This fireside chat recap is from FreightWaves’ Enterprise Fleet Summit on Wednesday.
FIRESIDE CHAT TOPIC: Challenges to trucking newcomers in today’s market.
DETAILS: Rick Larkin, chief information officer of BCB Transport, and Anthony Smith, chief economist at FreightWaves, talk about the challenges trucking faces in the second half of 2023.
KEY QUOTES FROM RICK LARKIN:
“That independent contractor side, boy, I don’t know if I’ve seen a tougher market for a lot of those folks in a long time. This is a tough market and I also think it’s a tough market for the independent contractor because you see a lot of companies that have independent contractors and company trucks, and there has to be a decision at some point that says you have to make sure your trucks are staying productive, that they’re hitting the revenues you [need for] your fixed cost. The independent contractors, in general, they take the overflow. They take the surplus of freight. And when there’s no surplus of freight, they don’t get the miles they were used to. They’re not getting the percentage of the revenue they were used to.”
“So, for the new entrants — and when I talk about the new entrants I’m referring to somebody entering the business under their own authority — hey, don’t. It’s not the time to do it. And if you are going to come on as an independent contractor or company driver, it’s just not a bad time to [be involved with] the larger companies. I know you hear a lot of beef around that. You’re going to hear a lot of rumors about these large companies: how they don’t do this and don’t do that. But here’s the deal: In today’s market, most of them have a great deal of contracted freight, which allows you as that independent contractor or new company driver to perhaps get the miles you need. It may also be the difference in you getting home to see your family, to create a life around it.”
“If you’re deciding whether to buy a truck, you see a lot of cheap prices right now. We’ve seen prices now for used trucks — 3-year-old, 5-, 6-year-old — going back to pricing we saw in 2018 and 2019. It may seem like a great time to buy a truck because the pricing is back down. But the pricing you’re going to get out there on that market may not justify [buying the truck]. The big question is still around parts, around getting your truck in that shop and taking priority over those larger carriers. Also, if you’re going to be an independent contractor in today’s market, I’m going to say it: You cannot make a living today if 100% of your freight is at that spot market pricing. You can’t make it in today’s market. Now, people are making it and here’s the reason: If you’re making it in today’s market off that spot market pricing, there’s a good chance something’s sliding. Because you’re going to pay yourself. You’ve got to take care of your family. But are you making your truck payments? And is that truck getting the maintenance it needs to sustain itself for the long haul? I just think, boy, that is the big struggle with independents today.”