Dean croke

Interview by
Published on
October 28, 2022

In this episode...

DAT Freight and Analytics Principal Analyst Dean Croke is back on Life By The Mile for a thoroughly informative episode on current freight market conditions and more! If you’re just entering the trucking industry as a new carrier, you will not want to miss this episode. Learn what opportunities are there for you today, as well as what it really costs to operate a truck in 2022, the possibility of a massive shift towards electric trucks in 2023, and what problems may arise from speed limiters. Stay tuned as well for a sneak peek of official Life By The Mile merch that will be made available on our online store very soon!

Dean Croke

Dean Croke is the Principal Analyst at DAT IQ


there's a lot of misinformation around the market right now around diesel prices and Fuel and what the cause of it is and you know today Bloomberg had a great report that says that our level of inventories of diesel are down to 25 days nationally that's the lowest it's been since 2008. Welcome to Night for the mile delivered by freightworks one of America's fastest growing podcasts actually produced by Trucking indicted to tell stories

all here right now slight by the mile delivered by Freight works I am so excited because I have an old friend we haven't known each other a long time but you know Dean croak is the principal analyst for d-a-t-iq the freight data and analytics operation of dat he brings more than 35 years experience in the fields of data science supply chain management Logistics risk management Human Performance listen for the latest Market updates follow at data Freight team on Twitter you know what uh I also want to say this real quickly folks the way we're able to bring insightful intuitive and prescient thinking guests like Dean is when you like share subscribe engage and become part of our team so anyway all right Dean you're in Boston right yeah and uh we're in the midst of fall which is uh spectacular here in New England at uh the best of times this year it's even more vibrant because of the the dry summer has apparently made the leaves more vibrant so there's more Reds and oranges so there's a lot of traffic a lot of charter buses a lot of what we call Leaf peepers and uh it's a it's just a gorgeous time of the year but winter is around the corner is the is the dark thought that immediately comes to mind and it's pretty brutal up here yeah you know what I want to I want to say this I'm on many things and I'm not being patronizing you're one of the more poetic data analysts I've ever met maybe the most so I mean for you to say Leaf peepers with an Australian accent says says everything to me and I can't say it in quite quite the same way of course here in Western North Carolina when I first moved here five years ago in two weeks when I checked out of the Walmart the cashier said to me Dean you're not from around here are you and you you never you never know what things things like that mean now now listen there is so much going on in the trucking and Logistics world and one of the gifts I believe you've been uniquely given is the ability to sort through data but also really ascertain what's going on and in the world of social media and the like everybody's got an opinion on this that and the other I would like you I would like you to answer if you would and talk as long as you need to this question what is really going on right now I I was reading the rising price of diesel was enough to knock the driver shortage from the top of atri's annual report on trucking industry worries but you you dive in for us and just give us an idea of what's going on be the doctor yeah these are extraordinary times Butch we're at the we're at the precipice of I think a change in the market we've had two and a half years certainly the last 18 months of exceptional growth in trucking you will see some of the earnings calls from some of the large truckload carriers have been reporting record earnings record income in Q3 that hasn't been a surprise given how high spot rates were and how high contract rates still are although you know on the rate side the market is certainly at the peak and you know heading down the other side to the bottoming out of the next Freight cycle but what what a lot of folks Miss in the market is how extraordinarily profitable the last 18 months have been right and there was there was a lot of pessimism and doom and gloom talks when Russia invaded the Ukraine diesel prices skyrocketed the Diesels you know fuel surcharge went to 68 70 cents a mile uh we were paying I think today we're paying 5.34 a gallon nationally on average so there was a lot of dire predictions then but what a lot of folks didn't realize was that carriers were fairly well cashed up and they were able to weather the storm and I I think we might have talked about this at Mid-America truck show when we were together yes this has been one of those Cycles where unlike any other Freight cycle carriers have been so profitable in the last year in fact some have said the most profitable year since deregulation and and if you know that's from everybody from owner operators all the way through uh to the large carriers now fast forward to February this year Russia invades the Ukraine diesel prices go up but at the same time which spot rates are plummeting and they've dropped almost a dollar a mile since the start of the year right that's a long way down now to put that into context it's still about 20 to 22 cents a mile above where we'd normally be in non-pandemic years going back to 50 in 2015. now the rub there is that our operating costs are up by about the same amount so it's a bit of a wash when you say well rates are higher but so are my costs because most of the price rise that we've seen in the last year I know on my truck I'm up about 25 cents a mile in terms of operating costs compared to this time last year 21 cents of that is diesel alone so the reason I say that is there were a lot of carriers that just couldn't absorb the price increase and they were the carriers typically paid a lot of money for a used truck in the last year to sometimes double what they would have normally paid lots of insurance costs and this was their first cycle and we saw it in 2018 2019 a lot of carriers came in in 18 it was all upside there was their first Freight cycle and then 19 hit we had record bankruptcies so a lot of people said well why would why wouldn't that happen again in 2022 and I said because they had a fantastic 2021 more profitable than ever so that kind of sets the stage for where we are now which is the you know the the freight rate side of the market is decreasing but demand remains relatively strong okay I think this is this is a really important point because a lot of the big indexes that we track for tonnage and demand you know ATA truckload tonnage index is up about five and a half percent compared to this time last year manufacturing this is a really important data point Manufacturing manufacturing alone accounts for 58 of the ton miles in truckload it's up four point six percent year over year so there's a lot of good volume metrics that tell us that trucks are still hauling a lot of freight and and we're not seeing the downside of course the headlines that get everybody's attention are the decreasing Imports and retail sales and inflation and things like that underlying all that still a lot of construction a lot of building a lot of Road works a lot of Steel being hauled cement all those sorts of products so uh even even housing is is copped a fair bit of attention and and people have talked about you know the housing market crashing the number of homes we are building today even though it's down 14 compared to this time last year that's the number of homes cons you know starting not completed still above 2018 levels 2018 was a great year for carriers so the the data point that I'm Fascinate fascinated by Butch is in the last three months we've we've had about 30 000 new carriers into the market isn't that something and you'd say well heck what are they looking at and it's and it's I you know I have a theory and and I think what's happened is we've seen a disproportionate amount of freight move closer shorter distances to populations during the pandemic because we've ordered more online so it has to be delivered in a shorter time frame but staged closer to populations so if you look at I-78 around Allentown Harrisburg Carlisle it's nothing but warehouses now if you say why build that well a third of the U.S population is in with within one day's drive by truck it's overnight to a third of the U.S population from Allentown now I know here in New England when I order something on Amazon Prime it comes from allentown's warehouses overnight and it's here the next morning so what's Driven a lot of the growth in these new carriers entering the industry are smaller box truck pickup and delivery trucks straight trucks Hot Shots and and that I think we haven't got the numbers to prove that but there's a lot more carriers anecdotally joining the market better have smaller vehicles and and I think that's what's fueling the growth so that shift in length of Hall to shorter uh fulfillment type operations you know like sort of direct-to-store from a warehouse that's where I think a lot of the opportunities are for these carriers joining the market diesel prices are still at record highs um my operating costs are in terms of running my 18 wheeler uh up about nine cents a mile just in the last three weeks because of diesel now of course shippers are paying the most they've ever paid to move Freight even though those numbers are sort of cresting and coming down a bit that's been passed on to you and I so a lot of people think oh well you know diesel prices are high but spot rates have dropped a dollar per mile we've always got to remember that the spot Market is only about 10 of all the freight moved you know 90 of it's moved under contract exactly which uh include the fuel surcharge of 68 cents a mile today so that's kind of the synopsis um we've got more capacity yes we're over supplied with trucks there is more trucks in the market than Freight but Freight demand is still holding pretty strong but we're not naive enough to say we don't see headwinds on the horizon we've been saying for months now me in particular to carriers if any carriers are listening I've been saying make sure you've got January February March truck payments in the bank before the holidays before the end of this year you need a buffer because I don't know how how slow it's going to be and if you have a bit of back a bit of a backup in terms of money in the bank and a few payments in the bank it'll help you weather the storm so that's kind of set where we sit here at the almost the start of November now I'm going to ask you a question I'm not sure you've been asked before maybe you have how does social media and people's picking and choosing little bits of information that they put out there Dean how does that affect the perceptions of what's really going on the thing I appreciate about you I tell people he's like a trucking and Logistics surgeon neurosurgeon you know if you've got a brain issue you want a neurosurgeon you don't want to you don't want to uh want to be a doctor how does social media affect all of this at the moment significantly and anytime we get into an election year it tends to get a little bit sideways you see a lot of messaging get Amplified you know the fuel prices is a great example and and you would swear that it's all the current administration's fault uh you could go back in history and and find that there's an easy target all the way along the line this is really complex because you've now got a World War uh of sorts going on in in Europe that's affecting diesel prices it's not one person's responsibility although there's some levers that the current Administration can pull but on that front there's a lot of misinformation around the market right now around diesel prices and Fuel and what the cause of it is and you know today Bloomberg had a great report that says that our level of inventories of diesel are down to 25 days nationally that's the lowest it's been since 2008. now it's also what a lot of people wouldn't expect is this is also refinery maintenance season so Productions normally decreases now anyway the challenge is that demand is at 2007 levels if you look at the amount of diesel that's going out into the market so we've got you know very low levels of inventory very high levels of demand and then of course you've got Global Supply constraints because of the the challenges that we've lost in terms of the Lost production of both OPEC in the Middle East and and Russia alone so that's just a simple example of how the the message is getting completely distorted on social media there's lots of things the current Hot Topic of course is speed limiters great and last last week when the FMCSA made the announcement there was uproar even to this morning on social media I know my accounts people are talking about slow downs slow you know protests all those sorts of things um you know that's it's never a good idea to do that it's got to be a more concerted effort um you know I'm I'm with truckers on this I you know having driven a few million miles inconsistent Road speeds is a disaster um and and we need to you know keep the lobbying efforts going to make sure that our voice is heard so but that's an example where everybody said not everybody but most people on social media was commenting that as if it's going to happen well it's not going to to happen in the summer of next year they're just making an announcement right and then people were saying oh it'll be 60 miles an hour and and and you know people feed off each other in the comments and and if you only get your information from One Source you only get a particular view what we recommend to people at dat is get your information from a wide variety of sources and weigh on your own scales so I think social media is is good and bad it's good in that we can connect and drivers can express themselves and you can see the frustration that they've got it's a it's a venting for them when they're sitting on a loading dock for 10 hours or they can't find a parking spot in a rest area or a truck stop that's good that they can vent for us on the outside it gives us a look into what drivers have to deal with we've never saw that before right and and like Tick Tock and Instagram have been really good tools to for drivers to share what they're going through so that's sort of the good side of it I think there's lots of pluses probably more pluses than negative negatives and I think that's but negatives tend to get Amplified when the topic is particularly political has a political bent to it or it's something controversial like speed limiters or elds or of like truck parking availability and and people having you know big concrete Jersey barriers or their trucks are booted because they didn't pay for a spot you know that that sort of stuff is going on right now in truck stops and Truck Stop owners are trying to figure out how do we generate more Revenue without necessarily building more more parking spaces lots of hot topics but social media has been a great thing for for drivers to I think show how funny they are and that's the bit that I love about social media is there's some real characters out there right when I was driving before iPhone days and we just came out of black and white TV which was a long time ago we had no cameras so nobody could really see how funny drivers were that you were working with today there are some hysterical characters on social media that just happen to be truck drivers and and it's thoroughly entertaining so I think it's a good thing that it's happened you know it's so interesting uh Pew research of course came out a couple of years ago with a report that said that 50 percent of the articles that are shared on social media people never read the article they only share it based on the headline right and and so it just contributes to things doesn't it it does it does and you've got a car it's got to do with why social media is successful um it's It's Entertainment you know a few seconds at a time it's not like you know when I grew up I would read letters write letters read books you need read books at night now you've got headlines it's about it's about imparting information in bytes you know headlines a paragraph you know when I write my blog post every week I write it assuming people won't read past the first three paragraphs so I always I always practice the bottom line on top blot bottom line on top means if you write an email or an article you put your bottom line right at the top and then you follow whereas the old days you write you'd write something and you'd build it sequentially and people aren't getting there and so now you've got to almost reverse the order and put the bottom line on the top of whatever it is you want to do because and I even go as far as when I write an email I put what I want in the subject line because as they're scrolling through emails on their phone or they're seeing in the headlines exactly exactly denied I I do the same thing if it's a question a comment or an update I will put it in the subject line now in a truncated kind of way you know what I'm I'm older than you are but you know we grew up where we read things and you know I have these interesting conversations with of course we're in freightworks one Studio here by the way we want you to come visit us sometime uh and I have these conversations with Jordan who's the executive producer here of life of the mile and uh you know a lot of Millennials this is not a dismissing comment they just don't think you need paper ever and I'm Still A Guy that scribbles stuff are you I I am I have a notebook I write notes but you know I'm I'm becoming more trusting of the internet that that cloud thing right that sort of computer in the sky you know normally I would have uh duplicate copies of everything over time I've realized that things really didn't get lost computer storage online became uh cheaper and and less uh less likely to be you know lost so now I've got data storage in a few places I'm gradually weaning myself off paper but it's hard I I prefer to think on paper for sure yeah you know what okay so I don't know if you and I are going to start a movement but maybe we will by the way by the way folks if you're wondering who I'm talking to this Dean croak he's the principal analyst for d-a-t-i-q and and by the way Dean uh the thing I appreciate so much about you is that you have a hold of not just the data but the implications of what the data means there are people that are out there trafficking data but you know it and and for a person of faith second chronicles eight talks about the children of issachar who understood the times and knew what to do so you're part of that you're part of part of that tribe you've got to be able to tell stories with data otherwise the data on its own doesn't really mean anything I remember as CEO of a big company big truckload carrier I did this wonderful presentation on data analytics and he said so what now what he said I get all that what do I do with it and that's the part you've got to get very good at you know we've talked a lot about hurricane Ian and the Damage across Florida the fruit and vegetable crop reports just came out today uh looks like the damage estimates about 1.9 billion dollars and across it crossed across the middle third of uh Florida where a lot of fruit and vegetables Horticultural beef uh you know a produce comes from I looked at the USDA report today on the volume of truckloads so you take the story you say what does that mean for truckload carriers compared to the last week of October last year they are shipping 77 fewer truckloads of produce North out of Florida mostly Citrus and winter vegetables so it means for you and I'm up higher prices for our winter veggies Citrus in particular about crop has been decimated for carriers the numbers aren't queued you're talking about 700 loads a week last week versus about 150 this week for carriers that run north south and you know South north on dedicated Lanes you take 550 loads out of the market in a week suddenly you've got a lot of deadhead miles so to answer you know to give you an example that's where you take the what's happening in the market and what does that mean for carriers so it's about you've got to get very good at taking information and putting it in the eyes and ears of The Listener in terms of what does that mean for them and that's that's sort of a really good example that's what we do every week here is tell stories with data so that people can figure out where they need where they need to be thinking and acting I want to give you the opportunity to make a quick commercial for what you do when you're not with people like me go ahead yeah I'm a market Analyst at dat Freight and analytics we're a load board company uh it started out as dialer truck in 1978 so we're a you know a Load Board Freight matching rating company you can find us at I push out a weekly market update on Tuesday nights if you get go to forward slash market update you can read our blog post this week we're talking about the Sleep epidemic that's affecting teenagers and and parents such as truckers on the road that leads into next week which is National drowsy driver week in the end of daylight savings so a lot of focus on sleep and scheduling and how do you get better quality sleep at the moment so that's the sort of things we do and then we break down the freight market for dry van refrigerated and flatbed carriers and it's it's a what an incredibly wonderful resource I want to encourage all of our viewers and and listeners to to take hold of that let me ask you a couple of other quick questions here Dean um when we talk about the whole issue of spaces for drivers and what's happening there that comes up consistently is an issue where do you think we're going with that where do you think we're gonna land on the whole issue of driver parking it's going to take a long time for which um just this there was an announcement by uh the transport secretary Pete Pete butterjudge and and they made some announcements about truck parking and right now there's their data show that there's one parking spot for every 11 drivers that's the shortage of parking spots and what they did is they made an announcement there was some expansion going on in Florida and I think it was Georgia Atlanta area they're adding more parking spaces as part of a multi-billion dollar Grant to states to build parking places as part of the infrastructure bill it's gradually starting but it's only 240 parking spaces in total and it's going to take a long time for us to get the right number of parking spaces for carriers and you've got more carriers you've got more freight moving in congested areas it's going to take a long time for this to to weed its way out of sort of being a top issue I feel for drivers because and of course we are paying for it which mean you know when they have to get charged to park at night to park their truck that gets added to the cost to the rates that we all pay for that in the end but I think we're making progress you know I don't want to downplay what the government's doing they're doing a great job in pushing infrastructure out into the country whether it be Bridges roads um you know highways overpasses parking spots are certainly one of those ones I think they got the message through all the lobbying efforts that parking was a critical issue it's number one on the archery list this year I noticed so yes it's a it's a top issue it's pretty frustrating for drivers though like this is when you asked about social media the first thing that came to mind are all the fights in truck stops fights between drivers fights between drivers parking too close to each other blocking each other in fights between security guards harassing drivers for not paying uh there's and and if you think about accidents one of the most common accidents in trucking is the low-speed backing maneuver in a truck stop right it's one of the most frequent it's it's a low-cost event but it's one of the most frequent so we yeah we need more parking for sure but it's going to take a few years I think for us to get the where we need to be and you know for the uninformed uh when a driver can't find a place to park what do they do uh unfortunately some of them keep driving which means they're eventually going to run into that spot where they fall asleep at the wheel and hurt themselves that's the that's the worst possible outcome for a lot of guys it's taking a chance on an exit ramp or an off-ramp entry you know entry exit ramps where you're not supposed to be some states have different views on leniency a lot of drivers though I notice find places that are off the grid uh you know places that you wouldn't normally you know because they've been around for years and when they unload at a particular shipper they Spot somewhere they could park next time out of the way no lights no businesses around and I think there's a lot of guys that have figured that piece out but for a lot of the new guys in the industry that don't know the truck stop is sort of the only place you can go that's safe right and even man that's probably not a good term you know safe is not you know it's a relative term it's not that safe for them if you think about all the accidents and and some of the crazy stuff that goes on at night as we look ahead to uh to to 2023 can you paint with a a broad brush what you see ahead what are you seeing on the regulatory front lots of controversy uh they're talking about changes to the ELD regulation um we're autonomous trucks are you know getting some traction um electric vehicles Tesla's going to deliver there you know 500 mile radius truck hopefully this year um we've got lots of infrastructure being built around electrification of charging stations so I think 2023 is going to see some big changes in the electrification side of the freight Network I think you're going to see more vehicles running electric batteries you know or hydrogen cell batteries in shorter Hall operations uh that's going to be the big thing changes in regulations I'm not sure what's planned on the ELD front um I don't think it's anything major in terms of changing the sequencing of hours and rest although I wish they would add a bit more flexibility in the big one though which is speed limit is I think that's going to be a red Hot Topic um of course you know lack of parking is brewing along under the surface all the time but I think there's going to be a lot of problems around the speed limiter regulation that they're talking about that's going to be the big thing next year to watch I think the first first part of the year though we're very worried about demand but we've been predicting for a few months now that the first quarter of next year will be the low point in Freight rates so spot rates are certainly going to bottom out maybe uh 10 to 15 percent lower than they are now but contract rates your contract rates are going to be pretty healthy at the start of next year because we've got a big fuel surcharge those rates were negotiated you know sometime in the last three or four months they're going to come into routing guides in the early part of New Year so I think the contract Freight Market which represents about 90 percent of the loads carried is going to be pretty strong and healthy a lot of carriers are still going to do exceptionally well we're going to see more carriers enter the market so I think we're seeing an upswing the next Freight cycle pick up towards the you know the middle to end of second quarter so this this Freight cycle that we're sort of peaking now will drop down and pick up and then of course we're off to the races again the the biggest question we've got the Wild Card of course is uh the word you know the r word people are talking about recession um a lot of economists are talking about a recession technical definition two quarters of negative GDP growth the experts we talk to at IHS Market suggest that yes there'll be a recession in second quarter but it'll be shallow that they were saying it'll be a softer Landing I really hope that's the case so we've got we've got to prepare ourselves as a community Trucking community in particular for a decrease in demand that's why I'm saying to carriers now get a handle on your costs uh you know get some good technology around you solidify your business partners so you've got some good guidance coming in because I think the first half of next year is going to be really really tough from a a margin perspective and a demand perspective now overlaying all of that we just had a record number of new truck orders in in September the highest ever go figure how how does that happen well and you know here here at freightworks we uh we we're in the middle of delivery of 75 new Peterbilt 579 Ultra Lofts we've got another order I think we're making for 50 and uh right you know so so it's it's really so important the data informs the Strategic decisions right Dina I wanted to make sure that you knew this too we uh we're announcing it'll be in the local paper tomorrow and of course this podcast will be on I think sometime next week uh we we have uh created a deal with loves and so right at the intersection of 74 which we're working hard to make an interstate designated Highway and 221. there's going to be a new freightworks terminal at some point in the next couple of years and love is going to break ground and on the 22nd of uh November we're going to have a groundbreaking I'm going to make sure that I get from that all of the memorabilian things and we we send it to you because we consider you a a partner in the effort here you know as an asset-based carrier freightworks is just trying to tell stories and you are so vital in helping the marketplace understand what's going on Dean uh we're really grateful well yeah thank you butch I think the uh the new truckload is kind of fascinating right because I guess six months ago you might have been as optimistic maybe you weren't even getting those trucks out of the factories uh the thing that I'm watching you know a record number of truck orders in September tells me truckload carriers are fairly bullish on 2023. and then I think okay so you've you've run your trucks a little bit longer than you should because you couldn't get new ones uh they're a little bit long in the tooth um will we see sort of a a net change of zero as in lots of new trucks come in but we push a lot of older trucks out onto the used truck market and and we don't actually get a net increase because the number I'm going to watch carefully is the number of cancellations that truckload carriers start to you know sometime next year we might see cancellations I don't think so the experts think that we've got very good truckload demand next year will be of course a great time to buy a used truck because used truck prices will go down as that uh that higher mileage large Fleet inventory hits the used truck Market uh smaller carriers that'll lower the barriers to entry for smaller carriers and then they'll start joining the industry again and we're off again in the next Freight cycle so I think the supply side's been very interesting in some ways which it's been a good thing we couldn't get trucks out of factories because if we'd have had trucks coming out at the normal rate we'd have had a lot more capacity than we've got now in some ways the semiconducted ship regulated capacity in the trucking industry that was one of the positives that came out of it very insightful positive yeah that's that's extremely insightful you know Dean uh you're you're the kind of person I could sit and talk to for hours and uh I want to honor your time and also respect the reality that uh that uh we just can't keep you forever here you know what we gave you a mug before and we're going to give you another gift so you got you just need to indulge me if you would for a second okay so we got we got the life of the mile hat that we had at mats yep okay we've got the we're in freightworks one Studio we got the freightworks one cap and then recognizing that winter is here we have got this uh oh sweet skull cap with the life of the mile there and this has really been flying off the shelves here recently we're about to actually open up a little merch store so which one of these may we send to you I I need the uh the beanie in a triple XL for my big head okay I'm gonna tell William that all of the information that comes out of that considerable Cranium needs to be warmed by a really nice life of the mile hat so we'll we'll do whatever we can to make sure it's sufficient to encase everything that's inside there you know you know what you were you you were among the easiest interviews I've ever done in my life folks uh for those of you that don't know uh this is Dean Croke Dean is the principal analyst for dat IQ it's the freight data analytics operation at d18 but more than that he he has the experience of being a driver and uh and he and he loves the industry and it sure comes through through we love having you on we want to have you on more frequently we've got some exciting news the days ahead that I'll share with you privately and uh it's life of the mile delivered by freightworks make sure you subscribe get the notification Bell coming on like share engage and we'll keep coming back to you thank you so much Dean for being here today thank you for having me Butch 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 more episodes click here and make sure that you subscribe to this channel by clicking here we'll see you there

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