One of the most dependable regions for freight right now is the Permian Basin in West Texas and southeastern New Mexico, home to the largest crude oil fields in the United States. Today this region produces nearly 4 million barrels of oil a day and accounts for about one-third of all U.S. output. More than 470 drilling rigs, about half the operating rigs in the continental United States, are in the Permian Basin.
Where there’s oil activity, there are opportunities for trucking. Here are four things you should know about hauling in the Permian:
1. Midland Is Booming
Midland, Texas—the region’s biggest city—had a 1.7% unemployment rate in April, the fourth lowest in the country, according to the Bureau of Labor Statistics. And last week the Walton Family Foundation named Midland the “most dynamic” metro area in the United States in a ranking of economic performance in 379 metropolitan areas.
From groceries and office supplies to heavy equipment and construction materials, a strong economy in Midland translates to all kinds of freight coming into the market to support new residents, infrastructure, and local businesses. You can haul flatbeds, reefers, vans, or specialized equipment and find freight right now.
2. This Boom May Have Staying Power
Production in the Basin will always be subject to decisions by Saudi Arabia and other OPEC members: when they overproduce, the price of oil goes down. When they cut back, the price goes up.
But Bobby Burns, president and CEO of Midland’s chamber of commerce, tells the Houston Chronicle that this most recent economic surge is different: long-term investments by Exxon Mobil, Chevron, Royal Dutch Shell, and BP are supporting local infrastructure projects and services like child care centers. These companies should provide greater economic stability as they can more easily weather fluctuating oil prices.
3. Houston, We Have Lift-Off
Houston is the busiest point of origin for the type of spot truckload freight that ends up in Midland as well as Odessa, and San Angelo, two other growing markets in the region.
The average spot van rate from Houston was $1.85 per mile last week, a 6% increase over the previous four weeks, according to DAT Solutions, which operates the industry’s largest network of load boards. Van and flatbed loads between Houston and Dallas are plentiful enough that drivers can make the 500-mile round trip “until they run out of hours,” says DAT analyst Peggy Dorf.
4. Productivity Is Paramount
In such a competitive market, one of the keys to winning the next contract or load is productivity.
So, drivers and fleets are turning to digital workflows and mobile technology. The ability to send or receive messages or alerts using a mobile device, scan and send paperwork from anywhere at any time, and manage hours of service with an intuitive, FMCSA-registered ELD can help haulers improve cash flow, efficiency, and compliance. Also, ask your Transflo rep about our ELD integration with oil field regulations to help you stay safe, productive and compliant!
For instance, with Transflo Mobile Scanning, drivers can turn trip paperwork into revenue faster by reducing the time it takes to send a bill. The app allows drivers to snap a picture of their document and with industry-leading document compression protocols, submit a high-quality image that uses less data than a Facebook post. The easy-to-use functionality means drivers can submit multiple documents at one time while ensuring that carriers receive high-quality images that can move directly into billing workflows.
Oil markets may be subject to booms and busts, but your cash flow and productivity don’t have to be.