Have trucking rates peaked and is that a great sign for the upcoming holiday season?

Will:
All right ladies and gentlemen, we are back. It is another episode of Safety Stock, Your favorite podcast. I’m Will Davis. I am with Dan Magida. And Dan, you know, do you ever get those feelings of nostalgia when you’re driving down the highway and you look at a trucker that may be passing you by or you’re passing them by and you just want to throw up the signal and see if you can get a honk? No.

Dan:
Wow. Ne never, never once crossed my mind. I thought you were gonna say maybe stare at billboards.

Will:
No. Wow. Well, obviously that

Dan:
Was that the approach you thought I was gonna take? I said it very condescendingly too. Just No,

Will:
No. I, you know, I’m not surprised because, you know, nostalgia is not necessarily your thing. No,

Dan:
I’m a very, I’m a, I’m a very nostalgic person. Now when it comes to, sorry, trucking.

Will:
Well, you’re gonna be nostalgic because number one demand is weakening and demand weakening means that prices are going down as supply has relatively risen and will probably continue to rise slash stay sable over the next six months. Also, we know warehouses are full and so warehouses are full. So the trucks going from ports to warehouses are going down. The reason why we didn’t see too much of a drop is because you’re still needing trucks to go from those warehouses to the store. And then lastly in the interesting point is that truck prices and you know, when you think about car prices, those will continue to go up. Truck prices have continued to rise and that barrier to entry to own a truck is higher than it has been before.

Dan:
Yeah. The sales price of Class A trucks used has doubled since 2019 according to a c t research. But on that point, in the report as well, from the American Trucking Association, there’s a shortage of a record 80,000 and then to maintain just current levels. So not

Will:
80,000 truck drivers,

Dan:
80,000, it just says truckers shortage. So I assume that’s Oh,

Will:
So drivers. Yep.

Dan:
Yeah. But there’s saying they need a million new truckers just over the next decade to put a hundred thousand per year to maintain current levels. So is that based off of possibly slightly softened demand or is it gonna get picked up regardless of whatever the number is? If they’re off even by 20%, it’s still a very high number. Yeah. That we’re gonna have this issue for years to come. But I think on your point as well, you made earlier where okay, we can demand, which we’ve seen across the board you can also see it with ocean container prices have have pretty much level now. There is the holiday rush coming up or ongoing right now warehouses are filling up, but trucking is still gonna have a significant impact on the economy. Now there may not be as much from the port to the warehouse, but you’re gonna have from the warehouse to the fulfillment center to the CM Contra manufacturer. So there will still be a need for that trucking leg. That is vital for this end of Q4 calendar year 2022.

Will:
Yeah, I mean we, we know holidays coming around and once that, once that’s there, that’s going to obviously drive a big movement of goods. Rarely. Both from warehouses that need to get there that are already there. But what’s coming over, you know, I think to your point Dan, and some of the reason, like we’ve seen such a big deal with like the California regulations regarding to like the gay economy and truckers, you know, looking for some feedback there is that it’s, it’s an industry that’s seeing less people, you know, they’re going to see people continue to leave the industry one as like some of the truckers grow older, you know, as we see a tight labor market as it is. And a lot of people are looking at, you know, the type of jobs they’re wanting to do, but also, you know, there’s some automation that’s, you know, coming down the line and that they know that there’s things like Tesla and the other people that like from an autonomous driving perspective, you know, they wanna get there in terms of, especially for trucking.

Dan:
Yeah, love, love the Rian cars, but to your point, technology will revolut revolutionize trucking. Well, yeah. Will to your point, self-driving cars definitely for the future. Evs definitely for the future as seen in the inflation reduction act as well with those credits that could be there. I don’t know if it fully weakens the demand or supply to grab that, the market penetration for truck drivers. I think they’re doing a lot there to actually entice people to join that workforce. Cause also, you know, pay the main driver there, the pay

Will:
Is going up for sure. Yeah.

Dan:
So I think so there but I would be curious to see what happens. Cuz the one thing for sure is people want their goods and I don’t know if that is gonna change in the next decade. That drastically.

Will:
I agree with you, Dan. You know, what do people wanna know before we in the episode is, have you ever spent the night at a rest stop or a truck stop?

Dan:
No, I would just, I would just pay for a really crappy hotel or motel, which I’ve done before.

Will:
Fun fact, I have. And the reason why was because it was during Covid and I needed to get to one of our production facilities for supporting a site. But you didn’t really know if it was like, what was going on at the time. You thought hotel rooms, you were having a lot of people go in and out. So my wife made up the back of our traverse and put like sleeping bags and everything in there, and I slept at a restaurant outside of Columbus, Ohio and my car. Wow. Yeah.

Dan:
Glamp, little glamping.

Will:
Little glamping. Did you let the, did

Dan:
You leave the car car on? How did you for, you know, that ac did you get too hot?

Will:
No, it was like in September-ish, like September of 2020. And so

Dan:
Did you lock the doors?

Will:
Oh, of course. Yeah. Yeah. Locked the doors and it wasn’t the best sleep, you know, the lights were still shining in a little bit through the car and I was nervous, so, you know.

Dan:
Well, I wanna, I wanna thank all the viewers for listening to Story Time with Will Davis right there. As we end another episode of Safety Stock. We hope to hope we didn bore you to death on that story. And you can come join us next time.

Will:
Or if you wanna tell us about interesting places that you’ve been, let us know at hello@anvyl.com. That’s A-N-V-Y-L.com.