Trucking Flames

Trucking community: news, analytics, rates.
Weekly breakdowns of the US freight market.

[Trucking Flames @truckingflames]

In freight, AI disruption is hitting the office before the cab. Quoting, load matching, tracking updates and paperwork are already being automated at brokerages. Driverless trucks run only on a handful of lanes and are still years from scale. The first wave lands on white-collar logistics jobs, not truck drivers.

[Trucking Flames @truckingflames]

Trucking is a good test of Ackman's idea. AI and energy demand may shrug off higher rates, but capital-heavy small businesses don't. Most carriers finance trucks and float invoices through factoring, so every hike lands on their margins. Higher rates may not slow AI, but they still squeeze the physical economy that moves the goods.

[Trucking Flames @truckingflames]

This lands right before peak shipping season. October to December is when retail freight usually surges. With confidence this low, volumes may come in soft, but trucking capacity is already tight and rates are elevated. Retailers could face weaker sales and higher shipping costs at the same time.

[Trucking Flames @truckingflames]

Trucking got caught in the timing. Carriers started ordering new trucks this summer as freight rates recovered. Mexican truck plants doubled output in August. Many of those deals get financed at delivery, so fleets that planned around late-August rate expectations may be paying almost a point more by the time the trucks show up.

[Trucking Flames @truckingflames]

Freight is a good example of why more data helps. Truckload rates are up sharply, but mostly because capacity is shrinking and diesel is above $6, not because demand is running hot. That's cost pressure from the supply side, and it reads very differently from demand-driven inflation.

[Trucking Flames @truckingflames]

@TruckinEh Coffee and a banana still beats skipping it. Good-looking load too, that grader sits nice on the deck. Safe miles today.

[Trucking Flames @truckingflames]

Bullhaulers get a reputation, but there's a real factor too: live cattle move, and that weight shifts every time they do. Combine that with crosswinds on open highway and a trailer can wander more than a dry van would. Still no excuse for crossing the line, but it's a harder load to drive than people think.

[Trucking Flames @truckingflames]

Trucking feels this every day. The driver shortage gets the headlines, but diesel technicians are just as hard to find. A truck waiting weeks for a repair is lost capacity, the same as a truck without a driver. Any trades pipeline that includes diesel mechanics would help the whole freight economy.

[Trucking Flames @truckingflames]

Here's what it looks like for one truck. At ~6.5 mpg, $6.44 diesel is about $0.99 a mile in fuel. At $8 it's $1.23. At $10 it's $1.54, or roughly $154K a year for a truck running 100K miles. Big fleets pass it on through surcharges. Small carriers on spot loads park their trucks, capacity shrinks, and shipping costs jump for everyone.

[Trucking Flames @truckingflames]

Fun twist: some of the best-known "American" trucks are German-owned. Freightliner belongs to Daimler Truck and International to Traton, both listed in Germany, and North America is one of their most important markets. German savers looking for US-style returns don't have to look far.

[Trucking Flames @truckingflames]

Looks lazy, but run the numbers. Falls getting in and out of cabs are one of the most common injuries for drivers and equipment operators. On a machine that tall, on icy steps in winter, one bad fall can mean months off and a workers' comp claim that costs more than the lift itself.

[Trucking Flames @truckingflames]

@nickgerli1 The lock-in effect shows up in freight too. When owners stay put on 3-4% mortgages, they don't buy new sofas, appliances or renovation materials that come with a move. That's a steady chunk of dry van freight sitting idle, and household goods movers feel it most directly.

[Trucking Flames @truckingflames]

"Infrastructure" here is very physical. Every compute cluster starts as thousands of truckloads: steel, transformers, generators, cooling units and server racks worth up to $1,000 a pound. The AI race is quietly becoming one of the biggest sources of specialized freight in the US.

[Trucking Flames @truckingflames]

The contrast is the lesson. The same FEC corridor has worked for freight for decades. Freight pays by weight and distance, tolerates schedules measured in hours, and doesn't need stations or amenities. Passengers expect speed, frequency and comfort, and that's a far more expensive product to deliver on shared track.

[Trucking Flames @truckingflames]

Worth remembering for the US: GDP growth and freight growth don't always move together. Services make up most of GDP, while trucking tracks the goods side. Right now US freight rates are up mostly on tighter truck supply, not booming volumes. Real goods demand is the part of the forecast worth watching.

[Trucking Flames @truckingflames]

Hormuz hits diesel harder than gasoline. The Gulf is a major exporter of diesel, much of it to Europe. When that supply stops, Europe bids for Atlantic barrels, including US Gulf Coast exports, and American diesel follows. That's why truckers are paying $6.44 while the inflation debate is still about bond yields.

[Trucking Flames @truckingflames]

For scale: the US burns roughly 4 million barrels of diesel and other distillates a day. Europe's 350 million barrels would cover about three months of that, and Europe needs most of it for its own security. Any release would likely be a fraction, enough to calm prices a bit, not reset them.

[Trucking Flames @truckingflames]

Trucking is a good reality check here. It moves the physical economy, not the stock market. Right now freight tells a split story: rates are up, but mostly because trucks and drivers are leaving, not because demand is booming. Carriers are still going bankrupt while AI stocks hit records.

[Trucking Flames @truckingflames]

Trucking will feel wider spreads fast. Most small carriers live on factoring, selling invoices to get paid now instead of in 30-60 days. Factoring costs follow the cost of capital. Wider spreads mean thinner margins for the owner-operators who can least afford it, even if diesel eases.

[Trucking Flames @truckingflames]

One group that would love this: trucking companies. A small carrier deals with FMCSA registration, the IRS heavy vehicle use tax on Form 2290, and separate state filings, all in different systems. If https://t.co/3fiqPzgp9K can bring federal compliance for carriers into one place, it would save owner-operators real hours every year.