ended up in the river, there were no serious injuries to report.

    Here come the … Nikolas?

    Here come the … Nikolas? — Back in September of 2020 when Hindenburg Research dropped its scathing short seller report on the company, Nikola was thrust into top-tier meme status in the EV world. The Badger and Nikola One were canceled, Milton was ousted, and the Phoenix-based company refocused its goals. Fast forward a year and a half, and units of the Nikola Tre are starting to roll off the production line. The BEV maker admits early assembly is slow, with only one unit a day rolling off the line. Last month, Nikola told investors that it plans on shipping 300-500 units by year’s end. After zero revenue and a $690 million loss last year, the company’s Iveco-based day cabs may be the Hail Mary they need.


    Test ride — Earlier this month a Nikola Tre BEV showed up at Covenant right here in Chattanooga. The Dude and I took a trip over there to see how it drove. Here’s our video from the ride and impressions after being in one. TLDR: The truck drove well and was quiet but it isn’t without a few limiting factors.

    Friday on WTT

    Live at 12 p.m. ET — On the show we’re talking about the intermodal community in crisis, nuclear verdicts, freight memelords take to Macedonia, a new song from a trucker and the latest freight market news.

    With special guests: Mark Schedler, senior transport management editor with J. J. Keller & Associates Inc.; Paul Bernard-Jaroslawski of Freight Caviar and Boris Panov of Superior Dispatch Services; Damon Hatcherson, truck driver at CRST Dedicated; and Martin Otero of Steadfast Warehousing

    Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn and Facebook, or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.

    Now on demand

    Is it doom and gloom for trucking?

    PLAY

    Test Ride: Nikola Tre

    PLAY

    Can the FMC help trucking?

    Maritime Transportation Data Initiative — FMC Commissioner Carl Bentzel stopped by WTT to tell us how he thinks the Maritime Transportation Data Initiative can help trucking. Take a look.


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    Don’t be a stranger,

    Dooner

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    Dooner is an award-winning podcaster, content producer and host who is currently the director of audio at FreightWaves and the creative director of Back The Truck Up. In under a year he helped build FreightCasts, the world’s largest logistics and supply chain podcast network in media. He produces and co-hosts the hit podcast and FreightWavesTV show, WHAT THE TRUCK?!? WTT is ranked in Apple Podcasts top-20 Business News podcasts. He also writes a newsletter of the same title with over 10k subscribers in the supply chain and trucking niche. Dooner has been in freight since 2005 and has held directors positions in operations, sales, consulting, and marketing. He has worked with FedEx, Reebok, Adidas, L.L. Bean, Hasbro, Louis Vuitton, and many more high level clients across the full spectrum of the supply chain. He was a featured speaker at TEDx Chattanooga.

    Related Posts

    California moves to ban chrome plating in next wave of environmental protection actions

    January 27, 2023

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    January 27, 2023

    NASA’s sustainability takes flight; University of Arkansas supply chain students soar – WTT

    January 27, 2023

    Trucker wins million dollar grand prize in Kentucky Lotto scratch-off

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