9 ms·

On Trucking

145 points by snowypine 4y ago

jborichevskiy 4y ago
Wonderful writeup. Thanks for sharing!
- snowypine 4y ago
  Glad you liked it!
readthenotes1 4y ago
Pet peeve: every time I get on the interstate I think they should have driven 90% of the 18-wheelers on to a train. Or at least have tracking software that fines them heavily for leaving the slow lanem
- melling 4y ago
  While much more efficient, I believe freight trains are close to 100% capacity.
  - cesnja 4y ago
    Then just add another lane, right?
    - PedroBatista 4y ago
      Who?
- forgetbook 4y ago
  Isn't there a 'last mile' problem that differentiates trucks and rail?
  - mjg59 4y ago
    Given the density of the US rail network it's rather more than "last mile", but yes - rail depots are not where you actually want the goods to be in most cases, and you need to do something about that. The question is more whether it would be more efficient to only truck goods as far as the nearest rail freight node and then have it shipped that way rather than via interstate. The article here suggests that's not viable because many vendors are shipping quantities that aren't economically viable given rail freight costs, but doesn't really address why that's the case.
- UncleEntity 4y ago
  Pet peeve: no matter what you do in a truck someone gets mad. You’re either driving too fast or too slow. You try to stay in the slow lane but catch up to the person going 45 on the interstate who speeds up as soon as you get next to them trapping you in the fast lane until you give them ‘incentive’ to let you back over. I could go on and on but my government mandated 30 break was over six minutes ago and there’s people to annoy on the two lane highway I get to drive on until Texas.
  - nerdponx 4y ago
    People are generally oblivious idiots, but I've also seen some truly insane truck drivers on I-84 in CT, stuff like tailgating people in the left lane at 70+ at night.
    - dazc 4y ago
      Indeed, it's as if some truck drivers are guilty of the same bad behaviour as regular car drivers.
    - UncleEntity 4y ago
      I’ve seen countless truly insane car drivers over the years where I honestly thought people were going to die. Some did die. I’ve also have seen some truck crashes where I’m like “how is that even possible?” The thing with truck drivers is the bad ones don’t last very long. It’s almost impossible to get another driving job after getting fired for being a shitty driver. —edit— And law enforcement holds professional drivers to a higher standard so there’s no talking your way out of a ticket if they see you doing something stupid. Most of the time that’s when they get all up into the logbook and full on level 1 DOT inspection on the truck.
- PedroBatista 4y ago
  That’s rich coming from a 4wheeler. And why do you think they sometimes enter the fast lane? ( which is legal in many roads and some circumstances)
yafbum 4y ago
Great rundown. "Factoring" sounds a bit like a euphemism for payday loans!
- simonbarker87 4y ago
  Factoring is very common across sectors with long payment durations. It’s amazing for manufacturing businesses for example who may not get paid for 30, 60 or 90 days after shipping product. The great thing (and where it is nothing like payday loans when done correctly) is that the responsibility and risk of collecting payment falls to the factoring company and not you. We happily factored for years just to offload payment chasing for a tricky customer, well worth the 2%.
- adaml_623 4y ago
  There was an interesting sentence in that section. I thought that factors shouldered the non-payment risk but article seems to imply that non-payment would come back and bite the truckers
  - snowypine 4y ago
    Yeah, I had to heavily edit the piece to ensure that it wasn't a mini-novella. So, for more context on factoring, there are two types - recourse and non-recourse. Recourse factoring means that the factoring company can come back and ask the driver for their money back. Generally, the rates for recourse factoring are lower (by 20-50 basis points only because the default rate in drivers is quite high). Non-recourse factoring is something that the industry is transitioning to. Most of the startups offering factoring today are doing non-recourse. The problem with that approach is that fraud rates rise exponentially. Not too sure how the landscape will look even 6 months from now as easy capital goes away.
coderintherye 4y ago
Awesome write-up. Would be really curious for insight into why truck purchase loans run 8-10% APR with 20% down. If anything, I'd expect them to be lower risk and easier to re-posses?
- jillesvangurp 4y ago
  Probably because it's a cut throat business and truckers operating on razor thin margins are more likely to default on their loans when they get into trouble. The second hand value of the trucks is not enough to cover that risk. A two year old truck has a value of course, but it's nowhere near the new value of the truck.
  - toomuchtodo 4y ago
    Correct! It’s like rent to own homes, when the operator knows the renter will default and won’t take ownership. The profit is the transaction duration. (family member is a truck driver)
- snowypine 4y ago
  I'd say it's more market conditions over anything else. Truck drivers generally have poor credit - they're not going to be able to come up with ~400k otherwise. As a result, you get lenders that charge more. Also, repossessing trucks across the country is kinda an issue. You might need to drive hundreds or thousands of miles to claim the truck which is a nightmare that carriers deal with on a daily basis.
- landemva 4y ago
  > easier to re-posses It can be difficult to locate a tractor when the operator who is in default on the loan/lease has all of the lower 48 to make it disappear.
mjevans 4y ago
"90% of owner operators fail in their first year - trucking is incredibly cutthroat." Maybe the disruption this market needs is a set of unions rather than just trucking companies. It would be nice if unions were limited such that... E.G. they could not grow to larger than 15% of the workforce for a sector in any single union. Contracts would need to be approved by... some number, lets say 2/3rds of all workers across all unions. With the 15% number that would require at least 5 unions and over 66% of workers to approve of contracts.
- barry-cotter 4y ago
  You have reinvented cartelisation or the trusts in anti-trust. Congratulations on your economic acumen[1]. [1] Sincere praise, not sarcasm.
  - prox 4y ago
    Are unions in the US the same as Trade Unions in Europe? https://en.wikipedia.org/wiki/Trade_unions_in_Europe https://en.wikipedia.org/wiki/Trade_unions_in_Europe
    - barry-cotter 4y ago
      Yes and no. So in both cases the aim is to act as a labour cartel to redistribute economic surplus from either consumers, firms or potential competition to insiders. But US labour law makes co-determination illegal. Having a company approved union is forbidden. Cooperation between firm management and union management is forbidden. Everything must be adversarial all the time. In reality like everything else it’s fractally complex. US unions vary from ones like the UAW that are about money and benefits to journalist unions that are more concerned with ideological correctness. There are states where union shops are legal and there are right to work states. In Europe you have let’s strike at the slightest provocation, all the time countries like France, ones where firm management and union management work hand in glove like Germany and countries where unions are close to dead except for state employees like Ireland or Britain.
cobertos 4y ago
The article mentions that a lot of the trucking spot market takes place on load boards (DAT, Truckstop, etc...) How did the spot market work before the internet/the proliferation of technological devices? Where did the "pool" of owner operators hang out before the internet? Or was trucking completely unlike it is today?
- waiseristy 4y ago
  They used telephones & personal/professional connections
  - cobertos 4y ago
    If they were using telephones, then there were people operating call-in centers for this pool of owner operators? If this was pre-90s, probably not even cell phones but, pay phones/physical phones? And if personal/professional connections, then there were meetings where owner operators get together? How would they schedule time for all of this, or coordinate it? I'm having a hard time picturing either of these methods. It feels hard to have a large spot market of owner operators without some large broker in the middle, at least pre-cellphones.
    - braveyellowtoad 4y ago
      Yes that’s correct. If you were owner operator you might be aligned with a particular firm (their name on your truck) and their dispatch would find you loads or you would also know people. You could have a dry van and look for generic loads but lots of guys I knew had specialised equipment (flatbed, tanker, etc) and over time you locked in good lanes and repeat customers. I met a tanker driver once who started in Florida, took orange juice to Canada, picked up some food ingredient in Canada , drove it to somewhere in Tennessee then took something from there to Florida. And repeat. He did that triangle for 10 years. Shipping used to be a real people business. If you had an unusual or unexpected load you’d call your 5-10 providers and they might have capacity or not, or do you a favour and call their buddies for you or not. That would almost always work out, if it didn’t you’d call the sales person from the new 3pl or trucking company who had been wanting your business and he/she would move mountains to get that chance. Definitely an interesting industry full of problems to solve. Don’t think it’s the same any more.
i_am_proteus 4y ago
Relevant John McPhee article from a couple of decades ago: https://archive.md/5GIIg https://archive.md/5GIIg He rode across the country with an owner operator, and he tells the story. "A true truck has eighteen wheels, or more. From Atlanta and Charlotte to North Powder, Oregon, this was the first time that Ainsworth had so much as tapped his air horn. In three thousand one hundred and ninety miles I rode with him he used it four times. He gave it a light, muted blast to thank a woman in a four-wheeler who helped us make a turn in urban traffic close to our destination, and he used it twice in the Yakima Valley, flirting with a woman who was wearing a bikini. She passed us on I-82, and must have pulled over somewhere, because she passed us again on I-90. She waved both times the horn erupted. She was riding in a convertible and her top was down."
- Stratoscope 4y ago
  What a great article! Thank you for linking to it. I love the ambiguity of the last sentence you quoted. I won't spoil it for others; just go read the article, it's that good. Fair warning: it is long form journalism, of the best kind. Give yourself some time to savor it.
  - i_am_proteus 4y ago
    Full circle: I discovered this article after another HN commenter suggested the book Uncommon Carriers, a collection of essays including this one.
- dmd 4y ago
  > She was riding in a convertible and her top was down. Now that is a great ambiguous sentence.
  - mc32 4y ago
    Off vs down makes a difference.
    - dmd 4y ago
gnfargbl 4y ago
The article claims about 3 million truck tractors on US roads, and puts the cost of each driver at about $65k/year. Am I correct in naively calculating something like $200B/year on the table for full-self-driving truck technology?
- adaml_623 4y ago
  Truck drivers do a lot more than just sit in the cab and drive. Sure I guess there are operating models where you don't need one driver paired all the time with one truck but definitely can't just replace drivers IMHO
  - alexdoesstuff 4y ago
    The fact that truck drivers do more than just drive isn't a necessity though. There is no reason why truck drivers also needs to be an unpaid loaders/unloaders and any other roles currently taking on by them. It's just a matter of "we've always done it like that". Businesses will reorganize themselves if it means a substantial reduction in transport costs.
    - antisthenes 4y ago
      > There is no reason why truck drivers also needs to be an unpaid loaders/unloaders and any other roles currently taking on by them. There's no reason, but then it also proportionally reduces the cap of $65k to some lower amount, that doesn't include those extra responsibilities.
- yourapostasy 4y ago
  That’s what is at stake, but monetization will be less than that valuation because Level 5 autonomy roughly expands capacity 3X (bots don’t sleep), so there likely will be somewhat less monetized value. Might need to add the capex of equipment costs, and subtract the externalities costs of increases wear and tear on infrastructure and equipment.
  - 4y ago
adaml_623 4y ago
There are some interesting podcasts about this recorded by the Bloomberg OddLots team. Interviews with the guy who runs https://www.freightwaves.com/ https://www.freightwaves.com/ and at least one actual trucker. Lots of other podcasts recently about global issues affecting logistics
mrhektor 4y ago
Super interesting analysis of the trucking market. A couple of questions would be: * At what speed is the industry going to embrace self-driving / "augmented driving" in trucks? I'd imagine a driver would still be required at the wheel in case of emergencies for the foreseeable future. What new skills would truckers have to learn? * Given the environmental impact of trucking (self-driving or not), what are some interesting propositions that climate change startups could come up with? Do any players in the value chain even care about climate impact? Clearly, given the cut-throat nature of the business, there would necessarily need to be a revenue impact otherwise no one is going to use the proposition. * I find the insurance part more interesting that the factoring part. Given the generally poor service quality of insurance companies, I'm wondering if there is a possibility of a "Lemonade" like insurance company in this space? Lemonade started out as a home insurer I believe. What is the killer proposition for an insurance company in this space? Lots more thoughts come to mind. Again, great writeup, thanks!
- karussell 4y ago
  > I'd imagine a driver would still be required at the wheel in case of emergencies for the foreseeable future. Yes, and manual work for on/off-loading or even paper work is still not uncommon. I can imagine that self-driving on long highways will come as a first step to avoid longer stops (no sleep time required) or to avoid a second driver. > Clearly, given the cut-throat nature of the business, there would necessarily need to be a revenue impact otherwise no one is going to use the proposition. I was wondering why route optimization wasn't mentioned in the post. Lot's of innovation happened in the past years. (With "route optimization" I mean both, the route selection between two points and also optimization of the order of multiple stops.)
- jillesvangurp 4y ago
  IMHO (and this is just my relatively uninformed opinion), the key driving force here will be the shift to electric trucks. These are more expensive to buy but cheaper to operate. At least right now. And also easier to turn into self driving platforms. ICE trucks are really hard to operate. You are basically micro managing the gears, dealing with lot of fairly complex bit of equipment, etc. Electric trucks basically have no gears, heaps of torque and don't really require much more than just pointing them in the right direction. Apparently as easy as driving a normal car. So, electrification strikes me as a core requirement for self driving. And of course electric trucks are also more environmentally friendly. Less brake dust (regenerative braking) and less emissions. And the batteries are recycled at the end of their life. So there's that. The shift to electric trucks is already happening of course but its very capital intensive. Millions of trucks with a price tag of hundreds of thousands each means a lot of capital will have to be expended. Trillions basically. That alone will ensure it will take quite long to complete. A decade minimum before most new trucks are electric and then at least another decade before most ICE trucks have been retired. And the first generations won't be self driving. So these new trucks would be in service for a decade plus before being swapped out for self driving ones. So, if that takes another decade to happen, we're talking 30-40 years. Minimum. But with the first ones on the road as early as less than a decade from now. It's going to be a slow process. Insurance is basically about risk. Insurance companies like to minimize risk and maximize profits. An electric truck that is less likely to break down regularly is less risky and would on paper require a lower insurance fee. And then a self driving truck is less likely to get into accidents or other liability related issues. Which again means lower fees. So, that helps.
tonguetrainer 4y ago
Great writeup. I sent this to a friend who has been in the trucking business for decades. There's enough meat here that even he will learn something.
- deleted 4y ago
  [deleted]
college_physics 4y ago
hmm, I would have expected at least some token references to environmental sustainability / impacts, energy risks (and opportunities) etc.
- snowypine 4y ago
  I actually had some figures around energy impact in earlier drafts of the piece. The issue I kept running into was the range of data - trucking is more inefficient than rail. But the question is how much, it could be as little as 2x more energy or as much as 100x more energy. It depends on factors like load weight, truck conditions, rail route, and a bunch more.
throw0101c 4y ago
The Odd Lots podcast recently did two episodes on US trucking that were interesting. The first with an actual trucker, "The Trucking Episode: Why the Industry Is Such a Mess": * https://podcasts.apple.com/us/podcast/the-trucking-episode-why-the-industry-is-such-a-mess/id1056200096?i=1000526244956 https://podcasts.apple.com/us/podcast/the-trucking-episode-w... * https://omny.fm/shows/odd-lots/the-trucking-episode-why-the-industry-is-such-a-me?in_playlist=odd-lots!podcast https://omny.fm/shows/odd-lots/the-trucking-episode-why-the-... Interesting observations on tracking in that episode: > Gord: (23:44) […] So they regulate the drivers, right? And there's going to be another book being published next month by an academic at Cornell named Karen Levy, which is called “Data Driven: Truckers, Technology and the New Workplace Surveillance.” And she has spent 10 years studying like the effects of all of the regulatory imposition on the driver through surveillance technology, driver-facing cameras, ELDs, all of this stuff that's meant to regulate us because of the public's fear of, you know, drivers driving tired over their hours, all this stuff, which is an effect of the fact that the market's been pummeled by deregulation. So there's this regulation question, but it's not looked at correctly, that they've deregulated the market, but they just moved the regulation from the operations of the companies and the rating and the business side of it, and they've moved all the regulation onto the operations and onto the driver, which is another reason people wash out. > Because if you're somebody like me who's been in the business my entire life, my dad was a trucker, both my uncles were truckers, my grandpa was a trucker. I was helping mechanics fix trucks and driving around when I was a teenager after school. And I'm one of the sort of last of the big game hunters. I know what I'm doing. If somebody is a professional and knows what they're doing, they don't want to be told how to do their job by some human resources harridan, or a health and safety pencil neck person that's breathing down their neck. And that's a factor. > Another thing, and this applies to more than just trucking, is like the psychology of people who work for a living. Most people that work for a living just want to do their jobs and be left alone. And we have this management mentality where like every single thing has to be done exactly as the computer models tell us and as safe as possible. And they're trying to impose theory on material reality and it drives the people actually doing the work insane. So, you know, you want to end driver churn and driver retention? One of the factors causing that is that they've overregulated the people doing the work rather than the people in charge of the markets in which the work is being done. Does that make any sense? > Joe: (27:20) Yeah, and that's an incredible point, and I hadn't really thought about this before, this idea that it’s like, okay, the business of trucking, the business of pay, etc., [it’s] increasingly deregulated even as more burden gets shifted to the driver in the truck and the idea of monitoring. And so essentially sort of redistributing the imposition of where the regulation happens. […] And just in the last week or so a second episode, "What Truckers Already Know About the Future of Electronic Worker Surveillance", with a researcher that just published a book on the industry: * https://omny.fm/shows/odd-lots/what-truckers-already-know-about-the-future-of-ele?in_playlist=podcast https://omny.fm/shows/odd-lots/what-truckers-already-know-ab... * https://podcasts.apple.com/us/podcast/what-truckers-already-know-about-the-future/id1056200096?i=1000593136236 https://podcasts.apple.com/us/podcast/what-truckers-already-... > Long-haul truckers are the backbone of the American economy, transporting goods under grueling conditions and immense economic pressure. Truckers have long valued the day-to-day independence of their work, sharing a strong occupational identity rooted in a tradition of autonomy. Yet these workers increasingly find themselves under many watchful eyes. Data Driven examines how digital surveillance is upending life and work on the open road, and raises crucial questions about the role of data collection in broader systems of social control. * https://press.princeton.edu/books/hardcover/9780691175300/data-driven https://press.princeton.edu/books/hardcover/9780691175300/da... * https://www.karen-levy.net https://www.karen-levy.net
zabzonk 4y ago
according to the grateful dead, there should be no terminating 'g'
deleted 4y ago
[deleted]
abetusk 4y ago
Maybe this is a stupid question but is there any value in trying to put solar panels on the roofs of trucks to offset fuel costs? Solar panels are (new) around $0.75 / Watt and less than that used. Maybe you could fit 9 or so on the top which, depending on what panels you use, could be about a 1kW or so in sunlight. Maybe it's too much of a stretch to ask for a modified engine but heating the driver cabin or even providing some type of heating or cooling to the container might help offset costs.
- college_physics 4y ago
  its definitely been proposed [0] [0] https://www.ttnews.com/articles/nacfe-issues-confidence-report-solar-panels-trucks-trailers https://www.ttnews.com/articles/nacfe-issues-confidence-repo...
- Vvector 4y ago
  Solar powered 'reefer' trailers have been around for a long time, just not economically viable until recently. Dozens of companies showed new designs last year.
- hotpotamus 4y ago
  My first thought is that the differences in energy in what you can collect from an area the size of a trailer and how much energy it takes to move a 40 ton object make the whole thing seem pretty marginal. My second thought is that even if the math worked out the incentives might not since it's a combination vehicle and each part of the combination is probably owned by a different entity. That's where a government mandate might be needed.
- kec 4y ago
  That's a lot of extra weight for maybe 9-10kWHr of energy at most (assuming a full day of perfect summertime conditions)... One gallon of diesel fuel contains about 35kWHr of energy.
  - SoftTalker 4y ago
    Also would not really work for many truck types: tankers, flatbeds, intermodal containers. And many trucks drive at night because traffic is lighter.
dglass 4y ago
I work for a startup in the trucking space so it's nice to see such an in depth analysis of the industry. I can agree that most of the article is accurate based on what I've seen in my 4 years in the industry. There is so much more innovation going on in the trucking industry that a lot of people don't know about. My company, Platform Science, is building a configurable open platform that connects a lot of the different categories mentioned in the article (drivers, carriers, brokers, OEMs, software vendors, etc). If you're interested in career opportunities in the trucking industry, we're hiring for a number of open positions[1]. Feel free to send me an email (My work email is in my profile) and I can connect you with the right hiring manager. [0]: https://www.platformscience.com https://www.platformscience.com [1]: https://www.platformscience.com/jobs https://www.platformscience.com/jobs
- snowypine 4y ago
  This is another piece that I never got to talk about in my post. There's a LOT of software in trucking, the problem is that most of the software was built in a different era. Platform Science looks pretty cool - seems like a TMS with specific improvements against legacy systems. Building a TMS is a pretty good business - massive fixed cost but once you've built the system, it's fairly hard for competitors to dislodge you.
s1mon 4y ago
I’m surprised with how much care went into breaking down the various pieces of the industry, there was zero mention of the Teamsters Union. Nor is there much mention of any of the human issues which lead to things like most trucking companies failing in the first couple of years. Perhaps looking at trucking from a human centered design perspective would identify problems and needs which are missing from this otherwise deep analysis. What are the pain points of the various types of roles/people involved, what makeshift solutions are they currently using, and do they have money to spend on a better solution?
- Scubabear68 4y ago
  This is an excellent observation. I am working a bit in the marine/rail terminal space (on the software side), it is amazing how much functionality is built specifically to fulfill union contract terms at various terminals.
- snowypine 4y ago
  Author here - there's definitely a lot about trucking that I didn't get to cover. E.g. growth in autonomous vehicles, the issues recruiting drivers, federal regulation, and the lasting impacts of unions. That being said, human centered design probably doesn't work in trucking. The assumption here is that people within a certain role has a fixed set of pain points. The truth is that trucking is too wide to categorize in that way. E.g. I met dispatchers that had a really hard time finding loads, but others had a really hard time getting drivers to pay them. Every person's experience and pain points in trucking are all slightly different simply due to the nature of the industry. I think there's certainly an education component to most trucking companies failing but the root of the problem is the design of the industry.
ShredKazoo 4y ago
Has anyone estimated what the impact on the trucking industry would be if the US repealed the Jones Act? Most of America's biggest cities are adjacent to ocean or other waterways, and water transport is cheaper than land transport. So it seems fairly plausible to me that the American trucking industry in its current form is basically just a huge source of excess carbon emissions, created as a result of bad regulation. Here is some info on the Jones Act for those who are unfamiliar: https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear https://www.cato.org/publications/policy-analysis/jones-act-...
- digdugdirk 4y ago
  It would be interesting, for sure. Unfortunately, decades of waterway infrastructure neglect would leave a massive gap between where things stand now, and where they would need to be in order to utilize waterway transportation outside of existing facilities. For example - it would enable higher volume transport of commodities (that are currently shipped by river) along rivers, but we don't really have any river-based shipping container ports in existence now. The expansion/creation/upgrades to existing facilities would take time and money, and as the article points out... The trucking industry has managed to externalize those infrastructure costs onto the taxpayer - why would a shipping company lay down that uncertain investment when they have to compete with an industry that doesn't have to do any of that?
- snowypine 4y ago
  I'm not an expert here on water transportation but I think water is very similar to rail. Both are much more cost and energy efficient. But they require large freight volumes and sacrifice a lot of the flexibility that trucking has. Unless we change our supply chain philosophy, trucking will likely reign above all other forms of transportation.
- cafard 4y ago
  I imagine the impact would be minimal in Wyoming.
  - ShredKazoo 4y ago
MadScott 4y ago
This. Is. Brilliant. Good analysis of the nooks and crannies of potential for trucking. I work in this space and there's still a lot to learn here.
- snowypine 4y ago
  Thanks for reading and the compliment! :)

On Trucking

145 points by snowypine 4y ago

jborichevskiy 4y ago

Wonderful writeup. Thanks for sharing!

snowypine 4y ago
Glad you liked it!

readthenotes1 4y ago

Pet peeve: every time I get on the interstate I think they should have driven 90% of the 18-wheelers on to a train. Or at least have tracking software that fines them heavily for leaving the slow lanem

melling 4y ago
While much more efficient, I believe freight trains are close to 100% capacity.
- cesnja 4y ago
  Then just add another lane, right?
  - PedroBatista 4y ago
    Who?
forgetbook 4y ago
Isn't there a 'last mile' problem that differentiates trucks and rail?
- mjg59 4y ago
  Given the density of the US rail network it's rather more than "last mile", but yes - rail depots are not where you actually want the goods to be in most cases, and you need to do something about that. The question is more whether it would be more efficient to only truck goods as far as the nearest rail freight node and then have it shipped that way rather than via interstate. The article here suggests that's not viable because many vendors are shipping quantities that aren't economically viable given rail freight costs, but doesn't really address why that's the case.
UncleEntity 4y ago
Pet peeve: no matter what you do in a truck someone gets mad. You’re either driving too fast or too slow. You try to stay in the slow lane but catch up to the person going 45 on the interstate who speeds up as soon as you get next to them trapping you in the fast lane until you give them ‘incentive’ to let you back over. I could go on and on but my government mandated 30 break was over six minutes ago and there’s people to annoy on the two lane highway I get to drive on until Texas.
- nerdponx 4y ago
  People are generally oblivious idiots, but I've also seen some truly insane truck drivers on I-84 in CT, stuff like tailgating people in the left lane at 70+ at night.
  - dazc 4y ago
    Indeed, it's as if some truck drivers are guilty of the same bad behaviour as regular car drivers.
  - UncleEntity 4y ago
    I’ve seen countless truly insane car drivers over the years where I honestly thought people were going to die. Some did die. I’ve also have seen some truck crashes where I’m like “how is that even possible?” The thing with truck drivers is the bad ones don’t last very long. It’s almost impossible to get another driving job after getting fired for being a shitty driver. —edit— And law enforcement holds professional drivers to a higher standard so there’s no talking your way out of a ticket if they see you doing something stupid. Most of the time that’s when they get all up into the logbook and full on level 1 DOT inspection on the truck.
PedroBatista 4y ago
That’s rich coming from a 4wheeler. And why do you think they sometimes enter the fast lane? ( which is legal in many roads and some circumstances)

yafbum 4y ago

Great rundown. "Factoring" sounds a bit like a euphemism for payday loans!

simonbarker87 4y ago
Factoring is very common across sectors with long payment durations. It’s amazing for manufacturing businesses for example who may not get paid for 30, 60 or 90 days after shipping product. The great thing (and where it is nothing like payday loans when done correctly) is that the responsibility and risk of collecting payment falls to the factoring company and not you. We happily factored for years just to offload payment chasing for a tricky customer, well worth the 2%.
adaml_623 4y ago
There was an interesting sentence in that section. I thought that factors shouldered the non-payment risk but article seems to imply that non-payment would come back and bite the truckers
- snowypine 4y ago
  Yeah, I had to heavily edit the piece to ensure that it wasn't a mini-novella. So, for more context on factoring, there are two types - recourse and non-recourse. Recourse factoring means that the factoring company can come back and ask the driver for their money back. Generally, the rates for recourse factoring are lower (by 20-50 basis points only because the default rate in drivers is quite high). Non-recourse factoring is something that the industry is transitioning to. Most of the startups offering factoring today are doing non-recourse. The problem with that approach is that fraud rates rise exponentially. Not too sure how the landscape will look even 6 months from now as easy capital goes away.

coderintherye 4y ago

Awesome write-up. Would be really curious for insight into why truck purchase loans run 8-10% APR with 20% down. If anything, I'd expect them to be lower risk and easier to re-posses?

jillesvangurp 4y ago
Probably because it's a cut throat business and truckers operating on razor thin margins are more likely to default on their loans when they get into trouble. The second hand value of the trucks is not enough to cover that risk. A two year old truck has a value of course, but it's nowhere near the new value of the truck.
- toomuchtodo 4y ago
  Correct! It’s like rent to own homes, when the operator knows the renter will default and won’t take ownership. The profit is the transaction duration. (family member is a truck driver)
snowypine 4y ago
I'd say it's more market conditions over anything else. Truck drivers generally have poor credit - they're not going to be able to come up with ~400k otherwise. As a result, you get lenders that charge more. Also, repossessing trucks across the country is kinda an issue. You might need to drive hundreds or thousands of miles to claim the truck which is a nightmare that carriers deal with on a daily basis.
landemva 4y ago
> easier to re-posses It can be difficult to locate a tractor when the operator who is in default on the loan/lease has all of the lower 48 to make it disappear.

mjevans 4y ago

"90% of owner operators fail in their first year - trucking is incredibly cutthroat." Maybe the disruption this market needs is a set of unions rather than just trucking companies. It would be nice if unions were limited such that... E.G. they could not grow to larger than 15% of the workforce for a sector in any single union. Contracts would need to be approved by... some number, lets say 2/3rds of all workers across all unions. With the 15% number that would require at least 5 unions and over 66% of workers to approve of contracts.

barry-cotter 4y ago
You have reinvented cartelisation or the trusts in anti-trust. Congratulations on your economic acumen[1]. [1] Sincere praise, not sarcasm.
- prox 4y ago
  Are unions in the US the same as Trade Unions in Europe? https://en.wikipedia.org/wiki/Trade_unions_in_Europe https://en.wikipedia.org/wiki/Trade_unions_in_Europe
  - barry-cotter 4y ago
    Yes and no. So in both cases the aim is to act as a labour cartel to redistribute economic surplus from either consumers, firms or potential competition to insiders. But US labour law makes co-determination illegal. Having a company approved union is forbidden. Cooperation between firm management and union management is forbidden. Everything must be adversarial all the time. In reality like everything else it’s fractally complex. US unions vary from ones like the UAW that are about money and benefits to journalist unions that are more concerned with ideological correctness. There are states where union shops are legal and there are right to work states. In Europe you have let’s strike at the slightest provocation, all the time countries like France, ones where firm management and union management work hand in glove like Germany and countries where unions are close to dead except for state employees like Ireland or Britain.

cobertos 4y ago

The article mentions that a lot of the trucking spot market takes place on load boards (DAT, Truckstop, etc...) How did the spot market work before the internet/the proliferation of technological devices? Where did the "pool" of owner operators hang out before the internet? Or was trucking completely unlike it is today?

waiseristy 4y ago
They used telephones & personal/professional connections
- cobertos 4y ago
  If they were using telephones, then there were people operating call-in centers for this pool of owner operators? If this was pre-90s, probably not even cell phones but, pay phones/physical phones? And if personal/professional connections, then there were meetings where owner operators get together? How would they schedule time for all of this, or coordinate it? I'm having a hard time picturing either of these methods. It feels hard to have a large spot market of owner operators without some large broker in the middle, at least pre-cellphones.
  - braveyellowtoad 4y ago
    Yes that’s correct. If you were owner operator you might be aligned with a particular firm (their name on your truck) and their dispatch would find you loads or you would also know people. You could have a dry van and look for generic loads but lots of guys I knew had specialised equipment (flatbed, tanker, etc) and over time you locked in good lanes and repeat customers. I met a tanker driver once who started in Florida, took orange juice to Canada, picked up some food ingredient in Canada , drove it to somewhere in Tennessee then took something from there to Florida. And repeat. He did that triangle for 10 years. Shipping used to be a real people business. If you had an unusual or unexpected load you’d call your 5-10 providers and they might have capacity or not, or do you a favour and call their buddies for you or not. That would almost always work out, if it didn’t you’d call the sales person from the new 3pl or trucking company who had been wanting your business and he/she would move mountains to get that chance. Definitely an interesting industry full of problems to solve. Don’t think it’s the same any more.

i_am_proteus 4y ago

Relevant John McPhee article from a couple of decades ago: https://archive.md/5GIIg https://archive.md/5GIIg He rode across the country with an owner operator, and he tells the story. "A true truck has eighteen wheels, or more. From Atlanta and Charlotte to North Powder, Oregon, this was the first time that Ainsworth had so much as tapped his air horn. In three thousand one hundred and ninety miles I rode with him he used it four times. He gave it a light, muted blast to thank a woman in a four-wheeler who helped us make a turn in urban traffic close to our destination, and he used it twice in the Yakima Valley, flirting with a woman who was wearing a bikini. She passed us on I-82, and must have pulled over somewhere, because she passed us again on I-90. She waved both times the horn erupted. She was riding in a convertible and her top was down."

Stratoscope 4y ago
What a great article! Thank you for linking to it. I love the ambiguity of the last sentence you quoted. I won't spoil it for others; just go read the article, it's that good. Fair warning: it is long form journalism, of the best kind. Give yourself some time to savor it.
- i_am_proteus 4y ago
  Full circle: I discovered this article after another HN commenter suggested the book Uncommon Carriers, a collection of essays including this one.
dmd 4y ago
> She was riding in a convertible and her top was down. Now that is a great ambiguous sentence.
- mc32 4y ago
  Off vs down makes a difference.
  - dmd 4y ago

gnfargbl 4y ago

The article claims about 3 million truck tractors on US roads, and puts the cost of each driver at about $65k/year. Am I correct in naively calculating something like $200B/year on the table for full-self-driving truck technology?

adaml_623 4y ago
Truck drivers do a lot more than just sit in the cab and drive. Sure I guess there are operating models where you don't need one driver paired all the time with one truck but definitely can't just replace drivers IMHO
- alexdoesstuff 4y ago
  The fact that truck drivers do more than just drive isn't a necessity though. There is no reason why truck drivers also needs to be an unpaid loaders/unloaders and any other roles currently taking on by them. It's just a matter of "we've always done it like that". Businesses will reorganize themselves if it means a substantial reduction in transport costs.
  - antisthenes 4y ago
    > There is no reason why truck drivers also needs to be an unpaid loaders/unloaders and any other roles currently taking on by them. There's no reason, but then it also proportionally reduces the cap of $65k to some lower amount, that doesn't include those extra responsibilities.
yourapostasy 4y ago
That’s what is at stake, but monetization will be less than that valuation because Level 5 autonomy roughly expands capacity 3X (bots don’t sleep), so there likely will be somewhat less monetized value. Might need to add the capex of equipment costs, and subtract the externalities costs of increases wear and tear on infrastructure and equipment.
- 4y ago

adaml_623 4y ago

There are some interesting podcasts about this recorded by the Bloomberg OddLots team. Interviews with the guy who runs https://www.freightwaves.com/ https://www.freightwaves.com/ and at least one actual trucker. Lots of other podcasts recently about global issues affecting logistics

mrhektor 4y ago

Super interesting analysis of the trucking market. A couple of questions would be: * At what speed is the industry going to embrace self-driving / "augmented driving" in trucks? I'd imagine a driver would still be required at the wheel in case of emergencies for the foreseeable future. What new skills would truckers have to learn? * Given the environmental impact of trucking (self-driving or not), what are some interesting propositions that climate change startups could come up with? Do any players in the value chain even care about climate impact? Clearly, given the cut-throat nature of the business, there would necessarily need to be a revenue impact otherwise no one is going to use the proposition. * I find the insurance part more interesting that the factoring part. Given the generally poor service quality of insurance companies, I'm wondering if there is a possibility of a "Lemonade" like insurance company in this space? Lemonade started out as a home insurer I believe. What is the killer proposition for an insurance company in this space? Lots more thoughts come to mind. Again, great writeup, thanks!

karussell 4y ago
> I'd imagine a driver would still be required at the wheel in case of emergencies for the foreseeable future. Yes, and manual work for on/off-loading or even paper work is still not uncommon. I can imagine that self-driving on long highways will come as a first step to avoid longer stops (no sleep time required) or to avoid a second driver. > Clearly, given the cut-throat nature of the business, there would necessarily need to be a revenue impact otherwise no one is going to use the proposition. I was wondering why route optimization wasn't mentioned in the post. Lot's of innovation happened in the past years. (With "route optimization" I mean both, the route selection between two points and also optimization of the order of multiple stops.)
jillesvangurp 4y ago
IMHO (and this is just my relatively uninformed opinion), the key driving force here will be the shift to electric trucks. These are more expensive to buy but cheaper to operate. At least right now. And also easier to turn into self driving platforms. ICE trucks are really hard to operate. You are basically micro managing the gears, dealing with lot of fairly complex bit of equipment, etc. Electric trucks basically have no gears, heaps of torque and don't really require much more than just pointing them in the right direction. Apparently as easy as driving a normal car. So, electrification strikes me as a core requirement for self driving. And of course electric trucks are also more environmentally friendly. Less brake dust (regenerative braking) and less emissions. And the batteries are recycled at the end of their life. So there's that. The shift to electric trucks is already happening of course but its very capital intensive. Millions of trucks with a price tag of hundreds of thousands each means a lot of capital will have to be expended. Trillions basically. That alone will ensure it will take quite long to complete. A decade minimum before most new trucks are electric and then at least another decade before most ICE trucks have been retired. And the first generations won't be self driving. So these new trucks would be in service for a decade plus before being swapped out for self driving ones. So, if that takes another decade to happen, we're talking 30-40 years. Minimum. But with the first ones on the road as early as less than a decade from now. It's going to be a slow process. Insurance is basically about risk. Insurance companies like to minimize risk and maximize profits. An electric truck that is less likely to break down regularly is less risky and would on paper require a lower insurance fee. And then a self driving truck is less likely to get into accidents or other liability related issues. Which again means lower fees. So, that helps.

tonguetrainer 4y ago

Great writeup. I sent this to a friend who has been in the trucking business for decades. There's enough meat here that even he will learn something.

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college_physics 4y ago

hmm, I would have expected at least some token references to environmental sustainability / impacts, energy risks (and opportunities) etc.

snowypine 4y ago
I actually had some figures around energy impact in earlier drafts of the piece. The issue I kept running into was the range of data - trucking is more inefficient than rail. But the question is how much, it could be as little as 2x more energy or as much as 100x more energy. It depends on factors like load weight, truck conditions, rail route, and a bunch more.

throw0101c 4y ago

The Odd Lots podcast recently did two episodes on US trucking that were interesting. The first with an actual trucker, "The Trucking Episode: Why the Industry Is Such a Mess": * https://podcasts.apple.com/us/podcast/the-trucking-episode-why-the-industry-is-such-a-mess/id1056200096?i=1000526244956 https://podcasts.apple.com/us/podcast/the-trucking-episode-w... * https://omny.fm/shows/odd-lots/the-trucking-episode-why-the-industry-is-such-a-me?in_playlist=odd-lots!podcast https://omny.fm/shows/odd-lots/the-trucking-episode-why-the-... Interesting observations on tracking in that episode: > Gord: (23:44) […] So they regulate the drivers, right? And there's going to be another book being published next month by an academic at Cornell named Karen Levy, which is called “Data Driven: Truckers, Technology and the New Workplace Surveillance.” And she has spent 10 years studying like the effects of all of the regulatory imposition on the driver through surveillance technology, driver-facing cameras, ELDs, all of this stuff that's meant to regulate us because of the public's fear of, you know, drivers driving tired over their hours, all this stuff, which is an effect of the fact that the market's been pummeled by deregulation. So there's this regulation question, but it's not looked at correctly, that they've deregulated the market, but they just moved the regulation from the operations of the companies and the rating and the business side of it, and they've moved all the regulation onto the operations and onto the driver, which is another reason people wash out. > Because if you're somebody like me who's been in the business my entire life, my dad was a trucker, both my uncles were truckers, my grandpa was a trucker. I was helping mechanics fix trucks and driving around when I was a teenager after school. And I'm one of the sort of last of the big game hunters. I know what I'm doing. If somebody is a professional and knows what they're doing, they don't want to be told how to do their job by some human resources harridan, or a health and safety pencil neck person that's breathing down their neck. And that's a factor. > Another thing, and this applies to more than just trucking, is like the psychology of people who work for a living. Most people that work for a living just want to do their jobs and be left alone. And we have this management mentality where like every single thing has to be done exactly as the computer models tell us and as safe as possible. And they're trying to impose theory on material reality and it drives the people actually doing the work insane. So, you know, you want to end driver churn and driver retention? One of the factors causing that is that they've overregulated the people doing the work rather than the people in charge of the markets in which the work is being done. Does that make any sense? > Joe: (27:20) Yeah, and that's an incredible point, and I hadn't really thought about this before, this idea that it’s like, okay, the business of trucking, the business of pay, etc., [it’s] increasingly deregulated even as more burden gets shifted to the driver in the truck and the idea of monitoring. And so essentially sort of redistributing the imposition of where the regulation happens. […] And just in the last week or so a second episode, "What Truckers Already Know About the Future of Electronic Worker Surveillance", with a researcher that just published a book on the industry: * https://omny.fm/shows/odd-lots/what-truckers-already-know-about-the-future-of-ele?in_playlist=podcast https://omny.fm/shows/odd-lots/what-truckers-already-know-ab... * https://podcasts.apple.com/us/podcast/what-truckers-already-know-about-the-future/id1056200096?i=1000593136236 https://podcasts.apple.com/us/podcast/what-truckers-already-... > Long-haul truckers are the backbone of the American economy, transporting goods under grueling conditions and immense economic pressure. Truckers have long valued the day-to-day independence of their work, sharing a strong occupational identity rooted in a tradition of autonomy. Yet these workers increasingly find themselves under many watchful eyes. Data Driven examines how digital surveillance is upending life and work on the open road, and raises crucial questions about the role of data collection in broader systems of social control. * https://press.princeton.edu/books/hardcover/9780691175300/data-driven https://press.princeton.edu/books/hardcover/9780691175300/da... * https://www.karen-levy.net https://www.karen-levy.net

zabzonk 4y ago

according to the grateful dead, there should be no terminating 'g'

deleted 4y ago

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abetusk 4y ago

Maybe this is a stupid question but is there any value in trying to put solar panels on the roofs of trucks to offset fuel costs? Solar panels are (new) around $0.75 / Watt and less than that used. Maybe you could fit 9 or so on the top which, depending on what panels you use, could be about a 1kW or so in sunlight. Maybe it's too much of a stretch to ask for a modified engine but heating the driver cabin or even providing some type of heating or cooling to the container might help offset costs.

college_physics 4y ago
its definitely been proposed [0] [0] https://www.ttnews.com/articles/nacfe-issues-confidence-report-solar-panels-trucks-trailers https://www.ttnews.com/articles/nacfe-issues-confidence-repo...
Vvector 4y ago
Solar powered 'reefer' trailers have been around for a long time, just not economically viable until recently. Dozens of companies showed new designs last year.
hotpotamus 4y ago
My first thought is that the differences in energy in what you can collect from an area the size of a trailer and how much energy it takes to move a 40 ton object make the whole thing seem pretty marginal. My second thought is that even if the math worked out the incentives might not since it's a combination vehicle and each part of the combination is probably owned by a different entity. That's where a government mandate might be needed.
kec 4y ago
That's a lot of extra weight for maybe 9-10kWHr of energy at most (assuming a full day of perfect summertime conditions)... One gallon of diesel fuel contains about 35kWHr of energy.
- SoftTalker 4y ago
  Also would not really work for many truck types: tankers, flatbeds, intermodal containers. And many trucks drive at night because traffic is lighter.

dglass 4y ago

I work for a startup in the trucking space so it's nice to see such an in depth analysis of the industry. I can agree that most of the article is accurate based on what I've seen in my 4 years in the industry. There is so much more innovation going on in the trucking industry that a lot of people don't know about. My company, Platform Science, is building a configurable open platform that connects a lot of the different categories mentioned in the article (drivers, carriers, brokers, OEMs, software vendors, etc). If you're interested in career opportunities in the trucking industry, we're hiring for a number of open positions[1]. Feel free to send me an email (My work email is in my profile) and I can connect you with the right hiring manager. [0]: https://www.platformscience.com https://www.platformscience.com [1]: https://www.platformscience.com/jobs https://www.platformscience.com/jobs

snowypine 4y ago
This is another piece that I never got to talk about in my post. There's a LOT of software in trucking, the problem is that most of the software was built in a different era. Platform Science looks pretty cool - seems like a TMS with specific improvements against legacy systems. Building a TMS is a pretty good business - massive fixed cost but once you've built the system, it's fairly hard for competitors to dislodge you.

s1mon 4y ago

I’m surprised with how much care went into breaking down the various pieces of the industry, there was zero mention of the Teamsters Union. Nor is there much mention of any of the human issues which lead to things like most trucking companies failing in the first couple of years. Perhaps looking at trucking from a human centered design perspective would identify problems and needs which are missing from this otherwise deep analysis. What are the pain points of the various types of roles/people involved, what makeshift solutions are they currently using, and do they have money to spend on a better solution?

Scubabear68 4y ago
This is an excellent observation. I am working a bit in the marine/rail terminal space (on the software side), it is amazing how much functionality is built specifically to fulfill union contract terms at various terminals.
snowypine 4y ago
Author here - there's definitely a lot about trucking that I didn't get to cover. E.g. growth in autonomous vehicles, the issues recruiting drivers, federal regulation, and the lasting impacts of unions. That being said, human centered design probably doesn't work in trucking. The assumption here is that people within a certain role has a fixed set of pain points. The truth is that trucking is too wide to categorize in that way. E.g. I met dispatchers that had a really hard time finding loads, but others had a really hard time getting drivers to pay them. Every person's experience and pain points in trucking are all slightly different simply due to the nature of the industry. I think there's certainly an education component to most trucking companies failing but the root of the problem is the design of the industry.

ShredKazoo 4y ago

Has anyone estimated what the impact on the trucking industry would be if the US repealed the Jones Act? Most of America's biggest cities are adjacent to ocean or other waterways, and water transport is cheaper than land transport. So it seems fairly plausible to me that the American trucking industry in its current form is basically just a huge source of excess carbon emissions, created as a result of bad regulation. Here is some info on the Jones Act for those who are unfamiliar: https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear https://www.cato.org/publications/policy-analysis/jones-act-...

digdugdirk 4y ago
It would be interesting, for sure. Unfortunately, decades of waterway infrastructure neglect would leave a massive gap between where things stand now, and where they would need to be in order to utilize waterway transportation outside of existing facilities. For example - it would enable higher volume transport of commodities (that are currently shipped by river) along rivers, but we don't really have any river-based shipping container ports in existence now. The expansion/creation/upgrades to existing facilities would take time and money, and as the article points out... The trucking industry has managed to externalize those infrastructure costs onto the taxpayer - why would a shipping company lay down that uncertain investment when they have to compete with an industry that doesn't have to do any of that?
snowypine 4y ago
I'm not an expert here on water transportation but I think water is very similar to rail. Both are much more cost and energy efficient. But they require large freight volumes and sacrifice a lot of the flexibility that trucking has. Unless we change our supply chain philosophy, trucking will likely reign above all other forms of transportation.
cafard 4y ago
I imagine the impact would be minimal in Wyoming.
- ShredKazoo 4y ago

MadScott 4y ago

This. Is. Brilliant. Good analysis of the nooks and crannies of potential for trucking. I work in this space and there's still a lot to learn here.

snowypine 4y ago
Thanks for reading and the compliment! :)