Big Bad Bill

Economic Watch: Construction Starts Index Hits Highest Level of the Year – News –

While great news for flatbed, and we have seen the rates increase, construction starts helps all sectors of trucking.

Most in trucking are watching housing starts to see how open deck rates are going to change.  But construction as a whole impacts the market, not just houses.  And this article does a good job explaining that. What is interesting when we look at index data is they always seem to be looking back.  But based on seasonality that can help predict what is going to be happening going forward.

With commercial construction in full swing, we can feel comfortable that this will stay strong into the winter months, indicating a better than normal winter flatbed market.  And we can also feel comfortable with these numbers because we have seen the rates and capacity for flatbed move in a positive direction during the period that it reports.

In terms of dry van, not all construction supplies moves via flatbed.  So watching indexes that are normally more geared towards flats is a good habit to get into.

Economic Watch: Construction Starts Index Hits Highest Level of the Year – News –

Manufacturing Expands in the Tighest Capacity Market in History

The actual headline of the attached article is:

“US Manufacturing Expands More Slowly In June”

By reading the headline you would think that we are in a worse position.  But, we have 13 straight months of growth in US Manufacturing.  So while we had a decrease of .1 from April (55.4 index in April and 55.3 in May), we have to remember that every month we are resetting the bar.

It is easier to think of this in terms of percentage.  If March had a base number of 100 and we had 110% growth in April then the new base number in April is 110 (100 x 110% = 110).

That places Aprils base number at 110.  So if we have a slower grow rate of 105% then we would have Mays base number of 115.

Not great at math but even I know that 115 is better than 110.

So why are these index’s important?  Because it helps us check the pace of growth.  But in terms of rates and capacity it tells us that what we are looking for (more products being created) that things continue to get better.

So watch the index’s but make sure you understand who the audience for the headlines are.

U.S. Manufacturing Expands More Slowly In June.

DAT Blog | Finding the Hot Spots

It sure would be nice if someone just generated an email telling you that Cleveland was going to be hot this week and that Indianapolis was cooling off.  That would really help position your truck.

Unfortunately, this reading of the tea leaves is not available for those drivers that are running around like the 3 blind mice hoping they land in a hot market.

For them, it is like hitting the Spot Market Rate Lottery.

Fortunately,  for the business owner that is in the trucking business, there are resources for data and knowledge to help them make educated guesses on where to position themselves and how to price themselves for the market.

We all would love this to be like some fixed math formula where we can plug all the information in and get solid results, but in reality it is much more like picking stocks than solving a calculus problem.  At the end of the day the business owner takes all the available data on capacity, knowledge of the industries that are in various markets, and their gut into consideration to make a decision.

Triad of Rates 2Like someone that picks stocks for a living, if you are right more than you are wrong then you are considered a genius.

All of this ties into my Triad of Great Rates and applies to the Knowledge portion but you still need to perform and have relationships. 

There are various resources to help the trucking business professional gain the knowledge to make the best decision.

1. I have to plug in The Trucking MBA.  This is a free resource that I have created to help Owner Operators and drivers looking at becoming Owner Operators understand the business and increase their chances of becoming successful.  All of our online classes are free.  Make sure you are following our blog to get all of the latest updates.

2.  If you are not a Facebook junkie,  one of the best groups around to learn about rates and markets is “The Rates Per Mile Masters”.  At present they have over 2,000 members and the typical internet bickering and insults are not tolerated and dealt with immediately.  I wish I had found a group like this years ago.  They can be found at

3. Check out the blog below on one of the must have products for getting information on rates and capacity, the DAT Load Board.  Chad that runs the above mentioned Facebook group has negotiated a free month.  Just use “promo721” when signing up.  In the coming weeks we are going to be hosting webinars that focus on specific areas in the DAT load board and how to use the tools to get the best rates possible and position your truck in the best markets.

DAT Blog | Finding the Hot Spots.

This is just a short list of resources that are out there to help you become a better business owner.  I am sure that there are dozens more.  Please share.

A rising tide raises all boats.

New Nutritionist Segment!

Nutrition Logo 2

The Trucking MBA is now starting a nutrition segment for drivers. Our staff nutritionist, Lili, is going to be posting later this week and then each Monday going forward. She will provide information and advice on how drivers can affordably eat healthy meals with the limited space and resources they are restricted by. This new segment is open to questions and comments throughout the week, feel free to post your own experiences and ask Lili for any information you may need through our blog. We are excited to be able to help drivers live and feel better.

Be happy, be healthy…

Leveraging Differences – Understanding your Truck Driving Peers

As an Owner Operator that books their own loads it is important to understand your competition.  A big part of that is understanding how the industry is changing.  PFS does a good job explaining the differences between generations.

Armed with this information, a smart Owner Operator can find ways to leverage better rates and build better relationships.

Understanding your Truck Driving Peers – Drive PFS : DrivePFS.

Reality is Better Than the Index Shows| December’s Truck Tonnage Index Spells ‘Best Year Since 1998′

What this index doesn’t capture is what happens when you have a high volume of loads that that are relatively light. Like what we had in December with all the online sales.

I’m not complaining or feel that this is not a good index to watch and understand. I say this to point out that December was actually even better than this index can capture because we had so many good paying miles that registered very little on the index.

The Owner Operator that wants to operate and think like a business owner needs to stop and ask what is an index missing. Is what is missing good or bad for the industry and their business? In this case it would be good.

Food for thought.

Trucking News Online – Trucking Industry News & Information | December’s Truck Tonnage Index Spells ‘Best Year Since 1998′.

A Strong Start for Spot Market in 2014

For January, this is a stunning map. What we are seeing is that in most of the country we have very tight capacity and rates should remain strong for the rest of the month.

Source: DAT

Clearly the weather at the beginning of the month had a big part in this. The lesson for all Independent O/O’s is when you see weather, regardless of the time of year, you need to start planning you next moves to capitalize on the coming truck-to-load imbalance.

Now, I love data and when I can see it graphically like this. I can quickly start looking for ways that I can take advantage of tight capacity.

What I see is a couple opportunities that most would tell you to avoid. Now these are not for the faint of heart but if you are smart and know how to negotiate and who are your best candidates to negotiate with are, you can score a big week.

State graphics-12


I love the opportunity with Florida right now.

“You are crazy Bill. There is no imbalance in Florida.”

And that is what everyone is thinking. They can make good money running other markets and avoid this all together. But Florida is a consumption state. Take, take, take and they aren’t giving out any freight right now. But they still need their sun screen and Walgreens knows that if they don’t have it the customer will walk across the street to CVS and buy it. So they are going to pay to get the sun screen on the shelf (remember, everyone is running with low inventory levels these days).

But that is only part of it. Because normally that still wouldn’t pay enough to make it worthwhile. But as I look at the map I see that North Florida has an imbalance. So for some planned deadhead you can move North and get a better than normal rate.

But you have to be smart and understand how the markets are working.

The sad fact is that many brokers have seasonal rates. And since January is typically (typical in terms of what the uniformed think) a slower month they will bid a lower rate. They are going to be very reluctant to go into their pockets to move this sun screen. And they likely don’t have room with the way these contracts are designed to go back to the shipper and get more money. So they are going to sit on it and take a service failure.

The other sadder fact is that many of the brokers don’t actually own the freight in times like this. Because Broker A is having a harder time moving the freight than normal they will reach out to other brokers to help them move it. Further reducing your ability to negotiate the rate you need.

No of course, don’t not call on these but understand the dynamics at work. Farm2Fleet has a driver that regularly gets good rates from CH Robinson.

Carriers are in a better position to get a good rate from. They will typically have more money in the load to start and they HAVE to move it. Service failures like this are not an option for the carrier. Taking a loss is typically less of an impact and often they have penalties if they have a failure.

The best option is working with 3PLs that are paid a flat rate. They have the room to move up on rates because it is being passed on to the customer. And the good news is that many of these accounts are coming to them when the broker fails to move the load. So the customer is already expecting to pay more.

State graphics-13Denver

There should be a big red flashing sign here. When do you see an imbalance like this in Denver? What is great about Denver right now is the customer is already expecting to pay more to move into the market. So getting the rate that you need shouldn’t be as hard as Florida.

But like going into Florida, you may need to negotiate a little more because the contract rate is going to reflect the typical market conditions.

Caution Icon-07Be Warned

Capacity can change quickly. So grabbing a load on Wednesday to deliver Friday and reload on Monday is a big gamble. Especially in Denver when you are talking about weather. This time of year you can get delayed days with a decent storm or add days because it is just slow going. And while you will likely still be able to get a rate you have lost days of productivity.

Common sense only works in common conditions. What we have now is not common and the educated Owner Operator can take advantage of these conditions.

By the time I post this the map will likely be out of date. But us this as an example to start thinking differently when conditions like these present themselves.