Trucking Is Booming Again, And Drivers Aren't Happy About It

The Trucking Industry Rebound

0:00Over 90% of publicly traded companies are listed outside the United States, so why limit your investing opportunities to one market? Interactive Brokers gives you access to stocks, options, crypto, prediction markets, futures, bonds, and more across over 170 markets in 29 currencies. The world is your market. Invest beyond borders. Join more than 5 million investors worldwide at ibkr.com slash invest. Restrictions apply for more information and support. See ibkr.com slash yibkr. This episode is brought to you by ChatGPT Work. You know that

0:36feeling when feedback, notes, and data are coming in from every direction? ChatGPT Work can make sense of it all, turning scattered context across the apps you use every day into docs, sheets, slides, and more. With your permission, ChatGPT Work can gather context from apps and files, summarize incoming messages, rebuild decks, and help finalize high-quality documents for your team or clients. Stay in control as you move from a goal to polished work faster with ChatGPT Work. Download the ChatGPT

1:08desktop app today and take on your most ambitious work. My name is Jessa. One of the things I love the most about working for UnitedHealthcare is that everybody matters. Every moment matters. There's a person behind every problem. I care because it's what I was put on this earth to do. I'm Ben and I work at UnitedHealthcare. I am just one piece of a larger puzzle, but every piece matters. It's more than just work. We want to make the healthcare system better for everyone. I care because I want

1:39to make a difference. That's what committed to care means to me. Bloomberg Audio Studios. Podcasts. Radio. News.

1:52Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wazenthal. And I'm Tracy Alloway. It's been too long since we've done a trucking episode. This is just an objective fact that we need to get out of the way here. It is time. I mean, to be fair, to be fair. I think we've both written about trucking in the Odd Lots newsletter recently. I think back in January, you started to get some of the freight and logistics companies talking about maybe they

2:23were starting to see an upturn. Yes. And looking at some share prices since then. So I've got, look up Knight Swift at the moment. Okay. What's the ticker? I mean. It's KNX. Okay. KNX. Look up Knight Swift or, you know, JB Hunt. But Knight Swift is a little bit more dramatic. I mean, since January of this year. Oh, yeah, yeah. No, it's a great run. It's had a great run. So I think the trucking rebound, it seems to be here. It seems to be here. You know, the problem with going like a long time, I mean, as you mentioned,

2:55we do write about it. So it's not like we're ignorant. But the one of the things that we learned when we did a lot of trucking episodes, particularly in the years after the pandemic, was like when we talk about like the business cycle, you know, it's like these multi-year cycles when truckers talk about the cycle, there might be like eight up and down cycles within one boom or within one recession. Just extraordinary cyclical. Right. So if we or hopefully anyone else have learned one thing from the truck episodes, it is that this is such an incredibly cyclical

3:27industry. And the standard explanation is that you have these really low barriers to entry for owner operators of trucks. And so as soon as trucking rates start to go up, everyone decides to become a trucker, the market gets flooded, it overexpands, and then inevitably the rates start to come down. And then you have a bunch of independent owner operators who start to go bust and then capacity comes out and the whole cycle can begin again. True. It seems real boom bust. And you mentioned the share prices of Knight Swift and J.B. Hunt. But another way to look at it, I'm just looking at the

3:58Internet Truck Stop Van Rate Index, just a sort of basic measure of how much it costs to move. That was in December of last year. It was like $1.94. I guess that's probably per mile. And now it's up to it broke three. It came down a little bit. So just by measuring the cost of trucking, it's clearly gone up. So we need to figure out what's going on. Sorry. I'm just looking at this Knight chart again, the Knight Swift chart. You know, they've outperformed Meta this year. That's amazing. I know. Look at J.B. Hunt. I think it's like almost a double. Yeah.

4:29Yeah. Like, forget about AI. The money apparently is in trucking. Well, how are all for real? This is how the cycle starts, right? People start saying the money is in trucking and then everyone gets it. How are the turbines getting to the data centers? How are all like, right? Like, we know that there is a lot of demand for physical goods as part of this AI story and the physical goods have to get to the data center somehow. So I think this is part of the story. This is the question. Is this the sort of same rebound that we've seen before? Or is there maybe something more structural that's happening here? We've also had some recent developments with

5:04like the actual supply of truck drivers, right? Which is also something that clearly impacts capacity. So there's a lot to talk about.

Meet Guest Reid Lustelo

5:11There's a lot to talk about. It's time to revisit the trucking market. We have a guest that we've never had on before, but someone really like, someone I've known from the internet for a while who really knows the space very well. We're going to be speaking with Reid Lustelo. He is the chief marketing officer at Truck Parking Club. And so, Reid, thank you so much for coming on OddLots. Joe, Tracy, thanks for having me. Joe, I got to give you credit, man. I said you weren't going to do it, but you did it and you said my name right. So congratulations. Thank you. All right. Test cleared for this episode. Actually, what do you get? Who are you?

5:45What's your background? What's the Truck Parking Club and all that? Why are we talking to you? Yeah, sure. So my name is Reid Lustelo. I have been in freight my entire career, which at this point feels like a long and short 10 years at the same time. Started out of college at a freight brokerage, Echo. It's a large freight brokerage, top five freight brokerage. Then spent some time at a technology company called Trimble. Did my own thing for a bit. That's where I encountered you on the interwebs three or four years ago. Just kind of stirring the pot on Twitter. And then I joined

6:18Truck Parking Club about three years ago and really have been focused on truck parking for the last three years, which we can talk about because that's a trending topic as well. But yeah, I mean, I've been in freight my whole career and I'm a freight guy. And I now live in Chattanooga, which has been dubbed Freight Alley by Craig Fuller. And yeah, so I'm in it, man. So the parking thing is really interesting here, because if you think about a truck or freight rebound, you think about things actually moving. Yeah.

6:50Right. But I'm curious from your perspective, does a rebound look like more trucks actually having to stop and find parking, like desperately circling for a place, I don't know, around a data center or something like that and trying to find space. Like is a healthy trucking market. What does that look like to a company that is in the truck parking space? Yeah, sure. So, you know, naturally, as demand increases, we'll see more trucks on the road. You, Tracy, you kind of talked about a number of the trending topics ahead of this, you know,

7:22and you talked about the cyclical nature of trucking and the barrier to entry, if you will. So there's it's a very multivariate market. And truck parking is one of those things that's structurally, it's very difficult to construct new capacity because it's very limited in where you can do it. It's expensive. Many municipalities don't want it. And so there's a bunch of structural reasons why it's difficult to quickly increase the supply in the traditional sense. And what we've done is really just leveraged existing space. So there's millions of truck parking spaces across

7:55the US that are on private property. And we've just built a network, a marketplace to tap into that. So we go to owners, we say, hey, you can make some money parking trucks, comes on our app, drivers use our app, find parking on private property and pay the owner. So Airbnb sort of style. Yeah, that's what I was just going to say. It sounds like a 2010s era sharing economy sort of thing, but it makes sense. Exactly, exactly. And here's another thing about trucking is trucking is from a tech standpoint is always behind. Right. And so we're, you know, when you operate in the

8:26physical world, and you're in as a fragmented a market is trucking is, I mean, there's nearly a million trucking companies, and most of them are, you know, the long tail is really, really small, less than 10 trucks. It's slow moving, and it's slow to adopt technology. And that's always been the case. And so we're really scaling. And we've really done this at an interesting time. Because like Tracy said, I mean, coming out of COVID, the market was hot, freight rates were through the roof, supply flooded the market, because there was indeed a very low barrier to entry. And a lot has happened

9:00as a result of that. And technology has really flooded the market too, I would say over that same period. Yeah. And so there's a lot, I mean, there's a lot to talk about. So I guess you guys

Forces Driving Freight Rates Higher

9:09tell me where you want to start. Yeah, well, here, I mean, let's start with like, maybe the really simple question. And then we'll drill down even further based on how you answer it. But like, big picture, this surge that we've seen over the last two or three quarters, whether we're looking at stock prices, or maybe more importantly, rates, like decompose the drivers, the forces that have pushed these lines higher. Yeah, I mean, so coming out of COVID, you know, starting in mid, basically mid 2022, mid to late 2022, we saw rates fall, and we were in a essentially a three plus year

9:43lull. And most folks were saying most of the talking heads were saying that demand returning was the only thing that was going to drive rates up. Like that was going to be the only thing. But what we've seen in really the last, you know, since the new administration took office, we've seen a massive kind of crackdown on English language proficiency on non domiciled CDLs. And there's been, as a result, a lot of capacity has kind of structurally been chopped out of the market. And so supply has really dwindled. And man, to complicate things,

10:19there's also been in the last couple months, a Supreme Court ruling, the Montgomery case, which, you know, historically freight brokers who move, I think, on average, about 30% of freight volumes, if I'm not mistaken, freight brokers, which are, you know, a critical component to the kind of the freight ecosystem, have historically not been liable, or have not been held liable for carriers negligence or carriers accidents, right? And now that's in question. And so there's been so many kind of structural things that are really pushing capacity out of

10:53the market, and also making certain types of capacity come at a premium, right? Like safety ratings all of a sudden might matter at carriers now, because brokers might be, you know, there's more scrutiny on brokers selection of carriers. And so there's, there's so many kind of like supply things that are affecting the rates, and that are kind of structurally affecting the barrier to entry. So that next time there is a demand spike, and you are seeing demand spikes in pockets of the market, right? Like Joe, you talked about data centers, right? Flatbed has been booming, and data

11:23centers have a lot in construction has a lot to do with that. But when you if you really were to have like a COVID level event, where like there was unprecedented demand, I'm not sure the market could bring on as much new capacity as it did, like it did during COVID, because there are, you know, fundamental changes to the barrier to entry. And the government is really, really put a lot of it or is working to, I guess I should say, put a lot of barriers in to prevent bad actors coming in mostly, if you were to kind of look at it from their perspective. So yeah, I want to talk more about

11:56the barriers. But just before then, I'm really interested in the supply versus demand question. Are there any empirical things that you can look at to show that capacity is coming out of the market? I'm thinking, for instance, people used to look at like the spot versus the contracted rate, right, as one indication of capacity. And that started flipping earlier in the year. Is that, for instance, an indication that capacity is really getting limited? The data guys will look at the spread between spot and contract

CDL Rules and Capacity Squeezes

12:25rates. I'll give you an anecdote. Yeah, sure. Love it. That's essentially me saying I'm not the biggest data guy. But anyway, anecdote. So I have a buddy who owns a trucking company. He's Ukrainian descent, immigrated here from Ukraine, I think, you know, over a decade ago. And many of his drivers were also Ukrainian. And this is a common story you hear in trucking. There's a many trucking is a very rich ecosystem full of every nationality you can possibly imagine. And they've got their own little network of companies. And they've got their own network of drivers. They bring

12:56people from their home country. And there's a lot of scrutiny on these folks right now, I should add, right, because many of them have non domiciled CDLs, which is a certain type of CDL. And there's been a lot of scrutiny on those. So many of these folks have those CDLs. But despite that, and despite what people are saying about non domiciled CDLs, there's still some really good companies. And in my days, I worked with a lot of them. So I'm still friends with a lot of them. So I was talking to my buddy who's Ukrainian guy. And he's like, look, this non domiciled CDL ruling means I have to get rid of all of my drivers. I have to find all new drivers. And of course, that means I can't hire

13:31people who are in my network, many of whom have non domiciled CDLs. So this is a serious thing for many of these companies. And in many of these companies are the ones that really do kind of run in the spot market, right? They're the, you know, the five, six, seven, one, two, three truck carriers, which is like I said, the vast majority of the total amount of companies. I mean, there's hundreds of thousands of these folks, and they're structurally at a major disadvantage. One, because

14:02of not domiciled CDLs, but also two, because of English language proficiency, which has been another thing the government is really focused on the DOT, I should say, under Sean Duffy has really been focusing on, which is, you know, it started from a very natural standpoint. It's like, if you can't read the signs, how can you operate a 80,000 pound vehicle safely? Okay, fair. But naturally, that's also kind of push people out of the market, too. And you hear the same thing. I mean, I hear the same thing every day from my friends who own fleets or who are drivers, it's things are tough for them

14:33right now. And hiring drivers is difficult right now. And historically, it's been another big issue is driver turnover. Yeah, I bring it up more issues, more rabbit holes, driver turnover is, you know, at some fleets, it's over 100% a year. It's crazy. It's crazy what goes on in some of these fleets. And when you kind of shrink the supply of drivers, that becomes even crazier. So naturally, that'll mean, you know, better pay for drivers who kind of fit the profile that companies are looking for. But it's just kind of more pot stirring, if you will, that's just further complicating the situation.

15:15What if you could use AI to research your investment portfolio and ask, find profitable mid-cap energy companies with growing cash flow? Which AI infrastructure stocks appear undervalued? Or rank stock opportunities based on valuation, growth, and risk? With interactive brokers, you can connect chat GPT or Claude to your investment portfolio to research investments,

15:46analyze your holdings, and uncover potential undervalued opportunities. AI accelerates the research. You can make every investment decision. Open and fund an interactive broker's account in minutes at ibkr.com slash invest. Restrictions apply. AI integrations provided by third parties. IBKR does not verify content generated by AI platforms. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol

16:17Masser. DoorDash, the largest food delivery company in the U.S., is building its own delivery drones and has gained the necessary FAA approvals to operate them commercially, the latest in its effort to delegate more orders to robots as a way of cutting delivery times. Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in-house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense

16:52to the business. Drones are also a way for DoorDash to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans.

17:18My name is Jessa. One of the things I love the most about working for UnitedHealthcare is that everybody matters. Every moment matters. There's a person behind every problem. I care because it's what I was put on this earth to do. I'm Ben, and I work at UnitedHealthcare. I am just one piece of a larger puzzle, but every piece matters. It's more than just work. We want to make the healthcare system better for everyone. I care because I want to make a difference. That's what committed to care means to me. There are so many rabbit holes that you have already thrown out, but just going back to

17:53one, explain the non-domiciled CDL issue to me, because it sounds like, again, I'm not a CDL expert, but just based on the name alone, if I have a non-domiciled CDL, couldn't I eventually turn that into a normal domiciled CDL? That is a great question that I am not the best person to answer. I will be honest about the legality of the CDLs. I think what started all of this was, Joe, you probably, and Tracy, maybe you do too, but there's a group on Twitter that we lovingly

18:26call ourselves FreightX, right? It's like this little kind of freight ecosystem. And for the last, I would say, two plus years, there's been a growing group of people that have been really looking into, like, who are these companies that have flooded the market? Who are the drivers? What types of CDLs do they have? And one of the most tangible things that I remember was, it was probably a year ago, people started to discover that a lot of CDLs were issued to people with something called no name

18:57given as their first name, right? Literally on the... Seems a little bit suspect. Literally on their license, it says, like, no name given. And so I think that kind of, like, as people started to discover this, and also, you also had many trucking companies being registered at, like, there was, like, 200 trucking companies registered to, like, an apartment in, you know, Signal Hill, California, or, like, Sheridan, Wyoming. There's, like, 600 trucking companies registered to a P.O. box. And so that really kind of started people looking at this. And then the non-dom-celled CDL thing

19:30really started to take off, you know, when Sean Duffy and the DOT started, I believe, in June of 2025, really kind of honing in on, you know, English-language proficiency and non-dom-celled CDLs. But I believe non-dom-celled CDLs have been around since the mid-80s. And there's, and it's not

Scrutiny on Training and Licensing

19:46necessarily, like, obviously, it's not unlawful, or else they wouldn't be issuing them. But I think there was a lot of scrutiny put on certain states that were, just had massive spikes in the issuance of CDLs. Like, California and Minnesota, I believe, were the two kind of biggest. And New York were some of the bigger examples where, you know, historically, they'd been issuing, you know, X amount of CDLs per year. And then all of a sudden, out of nowhere, right around COVID, it was, like, 10x, right? And all the while, you know, that all happened in years past, and nobody really looked at it. But then in the last

20:20year, everyone's been like, okay, what's really going on there? And so that's kind of what's led to the scrutiny, if you will. So someone with a non-dom CDL has taken a test in the US, or at least in theory, someone with a non-dom CDL. It's not like they're just like, oh, yeah, I took a test back. So non-domiciled CDLs are for people who are foreign nationals who are not nomiciled here, but are legally allowed to work. Yeah. Right. And so if they have the legal authorization to work, then they can go and get a non-domiciled CDL.

20:51But just to establish the CDL part, let's just say, in theory. In theory, yes. In theory, the non-dom CDL is not someone who's like, oh, I got my trucking license in Ukraine, and then I moved to the United States, and now I'm trucking. In theory, the non-dom CDL is someone who moved here. In theory, right. But when you see a really big spike in the number of issuance of non-dom CDLs that are way out of historical proportion, the question that might arise for regulators is perhaps the quality of the CDL, etc. Like,

21:26that's sort of what this source of concern would be. And to go down another rabbit hole, there's been a lot of eyeballs on CDL schools lately. Yeah. There's some, you know, you remember that guy, Nick Shirley or whatever, like the quality of the leering center in Minnesota? Yeah. It's like you guys, yeah, truckers have the same. Yeah, same thing. Okay. So there's lots of suspect CDL schools, lots of suspect curriculums, lots of suspect trainings. They've essentially been handing out CDLs like candy, it would seem. No, no, this makes a lot of sense. I know, obviously, the administration, Sean Duffy, the Secretary of Transportation, they've talked a lot

21:59about this, etc. Like, okay, how many of these drivers are actually safe and did a proper education, etc. Yeah. But from your perspective, the people that you talk to, it's basically like, no, this is more than just tweets. This is not just, oh, we're looking into this, etc. You think there's a clear, like, on the ground effect from, this is real? Oh, 100%. 100%. And I hear it every day from my friends who own trucking companies. Yeah, 100%. Okay. And it's been much harder to, you know, capacity has been much tighter. You talk to freight brokers, you know, what used to be,

22:32you know, rates have gone up, and it's harder to find trucks. So got it. There's only a couple sources for that right now. I guess what I'm getting at with the domiciled versus non-domiciled CDL thing is, would you expect this to be a temporary blip as the administration, you know, scrutinizes some of these foreign drivers, but eventually they, I don't know, like, maybe they have to go back to school and get relicensed again, and then they come back on stream? Or is this like a permanent cut in driver capacity in your mind? Well, I think if I'm not mistaken,

23:03the government in March of this year said that essentially non-domiciled CDLs, it's not going to be as easy to renew them. Okay. And so naturally, they'll start to expire, and there will be less of them over time. And I mean, who knows, you know, obviously, we can't get a crystal ball out and see, you know, what's going to happen in the next election. So who the heck knows what another administration might do or might be able to do? Who knows how permanent any of this is? I, man, anyone's guess is as good as mine on that.

Broker Liability and Supreme Court Rulings

23:37It occurs to me that there's sort of two interlinked things that strike me as interesting. So let's say, okay, you have the Ukrainian-owned trucking company and a lot of non-dom Ukrainian drivers. And then to your point, though, you know, they're part of a broader network, and they might network with Ukrainian freight brokers, et cetera, et cetera. And now you have the Supreme Court ruling, which for the first time opens the door to the possibility of the broker,

24:09who traditionally wasn't held liable, would be the carrier if there's a major accident caused by them. So it feels to me like this combination, like you could literally obliterate like sort of like whole networks. Like we think of the network as the driver, the truck, et cetera, but the network is also the sort of the capacity as the ecosystem itself. So structurally, this is, if this continues down the path it's on right now, and a lot of the pundits, you know, the legal experts, I know I

24:40could name a couple have said in the last day that if this all keeps going down this path, this is a serious structural issue for the freight brokerage business model. And if the freight brokerage business model is in trouble, then naturally that means that the long tail of trucking companies who primarily get their freight from freight brokers, they're in trouble too. And so, you know, historically, freight brokers have had to have processes to audit the carriers they set up and audit the carriers they give freight to. And each one has kind of had their own process

25:13for that. And that's evolved. And there's been a lot of technology that's gone into the vetting and compliance side of freight brokerage in the last couple of years, mainly because another thing we haven't talked about, which is the whole rabbit hole is cargo theft. Cargo theft has been through the roof since COVID. And there's been a kind of a huge amount of criminal element, like large criminal elements that have come in and are doing everything from spoofing carriers, pretending to be carriers, just setting up fraudulent entities, acting like a normal carrier for a while, then figuring out

25:43where the good freight is, stealing that and then disappearing. Oh, wow. I thought you just meant someone like picking a box off the back of the truck or something.

The Rise in Coordinated Cargo Theft

25:51No, no, no, no. Like, I'm talking like mafia type stuff, right? Like crime rings. And that's exploded in the last couple of years. And so as a result of that, freight brokers have been much more scrutinous of who they're hiring. And now, you know, safety, which is kind of the element we're talking about here with regard to the Supreme Court ruling is like, okay, what's a safe carrier, right? And, and so far, brokers have really kind of relied on the FMCSA's rating, right? It's satisfactory, conditional or not rated, right? And so traditionally, it's like, okay, I hired a

26:25satisfactory carrier, it says on the FMCSA's website, they're satisfactory, that must mean something, therefore, they're good. I'm going to hire them. And they go like there recently, there was CH Robinson was involved in a case where they hired a carrier that was satisfactory that had done like 200 plus loads for them, and then was involved in Iraq. And now they're facing like a $600 million judgment, right? And they're appealing it naturally. But if that I mean, if that holds true, like the freight broker business model is going to be in serious trouble, because the government's not really

26:58telling them like, clearly, okay, this is a safe carrier, this is the vetting standard, use this, if you do this, you're covered, right? Yeah, they're not really doing that. There's a lot of there's a lot of kind of gray areas around this. And that's, that's naturally going to cause a lot of problems for freight brokers. And like I said, the vast majority of these small carriers, and there's hundreds of 1000s of these companies, they get their freight from freight brokers, because they can't go, it's difficult for them to go get direct customers. It's traditionally, like if, if I'm a one truck operator, and I walk into Kraft Heinz, Kraft Heinz is going to be like, yo, like, I'm not giving you

27:30freight, I'm going to give freight to the broker, who can give me 1000 trucks, or, you know, Knight Swift, who can give me 10,000 trucks. Yeah, so it's just a very, it's a very difficult time. Yeah, this is Tracy, what I think like, maybe we need to broaden our conception of what capacity means, because we think of it as drivers, we think of it as trucks, etc. But if there is a small carrier, and it's 10 trucks and 10 drivers, if they can't really like plug into a network that they know, yeah, then that is, is that even capacity?

28:00I'm looking at a headline right now from, I guess, this is a stat from Roadmaster Group, but they're saying cargo theft jumped 60% last year, that just came out three hours ago. And also, there's a New York Times headline saying nearly 11,000 bottles of bourbon were stolen from a Philadelphia warehouse as a result of coordinated cargo theft. It's funny, because you and I both just assumed that when you said cargo theft, I thought it was like grabbing boxes. Yeah, like, you know, like, like in Goodfellas, you're like, that's as far as my criminal ambitions can stretch.

28:32And then the truck driver is like, please beat me up, right? Do you remember that? He's like, please beat me up so that my own boss does not think that I stole it. And but it is much more surprising. Guys, they've targeted Guy Fieri. Guy Fieri had freight stolen. Like all these celebrities in the last like year have like seemingly come out with liquor brands, and they're all being targeted to like, I think Shaq's like Range Rover got stolen off a car hauler. Like there's there's been all sorts of crazy stuff. But I mean, all jokes aside, like it is crazy. It is crazy what's going on. And seemingly, it's only getting worse, despite all the scrutiny and all the tech that's

29:06been kind of brought in. But Tracy, you did kind of mention something interesting, or maybe it was Joe the kind of the different types of capacity, right? Like one thing that I'm thinking a lot about, and I'm not a freight broker anymore. So I'm slightly removed, although I did do it for many years. Historically, there's not really been it's rates really a commodity. And there's, you know, one carrier versus the other might ask you for more money, but you don't really have a good reason to pay carrier a much more than carrier B, you know, some situations might be like, okay, you know, yeah, I'll give you a couple 100 extra bucks, because I know you, I trust you. And that's

29:40worth it. It's pretty much the same service, right? Like you expect the stuff to go from one place to another. Yeah, yeah, it's in tradition, it's been viewed as a commodity. But like now that there's this kind of extra scrutiny on the brokers vetting process and the hiring process, like there might start to be a kind of strata of carriers where like, they've got the best ratings, they're the safest operators, like they're able to fetch a premium and brokers might be like, shoot, like, I have to pay them more because I need to check these boxes so that if they get in a wreck, God

30:13forbid, I'm as covered as I possibly can be in the event that some, you know, billboard attorney tries to sue me for $600 million. Yeah, that's really interesting. So like, you could start to see more, I guess, diversification come into the market, more like stratification on rates, people paying a premium for certain services or trust. I think that would make sense to me if that if that happens, I think that would make sense. The jury's out on if that'll happen. But that makes sense to me.

Driver Morale and Life on the Road

30:40The other thing I want to ask about is just how do people feel about becoming truckers at this particular moment? So rates are up, it seems like the money's there, or at least there's more money there than there used to be a few years ago. But at the same time, we still hear complaints about it's a tough life. You're on the road all the time. The hours are insane. Like maybe you're waiting hours at a port to pick up a load. Hard to find parking. Hard to find parking, clearly. There's a lot to say here. There's a lot to say here. And it's actually interesting because I did just, you know, at Truck Park, we run a survey of all of our driver base basically every week.

31:14And I happened a couple of weeks ago to do a survey basically just about like driver's opinions on the state of the industry. Right? Would you recommend this job to a friend? Like, how do you feel about trucking? And anecdotally, I can say that in my discussions with my driver friends, like, it seems like morale's at an all time low. That's just the anecdotal, what I hear from people. But structurally, I mean, or what I see kind of in these surveys is like, like there's a strong sense of nostalgia in trucking. Like it was much better then than it is now.

31:49Right? You look at like the 70s and 80s when you had Smokey and the Bandit. Yeah. Movies like that. Truckers were like cow. Yeah. Truckers were cowboys. Right? Or explorers or frontiersmen. Right? And they were respected. And it was something that was a desire. It was kind of the last kind of frontier. Right? You're out on the road kind of figuring it out. And now it seems for whatever reason, that that kind of ethos has been damaged. And and you hear a kind of a lot of just kind of like a mourning of the industry when you talk to drivers and like, in this manifests itself,

32:23like if you go to a truck stop, and you just kind of pulled random drivers, I guarantee you that if you ask them, you know, were things better in the past than they are now? And maybe this is just a human thing. Yeah, to a degree, perhaps. So this isn't like a scientific study by any means. But like, there is a strong sense that things were better in the past. And I think there's a lot of reasons for that. So you know, technology for the driver is a bad word. Traditionally. Yeah. Okay. Because technology for the driver has meant surveillance. It's meant in cab cameras, surveilling their every

32:56move for liability reasons. It's meant speed limiters. It's meant electronic logging devices, which severely limits their freedom to operate as they see fit on the road. So it's all of these things that have kind of like, constrained them. Right. And if you think about traditional trucking as freedom on the road, like this, these are all anti freedom things, right? And so if the traditional trucker is looking for a job that gives them freedom, they're not finding that as much anymore. And so technology has had a bad rap. And I tend to agree with the driver on that. Like,

33:32there's all sorts of reasons why all those things are useful. But like, I can understand why they would feel that way. Yeah. Right. If we start from the premise, that it's already going to be a lifestyle sacrifice. And you're like, well, okay, it's a lifestyle sacrifice, but there's a paycheck. And everyone makes a lifestyle sacrifice paycheck. But if it turned out that it's like, in the past, it was a lifestyle sacrifice, plus a paycheck, plus a certain culture of freedom, and the sort of maybe burgers at roadside cafes, like the sort of and then it's just like, no,

34:06it's no longer that it's just the lifestyle sacrifice for the paycheck, then that's a different equation. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. DoorDash, the largest food delivery company in the U.S., is building its own

34:40delivery drones and has gained the necessary FAA approvals to operate them commercially. The latest in its effort to delegate more orders to robots as a way of cutting delivery times. Bloomberg's Natalie Lung reports the company says it has been conducting pilot programs with various restaurants, some of which have seen their order volume grow during the test period. The effort marks an expansion of DoorDash's in-house robotics efforts to reduce reliance on human couriers for some orders, as their wages constitute a key expense to the business. Drones are also a way for DoorDash

35:13to cut delivery times on orders from more remote locations that some dashers may not want. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting work mode, available on plus and pro plans. My name is Jessa. One of the things I love the most about working for UnitedHealthcare is that everybody matters. Every moment matters. There's a person behind every problem. I care because it's

35:50what I was put on this earth to do. I'm Ben and I work at UnitedHealthcare. I am just one piece of a puzzle, but every piece matters. It's more than just work. We want to make the healthcare system better for everyone. I care because I want to make a difference. That's what committed to care means to me. Are your ad campaigns lighting up the dashboard, but not the pipeline? That's bullspend, and marketers are calling it out in dashboard confessions. My boss asked for results, so I opened my dashboard for the only positive-sounding metric I had. Impressions. Cut the bullspend. See

36:24revenue, not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to linkedin.com slash campaign. Terms and conditions apply. The other thing is, just on the technology front, is for years now we've been hearing that, you know, self-driving trucks are coming down the line. So I imagine if you're a young person thinking about getting a CDL, maybe you're no longer looking at it as a viable long-term career.

Autonomous Trucks and Parking Scarcity

36:51Yeah, I mean, autonomous is very interesting. It's anyone's guess how long that's going to take to really reach significant levels of adoption. I know there are many companies currently operating autonomous lanes, mostly in Texas. And we do talk to these companies because, you know, one thing people ask is like, okay, like, if all the trucks are autonomous, like, do they even need to park? Like, does your business still exist? And so we have a whole... One, there's still trailers. Trailers need to be staged. Yeah, they still have to park, right? They must do. Yeah. And people forget that there's many...

37:22Oh, people are suggesting that they'll just keep driving forever. Like, they never need to stop, basically. Yeah. Okay, I see. All right. And they're like, okay, you know, and I've got my whole reasons why that's actually not the case. And we're actually kind of in deep conversations with the autonomous companies because autonomous trucks need reliable staging and they need to be able to plug into a network to know that if I arrive at this location, I'm going to have a spot. And truck stops and rest areas do not provide that level of surety at all. Yeah. Right? Like, I honestly do think that of all the trending topics that we've

37:54talked about, like, a lot of them are really kind of like, billboard level things. Shocking. Like, Guy Fieri's tequila gets stolen, right? Like, cargo theft. Like... Not the mayor of Flavortown. Right. But parking is really actually... I mean, it is one of the, like, top issues when you talk to drivers. Like, if not the top... Like, a quality of life issue is what you're saying, right? It's unbelievable. It's a quality of life issue, but it's also a pay issue. Like, a significant pay issue. And let me explain. I hinted at ELDs. So, electronic logging devices.

38:25In 2017, it was either 2017 or 2018. I can't remember now. But the government mandated every truck must have an electronic logging device. So, drivers are allowed to operate 14 hours a day, 11 of which they're allowed to drive. Okay? And there's no moving that around. And if you go over that 11 hours, you're in trouble. It's going to hurt your record. It might increase your insurance premiums. It'll cost you money. It's a problem, right? You do not want to do that. And so, naturally, what that means is the driver's day is very rigid. You know, I was driving to work this

38:56morning on I-75 in northern Georgia. There's a rest area I pass every day. And every day, there's trucks lining the exit ramp of the rest area, like on the highway. And how those trucks end up there is they've got two hours left on their clock. It's 5pm. Like they're rolling down the highway. They're trying to go as far as they can because they're paid by the mile, right? And they don't get that time back if they lose it. And they're trying to get as close to their destination as possible. And what that means is naturally, there's a trade-off every single day that every

39:30driver makes who's driving over the road. It's like, okay, I could park now, but I've got four hours left. Right? Yeah. I could park now and take a spot at the truck stop that's open because it's 3pm and nobody's parked yet. Or I could keep going down the highway, go for more hours and end up in the middle of Atlanta at 8pm and with nowhere to go. Right? And so, there's a serious cost associated with losing those four hours. Right? And four hours is a bit of an egregious, like that does happen

40:00every single day. But even if it's one hour, right? If you think about the cost to operate a truck, if you think about how many miles you're able to drive in an hour, like, and then you multiply that across an entire year for a driver or for a fleet, you multiply that across their entire, all of their drivers, like in the cost and the productivity loss go sky high, really, really quickly. And historically, there's been not really much fleets or drivers could do about that. Right? And not only is it a pay issue, but it is a quality of life issue to your point, Tracy, like, you guys live in New York City. I don't know if you have cars. But parking in New

40:33York City, not the easiest place to park in the country, put it mildly, to put it mildly, right? And naturally, that will mean, you know, if I'm coming into New York, and I want to go to a Knicks game, and it's two hours before, like, I got to be methodical about, okay, I'm gonna go here, I'm gonna park there, I'm gonna get there then. And if that's too much of a pain, I'm not gonna go. Right? I'm not gonna go do that thing. But when you live in rural, you know, Georgia, you don't think anything about where you're gonna park. Oh, yeah, I'll be fine. Like, I'm just gonna

41:05go, right? There, I got a place to park. And what truck drivers like my analogy is like, truck drivers, every single day is like being in New York City, in the Super Bowl, the World Series, the NBA finals, the NHL finals are all there on the same day, and there's nowhere to park at all. And you have to go. And it's going to be a total, it's going to cause you lots of stress, you're gonna be like, what the heck am I gonna do? Right? And that's every single day. Okay, but explain this, because America has a lot of roads, it's got a lot of highways, a lot of interstates, where are all the park? Like, why do we seem to have a shortage? Maybe it's not

41:39even a shortage. Maybe it's misplanning of resting areas for trucks. Why the scarcity? Because it's very, the traditional places to park, which are rest areas, which are built by the state, or the federal government, and truck stops. And those can only go in so many places, right? Loves and TA and Pilot, like, they would love to build more locations, but it's not like you can just put them anywhere, right? There's only so many interstate exits where it's appropriate to put a truck stop and economical because they're super expensive, right? And then rest areas are very,

42:13very expensive to build. Like, if you look at some of these projects that the government funds, it's like, sometimes it's as much as $200,000 to $300,000 per space. By the time a project is done, it takes years to complete. And so structurally, it's very difficult. It's just difficult to build capacity. And, you know, between rest areas and truck stops, there's about 700,000 spaces provided by these traditional sources. But there's millions of trucks on the road, right? And millions of them need a place to park on a daily basis. And so naturally, what you see is, if you talk to any

42:45driver, 5pm every day, the truck stops full. Like, I talked to an owner operator yesterday who's parked with us. So basically, what we enable them to do is fire up their phone, find a place to park, basically no matter what, in any time of day, in essentially almost any city at this point. And what the difference that makes for a driver, let me explain. So I talked to an owner operator yesterday, he's parked with us 56 times in the last year. And he spent his like, obviously, he's spending his own hard earned money on that. But he's not just doing that in operating the same way that he would, if he were just parking

43:19to the truck stop, he's thinking like, okay, like, I'm going into Denver. And Denver is a hard place to park, it's going to be 7pm. By the time I get there, I have to deliver at three in the morning, in the middle of Denver, I'm going to pay 25 bucks or 30 bucks or 40 bucks to park a mile from my warehouse, versus parking 30 miles away at the truck stop, and having to negotiate the hours of service requirements to be able to go and leave. And so that money he's spending is position he's

43:51positioning himself properly next to his delivery, he can be there on time, he doesn't have to fight traffic. He's the first one there, he gets empty. And that surety just offers him much more reliable planning. Right. And that just means that just means his life is easier. Right? It's less stressful. He's not driving into New York during the World Series every single day. And that's just an anecdote from a driver, right? So the key thing, though, just to understand this is a big function of this is the fact that drivers get paid by the mile and not the hour. And so if in the ideal world,

44:25you have 11 hours on the road, 11 hours, we're allowed to be behind the wheel, you're going 60 miles an hour, maybe on average, you cover 660 miles in a day, that's a, that's a good day or something like that. If three hours of those are spent waiting in line for something by the side of the road, because you're not sure if there's going to be parking when you hit the 11th hour, that's three hours of your day, they're not getting paid. That's three hours gone. That's three hours of behind the road time that clocks to your that goes to your maximum,

44:56that is not compensated. Yeah, yeah, that's not compensated. And and the fleet loses those productive asset hours to write, like there's layers to this. And then all this, you know, you multiply that across the entire trucking market. And that's like a serious kind of like throughput issue for the supply chain. Yeah, like, I can't emphasize this enough, like still to this day, most people in the industry do not think, oh, they just think, oh, well, this is a problem. We all agree this is a problem. What are we gonna do? Oh, well, we need to wait around for the government

45:27to allocate enough money and build enough spaces to fix this problem. And that's just not going to happen if we're honest with ourselves. And it makes sense. The government should be investing in this critical infrastructure. It's needed. Great, do it get as much as we can. The drivers need it. The more the merrier. But all the while, we're adding, you know, sometimes 1000 1500 new spaces to our network a week, right? A week. Cool. And so we're at like, you know, near 90,000. And we're adding more spaces in a week than truck stops build an entire year, right? And we're already have a

46:02larger more spaces than the largest truck stop chain, right? And soon we'll have more than all of them combined. And soon we'll have more than all of the public infrastructure combined. And that's going to just fundamentally reshape how drivers and fleets are able to operate. And that might sound hyperbolic to people who don't think about this like I do. But it is a very meaningful change to just the life of a driver. It just really is. And just to the productivity of a fleet, the driver's pay, the driver's health, like it touches turnover, it touches cargo safety,

46:33it touches all of kind of the hot topics we've talked about. Like it's all connected to this. It's all connected. So I'm getting fired up, guys. I'm getting fired up.

Data Centers and Pockets of Demand

46:42We talked a lot about the supply side of the industry. Can we just discuss demand a little bit more? Like on a basic level, what are you seeing from your network? Are you seeing pockets where things are really hot right now where, for instance, data centers are being constructed and things like that? Yes. You know, the components of the data centers are obviously incredibly expensive. You're talking turbines, you're talking, obviously, GPUs and all that and super, super expensive. And naturally, targets for theft. And so we've had direct conversations with

47:17folks building data centers, and are actively working on projects to kind of help them plan. Okay, we're going to stage here, we're going to stage here, like we need locations here. And so we're actively working on that right now. So to answer your question directly, yes, yes, of course, we are seeing we are seeing pockets of demand. And we are seeing, you know, it's interesting, because we're just kind of like this. So it's hard to tell like what's seasonal and what's not when you're just kind of like this, no matter what, you know, maybe in two years, like we'll be able to like have much more. Okay, this is like this season, this is that season. But yeah, I mean,

47:51the short answer to your question is yes. All right. Read loose the load. Thank you so much for coming on odd lots. For all the trucking episodes we've done. We've actually learned quite a bit more on this one. So really appreciate you taking your time. Yeah, I appreciate you, Joe and Tracy, you guys are you guys are killing it. Joe, your Twitter game is strong, man. I love following you. I always smash like. But thanks. Thanks for having me on. I really appreciate it. Thanks so much for you. Thanks guys. Tracy, I'm so glad we did that episode. There's so many interesting,

Brokers, Safety Ratings, and Credit Rules

48:33so much interesting texture, maybe is the word to the trucking market that is easy to not really observe if you're just looking at very simple metrics like line going up or how much physical capacity there is in a day. Yeah. I mean, it seems like a lot has changed for sure. It does seem like some of the things we talked about are more structural than cyclical. Right. I mean, again, who knows what the next administration is going to do. But for instance, a Supreme Court ruling saying that brokers can be held liable for dangerous hauls and things like that, that would appear to be

49:09something that's going to stick around and possibly affect the industry for years to come. No, it seems like a really big deal. And Reid put it really well. It's like, OK, like maybe there's fewer brokerages in the future, et cetera. But then it's like, OK, you might have drivers and carriers. It's capacity. Right. Maybe it's even safe, well-trained, very fluent in English capacity, but it might not have the scale to sort of plug into whatever that sort of new network or ecosystem looks like in a world with fewer brokers. Is it really capacity then at that point?

49:43And then it also means that the freight brokerage game isn't always going to be a race to the bottom, which I'm sure there's going to be a broker firm out there who complains. But like the impression you get is a little bit like, you know. Yeah. And also, I think, you know, one of the things that we both observed when we started doing trucking episodes is why is there still so much humans in the middle? It's because it's not a fungible market in the classic sense. It's very, you know, syncretic, kind of like the corporate bond market is the analogy that we use. If we have to get even

50:16more gradations of safety ratings, by the way, the FMCSA, he said that term. And so I wanted to tell people what it was, the Federal Motor Carrier Safety Administration. So it's like if we need like more gradations of safety ratings for the existing brokerages to feel comfortable with them, I'm going to having thought about this for five minutes, I will now weigh in on policy. It would be probably helpful if there was one rating where it said, if the broker goes with this rating, they are clear

50:47in terms of these sort of nuclear settlements or these nuclear lawsuits, et cetera, that could destroy a whole company. It probably would be good to have like, at least on your part, a clear box that you can check that establishes that you've done the right thing. Credit ratings for freight brokers. Yeah. And it's like if you, you know, it's like there are other, there are various ways to get in trouble. But if you get the AAA carrier, if the broker goes with the AAA carrier, at least on that level, they've done their due diligence. Nothing bad can ever happen from AAA ratings. All right.

51:18Shall we leave it there? Let's leave it there. This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Weisenthal. You can follow me at The Stalwart. Follow our producers, Carmen Rodriguez at Carmen Armand, Dashiell Bennett at Dashbot, Kale Brooks at Kale Brooks, and Kevin Lozano at Kevin Lloyd Lozano. And for more Odd Lots content, go to bloomberg.com slash oddlots. We have a daily newsletter and all of our episodes. And you can chat about all of these topics 24-7 in our Discord, discord.gg slash oddlots. And if you enjoy Odd Lots, if you like it when we do these trucking episodes, then please

51:52leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

52:32And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting,

53:06risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. This heat is doing the most and your patience isn't. It's time to find something that actually cools you off. Head to 7-Eleven and grab the truly spicy hottest fire chicken sandwich. Enjoy some kick and heat in every flavorful bite that packs a punch. It's available at 7-Eleven and just $4.99. Visit your local Chattanooga 7-Eleven and satisfy that craving today.

53:38Ballot through 825-26. Participating stores while supplies last. Toppings and sauces sold separately. Copyright 7-Eleven and all rice reserve. What if you could get more from what you already do? As a Shell Fuel Rewards member, that's just a regular weekday morning. You get more rewards, more savings, and more special offers. Earn rewards when shopping, dining out, and fueling up. And all of that becomes fuel savings when you're at the pump.

54:09Use the Shell app and enjoy life with more. Your nearest Shell station is less than 5 miles away.