When will freight markets turn? Part 2: Building business for trucking's down cycles

Overdrive Radio

In this week's Overdrive Radio edition, Part 2 of our "How to build business for trucking’s down cycles" online roundtable in late August. Among the questions flagged for panelists was just whether, and when, the long freight-rates slide of the last two years might turn the corner, or at least stabilize. Since the late-August time period, the march toward the presidential election and a modicum of certainty on that front continues, of course, but perhaps more importantly the Federal Reserve has cut benchmark interest rates by a half point, the first such cut in after a two years' worth of several hikes meant to help tamp down rapid inflation: https://www.overdriveonline.com/partners-in-business/article/15684315/ownerops-see-mixed-income-bag-but-wait-for-kickstart-on-rates Panelist and longtime Overdrive contributor Gary Buchs posted recently in his Truck Business Network group about expectations of further cuts when the fed meets again late in the year and early next year. Those cuts might spell not only good news for borrowing costs to, say, finance a truck purchase down the line, but also stimulate spending and moves in various sectors of the economy, generating freight. In essence, Buchs noted, get ready for potentially improved conditions, but not for a good while yet. Here’s how he put it: “Every trucker is waiting for the market to turn around, as so-called experts keep predicting These interest rate cuts are historically some of the things that will make this happen. But the increased opportunity for better rates doesn’t happen overnight. Go into your phone and set an alarm for four to six months out from the date these interest rates make dramatic moves. Odds are that is about the time business will change, as it takes time for companies to have confidence to place more orders, then the companies manufacturing have the confidence to ramp up production, and the cards begin to fall and make things move.” He went on to compare running an owner-operator business to an ultra-marathon, as it were. “The return on the investment of hundreds if not thousands of hours of intense commitment and training aimed at a goal is celebrated when, one day, we finally are able to cross that finish line,” he wrote. Today on the podcast we hope to give you further opportunity to learn from Buchs and two other panelists who were part of our roundtable, namely Silver Creek Transportation Founder and President Jason Cowan (Overdrive’s Small Fleet Champ for year 2021) and ICV Express owner-operator Ilya Denisenko. In the previous part of this two-part podcast, panelists ran through a variety of customer-management tactics aimed at preserving relationships, building new ones, and batting back those inevitable requests for a “discount” from even longtime customers. In part 2, they field a variety of live audience questions, from those about timing of a recovery to special considerations for flatbedders when it comes to customers, what owner-operators can do to combat brokers’ ever-increasing insistence on roadside inspections on the record as a condition of doing business, just how to compete when shipper customers are being solicited at cut rates by brokers, and more.