Contract follows spot
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.
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.
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?
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.”
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?
Test Ride: Nikola Tre
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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