Trucking's Cyclical Nature

I want to try to encourage those of you who are frustrated with trucking right now. We've been in a downturn for a while, but I am seeing light at the end of the tunnel. We are in a time period of excess capacity. Simply put, that means there are more trucks available than freight that needs moving.

A business environment like this pushes driver demand down, puts downward pressure on wages, and cuts into already narrow profit margins for the employers. None of those things enrich the life of a trucker. Never fear... the cyclical nature of this business means this downturn is basically unsustainable.

Do you remember how things were booming for us during the plandemic? Way too many people were at home purchasing goods. There was a shortage of capacity which created demand for drivers, put upward pressure on wages, and helped produce better operating ratios for trucking investors.

Upward ticks in the cycle are followed by downward ticks. The reverse of that holds true also. We are nearing the time when carriers will start baling out. We're already seeing early signs of this. The upcoming winter will produce more quitters, and I honestly think by next summer things will look much brighter.

Hang in there drivers and trucking investors. Another wave of good times is rolling in.

Always appreciate the sage wisdom OS. Than k You

I want to try to encourage those of you who are frustrated with trucking right now. We've been in a downturn for a while, but I am seeing light at the end of the tunnel. We are in a time period of excess capacity. Simply put, that means there are more trucks available than freight that needs moving.

A business environment like this pushes driver demand down, puts downward pressure on wages, and cuts into already narrow profit margins for the employers. None of those things enrich the life of a trucker. Never fear... the cyclical nature of this business means this downturn is basically unsustainable.

Do you remember how things were booming for us during the plandemic? Way too many people were at home purchasing goods. There was a shortage of capacity which created demand for drivers, put upward pressure on wages, and helped produce better operating ratios for trucking investors.

Upward ticks in the cycle are followed by downward ticks. The reverse of that holds true also. We are nearing the time when carriers will start baling out. We're already seeing early signs of this. The upcoming winter will produce more quitters, and I honestly think by next summer things will look much brighter.

Hang in there drivers and trucking investors. Another wave of good times is rolling in.

And if you work for one of the quitters, hopefully they’ll sell and you’ll still have a job. 🤔

Very true Steve!

Most of what I call the quitters are very small operators who finally realize the cards are stacked against them. We've seen some larger operations struggling lately. It used to be that a business could borrow its way through a difficult down cycle, but now borrowed money has gotten too costly. When you add in the interest expense incurred, nowadays it tips the scales in favor of departure rather than simple endurance.

I think this correction in market will continue for some time. It's deeper and wider than previous downturns from what I've read, for a few reasons, one of which being that we're in a serious recession although information about it is suppressed by the media and current regime. Consumers are not spending unless they have to, which is evaporating any market demand.

I think it's beneficial to drivers as a whole though from an evolutionary standpoint. If the marketplace continues to shrink, it will be harder to gain entrance. It will be harder to keep your job unless you are a strong performer. The weak drivers will eventually fall off due to starving for miles and money. The strong performers get the miles. If you're a safe efficient driver that's easy to work with, chances are, you're still getting miles when others are not.

The beauty of it is that while it benefits carriers to have a large pool of prospective drivers, they can't continue to do so due to shrinking revenue and profit.

This market will force carriers to trim the dead weight which flies in the face of some woke corporate policies that push equality and try to distribute the workload to all, irrelevant of their performance. As we know, this is not a natural practice and unstainable.

Eventually as capacity in trucks and drivers gets reduced and in balance, you'll have a leaner, more efficient driver base as a whole. That base will increase wages naturally. Experienced, safe drivers, like any tool that performs better, cost more.

I concentrate on fundamentals right now and keeping my value high. Making sure that I'm safe, reliable and easy to work with. Doing so leaves me with options, and in a great position for earning more.

I hope Old School’s optimism is going to prove to be the case. Time will tell, as always.

From what I read, we might be in for a longer downturn in the freight market than just another 6 months. The real estate market is at 1980 and 2010 recession condition and the high interest rates will keep it depressed for the foreseeable future. The national debt had grown by 10 trillion dollars since 2001 thanks to the Bush and Trump tax cuts for the billionaires among us. Those two things: 1)real estate 2) crushing national debt are connected to many other aspects of the economy, like consumer demand, freight and trucking.

Davy makes an excellent point: Drivers are well advised to safeguard their current jobs until the muddied waters clear. I have a pretty good record, but I do have one moving violation on record. If I quit my current job or got fired right now, I truly believe I would have a very hard time finding another job as a OTR driver. I may be paranoid, but I’m like Davy in trying to be a driver that my company wants to keep.

We can hope for better conditions in the future for drivers in general, but until demand for drivers really ramps up, hang on to what you have.

Very true Steve!

Most of what I call the quitters are very small operators who finally realize the cards are stacked against them. We've seen some larger operations struggling lately. It used to be that a business could borrow its way through a difficult down cycle, but now borrowed money has gotten too costly. When you add in the interest expense incurred, nowadays it tips the scales in favor of departure rather than simple endurance.

I hope your optimism proves true but, I agree with Davy that this is likely to last longer.

I believe (only my opinion) it’ll last longer because the powers that be ARE NOT interested in solutions, rather their political agendas and keeping their power.

I hope I’m wrong, but fear I’m not.

EVERYTHING is cyclic, the weather and so much more. This is an election year for Americans to hopefully make a better choice this go round to elect "someone" who CAN and WILL turn things around. And now with all this turmoil in the middle east going on, the U.S. needs to kinda butt out of other countries business for a change.

But not cower from the opposition, stand tough where it's needed. And take care of our OWN, for a long overdue change in how they have been doing things. Sadly with the current leadership (pfffft sarcasm) things have spiraled too far down from where it was 3+ years ago.

Somethings GOTTA change!

You all stay safe, and keep on, keeping on !! I can only watch from afar, just 8,000 miles

I read and study all I can and from the past 18 month trends and current trends most are hopeful by Q2 next yesr things should be balanced again. That means real better days won’t be realized until Q3 next year.

I can tell everyone things have been rough for owners. Some of us knew it was coming, just not how bad it would get and prepared as much as possible.

Great post OS