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'A lot of trucking companies are going out of business,': JKC Trucking & Summit Cold Storage Co-Owner & VP on COVID-19 impact on industry

Co-Owner and Vice President of JKC Trucking & Summit Cold Storage, Mike Kucharski, joined Yahoo Finance Live to discuss how the trucking industry has been impacted by COVID-19 and if 2021 will be a better year for the trucking industry.

Video Transcript

ADAM SHAPIRO: We want to keep on trucking because independent truckers keep us fed, keep us medicated. They are a crucial part of the national supply chain. And there's a lot that they are dealing with in this pandemic.

Let's bring in Mike Kucharski. He is co-owner and vice president of JKC Trucking and Summit Cold Storage out of, I believe, Chicago, Illinois, right? And welcome to the program.

MIKE KUCHARSKI: Correct. Thank you for having me on your show.

ADAM SHAPIRO: There's a lot I want to talk to you about. Let's start first with kind of the dire consequences some truckers-- you're a business. But a lot of truckers are independent. Were you able to get through the bureaucratic maze with the government assistance, those payroll assistance issues? Or are truckers getting shortchanged with that?

MIKE KUCHARSKI: I was very fortunate to get the PPP money. And honestly, it was very crucial to get that money because it kept JKC, number one, in business. We didn't cut any of our employees. We didn't even cut pay. And now we're trying to actually get a second round of PPP money. But we're about 5% to 7% off from the threshold. And it's kind of frustrating because they keep talking about increasing the fuel tax. And when that happens, I'm I definitely going to need that money as emergency money to put in the tank to keep the company going.

SEANA SMITH: So Mike, it sounds like you were able to get it. You need a little bit more. How about some of your competitors out there? I'm sure you speak with a number of other people within the industry. Were they as successful? Or did some of these small businesses, like Adam was saying, kind of run into that trouble that we've heard about in so many other industries?

MIKE KUCHARSKI: Most of the businesses I deal with, they did get PPP money. Maybe like one or two people that I talk to did not get it.

ADAM SHAPIRO: And we saw, what was it, 3,200 truck trucking fleets or actual truckers essentially taken off the road, a 185% increase, right?

MIKE KUCHARSKI: Correct. Yeah, a lot of trucking companies are going out of business for a couple of reasons. Number one, when we had the shutdown, for example, we haul food product. And over a little bit over 50% of our business is the food service business. So all the hotels, the casinos, the conventions, restaurants, bars all came to a screeching halt overnight. So we had nothing else to haul.

And then whatever was left went to the market and went to the lowest bidder. So it created a huge black void that we have to fill with money to get going because in the trucking business, all our costs are fixed. And the bigger problem is, costs of operations are going up, especially for insurance. You've seen that.

Ever year, insurance has been going up for trucking. But now I think there's going to be a huge jump especially when you're going into these areas that truck drivers are being attacked.

ADAM SHAPIRO: I want to switch-- well, let's switch gears because I think some people might be under the misconception that your costs have been coming down because fuel costs are coming down. But in this rush to get to diesel-- or to get to rather electric trucks-- we've got Nikola. We've got Tesla. I don't know if Rivian will make a semi. Will this be helpful to truck drivers? Or are those rigs going to be so expensive, cheaper to stick with a diesel-powered semi?

MIKE KUCHARSKI: It's like 50-50 right now because all the trucks, the diesel trucks now have a lot of this EPA particulate filters on there. And we're having a lot of issues with that as it is. And if you're going to make a truck electric, which I think it's a great idea, but it really needs to be tested. These trucks are going through mountains, high elevations, through extreme cold weather.

I'm curious if those batteries and those trucks and those generators on these trucks that they're making, how will they hold up? They're still in the testing stages. I believe Nikola is still testing all their trucks, which is great. And actually, we have a deposit with Nikola. But when this technology comes out a little bit too fast, my concern is, will it help or will it hurt the industry?

SEANA SMITH: Hey, Mike, real quick, we only have about a minute left here. But I want to ask you about drivers because, yes, the demand is still there. But are you able to find the drivers? Because even before the pandemic, drivers were already scarce.

MIKE KUCHARSKI: I mean, drivers are a hot commodity. We are constantly searching for drivers. And on top of that, driver morale has been down with COVID. A lot of drivers just said, hey, listen, I'm not going to drive because I have a family at home. I have somebody with a condition. I'm going to go back home and be with my family until all this is over. So yeah, we're still struggling with the drivers. And we will struggle moving forward in 2021 as I can see it.

ADAM SHAPIRO: We are wishing your industry the best. We appreciate your being here, Mike Kucharski, co-owner and vice president of JKC Trucking and Summit out of Chicago, Illinois. We all look forward to the day we can travel again, maybe get a burger at Debevic's in Chicago. All the best to you.