Good morning or afternoon, wherever you are! 

We trust the New Year has been going stellar for you– and if not, that’s ok, too. It’s been a wild two weeks already into the New Year, and we’re not just talking about the naked fella from Alabama who cannonballed into the Alabama Bass Pro Shops Aquarium.

♟️ We’re all in another chapter of the big rig chess game. Last year, we saw freight volume resilience that'd make a bulldog proud. But this year? We're looking at a potential shift all about the almighty consumer's dollar.

Big whigs at JP Morgan are saying consumers might tighten those purse strings this year. Piggy banks aren’t as fat as they used to be, wage hikes are hitting a plateau, and there's less itch to splurge.

This means fewer toys and gadgets being bought, which translates to fewer loads for the trucking industry to haul.

A consumer spending slowdown in spendin' might just cool off inflation. Still, it's a signal to keep our heads on a swivel and adapt. 

🐟️ We’re taking a page out of the Bass Pro Shops Guy this year– we’re cannonballing into whatever the economy throws at the trucking industry. 

This week’s Highway Hustle is brought to you by Upside. Over 500,000 folks are using Upside to save what could be hundreds of dollars on gas per year.

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⛽ Joe’s Fuel Corner

• Avg. Gas Price: $3.11

• Avg. Deisel Price: $396 (down $0.10 from December!)

• Priciest Gas State: California ($4.59)

• Cheapest Gas State:  Mississippi ($2.66)

Survival of the Fittest in the Capacity Crunch

2023 was a rodeo, folks. We saw a net drop of 2,646 trucking authorities – that's more folks hanging up their trucker hats than joinin' the parade. 

For folks not in the biz, a trucking authority, basically, is the official green light from the Federal Motor Carrier Safety Administration (FMCSA) that allows truckers to haul freight as their own boss. It's like a badge of independence in the trucking world. When you have it, you're the king of your own road.

So, that’s about 2,646 fewer independent drivers out there. It's a sharp U-turn from the boomtown days of 2020-2022. For example, in 2020, we saw a net increase of 32,234 new carriers jumping into the market. The following year, 2021, was even wilder, with 77,445 new carriers. And in 2022, the increase was 1,712 carriers. That’s a whopping total of 111,391 new carriers within three years!

However, this might not be a trend reversal, but rather a consolidation. In other words, you can only run so fast until you gotta catch your breath a little. 

Still, the shift from a surge to a slump reflects a significant change in the industry's landscape. It sounds like a country song of heartbreak, but here's the twist: it could be a chorus of opportunity for those still turning diesel into dollars.

🎢 Current Rates and Market Dynamics

Rates have been a rollercoaster. According to the DAT Truckload Freight Volume Index, a leading industry indicator, the national average van rate in late 2023 was around $2.40 per mile 📉, a noticeable dip from the highs of around $2.85 per mile in mid-2021 📈.

These rates are pressured by various factors, including fuel costs ⛽, supply and demand dynamics ⚖️, and the overall economic climate 🌍. With fewer trucks on the road, one might expect rates to climb 📊.

However, shippers are pushing for lower rates, aligning with the current supply-demand scenario 🤝.

🚚 Strategies for Truckers to Mid-2024

Looking ahead to the middle of the year, truckers should anticipate a more stable, if not spectacular, market environment 🔄. It's not going to be the wild west of 2021, but it's not the desert of 2023 either.

🌵 The Highway Hustle launched in the desert, by the way.

To thrive in this scenario, truckers need to be agile and adaptable 🤸‍♂️.

Here are a few strategies:

🔄 Diversify Freight Options: Don't put all your eggs in one basket. Look for different types of loads and routes to balance the ups and downs of specific market segments.

⛽ Focus on Fuel Efficiency: With diesel costs still a concern, maximizing fuel efficiency can significantly impact profitability. It sounds like a no-brainer, but it means actually putting the work in to map out not only the best stops, but best times of day to travel.

🤝 Build Strong Relationships: Cultivate good relationships with shippers and brokers. In a balanced market, those connections can give you the edge in securing better rates and consistent loads.

💻 Leverage Technology: Use modern logistics and fleet management software to optimize routes, reduce idle time, and manage expenses more efficiently.

📚 Stay Informed: We got you covered here!

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Diesel Prices: The Wild Card in Our Deck

Diesel is the lifeblood of our rigs and the bane of our balance sheets. Diesel prices have been soaring like a hawk in a heatwave, hitting our profits hard. But there's a change in the wind, and it's bringing some good news.

Since September 2023, we've seen those pesky diesel prices start to back down from their peak. According to the energy experts over at GasBuddy, we're looking at a possible peak of around $4.3 per gallon by March 2024. This might not sound like a big drop from the nosebleed heights we've seen, but every cent counts.

This might even address the consumer apprehension described above. Why should Joe Consumer care about diesel prices? Here's the scoop: lower diesel costs can lighten the load on everyone's wallet, not just ours. When we're not bleeding cash at the pump, it keeps the overall cost of transporting goods down. 

This, in turn, can mean lower prices in stores and online – a relief for consumers who've been feeling the pinch. When folks have a little extra cash, they tend to spend more, which means more goods moving from warehouses to stores.

… and who's hauling all that? We are. More spending by consumers can translate into more loads for us to haul, keeping our wheels turning and our pockets a bit fuller.

Let's not underestimate the power of diesel prices in shaping our fortunes. They're like the wild card in a poker game. If they play right, we could be looking at a hand that's more about thriving than just surviving. 

Keep a sharp eye on those fuel gauges and market trends because in this game of trucking, staying informed is key to staying ahead.

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