Industry Outlook

Industry Outlook: Is Freight Improving?

Wanna know what’s going on within the expedite industry, or with trucking overall? Then tune in to Industry Outlook, presented by Expediters Online and Expediter Services. Join our host, Brandon Baxter, as he engages with folks-in-the-know who will bring their knowledge, ideas, and expertise to the forefront of the trucking industry in 2024 and beyond.

Join us as Brandon and Expediter Services' Jeff Tacker tackle what's going on with freight in the trucking and expedite industries and more on today’s installment👇👇 of Industry Outlook.

Transcript:

Brandon Baxter: Welcome to Industry Outlook presented by Expediters Online and Expediter Services. I'm your host, Brandon Baxter.
My guest today is Chief Operating Officer of Expediter Services.
One Mr Jeff Tacker, Jeff, Thank you so much for joining me today.
How are you?

Jeff Tacker: I'm doing great, Brandon.
Thank you for making time to have me on your show.

BB: Absolutely. Absolutely.
And, and for those that don't know Jeff, we, we, we go way back.
I mean, I've been doing this for about 16 years in this industry.
I feel like I've known you for every one of those years.
So it's an honor to have you on with me and, and again, I appreciate you being here.

JT: Yeah, we're gonna have a good time today, Brandon and hopefully people will grab a hold and maybe decide to come join us in expediting.

BB: There we go.
And that's, that's actually where we want to start off, you know, and I, I don't mean to, I'm not gonna, you know, do the hardball questions or even softball, maybe something in the middle of the road.
But, you know, speaking of expedite, let's jump right into that. Right.
What are, what are the latest trends that maybe you might have been seeing recently, Jeff, when it comes to your corner of the expedite industry, I mean, the, the industry has been all over the place. So maybe we can kind of start there and tell us what, what you're seeing.

JT: We're starting to see a trend we're seeing is people from other segments of the industry, not in expediting, starting to come into expediting because they're saying, hey, there's some of these motor carriers and there's these services and they've expanded their customer base and they've expanded their offerings.
And so I can get into a place and have access to good freight, good rate with a a good brand.
And so we're starting to see some new entrants, not necessarily new to trucking, but new to expediting, starting to come in.
Another thing we're starting to see is people that's already in expediting and understand what's out there.
I will call them the informed crew or the informed operators.

BB: They've been around long enough now, right?

JT: They have, they know it. And so everything that glitters is not gold, you know, so they don't just jump and run to fool's gold.
So they're deciding to stay in mind where they are to work what they have to do what's been put in front of them and they're remaining low.
So we're seeing retention and stability, stay up at the motor cars we're with.
But now that does not mean, that it's not been hard time and, 

BB: and it's interesting that you say that because, and, and as you just alluded to, I mean, Freight Waves, right, a couple months back had an article that seemed to provide, you know, some sort of an update with, you know, what's being known or, or recalled as the, the great freight recession.
I mean, as far as what you're seeing, I mean, where do you think we are as an industry right now? You know, in terms of maybe coming out of the recession, 

JT: Anybody knows that we've been in a tough type of freight market. 
And so there's many things that would cause that.
And like I said, since we're not the motor carrier, I don't have front line conversations with all the shippers and that customer base, but we're getting it given to us very openly and transparently with the motor carriers that we support.
So it has been tough now, the freight still there, they still have the freight.
But as we know when it come out of COVID and all the money that was put in, which drove up the inflation, which drove up all the cost and which drove many people into the trucking industry and even into expediting it brought lots of people in, you know, everybody's chasing the almighty dollar and they came in, they ran after it and trucking grew well, when things tightened down, so costs went up and then the supply and demand started getting out of balance.
They had more supply than they had demand. They had more trucks and they had people or, or more trucks than they had freight to put on the trucks.
So, freight levels, I think are pretty good, but they just got a lot more people vying to get into that freight.
And so where we're at right now, Brandon is, I think the industry is going through a balancing act and it's trying to get things in line and unfortunately, there's good people that's getting going through some very tough times

BB: kind of caught in the crosshairs.

JT: They really are. And some of it is because, you know, some, we make our own mistakes and our own decisions and we get over leverage.
You know, I say we just normal people operating and then other times you just sort of caught, you get splash, you know, with the water that people run through the mud hole that's been created in the storm, right?
And so we, yeah, so that happens. that happens.
But I do think that we're bouncing along the bottom. I think we should start seeing some things trend up.
But now with that, you know, we're in an election year, Brandon and I know there's, I've read many different writers that say people believe that's causing it, that's not causing it. And I'm not getting political, I believe everybody's got their own political beliefs and we're talking about trucking, not about politics.
So I'm not trying to get into that area.
But what I will tell you is in an election year is the knowns or the unknowns.
More likely the best way to put it, that creates the instability.
So you can't trend, you can't forecast, you can't, people don't want to make long term plans because they don't know what's going to come out.
And while it doesn't matter, it doesn't matter what political party, I mean, it matters to you.
But I mean, as far as this conversation it doesn't matter what political party you're, you're in, you just need to know what, what to plan for and what to do.
And then those people make policies which do affect us and then those policies that they make have an impact on how money comes in and money goes out and people come in and people go out because in business people follow the money.
And so that's where we're at, I believe as far as the current industry, as far as coming out of recession.
But some people are saying fourth quarter, you could see a little bit of bump because the demand should be up.
Consumers hopefully will be spending some or more which everything that we have normally is touched by a truck at some point in time, which is driven by a driver or a contractor.
And so hopefully we'll start seeing it bounce, you know, with some positive energy in the fourth quarter.
And then I would expect it's gonna be spring of 2025 would be what my expectations were before things balance back out and everything's right size.
And I do expect that we'll see a good trend up starting in spring of '25.
But that's just projections from, you know, just a common person like myself, 

BB: like you said before, we're not experts in this, you know, we, we, we go along with, with the trends, we, we go along with what we see what we see every day because, you know, you myself, I mean, we've been in this long enough, you see the ups and downs, you see the people coming and going.
specifically an expedite, you see a lot of the same, you know, names and faces.
Sometimes they pop up in different places.
I mean, I know that I've been one of those people and so, you know, that not that there's anything wrong with that.
I, I guess where, where I wanna circle back to Jeff is that, you mentioned, you know, your, your feeling on this and that's all it is.
You know, again, it's, it's an opinion. It's a thought, it's a feeling on where things may be headed. Spring 2025.
I mean, and that's not even you saying that we're necessarily gonna break even.
That's where you feel like, hey, I, I think we're gonna come out on top of this again.
Is that what I'm understanding?

JT: Well, I, we're, there's people breaking even now and making money now, but you just have to, you know, pennies make dollars.
You've got to watch the pennies and pennies make the dollars.
So I think you have to do all that you can do to be, to be wise, and a good steward over what you have.
So you got to be very efficient. You got to keep your costs down.
You got to do everything that you can to drive, cost out of your business and you got to maximize your efficiencies.
It's just simple Business Economics 101. People are making money now. It's just not been easy. It's just not been fun.
You're having to work, as my uncle who's passed now, used to say you got to work twice as hard to make half as much.
So you got to gear down.
If you're in a truck to climb that mountain, it takes more fuel and a lower gear and more concentration to navigate the road that you're on.
So, I'm not saying that trucking is not good.
There's people always gonna make it and there's people always not gonna make it.
And a lot of, some of that has to do with them.
We're just at an, at a different, time period where you've got an odd influx of money that came in during the pandemic and, and odd stimulus packages that come in through certain policies and political parties and that juices the economy and then when that juices the economy is like a kid, they get on a sugar high and what goes up must come down and then that starts coming down when the sugar wears off.
And now all of a sudden it comes down.
But the, the issue is you've got, costs that could be inflation that's here to stay and you got earnings that's, that, that's the best case leveled, if not stagnant or declining.
And so there's where the pain and the gap comes in and it's not easy.
Now, I, I mean, it's real when you have more truck load and your expenses are up and R and M is up and labor costs is up and everything operationally is up and your rates aren't going because there's too many trucks.
I mean, that's a real deal.
When you go to the grocery store, it can't be theoretical.
It's factual whether you got money or don't and whether you're paying your bills or not there, that's a real deal.
So it's just painful but to, to answer your question back around or circle back if there are people making it now and I think they're going to continue.
It's just a, it's just a very, it's just very thin margins and, and your room for error are small, you cannot take extra time out of the operationally out of the truck.
You cannot do things that you had the luxuries or the way to do it before because you just don't have the excess resources to do that.
So I do expect fourth quarter people to get a little breathing room, hopefully.
And that's what we're, you know, projecting and then the election would take place.
Maybe there'd be one rate cut they're saying now in 2024, and then they're talking about one or two in '25 and all of that comes into play with what's gonna happen and getting things, back rolling.

BB: I think that's a great way to kind of wrap things up, you know, what, what is it that, that ES could help with, with folks out there, you know, let's, let's talk, let's talk a little bit about that would be something we can wrap this up with.

JT: Sure Brandon.
So we help people in many different ways.
We want them to come in the way they want to come in.
And we do have specific partner motor carriers that we supply our services to or with, but we can help anybody.
So whatever area they want to come in if they want to come in and just rent a truck and be long term, contractors and rent.
We can do that if they want to come in and own equipment. We can help them do that.
If they have down payment or not, if they have what we're going part of their credit file or their credit history, we've got many different programs and packages to help people.
We've got a owner operator program that helps every truck that whoever chooses, operate the most efficiently that they can with many different backend support mechanisms such as fuel discounts and insurance discounts and shop and labor discounts and tire discounts.
So we do everything that touches that truck except we're not the motor carrier, but we do it in a service capacity, not as we're telling people what to do.
We help people decide and do what they want to do.

BB: I want to thank you so very much for coming on with me today.

JT: It's, it's been a pleasure, Brandon.
I wanna thank you and I wanna say I do appreciate you.
Let me just get on here and ramble and flow and I know that you know, not to take over the conversation, but I just do appreciate you.

BB: This has been industry outlook presented by Expediters Online and Expediter Services.

I've been your host, Brandon Baxter until next time.