Jared Flinn:
You're listening to the Bolt floats podcast, your number one resource for everything, bolt freight trucking. Hey, guys. Jared Flynn with the bulk loads podcast. Got Tyler with me.
Tyler Allison:
What's going on, man?
Jared Flinn:
Summer's flying.
Tyler Allison:
I know. We only got like a month and a half left.
Jared Flinn:
Yeah. We are our family. We purchased this property behind our house. I've been telling you this about teller audience and this property, I've been wanting to buy it for years. It's got a river now that we have access to. But, man, we have been going down there every night and fishing and catching, catching fish, and it's been just such a blessing. I'll have Joe throw up a a couple of these pictures. But my daughter the other night, like, I think it was like, we need to buy a scale.
Jared Flinn:
Now, I don't own a scale, but we need to start weighing these fish. But I tell you, man, it's been just a blessing that we did this and how much I grew up fishing on a river, like.
Tyler Allison:
Yes. Yeah, that's awesome. You sent me some of those pictures and it looks beautiful.
Jared Flinn:
Yeah. So. But, yeah, I hope your summer's going well, man. I hope you're with spending some time with family and doing those fun outdoors activities. But, yeah, we'll kick it off with this week's truck feature.
Tyler Allison:
Yeah.
Tyler Allison:
This week we have Pratt trucking, Tyler Prattez. He's been a member since 2020 with us. And Tyler gave us a shout out on Facebook whenever he got some of the bulk load swag. So, Tyler, thank you so much for doing that and showing off the swag that we sent you. This is a beautiful truck, though. I always love whenever they do the color match with the trailer. Trailer tarps.
Jared Flinn:
Yeah, it's got the fenders matching.
Tyler Allison:
It's just. Yeah, that much. It just looks so much better.
Jared Flinn:
Yeah, cool, man. There's so many different combos. And every week when we see these and even out on the road that you can do mix and match and.
Tyler Allison:
You get a new favorite, it seems like.
Jared Flinn:
Yeah, it never gets old. Like, when I think that I like one style, then I see a different style. But, yeah. Tyler, man, great photo, but, yeah, cool rig setup. If you want to get your truck and trailer featured just quick, it's pretty easy. You can always share it on social media. You can even drop it down in this podcast. Just email podcast oakloads.com.
Jared Flinn:
however you can get it to us, we'll get it featured on there again. It's one great way that you can actually promote your company. We're all in business out here, and you can never help self promote yourself. So we want to do that for you. So again, send us your picture to podcastle oakloads.com and we'll get it featured on the podcast.
Tyler Allison:
Yeah, I'll even say, too, a lot of guys are posting pictures of the rigs on their personal profiles. If you, if you post it, just tag our channel, bulk loads, and we'll save it and we'll feature you on the podcast as well.
Jared Flinn:
Yeah, very cool. Cool. Well, the moment we've been waiting for, today's podcast, I'm going to bring on Jason Miller, or maybe I should say Professor Miller or Doctor Miller.
Tyler Allison:
Professor Mustache.
Jared Flinn:
Yeah, Professor, Mister Mustache. But Jason Miller, if you haven't seen him online, really active on LinkedIn, and I've been following this guy for, man, almost a year. Jesse Runyons, who a lot of you may have known if you listen to the podcast, really recommended this guy. I've been working on this guy for six months to get him on the podcast, and it wasn't because he didn't want to. He's just a busy guy. And with the summer a little bit freer, he was able to come on not too long ago and come on the podcast. And I, these are the podcasts that get a lot of attention because, number one, people want to know what's going on in the industry and more importantly, what does the future look like in the industry? And especially right now when the industry is in a little bit of slump. We want to see a little glimmer of hope out there.
Jared Flinn:
We want to see that little shiny star, something that's showing that man, the forecast looks good. And I don't want to spill the beans, but if you are in agriculture and trucking, you are in a good place.
Tyler Allison:
Yep, exactly. Yeah. The biggest seed that Jason brings, just have the patience to hold out, you know, control your costs and just keep looking forward. And he, I love that he brings the data to actually back up his claims on why he, on why he thinks the market's going to correct itself.
Jared Flinn:
And there was a couple of things I've always preached that he debated and I don't know, I'm going to figure out, I don't know. I think he's probably right, but I'm wrong. And we'll talk about that after the podcast. But again, I think what we always say and preach on here, if you are in agriculture and you do both like you are, you're in a good spot. I know we're in a slump right now. But, man, I promise you, long term, you will be set up for success.
Tyler Allison:
Yeah.
Jared Flinn:
So awesome. Well, with that said, here is my interview and podcast with Jason Miller. Jason, thanks for coming on.
Jason Miller:
Hey, thanks so much for having me on.
Jared Flinn:
I think before we get started, you're a. You're a rural farm, kidde, so you got to tell our audience. You grew up in the great state of Ohio.
Jason Miller:
Yep. The great state of Ohio, and the great defiance county in the northwest part, in a little town called Hicksville, Ohio. That is the real name. That is not its nickname. Area code 43526 for anybody who wants to look it up and actually prove that that is the real name.
Jared Flinn:
So I imagine growing up, I mean, corn and soybean country, probably big time corn, soy.
Jason Miller:
We had a decent amount of wheat as well. I'm not. Not really sure why specifically. Maybe it was the specific ground conditions, but right behind my house, we always had either a wheat field or a soybean field.
Jared Flinn:
Awesome. Well, let's just kind of going to get a little bit about your background, but your professor in logistics and supply chain. Can you just give us a little more information on that? Yeah.
Jason Miller:
So I hold the Eli broad professorship here at Michigan State University. A lot of my academic research really focuses on the trucking industry, very much focused on safety issues and understanding the eld mandate. How did that affect safety and things of that sort? And then a lot on the labor side. So, understanding job creation, job loss dynamics in trucking firms, is that really a function of firm size, or is it actually more a function of firm age? How is that linked to dynamics we see in manufacturing or mining activity, especially fracking, turnover and things of that sort? So, trying to apply a lot of sort of economic ideas, but sort of very specific and importantly, contextualized to the unique nature of trucking.
Jared Flinn:
I guess, on a personal side, why did you choose logistics and trucking versus other fields?
Jason Miller:
So, my dad was a leased owner operator back in the eighties, a little bit after D Wrek. Before that, he had been a manufacturer's rep selling axles and things of that sort. Then he went to work for international, so for Navistar as a sales engineer until he passed away. And so kind of grew up around the industry. And then really when I got to Ohio State and was doing my PhD, it was clear to see that there was so much open space to be done in trucking. There was so many interesting aspects of it that didn't fit well with a lot of economic ideas that were really developed, let's say, in the context of the four walls of a manufacturing plant. And conveniently, one of the faculty had just done a very large survey understanding formal control approaches. Trucking companies were using either incentive based pay for safety, or this was well before elds.
Jason Miller:
What extent were drivers being monitored with various forms of technology driver turnover? And all of that data was collected right around the time where the CSA program rolled out. And so that was essentially just a wealth of data to look at. And so kind of did that for my dissertation. And as an academic, it's still publish or perish. It's the same way in business schools and the CSA program existing, and a very convenient website holding tremendous amounts of data kind of made it a no brainer for what to focus on. And then by the time I grew down, a lot of that original research 2017 2018 hit, and at the time, the strongest bull market that the sector had experienced, certainly since before the global financial crisis, you know, just generated so much interest. And it's like, well, hey, I've spent almost, at that point in time, eight years learning this industry. I might as well leverage it in different ways.
Jason Miller:
And then Covid hit and just this incredible thirst of information and knowledge and really about data and where were sectors going. And since I had some experience with that, it was already how I taught a little bit. And then I got recruited by the Army Corps of Engineers to do a lot of help with robustness and resiliency planning for vaccine distribution. I had to really do a deep dive into a lot of the different government data sources. And so it's like, well, might as well keep doing what I'm doing.
Jared Flinn:
Yeah. What's interesting, just in my 20 years being in logistics, it seems like, and I'm on the ag trucking side, but it's been always hard to find data and to find research and stuff done specifically in the trucking market. And I just want to hear your take. I mean, I know there's different logistics schools. I know, I think is Michigan State maybe one of the top ones? I know, like, Tennessee is another one when it comes to. But, uh, I guess in our space, and especially in the bulk trucking space, man, it's just I've always tried to search and search to find good data that would relate to our industry, and it's always been pretty tough. I mean, you can look at some of the USDA data, and we work with the USDA on some of their transportation data and help them. But yeah, it's always one of those hard ones to really find a deep dive to get, I guess, good data points to make decisions?
Jason Miller:
No, it certainly is. And I mean, I think a big part of that is, from a government data standpoint, as the bulk sector either will show up as specialized freight trucking local or specialized freight trucking long distance. And so the challenge is, within government data, is this subsector is getting lumped in with your long haul refrigerated carriers, your long haul flatbed haulers, your heavy haulers, your tank carriers, your chemical haulers. And so it's kind of hard to piece out and isolate that one specific piece off of any given government data source for the industry. So I think that poses an issue. And then I think the other side is even like we were talking before, this is, we were mentioning animal food manufacturing being a key source of demand. Well, there's a Federal reserve industrial production data for animal food manufacturing. But you have to really know where to dig into the bowels of the us government data system to find that specific data and then backtracking over to say, what is this data even measuring in the first place? And so this is where, you know, the us government does a phenomenal job of generating data and benchmarking it and frankly, a horrible job of disseminating it.
Jason Miller:
So it's useful for practitioners in industry.
Jared Flinn:
We don't have to get into very specifics. But again, if, I'm just thinking if like somebody obviously just maybe learning more about trucking, you look at all these data points. I mean, trucking is a big indicator of what the economy is doing. But I want to hear your words because you can look at ocean freight rates and capacity and how that translates into the trucking industry. But maybe if you can, Jason, explain to our audience some of these metrics that you're looking at to really see a clear visual picture of why the industry is where it is.
Jason Miller:
Yeah. So, and again, this is where it's challenging, you know, specifically for the bulk space. We don't have the type of robust data reporting that we have. And let's say especially that drive in over the road truckload space, which is certainly where we have the most visibility. But a lot of this makes sense, though, because this is a sector that is much more contractual in nature because this is specialized equipment. It is certain shippers, it is certain destinations. It's not a, we have literally millions of lane possible combinations here. And so I like to think of it, I have almost a controversial view in that a lot of folks will say trucking is a leading indicator, and I'll actually say, no, it's actually one of the most lagging indicators of where the goods economy is, and the reason for that is trucking is derived demand from other industries.
Jason Miller:
It's derived from mining output, it's derived from manufacturing, manufacturing output, it's derived from wholesalers selling stuff, it's derived from warehouses, shipping stuff. And so to me, I almost look at it as the one reason that my colleague Yambol Yamole and I publish our trucking ten mile index is it provides at least sort of one representative way of saying from sort of a freight weighted basis, how are these essentially 41 major sectors of the economy doing that actually are identified as being the key freight generators. And so from my standpoint, I'm looking at freight volume, looking certainly at pricing, because so much of the story is told in pricing. I mean, that's what basic economics tells us. Supply and demand come together and we get price. So looking at pricing data, looking at demand data, containerized imports have been one that I almost want to say have led a lot of folks in the dry van sector a little bit astray. Because typically imports go up when things like manufacturing are going up. And so the interpretation will be, well, it's the imports driving things like.
Jason Miller:
Not really. It's still, still to this day, domestic manufacturing plants in the United States generate almost 60% of freight demand. And so, can you say that one more time?
Jared Flinn:
So 60% of domestic manufacturing.
Jason Miller:
So six. So roughly, the exact statistic is 59.3% of all of trucking demand. For higher trucking demand is measured by ton miles. So the amount of freight and the distance it has to move, 59.3% of for higher trucking demand is generated by us manufacturing plants.
Jared Flinn:
And I would not have guessed that. I would have said 30% to 40%, maybe at most.
Jason Miller:
Just to give some statistics for just how vast manufacturing is, is pick food manufacturing. It's the biggest contributor to trucking demand of any industry in the United States by far. 15% of all trucking demand is generated by us food manufacturing plants for just shipments. Over 10,000 pounds, 20 million loads a year, are generated by just food manufacturers in the United States. That's not including beverage manufacturers. They're in their own separate industry. And so when you look at that volume, all of the imports that come into this country, if you just convert the teus to feus, so 40 foot equivalent units, and you then say a 40 foot equivalent units of truckload, that is just 12 million shipments a year, 12 million feus are imported each year in containers. Food manufacturing plants generate 20 million truckload shipments a year just for.
Jason Miller:
It's incredible. And that's the ballpark that I have off the commodity flow survey, which is the most extensive document that is put together for shipments in the US, is once you include two quarries and the mining sector, there's somewhere to the tune of 250 million truckloads generated each year by locations in the United States. And that's not including less than truckload shipments. That's just shipments at 10,000 pounds or more. So the volume of freight that moves, it's a number that's so large, it's honestly incomprehensible to the in mind. I mean, because we can't think of what a number of 250 million loads is. And that's not including the roughly 28 million drayage loads to account for the 14 million containers or truck trailers that get hauled intermodal each year.
Jared Flinn:
Golly. Yeah, it's a number. Just like if somebody would have asked me, I think I was thinking the tune of five to 10 million total shipments, like in the US. This is crazy.
Jason Miller:
No, it is. Like I said, these are numbers that they cause the human mind to want to break down. I mean, I think the number of shipments, as an example, that go between wholesale locations for petroleum products. So rack locations, diesel and gasoline wholesalers to retailers, is to the tune of 30 million truckloads a year of gasoline and diesel that get shipped by truck to retail locations. I mean, and so these are just numbers that boggle the human mind to think about how much we manufacture and process each day.
Jared Flinn:
So you may or may not have this data. So how does this like. So we got these total shipments. How does this relate to for hire trucking companies or trucking companies as a whole? Hey guys. Jared Flynn, thank you so much for listening to the bulk loads podcast. Many of you all may not know, but we started a permitting business and insurance business. We know that many of you are in different stages of your life and we want to simplify and take those friction points away from you. So if you have interest in permitting, allowing a company to take care of your IFTA reporting, all your tax documents, all the back end work that quite frankly, I don't like doing, and I subcontract out to other people's to do, we want to do for you.
Jared Flinn:
So if you get a chance, click the permitting link below and you'll be directed to that. And then on top of that, we also offer commercial truck insurance. We represent really good truck insurance markets to give you the most affordable and best price on insurance. So we know insurance rates are climbing. We know every year at renewal times, people are sticker shocked to see the renewals. We want to walk you through that process, give you a better experience and hopefully better affordable coverage. So go ahead and click the link below for bulk insurance group. Let us quote your insurance for you.
Jared Flinn:
Thank you and God bless. I mean, in the tune of like, I mean, how many, I mean, how many trucking companies are moving this amount of freight in the US?
Jason Miller:
Yeah, so, I mean, we, it is effectively, and this is the scary thing, this is just numbers for the for hire sector. I'm not including the private fleet.
Jared Flinn:
Okay, I figured that. Yeah, this was just for hire.
Jason Miller:
This is just half of the picture, believe it or not. The other half is private fleet. Now private fleet, though, in fairness, the load counts are at least as high, if not higher. But the average distance is so much shorter. From a pure demand standpoint, it is much less. When you look at how employment data moves, it's very consistent that typically demand goes up, employment lags. And I think this is always why there's this. One of the reasons there's this perception that there is a shortage is whenever we do have good shocks to demand, like we had in, let's say, 2013, 2014 with the fracking boom, or 2017 and 2018 with a fracking boom, a general commodity market boom, a manufacturing investment boom because of tax cuts and a hurricane recovery efforts, demand goes up, capacity always lags.
Jason Miller:
And then we have these periods where it does feel like we don't have enough capacity for demand, but then what invariably happens is too much capacity gets added and then we go into a freight recession, because all it takes is at the end of this is demand to either slow or especially drop a little bit. We had that happen in 19, we had that happen in the second half of 22. And the market flips quite quickly from a pricing environment. And so that pattern has always existed. We had incredibly strong demand, 2004 through early 2007, and then global financial crisis had. But you always see trucking payrolls will go up and then they'll come down. The current cycle, theyve not come down nearly as much as we would expect given the depth of this freight recession. My hunch is that some of that was due to just the incredible accrued earnings that were racked up in 21 and 22.
Jason Miller:
For the industry you can think of take 2018, all profits in 2018. That was the best year we had had in essentially recorded data history from the Census Bureau. The profit we had in 21 and 22, that was beyond 2018. So the abnormal profit for those two years was larger than 2018 in and of itself. So the amount of excess revenue carriers were able to make those two years essentially baked in an entire extra of 2018 in the mix. That's led a lot of people. It's, again, it's one of those things. It's kind of like the ocean carriers, where you can see like, what were the profits of the container liners? And it's like they didn't make any money before COVID essentially for the last several years, and then they just, you know, gobs and gobs and gobs.
Jason Miller:
Trucking was not to the same degree, but it had a similar, similar behavior, and that's kept folks in the game longer than we would expect. Now we do seem to be starting to see in the dry van space, more capacity starting to exit, especially because bigger carriers have went or going under. The one thing that I think is misunderstood is the belief is that capacity normalizes because a bunch of small firms exit. That's not historically been the driver. The driver is actually larger firms either doing layoffs or going out of business.
Jared Flinn:
Really more than the smaller ones. Because if you look at the trucking industry as a whole, I've always used this statistic, and maybe you can debunk this, but 93% of the entire four hire trucking industry are usually that five or less trucking outfits.
Jason Miller:
Number of firms, yes. Volume of business, no. The majority. Majority of capacity. Your smallest carriers with, say, under that five power units make up. Maybe if we exclude four higher owner operators, maybe 20% of capacity in the industry is under five as carriers with five power units or less.
Jared Flinn:
Five or less trucks making up only 20% of the capacity.
Jason Miller:
Total capacity.
Jared Flinn:
Yep.
Jason Miller:
The split of capacity in trucking is actually much more. If somebody would ask and say, where is in capacity here being measured by employment? Because that's a pretty good proxy for where we're going to be at for capacity. The biggest chunk of capacity is carriers with 500 or more employees.
Jared Flinn:
What percentage is that?
Jason Miller:
So I can give you that number. Let me pull that up right now. This is for the general freight sector.
Jared Flinn:
I think I've been telling my audience a difference tune this whole time. I always thought the number, I always thought capacity wise it was that five or less was like a huge chunk of the whole industry.
Jason Miller:
So it's number of employees or it's not number of employees for number of firms. You're absolutely right. So the way you can think of in trucking, this is statistics from 2017. You could probably scale this up to the 20 to current, but in 2017, we had 100. We had, let's be 112,000 firms in trucking that had at least one employee. So 112,000 firms with at least one employee. That's excluding most of your for hire owner operators who are going to be so called non employer firms. There were 600,000 of those individuals, by the way, in 2017.
Jared Flinn:
600,000 owner operators.
Jason Miller:
Well, so 600,000, what we call non employer firms. So that would be a entity that reports to the IR's revenue for engaging in truck transportation, but there are no employees associated with that. EIN number is the way to think about it. So that does include your farmers who, hey, I've got a truck. I don't do this full time, but it's the winner. I might as well haul a couple loads because I do maintain my authority type of situation. Yeah, no, the non employer piece of trucking is about 20% of the industry by revenue. So you kind of got to set that aside and say we've got 20%.
Jason Miller:
That is micro, micro operations with no employees.
Jared Flinn:
Okay.
Jason Miller:
Of the 80% then that has employees. The biggest chunk of capacity by far is the big boys and girls of the world, firms with one to 20 employees. So those micro, the carriers that have employees but are small, they make up only 20% of the employment population. So in terms of where capacity is really at, it's actually much more at the bigger carriers than folks realize. And that's why when we have capacity corrections, it's when big players either downsize a lot or go out of business. I mean, when Yellow Corp failed, that was 30,000 payrolls that got wiped out. That is a huge drop in capacity. And we can see that in how the employment data that the BLS benchmarks and tracks behave.
Jason Miller:
You see this massive drop in August of 2023 when yellow had failed.
Jared Flinn:
Wow. So we've seen here lately some more of these reports of these trucking, bigger trucking companies that are going out. I mean, as we're doing this recording, there was an article last week in big Texas, I think. So. I guess in my mind, I've seen more of these bigger outfits, it looks like, that have gone out of business than in the past in my career. Why, if that is true, why is that happening?
Jason Miller:
So certainly this is the most failure, I would say, of large carriers of this sort. Well, we had a couple big ones in 2019. Celadon was one example, Falcon Express is another. So we had a couple big failures in 19 as well. But other than that, you got to go back to the global financial crisis where we had failure beyond failure. Trucking. We lost 15% of trucking employment during the global financial crisis. From the last peak of payroll, which was July of 2022, to today, we're down about 2.2%.
Jason Miller:
So it's about a 7th of the magnitude of what the GFC was in comparison.
Jared Flinn:
So really, as of now, we still haven't seen a big shrinkage of capacity.
Jason Miller:
Not yet. Even adjusting for where I think is some overestimation on the monthly survey, we may have seen maybe a three to 4% drop from the peak, which would have been in 2022. But that is, again, nowhere near the type of drop we saw in the global financial crisis, which was far worse, or even actually from 2001 through 2003, where we saw about a 7% drop in trucking employment. And a lot of that was because we had a tremendous amount of offshoring that took place. And in that time, we didn't have the type of robust spot market that we do today. I mean, certainly not to the same degree. And so carriers were much more attached to a small number of manufacturing plants. And if one of those plants shut down because it was getting offshore, that carrier didn't have an easy way to reallocate its trucks to something profitable, and they either had to downsize a lot or they go out of business.
Jared Flinn:
So, I mean, do you have numbers or data like. So for the very little bit that we've, you know, that have washed out of the market, I guess how much more needs to really kind of flush out to get stabilization.
Jason Miller:
So right now, pricing, at least in the dry van space, and even in flatbed and refrigerated, we seem like we finally kind of stabilize. And even looking in the specialized parts of trucking, we seem to be effectively at normal at essentially the low point of the cycle right at the moment. So it feels like we're getting towards an equilibrium part of that. In the dry van spaces, we've seen spot rates come down darn near marginal operating cost. And so that makes it kind of harder to go any more below the floor where we're at. But it does seem like that floor was reached in April. My general sense is we need, even if a little bit more capacity exits, we probably need demand to start increasing by, I would say, 2% year over year to get us into a strong bull market cycle. The problem is right now is we're talking year over year.
Jason Miller:
Demand has actually been down about 1% year over year. So we need either a lot more capacity to start leaving, or we need a nice uptick from a demand standpoint. And when you look at the big sectors of manufacturing that generate the most trucking freight, it's food, it's then chemicals, it's then nonmetallic mineral products. And so that's going to be very familiar to your listers. That's hauling gypsum, that's hauling cement, that's hauling clay. You know, any type of this stuff. Then believe it or not, it's paper. Paper is still the fourth largest ton mile sector.
Jason Miller:
And then you get things like primary metals and whatnot. And so you look at all of those industries and unfortunately right now I cant point to one of them, that is, in a year over year growth mode, chemicals are probably doing the best on a year over year comparison. Believe it or not, that nonmetallic mineral piece is doing the worst, which I think surprises folks because they see the infrastructure investment and they're thinking, well, hey, that's got to generate, we're not seeing that right now. And we've got very good data on that industry. So my standpoint right now is I don't see much of a demand recovery occurring in the second half of this year. But I do think there's some potential in 2025, assuming interest rate cuts do take place. The wild card in 2025, and this refers to both political parties, is just what are they going to do on the tariff front? Because that introduces a whole bunch of complexities and potential uncertainties.
Jared Flinn:
I'm glad you brought that up. I was actually going to ask about just the election year. And regardless of the side, I mean, typically in an election year like this, people always say you just don't see a lot of activity until there's clarity on which party is going to win. And it doesnt really matter. But they said theres just a lot of decisions that arent made kind of in an election year. Your thoughts?
Jason Miller:
Yeah, so again, this is one ill go back in history and ill disagree a little bit because 2020, throw that out. That doesnt count. Thats Covid year. 2016 was a bly year. But thats because commodity prices were terrible. I mean, we were still, fracking had finally hit bottom and it was starting to rise a little bit. But in the ag space, I mean, you know, this commodity price is great. 2012 through about mid 2014 and then they just tanked.
Jason Miller:
Right. And so it was a rough period there. 2012 freight demand was growing the grand, we were still coming out of the GFC, but fracking was doing well. The commodity markets went crazy because of drought. So that was a phenomenal year for farmers. From a revenue standpoint. 2008, that's the GFC. That doesn't count.
Jason Miller:
2004 was a phenomenal year for trucking. Freight demand was going crazy. We were in the middle of a housing boom. Freight demand that year was up like five, 6% year over year. Like incredible increases. 2000 was kind of our peak. We started having offshoring take place. 1996 is a pretty darn good year economically.
Jason Miller:
And so, like you kind of point back, there's not a for sure fire rule of thumb. It's just happened to coincide that 24 in 2016 are starting to feel basically like twins of each other right at the moment.
Jared Flinn:
Okay, so I mean, with that being said, I mean, there's a little bit of a light at the end of the tunnel, I think so.
Jason Miller:
I mean, the big thing this year was, you know, most folks and myself included, you know, I mis forecast this. I was assuming three interest rate cuts. I thought we see our first cut in June or July. That is clearly not going to happen. And I think what you saw was a lot, a little bit of excitement at the start of this year at the thought of the fed reducing rates by 75 basis points. That certainly would have been a huge positive for the housing side of things. We've not really seen that materialize. It also doesn't help again, especially when we've got our friends in Europe cutting.
Jason Miller:
The Canadians are cutting, we're not cutting. That means the dollar is even stronger than it is normally, and that hits exports. And so as we're talking the space we're in, you've got Russia and Ukraine effectively dumping wheat on the global market. You've got Brazil record soybean, record corn harvests year after year. You've got China still not happy with us due to tariffs, and that's pulling down demand. And it does place pressure on us agriculture. I'd say the biggest shining light has been the continual growth of renewable diesel and the soy crush demand that that generates. And so I do think there is a little bit of light at the end of the tunnel in 25, regardless of which party gets elected, because we should start seeing interest rate cuts.
Jason Miller:
Hopefully we start to see the european economy start to improve. China's economy is not doing well, obviously. They're essentially trying to manufacture their way out of the fact that their real estate market is a shambles at the moment. But we're seeing the retaliatory tariffs put on for certain sectors where it certainly does feel that there's dumping taking place. And so that's where I think there's just so much uncertainty from that regard because unfortunately for bulk carriers in the us ag sector, we are very dependent on China buying our farm commodities.
Jared Flinn:
Yeah, well, that's where I want to kind of end the or kind of in the conversation with this and kind of hone in just a little bit more specifically, when we're talking about commodities, you know, in the very beginning, you talked about kind of food production, but even animal food production. Can you give those numbers again just so our audience can listen? Because sometimes we don't realize, you know, kind of where this demand or where we're losing this demand. You know, we see, uh, you know, rates going down, obviously, load counts going down. Even on our load board, bulk loads, we can see a clear definition of, like, man, some of our load counts just aren't there where they used to be, and. But you're seeing a clear sign that actual animal feed production is going down.
Jason Miller:
Yeah, no, exactly. So, yeah, so the Federal Reserve Board publishes data for the physical quantity of animal food produced, and that's down right now almost 6% year over year. And it's at the lowest levels we've been at since 2019. Interestingly enough, 2018, we had seen a nice run up and then a soft period in 2019. And so you look at a sector like that as an example. But on the other side, the industry that handles a lot of the soy crush grain and oilseed milling, that industry right now has been humming along pretty well, which makes sense given renewable diesel demand, as we have all of these additional facilities coming online. Granted, though, a lot of the output for that is going to get picked up by the railroads. And so we've had sectors like that.
Jason Miller:
Unfortunately, with where agricultural commodity prices are and being much lower this year than last year, it reduces demand for things like fertilizer, because farmers are very conscious, the higher the price they were receiving, the more I marginally invest in fertilizer. So you see some headwinds there in a sector like that where you're not going to have the demand this year that you did last year, simply because if I'm a farmer, it's my rational decision to put less fertilizer or less other chemicals on my field.
Jared Flinn:
Yeah. So just practical advice for our listeners, you know, whether it's a green merchandise or listen to this podcast or owner operators out there in the ag space, kind of this, this data that you're seeing every day, this research that you're doing, what would be kind of your gut advice you'd be telling them right now.
Jason Miller:
So, number one thing that we probably don't talk enough about in trucking is productivity, is finding ways to maximize your productivity. And as we think about it, economists would talk about it as, you know, maximize the amount of tonnage you're hauling per day or ton miles per day. But it's about revenue productivity. It's about how much dollars are coming in per hour that you're operating. And a lot of that is about relationships. A lot of that is about finding every efficiency you possibly can. Because apart from firm age, firm age is the most powerful predictor of a company going out of business. The second most powerful predictor is how productive you are, is finding ways to maximize that productivity.
Jason Miller:
And it is all about relationships. At the end of the day, it is about finding that set of shippers that give you consistent volumes at a decent pricing. It's about making sure to find, you know, those destinations are getting you unloaded as fast as possible and letting you get back. But at the end of the day, it really comes out to figuring out how do we maximize productivity. It's about, you know, cost control then from a standpoint of not using too much diesel, making sure equipment's maintained, preventative maintenance pays for itself in the long run, cannot stress that enough. And so to me, it's all about finding ways to maximize productivity. And then I think find the couple broad indicators that really you find predictive of where things are at for yourself. You know, looking at GDP data is not going to be useful.
Jason Miller:
Like when CNBC talks about that, you can pretty much ignore that. That is way too macro level to think about. And then I think the other thing to recognize is that if you're doing really well, it doesn't mean your sector is doing really well. There's always going to be a distribution, even in the best market. So, for example, between March of 2017 and March of 2018, pretty hard market to not do well as a trucking company. We still saw tremendous numbers of firms fail between March of 2008, March of 2009, by far the worst trucking market in terms of demand that we have seen from a demand decline standpoint since well recorded trucking history, a lot of companies grew. And so it's finding that niche, finding those shippers that can get you that business. Closely monitoring the health of your customers.
Jason Miller:
I mean, I think one of the challenges in the bulk space is you tend to be really tied to a small number of key accounts, making sure those firms are doing well, because the situation you don't want to be in is somebody says, hey, we're going to shut down and all of a sudden, 25% of your fleet is idle.
Jared Flinn:
Yeah, well, and especially in our space, so many guys that are working with local companies that are transporting local. So, yeah, there's, if those, if something happens to those companies, then now you're having to go out further, try to find customers. So, yeah, that's really, really well put, man. Jason, I really enjoyed this podcast. There was so much data embedded in here. I'm just thinking like, I'm gonna have to go through like, like, and relisten to this and like kind of bite sizes just to really digest some of this data that you were talking about with us. But I mean, I find this fascinating. I think if you're in the trucking business, you gotta be looking at these points.
Jared Flinn:
You can't just be, I don't know, hoping for the best, pointing fingers at somebody else, but really talking about, hey, what are these really telling me on how I should manage and really forecast my business?
Jason Miller:
No, exactly. And if anybody listening is curious or wants some more data, like just connect with me on LinkedIn or send me an email, I mean, I'm not hard to find. Jason Miller, Michigan State I'm the first thing it's going to come up because I'm happy to share any of this stuff because I look at it this way, that we're all paying tax dollars for a lot of this data to be generated. And like you said, I think that we have a lot of maybe misconceptions and misunderstandings in the industry in the drive and space, the belief that it was all about containerized freight, and if that was growing, it was going to be good. That got completely shattered the first half of this year where you've got double digit import growth, but a market that remained weak and if anything, saw declines. And so all this data is out there, it's more accessible now. But this is one where I'm certainly happy to basically serve, as I'm going to say, the data tour guide, to say, hey, here's where you want to look. You know, doing long haul bulk movements, and you're trying to say, hey, my customers are demanding a 3% year over year price reduction.
Jason Miller:
How does that actually compare to what the Bureau of Labor Statistics says this overall sector is saying? And that way you can at least benchmark and say, hey, 3% down year over year may not be that bad at the moment.
Jared Flinn:
Yeah, that's so good. For those listening, we're actually going to put Jason's link in the episode notes. So if you're listening right now, you'll just be able to drop down in there. Jason, do you also, I mean, besides connecting on LinkedIn and your email, do you put out a. Do you have an email list that you send out data on, or is it just kind of more as people contact you?
Jason Miller:
More, more? The latter. And my team here is me, myself, and I. So, plus, actually, I'm mostly an administrator right now for one more year here. So this is actually me doing stuff over and beyond running a department with a multimillion dollar budget and 50 people reporting to me. So. So what? Yeah, just. Just reach out. Happy to help any way I possibly can, you know, again, especially pointing folks to the right directions or, you know, having some of these conversations that often as well.
Jason Miller:
Do you know, if you work for a company, you know, you're interested in having me speak or something like that, shoot me an email. We'll figure something out.
Jared Flinn:
Yeah. Awesome. Well, again, I can't thank you enough for coming on the show. I've been following you for a while and I think just the data that you put out there, I find it fascinating. And I'm glad there's professors and researchers like you willing to dive into this data on trucking because again, I think in just the years that I've been in the industry, it seems like it's been like this little secret or just where can we find this? And it's been awesome that, man, now there's a source of truth out there that can kind of show visibility to this. And again, like you said, this is, it's taxpayer money and using it for that, we are paying for this data out there to be generated. So, man, Jason, thanks for coming on the show. I hope that we have you back again and hopefully kinda to relook at some of these numbers we talked about and some other research that you're finding.
Jared Flinn:
So thank you very much and God bless you.
Jason Miller:
Yep. Hey, thanks for having me on, man. Everybody take care.
Jared Flinn:
Tyler. I hyped it up in the intro, but I think Jason just solidified how important agriculture and food and transportation, especially in the bulk industry, is crucial. And again, we're not recession proof and we see those slumps, but again, it's not near to the effect that the general freight market.
Tyler Allison:
Yeah, we're a little bit more isolated and protected in that sense. Yeah, I agree. Jason didn't disappoint, and hopefully he'll be able to make time to come on again to keep presenting these numbers and even maybe bulk loads conference next year if we could get him to touch on some of these things, I think it'd be very beneficial. But yeah, it's crazy that he was kind of leading up to, you know, we need more capacity to leave or we need more demand to come in and just, he was presenting, we need demand to increase 2% year over year, and right now it's actually negative 1%. And so I think there's a lot of hope for 2025 to correct itself. And we're going to see spot rates go up because of it.
Jared Flinn:
Yeah. And he's an ag boy, man. He grew up small town, Ohio, and I think that just made it even solidified how passionate he is about our industry. So, Jason, thank you so much for coming on. He even said, though, and I can't remember if it was during that recording or not, but that this is his job to give this date out. I mean, he is employed by the government, our tax dollars to do this. So I think, yeah, he'll come on more. And he said, like, it's his job to come on these podcasts and to show this data.
Jared Flinn:
So we are going to utilize him as much as possible.
Tyler Allison:
Awesome.
Jared Flinn:
And I think, yeah, he, the numbers, yes, speak for itself. So thanks, Jason, for coming on. So a couple of things before we head out.
Tyler Allison:
Yeah, so we'll mention we have a TMS webinar coming up at the end of August. We only have a few more spots left, so make sure to get your name on it. You can go to the bulk loads website and click on the banner at the top, or you can go to bulk dms.com, click webinar. You can just register. You don't have to attend live if you don't, if you can't make it, and we'll send you the recording. But we're going to go over some of the tools that we can help you. You know, whether you're a carrier, broker, shipper, or trucking, software can help you with invoicing, storing historical data and dispatching and all that good stuff. The second thing is we are actually going to start sending out a quick market update.
Tyler Allison:
I don't know if we're going to do it weekly or bi weekly, but pretty much we're going to stay specific on the bulk freight market, what we do, and we're going to start emailing out our members who want to receive it. Just some important numbers to maybe help inform your business decisions on what the market's actually doing.
Jared Flinn:
How do people, how will people sign up for that right now?
Tyler Allison:
So if you have a bulk loads account, you will go ahead and get it. If you do not have a bulk loads account, you can make one for free by going to bulk loads.com and making an account. Or you can simply just email us podcastleads.com dot and we will get your email on the list.
Jared Flinn:
Yeah, I'm super excited about this. I've been pushing on this one for a while. For me, I'm not good at organizing the data and all that, but we have a guy in house now, Nick Metheny, and he's been working on this and we just know that it's important. Just like this podcast, people want to see market data and really see the trends to make better decisions. So that's something that we're super excited about. And it's going to be a work in progress as we get going. But we have, we're probably going to get the next one out here in a couple of weeks. So make sure if you don't have a bulk load subscription or account, go ahead and sign up on bulk loads.
Tyler Allison:
And we'll, I'll say that's one thing like the general freight, you know, marketplaces, dat truck stop, that's one thing they do really well is packaging up that data for the general freight market and making it available. And yeah, you, like you said, you've been on it for, I mean, forever now. But I'm glad that we're going to be able to offer that.
Jared Flinn:
Yeah. Cool. Anything else?
Tyler Allison:
I think that's pretty much it.
Jared Flinn:
Cool. I want to, this is something. And when we close out of here, we're going to do a prayer here in a moment. And we've been getting a lot of prayer requests and thank you for trusting us and praying. And we just know that especially in uncertain times right now, politically, the industry, trucking market, man, people are uncertain and there's always a good time for prayer. But even more than now. But you can send prayer requests to prayer oakloads.com. and it is.
Jared Flinn:
And I mean, you can make it anonymous. We don't share that with anybody outside of this office. We want to pray for you. And again, I can't encourage you enough, I think, man, we had three or four just last week that came in that, that we've been praying over as an office. And we appreciate that. But I wanted to read something. I thought this was really good and then we'll close out in prayer. Peter Ospico, he actually runs, it's called the Kinsman Journal foundation that I'm a board member of and just really behind Peter, it's really about making men better and teaching more about masculinity and fatherhood and brotherhood and all that.
Jared Flinn:
You went to one of the events earlier this summer, but he wrote this, and I wanted to share it with our audience and then we'll close in there, he said, you know, so there's going to be a considerate amount of divisive rhetoric in the months ahead, and it's already beginning to ramp up. But he said, as followers of Jesus, let us consider the aim to be a peacemaker. Bring order amidst chaos, strength under control, engage offline, seek first to understand, embody humility, break bread at your table. Even if you are right, it doesn't need to be said. Immerse yourself in God's word. Spend time with your neighbors and actually pray. Remember, you are a part of the story, but not the whole story. And man, Peter, thanks for actually, he posted that, but it was just a good reminder.
Jared Flinn:
And I think I will say this probably, well, all of them, but I need to practice this a lot more. Yeah, I think for me it's really, you know, just because you're right doesn't mean you need to voice it with everybody out there and, you know, would you rather be right or would you rather be a follower of Jesus?
Tyler Allison:
Yep.
Jared Flinn:
And I think there's a big clear difference with that. So again, love this out there and just words of encouragement out there, especially in these times of, of uncertainty in all facets, man, we have a guard, a God that is larger and is in control, knows everything that's going on, and we trust fully in him. So with that said, I'll close this out in prayer. Heavenly Father, we thank you for this day, Lord, we thank you for the season of life that we're in, Lord, that we know that you have us specifically where you want us to be, Lorde, and that, man, all things happen for good that believe in the glory of you. Lord, we just pray over our industry. We pray over the farmers and ranchers and truckers and everyone that serves this great nation. Lord, we pray that you be with them. Lord, we pray specifically over our bulk loads members, Lord, as we pray over the prayer requests that have been in, Lord, that we petition those to you, that you answer those.
Jared Flinn:
And God, just be with us at this time. Lord, give us peace in our hearts. Lord, let us love one another. Lord, as you have taught us to love. Lord, we thank you for your son, Jesus. Lord, we thank you for him dying on the cross. And God be with us through these times in your heavenly and precious name.
Tyler Allison:
Amen.
Jared Flinn:
Thank you as always for listening to the Bulk Loads podcast. If you haven't yet, hit the subscribe button down here in the left hand corner. Also, man, we do this, these podcasts free of charge, honestly. We get to plug our businesses on there. But also we do this because we want to make you better out there and we want to empower and strengthen those out there. So please, if you know other people that can benefit from this, please share this. It's simple, just simple task and it would mean the world to us. Thank you as always and God blessed.
