Jared Flinn:
You're listening to the B Floats podcast, your number one resource for everything bold freight trucking. Hey, guys. Jared Flynn with the Bulk Loads podcast. Got Tyler with me.
Tyler:
What's going on?
Jared Flinn:
It's Christmas season.
Tyler:
I think any time of the year.
Jared Flinn:
Yeah, this is the best time of the year. We are excited. You can see we have the podcast room decorated, festive and the ladies in the office last week decorated the office. So, yeah, it feels. It's feeling a lot more like Christmas.
Tyler:
Time you got the tree up at home.
Jared Flinn:
We actually for the first time put the tree up before Thanksgiving. This is the first time in my marriage that we chose to do it before. And it seems like there's. It was just this pressure. Like people keep putting on pressure. Yeah. And to keep, you know, start Christmas earlier and earlier. And we were traveling through Thanksgiving, so that was another reason why they put it.
Tyler:
We have ours up at home. We're always, we're always excited to get it up. The kids are always excited to put it up. We just went to a Christmas party before Thanksgiving and I think that's the earliest Christmas party I've ever been to. And it was just kind of weird feeling. But yeah, I'm with you. I think there's a bunch of pressure. People wanted to do it earlier and earlier.
Jared Flinn:
Yeah.
Tyler:
Maybe we just delete Thanksgiving. Just start Christmas.
Jared Flinn:
Yeah. So while hopefully you all are getting in the Christmas spirit, it's just a wonderful time of year. It seems like, man, it keeps closing into. I get anxiety and just stressed out. Like, man, it's just everything's jam packed with work activities, school activities, family activity. I mean, you go through the last year, I have to constantly keep looking at my calendar like what's. What's going on today? Because there is something going on today or tonight.
Jesse Runions:
Yep.
Jared Flinn:
But yeah, full of excitement as well. And yeah, don't forget the reason for the season as. As well. It's more than just that.
Tyler:
Yeah.
Jared Flinn:
But I'll let you kick it off with the truck feature.
Tyler:
Yep. Today we have Joey Wilson with Entertainment Transport Solutions out of Greenville, S.C. joey joined the board this year, but actually it. So Entertainment Transport Solutions is Matt Mecom's company. I believe Matt Becum is the. The one. He's been a member with us for years, but he also has that group on Facebook, Bolt Callers, which is. I'm sure all of our listeners are part of it.
Tyler:
If you're not, go check it out. It's a pretty cool group. But thanks, Joey for sending this photo night photo. Yeah, we haven't got one of those. It seems like in a little while.
Jared Flinn:
Is that the North Star?
Tyler:
It might be, yeah.
Jared Flinn:
It's a great photo, honestly, even the clouds in the backdrop.
Tyler:
Yeah, yeah, I like it. I'm a big fan of the lights.
Jared Flinn:
Yeah. Well, Joey, thank you for sending that in. Appreciate that. If you would like your truck featured, we feature one of these every week. We love to feature these. It just shows our members all across the country and we know that there's just so many different types of photos and landscapes and trucks. So these are just super cool. So you can send us one any way you can send it.
Jared Flinn:
So you can email it to
[email protected] send it through social media any way you can get it to us, text it to us. And we will be glad and honored to get that featured on there.
Tyler:
All right, let's get into. I'm sure everyone's wondering what is the crystal ball?
Jared Flinn:
The crystal ball. You all know one of our favorite guests and reoccurring guest is Jesse Runyons, AKA we call the wizard of the Freight Wizard. And Jesse actually surprised us by bringing in his crystal ball. You can see the magic of the. Yeah. Was. Yeah, I was gonna say mirror, mirror on the wall. Crystal ball.
Jared Flinn:
Tell us. But yeah. So anyways, Jesse comes on again today. We're going to talk everything in freight, but I wanted Jesse to dive in on tariffs and really understanding tariffs. Now there's a mixed bag. We heard tariffs mentioned a lot in the election and we are hearing a lot of it now. What's going to happen with tariffs? The good mad the ugly. So what did Jesse, you know, he's just a.
Jared Flinn:
He's a wealth of knowledge of all things. But really to break it down, we've also seen some posts on social media, LinkedIn especially where like people are debating whether tariffs are good or bad. So this is another one I wanted to really kind of get the realization. We know especially in our industry tariffs, they're huge in all industries, but especially for our grain exports because a lot.
Tyler:
Of our grain gets.
Jared Flinn:
Yeah. Gets exported and if there's some. If tariffs can affect that. But also we've heard it when we visited PoK and some of these that, I mean one factor that reason why truck prices went higher was because of some of these tariffs. So I'm not saying it's bad and I'm not saying it's good, but I think we all need to kind of understand what the effects of tariffs do. And I think Jesse really breaks that down.
Tyler:
Yeah, that's good. I'm excited to have Jesse on more and more to talk about this stuff and into 2025. Just looking at the overall market. But tariffs is just one that like you said on my LinkedIn, it's just I see a post for, I see a post against it and it's just the whole feed. But I'm glad that Jesse came on to break it down, explain what they are and what they're actually going to do.
Jared Flinn:
Yeah, awesome. Last thing real quick. And I forgot to say this earlier, you know, I love traveling but want to throw up this picture. Actually last week I was at the University of Arkansas got to speak at the logistics school and or the business school within their logistics department. But a couple things I didn't know about the University of Arkansas, like they're ranked number one for graduate level for their logistics college. You know, there's, yeah, I think there's University of Tennessee, Michigan State where Jesse, or excuse me, Jason Miller's out of. But Arkansas is huge and obviously they're down there, you know, right there close to Walmart, J.B. hunt, Tyson Foods.
Jared Flinn:
So there's a lot of support that goes into their logistics. But it was really cool. I got to speak to this class and I love speaking to the next generation coming up. It's duly gratifying because I get to talk to these students. It's encouraging. Get to. I was at their, in their seat at one time and I love their questions. So thank you.
Jared Flinn:
The University of Arkansas look forward to coming back and speaking with that class. There's like over 200 kids that I spoke with. It was just incredible.
Tyler:
I can always tell whenever you go to speak to the classes because at the end I always, we always get a bunch of resumes for internships and so I'm like, oh, Jared, speaking at one of these classes.
Jared Flinn:
Yeah, we love hiring interns and it was part times and really a lot of those transpired. You were one of them. Yeah, full time employee. So yeah, thank you again for let me do that. So with that said, here is my conversation with the freight wizard, Jesse Runyon. Jesse, welcome back.
Jesse Runions:
Good beer as always.
Jared Flinn:
Yeah, we wanted to get you on before the year end. We a lot has happened since you've been on the podcast and as always, our fan base, our listener base loves hearing your comments. We usually get a ton of responses from these shows specifically that you come on I think because they're very thought provocative but just people want to know what's going on in the industry and again none of us well, actually you do. Have you brought in your crystal ball today with your predictions? Right here.
Jesse Runions:
Unlimited data, crystal ball right there.
Jared Flinn:
But I think we all want to know what's going on. I'll start the question off or the conversation. It does seem that there is more optimism. You know, call this regular effects, we're post election, but it does seem like there's been more optimism in the industry. We've seen the stock market go up. Trucking seems to be back on track. What are your thoughts?
Jesse Runions:
Well, there was always lots to be optimistic about. Once you get past the political noise. The American economy in terms of the basic fundamentals is stable and relatively sound. And when you compare us to the rest of the world, we're really good. Right off hand. Maybe Singapore is in a better position than us, you know, overall, short term, long term. And Singapore is a city state. And so it's got a lot more flexibility in what it does and how it does versus a nation of 340 or 50 million and all that comes with it.
Jesse Runions:
So optimism is a good thing, especially when you got the under the overall underlying economic fundamentals. But consumer sentiment is important. If, if the economy is going great and people think this, this economy is just terrible, I'm not going to spend as much, I'm going to put back, the economy is going to slow down no matter what the underlying fundamentals are. Something I've told an acquaintance recently. What people think the economy is doing is almost as important as what it's actually doing. You look at our worst economic events in past history, they're always preceded by a panic. The Great Depression probably wouldn't have been as bad as it was if it wasn't for the initial banking crisis of 1929 and then the overall, the Great Depression when the stock market at the bottom fell out afterward. And then all the government's responses to it were either too much in one area or too little in another.
Jesse Runions:
So you had recession from about 34 to 38 and then there was a slight recovery. Then World War II pops up in 39. We start ramping up because we're making more and people are making more money. People spend more. The wealth of a nation is not how much money it possesses, but how much that money circulates from hand to hand, wallet to wallet. So you make a dollar, you go spend that dollar, that dollar goes somewhere else, somebody else spends that dollar and there's no 3st clip. It sums it up really well. You know where Mo, Larry and Curley are exchanging that dollar to satisfy their Individual debts.
Jared Flinn:
Yeah. Well, talk about, you look at the freight market all the time. I love your responses. And if you don't follow Jesse on LinkedIn, really encourage you to do that because you put out a lot of good content. But talk about kind of what, where you're seeing the current freight market as compared to the. Where it was six months ago.
Jesse Runions:
Where it was six months ago. The freight market has cooled off a bit. That's not an unhealthy thing. You gotta rerun, rewind the clock back a little bit. Between the, you know, the second half of 2020 to roughly the end of 21, there were $7 trillion dumped in, into the economy. A big part of that in consumer, you know, in the consumer's hands. And rest of it works its way through payroll, et cetera, et cetera. So consumer spending shoots way up.
Jesse Runions:
Trucking companies are caught behind the ball. Like, you cannot just ramp up capacity. Hey, I'm going to, I need a truck tomorrow. Let me go. It takes time to ramp up your fleet to meet demand. So baton trucking started getting close to meeting that demand. Demand was already slowing down and the inflation at the beginning of 22 was actually more due to supply chain snarls than it was true monetary policy issues. And of course the Fed missed that cue.
Jesse Runions:
They thought it was transient, but as long as that demand stayed static because at that point trucking companies are like, oh, demand's falling off, we don't need to ramp up anymore. So you had a leveling off in capacity, but demand was just slightly higher. So that that supply chain snarl was going to perpetuate and the risk of a deep recession was real. And then you've seen the Fed eventually play catch up and go to a restrictive monetary policy, raising rates today and as far as November, the week or the market is cooling off a little bit, but it's stable. You know, it's. Some have predicted us great monumental freight surge or surge in freight demand and rates will materialize from now until, you know, somewhere in 2025. I don't see that.
Jared Flinn:
You don't see that?
Jesse Runions:
No, I see some demand bumping up. The last time I looked, inbound container volumes did ramp up 4 or 5%. And that's a big number when you consider, you know, the scale and scope. And part of that is our global competitors, adversaries, you know, with the potential tariffs coming in the next term of President Trump, they realize that there probably will not be this lag that we've seen between announcement of the tariffs and implementation. Odds are it Will probably be a day two implementation of tariffs by executive order. So they got from now to whenever, you know, to inauguration day or shortly thereafter to beat out tariffs is a dollar one is worth more today than it will be tomorrow. So if you have a chance to make a buck or save a buck in tariffs, you might as well get it over here. So retailers are pre stocking.
Jared Flinn:
So that's creating a little short term.
Jesse Runions:
It'll create a little short term bump. But it's important to remember, especially post pandemic from the ports, let's call it 70%, 80% of those containers don't even hit a truck except to dray it from the port to the rail. And some of that's just a yard truck moving it. But.
Jared Flinn:
Well, there's two, there's two avenues I want to go with this conversation. I want to talk about kind of the optimism, but then also the tariffs as well. If you look at the economy today though, right now we're seeing fuel prices down, Fed has dropped interest rates, how much? And stock markets going up. I guess in my mind all signals are pointing the right direction.
Jesse Runions:
And like I say, the American economy is, it was and it will be in a sound position so long as our policymakers don't do anything monumentally stupid to take that off the rails. Like I said, once you get past the political noise, you look at the hard numbers. The numbers never lie. Even the official metrics, they water out a lot of things that doesn't make sense to us. Consumer spending only jumped by this, which you look at your wallet. Well, they say 4% or 2% and you're down 20% that month. You know, reality versus adjusted because they take out energy. You know, all the things are that wildly swing from period to period.
Jesse Runions:
So I don't see this repeat of 2022. No matter what miraculous policies are made by policymakers, be it the president, Congress or whoever, you're not going to create $7 trillion or 3 or $4 trillion of new money into the economy in a space of 10 to 12 months. Not going to happen. There will be growth if that optimism holds. Optimism will breed growth. But the American economy is not what presidents or Congress members make it. It is what you and I. 340, 350 million people.
Jesse Runions:
We're the ones that make this economy work.
Jared Flinn:
But isn't it influenced though by the decisions of Washington?
Jesse Runions:
Yeah, you can apply any monetary number on that, but it's going to be less than a third in the end. Why do you make your business decisions? Because we have a certain president. Because your favorite person is a member of Congress or because you see a business opportunity, you have the capital to do it. So in the end what makes this economy good is the individual, you know from the consumer, you know, a law abiding citizen paying their taxes, making their paycheck, spending their money at the store, saving a little money, investing in their money. That's what makes our economy go. And then you get into the innovative products that companies I'll use you as an example bulk load you what 14 years ago? 15 you've seen an opportunity to deliver a new service to market or a better service to market. You did you made money. Did you do it because Barack Obama was president or did you do it because Jared Flynn had an idea? So when people start talking about politics, it's a non starter with me.
Jesse Runions:
Politicians more often than not take credit for our work.
Jared Flinn:
And yeah interesting. The other one, another big question. I want to talk about tariffs and I think we can camp out on this one and it's been a hot topic but also for right reasons many different ways. I'll ask several different questions here and have you answer them. I was on a trip a couple months ago in Idaho and we did this vlog. It's the John Pocock video that we put it's on our YouTube page. Really encourage you to go out and check it out. But John Pocock talked about the rise the cost of semi trucks being a lot related to tariffs steel but he was saying he made a comment I don't want to put words in his mouth but I thought it was something along the effects that like one of the big reasons cost of these trucks got so much expensive and trailers were because of these tariffs on steel.
Jared Flinn:
So that's number one. Then also two tariffs like there's a lot of these talks in Washington that there's going to be tariffs put on. How do you see that impacting the economy and overall but also just for the readers and I just want to dumb this down because I think if we make I want to make this stupid simple first, what exactly is a tariff and what did Trump do early on with tariffs that positively affected or negatively affected the economy?
Jesse Runions:
I'll take this in the reverse order. If you go through the history of the United States, we're a trading nation, we're an agricultural nation, we're a manufacturing nation. We weren't always that way. When we first started we were largely agricultural so we depended on exports. But when you start putting arbitrary tariffs, when you start irritating your Customers, they're going to respond.
Jared Flinn:
And a tariff is a tax, right?
Jesse Runions:
That is a tax.
Jared Flinn:
So that's a tax on. I mean, it can be exports or imports, but if.
Jesse Runions:
Typically import.
Jared Flinn:
Yeah. So if something's getting imported, there's a certain tax on that. Good. That gets paid to the federal government.
Jesse Runions:
You know, they're talking about the. The whole world or I can't remember, but all other countries tax or the tariff of 10%. So you're going to buy a TV for 100. There's going to be a $10 tax added onto that to the existing tariffs. And the taxes you're already going to pay at the register. So you're going to pay another $10 for that TV. If the retailer does not absorb that cost or the manufacturer, that will happen. In some cases, the seller is going to absorb some of that cost, but that can only go on for so long.
Jesse Runions:
If their profit margins aren't high enough, again, it goes back to cash is king. It's the same for them as trucking. Eventually that's going to go away, though. It's like boiling the frog in water. They're not going to turn up the heat on high. They're going to just ramp up the temperature until they get their cost, their overhead into the price tag easily without driving away their customer base. I mean, that's the only thing you can do. And just talking about American history in general, if you go.
Jesse Runions:
And Wikipedia is the best place to do this because the sources is a great rabbit hole to just dive down into. Go into the list of United States tariffs, go all the way back to our founding. None of those, not one of those tariffs ever worked as advertised during the presidency of Andrew Jackson, let's say 1826. But I may have that wrong. There was a new tariff that the people that like tariffs are actually. I take that back. The planter class, the agricultural class, hated tariffs because they get imported goods, you know, they sell their cotton and they get imported manufactured goods back from Britain. Well, then New Englanders wanted tariffs so that they could be competitive with cheaper British manufacturing.
Jesse Runions:
In 1826, it created what was called the nullification crisis that started in South Carolina because it vexed that particular niche of the nation bad enough that it was hurting, but it was so bad, they intentionally. And they're the ones that created this tariff bill. They tried to make it so bad that their opposition wouldn't pass it. Their opposition was like, well, this ain't. This isn't so bad. We'll go ahead and pass it. You know, we'll play we're a game. And so it was actually a self inflicted tariff crisis by the people that oppose it.
Jesse Runions:
But it very nearly caused a civil war. Jackson threatened to send troops to South Carolina if they didn't reverse their stance and eventually negotiated out and you know, bought time until 1860. We're not at a risk of that anymore. But to get the point across, tariffs typically do not work as advertised by policymaker. There is, you may get the intended benefits but there is always, no matter what you do, no matter how good, there are always unintended consequences. And that's me personally. I disagree with an arbitrary tariff without calibrating and understanding what those consequences are in advance so you can prepare for them. And my opinion is the way the policymakers are not prepared for potential unintended consequences that we've already seen in history.
Jesse Runions:
Bush in 2001 or two did a steel tariff that didn't work out so well. A year later he ended up reversing it and admitting that it was a bad idea.
Jared Flinn:
So hey guys, we are getting so much interest for our Bulk Freight Conference 2025. You know, we started this two years ago. We've had two phenomenal conferences. It keeps getting bigger. Our first conference we had over 200. This last one over 500. We have a lot of people that want to show up. We want to make sure that you can get your ticket reserved.
Jared Flinn:
It's going to be the third week of April. We hope that you can make it. But go ahead. Right now go to bulkfreightconference.com and put your email address in there and we will notify you when tickets go on sale. That way you will be the first one to be notified before they sell out. It's going to be amazing show. We have a new venue that's going to be even bigger. We're talking actually having show trucks inside the venue.
Jared Flinn:
Breakout sessions and man, just a world mess to get you connected. I was just talking yesterday, had had dinner with a lady that was at the conference last year and just talked about the connections that she made and the business that she's doing now by meeting those clients face to face. So we want you to be there, man. Go to bulkfreak conference.com Enter your email address, get signed up. It's going to be phenomenal. We'll see you there. God bless.
Jesse Runions:
So and you were talking about trucks and tariffs, the steel tariffs. Your pickup still has a 25% if you had the chicken tax. If Honda or Toyota wants to make a pickup Truck you decide to go buy a Toyota Tundra tacoma. There's a 25% tariff that was passed in the late 50s, early 60s. It's casually called the chicken tax.
Jared Flinn:
Yeah, I've heard that just recently. The chicken tax.
Jesse Runions:
Yeah. Actually Wall Street Journal did a real short video, except explaining that if I think about, I'll send it to you and what is it? Short version? We decided to put a tariff on imported vehicles from Germany after World War II, particularly pickup trucks, the big threes. Like, hey, this is our market, you know, we need some protection. We put that on. Well, we sold a lot of chicken to Germany at that time. I mean we were the biggest producer of it. Germans like chicken apparently. So the Germans put tariffs on chicken and we lost that market.
Jesse Runions:
And the good news is we, we found other markets obviously, but we lost the market because of that tariff. And the tariffs, once they're initiated, are hard to get rid of. So we got a 70 year old tariff from the 50s, 60s, whatever the exact date was, because we thought it would do something. And actually the only effect it has is either a, you want to buy a real pickup, you know, as far as from Toyota or what have you has that tax or you go get a Honda that's actually classified as a car but kind of looks like a pickup truck.
Jared Flinn:
There were some tariffs didn't Trump implement in his prior administration, but they kept them because I kept hearing during the campaign that even Biden kept those tariffs.
Jesse Runions:
Some of those tariffs, particularly on green energy stuff, Biden kept solar panels. China has a bad habit of dumping the market. But like right now, what their Europeans particular, they're flooding goods to market as much to get cash into their economy because they, the regional and municipal governments ran up so much debt that is actually higher than ours proportionally that they need cash just as much as the next guy. So I suspect that, yeah, we'd like more market share because we lost quite a bit during the pandemic and in extending our lockdown so our productive capacity was gone. We need to revitalize our market share. It's probably not going to work. All they're going to do is provide parts to Vietnam to make a better product or go to Mexico with it to try to get around tariffs. You know, basically to put it in agricultural terms, they'll supply the flour and say you're in Mexico, you have a, you know, a finishing company, you're going to make the biscuit.
Jared Flinn:
Yeah, well, and that's where I wanted to kind of go with this because what does this really mean when you talk of tariffs or tariffs wars, especially for American agriculture because again, our listeners are bull callers a lot. I mean 90% of our audience holds agricultural commodities. But what is this going to do for since we are still a big.
Jesse Runions:
Exporter of the biggest buyers of bulk commodities. Corn, soybean wheat is the People's Republic of China. What happened the last time in 2018 we instituted our tariffs, they retaliated. The Trump administration had to revitalize or pump $30 billion into what the depression era Credit Commodities Credit Corporation and that basically buys the grain or subsidizes the farmer because of an event that has impacted their ability to sell grain or commodities in general. So we had to pour $30 billion. So all that the tariffs in that particular niche was, was pay for that.
Jared Flinn:
Just taking it here and put it.
Jesse Runions:
So on its face it was a resounding success. But when you get into deeper numbers, at the very best it was there was no gain. There might actually been loss in certain categories and you know, certain niche sectors would have posted profits. Hey, we love this tariff but overall I didn't, it, it didn't damage the American economy but it didn't really do anything for us.
Jared Flinn:
So what about when Trump talks about there's recently just trying to keep these manufacturing jobs going to Mexico and saying they were going to put a tariff, you know, if they keep moving down to Mexico on these cars coming back versus having made domest. I guess it sounds good because we're keeping those jobs domestically.
Jesse Runions:
We've been doing that for decades. And talking about Honda or Toyota, there's more American content than in a Japanese brand car than there is in an American brand car. So you're getting in semantics here. You know the pee in the shell game. This is what he's putting out there is political messaging for his agenda. Fine, that's great. But the reality is no matter what policy he creates, even a home run policy, there will be unintended consequences.
Jared Flinn:
Yeah.
Jesse Runions:
And that's something people need to be mindful of. And moving back to the bulk freight industry. Yeah. If the People's Republic of China retaliates using the past as a basis, it's we're going to feel a pain now. The flip side of that is China to have more food security and be less dependent on us to make China great again. You ever notice the similarity in populist messages? We need, we need better security. We need not to be as dependent on the United States. And that's exactly their messaging, you know, condensed.
Jesse Runions:
If they Retaliate. The good news is, at the beginning of this year, they already canceled a bunch of orders in favor of Brazil, primarily Argentina, in Russia a little bit. But that's under the radar because Russia's kicked out of the SWIFT system right now. And they have to do that a little more opaquely because China cannot afford to be kicked out of the monetary system that uses the dollar as an exchange. We're their biggest customer. And that, you know, that's the biggest thing. If you're going to craft a radical policy, craft a message to go along with that, to say, look, here's what we need to do. You know, either you play with us or play without us.
Jesse Runions:
And as much as China wants to think it can play without us, it can't. They need us more than we need them. And that's one point I will agree with Trump on a hundred percent. But on this. A tariff is a tax. Eventually the citizen, the consumer, is going to bear the brunt of that tax. It may not be immediately, but it will be down the road. And again, when you initiate tariffs, they're hard to pull back.
Jesse Runions:
You know, the Bush tariff on Steel in 2002 was an exception. He pulled the plug. This is not working the way I intended. Let's shut this down. Let's. Let's do some negotiating and try to get a better, you know, get a little better formula here.
Jared Flinn:
I'm going to go out on a limb and say this, but it's almost like allowing the free market to do what the free market does, because regardless if you put a tax again, somebody's going to pay for it.
Jesse Runions:
Even with the tariff, the free market is going to do what it does. Why do all these economic indicators go by the wayside over time? We're human beings. We're always looking for a way around obstacles. So what's going to happen with this if it becomes an obstacle? I think it will to some degree. But if it becomes an obstacle, us, you know, we're the wily coyotes, and most of us don't hit the wall. We're going to try to figure a way to go around that obstacle.
Jared Flinn:
Yeah, it's so interesting.
Jesse Runions:
Even the tax code, why do these new tax laws keep going in and there are new, different, you know, various enforcement features keep going in the tax code because we figured out a way around them. It works the same way in economy. Policymakers put a barrier to commerce. Those that have an idea and they want to make money, they're going to figure out how to go around that. Now One thing you will have, and we had this in 2018 too, is a lot of companies applied for exemptions from the tariffs. There was two things that undermined our negotiating position and the 2018 tariffs, the long gap between announcement and implementation and exemption to tariffs. If you have so many exemptions, then the tariff's not going to pay for itself.
Jared Flinn:
You said a little bit ago, I just want to turn a little bit and then we'll kind of close on this when we're talking about tariffs on this. But you watch the US dollar, we've had conversations on how you watch it against other currency. I've heard where some of these other countries, they're trying to get away from the dollar. Like I think there was a, there was an article I read where you know, they're Russia but it had something to do with trying to get even South America to get away from the dollars.
Jesse Runions:
Brazil, Russia, India, China and I think now Singapore is the S. India's publicly stated. It has no animosity towards the dollar. It explores different ways to facilitate its trade. Brics, you know, is one more venue because BRICS wants to create their own dollar. The problem is China has a non convertible currency. It does not have transparency. It has capital outflow controls.
Jesse Runions:
They can't do it. Russia was before its invasion of Ukraine the 12th largest economy in the world. They're not in a position to do it. Brazil is not in a position to do it. India will be somewhere down the line if they want to become the world's reserve currency because they do have, they can make the rupee a convertible currency if they want to. They just choose not to so far as their economy expands. Because now they're the world's largest nation, not China. Eventually they will try to get into the reserve currency field and just because of their history, I, I see that happening.
Jared Flinn:
I guess my qu in my question might start hearing this. It was just talking about is there, is there anything to be worried about with the US currency not being, you.
Jesse Runions:
Know, we discussed this in my first podcast. So what happens if we're no longer the world's reserve currency? Now as an American, I like being the world's reserve currency. I like that. But what happens if we no longer are? It means our Congress has to balance budget. It means immediate pain for us in the short term to fix our financial affairs. But in the long term, once you get in a probably a 10 to 20 year period of pain, depending on how innovative people are, it might be a little less but not much. But eventually we're back to where we were. We start over again.
Jared Flinn:
Okay, that's interesting. Well, kind of to segue out and we'll kind of finish the conversation here as I always do, Jesse talking with you. And I know we always kind of say it's a broken record, but like if you're, you're working for a truck company, brb, what are you guys looking at? Or what should our listeners be preparing for here in 2025?
Jesse Runions:
The same thing we've been doing. We look at cutting and controlling costs, enhancing profitability and preserving cash. Cash is everything. It's not as important in a, you know, when you're in a boom cycle, you can, you can get cash. Banks are slinging money away, you know, usually the low interest rate. But when you're in tight times, you want to have that cash to fall back on it don't have to be immediately accessible, but you have to have that as a resource. And if you don't have cash, why do businesses go out of business? Doesn't matter what their P and L says. It matters what their bank account says.
Jesse Runions:
They ran out of cash to pay bills.
Jared Flinn:
The Fed as we're doing this recording, they've done a couple of cuts. Do you forecast seeing more Fed cuts? And what does that do for cash flow? What does that do for interest rates?
Jesse Runions:
What does that do for truck companies of the year? And probably first quarter they will, they will probably do another couple 25 basis points or a quarter percent cut. I don't see them do more. They may even split to do a 125 or 12 and a half percent interest cut on overnight funds rate. And that's not the, you know, that's not the interest rate you pay at the bank. But that is what banks use as a metric. And that rate depends. That determines how much their money costs when they borrow it in the short term from the Federal Reserve. The overnight funds rate.
Jesse Runions:
And we could have a whole hour discussion on how all that works. And I only know like this much. So overall, you know, our economy is good. That's why they're having the cut. But there are two contradiction forces. You were talking about the price of steel and how much trucks have went up in cost. I suspect even more so than steel wage costs is a bigger inflation factor in production of anything right now than it then the actual input products to go in it, the materials, the commodities. Wage inflation significantly went up.
Jesse Runions:
Why do we want more money? Because stuff on the shelves has went up a heck of a lot more than that. 2.8% that the Fed throws out at us. It's the difference between absolute prices and adjusted inflation. Absolute prices is the absolute. What you and I see when we're looking at a shelf and we're going to buy, you know, that bag of flour or the bag of sugar or, you know, in my case, being an old man with a little dog, the Stouffer's, a quick fix meal.
Jared Flinn:
You know, do you see this tough question, but do you see me talking about wages? Do you see that getting softer?
Jesse Runions:
The only reason it'll get significantly softer is if our economy starts rolling backwards. Yeah, there are some hints of the economy or the wage or the job sector cooling off a bit. That's not a bad thing. But if we roll, if you start seeing that nosedive, that means productivity is about the. Is already dropped off. It's just not registered on the thermometer yet, so to speak.
Jared Flinn:
Yeah.
Jesse Runions:
You know, so the problem is, and this is something, you know, everybody's been raising sand over tariffs, the immediate overnight deportations, our birth rate has declined. We don't have enough native quote unquote labor to throw in the workforce and keep the pressure off employers and producers. So any cooling we've seen in the employment market has been immigration driven, legal and illegal. So mass deportations likely will put more pressure on wage inflation, not less. Now, if the economy slows down at the same time, the tariffs have a negative effect that the naysayers have been having and that is a possibility. Then no, it might actually equalize, but that'll be more accident than design.
Jared Flinn:
Yeah, interesting. Lastly, is there stability now in trucking or are we still seeing trucking companies?
Jesse Runions:
Are we still seeing a keep the tires aired up? There's always stability. But no, I just had to.
Jared Flinn:
That was a good pun there.
Jesse Runions:
Right now, trucking as a whole, all segments and sectors are over capacity.
Jared Flinn:
Still over capacity.
Jesse Runions:
Marginally, it's over capacity enough. You can call it that in the national picture. But now it's shrunk enough that the bigger markets, New York City, Memphis, even the Springfield market probably noticed a little bit of shift. So whatever the majority delivery day is all these trucks. Trucks come in market. So you have a bunch of trucks in market. You probably see this on your boatloads board if you pay attention to the ebb and flows. So today I'm a shipper and I need a truck.
Jesse Runions:
I don't have to pay near as much because there's plenty of trucks trying to get out the area. Tomorrow or Wednesday, it may be right, the opposite. There's 10 trucks for 20 loads. Well, how do you get a load moving down the road when there's more loads than trucks or you start pouring money on it? So you're going to see that fluctuation. And I think a lot of the things that we're seeing posted from DAT dad is a great real time indicator for the bigger segments. I think a lot of what we're seeing there is the fluctuations and they're just having to hit it on the magic day where the average is a little lower for the bigger markets because you're a trucking company, you're, you're there and the more trucks and loads day, you got a choice, take a load. It's probably a lost run and that's not really doable anymore. Just move that truck somewhere where you know you can get a good paying load and keep on trucking.
Jesse Runions:
And so because the dead head, the lower the loss run, the back haul rate versus head haul rate, that's about to go because the brb, we don't have a back haul rate, we have a load rate. It still costs the same to run that truck down the road no matter where you're at. So you're going to see more pushback on the backhaul rates. So I. And that's going to have a positive effect down the road. But even Knight Swift said we can't do it anymore. I mean, they were the worst ones. Oh, you know what, 80 cents a mile, we'll go ahead and take it.
Jesse Runions:
We don't care. You know, we want the, we want the lane and we'll do this for a length of time for you. But you know, contract renewal. Just bear in mind, well, you're a shipper. What do you do? Go take the company you've been doing business with. You know, it's double the cost or maybe save half your cost and a little bit of headache to go with it. You know, insurance industry seen the same moves there too. There's two players there that have been really aggressive in cutting, cutting their rates at a loss run.
Jesse Runions:
I'm sure you're more aware of that. Yeah, yeah.
Jared Flinn:
I was talking to a friend recently that he, a friend of mine who has a friend that's in trucking and they're in the reefer side and I'm, I don't know where they're located, but he said that they were struggling. It was still a struggle out there.
Jesse Runions:
Yeah. In refrigerated freight for us in bulk commodity, the average rate cost per mile is still at $3 and that's you know, loaded, empty. Yep. What have you. Of course you're dragging a parachute down the road. You're. Unless you do some extreme stuff to improve Your aerodynamic signature, 6 is about the best you're going to get. These big fleets are getting 8, 9 and some 10 miles per gallon.
Jesse Runions:
Yep. So. But vans I was trying to see line haul rate $66 net fuel down $0.01. So there's no fuel surcharge there. So we can call it maybe two. Two and a quarter. Yeah.
Jared Flinn:
Two and a quarter. Yeah. If you do press a fuel, that's.
Jesse Runions:
An express lane for bankruptcy for most smaller companies. And that's the average. You know, there's always a really low rates that really water this down that nobody's going to touch. Not anymore. Yeah. So you see here Reefer 204 and a reefer unit costs significantly more than a hopper. And hoppers went up. So a basic spec hopper Pre pandemic is 45 to $50,000.
Jesse Runions:
Now you can't touch one for less than 75.
Jared Flinn:
What does that do for a company like BRB? Are you all holding on to those older trailers longer versus getting new ones or that?
Jesse Runions:
And we're eyeballing other suppliers. We had a traditional relationship and we probably still will. We're going to fight to do that. But it's about price point. You know, start looking at suppliers because right now the bulk commodity space is pretty even Steven demand all you do. If you want to know what the bulk commodity space is doing, go look at used trailer prices. If they're way higher than they should be, you know that we're still tight in demand, the capacity.
Jared Flinn:
So what are they right now as we're.
Jesse Runions:
Last time I looked a 2020 tempty was still going for 37 to 45. You know, there's some lower. But as far as a bulk commodity hopper, you know, the hull, you know, wheat, mids, rice meal feed, that kind of thing. It's a decent tonnage.
Jared Flinn:
So it's relatively still pretty high on.
Jesse Runions:
Oh yeah. And then of course new trailer prices. I suspect new trailer prices will start going down, but they're not yet again that part of that is their own input prices. No matter what the market forces are right now. Yeah, they still got to pay their bills, they still got to pay their payroll, which is probably their biggest cost. And then of course, you know, the buildings and then the steel, the aluminum inputs and that's significantly higher post pandemic. So they're under cost pressures just like a trucking company is the pandemic, even the playing field between big companies and little companies, the big companies can no longer command those cost saving synergies to run at a loss. Anymore than a recent podcast, the nuclear verdicts.
Jesse Runions:
That's, that's hurting the bigger companies because Warner's two big lawsuits, I don't know if that's going to be in their overriders range of coverage. I don't know what the limits are or if they're going to have to shuck out cash for them. They have to throw out some cash. That's going to make a wave.
Jared Flinn:
Yeah. Well, we can go on and on talking these topics. It's always, it's always fun. But I think we'll kind of wrap it up there on a fun note. When we, before we started the podcast you were talking about you, you have someone you consult when you talk about a lot of this and we're going to throw the image up on the screen. But your, your sidekick, your pet.
Jesse Runions:
Oh, P.O. montgomery.
Jared Flinn:
Oh Montgomery. Yes. I'm gonna have Garrett throw that up there, but I just want to throw up just for a little humor. But you're talking that a lot of times you really consult with Po when you're, when you're talking about or looking at this data and statistics.
Jesse Runions:
Absolutely. You know, he's got a brain about this big and he comes up with the wildest stuff. And of course what I mainly consult with him is on the taking of pictures. You know, I go to him and I say hey Poe, I got this idea and I'll tell him what I'm thinking and we'll go to taking a picture, doing a little, you know, a little mini shoot, whatever you want to call it. And he'll do everything. And it's, it's so funny as told you earlier, you know, he has his own Instagram Po Montgomery and two underscores because somebody got the one. I think he's world famous. 50 followers or something like that.
Jared Flinn:
Well, we will throw a pose Instagram link or handle on, on the link below if you want to see. We'll actually show a picture as well. But yeah, I thought plug that we have two dogs ourselves and their children. So I, I totally get that. So but anyways, Jesse, man, thanks again for always coming on making the drive up here to Springfield down from, from your neck of the woods. Merry Christmas to you and your family and man, happy New Year.
Jesse Runions:
Good to be here.
Jared Flinn:
Merry Christmas to you. Thank you. What I found fascinating with tariffs. It's really woke in my eye because I do believe in tariffs. But it's interesting that really the people that pay in the long term tend to be the citizens of that country or state that impose those tariffs indirectly. It affects us one way or the other and, but I don't believe that. I think that they're necessary. But it was just an interesting take.
Jared Flinn:
Jason Miller, who we had on our podcast earlier this year, professor at Michigan State. He argues strongly, I think I'm not going to put words in his mouth but I think he does a lot of postings about this but a little bit too the negativity of them of what that what happens with tariffs as well. So I don't want to get a battle going on that. But it's just, it's interesting perspectives on tariffs. So I think for us we have to fully understand tariffs so we really understand how they affect our business.
Tyler:
That's a good point. I, I'm, I think we should get a battle going in the comments. I want to hear just your all's perspective. Let us know in the comments how you feel about them. I think this is going to be an ongoing topic of conversation over the next four years of this incoming administration and yeah, I think, I think there's pros and cons but I think right now we're just discussing like you know, which one outweighs the other and yeah, yeah, I think we're just gonna. There. There's a lot of things wrapped up into this but I think that it's just one of those decisions that bleeds into every single aspect, you know, Ag Freight, you know, parts cost, fuel, everything. So we'll, we'll see a lot of changes coming.
Jared Flinn:
Yeah, yeah. Comments in below. I would like to. I always love listening I reading those comments anytime I see them. It's always good to hear from our listeners and their views and takes on that. A couple things before we head out of here. The 2025 bulk freight calendars. Bulk loads.
Jared Flinn:
Calendars are out man. Great job. Was this Joe that did these?
Tyler:
This is actually Garrett. Garrett, Joe. They put these together and man it's every year they get better and better.
Jared Flinn:
These are world class.
Tyler:
I'm going to give you a sneak peek. I'm not going to go through all of them, but if you want a free calendar, you can just drop down below, click the link, just let us know your address and we'll send you a free calendar. All you have to do is just subscribe to our YouTube channel and we'll send you one completely free.
Jared Flinn:
Yep. I think some people think sometimes it's a gimmick or we're going to try to do something. But yeah, absolutely free.
Jesse Runions:
I can tell you.
Tyler:
Nick who sends out all the swag will tell you it's not a gimmick. We send out so much each week.
Jared Flinn:
I think last year we had to order them again, didn't we?
Tyler:
We did a second order. These things are cool. Definitely good. A good, cool thing to hang on your wall in your office or you know, in your kids room, whatever. I know everybody likes big trucks. It's something cool. So if you want a free one, simply drop down below in the description. You can click the link and let us know where to send it to or you can just simply message us, email us, call us, however you want to get ahold of us and we'll make sure to send you one.
Jared Flinn:
Speaking of Christmas, like I said earlier in the beginning, Semi Sam Christmas. This was I think our second book that we released. But it's out there and available if you would like a copy. We will give them away to the first 10 people that comment below. The first 10 comments that want to semi sand book, we'll send you one for free. Otherwise you can go to Amazon.com and they're available on there to purchase. But it's, it's that time of year. What better gift to put in a stocking for a child? If you're ever struggling like I am trying to figure out good book or good gifts for kids, whether it's nieces, nephews, especially that under the age of 10, semisam is that perfect book to give.
Jared Flinn:
You will be thanked for it.
Tyler:
Yeah, and they, they all love books. I mean all kids love books. Yeah, but especially if you can give them a book or a piece of content that teaches them a little bit about trucking or what you do, what industry you're in. I mean all the better.
Jared Flinn:
Also, we just released Semisam, the audio one which I narrate and that is available on our YouTube channel. You should be able to click below and you'll be able to do that. So if you do have children that would rather watch instead of the actual book, either way, you can go down there below. But the audio version narrated by myself is available on YouTube. It should be down in the show notes below. So make sure and click and get a hold of that as well.
Tyler:
First 10 people go ahead and comment below to get your semi sandbox.
Jared Flinn:
Yeah, cool. Just. Yeah, a couple of things man. Seems like we got a list on here, but I want to get all these knocked out. All the data that we talked about today with Jesse Ryan is awesome. If you don't know, Nick Matheny office has now pushed out a weekly freight report, bulk freight, specifically to the bulk industry. That report is free to get. How do they get it, Tyler?
Tyler:
They can simply go to our YouTube and you can watch the video or if you are not on bulk load, simply sign up for a free account. You don't have to have a membership to get this update or anything like that, but whenever you sign up for a free account, you can. That means that we'll go ahead and email you it every single week. And if you are, if you do already have a free account and you're not receiving it, just let us know down in the comments or get ahold of us and we'll make sure that you receive that newsletter every week. I think Nick does a good job. We just started doing it not too long ago and every week he's improving and we're trying to figure out what data to include in it that you guys want to see and we've had great feedback on what to include and we're trying to get nitty gritty with the bulk freight rates and show you guys data that can help improve your business decisions and future outlook of your company.
Jared Flinn:
Yeah, the sole purpose of this is just like everybody else, you want to know what's going on and more importantly what's happening in there. Nick does a really good job every week. Updates it with trend lines that we're seeing. If we're seeing loads go up on the board, loads go down, rates per mile and all that. So yeah, make sure you can follow on our YouTube channel. Is. I thought they. Does he email a report out too? Is it all YouTube?
Tyler:
Yeah, we email every week.
Jared Flinn:
Yeah. And it will email a report out as well. So. And then last but not least, we'll say this every, every episode. Bulk freight conference, man, we've spent probably 15, 20 hours just this week planning on that. It keeps getting better and better. We actually are about to secure our keynote speaker, I believe and it is going to be exciting regardless. Like this is event you don't want to miss.
Jared Flinn:
All the people that are going to be in attendance, other shippers, brokers, carriers from all over the country. You will make new contacts, build relationships and you will honestly excel your business.
Tyler:
Yep. And you can get your tickets today, bulkfreitconference.com simply go there. You can hit the button that says tickets, purchase your tickets, book your hotel room right now. We have good deals going on right now with hotel rooms, 50% off room rates. But we want to see you there if you want to network, learn, educate yourself, learn ways to grow your business. Definitely want to be there.
Jared Flinn:
Incorporating with a vacation Branson, it's one of the. If you've never been, it's an awesome town to bring your family to good, clean family fun. There's shows, attractions, Silver Dollar City, fishing, boating. I mean it's endless. So. So Matt, if you can working into a good family vacation and it's a win, win.
Tyler:
It's kind of like a country Vegas without the gambling. Yeah. They got shows, got attractions, they got everything.
Jared Flinn:
Yeah, it'll be good. So yeah, make sure secure the bulk freight conference. I want to personally see you there and we look forward to it. It's going to be exciting. So cool. Anything else where we head out of here?
Tyler:
I think one last thing. We will be at the Nebraska Ag Expo December 9th through the 12th. So if you're there, reach out to us and we want to see you come by our booth and we're going to have a cool show rig. Jason Hummus with Hummus Trucking. He's going to drive up his rig and put it in our booth and we just want to hang out with you, chat with you and answer any questions you have.
Jared Flinn:
Cool as always. As we come to a close on this podcast, we always want to open up a prayer. We have a prayer
[email protected] where you can send those in. We just received one this morning and we take this very serious. We know that there are real needs and struggles out in our industry and one of the best things that we can do is lift our feather fellow brothers and sisters up in prayer. So man, if you would be so bold, send us a
[email protected] these are kept in house. We don't share these with anybody else, but we have a team that prays over that. And if you are struggling in any parts of your business or life, family, we, disease, cancer, we want to be there and pray for you.
Jared Flinn:
What's the worst that's going to happen? What's the worst that's going to happen, man? Send us a prayer. Let us boldly pray for you and petition your prayers to the Lord. We know that when we proclaim and profess our prayers that the Lord answers them. So that's my encouragement to you to do that today. And as always, I'll close this out in prayer. Father God, we thank you for this season thank you for this season where we get to spend more time with family and really, more importantly, learn more about you and just celebrate your birth on this earth, that you lived a sinless life and died on the cross to pay for our past, present and future sins, Lord. And we are forever grateful for that. Lord.
Jared Flinn:
Be with our members through this time and keep them safe. And we pray over our trucking members in this industry for your heavenly and precious name. God Bless. Thank you as always for listening to the Bulk Loads podcast. If you haven't yet, make sure and hit the subscribe button. That way you don't ever miss an episode. And if you can do us one small favor, share this just with a few people, other people that can benefit from this. Not for us, but so they can better their business.
Jared Flinn:
That is our number one goal. Intent. Thank you you so much. And as always, God Bless.
