Came back with a bank window down yelling now money anything hey oh Got the foot on the gas pedal to the metal when I'm get to the back hey Got the foot on the gas pedal to the metal when the lane moving fast hey Let them all cross if they hate then let them hate them Make a bigger ball.
Hey what is up, ladies and gentlemen? We are back. We are live. It is the Freight Coach Podcast, the top podcast in transportation coming to you guys every single weekday, 8:30am Pacific, 10:30 Central, to break down some industry headlines. But most importantly, you guys provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real side of freight, ladies and gentlemen. And I do say that before every single show.
And what I mean by that is I only speak with transportation professionals because at the end of the day, you guys, I, I want to talk to the right individuals who have done what you're looking to do or who are currently doing what you're trying to achieve. So you can take this information, apply it, utilize it, and see a meaningful difference in your business and your life. Happy Tuesday, everybody. I got a very special guest for you guys here today.
I am going to bring him up in just a second, though. But before I do that, my team always wants me to remind you we have a newsletter. It drops tomorrow, it drops once a week. And I do not auto sign anybody up for that stuff because I believe in a meritocracy. And if you want to get in on it, where we talk rates, industry diesel prices, that's it. I'm not trying to be your life coach. Just know a little thing or two about freight. So we talk about that in there.
I just need you to go to the Freightcoach.com though, and it will auto prompt you to register. Also, if you get value in what you hear today and you're not subscribed, you guys subscribe to the show. If you're feeling really ambitious after this one, rank the show as well on itunes and Spotify. Because if you saw value, that's how your network's going to see value as well. All right? We're going to talk some equipment financing.
We're gonna be talking about a bunch of stuff that's going on out there on that side of the world because it is ever relevant. And there is nobody more qualified to talk about this than my friend, James Currier. James, thank you so much for taking the time to join me today.
Always a pleasure, Jolly.
Nah, man, I, I Enjoy it. And I think this is about your perfect time of year. You got about 60 days of no inclement weather in Canada. So we gotta. I just appreciate you taking the time right now. And you're not saying like, dude, I'm out on the lake here. We got a little bit of window.
The lake would be nice. It's 105 degrees right now in Ontario. So we're getting the same heat wave that you do that you are right now. For some reason, the weather doesn't stop at the border. Like a lot of the freight.
Like actually 105.
Yeah.
Dang, dude, that's brutal for you guys.
It's quite warm for late June. We have had no inclement weather up until now. We had a really wet, rainy spring. A lot of the farmers were very challenged in the area with how much rain we got and how little heat we got because the moisture did not burn off as expected. So their planting season was delayed by several weeks, which then delayed a lot of the produce moving and things like that. So interesting side of the.
The farmers markets, dude, speaking of things not burning off as expected, dude, nothing's happening. When it comes down to it out there. I mean, I sit there and watch. I watch the Fed more than I'm proud to admit on like where things are trending. Right. Because I feel like, you know, again, it's a direct correlation into why freight volumes are.
I mean, it's one of the factors on why freight volumes are kind of bouncing around the bottom here still is like there's no real sign of a change coming where it gives people the confidence to go out there and spend money. And yes, there are people who can make that argument that some people spend money no matter what. I, I agree, but that's a very small percentage of people out there, you guys.
But there is a large portion of this industry that is small business that buys and sells based on financing terms and everything that's going on out there. And if they're going to go out and you know, and again, if you're looking at manufacturers and stuff as well, are they going to go out there and feel the confidence to buy more inventory if there's a chance that they could get it for cheaper based on their financing terms. Right.
So there's a lot of stuff that's kind of up in the air right now and you know, kind of from that holistic view, James, like, are you guys kind of sitting and waiting as well on a lot of this stuff?
Well, we don't sit around and wait for anything. Unfortunately, the rates that most banks and independents offer are at the, really at the source of what the Fed deems is appropriate. So, you know, candidly, I can't believe that Jerome Powell has held rates as long as he has or as the Fed has over the last few months. I really anticipated a rate reduction in the most recent announcement and the fact that it has not happened yet is candidly quite shocking from my perspective.
That being said, it all depends on where your lender is marking their base rates, whether it's on the Fed rate or on the five year bond rate or three year bond rate. Right now, rates are all high.
Yeah.
Because there's so much uncertainty. A lot of lenders have been bent over backwards on losses over the last 12 months, which is, you know, it's normal to see these kinds of volume losses when you have such a massive peak that we saw in 23, the equipment prices where they were for so long and the rates as high as they were. We, we expected and anticipated some market losses. Maybe not as high as we're seeing right now, but it does happen.
So from your perspective, what, why are interest rates staying the same? Like what? From everything that you study? Because obviously this is your day job. It's not my day job. My day job is to A, talk into this mic and B, slang some freight out there in the market. But what is the benefit? And then adversely, what is the risk of keeping interest rates as high as they are?
That's such a loaded question. I love it. It's a great question.
And I mean, James, I asked that because like we see a lot of headlines, right? Like no matter what you see, like everybody is a policy expert in the Middle east this week, right? Like everybody is, you know, all of that stuff out there, but it's all surface level headlines. Everybody sees that stuff, right? And it's like, let's look, let's look at it from a little bit deeper perspective. Why?
You know, like outside of, you know, I want to remove any political bias from this because that's all you can really see out there right now is this. Oh, they're doing this because of that and it's always politically motivated. But from somebody who is an expert in their field, like you are, James, what is the benefit of the Fed keeping rates elevated?
The, the reality that we see is that if you talk to 10 economists, professional or not, and I'm in the not category, you're going to get 10 different answers the, from my perspective, the reason why the Fed is keeping the rates where they are is because the economy is slowing, but not at the rate that they thought it was going to slow. They are going to keep rates stagnant until the economy kind of transitions into a spot where they feel it needs a kickstart.
And that has not been necessary given all of the economic figures that have come out yet. That being said, I, I would think that we're there on both sides of the border now. Canada reduced their interest rate two announcements ago. So approximately a month and a half ago.
I would anticipate Jerome Powell and the Fed doing the same thing, but there is so much uncertainty in the market right now that I have a feeling that the Fed wanted some form of security, that things were going to start to normalize and be more predictable. Again, the tariffs and the constant barrage of announcements have thrown every market into a frenzy and it's almost daily now. When you, when you have that, you can't predict anything that's going to happen tomorrow.
All earnings reports from major corporations are being thrown out the window. No company can develop a budget right now because you don't know what equipment is going to cost, you don't know what the price of goods are going to cost. And, and it makes it very challenging for anything to happen on a projections basis.
So it's like when I, again, this is if you go out there and you see headlines, right? Like, and I'm just, again, I'm just asking because, dude, I don't know this stuff. You see headlines of jobs, reports are positive, inflation is slowing, reducing all of that stuff out there. You would think again from, I went to public school and I always like to practice this stuff. Why not do something to kickstart it, right?
Like, why not lower it to improve lender confidence and purchasing confidence out there? Like, hey, I can get some more favorable terms. I want to reinvest out there. So it's like, it seems like they're, they're looking for certainty that might not ever come to fruition, right?
Well, the way that the Fed is going to work is that if they look at the jobs numbers and see positive growth in jobs, what would be the reason to reduce the rate if you don't need to produce more jobs? And the economy seems to be ticking along at a decent pace. You know, typically you aim for a 2 to 2.5% GDP growth year over year, GDP being the measure of an economy's overall health and well, being if you're seeing that is exactly what the Fed is aiming for.
And so there's no reason for them to drop rates until that stability happens.
No, for sure.
Once the economy goes below a 2% GDP growth, you can then start to look at what the potential impact of a rate reduction would be. But you know, right now they're not there.
And you know, again, just to, for anybody out there who is unaware, there is no legislation that can be passed to do this because the Fed is not actually part of the federal government. Just throwing that out there because there's a lot of confusion when you hear the Federal Reserve, you think the government has some sort of control over that or at least to say, and it is a complete separate entity from it.
There is no President, Congress or Senate that can say you guys have to reduce rates, you have to increase. That has nothing to do with anything. Just to clear that up for people out there who are listening to this who might be thinking, well why doesn't the current administration do something about it? So keep that.
No executive order on earth that can change what the Fed does.
Absolutely. And that's a common misconception that I see out there is it's like, well why doesn't this person do this? Or why doesn't Senate or Congress do. Because they can't, you guys. It's separate from the U.S. government out there. But let's talk about some other stuff here, man. Let's segue into some articles.
So the links to all of these articles, you guys that we're going to be talking about today will be uploaded into notes for you guys to check out because again you guys don't just read a headline, go in there and do your actual own research on this to make the best decisions from your, for your companies. Definitely don't listen to two dudes with beards out here talking their nonsense. But first article we're going to be breaking down today, you guys is from Equipment Finance News.
North American Class 8 truck orders drop 45%. North American medium duty trucks fall 27% year over year out there. And it just, you know, because in May of 2025, you guys class A truck net orders in North America plunged 45% year over year to 13,000 units. And I like, I just want to interject what's a standard like month out there, James? Is it, I mean obviously 40, is it normally 25 to 30,000 in any given month out there? Is this seasonally adjusted? Is this normal for a drop of this size.
Before I go any further, these.
Numbers in the article that you're reading are not seasonally adjusted. It should be mentioned and I believe it is somewhere that May is typically and historically not a banner month for any year. Gotcha. We typically see a drop in May. That being said, 45% is significant.
No.
No matter how you cut it, 45 is 45, dude.
Absolutely. And you know, again you guys, there are some, there's some charts in this article and that's why I want you guys to go out there and check this out and look at it because heavy and medievy commercial truck orders plummeted out there. Trailer tractor orders fell 43 year over year while vocational truck orders declined 48 year over year.
And then it goes on to say weakening economic conditions put pressure on both heavy and medium duty truck markets out there, said Carter Vaith of ACT Research. Entering the weakest period seasonally for new business class 8 orders continue to decline in May as weak fundamentals and broad uncertainty pressure demand, he said. Medium orders have also slowed across the past six months as current bloated inventories and weaker economic outlook weigh in on the orders.
Another part of the weaker economic outlook limiting the trucking industry is the uncertainty around tariffs and the continue to limit inventory and value upside, Sand Hills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
Obviously the whole tariff piece is affects probably trucking more than anything else because of all the manufacturing coming from Mexico or a majority of it, that's kind of that'll kind of be the lynchpin on what happens here for the rest of the year and early part of next year. So I mean with a lot of that being said there, James, is this something, you know, and again to kind of tie in your hey, in May, it's normally kind of slow, just not 45% slower.
Do you think that this is a direct reflection of the fact that there has been a lot of tariff talk out there? And correct me if I'm wrong, but I thought equipment and stuff like that was void from any tariff talk right now.
Well, it may be void, right? It, it may be void right now. But you know, there were current agreements in place amongst several countries, all three countries in North America and that agreement got ripped up a year early. So I, I think from a geopolitical perspective, if you're going to have an agreement, you should have three countries that abide by that agreement. Not not just rip it up whenever they feel it's appropriate to do so because it doesn't suit their current needs.
Now, if you do rewrite an agreement, what's to say somebody couldn't rip it up a year from now? There needs to be a level of trust and security that agreement, whatever it looks like in the future, will actually stand the test of time.
Yeah.
And when there's not a lot of trust, what's the point in an agreement?
I agree, man. And that's the problem with modern day politics is any change of administration if they don't like it. Executive orders, you know, like, oh, boom, we're done with that. It can change in any given moment. And that's why it's like, again, I want to call balls and strikes here. And I've, and I've said this since the talk of tariffs and everything else have come into play. I'm not opposed. Obviously, I'm very America first, just like you're very Canada first, as you should be. Right.
Like, that's where you live and that, that's where you raise your family.
I'll correct you, I'm North America first for sure.
Yeah, no, that's, that's very true. And you've, and you've been that way about that and you know, but my big, again, I call balls and strikes. I am very much against the flip flopping. I am very much for like, hey, if we're going to do tariffs, which again, there are some upside to this, right? Like when we're talking $80 billion, I believe is the last economic marker of what the United States has made from tariffs.
That's, that's not a small number out there, but it's the downstream effect that I hate for the small businesses out there and the business owners, to your earlier point about who are trying to budget some of this stuff, there's a massive difference when we're talking, hey, it's 25%. Oh, I had a bad moment. Now I'm slapping 50% and then, oh, no, I'm feeling a little bit better now. Now I'm going back down to 25%.
I think that it's highly irresponsible to flip flop on the daily essentially for a lot of this stuff because it hurts the people that they're ultimately trying to protect. And if you're going to be out there and be pro America business or pro Canada business or anything like that, the people who are purchasing, I. E. The everyday individuals like us who are talking right now and listening to this show and it affects us the most because ultimately we're going to have to pay for it. Right.
Ultimately those small businesses who are trying to purchase inventory, whether it's coming from Mexico, China, it does not matter. It affects them. Because most small businesses, you guys, contrary to popular belief, are 30 days from going bankrupt every single month. Cash flow constraints are going to potentially wipe them out. So this is why I feel like it's highly irresponsible to flip flop out there at the level that it has been.
Yeah, I mean listen, if the tariff's going to be 100%, make it 100%, we'll all figure out how to live with that. But it can't be 100 today and 50 tomorrow and then 0% next week and then 150. And that doesn't just go for Canada. Canada, US, Mexico, that's China, the EU everywhere. It just needs to be stable and there needs to be agreements in place so that we can all move on and figure out how to live with whatever it looks like.
Exactly.
The, the China tariffs I believe will have the largest impact on the freight market in the US and so however that shakes out, that will be a large indicator of what it looks like for the remaining of 25 and going into 26. We, from an economics and finance perspective, were all anticipating the latter half of 25 to be much better than the first half. And candidly, it's not looking that way right now just simply because there's no stability yet.
And you know, you add on three major conflicts across the world, that's not helping any indicators.
Yeah, no, exactly. Right. And, and that's the thing is I, I look at it as one of those where, you know, again, I'm a small business owner, I'm trying to build up a war chest, I'm trying to build my team and hire and do all of that.
But you know, again, the downstream effects for a lot of this stuff and if we're talking freight specific here, you guys, I feel like there's a, there's a multi front effect on what we're faced with right now because a lot of the prospecting phone calls that I make are, it's not your standard rejections. It's like, dude, we're slow as a company right now. It's not that there aren't opportunities, it's not that we wish that like we didn't have more freight, we're just slow as a company. Right.
And then again, if you follow the dotted line here, you guys, this is, I Think the ultimate side effect of where we're at with the amount of flip flopping that has happened. And I feel like all of us just to James's point, and I agree with this, we need stability for more than. I had a bad conversation. I'm changing my mind now. And again, before anybody argues, I know how negotiations work, you guys. All right? I'm very aware of how this works.
I just want to see a little bit more stability out there because like again, our entire industry is kind of on the hinges right now of where a lot of this is and buyer confidence is low. The orders out here, if we're looking at it. And again, you know, so like all the links will be out there.
Then we're going to, you know, switch over to Another article from ttnews.com is, you know, if we're looking at trailer orders for, you know, there's a seasonal dip in April and cancellation keep backlogs thin. And then it goes on to say that US Trailer orders continue fluctuating between year over year gains and losses by increasing. And preliminary data, net data shows orders increased 12% to 6,600 units. The, the monthly results so far this year have been split between positive and negative.
The latest figure also showed a contraction of 26% when compared to April. And again, I feel like a lot of it is tied in where it's like, hey, you want to go out there and invest in your company, update your equipment, maybe offload some of your old equipment, you know, because it's cash flow positive, whatever you want to look at. But again, you're going to be apprehensive if that price of trailer.
If you're like trying to put together a budget, right, James, and you're like, hey man, by July we're going to dump this. And I was like, oh, boom, this happened. Now prices at the dealer are going to increase and then you miss that window and then you're going to cancel that order for whatever reason. I feel like there's a, a net negative effect on consumer confidence that's going on in the market right now.
Yes, some of it's freight related, but I feel like a lot of it is global economy related as well.
Absolutely. Global economics plays a huge part in the day to day freight volumes in North America. One of the big factors was, you know, two weeks ago when the Iran Israel escalation happened and now with Iran threatening to shut down the Gulf of Oman, that could have a potential impact on the global price of Oil. And because, you know, 20% of global oil goes through the Gulf of Oman, if Iran shuts down that strait, it could be disastrous.
I was talking with a couple of carriers early this morning and their oil or their fuel prices went up 12 to 15% over the last two weeks. Just because the market's anticipating some kind of economic headwind with oil prices.
Yep. And I again, I think that it, that's kind of going to be yet to be seen. Especially with the preliminary ceasefire in agreement, it seems like that might not happen. And again, it's like, I feel like we need to look at stuff a little bit further than the 12 second society that we live in right now. Right. Because it's like everybody's opinions are changing every 12 seconds on what's going on.
And you know, I look at a lot of this and again, I'm not here to argue whether I'm pro or against anything, but it's like when we're talking about that for fuel alone, right? Like if that happens out there, you guys, we're talking about potential indicators about what could happen if that does happen. Because again, just because there's a ceasefire in agreement right now does not mean that cannot change at any given moment. Tensions are still extremely high.
And if that does happen, that could be the factor that puts a lot of people under. Because if we're talking 15, 20% increase in fuel, which fuel is already the highest expense on most companies, P Ls at the end of the day in the transportation industry, that could be the thing that tips people over and puts them under here, you know, and we don't need that. We don't need that.
Most spot rates that are being offered right now are well below cost for or well below what a profit margin would be for any small and medium sized trucking company. So the idea that you can still operate if fuel increases even 5 to 10% is preposterous.
Yeah. And that's the thing. Most trucking companies operating ratios are at like 4% already, right? Like razor thin margins. And that is the thing that's gonna, you know, it might not bankrupt them, but it might make them look at like, is it even worth continuing? You know, because that. Sorry, go ahead.
Yeah, well, no, I was just gonna say, you know, often, you know, trucking companies are under the impression that if their wheels are turning, they're earning a profit. And when oil prices start to skyrocket the way they have been and freight rates continue to dip the way they have been just because your wheels are turning doesn't mean you're operating profitably.
No. And that's it, man. And you know, as we're Obviously you'll be on before the end of the year again here, man, but like, what are you anticipating? And again, it's very tough to say. Would you say more on, we'll see what happens after the next Federal Reserve announcement that comes on and where you're kind of waning, or is it sitting idly by?
Because, like, I look at it from the freight market perspective and again, and I've been saying this for a while, outside of a black swan event, I feel like 2025, the way it is today is going to be how it ends. And 2026 very well might look like this. Right. I feel like we need to be anticipating that this is normal now and we need to start operating with that mentality as opposed to, well, if it gets better, I think we got to remove that thought.
If it gets better and like, hey, if it does, like, we hope for the best, but we have to prepare for how things are.
Preparing for the worst is always a recommendation from a financial perspective. You have to be able to survive down economies. That being said, I really hope for the sake of all of our mental, well, beings that it's not as chaotic in Latter half of 25 and into 26 as it is right now. It just seems like there's a lot going on. Everything is unpredictable. So stability would go a long way to help consumer spending, which is ultimately what's going to drive freight rates up.
Yeah, no, I agree, man. I think that there's a lot kind of hinging on a lot right now.
There are too many factors to predict what's going to happen and from a global scale, listen, just make some new deals with other countries. Canada and the EU are announcing new deals all the time. This is possible, it is possible to move forward on a global scale and have everyone still come out ahead. But it can't happen in a world where there are new tariffs announced every day and then taken back the next day.
Yeah, no, I agree, man. There, there has to be a little bit more stability on that front and I feel like that's going to ultimately improve consumer confidence. And you know, again, we're in. It's. I don't want to sit here and say wild times because it just kind of seems like this has been normal for the past five years now. But ultimately I feel like we are in a position right now where, you know, again, I always try and find the silver lining out there.
And if you've survived 2022 till present day, maybe even 2023 till present day, I think you're set up for success long term in like, if you can survive right now and make it work, like, dude, just wait till things improve.
And I'm not saying that like, and other than the mentality of is when things get better, because it will, ultimately it will get better, you're going to dominate because if you know how to operate in a down market, when things improve, it's only going to make you better in a better operator overall for when things are looking at it from that perspective, because you're going to remember right now, and at least the way that I'm thinking of it is I'm never going to be in this situation ever again.
Ever. I will never be in this situation again. Because when things flip, I am going to build that war chest that I'm talking about and I'm going to be sitting pretty for when it ultimately goes back down. Because that's the beauty of a free market. It's highly cyclical.
So 15 seconds left. The first question I ask any company that's been around for 15, 20, 25 years when I'm bringing them on as a new client is what were you doing between 09 and 11 to help your company produce good results in a really terrible economy? Imagine that's going to happen every time you talk to somebody like me for the next 10 years. What were you doing between 2023 and 2026 to ensure your company was successful?
Exactly. I love it. James, thank you so much for your time as always. If you.
Always a pleasure, man.
And how does anybody reach out to you to find out more about what you guys got going on?
James Currier, LinkedIn or James Currier, finlock.com Reach out anytime.
Perfect. If you guys can't find James or Finlock, hit your boy up. I would gladly put you guys in contact with him, but that is going to be it for today, ladies and gentlemen. As always, if you got value in what you heard, subscribe to the show. And if you're feeling really ambitious, rank the show on itunes and Spotify. Because if you saw value, your network's going to see value as well. I appreciate you guys. I love you guys. Let's go. And we'll be talking to you soon.
Came back with a bank hey got the foot on the gas Pedal to the metal when I'm get to the bag a got the foot on the gas pedal to the metal when the lane moves fast A Let them all cross if they hate and let them hate them Make a bigger boss a.