Dean Croke

Interview by
Published on
March 31, 2022

In this episode...

Dean Croke has seen most of it, if not all of it, in the trucking industry. He has a strong background in trucking operations, data science, business intelligence, data analytics, and so much more. As the trucking industry evolves, so too must company owners and their approach to improvement with more data-backed decisions. Life By The Mile sits down with DAT Freight and Analytics’ Principal Analyst, to talk about market trends, what data companies should study, and a whole lot more.

Dean Croke

Dean Croke is the Principal Analyst at DAT IQ


uh get at least six hours sleep every night okay because without the sleep the whole world looks very different you become very agitated grumpy depressed moody right your behavior changes on the road you're less courteous so I wouldn't talk about so much the symptoms of what we see on the road from truckers but the source is lack of sleep

we're here at the mid-america truck show lots of ambient background noise but it is an absolute joy to have dean crow principal analyst of d.a.t out of portland oregon anybody in trucking and logistics is familiar with the acronym d-a-t but for those of you who aren't let me remind you you get the most relevant matches for your business the right load for the right truck at the right place no matter where you are d81 is the largest on-demand truckload marketplace more than 249 million loads and trucks posted annually find the load board package that best suits your business below but we're going to bungee jump into something that's relevant for every one of the drivers and companies in america and it's this whole issue of of data and you become a maven in that industry but i want to know how you got there so what's your story yeah so i grew up in australia driving trucks a small family business um owned and operated my own trucks did a few million miles as an over-the-road driver and what i figured out over time was i was very very good at driving a truck you know delivering loads you know customer service but i was terrible at running the business side of the business right and that's probably not unusual right and that's what that's what we do at dat we're kind of the we're an outsourced analytical partner for the small fleet we're just one of many business partners that are small carrier needs whether it's a factoring company an insurance broker you know a freight broker every uh you need really good business partners especially today because you've got so much data available to you so i sort of made a transition in 2000 when i moved here i lost a couple of drivers um and and had to make a transition out of trucking i realized that it was something i needed to make a life change away from and i started analyzing data and because i'd spent so many years on the was that always in you by the way when you were young were you somebody here you're always my dad was always fascinated about why i wanted to know how to do things better i was always trying to figure out a better way to do what a wonderful thing to have in you at a young age yeah well that's what logistics is i learned at a very young age that you've got to get very clever about finding different ways to do things more efficiently and that's kind of what trucking and logistics is all about um if you're good at it you can become very good at it but since you know the iphone revolution sort of in the in the early 2000s or 2007 we started to have all this data available on all these digital platforms that can help you operate a truck business and i think that's what's made this transformation in the last freight cycle so if you think about the hundred or four thousand new truck companies that have joined right so what they've they've joined in an era where there's all these digital platforms on an iphone you can get an app on a phone like dat1 and see the entire frame what's the impact of that development specifically let's drill down on that for a minute it was substantial and here's why normally to understand the freight market and where all the freight patterns are and where the rates are hot and cold you'd have to do years and years and years over the road to figure it out it's daunting yeah these days you can pick up an app and have at your disposal an algorithm that's recommending what loads suits you uh we've just launched a feature where you can put in your desired rate into the app and it'll start searching for loads that match that criteria so that's new because what that does is it gets the carrier thinking about what does it cost me to run a truck so now you've started to have all this technology that can help you go point to point very few empty miles you can be matching loads that suit your home time requirements or your load requirements and these are pretty intuitive and easy to to use right for the modern day trucker that's new to this industry that's sort of not from my generation that had sort of old school if you're a newer driver that you've grown up with technology and you've been you know you've been uh playing you know sort of these online games all the time you're not you're no stranger to technology these sort even elds are completely familiar to them like technology is part of their life and so having an app on a phone to run your entire business now has become second nature to these guys and i think what's the difference you ask the question what's different right that's what's made this transformation so much easier for these new carriers because they now they don't have to have a massive back office department helping them run their business it's all at the end of their hand on a phone so they can have a complete market transparency and that's why so many carriers have been able to be so profitable in the last year because they've been they've had so much volume to move and so much transparency and so many different ways to connect with brokers and shippers and that's been the big difference you know dean one of the areas that the marketplace has come to respect so much about you is that you're able to through gifting uh and experience right uh deserve what's happening you know uh for those of us that are faith-driven there's actually a reference to the tribe of issachar who understood the times and knew what to do right that's kind of you right so tell us a little bit about where you believe we are in the cycle of things people know it's a volatile market but can you take some minutes and describe where you think we are yeah this is the one of the challenging times we're living through history right right now and one of the one of the things about living through history is we don't know where this is going to end and uh these are these are we use the word unprecedented we've been talking about that for a long time but it really is isn't it we've got no we've got nothing to fall back on to say well this is what happened in the last freight cycle everything's different now because our whole supply chain's been upended we can't even get new trucks out of factories because of chip shortages we have inventory being pulled in from overseas now for the fall shopping season we have massive backlogs of ships our ports we've got things happening i called last year the domino economy right because when one domino fell another fell and another felt and they were sometimes unrelated parts of the supply chain and of course for the trucking industry that's created opportunity because it's people have realized that logistics is a core part of our everyday existence so the la i don't know where this ends i'm not sure what i will say is that despite the doom and gloom that people have been talking about in terms of the current freight cycle this is very different because we've we've a been in an elevated bull market for an extended period of time so 2018 freight rates went up from uh january to about july then they started to come down right so it was a very short-lived industrial driven economy in 18. uh, record numbers of new truck and trailers orders followed in late 2018 oversupply 19 markets dropped freight rates didn't drop a lot but it was enough to compress margins because freight rates hadn't gone up a lot compared to the current freight cycle right so that's the big difference rates have been far more elevated for far longer in this current freight cycle if you're talking what do you attribute that so so we've had a dat our freight volumes annually the number of loads moved was flat so they're down about half a percent so we call it flat a lot of people have been saying freight volumes have been way up they haven't if you look at most of the major metrics whether it's the data truckload titans index it's up a few points ours was flat uh what changed though within that flat number contract volumes dropped 14 spot volumes jumped 14 interesting so we saw a doubling in the volume of freight moving in the spot market in 2020 uh 2021 from 2020. so why was that why was so much moving in the spot with urgency supply chain shortages we had to get stuff delivered shippers were wanting to get freight delivered on time as opposed to in full so we had this inflated demand scenario that a lot of people haven't quite caught on to because if you're shipping more part loads because there's more urgency to get on time because of supply chain shortages you have this inflated demand scenario where there appears to be more volume moving it's just not moving um at the same capacity now the other thing that is starting to ease now we've had this notion that it's been a driver shortage and i've been saying for nine months now there hasn't been a driver shortage it's much more nuanced than that what's happened is we've had uh the area that the trucks aren't circulating through the network as fast as they used to because they're spending more time on labour staff docks where there's only seven doctors open instead of 12 because there's they're hard to get labor so if you spend more time on docks your circulation time drops so it creates this notion that you've got tighter capacity so if you've got inflated demand and tighter capacity it appears like the world is going to end from a shipper perspective because you can't find trust that's an excellent example of interpreting what's really going on what's really going on here and i said that you wait and see you will find that as soon as supply chain disruptions ease demand falls off in q1 as we talked about before we came on air you will suddenly find we've had all the trucks we've ever needed lo and behold spot rates have dropped 25 cents in a month spot right so so the market's cooling capacity's easing trucks are becoming more fluid in the network they're moving faster so this is this is um how typical is what we're seeing right now seasonally very typical right this is a seasonal pattern it's just that the amplitude of the data is different so we're not seeing this massive sort of drop off in spot rates you're seeing more of a tapering off so it's we're seeing some seasonality but you know where you'd have like this roller coaster chart when you look at rates and volume we're seeing more of a you know kind of a ripple effect it's more of a gradual under undulating trend so we're not coming down like we're used to in terms of this it's not a precipitous scrub and remember carriers have had one of their best years in 30 years last year there right they're carriers despite all the grumblings they're pretty flush with money um i hope they paid off a lot of their debt um their operating margins been pretty good last year but it's not sustainable no no so that's that's what we've been saying is you really manage your costs now because it's the same message as 18 to 19. a lot of carriers came into the industry and their first freight cycle was a bull market and they're thinking this is going to go forever and i made a brilliant decision and and i think some have made that same mistake again okay i've been hammering them saying you guys have got to you could go back and find my commentary a year ago put money away for the rainy day because these so don't think that this revenue base that you're using in your p l is normal this isn't this is inflated it'll come back down but be prepared for that rainy day because not knowing that we'd have an acute jump in diesel prices um in the last month the rainy day is here right when uh when diesel costs and this is so valuable and this be speaks by the way we're with dean croak and he is the principal analyst for dat this be speaks how valuable your service is because you can be eyes and ears and an interpreter what's really what's really going on so take us through again where we are and what you see ahead so i look at two numbers um i i talk to carriers a lot about operating costs because you've got to understand this comes back to good business partners and having good people around you that helped do you run your p l but there's a simple number that i work on and it's pro it's been accurate for for the best part of 40 years right in running trucks if you can keep diesel it's no matter what country you're in if you kick diesel at about 25 percent of revenue that's you'll be profitable long term now i know that some loads will be 26 some will be 20 because it's a light load sometimes you've got to run into the hills with a headwind so you'll have a higher burn rate on the diesel side but if you can keep diesel as a percentage of revenue around 25 percent okay you'll be profitable long term when you look at your p l on all your operating costs so why do i say that well in 2019 when we had record bankruptcies diesel was 32 and there's a direct relationship between exit capacity bleeding off in the truckload market and high fuel prices because it's a big component it's about 45 percent of your operating costs for an owner operator right now so if it was 32 in 2019 it dropped down to 19 percent in 2020. remember diesel was only 2.48 right right right so the margin carriers were making incredible margins because rates were escalating and diesel was plateaued right down till november 2020 and then it took off again today diesel as a percentage of revenue is about 35 percent it's above where it was in 2019 which be speaks what bankruptcies yes so that's what i'm really concerned about you've got to really watch your numbers and what's your cash flow make sure you're getting full cost recovery on the fuel surcharge have good business partners you know cut down on idling slow down do all those things to cut it's not a time to be leaky on any of those variables yeah and i'll see a lot of guys in in spring idling their trucks this is the perfect time to be sleeping with the windows down but you shouldn't be idling your truck burning 10 gallons every 10 hour shift 10 hour break you know there's there's there's what's that 50 uh that's like 50 a day you're burning there just in idle in your truck right there's plenty of white noise machines you can buy if you needed something to keep you help you so that's just there's a lot of things carriers aren't doing they need to be doing because there's a lot of new entrants that don't know how to manage the business side of being in a trucking business and and that's where they need really good partners and hopefully we're filling part of that void with some of our market insights and analytics giving them some direction about where we're headed we think spot rates will decline there's no question about that okay but we're also set heading into produce season yes so we normally see a lull in march and then april and may second quarter volumes pick up a bit there's usually a bump around produce season the other transformation we're seeing this year is we've been spending as consumers in lockdown during the pandemic we've been spending more on physical goods at trucks hall right and less on services we're here today in louisville we're out at an event things seem fairly normal and i think what we'll see this summer is a shift back towards services more restaurants more travel more airplanes more jet fuel more hotel accommodation so all those things that trucks don't necessarily hold in the services side of the economy we will start to spend more money back in that part of the economy so demand could taper off this year in that regard compared to last year when we were hauling a lot of freight that people were consuming the physical goods side of the economy uh during the sort of the pandemic phase dean can you explain for people who may not be as in tune as uh obviously you are just how you create the models and the interpretation the data sources give a lay person's description of kind of the back end of you know take no regard for the person behind the curtain right but pull the curtain back and explain how you do what you do one of the one of the things uh uh people often say well you know the the rate's your the rates on dat rates well d.o.t is fixing the rates well no d.e.t doesn't own any trucks we don't actually move the freight we just match the freight we just match the shipper and the carrier and the broker together and we uh all of our rates come from contributions that are sent in from carrier shippers and brokers for loads moved it's totally different to a load board where a broker in a you know a free economy can put up whatever they want as a load it's up to the carrier to agree to that rate so when a load starts to get moved uh we get a contribution comes in and says here was the rate on that load moved um so keep in mind we're seeing about five million loads a week through our load boards we're seeing a smaller a reduced percentage of that through the loads moved and then what happens is over the within about a day and a half to two days of the load moving we're getting our rate contributions coming in okay so over time we start to get a really good feel for what the average rate is on on a lane and we look at about that's your finger on the pulse yeah so it's about 65 000 lanes it's an average so remember with averages you've got highs and lows uh we scrub out a lot of the high volume high rates and the low rates because they're obviously loads that were moved that are not atypical of loads over 250 miles we look for a minimum number of contributions on a lane minimum number of companies reporting so we look to find um an average that gives you the best feel for what a rate is across all of the different origin destination pairings there's about 65 000 of them in the country we do it across 135 freight markets okay they're at three digit zip code level okay and uh and we look at the rates every day we publish them on our on our dashboards on on you know through rate view and on our website so there's lots of ways carriers can get access to the data uh more importantly what we do from uh the insight perspective is every week we do a similar show and we'd say here's what's happening with rates here's the direction right here's the trend and here's what we think is why and here's what you need to watch for and you know as we're talking about the start of the show ports you know port market congestion um that's going to be one of the big things that'll be continue to be a feature of the market this year you don't see that changing anytime soon no i don't i don't it's like whack-a-mole right so what's happened is when when all this port congestion um you know we had 109 vessels waiting at anchor on january 9. down to about 45 today right but the the whack-a-mole effect the reference is that carriers said heck we need to find another port to avoid the congestion let's go to houston or savannah or charleston and of course both those ports charleston and savannah now have port congestion in particular charleston they've got lots of vessels waiting offshore now so the congestion's kind of moved around it's moved to seattle uh prince russo the systemic issues aren't really changing no because we're still we're still in this inventory replenishment phase you know may uh march and april of 2020 we went through the uh pantry stocking phase of the economy right and uh that soaked up a lot of inventory that people have not really caught up on and because capacity was tight on the ocean side what's happened is a lot of importers were just scrambling to get any capacity they could whether it be leasing their own vessel right or you know chartering on with another big company just to get involved they were just trying to scramble to solve a problem now right so so what they had for the best part of last year you know spring inventories were in late summer inventories were late fall inventories were coming in at christmas now what this meant was that that where that volume of freight that was missing its seasonal shopping timing because of all the congestion had to have a warehouse somewhere where does it sit so we were seeing a lot of spot market volume moving freight from ports to warehouses to sit and be staged until demand you know required the final mile move that's still happening now to the point where now shippers are pulling forward fall inventory now they're getting they're trying to get ahead of the curve right it's the seasonality is not what we used to see a you know a peak shipping season in september october right last year it was in june yeah yeah because people are trying to anticipate systemic issues and of course some industries are affected by that because you had whole fashion seasons that were missed yes and so a lot of these ended up going to liquidators and you saw a boom in some of these companies that uh did did that there's some fabulous deals out there right now from a lot of the big box retailers who are trying to move some of this inventory right right when you uh when you look down at the data sources you create reliability you create reliability you create uh relationships with key and and people can depend can't they on on the data that's coming out how do you go about the interpretive part of it for you right so i do it through an educational process right so we all talk to carriers we talk to carries a lot about negotiation skills right so because a rate is really just the starting point it tells you what loads are being moved on on a certain lane and then it's up to your negotiation with the broker or the shipper to try and get down to what's a fair rate to move that low so uh we spend a lot of time talking with carries about how to have you know good conversations good partnerships now is the time to be talking to people about building long-term relationships um but it's also about understanding uh so carriers think about multiple loads at a time so a lot of our brokers will be you're talking about their mindset yeah how you think right so you leave home on sunday you're trying to figure out how do i get the next five loads to get back saturday morning right in your head you're doing this multi-dimensional load planning it's like chess yeah but but in the uh 3pl broker logistics world it's transactional it's one load at the time but that you know if you're talking about negotiating a rate on a load in the absence of the next load and the next load for the carrier it's it's it's kind of a moot discussion because the carrier is thinking very differently about what rate he needs to get to that particular market so i think one of the things that we don't do well as an industry is helping carriers build multiple segments right and that's how they think about building their loads because they have a profit target each week they need to run 3 000 miles and they need to be home saturday they're clear on what they need to do yeah but you get a lot of people it seems from what you're saying that have a mindset of i just want to get the next load taken care of yeah and we're building so you asked a question about how we help carriers we're kind of building these multi-dimensional um uh try rate legs where we're trying to help carriers understand instead of a to b you could go a to b to c to d and and actually be more profitable so we're trying to build this more of a multi-dimensional view of the freight market right from the data because we have all the data about where all the loads and the rates are what we're trying to do is build more visibility into that app it's a bit like how you how you put your um you know your trip request into ways oh sure you go to the map and it gives you three options right faster slowest no tolls well we're trying to build a similar functionality where it says instead of just you know chicago to atlanta here's another couple of options to get to atlanta but you could go here with a load here with the load and then still end up in atlanta and uh and be more profitable get more loaded revenue so that's the sort of stuff we're helping carry as well if you had the opportunity to school or train all the drivers in america and just encourage them in a couple of ways let's say you were given the chance to talk to them all right now what would be a couple of specific meaningful manageable hacks or lists that you would give what would you say um other than be more polite uh because i'm i get a little bit disappointed at some of the behavior some of our drivers out there i think drivers need to do a lot more about making this a career as opposed to just something they're doing in between other jobs okay right so so treating it more as a long-term career opportunity because it's been a fabulous career for me the other thing now this is going to sound way out of left field but it's uh get at least six hours sleep every night okay because without the sleep the whole world looks very different you become very agitated grumpy depressed moody right your behavior changes on the road you're less courteous so i wouldn't talk about so much the symptoms of what we see on the road from truckers but the source the source is lack of sleep and because the way the hours of service rules are sleep is very difficult i often i've done a lot of sleep education for fleets and they say to me what's the one thing we could do to help our drivers and this and the one thing other than six hours sleep every night and two periods of night sleep every seven you start your drivers at the same time every day that's interesting consistent start time okay so why is that well if you have the same start time you have the same sleep pattern right but and this goes back to the old uh ten on eight off book rule right right because a new work day started six hours earlier you're trying to sleep six hours earlier every every shift you can't go to bed six hours earlier your body is not wired to do that right so you're cooperating with circadian rhythms that's there in the body so what you want to do is if you have the same sleep pattern and what a lot of people don't realize drivers are creatures of habit and we have we all have this inbuilt drive for anchor sleep anchor sleepers same place same time every day right that's what you're long for and if you do that um truck drivers would stay longer they do so i can quote you some statistics from a publication we did when i worked with local tracks i taught uh one of the large truckload carriers i told half their drivers how to sleep with an hour and a half class because i studied human physiology at harvard so i wanted because i wanted to understand why do drivers fall asleep and crash so long story short i was teaching drivers how to sleep within the confines of the hours of service my drivers in the my group had had one rollover right um in six months okay the control group had 14 which was the normal rate for the other half of the population so very few rollovers they were 30 percent less likely to quit and here's the here's the magic number drivers that went through my sleep class ran 10 more miles per track a week and you'd say why is that well if you're more rested you're not pulling over as often it's interesting and you're not dragging yourself in and out of rest areas because you're tired so i've always known as a driver if you if you can get enough sleep you can do plenty of miles that is so interesting and of course here it's probably true in australia as well here we have the national sleep foundation sleep deprivation is such a core issue it's hard to get as a trucker right man it's it's not hard because you're not tired it's hard because you don't have consistency right and it comes back to having the same schedule if you have the same schedule every day whether you're short haul a long haul by default you lock in your sleep pattern and it's the sleep that powers all of the other things that makes you know trucking a great life in the absence right it can be a really difficult grinding job well and of course we also know their physiological impacts hypertension cardiovascular right i've just passed my cdl physical and i'll share with the story by uh when i went in it was i was 146 over 92 and i've got to be under 90. right right so I have because I've got hypertension and high blood pressure and a history of heart disease in my family yes so I've gone for a two-year card or one-year card they made me wait for half an hour in a quiet room to get my diastolic down under 90. and i said so how often does this happen she said almost every driver that comes in here for a cd or physical we have to get them to wait until their blood pressure comes down is that because they're just an absorption it's stressful well the seed physical is very stressful about these days because it's not like in 2004 it said do you snore yes or no now it's like if you've got a next size of 18 inches you're going for a sleep study so there's a lot more science behind the cdl physical there's also a lot more liability on the practitioner doing it these days right so they're more careful about it right because they're tied to the behavior or the physical uh issues we've got the lack of amenities during the covered pandemic like a lot of restaurants closed down right so you didn't have a lot of good choices even on the way down here on sunday i pulled into a truck stop and the best they had was a fast food takeout nowhere to sit down because it was closed off so right it's even hard to make good choices even if you wanted to stay healthy that is so that is so interesting you know i'm learning so much and i know that our viewers and listeners are as as well dean let me ask you this because i've had some people ask before and it's a little bit of a different question what is trucking logistics like in australia um very other than we drive on the right side of the road literally uh it's it's uh about 10 scale economy of the us got the same population spread yeah um it's a lot of long haul but the big difference is we have uh much bigger trailers so we have three and four and five trailers on a lot of our trucks in the outback a lot of multi-combination trailers um but from a driving perspective uh you can do long haul but be home every weekend because of the capital city spread is mostly on the eastern seaboard right um and uh the other thing people say what what's it like as a driver get used to changing tires because there's no 1-800 come and help me yeah you're out in the middle i mean just describe for people you could literally be how far away from civilization you could do fifteen hundred two thousand miles before you see anybody you know driving road trains in the outback you might see half a dozen cars a day uh so it's a it's a you've gotta love solitude and your own company it's uh but it's a you get paid a lot of money to do this right but you've got to be a part you've got to be a mechanic a tire changer a jack of all trades and an explorer and somebody that's got it have you let me ask you this have you seen something really interesting along the way before in australia yeah um yeah like what are some of the the wildlife the wildlife so so one of the things a lot of people don't realize is the original road trains were camels yeah the camel trains afghan camels from the middle east so uh when when diesel power came along yes they just released all the afghan camels into the wild so we've got one of the largest populations of wild camels on the planet and so when you're driving trucks in the outback one of the things you got to really watch are campbell's wildlife like camels and it's been like hitting a moose that's why in australia we have big bull bars on the front of our trucks it's mainly for cattle horses camels things like that that is so interesting let me ask you this have you ever encountered uh snakes uh unfortunately yes so so i was telling someone yesterday the one thing you got to watch with snakes um you got some seriously venomous snakes yeah and as a trucker if you if you're lying on the road and you run over one because you can't stop they'll sometimes get wrapped around your axle and when you get underneath to change a tyre you've got to be very careful that there's one of these venomous ones not wrapped around an axle angry waiting to bite you i've had it happen once when i crawled on it to put the jack under the trailer axe on there's this snake wrapped around the action unbelievable i can i can i can imagine we're going to have somebody that hears that story and the next time they go under a truck they're going to always they're gonna remember it it has been an absolute delight i i knew when we talked beforehand that you were rich and full with experience with insights you have given us tremendous things to think about and again this is dean croak principal analyst of d18 in portland oregon you've given us a lot of useful information today we would love to have you guys let's be back on some time and we do have a little thing that we do uh we love people that become brand ambassadors uh for life of the mile and so this is uh kind of our attempt to be patriotic at the back yeah this is the life by the mile logo so that is yours thank you to keep and uh dean again you you have uh you you you know what you were also i will tell you this you are one of the most engaging analysts in any market that i've ever talked to thank you uh you've got great stories and we're grateful that you came to life of the mile delivered by brakeworks we're here at the mid-america truck show you never know who's going to be walking up one of the aisles today it's dean brook principal analyst from d18 thank you so much thank you thanks for watching this episode you know life by the mile delivered by freightworks is one of the newest largest and fastest growing podcasts actually produced by a trucking company now we want you to like and share this episode if you'd like to see 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