In this episode Aaron and Michael discuss the the impact (or lack thereof) of Coronavirus on freight domestically and abroad and then give an update on the proposed HOS rules heading to the White House. They also shout out a 5 star fan of the podcast and the @PDQAmerica truck of the month winner! 

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“A little Corona.“

“All right!”

 Michael Clements:

Welcome to Trucking for Millennials where we engage with the future of freight happening now. My name is Michael Clements.

Aaron Dunn:

and I'm Aaron Dunn. And we're here to help trucking and logistics professionals stay up to date and ahead of the curve. 

Michael Clements:

As our industry evolves, we're connecting with every step of the supply chain as part of our mission to increase transparency and provide a world class freight solutions.

Aaron Dunn:

You were saying? 

Michael Clements:

“It's the and of the world as we know it.” It was kind of just playing in the radio. 

Aaron Dunn:

Well, it's it's the mood of the country. 

Michael Clements:

It does feel that way.

Aaron Dunn:

I mean, it's an election year. Everybody's gonna die. That's how it's just how it goes. “My Sharona…” Well, my coronavirus.

Michael Clements:

Ahh, see what you did there. 

Aaron Dunn:

Yeah, yeah. My Corona virus.

Michael Clements:

Keep that away from me, by the way.

Aaron Dunn:

Trucking for Millennials podcast. Thank you for listening, Aaron and Michael here from an underground bunker where there is no virus yet. In remote East Texas. We got a good show lined up for you today we're going to talk what everybody's talking about. But before that we've got some we've got some announcements to make, some thank yous, some some shout outs. So really appreciate all the feedback that you you, the listener are giving us either through social media through an email or what have you. But especially for our five star listener. Not that TK, that's the name that he put into iTunes when he reviewed the podcast at five stars,  making this person a five star listener. 

Michael Clements:

Thank you. 

Aaron Dunn:

Yeah, thank you, TK. Yeah, subject loaded. All right, you can tell he's a listener because we have an episode called loaded or leave it. And he says “Loaded: good coverage of trucking headlines from people in the industry. The interviews showcase the wide variety of people who share a commitment to trucking.” 

Michael Clements:

My man. Not that TK. Thank you. 

Aaron Dunn:

We appreciate you. We appreciate you. So yeah, shout out to him. If you want to be a five-star listener, leave a five-star review. If you want to be a four-star listener. You're invited to do that as well. And we'll give you a shout out on the show.

Also, if you're a follower of the @PDQAmerica on Instagram or you follow us on LinkedIn or on Facebook, the Facebook page you might have already seen but just in case you hadn't we also want to do a special shout out to the truck of the month every week. (singing) “Wake up, wake up, it’s the Truck of the Month…” And yeah, we do it every week. We have a truck of the week. And then the community votes for the truck of the month, which will then be entered in a large competition. The PDQ America Truck of the Year. The truck of the month for February is Warren trucking out of Dexter city, Ohio. Give him a millennial horn. Yeah.

Warren trucking, they're super super. They've got a passionate crew. And they've definitely won in the past because they've just got so many people bought in and yeah, we really appreciate you for playing playing with us. For the for the truck of the week, if you want to be our truck of the month. If you want to be a Truck of the Year for 2020 I highly encourage you to participate in truck of the week. we look at them every week, make the decision and we'll give you a shout out if you win the truck of the month at the end of the month. Yeah. 

Michael Clements:

Thanks for those Warren Trucking guys there. They interact with the page, they're commenting, liking. Thank you all. 

Aaron Dunn:

Yeah, yeah, thank you for that. But also, thank you for just doing what you do every day. We appreciate the truck drivers out there. So yeah, so that's, that's me you got any uh…

Michael Clements:

Well, you know, I have a little surprise for you today. Okay, little surprise for the podcast and it was you know, we've been talking this week about the coronavirus, surprise, surprise, but we've been talking about it and I think, you know, we wanted to bring the listeners something today we want to discuss it on here. We like to discuss things that are happening around us. It's not like we're the only news outlet. I mean, there's plenty other people that are talking coronavirus, but we really wanted to get down in it today. It's It's It's the end of the week. So like, you know, we're already looking forward to next week. Looking forward to the weekend. I'm just kind of figured maybe we ought to start the weekend a little early. You know, for all of our listeners out there now it'll be Monday and next week whenever they hear this but we can just I figured we could bring the weekend everybody instead of the coronavirus. Okay, so I've got you a little gift here. Oh, have a little Corona. 

Aaron Dunn:

All right. Yeah. 

Michael Clements:

I felt like this is a very serious matter and discuss it of discussion here. So…

Aaron Dunn:

You're right. You're right in true Trucking for Millennials fashion. serious trucking topics and news, huh. Pretty good Cora Nita virus for for those that are…

Michael ClementsL

Yeah, these are the work safe bottles. Seven ounces, you can't get too crazy on seven ounces.

Aaron Dunn:

Awesome. So we're in the spirit of we're in the Corona spirit now. 

Michael Clements:

I feel like I've got it.

Aaron Dunn:

I can I can almost taste it. Awesome. All right. Well, what's the news on coronavirus? 

Michael Clements:

Well, there is…It is really affecting us. It's really affecting our country really affecting the global economy. If you have any money in the stock market or know someone that does their 15%, probably off of where they were a couple of weeks ago. You know, I'm, I'm kind of curious as to what's going to happen in the markets. Is it going to continue to go down? Is it going to bounce back? You know, we've had some days in there where it's kind of bounced back a little bit, and it seems like okay, maybe we've hit the bottom. But what I think we have to be we have to be asking ourselves as a country right now is, have we prepared for what it's going to be like at the end of March, and at the end of April in our markets. Are markets going down right now for what's happened in the last month in two months in China? Or the markets going down because of planning for what's going to happen over the next month or two months? And I think that's the big question right now on investors minds mind on people that follow the economy and ultimately, the supply chain follows the economy. It's it's, it's it's kind of the it's like the veins of the body, you know, if the body is the economy, the veins that carry the blood throughout that's going to be the supply chain that we are all a part of. 

Aaron Dunn:

Mm hmm. 

Michael Clements:

And so, yeah the the the coronavirus definitely has affected definitely affected trucking, especially at the ports and this article here from Overdrive it says, you know, this is a trucking spot market update. And it says spot truckload rates last week moved in line with seasonal expectations and load to truck ratios inched higher during the final week of February. So DAT Solutions, which operates the DAT load board network, stable national average spot rates and ratios at this time of year are signs that shippers are emerging from a typical mid-winter lull. Waiting for them of course is uncertainty surrounding the COVID-19 coronavirus outbreak. There are no specific indications that supply chain disruptions affected spot truckload freight in a significant way last week, this may change depending on import levels, how quickly Chinese ports can reduce their backlogs, and when those delayed sellings start to arrive here. 

Aaron Dunn:

So I mean, it's, yeah, it's, it's hard to there's so much uncertainty happening in the market and in the economy, like you said, and it's kind of hard to really feel the effects because of the distance and it's, it's like we can we know it's happening, and we hear about it happening. We can see it happening on the news and what have you, but we don't feel it necessarily for weeks. And then so we have like weeks at a time where we're kind of like, well, what's going on? I don't really, nobody really knows. It's really hard to come… It's pretty hard to plan for. 

Michael Clements:

It kind of makes me wish I would have watched more of…what's the TV show? It's like the Living Dead or something like that.

Aaron Dunn: 

Walking Dead. 

Michael Clements:

I wish I knew a little bit more about what the apocalypse was like right now.

Aaron Dunn:

That is true. The only thing I know is like one of my buddies. He had a bat with a bunch of nails in it. Maybe I need to go home and make one.

Michael Clements:

That can really help with the coronavirus. But there… a little other piece on here for our friends that haul in and around Texas and from others that come out of state to haul here. It does point out one way the international shipping distribution of the coronavirus outbreak in China could impact truckload freight here has to do with the price of oil high crude prices are a boon to trucking companies in markets like Texas because they spur demand for truckload capacity. More demand leads to higher rates. Oil prices have fallen about 20% since late January to their lowest point since December 2018, near $50 a barrel and forecasts are being lowered as the outbreak cuts into travel and other activity in Asia when the price of oil drops below the marginal cost of production here in the United States, estimated at 35 to $40 per barrel, producers could start to shut down drilling locations. This would reduce demand for domestic ground transportation, especially for flatbeds in rail intermodal equipment in key markets like Houston, Dallas, and West Texas, leading to looser capacity and declining rates. Very interesting. That hits home. 

Aaron Dunn:

Definitely, definitely we do a lot of hauls out to West Texas and oilfield freight. I mean, if you're in the flatbed market, that's what you're, you know, that's what you're working with. So it's like within freight, the biggest thing that's going to happen or the people that are going to feel at first are the people that are shipping containers and things like that, that the ships you know that that have a direct connection to those ports, but then it's also the impact on the global economy that the global oil markets and then you know, whatever the supply and demand is there, so it could impact that and then thereby impact at least flat bit rate. 

Michael Clements:

Yeah, I definitely think you're going to see a slowdown in the oil and gas community here over the next month to two months. And it's just going to be natural. It's going to be part of this regression in the markets. But you know, they mentioned here that it's estimated at 35 to $40 per barrel that that really is depending on the producer. You know, a lot of the big boys, the good producers out there, your companies that are strong, economically strong with technology strong in their drilling programs, they're at around 25 to $30 a barrel. So it really depends on who you're working for right now out in West Texas, because some of your smaller, more, I guess less cash heavy, more debt heavy companies, they're going to actually be probably closer to 3,. probably closer to that 40 to $50, even a barrel. You may want to get on the phone with their AP departments. 

Aaron Dunn:

Yeah, let them know. 

Michael Clements:

Yes. I mean, it's this is a real thing. Cash could get very tight in the oil and gas industry. So if you're tied to this industry and you are to the oil and gas industry and you're hauling in it right now, you may want to see what's going on. 

Aaron Dunn:

Awesome. Good point. Some other stuff that came up about Corona just like just some extra details, these numbers are going to change by the time this is out, unfortunately, is probably gonna go up, not down. But it's just, it's just crazy to think about the scale of this. So 100,000 people have been diagnosed, I guess you'd say, with Coronavirus worldwide. And then it talks about how California declared a state of emergency. I think it's like today, California now has the most cases of 54 people, more than any other state in the nation. 12 US deaths have been linked to the virus with 161 confirmed cases across the country. And now apparently, most of those people are old people. So most of the people that have died like 80% 90% are like 65 and older. So Trucking for Millennials listeners, if you're millennial, you have a Corona.

Michael Clements:

It does…the original outbreak that happened in Washington state last weekend was surrounded around more of a nursing home and there were people, multiple people, which nobody wants to lose anybody to a virus, no matter their age, but ultimately, yes, I think the younger generation here, if you're if you're already a healthy person, if you have a good immune system, you're probably going to be okay. You may, I… I don't know enough to talk about it, to be honest with you...

Aaron Dunn:

We’re not doctors.

Michael Clements:

I'm good at drinking Corona. But no, I don't think that there is, you know, just from what we're reading, there's not a whole lot to be overly concerned about right now. Now. You know, it's the same thing I've told our team though, at the office that this can change in a matter of weeks and days. That right now the stance we're taking is is it's not too serious. I think we should take proper precautions, wash our hands, use hand sanitizer, they're saying that's really the best thing you can do is just keep your hands clean and don't touch your face. But you know, right now they're saying it's gonna have less than a 1% mortality rate here in America, so, you know, I think we're going to be okay here. But it's I think the more that concern is the economy, and how is it going to affect us on a day to day basis. Is it going to hurt jobs here in America? Is it going to hurt the longevity of our economy? 

Aaron Dunn:

Yeah, productivity… 

Michael Clements:

In this in this, you know, bull market that we've had going on now for years. 

Aaron Dunn:

Yeah, yeah. Another thing that it's kind of impacted us directly a little bit. And you, you talked about it on on LinkedIn was the two conferences that have issued kind of statements and, of course, they need to, you know, if you're a big conference, if you're gathering a lot of people together, you've got to be aware of this. But they were talking about how you know, I mean, it's Coronavirus. Yeah, we couldn't you know, you can’t help it, we can’t help it but we can't help you if you decide to cancel based on the fact that Coronavirus is a thing. Yeah, so no refunds.

Michael Clements:

Super shocked to read that this week. Yeah, I got an email from the TIA about the TIA conference in Austin. This later this month, start of April. And in the email, you know, it has all this stuff about how they care about all the attendees and everything they're doing to prepare. And then the very last sentence pretty much tells you that if you're worried about this, you're not getting a refund. I just thought it was a really strong stance to take, even though it's it being a month away. Just because you see so many conferences, you know, seeing the music festivals, we see a lot of things that are getting canceled. I think in Italy right now they're actually playing through until April, they're playing all professional sports with no fans allowed inside the arenas. So to like this stuff's actually going on and for them not to show a little more empathy towards people that may have real life concerns about the coronavirus. And I think it is legitimate if you are worried about it or are worried about catching it. If you are, I think that's a personal thing. And if if you don't want to go to a conference because of that, and because of that fear, you should have every right to not have to do that. And I think it's ill advised of them to do that. Because we have travel, you have hotels, you have rental cars, you have to line up that transportation, flights, all of this. And so what are they going to do if this gets worse here in our country? Are they going to make are they going to cancel it a week before and then say oh, maybe we should have issued refunds starting back in the start of March but by then people who would have maybe backed out which we don't plan to but those that do want to they're not going to have the opportunity maybe to move that flight maybe to cancel that hotel reservation. So it could get very expensive for some of these people now have heard of some of the airlines and others though we're working with people who have fears but I was very shocked that an organization like TIA who we're supposed to trust here in the transportation industry, who is supposed to be looking out for our best interest who a lot of people pay a lot of money money to have memberships and to be a part of that organization for them to basically say we don't care about you and what you have going on and your fears of this, we're not giving you your money back very ill advised on the TIA’s part. 

Aaron Dunn:

Yeah, I mean, I can kind of see on on their end that, you know, what they don't want is a bunch of people saying, “You know what? On second thought I’ll just get our money back and just say coronavirus is the reason just so I can get a good excuse in there.” So you know what I mean? Like I can see that I guess. But like you said, I mean this is a you know, global pandemic is what they’re saying. And for as much as the we're taking it with a, with a shot of Corona, you know, taking it with a grain of salt for what it is and how dangerous it might actually be. It is important that you know, people, you know, it's like, it's like, hey, nobody could help this. At least you could kind of help out in that in…And to your point of like, I just heard of another logistics conference that did that exact thing, which was it was like two days before the conference that they cancelled it. It was it was very very recent. They barely gave any kind of notice.

Michael Clements:

That’s frustrating to people. 

Aaron Dunn:

Yeah, cuz some people are going to be already be there. So… 

Michael Clements:

Come on that… value your attendees over a dollar. That's all I think that they should be looking at. I think you're valuing that dollar that you've already got off their credit card, instead of valuing the longevity and then being able to trust that organization because I definitely feel I don't know it bothered me a little bit being seeing that and thinking about the people out there that have a legitimate concern and don't want to go 

Aaron Dunn:

Yeah, in other news, in other news, we've got hours of service reforms headed to White House OMB for final approval. So if you've been a long time listener to Trucking for Millennials, we've talked about the hours of service reform. Before when when the when the proposed hours of service rules went into effect for public comment. And now we're in that like next step. This article, again from Overdrive says final rule to overall federal hours of service. regulations for truck drivers has been sent to the White House's Office of Management and Budget for approval. One of the final steps before the rule can be published in the Federal Register and take effect. It's unclear what exactly is in the HOS final rule as the text has not yet been made public. FMCSA has proposed hours of service reforms published last August called for a key few key changes to existing hours of service regulations. You can go listen to that podcast when we discussed them. But here's a quick overview. Chief among those changes would be the ability for drivers to pause their 14 hour on duty clock one time and go off duty for up to three hours. Likewise, the rule expanded the split sleeper berth option to allow drivers to use a seven and three hour split of their required 10 off duty hours. Existing regs allow split sleeper options of eight hours and two hours. FMCSA’s HOS proposal last fall also provided an option for drivers to extend their 14 hour clock by two hours if they face adverse conditions such as traffic or weather. No word on the coronavirus. What if coronavirus delays your time?

Michael Clements:

It very well could it could.

Aaron Dunn:

But if OMB clears the rule FMCSA would be free to publish a rule in the Federal Register meaning a final rule could be filed within the coming months. After it's published, there's likely to be an implementation period of either months or years to allow the industry prepare for the changes. So we will keep you updated on Trucking for Millennials on like, what happens there when it becomes available when those changes become public. But that's good to know that there's probably you know, they're moving the ball down the field. 

Michael Clements:

And, yeah, making progress. Hopefully, we were able to hear some of the things that people brought up some of the things that people were voicing, you know, that wanted changes, hopefully, we get to see some of those in a positive way. And the trucking industry as a whole. It's not going to satisfy everybody, but hopefully they satisfy a good portion of the trucking industry and really make make some progress towards a, I guess, a more progressive way to look at hours of service. Mm hmm. 

Aaron Dunn:

Yeah. Yeah. Something that actually works with the truckers instead of against them. Mm hmm.

But yeah, that's all the news. Let's see. We got anything else?

Michael Clements:

No, no, we don't have anything else.

Aaron Dunn:

All right, man. Well, um, thanks for listening.

Don't forget to subscribe, maybe share with a friend. That'd be cool. 

Michael Clements:

That would be great. 

Aaron Dunn:

And let us know if you have any feedback, leave a review, and we'll talk to you next week. We got a good interview lined up for next week. It's gonna be great. So be sure to be back here on Monday.

Michael Clements:

Thanks for listening.