I'm looking at a headline right now from, I guess this is a stat from Roadmaster Group, but they're saying cargo theft jumped 60% last year. That just came out three years ago. And also, there's a New York Times headline saying nearly 11,000 bottles of bourbon were stolen from a Philadelphia warehouse as a result of coordinated cargo. It's funny because you and I both just assumed that when you said cargo, things like grabbing boxes. Yeah. Like, you know, like in Goodfellas, where you're like, that's as far as my criminal ambitions can strike. And then the truck driver is like, please beat me up. Right. Do you remember that in Goodfellas? He was like, please beat me up so that my own boss does not think that I stole it. And but this is what they've targeted. They've targeted Guy Fieri. Guy Fieri had freight stolen, like all these celebrities in the last like year have like seemingly come out with liquor brands and they're all being targeted to like, I think Shaq's like Range Rover got stolen off a car hauler. Like there's there's been all sorts of crazy stuff.
Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Wiesenthal and I'm Tracy Alloway. It's been too long since we've done a trucking episode. This is just an objective fact that we need to get out of the way. It is time. I mean, to be fair. To be fair, I think we both written about trucking in the Odd Lots newsletter shortly. I think back in January, you started to get some of the freight and logistics companies talking about maybe they were starting to see an upturn. Yes. And looking at some share prices since then. So I've got look up Knight Swift at the back. But what's the ticker? I mean it's knx okay, KNX gup knight swifter, you know, J.B. hunt, but Knight Swift is a little bit more dramatic. I mean, since January of this year. Yeah. No, it's a great run. It's it's had a great run. So I think the trucking rebound, it seems to be here. It seems to be here. You know, the problem with going like a long time, I mean, as you mentioned, we do write about it. So it's not like we're ignoring. But one of the things that we learned when we did a lot of trucking episodes, particularly in the years after the pandemic, was like when we talk about like the business cycle, you know, it's like these multi-year cycles when truckers talk about the cycle, there might be like eight up and down, two cycles within one boom or within one recession. Just extraordinary cyclical. Right. So if we or hopefully anyone else have learned one thing from the truck episodes, it is that this is such an incredibly cyclical industry. And the standard explanation is that you have these really low barriers to entry for, you know, owner operators and trucks. And so as soon as trucking rates start to go up, everyone decides to become a trucker. Yeah, the market gets flooded, it over expands, and then inevitably, the rates start to come down. And then you have a bunch of independent owner operators who start to go bust, and then capacity comes out and the whole cycle can begin again. A true is there seems real boom bust. And you mentioned the share prices of Nate Swift and J.B. hunt. But another way to look at it, I'm just looking at the the internet truck stop van rate index, just a sort of basic measure of how much it cost to move. That was at in December of last year. It's like .94, I guess that's probably per mile. And now it's up to it. Broke three. It came down a little bit. So just by measuring the cost of the trucking, it's clearly gone up. So we need to figure out what's going on. Sorry, I'm just looking at this this knight chart again. The knight Swift chart. You know, they've outperformed meta this year. That's amazing. I know, look at J.B. hunt. I think it's you. And that one's like almost a double. Yeah, yeah. Like forget about I. The money apparently is in trucking. How are for real. How is how the cycle starts, right. How people start saying the money is in trucking and then everyone gets it. How are the turbines getting to the data centers? How are all like, right. Like we know that there is a lot of sort of demand for physical goods as part of this AI story. And the the physical goods have to get to the data center somehow. Right? I think this is part of the story. This is the question, is this the sort of same rebound that we've seen before, or is there maybe something more structural that's happening? We've also had some recent developments with the like the actual supply of truck drivers. Right. Which is also something that clearly impacts capacity. So there's a lot to talk about. There's a lot to talk about. It's time to revisit the trucking market. We have a guest that we've never had on before, but someone really like someone I've known from the internet for a while who really knows the space very well. We're going to be speaking with Reed Loustalot. He is the chief marketing officer at Truck Parking Club. And so, Reed, thank you so much for coming on Odd Lots.
Joe, Tracy, thanks for having me.
Joe, I got to give you credit, man. I said you weren't going to do it, but you did it. And you said my name, right? So congratulations.
Thank you. All right. Test cleared for this episode.
What is, let's just actually. What are you? Who are you? Who, what, what's your background? What's the truck parking club and all that? Why are we talking to you?
Yeah, sure. So I'm, my name is Reed Loustalot. I have been in freight my entire career, which at this point is, is a feels like a long and short ten years at the same time. Started out of college at a freight brokerage. It was a large, large freight brokerage, top five freight brokerage. Then spent some time at a technology company called Trimble. Did my own thing for a bit. That's where I encountered you on the, in the interwebs. Yeah, three or four years ago. Just kind of stirring the pot on Twitter. And then I joined Truck Parking Club about three years ago, and really have been focused on, on truck parking for the last three years, which we can, we can talk about because that's a trending topic as well. But yeah, I mean, I've been, I've been in freight my, my whole career and, and I'm, I'm a freight guy and, and I now live in Chattanooga, which is, has been dubbed Freight Alley by, by Craig Fuller, and yeah. So I'm, I'm, I'm in it, man.
Right. So the, the parking thing is really interesting here because if you think about a truck or a freight rebound, you think about things actually moving. Yeah. Right. But I'm curious, from your perspective, does a rebound look like more trucks actually having to stop and find parking, like desperately circling for a place, I don't know, around a data center or something like that, and trying to find space? Like, is a healthy trucking market, does that, what does that look like to, to a company that is in the truck parking space?
You know, naturally, as, as, as demand increases, we'll see, see more trucks on the road. I mean, there's, there's, there's, you, Tracy, you kind of talked about a number of the trending topics ahead of this, you know, and you talked about the cyclical nature of trucking and, and, and the barrier to entry, if you will. So there's, there's, it's a very multivariate, you know, market and, and truck parking is one of those things that structurally it's very difficult to construct new capacity because it's very limited in where you can do it. It's expensive. Many municipalities don't want it. And so there's a bunch of structural reasons why it's difficult to quickly increase the supply in the traditional sense. You know, and what we've done is really just leverage the existing space. So there's millions of truck parking spaces across the US that are on private property. And we've just built a network, a marketplace to tap into that. So we go to owners, we say, hey, you can make some money parking trucks. Come on our app. Drivers use our app, find parking on private property and pay the owner. So it's a, it's, you know, an Airbnb sort of style.
That's what I was going to say. It sounds like a 2010s era sharing economy sort of thing, but it makes sense.
Exactly, exactly. And trucking, and here's another thing about trucking is trucking is, from a tech standpoint, is always behind. Right. And so, and so, you know, when you operate in the physical world, it's, it's, in, there's, in, is it fragmented? A market is, is trucking, is, I mean, there's, you know, nearly a million trucking companies and most of them are, you know, the long tail is really, really small. Less than ten trucks. It's, it's, it's slow moving and it's slow to adopt technology. And that's always been the case. And so, you know, we're really, we're really scaling. And we've really done this at an interesting time because, like Tracy said, I mean, you know, coming out of COVID, the, the market was hot. Freight, freight rates were through the roof. Supply flooded the market because there was indeed a very low barrier to entry. And, and a lot, a lot has happened as a result of that. And, and technology has kind of been, you know, technology has really flooded the market too, I would say, over that same period. Yeah. And so there's a lot, there's a lot, I mean, there's a lot to talk about. So I guess you guys tell me where you want to start.
Yeah. Well, here, I mean, let's start with, like, maybe the really simple question and then we'll drill down even further based on how you answer it. But like, big picture, this surge that we've seen over the last two or three quarters, whether we're looking at stock prices or maybe more importantly, rates, like, how it decomposed, the drivers now, the, the, the, the forces that have pushed these lines higher.
So coming out of COVID, you know, starting in mid-2022, mid to late 2022, we saw rates fall and we were in essentially a three-plus year lull. And, and most folks were saying, most of the talking heads were saying that demand returning was the only thing that was going to drive rates up. There was not going to be, like, that was going to be the only thing. But what we've seen in really the last, you know, since, since the new administration took office, we've seen a massive kind of crackdown on, on a number, on English language proficiency, on non-domiciled CDLs. And, and, and there's been, as a result, a lot of capacity has kind of structurally been chopped out of the market. And so supply, supply has really dwindled. And there's, and man, to complicate things, there's also been in the last couple months a Supreme Court ruling. It's the Montgomery case, which, which, you know, historically freight brokers who move, I think, on average about 30% of freight volumes, if I'm not mistaken. Freight brokers, which are, you know, a critical, critical component to the kind of the freight ecosystem, have historically not been liable or have not been held liable for, for carriers' negligence or carriers' accidents. Right. And now that's in question. And so there's been, there's been so many kind of structural things that have, that are really pushing capacity out of the market and also making, making certain types of capacity come at a premium, right? Like safety ratings all of a sudden might matter at carriers now because brokers might be, you know, there's more scrutiny on brokers' selection of carriers. And so there's, there's so many kind of like supply things that are affecting the rates and that are, that are kind of structurally affecting the barrier to entry. So that next time there is a demand spike, and you are seeing demand spikes in pockets of the market, right? Like, Joe, you talked about data centers, right? Flatbed. Flatbed has been, has been booming and, and, and data centers have a lot, and construction has a lot to do with that. But when you, if you really were to have, like, a COVID-level event where, like, there was unprecedented demand, I'm not sure the market could bring on as much new capacity as it did, like it did during COVID, because there are, you know, fundamental changes to, to the barrier to entry. And, and the government is really, really put a lot of, or is working to, I guess I should say, put a lot of kind of barriers in to prevent bad actors coming in, mostly, if you were to kind of look at it from their perspective.
So I want to talk more about the barriers, but just before then, I'm really interested in the supply versus demand question. Are there any empirical things that you can look at to show that capacity is coming out of the market? I'm thinking, for instance, of people used to look at like the spot versus the contracted rate, right, as one indication of capacity. And that started flipping earlier in the year. Is that, for instance, an indication that capacity is really getting limited?
The data guys will look at the spread between spot and contract rates. I'll give you an anecdote. Yeah. Okay. I, I've, that's essentially me saying I'm not the biggest data guy. But anyway, anecdote. So I have a buddy who owns a trucking company. He's, he's Ukrainian descent. Immigrated here from Ukraine, I think, you know, over a decade ago. And many of his drivers were also Ukrainian. And this is a common story you hear in trucking. There's, there's many, trucking is a very rich ecosystem full of every nationality you can possibly imagine. And they've got their own little network of companies and they've got their own network of drivers. They bring people from their, their home country and, and many of them. And there's a lot of scrutiny on these folks right now, I should add. Right. Because many of them have non-domiciled CDL, which is a certain type of CDL. And, and there's been a lot of scrutiny on those. So many of these folks have those CDLs. And, but, but despite that and despite what people are saying about non-domiciled CDL, there's still some really good companies. And in my days I worked with a lot of them. So I'm still friends with a lot of them. So I was talking to my buddy who's a Ukrainian guy, and he's like, look, this non-domiciled CDL ruling means I have to get rid of all of my drivers. I have to find all new drivers. And, and, and of course, that means I can't hire people who are in my network, many of whom have non-domiciled CDLs. So, so this is like, this is a serious, this is a serious thing for many of these companies. And, and, and many of these companies are the ones that really do kind of run in the spot market, right? They're, they're the, you know, the five, six, seven, one, two, three truck carriers, which is, like I said, the vast majority of the total amount of companies. I mean, there's hundreds of thousands of these folks and they're, they're structurally at a major disadvantage, one, because of, because of non-domiciled CDL, but also two, because of English language proficiency, which has been another thing the government is really focused, or the DOT, I should say, under Sean Duffy has really been focusing on, which is, you know, it started from a very natural standpoint. It's like, if you can't read the signs, how can you operate 80,000-pound vehicles safely? Okay, fair. But naturally, that's also kind of pushed people out in the market too. And you hear, you hear the same thing. I mean, I hear the same thing every day from, from my friends who own fleets or who are drivers. It's, it's, it's, things are tough for them right now and they cannot drive. And hiring drivers is difficult right now. And historically it's been, you know, another big issue is driver turnover. I bring it up more issues, more rabbit holes. Driver turnover is, you know, at some fleets it's over 100% a year. It's crazy. It's crazy what goes on in some of these fleets. And when you kind of shrink the supply of drivers, that becomes even crazier. So naturally, that'll mean, you know, better pay for drivers who kind of fit the profile that, that, that companies are looking for. But it's, it's just kind of more pot stirring, if you will. That's just further complicating the situation.
Where there are so many rabbit holes that you have already thrown out. You know, it's great. Just going back to one, explain the non-domiciled CDL issue to me because it sounds like, again, I'm not a CDL expert, but just based on the name alone, if I have a non-domiciled CDL, like, could I eventually turn that into a normal domiciled CDL?
That, that is a great question that I am not the best person to answer, I will be honest, about the legality of the CDL. There were, you know, I think what, what started, what started all of this was, you know, Joe, you probably, and Tracy, maybe you do too. But there's, you know, there's a group on Twitter that we lovingly call ourselves Freight X, right? We're like the, it's like this little kind of freight ecosystem.
And for the last, I would say, two, two-plus years, there's been a growing group of people that have been really looking into what's going on — like, who are these companies that have flooded the market, who are the drivers, what types of CDL do they have?
You know, one of the most tangible things that I remember was, probably a year ago, people started to discover that a lot of CDL were issued to people with something called 'No Name' given as their first name, right? Literally on their license it says like, 'No Name Given.'
And so I think that kind of, as people started to discover this, and also you had many trucking companies being registered at like — there was like 200 trucking companies registered to like an apartment in Signal Hill, California, or like Sheridan, Wyoming. There's like 600 trucking companies registered to a P.O. Box. And so that really kind of started people looking at this, and then the non-domiciled CDL thing really, really started to take off.
You know, when Sean Duffy and the DOT started, I believe in June of 2025, really kind of honing in on English language proficiency and non-domiciled CDL. But I believe non-domiciled CDL have been around since the mid-80s. And it's not necessarily like, obviously it's not unlawful, or else they wouldn't be issuing them.
But I think there was a lot of scrutiny put on certain states that just had massive spikes in the issuance of CDL, like California and Minnesota, I believe, were the two biggest, and New York were some of the bigger examples where, you know, historically they'd been issuing X amount of CDL per year, and then all of a sudden out of nowhere, right around COVID, it was like 10x, right?
And all the while, you know, that all happened in years past and nobody really looked at it. But then in the last year, everyone's been like, okay, what's really going on there? And so that's kind of what's led to the scrutiny, if you will.
So someone with a non-dom CDL has taken a test in the US? They have, or at least in theory, someone with a non-dom CDL — it's not like they're just like, 'Oh yeah, I took a test back in Ukraine.'
So non-domiciled CDLs are for people who are foreign nationals who are not domiciled here but are legally allowed to work. Right. And so if they have the legal authorization to work, then they can go and get a non-domiciled CDL.
So just to establish the CDL part, in theory, the non-dom CDL is not someone who is like, 'Oh, I got my trucking license in Ukraine and then I moved to the United States and I'm trucking.' In theory, the non-dom CDL is not that. But when you see a really big spike in the number of issuances of non-dom CDLs that are way out of historical proportion, the question that might arise for regulators is perhaps the quality of the CDL, etc. Like, that's sort of what this source of concern would be.
And to go down another rabbit hole, there's been a huge, there's been a lot of eyeballs on CDL schools. There's some, you know, remember that guy Nick Shurley or whatever, like the trucking school in Minnesota? It's like probably the same sort of phenomenon.
So there's lots of side effects — CDL schools, lots of suspect curriculums, lots of suspect trainings. They've essentially been handing out CDLs like candy, it would seem.
So just to sort of wrap up on this point, I know obviously the administration, Sean Duffy, the Secretary of Transportation, they've talked a lot about this, etc. Like, okay, how many of these drivers are actually safe, had a proper education, etc. But from your perspective, the people that you talk to, it's basically like, no, this is more than just tweets. This is not just, 'Oh, we're looking into this,' etc. You think there's a clear on-the-ground effect from...
Oh, 100%, 100%. And I hear it every day from my friends who own trucking companies. Yeah, 100%. And it's been much harder — capacity has been much tighter. You talk to freight brokers, rates have gone up and it's harder to find trucks. So that's — there's only a couple of sources for that right now.
I guess what I'm getting at with the domiciled versus non-domiciled CDL thing is, would you expect this to be a temporary blip as the administration scrutinizes some of these foreign drivers, but eventually they — I don't know, like maybe they have to go back to school and get re-licensed again and then they come back on stream? Or is this like a permanent cut in driver capacity in your mind?
Well, I think if I'm not mistaken, the government in March of this year said that essentially non-domiciled CDLs — it's not going to be as easy to renew them. And so naturally they'll start to expire and there will be less of them over time. And I mean, who knows? Obviously we can't get a crystal ball out and see what's going to happen in the next election. So who the heck knows what another administration might do or might be able to do? Who knows how permanent any of this is? Anyone's guess is as good as mine on that.
Okay, let's take it on to the next sort of sub-question here. And it occurs to me that there are sort of two interlinked things that strike me as interesting. So let's say, okay, you have the Ukrainian-owned trucking company and a lot of Ukrainian drivers. And then to your point, though, they're part of a broader network and they might network with Ukrainian freight brokers, etc. And now you have the Supreme Court ruling, which for the first time opens the door to the possibility of the broker, who traditionally wasn't held liable, would be liable if there's a major accident caused by them.
So it feels to me like this combination could literally obliterate whole networks. Like, we think of the network as the driver, the truck, etc., but the network is also the ecosystem. The capacity is the ecosystem itself. So structurally, if this continues down the path it's on right now, and a lot of the pundits, the legal experts — I know I could name a couple — have said in the last day that if this all keeps going down this path, this is a serious structural issue for the freight brokerage business model. And if the freight brokerage business model is in trouble, then naturally that means that the long tail of trucking companies who primarily get their freight from freight brokers...
Yeah, they're in trouble too. And so, you know, historically, freight brokers have had to have processes to audit the carriers. They set up an audit of the carriers they give freight to, and each one has kind of had their own process for that. And that's evolved. And there's been a lot of technology that's gone into the vetting and compliance side of freight brokerage in the last couple of years, mainly because another thing we haven't talked about, which is a whole rabbit hole, is cargo theft.
Cargo theft has been through the roof since COVID. And there's been a huge amount of criminal element, like large criminal elements that have come in and are doing everything from spoofing carriers, pretending to be carriers, to setting up fraudulent entities, acting like a normal carrier for a while, then figuring out where the good freight is, stealing that, and then disappearing.
Oh, wow. I thought you just meant someone like picking a bag off the back of the truck or something.
No, I'm talking like mafia-type style, you know, like crime rings, and that's exploded in the last couple of years. And so as a result of that, freight brokers have been under much more scrutiny of who they're hiring.
And now, but safety, which is kind of the element we're talking about here with regard to the Supreme Court ruling, is like, okay, what's a safe carrier? And so far, brokers have really kind of relied on the FMCSA. They have a rating — it's satisfactory, conditional, or not rated. And so traditionally it's like, okay, I hired a satisfactory carrier. It says on the FMCSA's website, 'satisfactory,' that must mean something. Therefore they're good and I'm going to hire them, and they go like that.
Recently, Robinson was involved in a case where they hired a carrier that was satisfactory, that had done like 200-plus loads for them, and then was involved in a wreck, and now they're facing like a $600 million judgment. And they're appealing it, naturally. But if that holds true, the freight broker business model is going to be in serious trouble because the government is not really telling them clearly, okay, this is a safe carrier, this is the vetting standard, use this, if you do this you're covered, right? They're not really doing that.
There's a lot of gray areas around this. And that's naturally going to cause a lot of problems for freight brokers. And like I said, the vast majority of these small carriers — and there's hundreds of thousands of these companies — they get their freight from freight brokers because they can't go. Traditionally it's difficult for them to go get direct customers. It's traditionally like, if I'm a one-truck operator and I walk into Kraft Heinz, Kraft Heinz is going to be like, 'Yo, I'm not giving you freight. I'm going to give freight to the broker who can give me a thousand trucks, or Knight-Swift who can give me 10,000 trucks.' So it's just a very difficult time.
Yeah, this is crazy. What I think, like, maybe we need to broaden our conception of what capacity means, because we think of it as drivers, we think of it as trucks, etc. But if there is a small carrier and it's ten trucks and ten drivers, if they can't really plug into a network that they know — is that even capacity?
I'm looking at a headline right now from, I guess this is a stat from Roadmaster Group, but they're saying cargo theft jumped 60% last year. And also there's a New York Times headline saying nearly 11,000 bottles of bourbon were stolen from a Philadelphia warehouse as a result of coordinated cargo theft. It's funny because you and I both just assumed that when you said cargo theft, you meant like grabbing boxes.
Yeah, like in Goodfellas, where you're like...
That's as far as my criminal ambitions can strike.
And then the truck driver is like, 'Please beat me up.' Do you remember that in Goodfellas? He was like, 'Please beat me up so that my own boss does not think that I stole it.'
But this is what they've targeted. They've targeted Guy Fieri. Guy Fieri had freight stolen. Like, all these celebrities in the last year have seemingly come out with liquor brands and they're all being targeted. Like, I think Shaq's Range Rover got stolen off a car hauler. There's been all sorts of crazy stuff. But all jokes aside, it is crazy. It is crazy what's going on. And seemingly it's only getting worse, despite all the scrutiny and all the tech that's been brought in.
But Tracy, you did kind of mention something interesting, or maybe it was Joe, kind of the different types of capacity. Like one thing that I'm thinking a lot about — and I'm not a freight broker anymore, so I'm slightly removed, although I did do it for many years — historically there's not really been... it's really a commodity.
And there's, it's, you know, one carrier versus the other might ask you for more money, but you don't really have a good reason to pay carrier A much more than carrier B, you know. So some situations might be like, okay, you know, yeah, I'll give you a couple hundred extra bucks because I know you, I trust you, and that's worth it. It's pretty much the same service, right? Like you expect this stuff to go from one place to another.
Yeah, yeah, it's in tradition. It's been viewed as an economy.
Commodity. But like, now that there's this kind of extra scrutiny on the brokers' vetting process and the hiring process, like there might start to be a kind of strata of carriers where, like, they've got the best ratings, they've got, they're the safest operators, like they're able to charge such a premium. And brokers might be like, shoot, like I have to pay them more because I need to check these boxes so that if they get into, right, God forbid, I'm as, I'm as covered as I possibly can be in the event that some, some, you know, billboard attorney tries to sue me for $600 million.
Yeah, that's really interesting. So like, it could, you could start to see more, I guess, diversification come into the market. More like stratification on rates, people paying a premium for certain services.
I think that would make sense to me if that, if that happens. I think that would make sense. The jury's out on if that'll happen, but that makes sense to me.
The other thing I want to ask about is just how do people feel about becoming truckers at this particular moment? So rates are up. It seems like the money's there, or at least there's more money there than there used to be a few years ago. But at the same time, we still hear complaints about it's a tough life. You're on the road all the time. The hours are insane. Like maybe you're waiting hours at a port to pick up.
Hard to find parking, hard to find parking.
Clearly, it's, there's a lot to say here.
There's a lot to say here. And it's actually interesting because I did just, you know, at Truck Park, we run a survey of all of our driver base basically every week. And I happened a couple weeks ago to do a survey basically just about like folks' opinion, like drivers' opinions on the state of the industry.
Do you recommend this to a friend? Like, would you recommend this job to a friend? Would you like it? Just how do you feel about trucking? And, and anecdotally, I can say that in my, in my discussions with my driver friends, like, it seems like morale is at an all-time low. That's just the anecdotal thing, what I hear from people, but structurally, I mean, or what I see kind of in these surveys is like, you know, many, like there's a strong sense of nostalgia in trucking. Like it was much better then than it is now. Right? You look at like the 70s and 80s when you had Smokey and the Bandit movies, like truckers were like cowboys.
The truckers were cowboys, right? Or, or explorers or frontiersmen.
And they were respected. And it was something that was a desire. It was kind of the last, the last kind of frontier. Right? You're out on the road kind of figuring it out. And now, and now it seems, for whatever reason, that that kind of ethos has been damaged. And, and you hear a kind of a lot of just kind of like a mourning of the industry when you talk to drivers, and like, and this manifests itself like if you go to a truck stop and you just kind of pull random drivers, I guarantee you that if you ask them, you know, were things better in the past than they are now, and maybe this is just a human thing to a degree, perhaps. So, so this isn't like a scientific study by any means, but like, there is a strong sense that things were better in the past. And, and I think there's a lot of reasons for that. And if you guys want me to kind of riff on that for a second, I'm happy to.
