Submitted by Mary Christine
Guest Post by John Galt
There are quarterly financial reports which read like BS in a blender, then occasionally one crosses my screen which makes me realize that all is not well on the Main Street front.
Late Tuesday afternoon the big boy of motor carriers, the legendary J.B. Hunt (Symbol: JBHT) reported their earnings today and the only good part about it was the final period at the end.
Together, let us dissect the information and the consequential data one section at a time.
So far, so bad.
The arrows which highlighted particular segments are only important because it reflects the general economic situation nationally. J.B. Hunt operates across the country, not regionally, so for these types of declines reflected in their financials, this is a disaster and a hint as to how bad it is for the rest of the industry and worse, the railroads.
Economic activity is not only declining, it is cratering no matter how much the Bubblevisions promote “the consumer.”
If one has any experience in transportation and knows the industry, the following page is a true nightmare.
There is nothing good in any of the data displayed above. If anything, it’s a hint that even if the biggest motor carrier sees these type of revenue and utilization declines impacting profitability, then the smaller carriers are getting slaughtered with operating ratios north of 98 or 100.
This is why news stories like this begin to hit the wire after financial reports like the one above:
Take my word for it as someone who engaged in idling 20% of a large fleet in my past, this is just the beginning. Stagflation guarantees that millions of jobs will be lost as credit conditions deteriorate while everyone is terrified of expanding their business or obtaining more inventory heading into a potential late cycle recession.
Or worse.
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Joe Biden, Jimmy Carter Déjà vu all over again.
If you weren’t alive during Carter’s 4 years, be glad of that. I can’t imagine if he had won another 4 years. Carters 8 years might have got as bad as Biden’s 4 years!
It’s been an ongoing continuum downward, not peculiar to presidents:
EXCERPT:
At first, the only “cut” was in Carter’s last-minute loony-tunes estimates for the future. But in a few short years, Reagan’s spending surpassed even Carter’s irresponsible estimates. Instead, Reagan not only increased government spending by an enormous amount – so enormous that it would take a 40 percent cut to bring us back to Carter’s wild spending totals of 1980 – he even substantially increased the percentage of government spending to GNP. That’s a “revolution”?
The much-heralded 1981 tax cut was more than offset by two tax increases that year. One was “bracket creep,” by which just inflation wafted people into higher tax brackets, so that with the same real income (in terms of purchasing power) people found themselves paying a higher proportion of their income in taxes, even though the official tax rate went down. The other was the usual whopping increase in Social Security taxes which, however, don’t count, in the perverse semantics of our time, as “taxes”; they are only “insurance premiums.” In the ensuing years the Reagan Administration has constantly raised taxes – to punish us for the fake tax cut of 1981 – beginning in 1982 with the largest single tax increase in American history, costing taxpayers $100 billion.
Creative semantics is the way in which Ronnie was able to keep his pledge never to raise taxes while raising them all the time.
READ REST:
Reagan was economically worse than Carter, and on down the line. It’s not the man, it’s the system, and numbers don’t lie. Reagan also helped lock down America more, while claiming to be against .gov. Read the article before having a DV snit. DVer is a fool, or a partisan liar.
The pattern is the R side creates the money while no one is looking and then the D side comes in to spend it.
Reagan never gets the credit he deserves for being a shit president. Amnesty, immunity for vaccine makers, illegal use of the executive branch are just a few of his betrayals.
I guess he fooled a lot of people as host of Death Valley Days soon after to become governor of California.
Thanks MC. I always appreciate cold, hard numbers.
Note to Admin: it would be nice for this old man’s eyes if you could make spreadsheets and such as above to magnify with a mouse click. I visit some blogs that have that capability.
Open image on another page.Voila’. Embiggered
Thanks, Doug. I learn something new every day.
If you are lucky, you do!
My Wal-Mart glasses worded just fine. Trouble is I can’t type worth a shit.
wwaaaatttt!!! You don’t have autocorrect glasses!! so last century
I spent most of two decades in the transportation industry with experience that ranged from driver to managing fleet operations for the largest private bulk food grade carrier in the country.
These numbers are astounding!
I can’t imagine managing a fleet in today’s environment. My biggest concern was driver shortages, now I would also be facing fuel cost, regulatory pressures, equipment cost, labor expense and an ever deepening shortage of drivers.
I was shocked in the past when Red Ball failed and when Yellow failed. But if Hunt was shuttered, there are not enough carriers to step in and move that freight.
If trucks stop, we are truly fucked seven ways from Sunday!
Too Big To Fail. This is how everything will become State owned…by the people, of course.
Here is an example of how important distribution is to our economy. Best known for her book, When Trucks Stop Running, This is her forecast of what would happen should our trucking system shut down.
I attended a conference many years ago and participated in a round table discussion of what the consequences would be if trucks were unable to deliver their cargo.
The discussion was based on a paper put together by The American Trucking Association and was delivered to Congress.
The panel and audience consisted of the owners and managers of some of the largest carriers in the nation, CR England, Swift, Schneider, for example.
The consensus opinion was that the country would be in complete ruin within thirty to sixty days. The entire system, to this day, is based on JIT (Just in Time) inventory systems. Very few companies warehouse locally, most rely on large distribution warehouses or direct vendor shipments, requiring trucks for delivery.
The worry at that time was Department of Transportation regulations that were being proposed.
The headwinds these companies are facing today are multitudes worse.
The report presented to Congress is still floating around the web. It’s forecast is shocking to say the least.
Many thanks, MD – good intel my friend – nothing like on-the-site experience. I was involved in FMOC in the 1970s UK – distribution was the major headache when even we had the basics of JIT then. There has to be a major change in the way logistics work.
Later on, I studied ants and how they organised their logistics – they ‘know’ much more than we do! https://www.zmescience.com/science/how-ants-are-inspiring-the-design-and-optimization-of-logistics-algorithms/
AND Jim Rickards has a new book which is worth reading IMHO:
My cousin did well in trucking. Jeff, oops he prefers Jeffery, Crowe. Look him up.
Haven’t seen him since 1963. Despite living 3 hrs. away down I-95. Dirtperson Steve can attest we ain’t poor or a disgrace. Snobbery. My guess.
this isn’t a good set of data for JB Hunt. However, it is presented in a vacuum. For instance, JB is just one of many players. How have FedEx, UPS, etc done? How has rail transport done? What about sea shipments? Has there been a more underlying disruption to JB Hunt’s business? How have the smaller competitors done – ie is JB losing business to the many, many small players who maybe offer better service and lower prices?
A far better way of checking trucking is to look at big truck sales overall. Truck sales are a leading indicator – companies stop ordering trucks before, and during, hard times. Heavy truck sales are down over the last year, but are starting to rebound. Heavy truck sales declining is a leading indicator of bad economic times coming.
However, light truck sales are up strongly. So, maybe there is a fundamental shift coming – smaller trucks may mean a shift to locally sourced instead of nationally sourced product. Etc.
This info is interesting and telling with respect to JB Hunt. But it is difficult to extrapolate a national narrative based on one trucking company, which may be nothing more than a mismanaged company going through problems.
Dad ran a corrugated box plant in the rust belt; he always said that one of the best leading indicators was the trend of corrugated tonnage being shipped. Business Week magazine (does it even exist today?) used to have a couple pages of statistics like that, and apparently they were fairly accurate since they were widely used by decision makers throughout America’s manufacturing base that largely no longer exists.
Want to help the trucking industry?!
Buy more ammo!
A mother trucking load of ammo,watch industry numbers soar!
But the Pucking Productivity Index states productivity is up because Financial and Banking services have improved over 30%. Can’t JB Hunt move financials in ther trucks?
I expect the rest of the trucking companies including Fedex and UPS to have similar indicators. Unless a crack up boom ensues then order whatever you can before the price goes up tomorrow.
This is the slowest start to a construction season I’ve seen in thirty seven years. Western Washington.
I don’t believe the thesis of this post. How long have we conspiracy theorists thought planes would fall out of the sky? Well, there are always a few. I don’t see anything but smooth sailing for the ubiquitous enemy. A metric that I can believe in is are the NFL venues packed? Yes, they are. Then the economy is fine for them. It is a command economy. I don’t know what’s keeping it up, but there is cheaper and cheaper labor. When might there be systemic failure for that? Do you really think ‘they’ don’t have recipes and protocols for how to exit us on their terms? They just fucked over Dutch farmers. They will fuck us over fringe section by fringe section and get what they want. Americans have too much. How do I know? They think I’m crazy. Fuck them all.
P.S. If the money supply is expanded faster than the wealth supply to keep the banking system ‘healthy’, that means the government sector is the only part of the economy that ‘grows’. I don’t expect you’d understand if I tried to explain it. I’ll just add that prices in general should go down by half if the money supply remains static and wealth is doubled. So if true, and I say it is, then how can this have gone on so, so long with people in the non-government economy only able to get ahead by others being destroyed to maintain the average decline necessitated by government largess that is all of the growth in the economy and then some to have net price inflation..
I don’t understand what keeps all this going. Is it lowering standards of living? How low can the saving go? People go in debt for useless college degrees that are made useless by the government making or backing the loans to inflate the demand and therefore costs of indoctrination at university. I am amazed that the can raise the price they charge to indoctrinate.
In short, I have my theories. I think they are right, but how does all this go on and on? Empirically, things just go on and on. Great Depression. Stagflation. Great Recession. Does not fucking matter. Workers keep working and the men think they are so manly simply because they do what the enemy owners let them do and charge them exorbitantly to let them do it. I expect idiots will be clamoring for bug dinners at middle class sit-down restaurants. I don’t know how ze bugs will be accepted, but if perfectly good penises can be chopped off and no revolution results from it, bugs ve vill be eetn. A few of us may choose to be eaten by bugs.
tl;dr No breezy economic analysis means shit. Sorry. We have a serious mystery here. All the vets of conspiracizing ought to be able to confirm.
I think you answer your own question. The government now like you said is the only sector that is “growing”.(money is debt). They are the lender of last resort. I personally believe EVERY industry is subsidized in some fashion by our illustrious government. That is why they are easily able to role out the asinine agenda’s…. they’re on the dole. This game will continue as long as it is allowed to continue. There is no escaping this mess and the few who do benefit once the plug is pulled is either by affiliation or just dumb luck. Will people accept the new system once it’s rolled out. That’s the question. Once faith and trust are gone, what else do you have?
I don’t think I answered my own question, Anon. Government programs are a net loss, often intentionally as warfare. How long can parasites rule by parasitism and destruction? The depths of subhuman willingness to work for miserable existence is amazing, but when does herd will run out of material reality to support steadfast compliance? I know the Roman Empire decline was extremely long, and the genesis of serfdom. We also have a Bolshevik revolution here, and that does not take centuries or even decades. I think the enemy intelligentsia has a good shot at a smooth, controlled decline termination. I know I don’t know enough to make the call on what’s really happening economically or even socially in the long run. An anti-climactic dark ages seems likely to me, but a major depopulation into a technocracy is also plausible. Sheeple gonna sheep. Just how can sheeple sheep this hard this long and still want to sheep?
I agree with you and still feel like we are saying the same things in different ways. The government is a parasite it produces nothing and is ultimately destructive to otherwise healthy economies. They give the illusion of growth through GDP (and all gov’t stats) which these days is the result of the printing press. They are subsidizing industries through the banks and wall st to give the appearance of growth even as these rates of growth diminish over time. The jig is up and like you said a controlled decline termination is in the cards and happening as we speak. I don’t know the catalyst for termination as there are many options to choose. Price stability is everything to me and they are losing their grip on that very quickly. Once that is gone and people can’t comprehend the price of something (i.e. a gallon of gas $100 and a car $20 (no gas)) then old systems are out the window because price and value do not correlate. The populace is hopeless at this point. To weak to fight, to comfortable to challenge authority, uninformed, lied too. Standard of living means different things to different people. We’re definitely going to a Dark ages 2.0 people will need to reevaluate what it means to live or be alive for that matter.
Yes, we agree. The only thing is I have nagging doubt about understanding our common understanding. I have this troubling feeling that T.H.E.Y. know something critical that we don’t know. If I ever witness an uncontrolled collapse, I’ll know they did not have it all figured out. I’m not getting any younger.
Regardless of whether this is strictly a single carrier problem, which I doubt, or widespread in the transportation industry,which conversations with old friends indicate, trucks will continue to roll.
Companies fail, fact of life. If a company the size of Hunt failed, initially there would be delivery issues but eventually other companies will fill the void. Filling that void with smaller fleets would mean substantially higher rates, since large fleets offer reduced rates and spread their costs based on volume. Small companies live and die on service.
Barring nuclear war, the only way trucking grinds to a devastating halt would be lack of fuel, in my opinion.
WOW. I was involved in the industry in the 1980’s. Those numbers are disturbing. We have to bear in mind the destructive “covid” lies which were intentional world wide.