October 10, 2025 • 62 mins
Two stolen truckloads of premium tequila just exposed how deep freight fraud runs—from double brokering and GPS spoofing to carrier identity theft—plus we are seeing real DOT and ICE enforcement on the road. As non-compliant fleets vanish, rates are rising even while volumes stay nearly the same, revealing how much “ghost capacity” never belonged in the market. We break down what’s happening, why it matters, and the simple fixes brokers, carriers, and shippers can take to restore safety, legality, and fair competition.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:19):
Welcome back.
It's another edition of theFreight 360 podcast.
We're going to talk about the uhenforcement of some of this uh
what would you call it, thenon-domicid CDL situation.
SPEAKER_01 (00:34):
Yeah, I would just I don't really know how to define
it.
Every time I'm talking tosomeone about a two, I'm like,
how do I explain this?
I'm like, is it it's not reallyjust non-domicidal?
I think it's also justenforcement of existing
regulations that never happened.
SPEAKER_00 (00:49):
Well, we'll dig into all that today.
We'll I'll I'll uh as we'rerecording and having this
conversation, I'll pull up someof the most recent headlines um
so we can reference the latestof what's going on.
But uh first, if you are new,check out the rest of our
content.
If you're looking for somethingon sales or carrier development,
just use the freight360.netwebsite and hit the search bar
(01:10):
and type in some keywords, andthat'll help pull up all of our
blogs, uh, long form podcasts,shorter educational videos.
You've got the Freight BrokerBasics course.
If you're looking for a aneducational, full length, we did
that with DAT a few years back,and it's um it's definitely a uh
a leading uh tool out there forfolks in the industry that are
(01:32):
new.
So um leave us a comment, share,like, all the good stuff.
Ben, uh we skipped sports lastweek.
Um but this week I've just hadlike I just it was a sad week
for me in general in sportsbecause the Red Sox, who I'm a
fan of, they lost they went upin game one um and if it was a
(01:54):
three-game series and they lostgames two and three and were
knocked out in the wild card.
So um but yeah, following the uhfollowing the major league
baseball playoffs, October's afun one.
So you got Yankees playingToronto.
SPEAKER_01 (02:09):
Dude, did you hear about the guy with the t-shirt?
They were talking about it thismorning who caught uh was it
61st Homer?
Um take a look at it.
They were just talking about iton um uh barstool sports.
They were talking about in theinterview.
I'd listen to at the gym justbefore I stepped in here.
SPEAKER_00 (02:29):
Um home run caught let me pull up barstool t-shirt.
SPEAKER_01 (02:35):
I just get it.
Um okay, cow Raleigh home runcaught this.
SPEAKER_00 (02:42):
Oh, yeah, he's a home run directed to a Mariners
fan wearing a dump 61 hereshirt.
SPEAKER_01 (02:47):
Oh, that's and they said after he caught it, he took
the shirt off and he had a dump62 shirt underneath it, and they
were joking, they were like, Iwonder how many shirts he had
on.
Because like the odds that thathome run hit that guy were like
astronomical.
SPEAKER_00 (03:01):
That's pretty funny.
Dump 61 here.
Wow, yeah.
So anyway, that's uh that's uhbaseball for you.
So Seattle and Detroit, um,we'll continue to follow that.
NFL Bills got their first loss,Philly got their first loss.
There's no undefeated teamsanymore.
The Chiefs lost again.
Sorry, Trey, if you'relistening.
SPEAKER_01 (03:20):
Um good weekend for the Steelers.
unknown (03:23):
What's that?
SPEAKER_01 (03:24):
Even though they didn't play.
Good weekend for the Steelers byweek, and basically everyone in
the AFC North lost.
SPEAKER_00 (03:30):
Yeah.
That's the that that's the thingwith like football, is with such
a short number of games comparedto like baseball or basketball
or hockey, um, one week canreally shake up the standings,
even if you're not playing.
So yeah.
Um, but we'll see.
Got the Bills.
(03:51):
I think we're playing AtlantaMonday night next week.
So yeah, Monday night football.
It's a double header, man.
You got two games Monday night,so we'll see how that goes.
Um, news, dude.
I put this out in our news, ournewsletter this week, but so the
guy Fieri or Fiat, however yousay his name, the stolen tequila
that was earlier this year.
SPEAKER_01 (04:13):
60 minutes.
SPEAKER_00 (04:14):
Yeah, like it made um, you know, it's like months
later, but like made nationalheadlines, right?
Like all across like like it wason 60 minutes, so naturally then
like every major news outletpicks up a story on it.
So whether it's, you know, Fox,CNN, News Nation, like ABC,
literally everybody covered itthen because it was such a big
(04:36):
thing, but um he had twotruckloads of of like premium
tequila, like special batch thathe had made for something, and a
mix of double brokering andcargo theft all in one.
And they ended up like they didrecover half of it.
Um, but the other half is stilljust like missing.
(04:59):
But what I'm glad about is likein the wake of all this we've
been doing with talking tolawmakers and trying to get
legislation passed, um, nothingmatters until people know about
it, right?
So I think that's that's where Ithink it's it's as much as it
sucks, like you know, a milliondollars worth of tequila, like,
you know, it's a much biggerissue than that.
(05:19):
And if it takes uh a celebrityto, you know, make it hit the
headlines, then hey, that'sthat's where we're at.
SPEAKER_01 (05:28):
Agreed.
I kind of laugh because in oneof the 60 Minutes articles, some
or one of the posts I think Isaw on LinkedIn, I think it
might have been from 60 Minutes,they were interviewing like law
enforcement in LA, and theysaid, you know, LA law
enforcement has recoveredsomething like$32 million worth
of cargo theft in the past year.
And I was like, wow.
I'm like, I know of more than$40,000 worth of cargo theft,
(05:50):
basically Southern California.
So it's like that is super greatand super happy that you know
they are doing what they can,but I mean, it is nowhere close
to putting a dent in theastronomical numbers of loads
and dollars lost in the supplychain to this problem.
Yeah.
I thought about this last night.
(06:10):
I think the TIA put out somenumbers because it's really hard
to gauge how much is beingstolen every year, but I've read
numbers at like 20 billion, 30billion, and I think I've seen
upwards of 40 billion.
What have you seen on likeestimated cargo theft from like
incredible sources?
SPEAKER_00 (06:27):
I had it in the the TIA downloads.
Right.
Um, I'll pull it up right nowbecause they let's see what they
well anyway.
Um while I'm looking that up, umKeith Lewis from CargoNet.
We had we did an episode withCargoNet early at the either ear
earlier this year or last year,and it was like kind of cool,
(06:48):
like see him on 60 Minutes.
You know what I mean?
SPEAKER_01 (06:51):
Oh, he was on 60 Minutes.
I haven't watched the episodeyet.
I'm gonna have to take a take alook at it.
SPEAKER_00 (06:55):
It's like a there's like a good um maybe like
12-minute clip that reallyhighlights it all in detail, and
like it they break down how thedouble brokering happened.
Like basically, two these twotrucks, like they forged their
identity, they spoofed GPStracking, like they did
everything that we talk about.
(07:16):
Um had they followed, theydidn't name the brokerage that
handled it, they just keptsaying like the logistics
company.
Um but like had they followedthe protocols that we preach,
like this wouldn't have thiswouldn't have happened.
So um but yeah Keith Lewis.
It's a it's a good one to checkout.
I'm I'm gonna pull up this uhthis fraud thing here and see
(07:38):
what what did you say yourestimate was on it?
SPEAKER_01 (07:41):
I'm gonna guess 30 billion because I've seen some
at like 40 and some at 20.
SPEAKER_00 (07:46):
Here's the uh the handouts that we got.
Um they're saying our industry'srevenue is 343 billion and then
35 billion is the cargo theft.
SPEAKER_01 (08:09):
That would mean one in ten brokered loads are being
stolen.
Like just think about that.
SPEAKER_00 (08:13):
I think that's just a cumulative.
Um I have to zoom in here.
35 billion.
So this is findings from the2025 TIA fraud report survey.
Uh$35 billion.
Cargo theft remains the mostcostly form of fraud, with the
National Insurance Crime Bureauestimating oh, annual losses up
(08:34):
to$35 billion.
Um, just think about that,right?
And nearly one in four companieslost over$200,000 to fraud in
(09:34):
just six months.
So most victims are smallbusinesses that make under$5
million a year.
34% say fake brokers are thenumber one threat, leaving
freight lost, stolen, orundelivered.
So yeah.
SPEAKER_01 (09:51):
So even if you like really exaggerate that and
consider all of everything thatships is like a trillion
dollars, right?
If that number is called 40billion, right?
That's four percent, right?
That's four out of every hundredloads moving in the country is
being stolen.
Like, that is astronomical, thatnumber, right?
And I do want to pause, right?
(10:11):
For like all the carriers outthere, like we talk a lot about
brokerage stuff and carrier, butlike it is very important as a
motor carrier.
You are making a phone call, goto the FMCSA, look for the phone
number or the main number of thebrokerage you're getting a load
from, if you get it from anyload board, and just call and
ask to speak to the broker thattendered you the load, right?
(10:34):
That 30 second to one minutephone call would prevent so much
of this.
SPEAKER_00 (10:39):
Because this guy fiery thing is like they said
the drivers had no idea that acrime was being committed.
Correct.
SPEAKER_01 (10:45):
Like most of the time they don't.
SPEAKER_00 (10:46):
Oh, yeah.
They were just given, like, hey,deliver this to a warehouse in
Southern California.
SPEAKER_01 (10:51):
And that's why we have to work together.
The thing that I just keepthinking a lot about is like we
really have addressed this as anindustry from like the 3PL side.
But to be honest, we needcarriers to be doing the same
thing.
Meaning, like, just simple phonecalls, Googling the main phone
number for a freight brokerage,and just calling before you run
(11:13):
that load.
Like book the load, do whatever.
But before you dispatch adriver, a two-minute phone call
would avoid so many of thesethings.
Because after the fact, when yourun into one or I run into one,
that's the first thing we do,and you find out immediately
exactly what happened.
You call them, they give you thetender, you call the brokerage
they thought they got the loadfrom, and they're like, that
(11:34):
person doesn't work here.
That's not us, that's fraud.
And you're like, man, again, ifboth parties, all three shippers
or brokers and carriers, justmake a phone call to verify what
they're getting via email wouldreduce so much of this.
My guess is it would probablyreduce like at least 75 to 80
percent of these things.
SPEAKER_00 (11:54):
Yep.
Process, man.
So if you want, I highlyrecommend check out episode two
hundred and twenty-two, cargotheft and hostage loads with Sal
Marino and Keith Lewis of Cargo.
Now, Keith is the one that's onthe 60 Minutes clip that came
out in December of 2023.
So almost two years ago, we hadwe had uh did an episode with
them.
(12:15):
And um Keith, really impressiveguy.
Um, if I remember correctly, hecame from a law enforcement
background.
And um he really he does areally good job in the 60
Minutes clip breaking down howhow the crime is um put together
and how it's executed in a waythat makes sense to people that
(12:36):
aren't in logistics.
So even if you're new tobrokerage, um, that's probably
you, right?
You you know, you don'tunderstand the complexity of it.
I definitely recommend check outour episode and check out the 60
Minutes clip because it's uhit's pretty eye-opening.
But yeah, this was likecross-border stuff.
So it came in from Mexico, uh, Ithink to like Laredo, very
(12:58):
common cross-border point.
And then from there, um, twotrucks were supposed to go to
Pennsylvania, and they had thetracking make it look like it
was going there.
And then they kept saying, like,oh, the truck's got a like
basically broke down mechanicalissue near DC, and the tracking
all makes sense.
And in reality, they justspoofed the GPS and the trucks
(13:20):
actually went to California.
So, and these two drivers thatgot hired, like basically
trucking company gets hired, andit's not even the real trucking
company that that they booked.
Um, someone stole theiridentity, and then they turn
around and use a brokerageauthority that they likely stole
and or impersonated, and theyhire these two un unknowing
(13:41):
drivers, probably owneroperators, to uh to haul these
loads to a warehouse in in LA.
SPEAKER_01 (13:48):
So here's the equivalent, right?
To give people an example,right, that are maybe new to
this or trying to understandthis.
This would be like if armoredcars that pick up money from a
bank could be hired the day of,like an Uber driver, and
somebody just hired a legitimateUber driver to go and pick up
money from the bank.
They didn't know they werestealing money, and basically
(14:10):
the thieves, it's like a perfectcrime.
I literally don't even have togo steal this thing.
I could pretend to pay someoneelse that thinks they're picking
it up legitimately, they'lldeliver it to my house, they
don't even know they stole it,and I don't even have to leave
my house.
In fact, I don't even need to bein the country.
I can just hire unsuspectingdrivers.
(14:31):
Yeah, to just go steal thingsand deliver it wherever I want,
never gonna pay them anyway, andnobody knows that I did any of
this, and I don't even have toleave my country, like or
wherever I am.
SPEAKER_00 (14:41):
Yeah, Keith had pointed out too that they've
identified I think it wassomething like 50 foreign
countries that have beenidentified as um actively
participating in this kind offraud.
So um seems about crazy.
SPEAKER_01 (14:56):
So here's a good segue.
I'm looking at X, of which I'mlike kind of never on, but
Steven, our producer, sends methis stuff.
And it's funny, I realizedyesterday why I think I don't
spend time on social media.
It makes me motion sickness,like scrolling through it, like
it literally gives me aheadache.
And I'm like trying to find allthese different articles and
(15:17):
posts because a lot of thisstuff hasn't really hit the news
yet, but people all over thecountry have been talking about
it.
So, Craig Fuller, of which I'mnot a huge fan of, but I will
read his post from like 12 hoursago because I think it really
does kind of identify what we'regonna talk about today.
And it's, you know, freight is acommodity, supply and demand
(15:39):
determines price.
Supply is capacity, the numberof trucks, demand are the number
of things that need shipped inthe country, right?
So the demand for trucks arejust all the things we buy, and
the supply of trucks are justthe number of drivers and trucks
on the road.
It really doesn't matter howmany brokers and it really
doesn't matter how many truckingcompanies.
(15:59):
At the end of the day, it's howmany shipments need moved and
how many actual drivers with atruck can move them, right?
Because whatever happens in themiddle doesn't have anything to
do with supply and demand.
So what he says is the freightmarket volumes are terrible,
meaning the number of shipmentsin our country being moved every
day are at like 2019 and 2008 ornine levels, considering I think
(16:24):
Cass put this report out lastweek, meaning like at the lowest
point in the US economy in thepast 25 years is right now, like
2019, right before the pandemicand during the great recession
in 08-09.
So for anyone out therewondering how the economy's
doing, from a shipment point ofview, there are the lowest
(16:46):
number of shipments being movedalmost in our entire lifetime,
if maybe ever in the moderneconomy, like right on par with
the two other lowest worsttimes.
So whether you're pro or contariffs or what you think about
the future, right now, nobody'sbuying anything, nobody's
manufacturing anything, andpeople shipping volumes are way
(17:06):
down, used car sales are down,home building is down, home
buying is down, home selling isdown, home improvements are
down, building offices are down,building almost any type of real
estate is down or not moving atall.
So, like there really isn't muchgoing on in the country.
So if that's happening, ratesshould be going down because
(17:28):
there's less business for truckdrivers to go and get or to
haul, right?
And what he says is anyoneinvolved in trucking has been
waiting for all of the excesscapacity, meaning like there's
been too many truck drivers forthree and a half years, and so
many such that usually everyyear to a year and a half,
there's not enough business forthe number of truck drivers,
(17:50):
most of which will just getanother job doing something
else, work on farms,construction, wherever, offices.
And then when there's a need,they'll come back in and make
money driving the truck untilthe things that need moved are
moved, right?
But this hasn't happened inalmost four years.
So the interesting part is, andthis is from Craig's post, the
(18:12):
stories around immigration raidsmatter in the industry because a
large percentage of new entrantsinto trucking are immigrants.
Some of these immigrants havefollowed the law and have proper
work permits, but many do not.
A good portion of these driversare also recruited by foreign
organized crime syndicates thatbring in truckers into the US
(18:34):
from overseas under falsepretenses.
This is what everyone intrucking is watching.
Because what happened last weekcan put this out, and we're
gonna be doing an episode withhim or Dean soon, I think
yesterday, that spot ratesstarted to just go up.
Meaning, like what it costs togo move a shipment all of a
sudden got more expensive.
(18:54):
And that doesn't make any sensewhen the number of shipments is
also going down.
So economically speaking, thatshouldn't occur, but it is,
right?
And what I find superinteresting about this is
because you and I have beentalking about this for literally
years now, is economically, themath doesn't math.
(19:14):
Like rates shouldn't have stayedthis low for this long.
And there's really no rationale.
And early in the after thepandemic, the rationale was lots
of government money was outthere, lots of trucking
companies had saved a lot ofmoney, so they were able to run
freight less profitably thanthey normally would.
So it made the cycle stagnant orlonger, meaning like it just
(19:36):
took longer for some of thesetrucking companies to decide to
either lay drivers off or forpeople to go find other work.
But that just never happened.
And it never happened, again,for reference, this usually
happens basically every year.
This is almost four years.
So we're at four times as longas this has ever happened in the
modern trucking industry in40-some years, which makes zero
(19:59):
sense.
And why I'm super interested inthis is because about six weeks
ago, Steven and some of theother folks he's been working
with, who we've had on the show,Justin, Danielle, and Steven,
have found some really egregiousthings on the carrier side
between CDLs being issued withno name.
I've literally seen thesedriver's license.
(20:21):
There's just no name given on adriver's license.
Yep.
They are CDLs for non-domiciled,meaning like no address.
So truck drivers were literallyhaving IDs being shown with no
name and no address, but somehowgetting a CDL.
Then they found massive ELDfraud, which meant drivers are
(20:41):
only legally allowed to work,say, drive 11 hours in a day,
are driving dozens of hours, ifnot the entire day by
themselves, which is one,illegal, two, unsafe.
And the Hope Trans accident inTexas that killed five people
was like a perfect example ofthis.
You had an immigrant from Cubawho had driven 21 hours on a US
(21:04):
postal service load that wassupposed to be a team, fell
asleep, killed five people,right?
So, like these things, to yourpoint of awareness, are starting
to become oh, I don't know, Iguess aware, not to be
redundant, of like people in thecountry are starting to
understand like this is reallybad, right?
Okay.
So to set the rest of the stage,right?
(21:24):
Last week, I think it was lastweek, Secretary Duffy made an
announcement who is theSecretary of Transportation for
the federal government and said,Hey, we have uncovered massive
issues and issuances of CDLs andregulations in the trucking
industry.
And then said, and for anyonethat doesn't understand this,
(21:44):
the federal government doesn'tissue a truck driver's license,
a CDL.
Each individual state does that.
So the federal government can'treally just say you can or can't
do this because the states arethe one that issued these.
However, a state issues it andthen a truck doesn't necessarily
work in that state.
They drive all over the country.
So it's kind of a weird setupwhere like your state issues
(22:06):
your CDL, but then you're gonnago work in all these other
states anyway.
So what Secretary Duffy said wasbasically all non-domiciled CDLs
need to be re-audited uponrenewal for every single state.
And they also need to go throughthe immigration system, which
they had found they hadn't toverify this person is legally
(22:26):
and able to work in the UnitedStates, to should be in the
United States and have theability and authority and
training to run.
Found I think 98% of the issuesof the estimated 200,000 CDLs
that are possibly issued thatshouldn't have 98% give or take
came from California.
Another big portion came fromNew York, some PA.
(22:48):
I can't really remember exactlywhich other states, but there
were a few that had like waymore issues, right?
Now, here's the important partwas they said if the states
don't fix this, we will pullfederal funding for the
highways.
So basically the federalgovernment can't fix that part
of it, but they said, we're justnot going to give you any money
to fix your roads if you don'tfix this.
(23:09):
So what has happened in the pastweek, and this is the thing
that's hard to figure out, is itseems or appears like states are
starting to try to fix this.
Like I saw posts in SouthCarolina where drivers were
basically posting, my CDL justliterally got yanked today.
They said I didn't have theright documentation, I now can't
go to work.
(23:30):
But nobody knows exactly whatstates are doing what yet,
because I don't think they'veannounced it.
And on top of that, it seemslike the administration is using
this to deal with theimmigration thing they've been
talking about, where they'rejust sending ICE agents,
immigration agents, to truckstops in places for sure in
Chicago, where they're pullingdrivers over or they're checking
(23:51):
for documentation.
And the reports that I had heardyesterday were like hundreds of
trucks were found on the side ofthe road where drivers just
abandoned them, right?
And ICE agents were literallytaking people into custody for
deportation.
And a lot of trucking companieswere reporting drivers just
didn't show up for work, right?
So, what all of that means is itvery much seems like the
(24:15):
enforcement of currentregulations is making it so the
industry should function the wayit did.
And the reason you can see thatin the numbers is rates are
going up in certain areas of thecountry that really haven't and
economically shouldn't be,unless there is some anomalous
outside reason creating this.
(24:36):
And to me, I'm like superinterested in seeing how this
plays out and hearing yourthoughts, which is why I want to
talk about because you and Ihaven't had a chance to talk
about any of this.
SPEAKER_00 (24:44):
So I pulled while you were while you were um
talking through that, I pulledup some um recent, like as of
today, um, news headline.
So Secretary Duffy was on FoxNews this morning uh talking
about this.
SPEAKER_01 (24:59):
He was.
I haven't seen that yet.
SPEAKER_00 (25:01):
So um if you go to just look him up on on X, you'll
see uh the clip.
But he says, um, we will holdstates accountable for giving
licenses to dangerous foreigndrivers.
Some can't even speak Englishand aren't even in the country
legally.
FMCSA's investigation shouldshock and outrage every
American.
So again, they're at the processwhere we are um basically
(25:24):
bringing this into thespotlight, uh, you know, because
you have to make people aware ofwhat's going on before there's
really a push to do anythingabout it.
Further, the the Craig Fullerpost, he posted again this
morning.
And what he did was he, and thisthis goes back to your supply
and demand and the market cycle,he um overlaid tender rejections
(25:45):
versus spot rates.
SPEAKER_01 (25:46):
Okay, and there's usually a direct correlation,
meaning Explain that foreverybody what a tender
rejection is, because I don'tknow that everyone necessarily
understands.
SPEAKER_00 (25:54):
So um tender rejection and spot rates tend to
have a correlation, meaning uhtender rejection is when um when
a motor carrier is contractedfor a load or a, you know, they
won a bid and they werecontracted or awarded a lane.
Um if they reject it, so youknow, the tender comes over and
(26:16):
they say, hey, we're not gonnahaul that at that price, that's
a tender rejection.
Okay.
When that happens, typicallythose loads will follow the
waterfall or um uh routing guidefor a large shipper and will go
into the spot market, which iswhere a lot of brokers um
operate day to day.
Meaning, um, truck six monthsago might have been awarded
(26:40):
this, tender comes over thisweek, they say nope.
And now a broker is working onit.
And you tend to see when thewhen the tender rejections go
up, the rates go up becausecapacity seems to be tightening.
Okay.
Now, uh we saw so we saw this inCOVID, right?
Tender rejections were at like a30%, meaning like three out of
(27:00):
10 loads, carriers were like,I'm not hauling at a whatever
rate per mile, freight's payingway more.
SPEAKER_01 (27:05):
So think about it like this.
If the number of shipmentsneeding moved every day, just
say is a hundred, and saythere's a hundred truck drivers,
hundred literal drivers ontrucks for a hundred loads, you
have equilibrium.
So say that rate is two dollarsa mile.
As soon as, as a company, acountry, we produce and buy two
hundred truckloads worth ofshipments per day.
(27:27):
There's only a hundred truckdrivers that already agreed to
move for two dollars a mile.
But all the companies with thefreight they can't move, they go
to the spot market and say,Well, I'll give you two dollars
and 25 cents a mile to pick upmy load today.
And then some of the truckdrivers go, Well,$2.25 to your
point is better than two.
So they call the customer, theyalways pick up from and go,
(27:48):
sorry, truck's broken downtoday, driver's off sick, I
can't move it.
And they go and grab a load for$225 a mile.
So that is the rejected load,but the truck just goes and
picks up a load at a better at abigger price.
So normally when the economyexpands and we buy and create
more things, truck rates go upbecause those companies need to
move things that didn't expectto have to move them, right?
(28:09):
But now isn't going up.
SPEAKER_00 (28:13):
Demand is going up, right?
And the supply is is so um,yeah, there's that difference
there.
So normally when you see therates go up, the tender
rejections are also up for thatexact reason that we just
outlined.
In this case, in the last month,rates have ticked up, tender
rejections have gone down, allright, which is an inverse.
(28:36):
Even if tender rejections stayedflat, which um they're at 5.67%
right now.
I think you know, 10 or belowlike 5 to 10, I I kind of
consider like um you know,somewhere in in the what I've
seen in my in my career as youknow, standard.
If you get like real low, it's asuper loose market.
(28:59):
If you get above 10, you that'sa tight market.
So yeah, you've got 5.67 is thetender rejection rate, and rate
per mile went up, um looks to beabout 5%.
Okay.
With no, and so so what heconcluded through that is that
um since tender rejection, andI'm quoting him directly, he
(29:20):
said the divergence isn't normaland it's telling us the capacity
is leaving the market.
Since tender rejections measurecarriers that normally
participate in the contractmarket and are often compliant,
we aren't seeing it in thosedata sets.
It's the bottom feeders thathave no regard for the rules
that are exiting.
And I think a lot of it comesfrom the pressure.
So here's another article thatI'll reference for you.
(29:41):
Headline ICE helped remove 130truck drivers from the road as
part of a three-day enforcement.
SPEAKER_01 (29:46):
Go ahead.
Before you segue into that,because I want to read something
else to the point you just made,right?
Because then we'll segue rightinto that.
Is this was also from FreightWaves.
We have never seen this happen.
Market change is occurring, butit's showing up in the tender
data, right?
It's not showing up.
(30:53):
Exactly what you said.
It said we're seeing somethinghappening on the four-day spot
rate map.
Almost every market is blue,which means significant rate
increases relative to what isactually being shipped.
We have never seen rates surgewith tender data not reflecting
it ahead of time.
This appears it has to becapacity leaving the market.
(31:14):
And also points out the biggertrucking companies haven't
really seen this and aren'taware because their rates
haven't changed, which againmatters because if you use any
rating engine, most of theshipments are moved by large
trucking companies.
So if what we're seeing insmaller brokerages, call it$100
million or less or$50 million orless, we're seeing things that
(31:36):
the bigger companies aren'tseeing and the bigger rating
engines, I don't think, aregoing to reflect yet because
it's literally happening rightnow and started happening in
like in the past couple of days.
So segue into what you weresaying because I'm like, this is
really important of why thesmall companies are getting this
information before any of thelarge companies, I think, are
either able to react or are.
(31:56):
Noticing that it's occurring.
SPEAKER_00 (31:57):
So I'll give you one more data point and I'll I'll go
just so we can balance oursources, right?
So I'll look if we look at DAT'sum uh market conditions, right?
I just pulled the the currentnational average outbound
capacity market conditions,meaning if you take every state
that's out there and you justaverage them all together as a
(32:20):
country, uh, and the colors arereverse on DAT, they consider
red to be tight and blue to beloose.
As a country currently, it isplus 49 on a scale from negative
100 to positive 100, meaning itis considered a very tight
market nationwide right now.
Okay.
So there's your data set.
I didn't pull up the uh the therates.
(32:42):
I could probably do that.
SPEAKER_01 (32:43):
Um here's the other thing.
Yeah, this is why I was superexcited to talk to you about
this, because we have a prettydiverse book of business at our
brokerage, meaning like lots ofdifferent types of shipments
moving in, lots of differenttypes of equipment, really all
over the country.
It's not really centralized inany one place.
So it's a pretty good samplesize for kind of what capacity
(33:04):
feels like, which is again notnecessarily objective, but it
kind of is.
And I'll tell you what we'veseen.
Lanes and RFP stuff that we werelooking at.
I always talk to our team and Ialways ask the questions more of
like what I would ask as abroker, not like running the
brokerage, like, how many hitsare you getting on every load
post?
Meaning, like, are you getting10, 20 carriers reaching out on
(33:25):
a lane?
Are you getting two or three?
Is it going up or down?
Like, what does it feel likewhen you're trying to cover the
load?
Like a lot of demand, meaning alot of trucks need it, or none.
And every single person on ourteam for the past week is like,
we thought it was maybe the endof the quarter, which was last
week, and end of month.
Usually lots more ship, so likecapacity gets a little tight and
(33:47):
it was hard to tell.
But a lot of the guys on ourteam have been doing this a long
time, and they're like, Ben,these are lanes we would get 20,
30 carriers trying to take thisload every day of the week, no
problem.
We're seeing like two, threeresponses on some of these load
posts.
And I was like, every day lastweek.
And it wasn't necessarily justone area, it was kind of
(34:09):
everywhere.
And I'm like, that's reallyinteresting.
Maybe it's month end, quarterend.
But this week, similar thingswhere they're like, yeah, we're
still able to move the freight,but there's just a lot less
carriers asking for these loads,which seems weird.
And what we were talking aboutinternally is just what you just
explained, which is economicallyspeaking, like it makes no
(34:32):
sense.
There's no reason that should behappening, but yet it is.
And that's why it's super, Ithink, important for us to talk
about it because Jason Miller,who I think puts out great
stuff, really great metrics onlike the economy, manufacturing,
what goods are moving in and outof the country and the actual
demand for trucks.
And also, I think on thetrucking side, him and I had a
(34:54):
discussion on LinkedIn last weekwhere I was like, hey, I'm
really curious what you thinkcould happen.
Because this didn't reallyhappen yet.
It was starting to feel like itwas.
And I asked him, I said, iftheoretically, because this was
right after Duffy announcedpossibly losing 200,000 drivers
over, which could be a year, solike no one knew how long that
would be.
Right.
(35:14):
And basically everyone that wereally respect and have talked
to on the show were like, look,this has never happened.
We don't think it'll have animpact on rates because like it
always comes from the number ofshipments, not necessarily the
carrier side, to move the wholemarket.
And I keep going back to what wetalked about with Danielle and
Gord on the show and Steven.
(35:35):
And I'm like, okay, well, if theFMCSA is estimating 200,000
drivers, okay, one, that'ssignificant, but how quickly
they leave is really important.
Because if it's a long time,maybe you don't notice that.
But the other number that keptsticking in my head, and this is
what I wanted your thoughts ontoo, is DOT week last year said
(35:56):
I think it was 22% of thecarriers inspected or drivers
inspected had no CDL, like noCDL, right?
And I'm like, okay, so if one infour trucks that they pulled
over on a week, they toldeverybody they were pulling
people over didn't have any CDL,and we know 200,000 current CDL
(36:16):
holders have them that shouldn'thave it.
Guess what's not in that200,000?
It's not any of the truckdrivers that have no CDL
whatsoever, which the DOTannounced and publicly put out
there like one in four trucks wesaw had no driver's license.
So if 200,000 of them havelicenses that shouldn't, and one
in four trucks pulled overdidn't have any, the number of
(36:39):
drivers that really shouldn't beon the road could be anywhere
from 200,000.
It could be 800,000, it could be600,000, it could literally be a
million.
Like no one has any idea whatthe number of drivers on the
road as of last week eitherdidn't have a license or
shouldn't have a license.
What we do know is that tons ofstates were just handing out
(36:59):
CDLs with no verification,people were cheating on tests,
never should have had them, noverification of employment or
citizenship or ability to workin the country.
Like this could be a giant,giant issue where if all of them
just are scared they're going toeither get deported or arrested
and just leave the market, youcould actually see a giant flip
(37:23):
in the market that we've beenwaiting four years for that have
never happened.
It could theoretically happenright now, and rates could go up
and just stay there because theyshouldn't have been moving the
freight in the first place withload volumes.
SPEAKER_00 (37:35):
Nothing to do with load volume.
SPEAKER_01 (37:36):
And like to me, here's the part what I'm so
excited about, right?
SPEAKER_00 (37:39):
Is because Hey, we're not, we're not so I want
to clarify something.
We're not advocating to maketrucking expensive.
We want rates to be back at aplace where everybody is like
and the roads to be safe.
The roads to be safe, and theour our partner trucking
companies that are out therethat we do business with, we
want them to be able to operateefficiently.
Like the the carrier companythat we have at my brokerage,
(38:03):
um, we've downsized our fleetsignificantly in the last few
years because it's the market'sjust not.
Well, that's the point, right?
Doesn't make sense to run MAtrucks.
SPEAKER_01 (38:12):
The two points that I think are really important to
your point for the audience oranyone listen to this, right?
Is who is being hurt the mostwhen people break the rules, are
outright just running illegally.
It's the companies that aredoing things correctly.
The companies that maintaintheir vehicles at the correct
maintenance, meaning likethey're safe to drive on the
(38:34):
road, which by the way is onlywhat four out of five actually
are safe to be on the road.
That's just the equipment side.
Then you have drivers that havebeen driving for decades, that
drive legally, that play by therules, that care about the
safety of our roads, that arereally good at their jobs and
career truck drivers.
Those are the companies and thedrivers that are being penalized
(38:58):
by the groups of people breakingthe rules and running illegally,
unethically and unsafely.
So we're not saying we wantthings to be more expensive.
What we're saying is they havebeen too cheap for too long
because people were justoutright breaking all of the
rules, nobody was payingattention, people were getting
killed, the roads weren't safe,and people that legitimately
(39:19):
have run businesses for decadesthat are good drivers that care
about safety on the roads andtheir equipment couldn't find a
job or pay the bills becauseyou've got people running
illegally, working twice thehours for half the money because
they don't have insurance, theydon't maintain their equipment,
and they're not training theirdrivers.
So like it is a safety issue,it's an effective issue, and
(39:43):
it's something that like shouldnever have happened in the first
place.
So it's more about justcorrecting the fact that like
it's basically been the WildWest for the past five or six
years, where things have gottenso out of hand that things
literally legitimately aren'tsafe.
So, like it is an advocacy, Ithink, from our point of view,
that things shouldn't havegotten that bad.
But why I'm so excited about it,to your point, which makes it
(40:06):
seem like I was excited aboutrates going up, I'm just excited
because when we found this out amonth or two ago, I was
terrified because I had no ideahow bad this was.
And when we really got to seewhat was happening, I was scared
to be on the road and genuinelyfearful of how unsafe the roads
were because of how bad thisproblem was.
(40:26):
Then I was even more scaredbecause the only, the only
solution to that problem was thefederal government, which hasn't
exactly had a great track recordof fixing things in a timely
manner.
And basically I was almost inthis mental state of like, maybe
I'm just gonna go find anothercareer.
Because if the governmentdoesn't solve this, this is
horrible.
And it was physically making mesick.
(40:48):
And like when I started seeingthem actually start to enforce
things that should have beenenforced for a long time, I'm
like, I think this is the firsttime in my entire life I've been
like optimistic and hopefulabout any specific aspect of
(42:19):
what the federal government isdoing.
SPEAKER_00 (42:20):
So I'll give you here, here's a stat that'll make
it very clear and obvious ofwhat we're talking about here.
Okay.
You would expect the cost ofanything to be in line with
inflation, right?
In general.
Okay.
If you benchmark 2022 to 2025,national inflation was at around
it's it's around 11%.
So the cost of living in generalhas gone up about 11% in the
(42:44):
last three years.
The cost of trucking rates havegone down roughly 45%.
Down.
Right?
That is an inverse correlationby a lot, right?
And when you're going whenyou're doing a negative um
percentage, it it kind ofshrinks how it is because you're
you're taking the change off alarger number.
(43:05):
So here's a perspective, right?
Rates were about 275 a mile inuh three years ago, okay?
And they're at like a dollar,we're talking without fuel right
now, okay?
And this is coming from freightwaves data, right?
So in uh let's see, equal to thebeginning of the year, 270 a
(43:27):
mile.
Okay.
And uh right now, this is withit upticking about a dollar
seventy, right?
So you're going down a dollar amile.
So if someone drives 500 milesin a day, that's$500 of revenue.
That's they're doing the samejob, but the revenue just goes
down again.
(43:49):
We're not asking more expensive.
The consumers will pay for.
This is trucking companies thatcan operate, um, you know,
basically we don't we want themarket to be at a normalized
level, um, which has been takenaway from them because of um a
lot of the the bottom feedersthat have come in and have
(44:10):
abused the system and had youknow haven't had to pay the
price for it.
SPEAKER_01 (44:14):
So and it's like to your point, right?
Like for another analogy, let'sjust think about like something
like physical, right?
If Nate has a farm and I have afarm, right, and we both grow
corn, okay, and the governmentsays, you're only allowed to use
fertilizers that don't causecancer.
Nate follows the rules, buysthose fertilizers, right?
(44:35):
So Nate can sell his corn for$10a year because he's got to pay
for the right fertilizer so hedoesn't poison people.
And then I have a farm acrossthe street and I go, you know
what?
No one's looking.
So I'm gonna buy fertilizer thatis way cheaper, that causes
cancer because no one knowsanyway.
And I can sell my corn for$5 anyear.
(44:55):
Nate has to go out of businessbecause he can't compete with
me.
Why?
Because Nate's playing by therules and not poisoning people.
I feel like no one's gonna lookanyway, so I don't care who eats
my corn, they're not gonna knowit came from me anyway.
So I put Nate out of businessbecause I can sell my product
cheaper than Nate.
The exact same thing happenedwith trucking, right?
You have companies that arelike, we will drive illegally,
(45:17):
we won't train our drivers, wewon't pay to make sure they have
the right citizenship, we won'tpay the right taxes, we won't
pay the right employment, wewon't pay for the right
insurance, and we're not goingto maintain our vehicles.
So they can run to Nate's pointat$1.50 a mile when a legitimate
trucking company, it costs them$1.50 a mile.
(45:38):
At$2 a mile, they only profit 50cents a mile.
That is why the legitimate rulefollowing people that have the
country's literally depended onsince its existence in
transportation are going out ofbusiness while the people
breaking the rules are justrunning amok with things, and
you're seeing people die on theroads, and you're seeing things
(46:00):
that economically should havenever happened in the first
place.
SPEAKER_00 (46:03):
Exactly.
So here is the news article thatI was uh referencing earlier.
Um, this is from CDL life.
It's a ICE helped remove 130truck drivers from the from the
road as a part of a three-dayenforcement at an Oklahoma port
of entry, officials say.
That's just one specificlocation.
And we're talking about hundredsof thousands of drivers.
(46:24):
Um, this is gonna be an ongoingmix of, I believe, enforcement
and deterrence.
So you're gonna have like I Isaw a funny meme today that was
like, um, this is the new drivergot covid.
Did you see that one?
So it's basically like, youknow, in 2020, if a carrier
wanted to fall off a load, theywould just be like, oh, the
(46:46):
driver's got COVID.
And now it was like a screenshotwhere the the carrier was like,
uh driver got pulled over and uhdidn't have a license, so he got
pulled out of the truck.
We can't we can't haul this loadfor you.
Um so basically, like they felloff the load when they're
claiming it's because of um youknow the the driver not being
(47:07):
legitimized.
SPEAKER_01 (47:08):
Um why'd you hire him in the first place?
That's your job.
SPEAKER_00 (47:12):
So the joke is like you don't even have like you can
just use that excuse now and andpeople could believe it the same
way that you could just say theyhad COVID five years ago.
Um but I think it's gonna be twofull.
Like I said, I think deterrents,so you're gonna have carriers
that um just say, all right,clearly this is a you know, um,
it was an easy target before andit's not anymore.
(47:33):
So we're gonna focus our effortson, you know, scamming or doing
something nefarious in adifferent, you know, area of the
of the economy.
Okay.
So there's that deterrence.
And then you have theenforcement, where it's whether
it's the um English proficiency,um, or the the ELP, right?
(47:54):
The English English languageproficiency, whether it's the
the CDL um you not not having avalid CDL, or if they start to
crack down on the you know,first name unknown, last name
unknown, whatever.
Um, probably a mix of both ofthose will lead to capacity
leaving the market.
It's capacity that just doesn'tneed to be there anyway, right?
SPEAKER_01 (48:15):
Shouldn't have been there because they're not
running legally.
SPEAKER_00 (48:17):
Right, right.
This is yeah, so this islegitimately a highway safety
issue on top of a whole you knowboatload of other things.
SPEAKER_01 (48:25):
So here's another one.
Here's some good, this isanecdotal data, meaning like
these are stories that peopleput out there, but like this is
from John Paul Hampstead, who'sreally credible and has been in
the industry a long time, right?
He said, This is what he hadheard, this is yesterday, on
ELP, English languageproficiency and ice
(48:46):
enforcement's impact on thetruckload market.
First, a 55 trucking company, 55truck carrier out of Chicago
told me most of their driversjust didn't show up to work this
week.
Number two, a vice president ata$1 billion freight brokerage
told me, that's a Big Ten Four,buddy.
And when I asked him if he saw amovement on the buy rates,
(49:08):
meaning what they pay carriersin the past 48 hours, he said
he's had loads in transit bedisrupted due to ELP violations
putting drivers out of serviceand margins compressed by 150
basis points.
Meaning, like trucks that theybooked on the road were getting
pulled over by somebody and theywere being found for using
(49:31):
fraudulent ELPs and just yankingthem off the road, which meant
literally the truck that youbooked that said they were
running legitimately got pulledover somewhere and the load just
isn't moving anywhere.
And on top of that, seeingthey're paying more because a
lot of the cheaper carriersaren't there, which I want to
circle back to in a second.
But three, a director of pricingat a half a billion dollar
(49:54):
brokerage told me margins onspot business have been under
pressure on what they're payingtrucks for the past two weeks,
which is counter-seasonal, whichis what we've been seeing.
Four, a source at a largefactoring company said he hasn't
seen significant movement yet,but the bills could be on a
little time lag, meaning likethey haven't seen price changes
on the factoring side, but thatcould be just because invoices
(50:16):
lag a few days or a week in alot of cases.
So this data might not beshowing up yet on the factoring
side of things.
And five, another vice presidentat a different billion-dollar
brokerage said the Midwest isbrutal.
ELP and ICE enforcement is amaterial threat to capacity, but
he doesn't think the tippingpoint has arrived yet.
So these are huge companies,mid-sized companies, and small
(50:39):
companies all seeing this beforefactoring companies.
And I think a lot of the data isshowing, but it's starting to
appear.
Because the one thing thatalways stuck with me, this has
been for the past couple ofyears, whether it's clients or
just people I've talked to, ourcolleagues, like I have heard
more and more people tell me,like, here was the thing that
made me think about it.
People kept going, I have a bigproblem with my customer in
(51:03):
transit times.
And I'm like, transit times?
I'm like, that is a weird thingto have a problem with.
I've never really heard thatbeing a problem so bad that like
someone has ever talked aboutit, like at scale.
And I'm like, I kept hearing it.
And then I would ask them, like,what do you mean by transit
times?
They're like, well, the carriersI want to book for the price my
customer wants to pay say theycan run this load in one day.
(51:25):
And my customer's saying it'sbeen a two-day transit forever.
So the shipper is like, this isa thousand mile load, called a
1200 mile load.
And from the shipper's point ofview, that's always taken two
days, because roughly it's like550 miles a day.
Changes a little bit where youare, but like a rule of thumb, a
truck drives about 550 miles aday.
So a 1200 mile transit, right,or 1100 truck transit is a
(51:47):
two-day trip with a truck unlessyou have two drivers.
And all the brokers are like,look, I got carriers that'll run
this in one day and I can get abuck 50 a mile from my customer,
but my customer's telling me ithas to load two days later.
I can make the rate work, butthey won't make the lane
shorter, meaning the time frompickup to delivery.
And I'm like, that shouldn'thappen because legally a driver
(52:09):
can't drive that fast that far.
But I heard it everywhere.
And I heard it so much thatpeople doing RFPs were telling
me this.
They're like, listen, I can getrates to make all these rates
work and I can get thisbusiness, but my customer won't
shorten the transit time for meto book the carriers that will
run it for a buck 40 a mile.
And I'm like, like again, themath doesn't math.
(52:31):
Like you can't make a truck gotwice as fast.
There's a national speed limit.
They don't go 120 miles an hourand it weighs 80,000 pounds.
So, like, the physics areimpossible.
You can't travel that fast thatfar.
I'm like, so the only way thatis physically possible is for a
driver to drive illegally.
And after hearing that foryears, when we saw the ELP
(52:52):
fraud, I'm like, oh my God, allthis shit it all makes perfect
sense.
All these cheap rates weredrivers.
How they made up for runningcheaper was they just worked
longer illegally.
And now when all of thatdisappears, you're seeing the
industry function the way itshould, which is exactly why
you're seeing rates go up.
It's not because they're gettingmore expensive, it's because
(53:14):
they're going to where theyshould be.
And the people that werebreaking the law are too scared
to keep breaking the law becausepeople are paying attention.
SPEAKER_00 (53:22):
Yeah.
So I'll give you some more datahere, right?
And this comes from uh transporttopics.
And this is and this is lookinglike earlier this year, back to
the summertime, you know, andand it this is picking up steam
as it's getting more and moreattention and there's more
emphasis on inspections.
Um during a 90-day stretchbetween June 25th, kick the
(53:43):
kickoff of the ELP reinstatementand August 31st.
So 90-day stretch in the summerthere, federal roadside
inspections, it's just federal,right?
We're not talking your state umstate troopers, right?
Rose 67% to nearly 8,000compared with 4772 during the
same span last year.
If you look at an individualmonth, um jumped 76% alone in
(54:08):
the month of June to 2956compared with 1680 uh in June of
24.
So you're seeing massiveincreases of we're not so we're
not saying that uh that thenefarious acts have increased.
We're just saying that doingsomething about them has
increased, right?
Because you always say, youknow, people hear like the the
term like, oh, you're like allbark, no bite, right?
(54:30):
Like you you say these threats,but you don't actually do
anything with them.
Um that is legitimately um whatwe're seeing here is that now,
with an emphasis from um thefederal government and the
agencies on enforcement of theexisting, this is like again,
this is nothing new, right?
ELP has been around for a verylong time.
(54:52):
Um, we're just actually doingsomething about it now.
Okay.
So I think that's where uh andagain, this this data is you
know through August, and we'rein October now.
So you're gonna see, I think,more in and more of this um as
time goes on.
So uh as far, you know, as faras the demand side of trucking,
that's a totally different umpart of the equation that I
(55:17):
don't really see much happeningthere personally until we have
some clarity on what's going onwith everything from tariffs to
um our just general policymaking and um interest rates,
you know, and that stuff is muchmore of a s a slower burn than a
uh immediate um you know kick inthe butt when it comes to
(55:40):
fraudulent motor carriers thatare gonna exit the market
because you know, enforcement oror fear of enforcement.
SPEAKER_01 (55:48):
Correct.
And again, like I to Nate'spoint, I I don't want to, I
can't I don't think we can saythis enough is like we're not
advocating we want things to getmore expensive.
Well we're super I think atleast I'll speak for myself
right now.
SPEAKER_00 (55:59):
They're they're unreasonably below market, like
people aren't getting paid whatthey're worth right now because
of you know, an over oversupplyof uh fraudulent folks posing as
legitimate folks.
That's it.
It's it's in brokerage too,though.
I mean, that's the whole thewhole thing with double
brokering, like the in all theseMC numbers that are are getting
(56:20):
burned through, it's the samething.
We're just seeing it on thecarrier capacity side.
Something that I never thoughtwe'd be talking about on the
show years ago, but we arebecause it's we've always been
focused on you know fraud andbrokerage, not on the capacity.
SPEAKER_01 (56:32):
And here's the thing, here's the thing that I I
to give people a little bit oflike how could this have
happened and how could this getthat bad with the last few
minutes?
What I think happened, and thisis Gord put this out, he did a
really good interview on hisshow with Danielle, who we had
recently, and the name of thepodcast or the episode was
called No Name Given.
(56:53):
And it was on like fraudulentissue of CDLs.
But what really what I thinkmakes sense, and it all kind of
puts this together, is duringCOVID, right, everybody stopped
going anywhere and bought abunch of things.
So the number of shipments thatneeded moved in the country
unexpectedly and very quicklyincreased.
(57:16):
That was an increase in demandfor truck drivers.
And it was such a fast increasethat it literally caused
everything to cost more money.
That's where inflation camefrom, right?
The sudden spike in unexpected,the volume and the time at which
it happened.
So at the time, I think reallyprobably the Biden
administration was looking atlike, how can we fix this before
(57:38):
the economy collapses on itselfand people don't have food on
the store shelves, which was areal possibility.
You couldn't buy toilet paper,you couldn't buy certain things
because they literally weren'tgetting delivered.
So, in that context, I thinkthey were like, well, we need
more drivers, we need them fast,and we need them cheaper, or
we're literally not gonnafunction.
(57:59):
So I think the intention was toincrease a number of drivers
quickly.
It was the execution that Ithink made this problem so bad
because they basically loweredthe standards for CDLs.
At the same time, you also hadthe people that literally issued
CDLs not going to work.
(58:20):
So you had less people that weresupposed to make sure you had
what you needed when you got atruck driving license, a CDL,
and you lowered the bar to getmore in.
So you have less people at thedoor making sure everybody's
supposed to be able to legallywork.
At the same time, you're tryingto force people through.
And Gord put the number out, butit was like astronomical.
(58:41):
I think on a year, normallythere's like 400,000 CDLs
issued.
During that period, or maybe itwas just that year, it was
something like 800,000 or amillion CDLs were getting
issued.
So, like two or three times theamount of truck drivers were
getting licenses with half thenumber of people supposed to
issue them.
So you had half the people andthree times the people running
(59:02):
through the door, right?
And then I think nobody justwent back and changed it or
looked at it because it gotworse and kept getting worse
until it's gotten to a pointwhere we're at now where it's so
bad that like it's literallybecome like a safety hazard for
like legitimately almost everyfamily that is on the road
(59:23):
person driving anywhere is atrisk of being on the road next
to somebody that shouldn't havea driver's license, can't read
road signs, and maybe hasn'tslept in a day or two.
Like those are all very, verybad things for anybody, let
alone people in our industry.
So like I don't think maybe itwas caused intentionally to
(59:43):
create riskier roads or to harmpeople.
I think the intention was tokeep things functioning at a
very, I don't know,unpredictable time where kind of
nobody knew what was gonnahappen or how long it was, and
people were scared they weren'tgonna get food or be able to get
what they needed.
So like I think it was wellintentioned.
I think it was just poorlyexecuted and then never
(01:00:06):
reviewed, and it just continuedto get worse until we got to
where we are today, which is whythe industry has ended up in the
position it's in after fouryears.
SPEAKER_00 (01:00:15):
Yep.
Precisely.
Well, hey, we got through a lotof news headlines, a lot of
stats today.
We'll be definitely monitoringthis and and seeing how rates
and um tenor rejections, all allthe all the metrics, curious to
see how they pan out.
Um, because don't forget, what'sright around the corner is peak
season, end of year.
SPEAKER_01 (01:00:35):
So by the way, that should be starting now, and the
data is already showing loadvolume is down year over year,
and we are having a slower peakseason than we've had in recent
memory.
So there's even less shipmentswhile rates are going up, which
is even more reason whyeverything we talked about
shouldn't be happening unlesssomething very, very wrong was
happening.
SPEAKER_00 (01:00:56):
Yep.
That's right.
All right, good episode, Ben.
Final thoughts.
SPEAKER_01 (01:01:00):
Whether you believe you can or believe you can't,
you're right.
SPEAKER_00 (01:01:05):
And until next time, go bills.
Welcome back.
It's another edition of theFreight 360 podcast.
We're going to talk about the uhenforcement of some of this uh
what would you call it, thenon-domicid CDL situation.
SPEAKER_01 (00:34):
Yeah, I would just I don't really know how to define
it.
Every time I'm talking tosomeone about a two, I'm like,
how do I explain this?
I'm like, is it it's not reallyjust non-domicidal?
I think it's also justenforcement of existing
regulations that never happened.
SPEAKER_00 (00:49):
Well, we'll dig into all that today.
We'll I'll I'll uh as we'rerecording and having this
conversation, I'll pull up someof the most recent headlines um
so we can reference the latestof what's going on.
But uh first, if you are new,check out the rest of our
content.
If you're looking for somethingon sales or carrier development,
just use the freight360.netwebsite and hit the search bar
(01:10):
and type in some keywords, andthat'll help pull up all of our
blogs, uh, long form podcasts,shorter educational videos.
You've got the Freight BrokerBasics course.
If you're looking for a aneducational, full length, we did
that with DAT a few years back,and it's um it's definitely a uh
a leading uh tool out there forfolks in the industry that are
(01:32):
new.
So um leave us a comment, share,like, all the good stuff.
Ben, uh we skipped sports lastweek.
Um but this week I've just hadlike I just it was a sad week
for me in general in sportsbecause the Red Sox, who I'm a
fan of, they lost they went upin game one um and if it was a
(01:54):
three-game series and they lostgames two and three and were
knocked out in the wild card.
So um but yeah, following the uhfollowing the major league
baseball playoffs, October's afun one.
So you got Yankees playingToronto.
SPEAKER_01 (02:09):
Dude, did you hear about the guy with the t-shirt?
They were talking about it thismorning who caught uh was it
61st Homer?
Um take a look at it.
They were just talking about iton um uh barstool sports.
They were talking about in theinterview.
I'd listen to at the gym justbefore I stepped in here.
SPEAKER_00 (02:29):
Um home run caught let me pull up barstool t-shirt.
SPEAKER_01 (02:35):
I just get it.
Um okay, cow Raleigh home runcaught this.
SPEAKER_00 (02:42):
Oh, yeah, he's a home run directed to a Mariners
fan wearing a dump 61 hereshirt.
SPEAKER_01 (02:47):
Oh, that's and they said after he caught it, he took
the shirt off and he had a dump62 shirt underneath it, and they
were joking, they were like, Iwonder how many shirts he had
on.
Because like the odds that thathome run hit that guy were like
astronomical.
SPEAKER_00 (03:01):
That's pretty funny.
Dump 61 here.
Wow, yeah.
So anyway, that's uh that's uhbaseball for you.
So Seattle and Detroit, um,we'll continue to follow that.
NFL Bills got their first loss,Philly got their first loss.
There's no undefeated teamsanymore.
The Chiefs lost again.
Sorry, Trey, if you'relistening.
SPEAKER_01 (03:20):
Um good weekend for the Steelers.
unknown (03:23):
What's that?
SPEAKER_01 (03:24):
Even though they didn't play.
Good weekend for the Steelers byweek, and basically everyone in
the AFC North lost.
SPEAKER_00 (03:30):
Yeah.
That's the that that's the thingwith like football, is with such
a short number of games comparedto like baseball or basketball
or hockey, um, one week canreally shake up the standings,
even if you're not playing.
So yeah.
Um, but we'll see.
Got the Bills.
(03:51):
I think we're playing AtlantaMonday night next week.
So yeah, Monday night football.
It's a double header, man.
You got two games Monday night,so we'll see how that goes.
Um, news, dude.
I put this out in our news, ournewsletter this week, but so the
guy Fieri or Fiat, however yousay his name, the stolen tequila
that was earlier this year.
SPEAKER_01 (04:13):
60 minutes.
SPEAKER_00 (04:14):
Yeah, like it made um, you know, it's like months
later, but like made nationalheadlines, right?
Like all across like like it wason 60 minutes, so naturally then
like every major news outletpicks up a story on it.
So whether it's, you know, Fox,CNN, News Nation, like ABC,
literally everybody covered itthen because it was such a big
(04:36):
thing, but um he had twotruckloads of of like premium
tequila, like special batch thathe had made for something, and a
mix of double brokering andcargo theft all in one.
And they ended up like they didrecover half of it.
Um, but the other half is stilljust like missing.
(04:59):
But what I'm glad about is likein the wake of all this we've
been doing with talking tolawmakers and trying to get
legislation passed, um, nothingmatters until people know about
it, right?
So I think that's that's where Ithink it's it's as much as it
sucks, like you know, a milliondollars worth of tequila, like,
you know, it's a much biggerissue than that.
(05:19):
And if it takes uh a celebrityto, you know, make it hit the
headlines, then hey, that'sthat's where we're at.
SPEAKER_01 (05:28):
Agreed.
I kind of laugh because in oneof the 60 Minutes articles, some
or one of the posts I think Isaw on LinkedIn, I think it
might have been from 60 Minutes,they were interviewing like law
enforcement in LA, and theysaid, you know, LA law
enforcement has recoveredsomething like$32 million worth
of cargo theft in the past year.
And I was like, wow.
I'm like, I know of more than$40,000 worth of cargo theft,
(05:50):
basically Southern California.
So it's like that is super greatand super happy that you know
they are doing what they can,but I mean, it is nowhere close
to putting a dent in theastronomical numbers of loads
and dollars lost in the supplychain to this problem.
Yeah.
I thought about this last night.
(06:10):
I think the TIA put out somenumbers because it's really hard
to gauge how much is beingstolen every year, but I've read
numbers at like 20 billion, 30billion, and I think I've seen
upwards of 40 billion.
What have you seen on likeestimated cargo theft from like
incredible sources?
SPEAKER_00 (06:27):
I had it in the the TIA downloads.
Right.
Um, I'll pull it up right nowbecause they let's see what they
well anyway.
Um while I'm looking that up, umKeith Lewis from CargoNet.
We had we did an episode withCargoNet early at the either ear
earlier this year or last year,and it was like kind of cool,
(06:48):
like see him on 60 Minutes.
You know what I mean?
SPEAKER_01 (06:51):
Oh, he was on 60 Minutes.
I haven't watched the episodeyet.
I'm gonna have to take a take alook at it.
SPEAKER_00 (06:55):
It's like a there's like a good um maybe like
12-minute clip that reallyhighlights it all in detail, and
like it they break down how thedouble brokering happened.
Like basically, two these twotrucks, like they forged their
identity, they spoofed GPStracking, like they did
everything that we talk about.
(07:16):
Um had they followed, theydidn't name the brokerage that
handled it, they just keptsaying like the logistics
company.
Um but like had they followedthe protocols that we preach,
like this wouldn't have thiswouldn't have happened.
So um but yeah Keith Lewis.
It's a it's a good one to checkout.
I'm I'm gonna pull up this uhthis fraud thing here and see
(07:38):
what what did you say yourestimate was on it?
SPEAKER_01 (07:41):
I'm gonna guess 30 billion because I've seen some
at like 40 and some at 20.
SPEAKER_00 (07:46):
Here's the uh the handouts that we got.
Um they're saying our industry'srevenue is 343 billion and then
35 billion is the cargo theft.
SPEAKER_01 (08:09):
That would mean one in ten brokered loads are being
stolen.
Like just think about that.
SPEAKER_00 (08:13):
I think that's just a cumulative.
Um I have to zoom in here.
35 billion.
So this is findings from the2025 TIA fraud report survey.
Uh$35 billion.
Cargo theft remains the mostcostly form of fraud, with the
National Insurance Crime Bureauestimating oh, annual losses up
(08:34):
to$35 billion.
Um, just think about that,right?
And nearly one in four companieslost over$200,000 to fraud in
(09:34):
just six months.
So most victims are smallbusinesses that make under$5
million a year.
34% say fake brokers are thenumber one threat, leaving
freight lost, stolen, orundelivered.
So yeah.
SPEAKER_01 (09:51):
So even if you like really exaggerate that and
consider all of everything thatships is like a trillion
dollars, right?
If that number is called 40billion, right?
That's four percent, right?
That's four out of every hundredloads moving in the country is
being stolen.
Like, that is astronomical, thatnumber, right?
And I do want to pause, right?
(10:11):
For like all the carriers outthere, like we talk a lot about
brokerage stuff and carrier, butlike it is very important as a
motor carrier.
You are making a phone call, goto the FMCSA, look for the phone
number or the main number of thebrokerage you're getting a load
from, if you get it from anyload board, and just call and
ask to speak to the broker thattendered you the load, right?
(10:34):
That 30 second to one minutephone call would prevent so much
of this.
SPEAKER_00 (10:39):
Because this guy fiery thing is like they said
the drivers had no idea that acrime was being committed.
Correct.
SPEAKER_01 (10:45):
Like most of the time they don't.
SPEAKER_00 (10:46):
Oh, yeah.
They were just given, like, hey,deliver this to a warehouse in
Southern California.
SPEAKER_01 (10:51):
And that's why we have to work together.
The thing that I just keepthinking a lot about is like we
really have addressed this as anindustry from like the 3PL side.
But to be honest, we needcarriers to be doing the same
thing.
Meaning, like, just simple phonecalls, Googling the main phone
number for a freight brokerage,and just calling before you run
(11:13):
that load.
Like book the load, do whatever.
But before you dispatch adriver, a two-minute phone call
would avoid so many of thesethings.
Because after the fact, when yourun into one or I run into one,
that's the first thing we do,and you find out immediately
exactly what happened.
You call them, they give you thetender, you call the brokerage
they thought they got the loadfrom, and they're like, that
(11:34):
person doesn't work here.
That's not us, that's fraud.
And you're like, man, again, ifboth parties, all three shippers
or brokers and carriers, justmake a phone call to verify what
they're getting via email wouldreduce so much of this.
My guess is it would probablyreduce like at least 75 to 80
percent of these things.
SPEAKER_00 (11:54):
Yep.
Process, man.
So if you want, I highlyrecommend check out episode two
hundred and twenty-two, cargotheft and hostage loads with Sal
Marino and Keith Lewis of Cargo.
Now, Keith is the one that's onthe 60 Minutes clip that came
out in December of 2023.
So almost two years ago, we hadwe had uh did an episode with
them.
(12:15):
And um Keith, really impressiveguy.
Um, if I remember correctly, hecame from a law enforcement
background.
And um he really he does areally good job in the 60
Minutes clip breaking down howhow the crime is um put together
and how it's executed in a waythat makes sense to people that
(12:36):
aren't in logistics.
So even if you're new tobrokerage, um, that's probably
you, right?
You you know, you don'tunderstand the complexity of it.
I definitely recommend check outour episode and check out the 60
Minutes clip because it's uhit's pretty eye-opening.
But yeah, this was likecross-border stuff.
So it came in from Mexico, uh, Ithink to like Laredo, very
(12:58):
common cross-border point.
And then from there, um, twotrucks were supposed to go to
Pennsylvania, and they had thetracking make it look like it
was going there.
And then they kept saying, like,oh, the truck's got a like
basically broke down mechanicalissue near DC, and the tracking
all makes sense.
And in reality, they justspoofed the GPS and the trucks
(13:20):
actually went to California.
So, and these two drivers thatgot hired, like basically
trucking company gets hired, andit's not even the real trucking
company that that they booked.
Um, someone stole theiridentity, and then they turn
around and use a brokerageauthority that they likely stole
and or impersonated, and theyhire these two un unknowing
(13:41):
drivers, probably owneroperators, to uh to haul these
loads to a warehouse in in LA.
SPEAKER_01 (13:48):
So here's the equivalent, right?
To give people an example,right, that are maybe new to
this or trying to understandthis.
This would be like if armoredcars that pick up money from a
bank could be hired the day of,like an Uber driver, and
somebody just hired a legitimateUber driver to go and pick up
money from the bank.
They didn't know they werestealing money, and basically
(14:10):
the thieves, it's like a perfectcrime.
I literally don't even have togo steal this thing.
I could pretend to pay someoneelse that thinks they're picking
it up legitimately, they'lldeliver it to my house, they
don't even know they stole it,and I don't even have to leave
my house.
In fact, I don't even need to bein the country.
I can just hire unsuspectingdrivers.
(14:31):
Yeah, to just go steal thingsand deliver it wherever I want,
never gonna pay them anyway, andnobody knows that I did any of
this, and I don't even have toleave my country, like or
wherever I am.
SPEAKER_00 (14:41):
Yeah, Keith had pointed out too that they've
identified I think it wassomething like 50 foreign
countries that have beenidentified as um actively
participating in this kind offraud.
So um seems about crazy.
SPEAKER_01 (14:56):
So here's a good segue.
I'm looking at X, of which I'mlike kind of never on, but
Steven, our producer, sends methis stuff.
And it's funny, I realizedyesterday why I think I don't
spend time on social media.
It makes me motion sickness,like scrolling through it, like
it literally gives me aheadache.
And I'm like trying to find allthese different articles and
(15:17):
posts because a lot of thisstuff hasn't really hit the news
yet, but people all over thecountry have been talking about
it.
So, Craig Fuller, of which I'mnot a huge fan of, but I will
read his post from like 12 hoursago because I think it really
does kind of identify what we'regonna talk about today.
And it's, you know, freight is acommodity, supply and demand
(15:39):
determines price.
Supply is capacity, the numberof trucks, demand are the number
of things that need shipped inthe country, right?
So the demand for trucks arejust all the things we buy, and
the supply of trucks are justthe number of drivers and trucks
on the road.
It really doesn't matter howmany brokers and it really
doesn't matter how many truckingcompanies.
(15:59):
At the end of the day, it's howmany shipments need moved and
how many actual drivers with atruck can move them, right?
Because whatever happens in themiddle doesn't have anything to
do with supply and demand.
So what he says is the freightmarket volumes are terrible,
meaning the number of shipmentsin our country being moved every
day are at like 2019 and 2008 ornine levels, considering I think
(16:24):
Cass put this report out lastweek, meaning like at the lowest
point in the US economy in thepast 25 years is right now, like
2019, right before the pandemicand during the great recession
in 08-09.
So for anyone out therewondering how the economy's
doing, from a shipment point ofview, there are the lowest
(16:46):
number of shipments being movedalmost in our entire lifetime,
if maybe ever in the moderneconomy, like right on par with
the two other lowest worsttimes.
So whether you're pro or contariffs or what you think about
the future, right now, nobody'sbuying anything, nobody's
manufacturing anything, andpeople shipping volumes are way
(17:06):
down, used car sales are down,home building is down, home
buying is down, home selling isdown, home improvements are
down, building offices are down,building almost any type of real
estate is down or not moving atall.
So, like there really isn't muchgoing on in the country.
So if that's happening, ratesshould be going down because
(17:28):
there's less business for truckdrivers to go and get or to
haul, right?
And what he says is anyoneinvolved in trucking has been
waiting for all of the excesscapacity, meaning like there's
been too many truck drivers forthree and a half years, and so
many such that usually everyyear to a year and a half,
there's not enough business forthe number of truck drivers,
(17:50):
most of which will just getanother job doing something
else, work on farms,construction, wherever, offices.
And then when there's a need,they'll come back in and make
money driving the truck untilthe things that need moved are
moved, right?
But this hasn't happened inalmost four years.
So the interesting part is, andthis is from Craig's post, the
(18:12):
stories around immigration raidsmatter in the industry because a
large percentage of new entrantsinto trucking are immigrants.
Some of these immigrants havefollowed the law and have proper
work permits, but many do not.
A good portion of these driversare also recruited by foreign
organized crime syndicates thatbring in truckers into the US
(18:34):
from overseas under falsepretenses.
This is what everyone intrucking is watching.
Because what happened last weekcan put this out, and we're
gonna be doing an episode withhim or Dean soon, I think
yesterday, that spot ratesstarted to just go up.
Meaning, like what it costs togo move a shipment all of a
sudden got more expensive.
(18:54):
And that doesn't make any sensewhen the number of shipments is
also going down.
So economically speaking, thatshouldn't occur, but it is,
right?
And what I find superinteresting about this is
because you and I have beentalking about this for literally
years now, is economically, themath doesn't math.
(19:14):
Like rates shouldn't have stayedthis low for this long.
And there's really no rationale.
And early in the after thepandemic, the rationale was lots
of government money was outthere, lots of trucking
companies had saved a lot ofmoney, so they were able to run
freight less profitably thanthey normally would.
So it made the cycle stagnant orlonger, meaning like it just
(19:36):
took longer for some of thesetrucking companies to decide to
either lay drivers off or forpeople to go find other work.
But that just never happened.
And it never happened, again,for reference, this usually
happens basically every year.
This is almost four years.
So we're at four times as longas this has ever happened in the
modern trucking industry in40-some years, which makes zero
(19:59):
sense.
And why I'm super interested inthis is because about six weeks
ago, Steven and some of theother folks he's been working
with, who we've had on the show,Justin, Danielle, and Steven,
have found some really egregiousthings on the carrier side
between CDLs being issued withno name.
I've literally seen thesedriver's license.
(20:21):
There's just no name given on adriver's license.
Yep.
They are CDLs for non-domiciled,meaning like no address.
So truck drivers were literallyhaving IDs being shown with no
name and no address, but somehowgetting a CDL.
Then they found massive ELDfraud, which meant drivers are
(20:41):
only legally allowed to work,say, drive 11 hours in a day,
are driving dozens of hours, ifnot the entire day by
themselves, which is one,illegal, two, unsafe.
And the Hope Trans accident inTexas that killed five people
was like a perfect example ofthis.
You had an immigrant from Cubawho had driven 21 hours on a US
(21:04):
postal service load that wassupposed to be a team, fell
asleep, killed five people,right?
So, like these things, to yourpoint of awareness, are starting
to become oh, I don't know, Iguess aware, not to be
redundant, of like people in thecountry are starting to
understand like this is reallybad, right?
Okay.
So to set the rest of the stage,right?
(21:24):
Last week, I think it was lastweek, Secretary Duffy made an
announcement who is theSecretary of Transportation for
the federal government and said,Hey, we have uncovered massive
issues and issuances of CDLs andregulations in the trucking
industry.
And then said, and for anyonethat doesn't understand this,
(21:44):
the federal government doesn'tissue a truck driver's license,
a CDL.
Each individual state does that.
So the federal government can'treally just say you can or can't
do this because the states arethe one that issued these.
However, a state issues it andthen a truck doesn't necessarily
work in that state.
They drive all over the country.
So it's kind of a weird setupwhere like your state issues
(22:06):
your CDL, but then you're gonnago work in all these other
states anyway.
So what Secretary Duffy said wasbasically all non-domiciled CDLs
need to be re-audited uponrenewal for every single state.
And they also need to go throughthe immigration system, which
they had found they hadn't toverify this person is legally
(22:26):
and able to work in the UnitedStates, to should be in the
United States and have theability and authority and
training to run.
Found I think 98% of the issuesof the estimated 200,000 CDLs
that are possibly issued thatshouldn't have 98% give or take
came from California.
Another big portion came fromNew York, some PA.
(22:48):
I can't really remember exactlywhich other states, but there
were a few that had like waymore issues, right?
Now, here's the important partwas they said if the states
don't fix this, we will pullfederal funding for the
highways.
So basically the federalgovernment can't fix that part
of it, but they said, we're justnot going to give you any money
to fix your roads if you don'tfix this.
(23:09):
So what has happened in the pastweek, and this is the thing
that's hard to figure out, is itseems or appears like states are
starting to try to fix this.
Like I saw posts in SouthCarolina where drivers were
basically posting, my CDL justliterally got yanked today.
They said I didn't have theright documentation, I now can't
go to work.
(23:30):
But nobody knows exactly whatstates are doing what yet,
because I don't think they'veannounced it.
And on top of that, it seemslike the administration is using
this to deal with theimmigration thing they've been
talking about, where they'rejust sending ICE agents,
immigration agents, to truckstops in places for sure in
Chicago, where they're pullingdrivers over or they're checking
(23:51):
for documentation.
And the reports that I had heardyesterday were like hundreds of
trucks were found on the side ofthe road where drivers just
abandoned them, right?
And ICE agents were literallytaking people into custody for
deportation.
And a lot of trucking companieswere reporting drivers just
didn't show up for work, right?
So, what all of that means is itvery much seems like the
(24:15):
enforcement of currentregulations is making it so the
industry should function the wayit did.
And the reason you can see thatin the numbers is rates are
going up in certain areas of thecountry that really haven't and
economically shouldn't be,unless there is some anomalous
outside reason creating this.
(24:36):
And to me, I'm like superinterested in seeing how this
plays out and hearing yourthoughts, which is why I want to
talk about because you and Ihaven't had a chance to talk
about any of this.
SPEAKER_00 (24:44):
So I pulled while you were while you were um
talking through that, I pulledup some um recent, like as of
today, um, news headline.
So Secretary Duffy was on FoxNews this morning uh talking
about this.
SPEAKER_01 (24:59):
He was.
I haven't seen that yet.
SPEAKER_00 (25:01):
So um if you go to just look him up on on X, you'll
see uh the clip.
But he says, um, we will holdstates accountable for giving
licenses to dangerous foreigndrivers.
Some can't even speak Englishand aren't even in the country
legally.
FMCSA's investigation shouldshock and outrage every
American.
So again, they're at the processwhere we are um basically
(25:24):
bringing this into thespotlight, uh, you know, because
you have to make people aware ofwhat's going on before there's
really a push to do anythingabout it.
Further, the the Craig Fullerpost, he posted again this
morning.
And what he did was he, and thisthis goes back to your supply
and demand and the market cycle,he um overlaid tender rejections
(25:45):
versus spot rates.
SPEAKER_01 (25:46):
Okay, and there's usually a direct correlation,
meaning Explain that foreverybody what a tender
rejection is, because I don'tknow that everyone necessarily
understands.
SPEAKER_00 (25:54):
So um tender rejection and spot rates tend to
have a correlation, meaning uhtender rejection is when um when
a motor carrier is contractedfor a load or a, you know, they
won a bid and they werecontracted or awarded a lane.
Um if they reject it, so youknow, the tender comes over and
(26:16):
they say, hey, we're not gonnahaul that at that price, that's
a tender rejection.
Okay.
When that happens, typicallythose loads will follow the
waterfall or um uh routing guidefor a large shipper and will go
into the spot market, which iswhere a lot of brokers um
operate day to day.
Meaning, um, truck six monthsago might have been awarded
(26:40):
this, tender comes over thisweek, they say nope.
And now a broker is working onit.
And you tend to see when thewhen the tender rejections go
up, the rates go up becausecapacity seems to be tightening.
Okay.
Now, uh we saw so we saw this inCOVID, right?
Tender rejections were at like a30%, meaning like three out of
(27:00):
10 loads, carriers were like,I'm not hauling at a whatever
rate per mile, freight's payingway more.
SPEAKER_01 (27:05):
So think about it like this.
If the number of shipmentsneeding moved every day, just
say is a hundred, and saythere's a hundred truck drivers,
hundred literal drivers ontrucks for a hundred loads, you
have equilibrium.
So say that rate is two dollarsa mile.
As soon as, as a company, acountry, we produce and buy two
hundred truckloads worth ofshipments per day.
(27:27):
There's only a hundred truckdrivers that already agreed to
move for two dollars a mile.
But all the companies with thefreight they can't move, they go
to the spot market and say,Well, I'll give you two dollars
and 25 cents a mile to pick upmy load today.
And then some of the truckdrivers go, Well,$2.25 to your
point is better than two.
So they call the customer, theyalways pick up from and go,
(27:48):
sorry, truck's broken downtoday, driver's off sick, I
can't move it.
And they go and grab a load for$225 a mile.
So that is the rejected load,but the truck just goes and
picks up a load at a better at abigger price.
So normally when the economyexpands and we buy and create
more things, truck rates go upbecause those companies need to
move things that didn't expectto have to move them, right?
(28:09):
But now isn't going up.
SPEAKER_00 (28:13):
Demand is going up, right?
And the supply is is so um,yeah, there's that difference
there.
So normally when you see therates go up, the tender
rejections are also up for thatexact reason that we just
outlined.
In this case, in the last month,rates have ticked up, tender
rejections have gone down, allright, which is an inverse.
(28:36):
Even if tender rejections stayedflat, which um they're at 5.67%
right now.
I think you know, 10 or belowlike 5 to 10, I I kind of
consider like um you know,somewhere in in the what I've
seen in my in my career as youknow, standard.
If you get like real low, it's asuper loose market.
(28:59):
If you get above 10, you that'sa tight market.
So yeah, you've got 5.67 is thetender rejection rate, and rate
per mile went up, um looks to beabout 5%.
Okay.
With no, and so so what heconcluded through that is that
um since tender rejection, andI'm quoting him directly, he
(29:20):
said the divergence isn't normaland it's telling us the capacity
is leaving the market.
Since tender rejections measurecarriers that normally
participate in the contractmarket and are often compliant,
we aren't seeing it in thosedata sets.
It's the bottom feeders thathave no regard for the rules
that are exiting.
And I think a lot of it comesfrom the pressure.
So here's another article thatI'll reference for you.
(29:41):
Headline ICE helped remove 130truck drivers from the road as
part of a three-day enforcement.
SPEAKER_01 (29:46):
Go ahead.
Before you segue into that,because I want to read something
else to the point you just made,right?
Because then we'll segue rightinto that.
Is this was also from FreightWaves.
We have never seen this happen.
Market change is occurring, butit's showing up in the tender
data, right?
It's not showing up.
(30:53):
Exactly what you said.
It said we're seeing somethinghappening on the four-day spot
rate map.
Almost every market is blue,which means significant rate
increases relative to what isactually being shipped.
We have never seen rates surgewith tender data not reflecting
it ahead of time.
This appears it has to becapacity leaving the market.
(31:14):
And also points out the biggertrucking companies haven't
really seen this and aren'taware because their rates
haven't changed, which againmatters because if you use any
rating engine, most of theshipments are moved by large
trucking companies.
So if what we're seeing insmaller brokerages, call it$100
million or less or$50 million orless, we're seeing things that
(31:36):
the bigger companies aren'tseeing and the bigger rating
engines, I don't think, aregoing to reflect yet because
it's literally happening rightnow and started happening in
like in the past couple of days.
So segue into what you weresaying because I'm like, this is
really important of why thesmall companies are getting this
information before any of thelarge companies, I think, are
either able to react or are.
(31:56):
Noticing that it's occurring.
SPEAKER_00 (31:57):
So I'll give you one more data point and I'll I'll go
just so we can balance oursources, right?
So I'll look if we look at DAT'sum uh market conditions, right?
I just pulled the the currentnational average outbound
capacity market conditions,meaning if you take every state
that's out there and you justaverage them all together as a
(32:20):
country, uh, and the colors arereverse on DAT, they consider
red to be tight and blue to beloose.
As a country currently, it isplus 49 on a scale from negative
100 to positive 100, meaning itis considered a very tight
market nationwide right now.
Okay.
So there's your data set.
I didn't pull up the uh the therates.
(32:42):
I could probably do that.
SPEAKER_01 (32:43):
Um here's the other thing.
Yeah, this is why I was superexcited to talk to you about
this, because we have a prettydiverse book of business at our
brokerage, meaning like lots ofdifferent types of shipments
moving in, lots of differenttypes of equipment, really all
over the country.
It's not really centralized inany one place.
So it's a pretty good samplesize for kind of what capacity
(33:04):
feels like, which is again notnecessarily objective, but it
kind of is.
And I'll tell you what we'veseen.
Lanes and RFP stuff that we werelooking at.
I always talk to our team and Ialways ask the questions more of
like what I would ask as abroker, not like running the
brokerage, like, how many hitsare you getting on every load
post?
Meaning, like, are you getting10, 20 carriers reaching out on
(33:25):
a lane?
Are you getting two or three?
Is it going up or down?
Like, what does it feel likewhen you're trying to cover the
load?
Like a lot of demand, meaning alot of trucks need it, or none.
And every single person on ourteam for the past week is like,
we thought it was maybe the endof the quarter, which was last
week, and end of month.
Usually lots more ship, so likecapacity gets a little tight and
(33:47):
it was hard to tell.
But a lot of the guys on ourteam have been doing this a long
time, and they're like, Ben,these are lanes we would get 20,
30 carriers trying to take thisload every day of the week, no
problem.
We're seeing like two, threeresponses on some of these load
posts.
And I was like, every day lastweek.
And it wasn't necessarily justone area, it was kind of
(34:09):
everywhere.
And I'm like, that's reallyinteresting.
Maybe it's month end, quarterend.
But this week, similar thingswhere they're like, yeah, we're
still able to move the freight,but there's just a lot less
carriers asking for these loads,which seems weird.
And what we were talking aboutinternally is just what you just
explained, which is economicallyspeaking, like it makes no
(34:32):
sense.
There's no reason that should behappening, but yet it is.
And that's why it's super, Ithink, important for us to talk
about it because Jason Miller,who I think puts out great
stuff, really great metrics onlike the economy, manufacturing,
what goods are moving in and outof the country and the actual
demand for trucks.
And also, I think on thetrucking side, him and I had a
(34:54):
discussion on LinkedIn last weekwhere I was like, hey, I'm
really curious what you thinkcould happen.
Because this didn't reallyhappen yet.
It was starting to feel like itwas.
And I asked him, I said, iftheoretically, because this was
right after Duffy announcedpossibly losing 200,000 drivers
over, which could be a year, solike no one knew how long that
would be.
Right.
(35:14):
And basically everyone that wereally respect and have talked
to on the show were like, look,this has never happened.
We don't think it'll have animpact on rates because like it
always comes from the number ofshipments, not necessarily the
carrier side, to move the wholemarket.
And I keep going back to what wetalked about with Danielle and
Gord on the show and Steven.
(35:35):
And I'm like, okay, well, if theFMCSA is estimating 200,000
drivers, okay, one, that'ssignificant, but how quickly
they leave is really important.
Because if it's a long time,maybe you don't notice that.
But the other number that keptsticking in my head, and this is
what I wanted your thoughts ontoo, is DOT week last year said
(35:56):
I think it was 22% of thecarriers inspected or drivers
inspected had no CDL, like noCDL, right?
And I'm like, okay, so if one infour trucks that they pulled
over on a week, they toldeverybody they were pulling
people over didn't have any CDL,and we know 200,000 current CDL
(36:16):
holders have them that shouldn'thave it.
Guess what's not in that200,000?
It's not any of the truckdrivers that have no CDL
whatsoever, which the DOTannounced and publicly put out
there like one in four trucks wesaw had no driver's license.
So if 200,000 of them havelicenses that shouldn't, and one
in four trucks pulled overdidn't have any, the number of
(36:39):
drivers that really shouldn't beon the road could be anywhere
from 200,000.
It could be 800,000, it could be600,000, it could literally be a
million.
Like no one has any idea whatthe number of drivers on the
road as of last week eitherdidn't have a license or
shouldn't have a license.
What we do know is that tons ofstates were just handing out
(36:59):
CDLs with no verification,people were cheating on tests,
never should have had them, noverification of employment or
citizenship or ability to workin the country.
Like this could be a giant,giant issue where if all of them
just are scared they're going toeither get deported or arrested
and just leave the market, youcould actually see a giant flip
(37:23):
in the market that we've beenwaiting four years for that have
never happened.
It could theoretically happenright now, and rates could go up
and just stay there because theyshouldn't have been moving the
freight in the first place withload volumes.
SPEAKER_00 (37:35):
Nothing to do with load volume.
SPEAKER_01 (37:36):
And like to me, here's the part what I'm so
excited about, right?
SPEAKER_00 (37:39):
Is because Hey, we're not, we're not so I want
to clarify something.
We're not advocating to maketrucking expensive.
We want rates to be back at aplace where everybody is like
and the roads to be safe.
The roads to be safe, and theour our partner trucking
companies that are out therethat we do business with, we
want them to be able to operateefficiently.
Like the the carrier companythat we have at my brokerage,
(38:03):
um, we've downsized our fleetsignificantly in the last few
years because it's the market'sjust not.
Well, that's the point, right?
Doesn't make sense to run MAtrucks.
SPEAKER_01 (38:12):
The two points that I think are really important to
your point for the audience oranyone listen to this, right?
Is who is being hurt the mostwhen people break the rules, are
outright just running illegally.
It's the companies that aredoing things correctly.
The companies that maintaintheir vehicles at the correct
maintenance, meaning likethey're safe to drive on the
(38:34):
road, which by the way is onlywhat four out of five actually
are safe to be on the road.
That's just the equipment side.
Then you have drivers that havebeen driving for decades, that
drive legally, that play by therules, that care about the
safety of our roads, that arereally good at their jobs and
career truck drivers.
Those are the companies and thedrivers that are being penalized
(38:58):
by the groups of people breakingthe rules and running illegally,
unethically and unsafely.
So we're not saying we wantthings to be more expensive.
What we're saying is they havebeen too cheap for too long
because people were justoutright breaking all of the
rules, nobody was payingattention, people were getting
killed, the roads weren't safe,and people that legitimately
(39:19):
have run businesses for decadesthat are good drivers that care
about safety on the roads andtheir equipment couldn't find a
job or pay the bills becauseyou've got people running
illegally, working twice thehours for half the money because
they don't have insurance, theydon't maintain their equipment,
and they're not training theirdrivers.
So like it is a safety issue,it's an effective issue, and
(39:43):
it's something that like shouldnever have happened in the first
place.
So it's more about justcorrecting the fact that like
it's basically been the WildWest for the past five or six
years, where things have gottenso out of hand that things
literally legitimately aren'tsafe.
So, like it is an advocacy, Ithink, from our point of view,
that things shouldn't havegotten that bad.
But why I'm so excited about it,to your point, which makes it
(40:06):
seem like I was excited aboutrates going up, I'm just excited
because when we found this out amonth or two ago, I was
terrified because I had no ideahow bad this was.
And when we really got to seewhat was happening, I was scared
to be on the road and genuinelyfearful of how unsafe the roads
were because of how bad thisproblem was.
(40:26):
Then I was even more scaredbecause the only, the only
solution to that problem was thefederal government, which hasn't
exactly had a great track recordof fixing things in a timely
manner.
And basically I was almost inthis mental state of like, maybe
I'm just gonna go find anothercareer.
Because if the governmentdoesn't solve this, this is
horrible.
And it was physically making mesick.
(40:48):
And like when I started seeingthem actually start to enforce
things that should have beenenforced for a long time, I'm
like, I think this is the firsttime in my entire life I've been
like optimistic and hopefulabout any specific aspect of
(42:19):
what the federal government isdoing.
SPEAKER_00 (42:20):
So I'll give you here, here's a stat that'll make
it very clear and obvious ofwhat we're talking about here.
Okay.
You would expect the cost ofanything to be in line with
inflation, right?
In general.
Okay.
If you benchmark 2022 to 2025,national inflation was at around
it's it's around 11%.
So the cost of living in generalhas gone up about 11% in the
(42:44):
last three years.
The cost of trucking rates havegone down roughly 45%.
Down.
Right?
That is an inverse correlationby a lot, right?
And when you're going whenyou're doing a negative um
percentage, it it kind ofshrinks how it is because you're
you're taking the change off alarger number.
(43:05):
So here's a perspective, right?
Rates were about 275 a mile inuh three years ago, okay?
And they're at like a dollar,we're talking without fuel right
now, okay?
And this is coming from freightwaves data, right?
So in uh let's see, equal to thebeginning of the year, 270 a
(43:27):
mile.
Okay.
And uh right now, this is withit upticking about a dollar
seventy, right?
So you're going down a dollar amile.
So if someone drives 500 milesin a day, that's$500 of revenue.
That's they're doing the samejob, but the revenue just goes
down again.
(43:49):
We're not asking more expensive.
The consumers will pay for.
This is trucking companies thatcan operate, um, you know,
basically we don't we want themarket to be at a normalized
level, um, which has been takenaway from them because of um a
lot of the the bottom feedersthat have come in and have
(44:10):
abused the system and had youknow haven't had to pay the
price for it.
SPEAKER_01 (44:14):
So and it's like to your point, right?
Like for another analogy, let'sjust think about like something
like physical, right?
If Nate has a farm and I have afarm, right, and we both grow
corn, okay, and the governmentsays, you're only allowed to use
fertilizers that don't causecancer.
Nate follows the rules, buysthose fertilizers, right?
(44:35):
So Nate can sell his corn for$10a year because he's got to pay
for the right fertilizer so hedoesn't poison people.
And then I have a farm acrossthe street and I go, you know
what?
No one's looking.
So I'm gonna buy fertilizer thatis way cheaper, that causes
cancer because no one knowsanyway.
And I can sell my corn for$5 anyear.
(44:55):
Nate has to go out of businessbecause he can't compete with
me.
Why?
Because Nate's playing by therules and not poisoning people.
I feel like no one's gonna lookanyway, so I don't care who eats
my corn, they're not gonna knowit came from me anyway.
So I put Nate out of businessbecause I can sell my product
cheaper than Nate.
The exact same thing happenedwith trucking, right?
You have companies that arelike, we will drive illegally,
(45:17):
we won't train our drivers, wewon't pay to make sure they have
the right citizenship, we won'tpay the right taxes, we won't
pay the right employment, wewon't pay for the right
insurance, and we're not goingto maintain our vehicles.
So they can run to Nate's pointat$1.50 a mile when a legitimate
trucking company, it costs them$1.50 a mile.
(45:38):
At$2 a mile, they only profit 50cents a mile.
That is why the legitimate rulefollowing people that have the
country's literally depended onsince its existence in
transportation are going out ofbusiness while the people
breaking the rules are justrunning amok with things, and
you're seeing people die on theroads, and you're seeing things
(46:00):
that economically should havenever happened in the first
place.
SPEAKER_00 (46:03):
Exactly.
So here is the news article thatI was uh referencing earlier.
Um, this is from CDL life.
It's a ICE helped remove 130truck drivers from the from the
road as a part of a three-dayenforcement at an Oklahoma port
of entry, officials say.
That's just one specificlocation.
And we're talking about hundredsof thousands of drivers.
(46:24):
Um, this is gonna be an ongoingmix of, I believe, enforcement
and deterrence.
So you're gonna have like I Isaw a funny meme today that was
like, um, this is the new drivergot covid.
Did you see that one?
So it's basically like, youknow, in 2020, if a carrier
wanted to fall off a load, theywould just be like, oh, the
(46:46):
driver's got COVID.
And now it was like a screenshotwhere the the carrier was like,
uh driver got pulled over and uhdidn't have a license, so he got
pulled out of the truck.
We can't we can't haul this loadfor you.
Um so basically, like they felloff the load when they're
claiming it's because of um youknow the the driver not being
(47:07):
legitimized.
SPEAKER_01 (47:08):
Um why'd you hire him in the first place?
That's your job.
SPEAKER_00 (47:12):
So the joke is like you don't even have like you can
just use that excuse now and andpeople could believe it the same
way that you could just say theyhad COVID five years ago.
Um but I think it's gonna be twofull.
Like I said, I think deterrents,so you're gonna have carriers
that um just say, all right,clearly this is a you know, um,
it was an easy target before andit's not anymore.
(47:33):
So we're gonna focus our effortson, you know, scamming or doing
something nefarious in adifferent, you know, area of the
of the economy.
Okay.
So there's that deterrence.
And then you have theenforcement, where it's whether
it's the um English proficiency,um, or the the ELP, right?
(47:54):
The English English languageproficiency, whether it's the
the CDL um you not not having avalid CDL, or if they start to
crack down on the you know,first name unknown, last name
unknown, whatever.
Um, probably a mix of both ofthose will lead to capacity
leaving the market.
It's capacity that just doesn'tneed to be there anyway, right?
SPEAKER_01 (48:15):
Shouldn't have been there because they're not
running legally.
SPEAKER_00 (48:17):
Right, right.
This is yeah, so this islegitimately a highway safety
issue on top of a whole you knowboatload of other things.
SPEAKER_01 (48:25):
So here's another one.
Here's some good, this isanecdotal data, meaning like
these are stories that peopleput out there, but like this is
from John Paul Hampstead, who'sreally credible and has been in
the industry a long time, right?
He said, This is what he hadheard, this is yesterday, on
ELP, English languageproficiency and ice
(48:46):
enforcement's impact on thetruckload market.
First, a 55 trucking company, 55truck carrier out of Chicago
told me most of their driversjust didn't show up to work this
week.
Number two, a vice president ata$1 billion freight brokerage
told me, that's a Big Ten Four,buddy.
And when I asked him if he saw amovement on the buy rates,
(49:08):
meaning what they pay carriersin the past 48 hours, he said
he's had loads in transit bedisrupted due to ELP violations
putting drivers out of serviceand margins compressed by 150
basis points.
Meaning, like trucks that theybooked on the road were getting
pulled over by somebody and theywere being found for using
(49:31):
fraudulent ELPs and just yankingthem off the road, which meant
literally the truck that youbooked that said they were
running legitimately got pulledover somewhere and the load just
isn't moving anywhere.
And on top of that, seeingthey're paying more because a
lot of the cheaper carriersaren't there, which I want to
circle back to in a second.
But three, a director of pricingat a half a billion dollar
(49:54):
brokerage told me margins onspot business have been under
pressure on what they're payingtrucks for the past two weeks,
which is counter-seasonal, whichis what we've been seeing.
Four, a source at a largefactoring company said he hasn't
seen significant movement yet,but the bills could be on a
little time lag, meaning likethey haven't seen price changes
on the factoring side, but thatcould be just because invoices
(50:16):
lag a few days or a week in alot of cases.
So this data might not beshowing up yet on the factoring
side of things.
And five, another vice presidentat a different billion-dollar
brokerage said the Midwest isbrutal.
ELP and ICE enforcement is amaterial threat to capacity, but
he doesn't think the tippingpoint has arrived yet.
So these are huge companies,mid-sized companies, and small
(50:39):
companies all seeing this beforefactoring companies.
And I think a lot of the data isshowing, but it's starting to
appear.
Because the one thing thatalways stuck with me, this has
been for the past couple ofyears, whether it's clients or
just people I've talked to, ourcolleagues, like I have heard
more and more people tell me,like, here was the thing that
made me think about it.
People kept going, I have a bigproblem with my customer in
(51:03):
transit times.
And I'm like, transit times?
I'm like, that is a weird thingto have a problem with.
I've never really heard thatbeing a problem so bad that like
someone has ever talked aboutit, like at scale.
And I'm like, I kept hearing it.
And then I would ask them, like,what do you mean by transit
times?
They're like, well, the carriersI want to book for the price my
customer wants to pay say theycan run this load in one day.
(51:25):
And my customer's saying it'sbeen a two-day transit forever.
So the shipper is like, this isa thousand mile load, called a
1200 mile load.
And from the shipper's point ofview, that's always taken two
days, because roughly it's like550 miles a day.
Changes a little bit where youare, but like a rule of thumb, a
truck drives about 550 miles aday.
So a 1200 mile transit, right,or 1100 truck transit is a
(51:47):
two-day trip with a truck unlessyou have two drivers.
And all the brokers are like,look, I got carriers that'll run
this in one day and I can get abuck 50 a mile from my customer,
but my customer's telling me ithas to load two days later.
I can make the rate work, butthey won't make the lane
shorter, meaning the time frompickup to delivery.
And I'm like, that shouldn'thappen because legally a driver
(52:09):
can't drive that fast that far.
But I heard it everywhere.
And I heard it so much thatpeople doing RFPs were telling
me this.
They're like, listen, I can getrates to make all these rates
work and I can get thisbusiness, but my customer won't
shorten the transit time for meto book the carriers that will
run it for a buck 40 a mile.
And I'm like, like again, themath doesn't math.
(52:31):
Like you can't make a truck gotwice as fast.
There's a national speed limit.
They don't go 120 miles an hourand it weighs 80,000 pounds.
So, like, the physics areimpossible.
You can't travel that fast thatfar.
I'm like, so the only way thatis physically possible is for a
driver to drive illegally.
And after hearing that foryears, when we saw the ELP
(52:52):
fraud, I'm like, oh my God, allthis shit it all makes perfect
sense.
All these cheap rates weredrivers.
How they made up for runningcheaper was they just worked
longer illegally.
And now when all of thatdisappears, you're seeing the
industry function the way itshould, which is exactly why
you're seeing rates go up.
It's not because they're gettingmore expensive, it's because
(53:14):
they're going to where theyshould be.
And the people that werebreaking the law are too scared
to keep breaking the law becausepeople are paying attention.
SPEAKER_00 (53:22):
Yeah.
So I'll give you some more datahere, right?
And this comes from uh transporttopics.
And this is and this is lookinglike earlier this year, back to
the summertime, you know, andand it this is picking up steam
as it's getting more and moreattention and there's more
emphasis on inspections.
Um during a 90-day stretchbetween June 25th, kick the
(53:43):
kickoff of the ELP reinstatementand August 31st.
So 90-day stretch in the summerthere, federal roadside
inspections, it's just federal,right?
We're not talking your state umstate troopers, right?
Rose 67% to nearly 8,000compared with 4772 during the
same span last year.
If you look at an individualmonth, um jumped 76% alone in
(54:08):
the month of June to 2956compared with 1680 uh in June of
24.
So you're seeing massiveincreases of we're not so we're
not saying that uh that thenefarious acts have increased.
We're just saying that doingsomething about them has
increased, right?
Because you always say, youknow, people hear like the the
term like, oh, you're like allbark, no bite, right?
(54:30):
Like you you say these threats,but you don't actually do
anything with them.
Um that is legitimately um whatwe're seeing here is that now,
with an emphasis from um thefederal government and the
agencies on enforcement of theexisting, this is like again,
this is nothing new, right?
ELP has been around for a verylong time.
(54:52):
Um, we're just actually doingsomething about it now.
Okay.
So I think that's where uh andagain, this this data is you
know through August, and we'rein October now.
So you're gonna see, I think,more in and more of this um as
time goes on.
So uh as far, you know, as faras the demand side of trucking,
that's a totally different umpart of the equation that I
(55:17):
don't really see much happeningthere personally until we have
some clarity on what's going onwith everything from tariffs to
um our just general policymaking and um interest rates,
you know, and that stuff is muchmore of a s a slower burn than a
uh immediate um you know kick inthe butt when it comes to
(55:40):
fraudulent motor carriers thatare gonna exit the market
because you know, enforcement oror fear of enforcement.
SPEAKER_01 (55:48):
Correct.
And again, like I to Nate'spoint, I I don't want to, I
can't I don't think we can saythis enough is like we're not
advocating we want things to getmore expensive.
Well we're super I think atleast I'll speak for myself
right now.
SPEAKER_00 (55:59):
They're they're unreasonably below market, like
people aren't getting paid whatthey're worth right now because
of you know, an over oversupplyof uh fraudulent folks posing as
legitimate folks.
That's it.
It's it's in brokerage too,though.
I mean, that's the whole thewhole thing with double
brokering, like the in all theseMC numbers that are are getting
(56:20):
burned through, it's the samething.
We're just seeing it on thecarrier capacity side.
Something that I never thoughtwe'd be talking about on the
show years ago, but we arebecause it's we've always been
focused on you know fraud andbrokerage, not on the capacity.
SPEAKER_01 (56:32):
And here's the thing, here's the thing that I I
to give people a little bit oflike how could this have
happened and how could this getthat bad with the last few
minutes?
What I think happened, and thisis Gord put this out, he did a
really good interview on hisshow with Danielle, who we had
recently, and the name of thepodcast or the episode was
called No Name Given.
(56:53):
And it was on like fraudulentissue of CDLs.
But what really what I thinkmakes sense, and it all kind of
puts this together, is duringCOVID, right, everybody stopped
going anywhere and bought abunch of things.
So the number of shipments thatneeded moved in the country
unexpectedly and very quicklyincreased.
(57:16):
That was an increase in demandfor truck drivers.
And it was such a fast increasethat it literally caused
everything to cost more money.
That's where inflation camefrom, right?
The sudden spike in unexpected,the volume and the time at which
it happened.
So at the time, I think reallyprobably the Biden
administration was looking atlike, how can we fix this before
(57:38):
the economy collapses on itselfand people don't have food on
the store shelves, which was areal possibility.
You couldn't buy toilet paper,you couldn't buy certain things
because they literally weren'tgetting delivered.
So, in that context, I thinkthey were like, well, we need
more drivers, we need them fast,and we need them cheaper, or
we're literally not gonnafunction.
(57:59):
So I think the intention was toincrease a number of drivers
quickly.
It was the execution that Ithink made this problem so bad
because they basically loweredthe standards for CDLs.
At the same time, you also hadthe people that literally issued
CDLs not going to work.
(58:20):
So you had less people that weresupposed to make sure you had
what you needed when you got atruck driving license, a CDL,
and you lowered the bar to getmore in.
So you have less people at thedoor making sure everybody's
supposed to be able to legallywork.
At the same time, you're tryingto force people through.
And Gord put the number out, butit was like astronomical.
(58:41):
I think on a year, normallythere's like 400,000 CDLs
issued.
During that period, or maybe itwas just that year, it was
something like 800,000 or amillion CDLs were getting
issued.
So, like two or three times theamount of truck drivers were
getting licenses with half thenumber of people supposed to
issue them.
So you had half the people andthree times the people running
(59:02):
through the door, right?
And then I think nobody justwent back and changed it or
looked at it because it gotworse and kept getting worse
until it's gotten to a pointwhere we're at now where it's so
bad that like it's literallybecome like a safety hazard for
like legitimately almost everyfamily that is on the road
(59:23):
person driving anywhere is atrisk of being on the road next
to somebody that shouldn't havea driver's license, can't read
road signs, and maybe hasn'tslept in a day or two.
Like those are all very, verybad things for anybody, let
alone people in our industry.
So like I don't think maybe itwas caused intentionally to
(59:43):
create riskier roads or to harmpeople.
I think the intention was tokeep things functioning at a
very, I don't know,unpredictable time where kind of
nobody knew what was gonnahappen or how long it was, and
people were scared they weren'tgonna get food or be able to get
what they needed.
So like I think it was wellintentioned.
I think it was just poorlyexecuted and then never
(01:00:06):
reviewed, and it just continuedto get worse until we got to
where we are today, which is whythe industry has ended up in the
position it's in after fouryears.
SPEAKER_00 (01:00:15):
Yep.
Precisely.
Well, hey, we got through a lotof news headlines, a lot of
stats today.
We'll be definitely monitoringthis and and seeing how rates
and um tenor rejections, all allthe all the metrics, curious to
see how they pan out.
Um, because don't forget, what'sright around the corner is peak
season, end of year.
SPEAKER_01 (01:00:35):
So by the way, that should be starting now, and the
data is already showing loadvolume is down year over year,
and we are having a slower peakseason than we've had in recent
memory.
So there's even less shipmentswhile rates are going up, which
is even more reason whyeverything we talked about
shouldn't be happening unlesssomething very, very wrong was
happening.
SPEAKER_00 (01:00:56):
Yep.
That's right.
All right, good episode, Ben.
Final thoughts.
SPEAKER_01 (01:01:00):
Whether you believe you can or believe you can't,
you're right.
SPEAKER_00 (01:01:05):
And until next time, go bills.
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