Article: A Second Trucking Bloodbath?

I read an article this morning:

A Second Trucking Bloodbath?

They say the trucking market will hit a major slowdown this year. Honestly, the article was not that interesting except for one part at the end:

According to the Federal Motor Carrier Safety Administration, the number of trucks in the for-hire market is up 29% since early 2018. It will take time to bleed off excess capacity.

The gist of the article says the number of trucks on the road skyrocketed over the past couple of years. Retailers expected little buying power from the consumer. When they discovered that wasn't the case, they had to scramble to catch up on inventories, causing rates to skyrocket, which caused the number of trucks on the road to skyrocket.

Now, the industry has to bleed away the excess capacity, which will happen throughout the rest of 2023.

So the bleeding away will include both equipment AND personnel, is that a fair assumption.?

Do older drivers tend to choose periods like this to pull the trigger on retirement?

Hang on for the ride.

So the bleeding away will include both equipment AND personnel, is that a fair assumption.?

Yes. Fewer trucks as O/O can't make payments with the loads available. Fewer drivers as companies are less willing to salvage drivers with tickets/incidents/accidents or drug and alcohol issues. Fewer new drivers as companies either freeze hiring or get real picky about who they will take.

While I agree that the economy is slowing and there will be a thinning of the herd until capacity meets demand I also see a lot of emerging threats compounding the problem:

Walmart's push to automation The don't give a lot of details about what that means. Eliminating hostlers? Automatic loading and loading of trailers? It's a safe bet that if Walmart is on board and it works for them that Target, Macy's and other retailers won't be far behind.

California's push to outlaw diesel trucks Right now they want HALF of all new trucks to be electric by 2035, but they keep pushing the date up and increasing the percentage. I get the impression that there will be diesels who just drop and hook at drop yards on California's border while California-only electrics do all the driving inside the state.

Actual self-driving trucks Not sure how much freight moves between Dallas and Houston, but I can see if the model of mapping one stretch of road for robot trucks works they will roll it out to other freight routes. The route mapping seems like a better idea than the, "one truck that can go anywhere" model they keep hyping. There's also Waymo, Google's company that has been mapping cities for robot taxis branching out into freight trucks.

It's going to be a bumpy ride and I doubt any of us will recognize the industry in 10 years.

Prime is already being extremely picky about hiring and rehires. They are also firing drivers with lousy records. Mediocre is no longer acceptable.

I went by the Richie Brothers yard on I70 west of Columbus today. I have never seen so many tractors in their lot ,both sleepers and day cabs. Saw quite a few that looked to be owner operator types along with fleet models.

Right now they want HALF of all new trucks to be electric by 2035

I don't think it's possible. They don't have the production capacity and raw materials needed to build that many electric trucks that quickly, and they won't have the infrastructure in place to support charging that many trucks.

It's going to be a bumpy ride and I doubt any of us will recognize the industry in 10 years

We're guessing here, which is fun, so I'll jump in too. I disagree with that statement. I think very little will change in the next 10 years, just like very little has changed in the past 30 years.

I tell the story regularly that Tony Robbins said, "In 5 years there will be no truck drivers!" That was three years ago, and there are way more truck drivers now than there were when he said it. Two years from now there will be more truck drivers than there are today.

We always overestimate what technology will do to change our society. New technologies will only be implemented if:

1) The government allows it

2) It's more profitable than current methods

If #2 is true about a technology, then #1 will almost always be what prevents it from happening. Why? Because people who are making big money today are in good with the government and they'll influence the government to pass laws protecting their position in the marketplace.

Here's an example we talked about recently. You can produce approximately 6 times more paper per acre with hemp than with trees. So why do we still use trees? Because the logging industry bought tens of millions of acres of forest and built an entire infrastructure around producing paper with trees. So the logging industry influenced the government to make marijuana illegal, to prevent the use of hemp.

You can also produce incredible clothing and other products out of hemp, which could easily and inexpensively replace synthetic materials like nylon. So the chemical industry also influenced the government to make marijuana illegal to prevent the use of hemp in clothing and other products.

Now here's the real kicker. The truly ironic thing about electric vehicles is that we purposely repressed their production and development because gasoline engines were cheaper. The earliest cars, back in the early 1900s, were electric. The streets of Boston, NY, and Philadelphia were full of electric vehicles. When the gas-burning engine was invented, the entire industry shifted to gasoline.

Once the shift to gasoline happened, Standard Oil became so big and powerful that they controlled the market through the government and created what may be the most dominating monopoly in the history of the US.

All these years, they've prevented the development of technologies needed for electric vehicles. Notice how we're always "almost there" but never quite get there? Sure, there are some on the road. But imagine where we would be if we had said 100 years ago that we would stick with electric vehicles.

Lastly, we have a war coming with China over Taiwan. It's coming. China provides many of the materials needed for battery production. We'll see how all of that plays out in the coming years.

Electric vehicles are not the "great solution" people like to think they are. Producing electric vehicles and building the infrastructure needed to support them is a monumental task that does a tremendous amount of harm to the environment.

I went by the Richie Brothers yard on I70 west of Columbus today. I have never seen so many tractors in their lot ,both sleepers and day cabs. Saw quite a few that looked to be owner operator types along with fleet models.

I've passed by a few RB auction yards in the past couple weeks and also noticed a higher-than-average amount of tractors waiting on their next home. Not going to be in my driveway, though.

Another thing with the EV narrative is that alternative fuel is a synthetic fuel made from scrubbing co2 out of ambient air. It's emissions free, carbon negative, meaning it actually reduces carbon, is cheaper and easily produced to scale. Existing ICE machines can run it with no modifications and produce power output the same or above current petro based fuel.

All of the major manufacturers are continuing to develop ice platforms many with electric assist which helps torque loading at startup where it's most needed. Many are investing directly into the synthetic fuels market as are the oil companies.

The technology limits have been reached from a metallurgical standpoint with batteries short of finding non earth metals or conductors, (meaning they don't exist that we know of), the charging rate and conversely rate of degradation in a battery can not be overcome. We can make them bigger, but not longer lasting, nor more efficient nor can we reduce their cost.

I wonder what Walmart is doing on driver hiring . Maybe Turtle knows if they are slowing down.