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Fluctuating supply and demand leaves capacity trends unpredictable

Trying to Predict Holiday Sales? Gauging Capacity Trends Is Even Tougher

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All business owners are familiar with the rules of supply and demand. Few, however, realize how heavily trucking companies depend on supply and demand to function. We don’t blame them, either. With free two-day delivery becoming the norm, it feels like shipping just happens automatically. Most of us know that it’s more complicated than that, but just how much more complicated might surprise you. Predicting capacity trends is extremely challenging, and that’s particularly true in 2022. 

Freight Transportation Always Has Four Seasons

Market conditions have always influenced the trucking industry, from capacity to rates. Still, there’s usually some level of predictability. There are four seasons in the logistics work. You have:

  1. The Quiet Season (January – March)
  2. The Produce Shipping Season (Produce Shipping Season (April – July)
  3. The Peak Shipping Season (August – October)
  4. The Holiday Shipping Season (November – December)

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Trucker protesting AB 5 law

Big News: The Controversial AB 5 Law Now Applies to Trucking

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Back in 2019, a bill was proposed called the AB 5 independent contractor law. It was intended to regulate companies that hire massive numbers of gig workers, like Uber and DoorDash, but when the law went into effect on January 1, 2020, it radically changed worker classifications.

Millions who were previously defined as independent contractors are now considered employees. While the trucking industry was previously exempt from AB 5, the Supreme Court’s recent ruling changes everything. Now, the law applies to trucking too, sparking industry-wide frustration. 

No Buts About It: The AB 5 Law Is Bad for Trucking (But not BYX)

Now that AB 5 impacts all 1099 truck drivers, the majority of trucking companies will be impacted. 

The law states that to be classified as an independent contractor, three conditions must be met: 

(a) The worker is free from control and direction in the performance of services; and

(b) The worker is performing work outside the usual course of the business of the hiring company; and

(c) The worker is customarily engaged in an independently established trade, occupation, or business. Read more

Rising insurance costs

Rising Insurance Costs and What It Means for Trucking

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The past few years haven’t been easy for the trucking industry. In addition to the supply chain crisis that was made drastically worse by the economic impact of the COVID-19 pandemic in 2020, we’ve also faced a persistent driver shortage, rising gas prices, an automation evolution and shifting client expectations. While fleet owners have been scrambling to find solutions to all of that, insurance costs have crept up in the background. Rising insurance costs has now become so substantial that ignoring it is no longer an option.

Over the past decade, insurance premiums have risen by 47%

The latest report by ATRI, the American Transportation Research Institute, found that insurance premium costs per mile increased by nearly half over the course of a decade, rising from 5.9 cents to 8.7 cents. Insurance rates also fluctuate substantially. Fleet owners hop on an unpleasant roller coaster ride when it’s time to renew coverage each year.

The last four years have been especially challenging. Between 2018 to 2020, virtually all motor carriers saw substantial rises in insurance costs. Despite efforts to improve safety and lower risk, insurance premiums continue to creep up. Read more

Rising gas prices visual

How Gas Prices Affect BYX and Our Customers

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Gas prices fluctuate by the day. This is nothing new, but the conflict between Ukraine and Russia has caused an exceptionally painful spike. The current average price per gallon in Los Angeles County is currently $5.52, with diesel averaging $5.85, but some stations are charging over $6 per gallon. Trucking companies feel the sting of elevated fuel prices more acutely than most. To fill up a 100-gallon diesel tank costs about $585. If you’re thinking “ouch,” so are we. 

Gas prices look very different than they did in recent months. The average prices are up by 57 cents/gallon from just last month. It’s hard to believe that at this time last year, gas only cost $3.73 a gallon. Inflation is hardly a new dilemma, but now its effects are more pronounced than they have been in decades. 

Shipping companies use something called “fuel surcharge.” A fuel surcharge is a flat rate that allows the cost of fuel to be incorporated into shipping rates in a fair manner and allows shippers to have a fixed fuel cost they can count. Fuel surcharge is an important part of us continuing to operate our business and is set by the Energy Information Administration (EIA) and updated weekly. 

Rising Gas Prices May Lead to Rate Hikes Down the Line

Before you panic, BYX just updated our rates at the start of 2022, and we hope to keep them stable for some time. Still, we prefer to be transparent with our customers so they understand why price increases have to happen. It goes without saying that elevated gas prices make transporting goods more costly. The farther the pickup, the more the additional fuel expenses are felt. 

The hike isn’t just felt by trucking companies. Every rung of the transportation ladder is effected, including cargo vessels and moving freight by air. Coupled with the existing supply chain crisis and materials shortage, the cost of everything is likely to increase, not just gas prices. Maintaining our fleet, from replacing tires to changing the oil, is more expensive than it was a year ago. Read more

Supply chain crisis double exposure

8 Tips For Dealing With the Supply Chain Crisis

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In the past year, companies of all shapes and sizes have been hit hard by uncertainty, shutdowns and unpredictable demand shortages. Now, we’re also facing a prolonged supply chain crisis. It’s been a long time coming, but the COVID-19 pandemic made matters substantially worse.

With the supply chain issues forecasted to continue well into 2022, what’s a business owner to do? While completely safeguarding your business from complications is impossible, these eight steps will help you get through today’s crisis and prepare for future disruptions.  Read more

Ships like this one are struggling to unload cargo due to the global supply chain crisis

The Global Supply Chain Crisis of 2021: Here’s What to Expect

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Go to a department store and try to buy a dress for a wedding. Can’t find one? It’s not just you. The shelves have been picked clean of countless different products, from clothing to certain food items and takeout boxes. The items that we used to take for granted seem to be in short supply. Prices won’t quit climbing. But why? Our global supply chain wasn’t built for e-commerce in the first place.

To Start, the System Was Already Struggling

When a customer placed an order 20 years ago, they expected to receive their package in a couple of weeks. Now, we get antsy if it’s been a couple of days. The global supply chain, however, has struggled to meet the demand for more and more products to be delivered faster than ever. 

While ordering a product online might seem like the easy option, there’s more to it behind the scenes. The process to actually manufacturer a product, sell it, and deliver it to your doorstep is complex. First, the supplies to produce the product need to be shipped to the manufacturer. Then, the products have to make their way through a complicated import and export system to make it to U.S. retailers. Then, products are shipped, often being passed through many hands before they make it to your door.  Read more