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Monday, June 03, 2019

Auto Transport Industry and Economic Prospects 2019 through 2020


As business owners, we spend most of our time trying to pull the levers available to us: controlling expenses, planning for future needs, improving quality of service. While we do this work, we're glancing at the horizon to keep an eye on the industry as well as economic conditions in general.

I've got to say in 15 years of being in business, I've never seen an industry and an economy so hard to predict. I'll outline a few ideas here

First, the good news: Unemployment is at record lows.

The official rate is 3.8%. Even the broader U6 measure which includes discouraged workers and people working part-time for economic reasons is down to 7.3%

As my grandfather used to say: “Everybody that wants to work is already working.”

More good news: Productivity is rising.

More people are working, and those people are earning their employers more money. Gross Domestic Productivity, the total number of dollars paid for all goods and services in the economy has been going up relative to the number of employees working. In the broadest sense, increasing productivity means the workers of an economy are working harder, faster, smarter, and creating more innovation. That's good for business owners, workers, and customers. (I like to think of business as a stool with three legs-- if the business is run in such a way that the needs of the owners, the workers, and the customers are taken care of, then that business is probably going to be stable. If one of the legs is short-changed, then the whole thing is going to be wobbly.)

Increasing productivity coupled with low unemployment is the best recipe I know to decrease income inequality. Put another way: an economy that produces jobs is going to help raise people's standard of living faster than any government program.

The (sort of) bad news: We are now in a trade-war on multiple fronts, so prices will go up as businesses pass on the cost of the 25% tariffs they're paying. (to get some deals on pre trade-war straps, click here.)

People can argue back and forth about how we got into this situation, and whether it is for a good cause or not. The fact of the matter is: we're in it now. Material costs are rising, and they're rising not only for straight up imported products, but they're rising for stuff made in the USA, because lots of products made in the USA have some imported products as components.

The really bad news: This could slow down sales of big-ticket items like cars and trucks, or even trigger the start of a full-on recession.

With the current trade war with China and the ones threatened with Mexico and Europe, the entire logistics ecosystem is being upended. Whether this conflict is resolved in a way that is favorable remains to be seen. In the meantime, the tariffs act as a sudden tax jolt, as costs paid by importers are passed on to distributors and ultimately consumers. With the complex logistics of auto manufacturing, this could result in price increases for vehicles that will start slowing down sales. That's bad news for car haulers and people like me that want to sell stuff to car haulers.

More bad news: Federal deficits are skyrocketing, with US spending expected to exceed income by over 1 Trillion dollars just for 2019 alone! This is on top of the mountain of debt the US created in the aftermath of the mortgage meltdown and Great Recession of 2008.

Most of this current deficit (not to be confused with the aggregate US debt, which has risen over multiple decades) came about as a result of the Tax Cuts and Jobs Act of 2017.

Normally, a tax cut would be a go-to option for the government to try and stimulate an economy that is already mired in a deep recession. It has never been done when an economy is operating at full capacity with full employment. So we are in uncharted waters here.

Some economists are beginning to question whether such mountains of debt even matter. Other, more traditional economists say that it does indeed matter, because if there is ever more debt than there is appetite to purchase it, then the yields offered on all that debt must rise until buyers are found. Not a big deal if yield on the 10 year US Bond is 2.2%, but what if it goes back up to 15.5% where it was back in 1980. The amount of debt we're getting ourselves into could be similar to the trap some families get into when they use too much credit on one of those 6 month 0% interest rate cards that snaps back to 24% compound interest in the 7th month. By the time the interest rates change, it's too late to take the stuff back to the store. Now imagine that times trillions of dollars.

Worse news: Since we've already used the stimulus of tax cuts during the boom times and piled onto our already huge mountain of debt, it will be politically and economically difficult to do future tax cuts in the next recession. Also, if Congress decides to play a game of chicken with the debt ceiling limit, credit ratings agencies like Moody's could downgrade US debt issues, resulting in higher yields being demanded at auction. Also: China, with whom we're currently in the middle of a trade war, has historically been the biggest foreign buyer of US debt. It is doubtful they would weaponize this debt by selling off their $1.12 Trillion in debt, because this would drive the US dollar down in value, which they definitely don't want to do right now. But sometimes people don't act in their short-term interest if they have a longer term goal or a point to prove.

Conclusions:
My conclusion is that as business-owners, we have no choice but to make hay while the sun shines. We don't get to decide what the government does or doesn't do. We can only pull the levers we have in front of us. Right now, economic conditions in this country are doing exceptionally well.

Monday, March 25, 2019

Carhauler bridge strike Connecticut 2019

Damn!  This was a bad one.

https://youtu.be/C-7Xn_UuPV0

Wednesday, February 27, 2019

All new Hi Viz Diamond Weave Strap

New extra durable Diamond Weave webbing has 2 different patents for abrasion resistance and also edge protection.  2 foot low profile tread-grab sleeve replaces the three rubber tread grabs normally found on a traditional 3 point auto tie-down.  The advantage here is ease of use on low-profile cars where wheel-well space is in short supply.

These are manufactured in our shop in Dallas, TX out of webbing ALSO manufactured in the USA.  Each strap tagged with safe WLL of 3333 lbs.  Available in 10, 12, 14 and 16 foot lengths.  We can also make custom lengths for you for a slight additional cost.

For more information, visit our website:  https://www.autohaulersupply.com/catalog/low-profile-sleeve-straps/low-profile-14-ft-diamond-weave-swivel-j-hook-wheel-strap-hiviz-green-553771.php


Thursday, November 29, 2018

Good deal on straps for Cottrell trailers

Ratchet wheels traps or replacement straps for next-generation type trailers. This is from the sales department of Autohauler Supply.  If you click on the picture, you can see more details on the wheel straps.  If you don't see what you need, you can call us 8AM-8PM at 866-855-4285, Monday through Friday.  Those who possess the secret bat phone number can call Steve or Gunnar on the weekend.  But don't call Dale or RJ.

$17.95 While supplies last at Autohauler Supply



Diamond Weave strap in Black, with Low-Profile tread grab sleeve and reinforced hook eye.  I call this one The Bumble Bee strap

This is a regular tread grab strap for small-hole Miller and Sun Valley trailers

Low Profile Sleeve strap to fit next generation trailers and chain conversions.


Shipping included on this Red Wheel Strap from PCC if you buy a box of 8  (Offer good while supplies last, so if you're reading this in 2021, don't get mad.)

Jack Cooper buys Selland

Well, at least this time they're getting some decent equipment.  Way better then when they bought Allied's fleet from the 1990s!
Check out the news story here: https://www.ttnews.com/articles/jack-cooper-holdings-acquires-assets-selland-auto-transport

Diamond Weave straps for auto transport and towing, now in stock in Dallas, TX

Now available in high visibility Green or hide-the-grease Black. Try the strap that has two patents for abrasion resistance.  Made in USA.  Click here for more info: https://www.autohaulersupply.com/catalog/towing-433-1.php

Thursday, March 23, 2017

How to put protective sleeves on your lasso straps.


If you don't want this to happen to your straps, then you should think about buying protective sleeves.  If you buy Cordura protective sleeves for your car hauler's wheel straps, then you will save time if you follow the instructions laid forth for us by Doug Valley at Cruiser Parts in New Hampshire.  Read all about it here:  https://www.autohaulersupply.com/catalog/how-to-put-protective-sleeves-on-your-wheel-straps.-601-1.php

Cordura Protective Sleeves 10-Pack (option of 12pk)https://www.autohaulersupply.com/catalog/protective-sleeves-476-1.php


Thursday, March 16, 2017

Bradley Childs moves to Moore Transport

Just noticed on my LinkedIN feed that Bradley Childs, formerly VP of Sales and Operations at Proficient Auto Transport is now VP of Sales and Marketing and Moore Transport.

Thursday, January 12, 2017

What to do when drivers run over wheel straps?

Diamond Weave
Are your drivers running over their straps?  You can train them all you want, but once they roll out of the yard, they're probably going to do whatever they want. Solutions:  Make a checklist of all the equipment and what kind of shape it is in when you put the driver in the truck.  Anything that doesn't return in tht shape is his or her responsibility and will come out of the settlement check.

You wouldn't borrow someone's car and return it without the radio?  Or with a hole in the tire?

I know straps are probably pretty far down the list of items to worry about, but there is an improvement you can order on your straps-- reinforced eyes.  If the driver drives over the wheel straps, this will at least protect the strap where it is sewn around the hook, which is typically where the most wear and tear happens. This is only available on our Diamond Weave brand of straps, which I should add  have two different patents for abrasion resistance and also edge protection.

Click here for more replacement 3 point wheel strap tie-downs.

Thursday, August 18, 2016

Do your drivers run over wheel straps?

This is what happens to wheel straps when they get driven over. One solution is to move the strap out of the way. If you don't want to do that, then get your straps with reinforced eyes. It doesn't add much to the cost, but it will give you way longer strap life if you are tough on your straps. Google: SS-S-2x12RE-WH-RCS-DW to see pics of our sleeve reinforced eye.



Thursday, April 14, 2016

Tow dolly straps for really really really big Jeep tires


Yes, you can get custom tow dolly straps for your Jeep or other off-road 4x4 if the U-Haul tow dolly straps don't fit your oversize tires!  Check these out here.

Time to slip plate...

Slide N Glide Graphite Gallon (Case of 4)Auto Transport Professionals: Now that winter is over, take a look at your posts and sliders. If your posts are developing rust scales or graphite accretions, spend a bit of extra time with a needle gun to prepare the surface before you apply more dry film graphite. You'll be glad you did next winter if your trailer has any sticky positions. And if you need any graphite paint, take advantage of our pre-order special.

Wednesday, March 23, 2016

How will the car hauling business be in 2017 and 2018? Probably pretty good!

With U.S. auto sales slightly off the annualized vehicle sales seen in the last half of 2015, one might wonder what 2016 will be like, let alone 2017 and 2018.

If one looks at the long-trend charts, in early 2014 the U.S. auto industry appears to have clawed back its losses from the Great Recession.





However, an interesting trend has developed in recent years as the average age of cars on American roadways has climbed to 11.5 years.  This has been attributed to both longer terms of finance contracts as well as higher quality of construction.




If  Mr and Mrs Car Buyer can't afford a new car (they're upside down in their finance contract, because they signed up for an 84 month term)... and their car is doing just fine, they won't buy a new car.

However, a great deal of sales momentum remains in the light truck market, on account of continued growth in residential building, up 18% this year.  Just try and get a carpenter to come to your house for a remodel.  Many are already booking new work into 2017, because their dance cards are full!  Source

With taxes what they are, most contractors are more than willing to buy a shiny new truck or van as a tax write-off.  They can either keep the old one and pay extra tax, or buy the new truck and have the use of it for all the extra miles they're running trying to keep up with the demands of work.

Looking at an even wider set of data, the news for construction in general looks even rosier.  As residential construction continues to accelerate, so does work for energy and utilities.  And since Congress passed the Highway Approporiation Bill, construction on the nation's aging infrastructure should also support sustained demand for vehicles. Source

We hear a lot of talk about the Millenials avoiding the purchase of cars in favor of living close-in to urban centers and using public transport.  This will almost inevitably change as they start families and confront the difficult economic realities of finding enough room to store their children's toys in a 650 square foot apartment.

It is probably safe to say that there will be plenty of work hauling cars in the next few years.  The bigger questions are:  Will the loads pay?  Will fuel prices snap upwards in the next three years?  

We know that as more car haulers enter the field, load prices tend to drop in different regions.  This is already starting to happen in certain areas.  Those car haulers who rely on Central Dispatch brokers to pay them a fair price for their services are risking  disappointment... and bankruptcy if fuel prices move up sharply. 

However, the trucking company that cultivates business relationships with dealers directly, and finds more profitable lanes in which to run, should have a pretty good prospect of prosperity. 

So as in many areas of enterprise, the smart guys will find a way to make a buck.

Wednesday, March 16, 2016

Oops, we need to pay car haulers more money.

OK this news article from Automotive Logistics made me laugh out loud.  In Europe, apparently there is a real problem in outbound logistics, because there aren't enough trucks to haul the freight.  "Why is that," you ask?  Apparently, the automakers negotiated rates so low, and so many trucking companies went out of business, there were fewer companies willing to invest in the assets to provide transport service.

Imagine that!  If you want someone to provide a service, you have to pay enough that they not only will NOT go out of business, they will actually MAKE MONEY.  If an industry is deemed to be unprofitable, fewer companies want to invest in it.

If you'd like to read the original article, click here.