Trucking news and briefs for Thursday, May 9, 2024:
Owner-ops optimistic about spot market
A new survey conducted by Bloomberg and the Truckstop load board, which polled owner-operators and small fleets, found sentiment among carriers operating in the truckload spot market has improved over the past three months, but some concerns still linger.
"The industry is emerging from a challenging quarter, and the improved sentiment coupled with Truckstop's rising Market Demand Index suggest rates may move higher from here," said Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence. "The direction of rates will be driven by supply-side factors as the industry remains flush with capacity."
Despite 62% of carriers reporting lower freight volume in the first quarter, 33% predicted freight demand to increase in the next 3-6 months, the survey found. Only 19% predicted freight demand would decline in the same timeframe, which represents a 12-percentage-point decline compared to the fourth-quarter survey.
The survey also revealed that a majority of carriers believe better times are around the corner with Truckstop's Market Demand Index up 9% in Q1 from last year, the first year-over-year gain after seven quarterly declines. Only 26% expect rates to decline over the next three to six months, six percentage points less than in the Q4 survey, while 28% see rates rising, which is six percentage points more than in Q4.
[Related: Carrier failures declining but still elevated]
Looking at their own businesses, however, 44% of respondents were unsure about their status in six months, and 9% said they wanted to leave the trucking industry. More than three-quarters of respondents (78%) said higher interest rates in Q1 affected their businesses.
Elevated interest rates can have a significant impact on equipment-financing expenses, with 19% citing increased costs as the main reason they're not replacing or adding tractors. Though demand was challenging for carriers in Q1, with loads dropping an average of 10%, that was slightly better than the 13% decline in Q4.
"We're all eagerly anticipating a more positive shift in the tide," said Kendra Tucker, chief executive officer, Truckstop. "Truckstop continues to be a trusted partner, committed to delivering innovative solutions to help carriers navigate this ever-evolving business landscape."
The Bloomberg/Truckstop survey of owner-operators and small fleets provides timely channel checks into the health of the spot market. The sample size of the Q1 survey was 225, consisting of dry-van, flatbed, temperature-controlled and specialized/diversified, hot-shot and step-deck carriers. Of the respondents, 45% operate just one tractor.
[Related: Trucking conditions improved to start 2024]
NTP launches new warranty package covering electronic components, systems
National Truck Protection (NTP/Premium 2000) is rolling out a new extended warranty package that covers critical electronics and systems on commercial trucks.
NTP’s Electronix Package was introduced at a limited number of Class 8 dealerships as a warranty option in 2023. After strong interest from dealers and owner-operators buying trucks at those dealerships, NTP is now rolling the package out nationwide, as well as expanding it to include Class 2-7 light- and medium-duty vehicles.
The Electronix Package covers systems such as adaptive braking, anti-roll sensor, collision avoidance, navigation, power windows/locks, turn signals, wiper motor and more. The package can be added to any NTP or Premium 2000 warranty.
“Commercial truck OEMs include a growing list of high-tech electronics on all their new models that provide more efficient truck operation and driver assistance features common with the automotive industry,” said Geoff Stigler, Chief Commercial Officer at NTP. “As trucks age, we see an increasing failure rate of these electronics. So, our product development team created the industry’s most comprehensive electronics coverage plan available today.”
[Related: Used-truck warranty evolution, coverage improvements, and what to consider when evaluating]
Trucking company owner indicted for tax evasion
The owner of an Ohio-based trucking company has been charged with seven counts accusing her of attempting to evade taxes.
A federal grand jury returned a seven-count indictment charging Alice F. Martin, 59, of Louisville, Ohio, accusing her of attempting to evade the assessment of income taxes from 2013 through 2018. Martin is also accused of attempting to evade the payment of previous taxes, penalties and interest from 2011 through 2013, all tied to Martin Logistics, a trucking company which she owned and operated.
According to the indictment, Martin allegedly set forth a plan to phase out Martin Logistics after it became burdened with tax debt in order to make herself, and Martin Logistics, uncollectable to the Internal Revenue Service.
Martin allegedly directed one of her employees to open a new company, TSA Transportation, which would serve as Martin’s nominee trucking business. Beginning January 2013, contracts for trucking services were primarily bid under TSA Transportation’s name, but the income TSA Transportation received was directly deposited into a bank account for another entity that Martin owned and controlled, A.F. Martin.
Additionally, Martin placed Martin Logistics’ assets, including trucks and trailers, into the name of yet another Martin-owned company, Martin Global.
From around 2013 to 2018, Martin allegedly directed approximately $18 million in gross receipts associated with TSA Transportation contracts to be deposited into the A.F. Martin banking account. Despite this, Martin regularly failed to file individual and corporate tax returns related to her trucking entities and failed to pay the taxes on her income. Martin also made several misrepresentations to the IRS related to the finances of Martin Logistics. After her fraudulent scheme was discovered, Martin caused several more misrepresentations to be made to the IRS related to the filing status of her income tax returns.
Martin allegedly received over $3.6 million in unreported taxable income resulting in her evading the IRS’s assessment of approximately $1.2 million in taxes due between 2013 and 2018.
