These sees Bloomberg Business Week with Carol Messer and Tim Stinovic on Bloomberg Radio. So we got a great read of the economy and an important part of our economy, and that is the group that kind of moves everything around. We did it in December. We wanted to have our next guest back for an update, and we're talking about the trucking industry. Yeah, very please step back with us once again. Melissa Foreman, president at Triumph Pay, joining us
via zoom from Dallas, Texas. To remind everyone, Triumph Pay is a payment platform. What it does is it connects brokers, shippers and carriers. It's a division of t b K Bank SSB member fd I C and part of the publicly traded Triumph Financial got about one point five billion dollar market cap. Melissa, good to have you with us. How are you? I'm good, Carol and Tim, how are you guys? Would you for having me back? We're doing
pretty well. So we last spoke to you towards the end of the year last year, and I'm just wondering how things are going now and how things have changed since then. Yeah, I think you know what what we talked about last time. Is that we didn't see the seasonal peak that we typically do in in October, November, December into the holidays and things kind of we're starting
to hit the bottom. What we've seen on our side in that time frame, you know, through the beginning of January in December is it's starting to feel like it's flattening a little bit. So the average voice prices seem to stabilize UM and so I we hope we don't have a crystal ball, but we hope that it will hold fast and we'll start seeing things pick back up here um in the next month or two, but down from a year ago. Like how is the best metric here?
I always feel like because of the pandemic, everything is so a little bit foggy. So do you compare it to pre pandemic levels kind of where we are? We do so, yes, when you look at pre pandemic levels and I can't quote exactly, you know, this week where they're at, but um, what an average invoice price for a spot market over the road trucker's invoice would be
around sixte UM. So now we're seeing that right around two thousand and fifty UM, which is far better than than what we saw pre pandemic, but certainly not as good as that, you know, the peaks that we hit a year or so ago when it was hitting. So
it feels like it's it's rough, um. But again, what we have to remember is what's changed since pre pandemic is the cost of fuel, the cost of equipment, the cost of financing with the federate increases and all those hikes and how they impact driver's ability to operate their business. So it has become more expensive for them to operate
their business than it was pre pandemic um. And so you know, I certainly can't imagine that we could get much lower than the two dollars you know, two dollars per per mile um for a driver carrier to even be able to operate. What about when it comes to supply of drivers and carriers, is it still is it still difficult? Are you still having trouble finding people? There? There are and and a lot of that. You know, the reasons differ right from from season the season and
what's happening in the industry. And you know, right now there's there's a lot of drivers that are saying, I'm going to park my truck, I'm not going to operate at a loss, and so they're able to to park it, put it on the fence, and and go do something else while they waited out. And so you see a lot of authorities coming out of the market. Um. And then as soon as things pick back up, you'll start to see them come back in. That sounds that sounds
inflationary to me. That sounds exactly like what the FETE is worried about. Mm hmm. It is so how much more would would people have to pay in order to get these drivers off the sidelines? And how do we see those higher payments actually, uh go, you know, trickle into the economy in terms of higher prices for us,
which again is what the FETE is worried about. Yeah. Absolutely, So you know, when you look at their cost to operate, you know, trucking companies historically have made you know, a ten to fifteen eighteen on a on a good year
percent margin um. Right now they're running at at zero or three to five percent margins for the smaller guys, and so we just need to be able to make money again, right, They need to be able to be profitable, They need to be able to operate their businesses, um, and so the all the inflationary cost increases for equipment and fuel, ETCeteras is really what's what's causing them to have these issues? And so how do we fix that? Right? We've got to get to feel the cost of fuel down.
I got to get how do you make money on if you're getting two dollars per mile your operational cost? How do you how do the trucker make money? Help me understand the math here, Yeah, I mean, you know, the majority of that is going towards fuel and the equipment and and the cost of the drivers you know, salary and so. Um, it's difficult again like right now is you know three five eight percent margins are are push and so it's difficult to make money. And that's
why you see a lot of carriers coming out. I want to talk autonomous trucks with you. Once again, we're not seeing them on the roads, you know, despite the fact that Tesla, well we do see it. I mean a couple of those, but I mean they're not widespread by any means right now. How do you think about autonomous trucks in your work? And to what extent should should we think about them as consumers? And should drivers think about being replaced. Yeah, again, m as I said
last time, we're a long ways out. No no difference. Um, I don't. I don't think we're anywhere close to having drivers on the road. Are autonomous trucks on the road without drivers and they're controlling them. Um. There are certainly applications for point to point pick up such importance and such where you can have UM equipment do that, but that's because you don't have the variables of the open road.
Our drivers are phenomenal and navigating our interstates, are infrastructure in the state that it's in, and dealing with other people, and and and not only is that they face with you know, fifty ft trailer behind them that's fully loaded. And so will there be an application someday that allows us to alleviate a driver shortage, Yes, But then there
it's going to create other opportunities. You know, somebody is going to be and I imagine, you know, behind a joystick on a computer game, you know, helping navigate these trucks through the city, And it's just going to change the way we see things. But I don't see it taking trucks off the road completely. It's one of the things we talked to Robotic right truck trucking specifically with the Amazon with Cathy would recently, Hey, what you are
seeing Melissa from UM Truckers. What does it tell you about the economy right now? Is it a little bit up in the air? Is the glass more half full? Is a glass more half empty? Well? I think I think I saw the report that GP was up a little bit in the last report. UM. We do see, you know, folks have shifted their spending UM to more
experiences than than consumer products. Again, we talked about that UM a couple of months ago, and you know, I feel like it's it's it feels to me that it's stabilizing. We're starting to see some you know, orders go up a little bit to bring UM product across you know, import products and into our warehouses, and so you're starting to see some signs of that coming back. UM. But I think it's too it's too early to tell right now is to how deep we're going to go or
or when it's gonna turn that corner. But you say recession, it feels that way. Okay, Okay, So what about the questions sort of a different way when it comes to just inflation, because speaking to you and understanding the shortage is understanding that drivers are going on the sidelines because they can't make money. Uh, do you feel like uh, the FED? And I know, I know we're not talking you know, federal reserve policy here, but that's what we
talked about last week. So do you feel like the FED is is I don't want to ask you if they're making the right decision, but do you think does it seem like to you inflation is coming down? You know, I could not answer that question, Tim, I don't know enough about the financing side of it and and how all those lovers that can be pulled affect. But what
about trust from you? So for Triumph Pay, we we feel like and for the industry, while there are some slowing and it has been some some slowing that's happening, we feel like it's it's flattened out. And so from the view that we have UM, it starts to feel like things are are leveling right and we're going to start to see some more normalization in the industry. But looking at that lens from you know, four to six week view is too short to be able to make
a call. And so we could we have seen, you know, average and voice prices fluctuate from from week to week pretty substantially um from all the different indicators, you know, different things that happen in the industry, whether it's weather related or inflationary related, and so it's it's just a
very volatile market. And you know, we will continue to be here and support carriers through through the process and brokers through the process that we can make sure that their businesses are ready right to address that vall Chile. And that's what Triumph paid us, all right. Melissa Foreman, president of Try and Pay, joining us via zoom from Dallas, Texas with a check on the trucking industry