The balance of power in driver recruiting may be starting to shift. Freight is moving, capacity is constrained, and fleets are competing harder for drivers. But drivers? Well, as we've discussed over the last few editions of the 30 Day Reset, they're not exactly rushing to find their next job. And that combination is creating a recruiting market where, at least right now, fleets find themselves needing drivers more than the drivers need the fleets.

So what exactly is going on, and how does this all tie into the data we have? Well, let's dive in and talk about it.

We've been waiting for stronger freight conditions for a long time, and the year-over-year numbers are becoming increasingly difficult to ignore. Overall spot rates are up 39% year-over-year, while load volume is up 27%. And when you break it down by equipment type, the gains are broad. Dry van spot rates are up 39%, with load volume up 42%. Refrigerated rates are up 42%, with load volume up 44%. And flatbed rates are up 41%, with load volume up 17%.

Now, all that sounds great, right? Freight overall is up in a big way, but that doesn't mean freight is suddenly booming everywhere. A lot of this is tied back to the ongoing data center boom and everything associated with the physical buildout surrounding AI.

Now, before we get into the weeds on the recruiting numbers, I'll let Jason Miller explain the overall economic picture because, well, it's a little murky with some conflicting BLS numbers and factors that can get a little confusing. But he's going to lay it out. And this month's economic update is being filmed right after Labor Day, for some context on where we're looking at things at that time.

So starting off on the dry van spot rate side, the narrative to me right now is rates have reached a plateau and are actually down a little bit from late June, early July levels in absolute terms, but especially on linehaul terms. So as diesel's run up, we've seen those linehaul rates are essentially back to about up 33% year-over-year, which is still very robust growth. It's much more profitable to be a carrier this year than it was this time last year, but it's not as profitable as what it was in May, June, early July if you're living on that spot market.

Now, when we look right now about how tight the market is, one thing I like to do is compare DAT's contract rates with their spot rates. What we're seeing with this market cycle is, you know, we reached expansionary conditions around December based on the spread between those two. We got shockingly tight in May and June. That's a combination of Roadcheck, but also the Montgomery ruling that I think caused a lot of brokers to be very worried about things. And now we have loosened up a little bit.

And the one thing I just want to highlight to folks is typically what I consider ultra-tight conditions, which is a 5% or less spread, these usually last for a number of months. We were like 10 or 11 months in the 2017-18 market cycle. We were at like 20 months or 18 months for the second half of 2020 through first quarter of '21 market cycle—or sorry, first quarter of '22 market cycle. We've only had three ultra-tight months during this cycle. So I think that's just something to keep in mind, that my read on the market right now is until we get to December, we're probably going to keep around this cadence in terms of market tightness.

Now, from a demand side, really the story right now is just the physical ecosystem supporting AI and data center construction. Latest Census Bureau data puts data center construction now five and a half times what it was in 2022, before the rollout and popularization of large language models like ChatGPT.

And just for perspective, the growth in data center construction as of July of this year compared to July of last year, the growth was more than double what the overall level of construction was back in 2022. So it's like we added two times what the industry was four years ago into just this last year, and that's just adding on to it. We've never seen construction growth like this in an industry. The word is unprecedented.

And we know this isn't a measurement error because we can see, with a lag, that imports of things like computers and computer parts, they're now almost three and a half times what they were in 2023. Again, right as things like ChatGPT started becoming popularized.

What that tells me is, essentially, outfitting of these structures, we've got another nine months to a year runway on the data center construction piece. I don't know how much more runway we have for additional breakneck growth. My view is I think we're going to start to plateau latter part of this year into 2027.

Now, on the supply side, on trucking, especially if we look at the dry van space, two different programs from the Bureau of Labor Statistics are giving us a different picture. The monthly survey that we get is more high frequency. It's what gets talked about a lot more. That showed payrolls hit a bottom in January, seasonally adjusted. They've rebounded ever so slightly.

The administrative records, though, tell a different story. They say payrolls kept plunging down through March, and they're putting capacity now all the way back to where it was in 2012. In comparison, the establishment survey is putting capacity where it was in 2016, and that is a significant enough difference that it matters as we think about things.

And so what I would say right now is we do know that supply is way down. It's somewhere probably between 2012 and 2016 levels. No one is expecting it to come back very sharply in the back half of this year or into 2027, which means the question then turns to what is the demand side going to do? That right now is quite murky, because we don't know how much more growth there is in this physical ecosystem of AI in terms of the construction spending and the freight associated with that. And we also don't know what the Federal Reserve is going to do when they meet about interest rates this month. So we'll talk a lot more about that and where we can see the Fed going when we have our next market update.

Thank you, Jason. I couldn't have said it better myself, literally.

But how does all of that factor into the recruiting data? Suffice it to say, if freight continues to strengthen, fleets are going to need capacity. And adding trucks, well, it doesn't do much good if you don't have people to drive them.

But drivers? They're still not rushing into the market. And that's the rub.

Google search activity for truck-driving jobs increased 5% in August. That sounds encouraging until you zoom out. Search activity had been flat for three straight months before that increase, and organic driver search intent remains historically low.

We're seeing something similar on Indeed. The number of available truck-driver job postings on the platform increased another 2%, while the number of job seekers declined 2%, and that pushed the number of seekers available per job down another 4%.

So you've got fleets putting more opportunities into the market at the same time that the pool of people looking at those opportunities is getting smaller. And fleets are paying for the imbalance.

This is probably the clearest indication of just how competitive recruiting has become. Overall cost per lead increased 9% in August and is now 56% higher than it was a year ago. It's the highest overall CPL we've seen since July 2022. Company-driver leads are 70% more expensive year-over-year. Owner-operator leads jumped 33% in a single month and are now 64% more expensive than last year. And even though team-driver CPL did improve in August, it's still 127% higher year-over-year.

Today's drivers, well, they have options. And fleets are increasingly competing for their attention. And that makes every driver you do reach even more valuable.

And that's why for this month, instead of our normal Truckers News polling, we analyzed phone conversations to get a better look at what drivers are actually experiencing when they do interact with fleets. And one finding jumped out immediately.

31.4% of the transcripts we analyzed involved application updates or missed callbacks. These weren't necessarily people deciding whether they wanted to apply. They'd already raised their hands. Some were calling to find out what happened to an application, while others were following up because they'd received a message, but they couldn't get anyone to call them back.

Now, just think about that alongside everything we just discussed. You're potentially paying 70% more than last year to generate a company-driver lead. The driver applies, and then the driver has to chase you. In this market, that's a very expensive way to lose somebody.

Now, we saw another recruiting frustration in those calls, too. Drivers weren't always sure whether they were talking to an actual recruiter or an automated voice system. One caller finally asked, "Hey, is this a real person or a computer? Oh, God."

Now, I do want to be clear here. There's nothing inherently wrong with using automation in recruiting. I mean, we here at Randall Reilly, we have our own AI call agent, Stratas Agent. And if done well, it can help recruiters respond faster, handle repetitive tasks, and make sure candidates don't fall through the cracks.

But automation should be used to remove friction from the hiring process and not create another layer of it. Because if a driver has options, you can't assume they're just going to keep fighting through the process until they finally reach someone. They may simply move on to the next fleet.

And that is the hiring power shift.

Freight is stronger than it was a year ago. Capacity has contracted. Fleets have more reason to hire, but driver interest hasn't risen at the same pace. That's pushing recruiting costs higher, encouraging fleets to sweeten their offers, and giving qualified drivers more room to be selective about where they go next.

So the recruiting question right now, it's not simply: How do we generate more leads? Now the question becomes: What are we doing with the drivers we've already got?

If you are spending more to attract every applicant, speed to contact matters, follow-up matters, and candidate experience matters. Because right now, you may need that driver a whole lot more than that driver needs you.

Now, if you want to dive into what drivers are actually experiencing when they call fleets, we've analyzed more than 5,000 calls for our upcoming download, Anatomy of a Bad Recruiting Call. It looks at where those conversations break down and what fleets can do to improve those interactions.

That download is going to debut just a little bit later this month, and we're also going to be digging into the findings during this month's live Digging Deeper. Bring your questions. You'll find links for that down below.

As always, everything we covered today and a whole lot more is available in this month's 30 Day Reset download. And you can also get set up to explore the data yourself in Stratas. Links down below.

That's going to do it for this edition of the 30 Day Reset. I'll be back next month with more data and an all-new episode. Until then, thanks for watching.