AL'S CORNER

AL Hursey

Past President - Transportation Club of St. Louis

al.hursey@rockfarm.com      618-795-3672

Transportation Club of St. Louis

                                                                                                                        

                             Annual Dinner is Back April 22nd at the MAC Downtown

                                                   Time for the April 2021 version of Al’s Corner

This month I am promoting our Happy Hour event on April 1st at Backdoor Comedy Club, located in O’Fallon, MO. Free Food, Free Entry, Cash Bar.

Annual Dinner - Also, we will be having the return (after a one-year covid absence) on April 22nd of the incredible Annual Dinner. Again, this year it will be at the Missouri Athletic Club (MAC) downtown St. Louis. It is only $65 and includes an open bar, dinner, and a great speaker, Donald Broughton, Capital Managing Partner. See you there!

Golf - Please do not forget the Golf outing on May 7th again at Eagle Springs Golf Club in North St. Louis.

Personal Updates---got both shots of Pfizer Vaccine in March. On my First shot, I was tired the next day, sour arm, then had a bad headache and chills for 4 hours. On my Second Shot, I had little reaction to it. I was ready with pain killers just in case, but I only took a few pills.  It appears that since I had Covid before, the first shot made my body think it was back, thus the issues, I think.

My Last 10,000 Everyday Step Update—as I turn this article in, I only have 16 days left for a full year without a missed day. After April 16th, my personal challenge will be completed, or will it be?  Thinking about taking it to the end of the year or 249 more days=614 days.  My heel bothers me some, so not sure yet. Kind of funny, in my heart I really do not want to stop it ever, and I might feel bad when I do stop.  As info, over the past 5 years I have averaged over 10,000 per day, but not every day. I thought something like being sick, or a tough injury might stop me, but it did not.

In the beginning, my previous streak was 22 days in a row and it never crossed my mind about how long it would last. It just evolved. I have a friend named Dave G. that has pushed me some too (thanks).  So, as I complete the full year, I want everyone to know I did this as a personal challenge for me.  Kind of like holding myself accountable type of thing.  I also thought that by keep moving it might help me if I ever got Covid, which I did. The Big Picture for me is---I have come to realize that I have struggled with my weight for the past 30 years (at times not knowingly) mostly because of a poor diet. Now, by paying attention to my diet, and the consistent exercise, I am down 41 pounds over 16 years.

I really do not go up or down much, just lose a little monthly. The exercise (or lack of for most people) really showed during covid as I believe some people died from it due to being “not as healthy as they thought.” So, again for me, I thought it might be good to keep moving. My lone advice to others is to keep moving, set a goal, do it for yourself, and hold yourself accountable. It doesn’t have to be 10,000 try 6,000 or something. To me, the 2,000 step days (not enough) can easily be beaten. If you have 2,000 try to add 2,000 to it, or something. “YOU CAN DO IT!”

Transportation Related Thoughts: High Rates terrible Equipment Supply---the past calendar year has been like none other. This includes transportation and shipping. It reminds of something my financial advisor, Ed Henrichs, Vice President-Wealth Management with the Raymond James 314-214-2100 (another free plug I just snuck in!!!) said to me. “Al, don’t try to time the market!” I have heard several shippers say, “I am done with spot market and will never go through this again.” The assumption being they will do bids now and hold everyone accountable. To shippers I would tell them this was a once in a lifetime, hopefully, event. Make no mistake, I totally understand the reason so many shippers are unhappy. They should be, it is their freight.

We, at Rockfarm STL (RT&T Logistics) have tried to work on low margins, knowing that times are tough. I am confident this is one of the reasons we have grown. Years ago, when I worked for NYK Logistics the President asked me how we should deal with a down market in rates? I told him I would step ladder the rates down quite quickly. He said they would hold the line on the higher rates as “we may not be the cheapest, but we can always get our customers a truck.” I told him you were going to lose lots of customers that way. They went down 40% in sales over the next 12 months.

It does appear that advance planning will be necessary for the rest of the year for shippers to achieve better rates. Without a doubt shipper’s that look internally at the way they do business by seeking improvements on their own internal processes will find savings. Also, advance planning in order to find cost savings on rates will put them ahead of the game. Again, I do not think doing bids in the short term, thus trying to hold the line on rates for 4 months will work. Too much guessing on what the near term will be, and what if the rates drop? But I am confident also that rates will get back to a more normal situation over time, in less than a year.

My theory on the whole thing is this, and it has worked this way for the 30 years I have been in it. During times like these, rates go thru the roof due to mostly carriers and drivers leaving the industry because of the opposite of these times, low trucking rates. In May of 2020, the rates were terrible, even unfair to carriers, many carriers closed. Fast forward to now, High rates entices drivers to enter or re-enter into the market. Large carriers try to add huge amounts of drivers in order to make lots of money. Then the market gets flooded with plenty of capacity, and then the rates tumble as shippers are swamped with carrier capacity. Thus, it becomes a shipper, rate-controlled market.

It is usually a shipper rate market to me 2/3 of the time. Then the rates remain low for a while (a few years) then drivers leave the market for better paying careers. The cycle goes on, and on.  But these times are different as it was created by Covid and several natural disasters. Another problem is younger people want things delivered especially to their homes adding the need for even more drivers, but they themselves do not want to drive a truck. Couple that with an aging driver pool and this looks a little more ominous, or longer lasting.

So, I think rates will be higher permanently, not like these, but a little higher than the past (what isn’t?). Drones and driverless trucks, in my opinion will have a small effect over the next 5 years. Because of increased shipping costs shippers and manufactures will just raise their prices higher to offset the higher transportation costs and reduce packaging sizes (already).
 

Have a great month,

Al Hursey

Rockfarm St. Louis

618795-3672   al.hursey@rockfarm.com