Since 2016, FreightWaves has established itself as a go-to resource for all things related to the trucking industry. This episode of the Freightvine podcast dives into the background of Craig Fuller, CEO of FreightWaves, and his perspective on the past, present, and future of an industry that is undergoing radical change.
Throughout his career, Craig has been surrounded by the industry; his grandfather, father, uncle, and brother have each been involved in trucking. With a desire to continue harnessing his own entrepreneurial capabilities, Craig founded FreightWaves in 2016 with the initial plan to create a futures market based on trucking. FreightWaves hired its own content curators to help create liquidity in the market – a necessity for establishing a financial market. In three years’ time, FreightWaves had solidified its reputation for providing trucking-related market insight, which led to the creation of SONAR, a proprietary, software-as-a-service trading screen (akin to a Bloomberg Terminal). These two evolutionary steps in the business ultimately enabled the trucking industry’s first-ever futures trade in 2019.
After this walk down memory lane, host Chris Caplice asked Craig to weight in on the long-term trends in the industry. For example, is the industry going to shift away from annual bids and other legacy behaviors? Craig anticipates evolution over time, whereby the industry relies on the spot market to a greater degree because technology proliferation is optimizing the capacity and price discovery process. However, he predicts it won’t be shippers meddling in the riskier nature of the spot market; they will still seek contracted rates via brokers and third party providers, who are far superior at leveraging technology – as compared to asset-based providers.
At the end of the day, Craig believes that the innovation of key third party players will solve problems that the industry never wanted to solve because of risk and expense. Data is more readily available – as a result of Electronic Logging Devices (ELDs) – and these data will further the innovation required to solve the driver shortage and driver utilization challenges that plague the market. Traditional consolidation tactics are unlikely to drive increases in profitability for asset-based carriers, however non-asset based brokers and third party providers will likely pursue profitable consolidation opportunities given the continued market fragmentation of over-the-road carriers.
This episode recap was written by Reid Johnson, Product Manager, FMIC.
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Market Update & Forecast: 19 December 2019
Dry Van
Active rates were flat; spot rates increased 1%; and replacement rates decreased 1.5%
Temp-Control
Active rates were flat; spot rates were flat; and replacement rates decreased 2%
Intermodal
Active rates are flat; spot rates were flat; and replacement rates increased 4%
Overall, all indicators still point to softness in the market, with the exception being Intermodal. If this trend continues (i.e., positive replacement rates), active rates will go up. Celadon — a carrier with 2,600 trucks — recently declared bankruptcy and this will undoubtedly impact some shippers, but the trucking industry as a whole remains soft.
