Canadian Trucking Company filing for bankruptcy protection

[Snagglefoot]

Pride Trucking, a company that does a lot trucking between the US and CANADA is near bankruptcy. It has control of 20,000 tractor units and is $ 1.6 billion in debt. What does a trucking company have to do to borrow $ 1.6 Billion ?

Apparently things started going bad during the C times, then afterward, too many trucks were put on the road and rates went down. Funny, I thought shipping costs were going up.

 

[Trav]

I think the companies doing the shipping are cashing in on a bad situation but the trucking companies are getting less. JMHO

 

[Snagglefoot]

Here’s a bit more. A lot of the borrowed money was from truck manufacturers. Pride was also into truck sales.

 

[SC Maintenance]

I follow this guy on twitter. I have learned a bunch about freight, which is the leading indicator of leading indicators. He is saying in this post there have been record low tender rejections. That simply means that everyone is looking for loads and will take anything. Another post he said a record amount of capacity had been added to the system during the pandemic, so now we have too much capacity.

 

[Snagglefoot]

This like storing flatcars on sidings along the Missouri River in Montana in 2008 just before the 2009 collapse.

 

[SC Maintenance]

This like storing flatcars on sidings along the Missouri River in 2008 just before the 2009 collapse.

Yes, there area a lot of cracks under the hood right now. Its not definitive, but if you point it out around here someone jumps on you and screams soft landing or whatever. They don't understand the typical long lag from Fed hiking to recession. Here is the last 3. Notice the fed funds always start coming down just before the recession. I think its been this way for the last 6.

I don't know if we will have a soft landing or not - but I can say that we haven't had it yet.

Anyway, freight is the leading indicator of leading indicators. If freight is doing poorly its a bad sign.

 

[Snagglefoot]

Yes,
911
The Great Recession
Covid
Now what? Wars?

 

[daves87rs]

Yes,
911
The Great Recession
Covid
Now what? Wars?

Plain and simple greed.

Notice the Fed has not dropped rates? Don’t expect them to. Nice profits for Wall Street…..

 

[ecotourist]

Nice profits for Wall Street…..

Nice returns for mom and pop investors who want relatively safe investments too. [That doesn't include me. I'm mostly in equities.]

Interest rates were practically zero for a number of years. Actually negative interest rates in some countries. How long could that go on? Those very low interest rates were very abnormal. I don't think they're ever coming back. And in my opinion, that's a good thing.

 

[loneryder]

I follow this guy on twitter. I have learned a bunch about freight, which is the leading indicator of leading indicators. He is saying in this post there have been record low tender rejections. That simply means that everyone is looking for loads and will take anything. Another post he said a record amount of capacity had been added to the system during the pandemic, so now we have too much capacity.

View attachment 212228

I made a phone call to inquire about the cost of trucking an automobile from Denver to Va. I’ve been bombarded with calls and texts bidding for the job. Even 2weeks after I told them I was not going to ship a car. Things must be soft.

 

[GMFan]

Feels like these past few years were like the “roaring 20’s”. We all know what happened after that…. Commercial real estate collapse? Nearly 25% of homes bought by YOLO investors buying multiple homes and leveraged to the gills? $800/month car payments? Credit card debt at all time highs? There are lots of cracks.

Everyone says “it’s different this time.” Go back and read news articles from 2007. Economy is fantastic. Housing is booming. Then 2008 hit.

Always be prepared for anything.

 

[zzyzzx]

Interest rates were practically zero for a number of years. Actually negative interest rates in some countries. How long could that go on? Those very low interest rates were very abnormal. I don't think they're ever coming back. And in my opinion, that's a good thing.

I don't know about the whole never coming back part. That seems too optimistic to me.

 

[zzyzzx]

Obligatory Ice Road Truckers TV show reference.

Ice Road Truckers - Wikipedia

en.wikipedia.org

 

[SC Maintenance]

I don't know about the whole never coming back part. That seems too optimistic to me.

I won't be at all surprised if its back - and much sooner than anyone thinks.

Of course they won't go to zirp - they will maybe go to 0.5% and tell us its not zirp and its different this time. But it will be the same game.

 

[ecotourist]

The central banks failed us all by keeping interest rates way too low for way too long. That eventually led to inflation. "Normal interest rates" (something like 3 or 4%) would maintain discipline in the economy and that would be a good thing.

If a business investment can't earn a safe 6 - 8% (or more) no business should make it. But if money is free, well why not.

Just try and buy a $1 million house (a really cheap house in this area) with no down payment and a 5% mortgage. The interest alone would be $4167 a month. House prices will have to fall if mortgages were 5% because new buyers couldn't afford them. Sure, people with $1 million homes can trade among themselves but that's a limited market.

 

[Dave Hess]

Pride Trucking, a company that does a lot trucking between the US and CANADA is near bankruptcy. It has control of 20,000 tractor units and is $ 1.6 billion in debt. What does a trucking company have to do to borrow $ 1.6 Billion ?

Apparently things started going bad during the C times, then afterward, too many trucks were put on the road and rates went down. Funny, I thought shipping costs were going up.

The economy is slowing and so is trucking.

Trucking is a bellwether for the global economy.

 

[Dave Hess]

Feels like these past few years were like the “roaring 20’s”. We all know what happened after that…. Commercial real estate collapse? Nearly 25% of homes bought by YOLO investors buying multiple homes and leveraged to the gills? $800/month car payments? Credit card debt at all time highs? There are lots of cracks.

Everyone says “it’s different this time.” Go back and read news articles from 2007. Economy is fantastic. Housing is booming. Then 2008 hit.

Always be prepared for anything.

Unfortunately you are correct and this is calm before the storm.

Things will collapse after the election is over.

 

[sloinker]

I think this time may be different and we may avoid a recession and just glide along. Interest rates may go down 1.000 basis points but no further imo, over the next 8 months. The real problem is not enough skilled workers available, not enough non-skilled workers even. Besides the baby boomers retiring, or what I call, skilled workers. At least 1,000,000 and maybe as high as 2,500,000 deaths occurred in the last 4 years, above and beyond the normal range expected. Excess Deaths. This throws a real wrench in what people predict for future bond markets and to a lesser extent equities. As AI is integrated into all facets of our economy, that is also gonna heat things up, but only as fast as you can hire talent. China/India may win this war. Be a slap to America as we have won all the past new technology/product wars. Tough to borrow your way out of spending when you are used to near free money. Pride was weak on fundamentals and was exposed by tighter and more expensive money. They will fail along with many others. Housing is tough for first time buyers without equity. No great answers. Many of my peers have one or two adult children still living with them. Some with families. I suppose that many are waiting for mom and pop to pull the plug so they can also enjoy the American dream.

 

[SHOZ]

The economy is slowing and so is trucking.

Trucking is a bellwether for the global economy.

I can watch the traffic on the local Interstate 57 and see the truck traffic going to or from Chicago and get a quick idea of the economy. It's very obvious.

 

[daves87rs]

Nice returns for mom and pop investors who want relatively safe investments too. [That doesn't include me. I'm mostly in equities.]

Interest rates were practically zero for a number of years. Actually negative interest rates in some countries. How long could that go on? Those very low interest rates were very abnormal. I don't think they're ever coming back. And in my opinion, that's a good thing.

I would say yes and no. The problem is everything was prices for those low rates. You can charge whatever you want when something can be financed. Look at what is overpriced now: Houses, cars, large ticket items. Interest rates will be over 30% on average soon. Considering we are in a consumer spending based economy- guess what will happen now. A recession is the least of my worries. Bottom line- people can’t spend what they don’t have. Guess Wall Street should have though about that before raking in record profit the last bunch of years…