Trump Tariffs Hit Trucking; Higher Prices To Result

Well, its the fall now and its about time for the effects of Trump tariffs to start hitting the fan. One place the tariffs are starting to take their toll is in the trucking industry. Consider this:

https://www.foxbusiness.com/markets/trucking-companies-closing

While tariffs were not the sole cause of the failures, they were a contributing factor.

Brace yourself folks. Trumps tariffs are coming your way.

 

Those trucks are not pulled from the road. They are sold to truckers. It's a pretty tough business with lots of overhead. It's a bit like opening a restaurant, which is also a very tough business to get into. Just because an IHOP goes out of business doesn't mean that building is demolished. It means somebody else rented or bought it, and it's now a Denny's.

 

Here's some more

https://www.cnbc.com/2019/08/23/us-...flashing-warning-signs-about-the-economy.html

 

Good. Maybe I can get a driver hired for corn harvest this year.

 

What does that mean? It means six hundred odd people jumped into a highly competitive field with inadequate resources.and got flushed out of the system instead of the usual three hundred or so. Beyond that not much.

 

600 COMPANIES not 600 people.

 

Are you really a farmer?

 

Dude in the Trucking business individuals are often the company there are over 350k owner operators slightly more than half of them lease out to bigger companies the rest are truly independent operators. That's potentially at least 150k small one man companies. Please not according to the IRS there are over 18 million compnies in the US with four or fewer employees. So you're trying to make a big deal out of less than 1/10 of 1 percent of small trucking out fits going under.

 

Well, the elitist among us refer to themselves agricultural producers.

The technical types claim we are are combinations of mechanics, agronomists, animal scientists, commodify marketers, and transportation specialists.

Farmer is still good enough for me. So, yes.

 

Couple of points

1. We don't know how many of that 600 number were individual companies

2. There was a 100 percent increase in the failure rate and the tariffs are forcing people to curb new orders.

 

Great answer. That's interesting. Do you export anything to China?

 

Ha ha. Not right now!

A lot of soybeans and some corn have gone to China over the years. It’s common for them to manipulate our markets using their buying power at strategic times. They have crashed corn markets in the past by signaling they will buy new genetic traits and then backing out once the crop is in the ground. A couple years ago some Chinese were caught digging up freshly planted seed corn in test plots to steal the genetic/intellectual property of the seed corn business. They run their country like a cutthroat business. We haven’t been.

It’s my opinion this tariff thing would have been over by now without the death of all China’s hogs. It’s an unforeseen disrupter. If you have 1.5 million dollars sitting around I suggest building a swine facility and contracting with someone to feed hogs. China and the rest of Asia will be needing a lot of pork.

Tariffs suck. But I don’t have a better answer.

I was flippant about trucking but it’s a business I respect. My dad was an owner/operator when he got too old to swing hammers etc. It has been impossible to hire drivers the last 3-4 years here. My regular seasonal guy retired and moved. One of my trucks has set idle the last two harvest seasons because drivers just can’t be had. But increased rate of business failure is news to me so thanks for the OP.

 

It's those pesky unintended consequences some folks never bother to consider.

 

You think there were people unaware of the consequences of tariffs?

 

You are very welcome on the info. That was interesting info on how the Chinese have crashed corn prices. I remember that this guy that I used to work for when I was young did something very similar in the business we were in. It was pretty cut throat to be honest. Essentially he placed a couple of very big orders with two suppliers that both struggled to fill. Then he forced the price down by telling each one that the other one was now offering him a better price. WOW! They were very pissed off.

 

I don't think Trump thought the matter through in a thorough way. The evidence for this can be seen by how he had to backtrack on the imposition of tariffs on electronic items coming from China.

 

Yep. Da devil be in dem pesky details!

 

I guess that’s how capitalists get a bad reputation. There is the possibility that guy’s actions caused eventual consolidation of suppliers limiting competition and hurting him in the long run. At least there’s that.

 

The Transportation and warehousing industry only experienced a net loss of 800 jobs in the last two months, only after experiencing a 20K net gain in jobs a month prior.

Perhaps these fears are overblown.

 

You could be right. I still see the loss of soybeans as a big bargaining chip to be the wrench in the gears. Could be my bias from understanding that market better than electronics etc.

 

Hmm, tariffs are mentioned just once by some obscure nobody in this very lengthy article which describes literally dozens of real reasons for the slowdown in the trucking industry and does not even attempt to explain the connection between the tariffs and the slowdown - because there is none.

The left's utter intellectual dishonesty is on full display here, nothing else, finding the word tariff in any article on any issue of the day and blindly blaming the issue on Trump is what the libs are reduced to.

Meanwhile in the real world, the unemployment is at record low, the payroll has increased by 3.5%, new high paying jobs keep getting created daily... and that any failure of any business will be blamed on the tariffs goes without saying.

 

Climate Change is responsible for many failures. With winter on the way, refineries are realigning their operations to produce heating oil which competes with and raises the price of diesel. Is Trump responsible for the seasons?

With pull systems replacing push systems at an accelerating pace, the face of the logistics industry has got to be changing --- to the detriment of the thousands of independent operators who used to be largely truckload operations.

Seems the people who voted for Hopey Changey are pretty brittle in the face of even evolutionary change.

 

...and it's all Trump's fault?

Do you know why Trump is placing tariffs on Chinese imports?

 

Are you saying we should run up the white flag at the first sign of pain?

 

Higher prices? Deflation is more of threat than inflation in 2019.