We open our training programs with two defining statements.
- Hotshot trucking is one of the best businesses to own in America with a net income under $100,000 a year.
- Hotshot trucking is one of the easiest businesses to start, and one of the hardest to keep operating into the second year.
Fluctuations in the car hauling business are a direct reflection of the fluctuations that occur in the car selling business. Every year dealers approach tax season as a sort of “Super Bowl” season for car sales. Tax refunds are often converted into down payments on car purchases and dealers move a good percentage of their year’s total volume in tax season. Dealers build inventory through the first quarter of the year and then start selling it off in April into May. The trend creates a buggy whip effect and greatly reduced unit volume of cars shipped in late April and May.
We routinely watch certain regional routes for our dispatch client drivers. One such search under normal volume conditions routinely produces between 200-250 hits or units. In the last 2 weeks we have observed a steady decline on that route to a point where today the search recently produced only 51 hits. That represents a 75% decline over the past 2 weeks on that regional route. Since it doesn’t involve Florida or seasonal fluctuations due to the snow bird migration, we can conclude that this year’s tax season buggy whip decline is going to be nasty. We frequently talk to dealers while on the road and the general consensus is that the 2016 tax season for auto sales has been “soft.” Couple that with the significant increase in hotshot trucks on the road, and it’s going to be a tough late April into May for hotshot auto hauling.
Finding loads is when volume is high is obviously easier than when volume drops. Carriers on the financial edge will reach a tipping point in May when volume is down. But this annual “thinning of the heard” in hotshot auto hauling happens every May and is a healthy correction.