I can always count on Murray Mullen, the top dog at the Mullen Group, to provide a little dry powder for a future column.

Take his last quarterly call. Discussing Q1 2025, Mullen noted that trucking bankruptcies are at levels not seen in a decade or more.

Conditions for many carriers are so dire that they may no longer be viable acquisition targets. The best course might be to allow the market to “play itself out.”

Several years of predatory pricing, tight credit, crushing operating costs, and reduced demand have already taken a heavy toll.

According to the Canadian Association of Insolvency and Restructuring Professionals, there were 122 trucking insolvencies in the first quarter of 2024, a whopping 114% year-over-year increase.

That was a year ago. Today’s trucking landscape is even more screwed up.

Since Murray’s comments are always “spot on,” I’m inclined to believe the worst is yet to come for Canadian truckers — but there may be some hope, too. Here’s what to look for:

Learning on the fly

As fast as trucking companies are failing, new ones are starting. The troubling lack of barriers to entry makes trucking a perfect landing spot for first-time Canadian entrepreneurs.

These newbies have no idea what they’re getting into, let alone what to do when they hit the road. Trucking is a low-margin business and not for the faint of heart. Learning to run a trucking company on the fly is nearly impossible.

Doomed from the start

These trucking startups aren’t just short on experience. They’re undercapitalized. Banks won’t help. Family and friends can lend only so much cash.

Factoring is fine for cash flow, but you give away up to 5% when you sell your invoice. Add the 5-10% annually for operating leases and the business is losing money from day one.

Worse, there’s no long game when a business is tight on cash. Focused on daily survival, too many of these desperadoes take loads no one should be hauling at rates no one should accept.

Dirty underbelly

Trucking is getting dirtier by the hour. Crash clips on social media create fear and speculation about whether any trucker cares about public safety or has the wherewithal to run responsibly.

Public perception spills over into business. For instance, bankers no longer trust our industry. Funding trucking companies is a risk, even the ones with good bones. Bankers don’t want the exposure and get trigger-happy the moment any covenants are broken.

Bank of OEM

One banker even shared a little secret with me.

Ever wonder how carriers who should be out of business and have no credit are able to run up and down the road, hauling freight for free?

Trucking OEMs are the “bank” of new startups. Their leasing arms are the only way a newbie trucking entrepreneur can get in the game.

In many cases, the OEMs are reluctant to repossess trucks that are in default. The used market is soft. People don’t have a place to park anymore. They have enough iron sitting on their lots rotting away.

I had trouble confirming this, but I’ve heard the whispers for some time.

Truck OEMs and dealers are smart people. But I wonder how they make money with such massive customer churn.

Real advantages

During the Great Recession, business at MSM Transportation was so bad that we almost ran out of cash.

Owning our real estate saved our bacon. I’m not sure we would have made it without the equity in our dirt. With outside storage land exceeding $3 million an acre in some “trucking” markets, I’m guessing real estate is a lifeline for many carriers in today’s storm.

Many established carriers have their dirt to fall back on. Newcomer carriers don’t.

A silver lining?

Which leads me to a potential silver lining in all the ominous clouds.

I was recently sent a list of 26 carriers that have gone bankrupt this year. Twenty-five of them used the Driver Inc. model.

We’ll see if this is the start of the culling of that herd. Unfortunately, many fleet owners don’t have the time to wait around and find out.