Why June is Considered a Pivotal Month for the Spot Market


2018 was a booming year for the trucking industry’s spot market. A corporate tax cut unleashed a strong demand for all types of freight services, creating tighter capacity, higher volumes, and stronger pricing power throughout the trucking industry. The U.S. tariff that threatened a penalty of 25 percent on $200 billion dollars of Chinese products caused huge amounts of early shipments of goods to be moved in Q3 and Q4 of 2018. Earlier in 2018, trucking firms added to their fleets to handle the increased demand.

The trucking industry, or rather the flow of shipments facilitated by the trucking industry, is one of the leading indicators of the United States’ economic health. As such, the industry is a proverbial parakeet in the coal mine; it feels the effects of any economic turbulence before most of the industries and businesses it serves. So, why did the first half of 2019 tell a different story from the previous year?

Weaker European Economy

Several factors sparked major shifts within the trade world. A weaker European economy and Great Britain’s “Brexit” have created a plethora of trade uncertainties within the area and throughout all of their trading opportunities in the Eurozone.

Weather Events

Weather events affected food and crop availability in early 2019 throughout the United States. When crops fail, or harvests are delayed, they might not need to be transported at all or their transport occurs later than it normally would, which affects the normal rhythms of the supply chain. In effect, shipping volume decreases while trucks not being used at their normal rates become available and create excess capacity. Lower shipping volumes coupled with higher capacity means too many trucks for too few transports. That was, and is, a recipe for softer rates, which is exactly what came to fruition.

New Tariffs

Tariffs, or the threat of their implementation, have been the broadsword that the United States has used to drive trade negotiations and agreements throughout industries and nations, especially with respect to China and Mexico. Regardless of your opinion regarding the tactic, tariffs and their related negotiations take time to resolve and close. In so doing, they introduce uncertainty into the business landscape due to the businesses affected by them not knowing the final outcome. This uncertainty persists until a negotiation closes and the affected businesses understand the terms of the resulting agreement.

The United States has placed tariffs on a variety of goods that businesses import from a variety of countries. In response, these countries have retaliated, placing tariffs on goods they import from the U.S.

If there is one thing businesses dislike, it is uncertainty. What happens during times of uncertainty? Businesses temporarily retrench until they can determine the eventual impacts – plans may never come to fruition or can be postponed; manufacturing slows down; orders are canceled; and shipments get canceled. All decisions reside in a “wait-and-see” mode and it takes large amounts of time for companies to return to a “business-as-usual” rhythm.

You may be asking, “Which industries have been affected?” An easier question to ask may be, “Which have not been affected?” Some of the industries caught in the crosshairs include the agricultural industry, the automotive industry, the telecommunications industry, the semiconductor industry, the energy industry, and the construction industry. All of these industries rely on big rigs to transport their goods.

Housing Starts Slump

In comparison to former years, housing starts declined by 4.7 percent as of May 2019. Fewer housing starts reduce demand for the various products used in housing construction, which in return lowers manufacturing output as well as the amount and types of product to be transported to their various destinations. This once again means lower shipping volume on the spot market, mostly for flatbeds, but this could affect the demand for reefers and vans, too.

June 2019 and Forward

May’s load count numbers continued in a downward fashion and disappointed those within the industry greatly. However, signs of a June rebound are now being discovered. An abundant capacity still exists within the spot market, but so does a relatively strong, growing capacity for volume.

Seasonal shipments come with the warmer weather during this time of year, and stored goods are moving towards the east from the west. This removes capacity from the spot market because the time it takes for a truck to make a round-trip is higher, which may nudge up rates.

Speaking of which, the average national DAT truckload June rates for vans, flatbeds, and reefers moved upward to $1.90, $2.30, and $2.25, respectively. These rates represent a roughly 6.1 percent rate increase for vans, a 0.9 percent rate increase for flatbeds, and an approximately 4.6 percent rate increase for reefers. A portion of a month does not necessarily indicate a steady trend, but it is an increase over the month of May across the board that many hope will continue for the rest of the year.

No one can say for sure, indeed, several market analysts see continued clouds for the industry. However, DAT market analysts see cause for optimism. They indicate a slow, steady year-over-year growth in spot freight volumes, with the only drag on rates being excess spot market capacity due to the fact that trucking demand did not grow as fast as capacity. Seasonal freight movement, as well as the resolution of tariffs, may help to consume existing excess capacity and help boost spot market rates.

Stay tuned for more updates on the freight industry and changes in spot market trends.

Top 6 Ways for Fleet Owners to Conserve Fuel


While you may find the picture above amusing, there’s nothing amusing about spending more money for fuel than you need. Your fuel prices are high enough without them receiving any extra help. While many ways exist for you to lower your fleet’s fuel costs, let’s look at six of them right now. Here are the top ways for fleet owners to start conserving fuel.

1. Regular Preventive Maintenance

The number one and most impactful method for reducing fuel costs is implementing an effective regular preventive maintenance (PM) program. Regularly scheduled PM, which can improve a truck’s fuel economy by up to 40 percent, includes maintaining engines and related components as well tires.


  • Regular engine oil changes are a must for your trucks because they’re one of the biggest components to PM. The United States Department of Energy states you can increase per-truck fuel economy by as much as two percent by using manufacturers’ recommended engine oil grades. Additionally, look for engine oil labeled as “energy conserving”; it contains friction-reducing additives that help increase fuel economy. Less friction means oil will circulate more easily through the powertrain, which helps improve fuel economy.


  • During each of your trucks’ PMs, remove and clean the battery, its connectors, and cables, then load test each one. Something may fail under load, but better in your shop than on the road. Buy your mechanics a battery tester and ensure they know how to use it.


  • Trucks’ coolant systems and pressure test caps must be checked during each PM. You don’t want coolant to boil, possibly leading to more costly repairs because of a faulty cap. By caring for your trucks’ cooling systems, you can prevent about 50 percent of potentially major engine failures.


  • Don’t forget antifreeze. By “don’t forget,” we mean pay attention to the antifreeze you use prior to adding it to a truck’s cooling system. Newer engines contain metals such as aluminum that don’t play well with some of the chemicals added to engine coolants. Ensure your technicians understand which trucks require which coolants, and ensure they monitor the coolant condition of each truck.


  • Lubricate, lubricate, lubricate – and not just engines. Kingpins and universal joints are two major weak points, so take care of them. Although some universal joints have been designed to run hundreds of thousands of miles without trouble, many eventually will require a normal lubricant regimen.


  • Let’s talk a little bit about your truck’s tires. The United States Department of Energy maintains that for every one PSI drop in tire pressure, gas mileage will decrease by 0.4 percent. Also, ensure trucks maintain proper wheel alignment, as improper alignment can negatively affect fuel efficiency by up to 10 percent. Needless to say, keep your truck’s tires inflated to the proper pressure and check your wheel alignment.

2. Reshape Your Driving Behavior

The second way to conserve fuel is by addressing driving behavior. The United States Department of Energy has found aggressive drivers can reduce highway fuel efficiency by up to 33 percent and city fuel efficiency by up to five percent.

How can fleet owners shape driver behavior? One way may be to deploy in-cab tools such as coaching apps. Here are three in-cab driver coaching apps that can help increase your fleet’s fuel efficiency. Although they all differ from one another in particular respects, they share several commonalities:

  • They draw their truck data directly from the engine control module through a truck’s data port.
  • They all provide drivers with indicators regarding their driving performances.
  • They all provide driver feedback and score them based upon driving technique, without relying upon fuel consumption data.

Deploying apps like these and having your drivers accept them will work best when you and your company trust your drivers. If you trust them, they’ll trust you and be more likely to accept new technology. Your drivers may even use apps like this to create friendly rivalries to determine who is the most fuel-efficient driver. You could even create company-sanctioned competitions complete with rewards for drivers and driver teams.

3. Fuel-Saving Technologies

Third, evaluate fuel-saving technologies you could implement in your fleet. If you haven’t yet, evaluate telemetry, automated manual transmissions, low-rolling-resistance tires, anti-idling devices, synthetic lubricants, automatic tire inflation systems, adaptive loading axles, full-tractor aerodynamic packages, and aerodynamic skirting for trailers. These are some of the low-hanging fruits you could grab.

4. Consider Truck Replacement

You might consider replacing older trucks with new trucks, even if you might be retrofitting older trucks with fuel-saving specs. Fleets can save $6,048 per truck in the first year of fuel expenditures when replacing a 2015 MY sleeper. That’s a 12 percent increase in fuel economy!

5. Analyze Your Truck Data

Perform some old-fashioned data analysis. How do patterns of fuel usage compare among your drivers on the same or similar routes? Who uses the most fuel, all things being equal? Which trucks present the lowest MPG? Could design or mechanical issues cause any discovered fuel efficiency issues? Maybe the route itself creates a fuel efficiency issue, which leads to the sixth and final top way for fleet owners to conserve fuel.

6. Optimize Your Route Plans

Don’t just rely solely on routing software; perform a route analysis the old-fashioned way. Road quality, traffic conditions, and speed limits influence a truck’s MPG. The shortest distance from one point to another may not always be the most cost-effective. Analyze idling time vs. driving time and design routes to minimize idling as much as possible. Also, look at the terrain your trucks travel on. The EPA’s fuel estimates assume operation on flat surfaces, so if your routes traverse hilly or bumpy roads, your vehicle’s MPG will be lower than the EPA’s ratings for your vehicles.

Retailers Respond to Amazon’s Next-Day Shipping


Commerce giant Amazon is no stranger to disrupting industries. From its early years of disrupting the book retail industry by making new and used books more accessible than ever, to changing the way people grocery shop with its purchase of Whole Foods, Amazon has challenged other businesses to keep up with the so-called Amazon Effect.

Now, Amazon is aiming to disrupt the shipping industry by changing their two-day shipping program into a ubiquitous, one-day shipping model across the U.S. It is now up to other businesses to adjust under the added pressure to keep up with Amazon and the heightened expectations of consumers. This change also has the potential to disrupt the trucking industry as faster turnaround will be in high demand.

Amazon Announces Next Day Shipping  

In April of 2019, Amazon made the announcement that one-day shipping would soon replace two-day shipping as the norm from Amazon Prime customers across the country. Previously, one-day shipping was reserved for specific areas, primarily those in large, metropolitan cities. Amazon also stated that they are expecting to invest $800 million during the second quarter this year to create the delivery infrastructures and warehouses necessary to make one-day shipping possible everywhere.

Amazon already has 100 million Prime members across the U.S. who pay $119 per year to receive free shipping and one-to-two-day shipping on goods including clothes, books, home supplies, dry goods, and even groceries in select areas. That means that Prime is already in 50 percent of U.S. households. With one-day shipping expanding to all areas of the country, more people than ever will be able to enjoy their orders arriving on their doorsteps in less than 24 hours. Additionally, Amazon can expect their member pool to grow exponentially. While this sounds like great news for Amazon and its members, these changes are leaving retailers needing big changes to retain their customer base.

Retailers Respond to Amazon Next-Day Shipping

Soon after Amazon’s next-day shipping announcement, Walmart alluded to their own one-day shipping plan in a short tweet:

 “One-day free shipping…without a membership fee. Now THAT would be groundbreaking. Stay tuned.”

This tweet not only stated that Walmart had plans to mimic Amazon’s one-day shipping model, but they have also hinted at their plans to offer this service without the membership fee Amazon requires.

In May of 2019, Walmart came through on their promise and announced their plans to release one-day shipping across the country. They stated that they will begin next-day shipping in Phoenix, Las Vegas, and Southern California, then expand the service to 75 percent of the U.S. by the end of 2019. Since Amazon has not released a set date for their next-day shipping expansion, there is a chance Walmart may beat Amazon to certain areas of the country. This could cause some consumers to be less interested in an Amazon Prime membership, since there is already a similar service for free.

Walmart is not the only retailer to quickly respond to Amazon’s new supply chain model. Home Depot has also announced its plan to offer next-day delivery for up to 50 percent of the U.S. population by the middle of 2019. Its CEO also stated the company is already offering this service to 36 percent of the population.

Over the years, Target has taken steps to keep up with Amazon’s ever-changing shipping services. In March of 2018, Target began offering free two-day shipping to all of its credit card holders. It also offers this service to other customers on orders over $35 dollars. Target also acquired the shipping company Shipt to allow customers to enjoy same-day delivery in larger cities. Target also offers a variety of services to make shopping easier for customers, including its Drive Up or Pick Up services provided at 8,500 brick-and-mortar stores.  To date, Target has not announced any new tactics to compete with Amazon, but simply reminded consumers in a statement about the services they already offer.

How Will Same-Day Shipping Affect the Trucking Industry?

Just like big box retailers must rethink their business models to keep pace with Amazon, the trucking industry must innovate to meet the demand of nationwide same-day shipping. For example, as retail analysts have opened, it may be in the interests of big box retailers like Home Depot and Walmart to combine one-day shipping volumes to provide faster logistics at lower cost. The trucking industry may need to develop new programs and services to help retailers maximize their logistics speed and timing to compete with Amazon’s logistics capabilities. Truckers will need to act as trusted advisors to recommend to shippers the program or service that best meets their needs.

The new, higher demand for fast shipping will cause some growing pains for multiple industries. However, it equates to high job security for truckers and potentially more demand for qualified drivers, freight owners, and logistics managers. That means now is a great time to invest in your business or truck. And for all your commercial financing needs, trust the experts at Mission Financial Services. Apply today and get approved for a semi-truck loan in no time.

How will the Trade War Between China and the U.S. Impact the Trucking Industry?


At the beginning of 2019, there was a wide range of speculation as to how new tariffs against China would affect the U.S. economy, the price of goods, and trucking demands. Now that the year is half over, tensions are heating up even more. As a trade war between the U.S. and China wages on, other countries are becoming concerned of the possible implications to their own economies. Additionally, in the U.S., the trade war may have an effect on the commercial trucking industry. Here is what you need to know about the trade war between the U.S. and China.

Tariffs Against China and Mexico  

In 2018, three rounds of tariffs against China were put in place by the U.S. These tariffs covered more than $250 billion worth of Chinese exports, including technology, tires, purses, and railway equipment. Accusing the U.S. of starting “the largest trade war in economic history,” Beijing retaliated with over $110 billion in tariffs against U.S. goods. This included tariffs on medical equipment, coal paraphernalia, chemicals, and soybeans.

The U.S. is not only aiming tariffs at China. In fact, The World Trade Organization (WTO) has stated this may be the worst global trade crisis since 1947. On May 30, the president shocked the financial markets by increasing tariffs to Mexico. In addition, threats were made that taxes would only continue to rise until Mexico began to work with the U.S. to minimize illegal immigration at the border. Analysts stated that these heightened tariffs could send both the U.S. and their closest ally into “economic and diplomatic crisis.”

Fortunately, just nine days after announcing these tariffs, the president tweeted that Mexico and the U.S. had come to an agreement, and the higher taxes would not go into effect. While Mexico has agreed to limit immigration at the southwest border, the results of this have yet to be seen. Only time will tell if this agreement will stand. However, for now, it seems the tariffs that would have resulted in increased prices on goods exported from Mexico, including a possible extra $15 million in taxes for the U.S. food chain Chipotle, will not be put into effect.

Understanding the Tariffs

The president’s tariffs have been placed on billions of dollars’ worth of goods in a variety of countries, with China receiving the brunt of the taxes. He has held the stance since before the 2016 election that he believes China has unfair trade tactics in place. In the case of Mexico, many tariffs are being used as a means to get them to cooperate with his plans. Additionally, President Trump believes that placing higher tariffs on imported goods will encourage more manufacturing to come to the U.S. This will, in turn, boost the U.S. economy and create jobs for Americans.

Will the Trade War Affect the Trucking Industry?

In regard to how the trade war may affect the U.S. trucking industry, Vice President of Trucking Research for FTR Transportation Intelligence Avery Vise, has a positive outlook. Vise states he does not expect the president’s new tariffs to have much of an effect on American trucking. It is projected that many price increases will be absorbed by the original manufacturer of the goods for competitive reasons. This means the higher prices will not transfer to the consumer.

Vise also mentions that if tariffs are applied to Mexico after all, it could mean consumers would seek products from other areas due to the considerable price increase. This, in turn, could result in declined freight volumes. However, there are no longer plans to increase Mexican tariffs currently.

An Uncertain Future  

When it comes to the U.S.-China trade war, there is no projected end in sight. Trucking is the primary form of transportation for foreign goods arriving in West Coast ports from China. The trade war has caused a dramatic drop in the number of ocean shipments coming from China, meaning less trucks are needed to haul freight. This has caused a drop in the demand for truckers at these ports.

While West Coast demand may continue to fall, trucking needs could increase on the East Coast. With products from China becoming too expensive, it is projected that businesses will find new sources for the goods they need. This could mean ports in Savannah, New Jersey, and New York could see a rise in demand for truckers as goods start coming in from other places. Therefore, the need for truckers will not diminish. It may simply transfer to a new location.

Despite trade tensions and threats of higher tariffs, the future of the trucking industry is still looking bright. Trucking will continue to remain a vital component of the U.S. economy, which means owner operators will always be needed. At Mission Financial, we are always keeping up with the latest industry news, so visit our blog today.

How the IoT Increases Visibility of Assets Throughout the Supply Chain

Trucking: A Supply Chain Workhorse


What image comes to mind when almost anyone thinks about moving palettes of product from a manufacturer to a distribution center or to a store for purchase? Trucks, and rightly so. The American Trucking Association reported that trucks moved 70.2 percent of all domestic freight tonnage in the United States. It took 3.6 million heavy-duty Class 8 trucks moving 10.5 billion tons of freight and burning 39 billion tons of diesel fuel to accomplish that feat.

Clearly, the trucking industry is a huge part of the supply chain. That’s quite a load of trucks, drivers, and freight to manage. How in the world can anyone or any company manage all of their drivers and trucks, not to mention all the freight they move? Can a company know all their trucks’ locations at any point on their routes in real time? Is a truck’s tire or engine about to fail while on its route, possibly impacting delivery time? Could anyone have foreseen that truck’s issues and taken it out of service for repair? If a company has multiple drivers delivering to a company, how can it know they are all taking the most economical and timely route or perhaps a route that can damage trailer contents? Is the environment in each trailer suitable for the type of freight it’s carrying? Are your drivers driving as safely as they could or should?

Attorneys say you should never ask a question to which you don’t know the answer; all these questions have answers that may surprise you. Briefly, the answer to all these questions is yes. Let’s explore a little.

What is The Internet of Things?

Almost everyone has an idea of what the Internet is. It began as a network of hardware and software technologies that allowed computers to connect to it and talk to each other so people in government, scientific, and academic circles could find information and share it with each other.

Now all kinds of devices connect and communicate through the Internet – smart TVs, smartphones, vending machines, refrigerators, and more recently, small devices called sensors. Hence the name The Internet of Things, or IoT for short. The Internet of Everything Under the Sun doesn’t quite have the same ring and the acronym is even worse.

Sensors communicate among themselves, meaning they send information to and from one another and with an asset tracking system or fleet management system (depending upon the type of asset you’re managing), all in real time, to help businesses solve many types of difficult business problems and save significant money that otherwise would have been lost.

Profound Benefits of IoT to the Supply Chain

The IoT will impact the supply chain in ways never seen before, creating sweeping revenue opportunities and operational efficiencies heretofore unseen. Asset tracking, vendor relations, forecasting and inventory, connected fleets, and maintenance are all areas within supply chain management that will see unprecedented boons. Here are some examples of the use of and the benefits from the IoT:

1. Asset Tracking and Supply Chain Visibility

A case study by Sierra Wireless discusses how one of their customers, Tive, helped a washing machine manufacturer identify and resolve washing machine damage that occurred during shipping by employing IoT asset tracking to improve supply chain visibility.

In another example, real time asset tracking saved $1.5 million of medication from ruin because trackers placed inside the shipping container alerted the pharmaceutical company that the container temperature was too low. The pharmaceutical company immediately was able to reach someone at the port where the container was and fix the temperature issue.

2. Proactive and Preventive Maintenance

Who hasn’t seen a fleet truck stopped on a highway shoulder with its cab up and the driver trying to determine what needs repair? In the meantime, the scheduled delivery time looks less likely by the minute.

That situation never would have occurred had the fleet owner installed sensors that talked to a fleet management system. The sensors would have alerted the fleet management system about the problem before the truck was even loaded with its freight. The system would have taken the truck out of service and scheduled it for repair for whatever component the sensor indicated was about to malfunction or was malfunctioning. Additionally, the fleet management system would only schedule a technician certified to work on that make and model of truck; problem solved even before it began.

Think of the headaches the IoT averted in that hypothetical scenario:

  • A truck destined to break down was not dispatched.
  • Towing fees were avoided.
  • The driver was able to do what he did best – be productive driving and not be sidelined on a shoulder somewhere.
  • Foreknowledge about a defective truck avoided a late delivery, keeping original delivery time commitments intact.
  • The truck technician could repair the truck faster because the truck sensor identified the problem, saving diagnosis time, and scheduled the right person to do the work.

3. Platooning

Platooning, which groups trucks on a journey, employs artificial intelligence and other IoT technologies to allow legal, digital tailgating among a fleet of trucks. It can improve truck safety using technology already available on trucks – lane-keep assist, adaptive cruise control, and air brakes. It also promises to reduce fuel consumption from 5-20 percent by meticulously and automatically managing the distances among fleets of trucks through wireless communication among sensors, allowing trucks to take advantage of an aerodynamic effect, known as drafting.

Platooning also improves road capacity and road safety. Because of the near instantaneous communication of these state-of-the-art driving support systems, trucks simultaneously can accelerate or brake, which supports better traffic flow. They also can follow each other more closely because platooned trucks react orders of magnitude faster than human drivers. They don’t require the same amount of distance between them to compensate for the slower reaction time.

Looking Forward and Forward-Looking

These are incredibly exciting times in the transportation industry with many positive changes in the near future. With change comes opportunity and all of us at Mission Financial Services look forward to helping you take advantage of those opportunities. Contact us today to get started with your commercial vehicle loan.

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