I think we all need to be very cognizant of how much damage the pandemic has done to drive as psyche things have changed on the roads car drivers have definitely changed their behavior on the roads I can't put my finger on why there is a lack of respect on the roads that you can see it feel it drivers are going through a hard time right now welcome to Lake for the mile delivered by freightworks one of America's fastest growing podcasts actually produced by Trucking indicted to tell story compelling driver story I need to do something insightful industry experts all here right now sleep with a mile delivered by Freight works I'm your host Butch malpe now listen you're going to have exciting solid meaty content in this podcast we're able to do it because you like share subscribe and engage with life of the mile we're closing in on 120 episodes we love having knowledgeable guests my responsibility is to ask short questions and let in this case Dean croak wax elegant he's eloquent he's seen most of it if not all in the trucking industry we've had him on a couple of times before always strong responses incredibly strong background and trucking operations data science business intelligence data analytics and much more he is the principal analyst for dat Freight and analytics talks about market trends data companies should study data more and I always find It's The End team I've learned things that cause me to want to learn even more so welcome back we really like it and you come on great to be with you butch I really enjoyed this show yeah and and uh and and I love our uh prequels if you will our conversations that happen even before you you're you're a wealth you're a plethora of information personally and professionally I'm gonna run through the 10 core issues that Atri indicated were vital issues for the industry and we're going to run through them quickly and I'm basically going to throw the item out maybe with one quick comment and just have you give your professional analysis of that particularly as we look at 2023 we're soon going to end this year it's not a lot of volatility ups and downs unpredictability and so I'm going to ask you for our viewers and listeners to just kind of cast a vision into 2023 on all of these different items that I'll quickly mention ATR released a report as you know a survey of more than three thousand responses from carriers and professional drivers all over the country they had 10 items that were the most critical let me start with one driver shortage yeah I think the industry's got more to do with the second point but it's driver retention I think we've always had a strong supply of drivers that are willing to fill in an application uh we've had a really big issue in the long-haul truckload sector retaining drivers uh in my period in data analytics um Peak driver turnover rate is about 90 days 9-0 so about three months in drivers decide they've had enough and quit so I think that's where we really struggle as an industry not so much on the front end I think it's the back end where we've really got a lot of work to do and that really leads to the second point which is driver retention I think that's our issue okay let me let me throw out number two driver health and well-being just a sense of being healthy being taken care of and the like I I think it's the number one issue I think we all need to be very cognizant of how much uh damage the uh pandemic has done to drivers psyche uh things have changed on the roads car drivers have definitely changed their behavior on the roads I can't put my finger on why there is a lack of respect on the roads that you can see it feel it um drivers are going through a hard time right now you know especially owner operators small fleets diesel prices are high rates are low they are struggling but I just think generally the the psyche of the driver is gone from a central worker to not appreciate it anymore and that's weighing heavily on our nation's drivers Dean what happens to a driver when they get to the place of just feeling hopeless I mean what what you've seen firsthand what what takes place when that happens yeah you get to a pretty dark place and I've been there I've been there because of uh sleep deprivations you know sleep apnea which causes uh you know one of the symptoms is depression you get into a black hole pretty quickly the problem drivers have got is small problems become big problems because you have so much windscreen time windscreen windshield you're looking out the window all the time you're thinking to yourself small problems become really big problems you lose the ability to communicate you can't articulate words properly due to some of the issues that go on with sleep deprivation ultimately drivers do Reach Out social media has been a really good thing but it's allowed them to connect uh Tick Tock is probably the one where I see drivers connecting and expressing their frustration the most we didn't have that in my day driving uh but I see drivers every single day when they get into a spot they'll just pick up their phone in a on a 10 hour break or at a loading dock and say hey Tick Tock here's what I'm seeing and I think that's a good thing even though some of it's very negative I think that's a good outcome of social media that's a very good Insight because it's cathartic I guess if you can't talk to somebody you can at least express your feelings right exactly but let me let me ask you about this item number three was truck parking big issue uh it's it's a big issue for drivers that have uh new to the industry that don't know the ropes don't know all the little Hardy holes that trucks park without anybody watching you know experience veteran drivers know all those spaces that they don't advertise uh company fleets have a pretty good deal when they've got lots of terminals that drivers can pull into I think it's a pretty big issue for new drivers who struggle with crowded parking spaces that they've got to back into and back to my previous point about Tick Tock the whole world is watching them and videoing them back in and uh and invariably don't get it right the first time it's one of the sad parts about it people aren't out helping they'd rather be in their truck videoing someone have 10 goes at backing in rather than getting out and teaching uh you know some of the basic skills so I think that's where you know the biggest problems are in the uh the big large truck stop a lot of data shows that some of the biggest accident frequency are low-speed backing Maneuvers in truck stops and customer locations because of that very reason all those new drivers really struggle with that which that's why they also trade off rolling time on their on duty Drive Time Each Day the average long-haul truck is only running seven to seven and a half hours a day when we did some studies of long-haul fleets drivers would trade off you know they would they would finish their uh day at about 4 35 to be in a parking spot in daylight before it got too congested for the very reason hey they wanted to get a spot for the night but B to be able to do it in the daylight and they but they would forego the roll time that they had on their uh clock which was essentially losing money for them that's that's a good explanation of behind the curtain there and you know the data shows that 84 percent of drivers feel unsafe when they're parked and what they see is illegitimate areas and so there's a lot of insecurity that goes with that what about item number four on the ETR uh Atri report compliance safety and accountability the explanation here is carriers continue to report challenges with data quality peer group assignments and challenges with the crash preventability program and what would your take on that yeah I think state level reported you know preventable accidents or a problem have always been a problem because there's different interpretations there's different severity in each state if you take the number of dot recordable accidents at a state level and divide it by the number of highway miles in each state you get a measure of severity at a state level and it won't surprise anybody that some states are more severe they have more enforcements per Lane mile than even some of the bigger states in the country so there's a lot of inconsistency in terms of how drivers are treated of course some drivers have done the wrong thing and uh some you know our Troopers and Highway folks have got them in their Bullseye so we're not squeaky clean when it comes to behavior on the highways but there's a lot of inconsistency both enforcement and reporting of what causes accidents on the highways the one size fits all analogy Butch is probably the best way to describe this a lot of carriers I do the right thing but of course a lot of our compliance and and regulations are built around the lowest common denominator which is only a small fraction of the industry most carriers do it right and probably need a little bit more of a break when it comes to some of the accountability measures it's well said item number five and of course you're well aware of this is insurance cost and eligibility uh it's it's interesting because the analysis the operational cost of Truckee report found that insurance premium cost per mile increase by 47 percent over the last 10 years from 5.9 since 8.7 smaller fees fleets tend to be the most affected um and many cited that as a primary reason for going out of business what's your take on that Dean I couldn't agree more I've heard carriers go from anywhere from twenty to thirty thousand dollars per power unit for new entrants if you think back in the last two years we've had a lot of new companies into the market a lot of insurance companies don't write what we call new authorities so they will write you if you've got two to three years experience or you've been an owner operator with a large Fleet and you want to go out and get your own authority very different I mean I pay 10 000 a year for my 379 Peterbilt it's uh you know it's not an overly expensive truck it's a very low risk operation but new entrants have coming into the industry three are paying triple that and that is a scary number on top of paying double for a used truck to get into the industry so I think they're the ones that are really struggling right now uh the problem is though it's a little bit more complex the insurance industry has lost a lot of its underwriting capacity they've been through a hard market for many years a hard Market means that Underwriters have you know basically been burnt on the loss ratio side of things most of the commercial auto companies run at about 105 percent which means they pay out five cents for every dollar and five for every dollar in premium they get it hasn't been a winning portfolio for most insurance companies for decades largely because the large Elixir premium that are generated allow them to invest money on the short-term money market in the stock market in the equity markets to make money that way profits have been hard to come by so they've tried to focus more on underwriting profits we're only just starting to see the market soften which means there's a little bit more money coming back in where big companies like Lloyd's are going to push money into the market pocket and Underwriters can open their books and underwrite more when capacity increases in the insurance industry it it means rates start the tail off and come down so we're just starting to see that now but rates have been very high for quite a while uh insurers really struggle with how to underwrite trucking profitably a lot of the multi you know the insurance side of its so the the litigation side of it has driven a lot of these very high claims so we've seen a lot of carriers um you know get hit pretty hard by multi-layer what they call nuclear vertex uh in the industry a lot of trucking companies have been seen as easy marks in the event that their drivers make a mistake one it also just engenders a lot of fear on the part of people too they're afraid that tomorrow is going to be the day that something disastrous may happen so let me uh let me hit item number six you touched on this earlier driver retention you you mentioned 30 percent of drivers quit within the first three months one reports that additionally approximately fifty percent leave within the first six months of course the numbers are alarming let me ask you this on the retention side given all that you've seen and personally experienced and in the position that you're in to know and and to observe and analyze what should companies be doing in the retention area that in the main they're not or they're not doing enough of yeah it starts during the recruiting space um talking to the spouse and the driver and finding out what their financial plan is it's the one thing companies don't do a very good job of and if you know what the company's financial plan is then you can figure out what part of the business they should work in uh because if you know what your financial goals are as a family then I that the driver is away from home and the family support that because a lot of drivers struggle with being away from home trying to deal with the stress of the spouse saying you're never home and you're not never here to deal with the problem if you establish the financial goals out of the gate then you figure out what run what Lane what home time what part of the country should run in flatbed drive and reefer all those sorts of things come into the mix and then the company finds a way to make sure you meet your financial goals and that'll then also help them with you know mortgage assistance and health insurance and all those sorts of things but which it really starts with something we don't do a lot of and that is at home what are the goals how do we get the family to where they need to be to sort of build that long-term relationship right so I guess what you're saying anything that creates division with a significant other with a wife a significant other family that is planting the seeds for disaster later isn't it yeah we we as an industry recruit our own problems if we don't do that um and one of the things we found when we built predictive models that would predict drivers likely to quit we found that ninety percent of those factors in data would always point to the home when we talked to the driver and he was turning down loads or he was late or he was his his weekly miles were falling off or he was having more hard break events than he would normally when we would talk to the driver it would invariably be I missed a wedding anniversary I couldn't get home from you know a doctor's appointment um I can't get home from my child's soccer match or graduation it's always something to do with stress at home most of the time and that manifests itself in data the signals are there for fleets to identify you discover got to find a way to find out what the signals are telling you but hey even without data analytics just pick up the phone and say how's it going I just talk to your drivers that's right right that is so true and you know some of the driver managers with whom I've spoken Dean have developed discernment in kind of an intuition of what does that comment really mean in other words what is the meaning behind the comment have you found that I mean there's some phrases and code words and the like can that can signal things yeah you've got to be very good at communication we did a lot of work with Predictive Analytics and sort of remediation policies for fleets and we had to teach we had to teach driver managers the art of communication how to listen how to ask open-ended questions what words to use and it would invariably start with things like hey how's your truck running you know it's always your truck you know I know freightworks owns trucks but you talk to the driver it's his truck so you always start with you know a soft open-ended questions how's your truck running you know what sort of sleep did you get last night all those sorts of things you want to get a conversation going because remember the driver's not being evasive they just don't talk to a lot of people all the time and you've got to coach them along in the art of communication good open-ended questions driver managers often as an entry-level job so it's hard to bridge the gap between entry level and a veteran driver so there's always a disconnect there a lot of companies I've seen very successful at this Butch make the driver manager job not an entry-level job where people want to get out of they make it a higher paying job where people want to get into because when you slow down the revolving door of people going in and out of driver management good things start to happen with drivers excellent Insight I'll say this as an aside when I lived in Maine when I first moved to Maine I didn't realize that meaners are their own breed and they're often monosyllabic so I would ask a question expecting some effusive response and the response Dean would be yep yep and that would be it no and uh and so a lot of my education on understanding the cues conversationally came from these grizzled old mainers that looked at me like what planet are you from but slowly they accepted me along the way yeah you should try it with an Australian accent it's uh well it's fun if if you if you if you teach me only only if you teach me all right let me hit seven we touched on this briefly tort reform there's a lot of discussion about that uh what what do you see happening there uh I think there's going to be some changes this year um I think the biggest part of the reform package that we're seeing is about the uh delineation of how we treat workers owner operators and employees I think that's where there's going to be a lot of Reform go on in the current year of course the ab5 has been the big issue in the west coast but that's starting to work its way around the country I'm not 100 sure where the latest byte Administration proposal is up to but I think that's going to be the biggest change that we're going to see this year is that owner operator model where you could lease on to a larger Fleet is probably going to go away unless if there's a very clear delineation between uh what you do for that company and you can work for other companies I'm not sure that's a good thing though Butch because I've always found that as a stepping stone to being getting into your own business you're working for another Fleet not a bad thing but I just think it's going to force up the operating costs of a lot of companies that are going to have to pay owner operators as much as they would pay employees well it's interesting I guess too because given some current economic conditions there are some other operators throwing it in the towel and saying I guess I'd it's time for me to go work for a company you've seen some of that or yeah a lot you know it's one of those things that happens in every Freight cycle you know the reverse happened in July of 2020 at the end of uh PPP loans uh right about July August we started the Sienna operators enter the industry in great numbers um and and a lot of them switched from being company owner operators leased on to going out and getting their own authority when rates got to about above two dollars a mile line haul rates excluding fuel that's the break-even point for when it became viable to get your own authority and run your own trailer you need about 50 cents a mile to run your own trailer and Authority including insurance and permits and all that stuff so rates went the rates were well North at two dollars a mile for 18 months to maybe two years they dropped down below two dollars a mile back here in March April and that's when carriers started to go back to being leased on to other carriers with a couple of nuances though a lot of carriers made a lot of money in the last 18 months to two years and that allowed them to I think you mentioned it earlier take a break you know Park up you know a lot of guys say I can I'd rather go broke sitting in a lounge chair than out on the highway uh they didn't have to do that this time because they'd made so much money sold a lot of equipment because prices were so high I think they paid down a lot of debt you know across the board and had a bit more Runway when rates dropped this year and that's why we haven't seen The Exodus out of the industry that many were predicting my sense is that if you're running today and and making money or or getting by you know six months after diesel prices were you know went through the roof I think you're going to make it and that's I'm sort of the eternal optimist but here we are at start of December and diesel prices are still north of five dollars and we're still seeing carriers enter the industry in great numbers that's a very good segue into item number eight we only have three left here and that's economic volatility in other words the the froth and the churn the unpredictability what do you see in there in 2023 and what's the impact directly on our industry yeah right now we've got we're looking at a non-existent peak season peak is more of a you know a small Mound the reason is simply the peak season's been a plateau this year a lot of the inventory that would have been shipped has already been shipped early in the year especially on the import side a lot of attention has been paid to retail and imports it only generates about 10 of the volume for truckload carriers so it's got way too much attention the other part of the industry that's doing well of course is just the heavier tonnage Side manufacturing industrial tunnels those volumes are up slightly year over year so the indicators are that you know demand for Trucking is still very solid the reason why rates are dropping is there's way too much capacity over capacity is what striving rates down we expect that rates to continue driving down until the end of the first quarter as you know which first quarter is always a quiet quarter it's always very soft we don't see this Market turning until the start of Q2 next year so that's that cycle we go through we went through a peak in 2021 it's going to drop down sometime in late q1 and then pick up again and then we'll see into the next up cycle getting to there though is the challenge for carriers and I think on our last show I might have said uh if you're a carrier put January February March truck payments in the bank before the holidays because I think rates rates could uh go up a little bit between what spot rates that is rates could go up a little bit before Christmas maybe another 10 to 15 cents a mile as they normally do but could drop right down to as low as a dollar sixty a mile from where they are today at 1.77 so they'll be up and up and down uh I think some carriers I talked to Butch you know they own their own equipment own their own truck and trailer don't have a repayment they can get by on a buck 70 a mile where line haul rates are today newer carriers though that have paid 30 000 for truck insurance and overpriced used equipment they're going to need more like two dollars a mile and that's going to take some doing to to be working at those rates I fear for some of the carriers that don't have a good handle on their operating costs consumer demand inflation all those sorts of headwinds we're talking about we could mention the rail strike that's going to start next week if it happens there could there could be you know that's one of those things like the polar vortex that completely upended the Freight Market uh as of this Friday you know this coming Friday will be when the a lot of shippers will start to move their volumes off the rail particularly Hazmat time sensitive Freight a week out from December 9. so we'll start to see some of that volume whether it impacts Freight rates and demand materially I'm not sure when I mentioned a few minutes ago that we've got a lot of capacity in the market we have a lot of trucks on the road that could absorb some of that volume that the rail shifts over to truckload to move we know that'll start happening this week as it did back in September uh the question is does the government intervene and and force an extension of the mediation period so that that could just sort of prolong the inevitable right as it sits right now we've got four of the unions not agreeing to the the package um I I just I can't approach I can't see it happening but if it did it would be uh devastating to the supply chain and um and our overall economy I think would be the best way to describe it no question I saw one report that said that it would uh it would cause a need for about 475 000 trucks right just to absorb you know that so uh we'll see it's it's that inner mixture of things economically and politically too isn't it nobody wants to be blamed for that right and again the overlay on top of that the West Coast you know Union agreement still has been reached you've got some go slows of work stoppages there um you know Freight volumes are way down so there's you know there's a chance that we can still get some uh mediation done but that contract for the West Coast Port workers was ended on July 1. here we are still trying to get it agreed the rail the rail discussion is the rail Union agreement that's trying to be ratified has been going on since 2020. a lot of people think this is a new thing no it's been we're two years into this negotiation but labor relations in the rail industry have never been as bad as they are according to the context I'm talking to and uh yeah interesting two more uh item number nine was detentions at customer facilities and of course drivers have a lot of angst and heartburn about that what's your take yeah I got heartburn on a massive degree when it comes to this this is um one of my biggest frustrations having spent what feels like years unloading docs over my time you know you sit there in your truck you you can't get out of your truck um you look in your mirror at that red light you're waiting for it to turn green and then you know you've got to get your paperwork even after that once you get once it's loaded you move off the dock it's a really frustrating time for over the road drivers that are paid by the mile because every hour on a loading dock is opportunity cost you're losing money because you're paid to roll you get very frustrated because a lot of drivers want to drive that's why they join the industry they don't want to sit on a loading dock and feel like they're disrespected and ignored shippers do a terrible job at communication some do a good job with technology others do a really poor job at communicating with drivers generally you'll see drivers on social media light up some of those bad offenders it seems to be always something to do with food whenever you get food related loads you'll always see those delays I saw a guy the other day post a picture of a shipper receiving facility live loads seven hours minimum to unload this is out in California seven hours minimum room for a live load of groceries you know you'll run out of your 14 hours very quickly and you're on your clock each day you won't get many miles in when you have to wait around now of course people get detention but we for some reason have this free period we give shippers to unload trailers and I think that's where the frustration comes you give a shipper two hours to unload a trailer or load a trailer or receiver for that matter that's two hours at say 50 miles an hour that's like a hundred miles the driver hasn't driven right which is you know so if you think money yeah money well over the course of a year it's it's thousands and thousands of dollars and that's part of the reason you know drivers always say they're not making enough money a lot of it comes down to the inefficiencies in the supply chain generally is what I describe the black hole of where you know efficiency goes to die in this black hole between the back bumper and the loading dock it's like you do all this great work and you get to the dock and you think well that's the end of all of that good work and you're sitting and Dean it also affects our perceptions of driver shortages right I mean the inefficiencies actually have impact on on that whole area well last year which um we everyone was talking about how tight capacity was capacity wasn't tight because we didn't have enough trucks capacity was tight because they were sitting on low docks loading docks short staffed because of the pandemic for excessive periods of time so our Network velocity dropped the speed at which trucks moved through the entire Freight work dropped because they were sitting around waiting to load now they were getting paid a lot of money per mile so it didn't matter so much that you could run fewer miles fast forward a year later where rates are way down every hour counts on these loading docks now because your weekly truck revenue is taking a hit so much especially in the spot Market very insightful and then finally hours of service that that is a hornet's nest for a lot of people too yeah I feel like I've been stung a few times on this topic I I hosted the FMCSA in 1997 in Australia and showed them how to do this uh some of those best practices we developed in Australia through the fatigue Management program made it into the 2004 revision of course that took 76 years for the 2004 regulation to be changed again the one size fits all doesn't work I've been an advocate for flexibility for many years I know that compliance doesn't equal safety as I've said on the show you can be 100 compliant and sound asleep at the same time two hours of service what I think we need is more flexibility again it goes back to the point we made earlier most drivers do it right uh you know you need to have flexibility for most the majority of carriers that that need flexibility that have great drivers that know how to manage risk and be safe and sleep properly what I've said to the FMCSA of recent times is if you could add in the flexibility of paper logs into an ELD device allow me to put my 10 rest area rest period together how I want minimum six hours continuous sleep but let me put my 11 together how I want and at the end of 24 hours it'll still add to 11 and 10. and if you could do that what you'd find is that that's what paper logs afforded drivers that they allowed the flexibility to pull up and have a nap and drive when you're awake and you know not have to sit there for hours and hours on end when you're wide awake and alert because you've got to let this 10 hour period science supports that if you can have flexibility in the hours of service you'll have much better safety outcomes tremendous Insight folks this is uh Dean crook he is a an industry expert in so many different areas of course by title he's the principal Analyst at d.a.t Freight in analytics this has only been an order for a lot of people if folks want to get a steady diet of you where can they go yeah um you can write to us at ask IQ at dat.com you can fire us off an email we'll get to most of those questions best places on our live IQ show 10 a.m Eastern on YouTube and Linkedin Ken Adamo and I uh we have a guest on every week and we generally go through and dissect the Freight Market and answer questions from viewers so 10 a.m Eastern it's the DAT IQ show and uh and just shoot us off an email ask IQ at dat.com and we'll get to you that way this is life of the mile delivered by freightworks Adine I want to let you know something if you ever decide it's time to move out of the industry that you're in you would be an excellent college professor that would be uh you know my son has said that to me up at UNH she said you should come up here and teach Logistics you know what I don't know if that's the right thing for you to do or not but you know what you have a way of making data fun and for a lot of people that are afraid of data and wandering into it I've talked to some drivers who just say to me all I want to do is get in my truck and drive but they don't realize that they will be more effective and more efficient really understanding the market better and you you you're like to trade a truck and Logistics Answer Man and uh I always love our conversation it's been another one uh that's good today now listen I know I know that you have enough hats but I'm gonna just go ahead and send you this beanie it's gonna yes it's gonna get cold up there the snow is going to come and so I'm gonna make a choice for you it's a life of the mile uh they call them different things around the country it's it's like a beanie cap and uh it's a beanie yeah a beanie you'll remember uh you'll remember our time together here folks it's like a mile delivered by freightworks make sure you like share subscribe and engage it's how we grow our audience two times a week we're uh uploading to YouTube and all the audio podcast platforms thanks so much Dean we really appreciate you thanks for watching this episode you know life by the mile delivered by freightworks is one of the newest largest and fastest growing podcasts actually produced by trucking company now we want you to like and share this episode if you'd like to see more episodes click here and make sure that you subscribe to this channel by clicking here we'll see you there

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