1 00:00:07,600 --> 00:00:11,039 Speaker 1: Hi everyone, this is Lee Clascow when We're Talking Transports. 2 00:00:11,200 --> 00:00:15,600 Speaker 1: Welcome the Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:15,720 --> 00:00:20,240 Speaker 1: Lee clascowse senior freight transportation logistics analysts at Bloomberg Intelligence, 4 00:00:20,600 --> 00:00:23,599 Speaker 1: Bloomberg's in house research arm of almost five hundred analysts 5 00:00:23,600 --> 00:00:27,280 Speaker 1: and strategists around the globe. A quick public service announcement 6 00:00:27,280 --> 00:00:30,480 Speaker 1: before we dive in. Your support is instrumental to keep 7 00:00:30,480 --> 00:00:34,360 Speaker 1: bringing great guests and conversations to you, our listeners, and 8 00:00:34,400 --> 00:00:37,360 Speaker 1: we need your support. So please, if you enjoy this podcast, 9 00:00:37,520 --> 00:00:40,120 Speaker 1: share it, like it and leave a comment. Also, if 10 00:00:40,120 --> 00:00:43,800 Speaker 1: you get ideas, feedback, or just want to talk transports, 11 00:00:44,000 --> 00:00:46,199 Speaker 1: I'm always happy to connect. You can find me on 12 00:00:46,200 --> 00:00:50,599 Speaker 1: the Bloomberg terminal, on LinkedIn, or on x at Logistics. Lee, 13 00:00:50,840 --> 00:00:54,000 Speaker 1: I'm very excited to have with us today. Seth Runzer, 14 00:00:54,240 --> 00:00:58,200 Speaker 1: President and CEO of arc Best. With nearly twenty years 15 00:00:58,200 --> 00:01:02,680 Speaker 1: of experience, Seth brings deep operational expertise and our customer 16 00:01:02,720 --> 00:01:08,840 Speaker 1: first approach to advance arc Best's integrated logistics strategy. Seth 17 00:01:09,120 --> 00:01:11,679 Speaker 1: joined the company in two thousand and seven as an 18 00:01:11,760 --> 00:01:17,279 Speaker 1: ABF Freight Management trainee, progressing through key operations and leadership roles. 19 00:01:17,440 --> 00:01:20,640 Speaker 1: He was named president of ABF in twenty twenty one 20 00:01:21,080 --> 00:01:24,360 Speaker 1: and president of arc Best in August of twenty twenty four. 21 00:01:24,800 --> 00:01:28,200 Speaker 1: Effective January first of this year, he became the CEO 22 00:01:28,319 --> 00:01:32,040 Speaker 1: of arc Best and was appointed to the board of directors. 23 00:01:32,440 --> 00:01:34,240 Speaker 1: Welcome to Talking Transport, Seth. 24 00:01:34,319 --> 00:01:36,080 Speaker 2: Yeah, thanks, Lee, I appreciate you having me on. 25 00:01:36,240 --> 00:01:39,640 Speaker 1: All right, great, So it's really great to meet you 26 00:01:39,760 --> 00:01:42,600 Speaker 1: and to have you on the podcast. You know, we've 27 00:01:42,720 --> 00:01:46,600 Speaker 1: had Judy on the podcast a couple of times, so 28 00:01:46,880 --> 00:01:49,880 Speaker 1: some people might be familiar with the company. For those 29 00:01:49,960 --> 00:01:52,200 Speaker 1: that aren't, can you just give a brief history and 30 00:01:52,320 --> 00:01:55,880 Speaker 1: kind of the markets that you serve there at arc Best. 31 00:01:56,040 --> 00:01:59,560 Speaker 2: Yeah, thanks Lee. So arc Best is a multi billion 32 00:01:59,600 --> 00:02:03,880 Speaker 2: dollar integrated logistics company. We were founded over one hundred 33 00:02:03,920 --> 00:02:06,720 Speaker 2: years ago. In September, we celebrated at our one hundred 34 00:02:06,720 --> 00:02:10,400 Speaker 2: and third anniversary, and we started in Fort Smith, Arkansas, 35 00:02:10,520 --> 00:02:13,040 Speaker 2: as a local freight hauler, and now we've grown into 36 00:02:13,639 --> 00:02:17,440 Speaker 2: a global logistics leader. We have about fourteen thousand employees 37 00:02:17,480 --> 00:02:21,119 Speaker 2: across two hundred and fifty locations. I've been traveling those 38 00:02:21,200 --> 00:02:23,520 Speaker 2: locations earlier this week, so got to see a lot 39 00:02:23,520 --> 00:02:26,520 Speaker 2: of our great people out there, and really when we 40 00:02:26,600 --> 00:02:29,560 Speaker 2: think about our best it's a full suite of shipping 41 00:02:29,560 --> 00:02:33,480 Speaker 2: and logistics services to support businesses of all size, whether 42 00:02:33,480 --> 00:02:36,960 Speaker 2: they're a small customer or a nationally recognized brand. So 43 00:02:37,639 --> 00:02:42,320 Speaker 2: we offer ground Air Ocean a broad network of capacity providers, 44 00:02:42,360 --> 00:02:47,240 Speaker 2: including our ltlcare Ava freight truckload services through Molo and 45 00:02:47,480 --> 00:02:51,960 Speaker 2: our expedite fleet through Panther Logistics. So we really try 46 00:02:52,000 --> 00:02:55,399 Speaker 2: to collaborate with our customers find a way to say yes, 47 00:02:56,000 --> 00:02:57,959 Speaker 2: and that's where we've seen a lot of growth is 48 00:02:58,000 --> 00:03:01,919 Speaker 2: through our managed logistics solution, which is the in my opinion, 49 00:03:01,960 --> 00:03:05,839 Speaker 2: the greatest representation of us as a logistics company. We're 50 00:03:05,880 --> 00:03:10,239 Speaker 2: developing logistics strategies to partner with our customers, trying to 51 00:03:10,240 --> 00:03:13,480 Speaker 2: figure out how to better serve their supply chain. So 52 00:03:14,000 --> 00:03:17,480 Speaker 2: we support all this through an in house technology team 53 00:03:17,520 --> 00:03:21,079 Speaker 2: that delivers custom built solutions. And we did our first 54 00:03:21,080 --> 00:03:24,280 Speaker 2: investor day in over a decade last fall and we 55 00:03:24,400 --> 00:03:28,600 Speaker 2: really talked about our plans through now into twenty twenty eight. 56 00:03:28,680 --> 00:03:31,519 Speaker 2: Is Judy and I transition the CEO role, So really 57 00:03:31,600 --> 00:03:33,320 Speaker 2: excited to be on the show and really excited to 58 00:03:33,320 --> 00:03:34,240 Speaker 2: talk about our company. 59 00:03:34,680 --> 00:03:36,520 Speaker 1: Right, So I guess can you talk about, you know, 60 00:03:36,560 --> 00:03:40,200 Speaker 1: these long term goals. You know, traditionally our Best was 61 00:03:40,280 --> 00:03:43,200 Speaker 1: known as an LTL carrier, but you know you've kind 62 00:03:43,240 --> 00:03:47,480 Speaker 1: of embarked on this transformation of the company. Can you 63 00:03:47,520 --> 00:03:51,320 Speaker 1: talk about, you know, where you are today in terms 64 00:03:51,360 --> 00:03:55,560 Speaker 1: of your LTL business relative to total revenue and then 65 00:03:55,680 --> 00:03:57,280 Speaker 1: you know where you kind of want that to be 66 00:03:57,400 --> 00:03:58,160 Speaker 1: longer term. 67 00:03:58,280 --> 00:04:01,440 Speaker 2: Yeah. So we shared our target gets Head Investor Day 68 00:04:02,360 --> 00:04:05,280 Speaker 2: in September and it really points out our plan going 69 00:04:05,320 --> 00:04:09,480 Speaker 2: through twenty twenty eight. So we outlined first ABF SOO 70 00:04:09,760 --> 00:04:11,560 Speaker 2: R where we wanted it to be in the ranges 71 00:04:11,600 --> 00:04:14,760 Speaker 2: eighty seven to ninety percent. We wanted to have asset 72 00:04:14,840 --> 00:04:17,960 Speaker 2: light up income in the forty to seventy million dollar range, 73 00:04:18,600 --> 00:04:21,200 Speaker 2: EPs in the twelve to fifteen and then operating cash 74 00:04:21,279 --> 00:04:23,919 Speaker 2: flow in the four hundred to five hundred million range. 75 00:04:23,920 --> 00:04:27,560 Speaker 2: And what we've done over the last decade is transformed 76 00:04:27,560 --> 00:04:31,120 Speaker 2: from an LTL company like you mentioned, into an integrated 77 00:04:31,160 --> 00:04:34,440 Speaker 2: logistics company. And the reason that we did that and 78 00:04:34,520 --> 00:04:37,120 Speaker 2: went down that path is because we continued to hear 79 00:04:37,160 --> 00:04:40,640 Speaker 2: from our customers that they wanted more solutions, they had 80 00:04:40,680 --> 00:04:44,120 Speaker 2: more services. So if you think about most customers they 81 00:04:44,160 --> 00:04:47,080 Speaker 2: don't just have LTL. They have LTL, they have truckload, 82 00:04:47,120 --> 00:04:52,040 Speaker 2: they have expedite needs. So we started down a strategic 83 00:04:52,080 --> 00:04:55,000 Speaker 2: path of not only organic investment but also M and A. 84 00:04:55,920 --> 00:04:59,240 Speaker 2: Our first kind of acquisition into the into the logistics 85 00:04:59,240 --> 00:05:01,919 Speaker 2: space was pan There. I believe that was around twenty 86 00:05:01,960 --> 00:05:06,480 Speaker 2: twelve timeframe, and that really got us into viewing our 87 00:05:06,520 --> 00:05:09,479 Speaker 2: customers to say, hey, we can service more than just LTL. 88 00:05:09,680 --> 00:05:12,120 Speaker 2: So that's really the path we went down. And the 89 00:05:12,160 --> 00:05:15,680 Speaker 2: reason we do that strategically and why we think we're 90 00:05:15,720 --> 00:05:19,640 Speaker 2: differentiated is because we're a logistics company with assets, and 91 00:05:19,720 --> 00:05:23,359 Speaker 2: not many people out there can say that. So the 92 00:05:23,400 --> 00:05:25,240 Speaker 2: way we kind of go to market is when a 93 00:05:25,279 --> 00:05:27,960 Speaker 2: customer brings us a problem, we want to find a 94 00:05:27,960 --> 00:05:30,640 Speaker 2: way to say yes, regardless of what the solution is. 95 00:05:30,720 --> 00:05:33,479 Speaker 2: So we've really built a company that way and we 96 00:05:33,560 --> 00:05:36,640 Speaker 2: think that's the best way to service our customers, which 97 00:05:36,640 --> 00:05:40,359 Speaker 2: will ultimately translate to long term shareholder value, which is 98 00:05:40,360 --> 00:05:42,680 Speaker 2: what we talked about at our investorday. 99 00:05:42,600 --> 00:05:44,520 Speaker 1: Right, and I guess I was remissed at the beginning. 100 00:05:44,560 --> 00:05:46,840 Speaker 1: You know, arc Best is a public company trades at 101 00:05:46,839 --> 00:05:50,080 Speaker 1: the ticker AARCB and has a market cap of around 102 00:05:50,120 --> 00:05:55,760 Speaker 1: two point two billion dollars. So within logistics, where where 103 00:05:55,920 --> 00:05:59,640 Speaker 1: is most of the growth opportunities that you have in 104 00:05:59,640 --> 00:06:02,280 Speaker 1: front of you today? And obviously that could change because 105 00:06:02,440 --> 00:06:04,600 Speaker 1: who knows you might acquire something down the road. 106 00:06:05,320 --> 00:06:09,560 Speaker 2: Yeah, I really think that there's growth opportunities across the board. 107 00:06:09,720 --> 00:06:12,239 Speaker 2: So when we look at the markets that we serve 108 00:06:12,560 --> 00:06:14,920 Speaker 2: and the services that we have, we have about four 109 00:06:15,000 --> 00:06:18,920 Speaker 2: hundred billion dollars worth of opportunity. So when you think 110 00:06:19,000 --> 00:06:22,440 Speaker 2: about LTL or truckload, it's not about hey, let's just 111 00:06:22,520 --> 00:06:26,120 Speaker 2: accelerate one area. It's about finding what works best for 112 00:06:26,200 --> 00:06:30,360 Speaker 2: that customer, supply chain, and ultimately with the solutions we have, 113 00:06:30,560 --> 00:06:32,599 Speaker 2: that's what we think it's going to allow us to grow. 114 00:06:32,680 --> 00:06:36,400 Speaker 2: So interesting stat about us. When customers use more than 115 00:06:36,440 --> 00:06:41,359 Speaker 2: one solution with our company, generally about seventy percent of 116 00:06:41,400 --> 00:06:44,960 Speaker 2: the asset Like customers they also use asset based When 117 00:06:45,000 --> 00:06:48,160 Speaker 2: they use multiple solutions, we see revenue improved by five 118 00:06:48,200 --> 00:06:51,880 Speaker 2: times or attention improve and that just speaks to the 119 00:06:51,920 --> 00:06:54,680 Speaker 2: partnerships that we try to have with customers. We actually 120 00:06:54,720 --> 00:06:57,719 Speaker 2: have a customer here in the building today that I 121 00:06:57,760 --> 00:07:00,559 Speaker 2: met with earlier today and they've been with us over 122 00:07:00,680 --> 00:07:03,760 Speaker 2: thirty years, and it's started as an LTAL you know 123 00:07:03,839 --> 00:07:07,120 Speaker 2: customer thirty years ago. Now they use us for expedite, 124 00:07:07,160 --> 00:07:09,720 Speaker 2: they use us for truckload, and where we're seeing the 125 00:07:09,760 --> 00:07:12,800 Speaker 2: greatest growth this year is in that managed transportation area. 126 00:07:13,400 --> 00:07:16,920 Speaker 2: We've seen double digit growth across the board, and that's 127 00:07:17,000 --> 00:07:21,120 Speaker 2: because supply chains have become so much more complex than 128 00:07:21,160 --> 00:07:23,680 Speaker 2: they used to be in the past. So as sourcing 129 00:07:23,720 --> 00:07:27,920 Speaker 2: has changed, as you know, manufacturing points have changed, customers 130 00:07:27,920 --> 00:07:29,800 Speaker 2: are coming to us and saying, hey, can you handle 131 00:07:29,880 --> 00:07:32,800 Speaker 2: my entire supply chain and help us, whether it be 132 00:07:32,840 --> 00:07:36,200 Speaker 2: pool distribution, you know, a launch, any of that type area. 133 00:07:36,280 --> 00:07:39,520 Speaker 2: So we have seen tremendous growth in that space and 134 00:07:39,520 --> 00:07:41,600 Speaker 2: we highlighted that as well as Investorday. 135 00:07:42,040 --> 00:07:43,720 Speaker 1: I don't know if you have these stats on hand, 136 00:07:43,760 --> 00:07:46,960 Speaker 1: but you know what percentage of your customers are using 137 00:07:47,520 --> 00:07:51,520 Speaker 1: more than one of your businesses? Where's that going to go? 138 00:07:52,160 --> 00:07:55,240 Speaker 2: Yeah, it's around I think it's in that seventy percent 139 00:07:55,360 --> 00:07:58,280 Speaker 2: range where they're you know, using asset based asset light. 140 00:07:58,480 --> 00:08:01,920 Speaker 2: When we when we look at our customer base, our 141 00:08:02,000 --> 00:08:05,080 Speaker 2: customers have generally a need for four or more of 142 00:08:05,120 --> 00:08:08,440 Speaker 2: our solutions, So it depends on the size and scale 143 00:08:08,480 --> 00:08:11,760 Speaker 2: of the customer obviously, but we really see a lot 144 00:08:11,800 --> 00:08:15,120 Speaker 2: of customers having multiple uses and it goes back to 145 00:08:15,160 --> 00:08:20,200 Speaker 2: that retention piece when they're using us for LTL Truckload Expedite. Ultimately, 146 00:08:20,920 --> 00:08:23,680 Speaker 2: it improves that retention step because they get to experience 147 00:08:23,720 --> 00:08:26,960 Speaker 2: the value that we deliver across each of the solutions, 148 00:08:27,240 --> 00:08:30,120 Speaker 2: and that's where we've seen the most impact with driving 149 00:08:30,120 --> 00:08:31,120 Speaker 2: that customer growth. 150 00:08:31,760 --> 00:08:35,480 Speaker 1: So you stepped into the CEO role at probably a 151 00:08:35,520 --> 00:08:40,360 Speaker 1: pretty difficult time in the freight markets, you know that. 152 00:08:40,520 --> 00:08:44,960 Speaker 1: Being said, what's the first reality had to confront when 153 00:08:45,000 --> 00:08:46,720 Speaker 1: you took your CURRN seat. 154 00:08:46,960 --> 00:08:51,160 Speaker 2: Yeah. I actually took over as president of ABF in 155 00:08:51,200 --> 00:08:53,360 Speaker 2: twenty twenty one at the height of the pandemic, so 156 00:08:53,720 --> 00:08:58,240 Speaker 2: I'm kind of used to stepping into challenging times. But yeah, honestly, 157 00:08:58,320 --> 00:09:02,800 Speaker 2: one of the biggest respectibilities I feel like is preserving 158 00:09:02,840 --> 00:09:05,280 Speaker 2: what's made our companies so special for one hundred years. 159 00:09:05,360 --> 00:09:07,480 Speaker 2: Not a lot of companies make it to be one 160 00:09:07,520 --> 00:09:10,760 Speaker 2: hundred years old. So I really see my job as 161 00:09:10,800 --> 00:09:14,320 Speaker 2: serving our customers and all fourteen thousand of our people. 162 00:09:14,440 --> 00:09:17,240 Speaker 2: So I really want to know I want our people 163 00:09:17,240 --> 00:09:19,880 Speaker 2: to know I care, I make decisions with the best 164 00:09:19,880 --> 00:09:23,160 Speaker 2: intentions in mind for everybody, and ultimately it all comes 165 00:09:23,200 --> 00:09:26,800 Speaker 2: back to being a customer led organization. So really, what 166 00:09:26,880 --> 00:09:30,600 Speaker 2: I want to try to organize our teams around is 167 00:09:30,640 --> 00:09:33,440 Speaker 2: those long term goals rather than the short term noise. 168 00:09:33,559 --> 00:09:36,720 Speaker 2: So we've we've been around a long time and there's 169 00:09:36,800 --> 00:09:39,520 Speaker 2: been a lot of different freight markets and different cycles 170 00:09:39,559 --> 00:09:42,120 Speaker 2: and all that, but it all comes back to if 171 00:09:42,160 --> 00:09:45,280 Speaker 2: we listen to our customers, meet their needs and always 172 00:09:45,360 --> 00:09:47,679 Speaker 2: keep an eye on what's coming one, three, five years 173 00:09:47,679 --> 00:09:50,120 Speaker 2: from now, we're going to be in good shape. So 174 00:09:50,640 --> 00:09:53,120 Speaker 2: now let's try to keep kind of that calm, collective, 175 00:09:53,160 --> 00:09:56,800 Speaker 2: positive attitude regardless of what's going on, because we can 176 00:09:56,800 --> 00:09:59,960 Speaker 2: only we can really only control what we can control, right, 177 00:10:00,160 --> 00:10:02,600 Speaker 2: So that's where we need to spend our times. We 178 00:10:02,640 --> 00:10:05,320 Speaker 2: can't control the macro and what's going on in the market, 179 00:10:05,440 --> 00:10:08,040 Speaker 2: so we need to focus on what we can control. 180 00:10:08,120 --> 00:10:11,560 Speaker 2: So even in these down markets, we invest in our people, 181 00:10:11,640 --> 00:10:15,120 Speaker 2: our customers, regardless of the cycle, because that's ultimately going 182 00:10:15,200 --> 00:10:18,800 Speaker 2: to turn and and and generate shareholder value and allow 183 00:10:18,920 --> 00:10:21,400 Speaker 2: us to thrive for the next hundred years. 184 00:10:22,120 --> 00:10:24,520 Speaker 1: So usually when there's a change in president, like the 185 00:10:24,600 --> 00:10:27,480 Speaker 1: United States President. One president leads a little note in 186 00:10:27,559 --> 00:10:30,720 Speaker 1: a drawer for the next president. Uh, did did Judy 187 00:10:30,800 --> 00:10:34,679 Speaker 1: mcrenolds give you any you know, sage advice before she? 188 00:10:35,120 --> 00:10:35,880 Speaker 2: Uh? 189 00:10:36,200 --> 00:10:37,520 Speaker 1: Before the transition? 190 00:10:37,920 --> 00:10:41,079 Speaker 2: Yeah? She was. Judy was my direct leader for almost 191 00:10:41,160 --> 00:10:45,040 Speaker 2: six years, you know, prior to the transition. And there's 192 00:10:45,080 --> 00:10:47,200 Speaker 2: really always two things that stuck with me. And it 193 00:10:47,280 --> 00:10:50,120 Speaker 2: wasn't like her last day she told me these two things. 194 00:10:50,440 --> 00:10:52,839 Speaker 2: She's been saying them since, uh, since day one when 195 00:10:52,880 --> 00:10:55,800 Speaker 2: I started working with her. But the first one was 196 00:10:55,840 --> 00:10:59,040 Speaker 2: always really about whatever you do, you know, do it 197 00:10:59,080 --> 00:11:02,400 Speaker 2: with integrity and keep our customers at the forefront and 198 00:11:02,480 --> 00:11:04,319 Speaker 2: everything will work out, you know, if you do the 199 00:11:04,400 --> 00:11:07,920 Speaker 2: right thing, that's just gonna be the best advice no 200 00:11:07,960 --> 00:11:10,280 Speaker 2: matter what. So and the other piece of advice I've 201 00:11:10,320 --> 00:11:13,080 Speaker 2: always kept with me, and this was probably the first 202 00:11:13,160 --> 00:11:16,400 Speaker 2: or second week that I started working with Judy, and 203 00:11:16,559 --> 00:11:19,640 Speaker 2: it was just take that next step forward. So during 204 00:11:19,720 --> 00:11:23,520 Speaker 2: hard times, you just don't always have the right answer, right, So, 205 00:11:23,679 --> 00:11:26,840 Speaker 2: but staying still is not an option. So that's why 206 00:11:26,880 --> 00:11:29,680 Speaker 2: you just always have to move forward. So I always 207 00:11:29,720 --> 00:11:32,040 Speaker 2: go back to the challenges over the last five six 208 00:11:32,120 --> 00:11:35,840 Speaker 2: years and on every time we take that next step forward, 209 00:11:36,160 --> 00:11:38,720 Speaker 2: and in every case we emerge stronger on the other side. 210 00:11:38,800 --> 00:11:41,120 Speaker 2: So those are the two things that I've really taken 211 00:11:41,160 --> 00:11:44,000 Speaker 2: with me and will probably carry the rest of my career. 212 00:11:44,400 --> 00:11:46,920 Speaker 1: Great and so just pivoting to you know, the macro 213 00:11:47,240 --> 00:11:51,480 Speaker 1: the freight markets. Obviously there's a lot going on, you know, 214 00:11:51,600 --> 00:11:54,480 Speaker 1: from your perspective, because you do touch upon on so 215 00:11:54,559 --> 00:11:58,400 Speaker 1: many different aspects of the freight markets. You know, what 216 00:11:58,640 --> 00:12:00,920 Speaker 1: is the state of the freight markets and you know, 217 00:12:01,000 --> 00:12:05,000 Speaker 1: are there certain businesses within our best that are performing 218 00:12:05,120 --> 00:12:07,560 Speaker 1: better under the current circumstances. 219 00:12:08,559 --> 00:12:12,080 Speaker 2: Yeah, there's a lot going on. The twenty twenty six 220 00:12:12,200 --> 00:12:15,160 Speaker 2: has started with that extreme weather, as you'd imagine, but 221 00:12:15,640 --> 00:12:21,120 Speaker 2: the freight environment overall continues to remain soft. There's still 222 00:12:21,200 --> 00:12:25,920 Speaker 2: excess capacity out there, still uncertainty around manufacturing and retail 223 00:12:26,000 --> 00:12:28,760 Speaker 2: and housing and all the things. And that's why I've 224 00:12:28,760 --> 00:12:30,400 Speaker 2: spent a lot of time the last two or three 225 00:12:30,440 --> 00:12:32,959 Speaker 2: weeks meeting with customers to say, what are you seeing 226 00:12:33,000 --> 00:12:37,280 Speaker 2: in your business? So we've navigated this prolonged freight recession, 227 00:12:37,440 --> 00:12:39,760 Speaker 2: so and a lot of the customers I've talked to, 228 00:12:39,960 --> 00:12:44,000 Speaker 2: they're still facing uncertainty around the impacts of tariffs and 229 00:12:44,000 --> 00:12:46,280 Speaker 2: what's going to happen with interest rates, demand, all that 230 00:12:46,320 --> 00:12:48,280 Speaker 2: type of stuff. So I think there's this sentiment of 231 00:12:48,320 --> 00:12:52,840 Speaker 2: caution out there. But also our customers, like us, they 232 00:12:52,920 --> 00:12:55,400 Speaker 2: want to continue to invest and grow their business, so 233 00:12:55,920 --> 00:13:00,320 Speaker 2: they're focused on cost control, operational efficiency, all those type 234 00:13:00,320 --> 00:13:02,920 Speaker 2: of things, and that's why I think that managed solution 235 00:13:03,040 --> 00:13:06,240 Speaker 2: that I talked about is resonating so much. So there 236 00:13:06,600 --> 00:13:09,640 Speaker 2: are some bright spots that we're seeing. It's different by 237 00:13:09,679 --> 00:13:14,040 Speaker 2: mode or by vertical so LTL we're seeing some indiscretionary 238 00:13:14,080 --> 00:13:18,120 Speaker 2: spending retail sectors, food and beverage that that's continued to 239 00:13:18,120 --> 00:13:22,720 Speaker 2: be stronger than we might have anticipated. On the truckload side, 240 00:13:23,400 --> 00:13:26,800 Speaker 2: we really put a focus on growing SMB business and 241 00:13:27,160 --> 00:13:31,400 Speaker 2: any of the non OEM automotive type business, and electronics 242 00:13:31,400 --> 00:13:34,640 Speaker 2: continues to be in a decent spot. And then Expedite 243 00:13:34,880 --> 00:13:38,120 Speaker 2: Life science has continued to be strong. So we're seeing 244 00:13:38,160 --> 00:13:41,040 Speaker 2: bright spots in certain areas of the business. But really 245 00:13:41,080 --> 00:13:43,800 Speaker 2: when I think about the macro and the demand side, 246 00:13:43,840 --> 00:13:46,840 Speaker 2: we still have some challenges there just from that, but 247 00:13:47,240 --> 00:13:49,520 Speaker 2: I go back to what I said earlier. We operate 248 00:13:49,559 --> 00:13:52,880 Speaker 2: in markets with four hundred billion dollars worth of potential 249 00:13:53,600 --> 00:13:56,080 Speaker 2: and we have a service that can that can service 250 00:13:56,120 --> 00:13:58,960 Speaker 2: our customers. Right, So there's a lot of people that 251 00:13:59,559 --> 00:14:01,800 Speaker 2: you know, when you go to a customer, they go 252 00:14:01,840 --> 00:14:04,439 Speaker 2: to a three PL to try to find multiple solutions. 253 00:14:04,480 --> 00:14:07,720 Speaker 2: But we are the three PL but we have assets 254 00:14:08,080 --> 00:14:10,920 Speaker 2: and I think that's really important for us. So a 255 00:14:10,920 --> 00:14:14,080 Speaker 2: lot going on in the market from a demand supply standpoint. 256 00:14:13,520 --> 00:14:17,320 Speaker 1: Though, Right, So, the audience of the Talking Transport podcast, 257 00:14:17,440 --> 00:14:19,720 Speaker 1: they're probably some of the smartest and best looking people 258 00:14:19,760 --> 00:14:23,680 Speaker 1: out there, but not everyone is a freight expert. Can 259 00:14:23,760 --> 00:14:25,520 Speaker 1: you just talk a little bit about what you know, 260 00:14:25,920 --> 00:14:29,120 Speaker 1: what is managed transportation? What are you guys doing in 261 00:14:29,120 --> 00:14:29,720 Speaker 1: that business? 262 00:14:30,320 --> 00:14:32,960 Speaker 2: Yeah, Really, what we're trying to do is act as 263 00:14:33,000 --> 00:14:36,920 Speaker 2: a three PL for our customers essentially, so we can 264 00:14:36,960 --> 00:14:40,040 Speaker 2: either use our own internal capacity or we can use 265 00:14:40,120 --> 00:14:46,120 Speaker 2: external capacity. So we have contracts with over forty LTL carriers, 266 00:14:46,160 --> 00:14:49,040 Speaker 2: So if the customer has a need, whether it's speed 267 00:14:49,040 --> 00:14:52,960 Speaker 2: to market, it's price, it's quality, whatever it is, we 268 00:14:53,000 --> 00:14:55,440 Speaker 2: can service it with our own internal capacity, but we 269 00:14:55,480 --> 00:14:58,400 Speaker 2: also have external capacity that could work as well. So 270 00:14:59,000 --> 00:15:01,440 Speaker 2: really what we're trying to do with that solution is 271 00:15:01,520 --> 00:15:06,120 Speaker 2: optimize the customers supply chain for them. So it's a 272 00:15:06,120 --> 00:15:08,520 Speaker 2: lot of data, it's a lot of optimization models, a 273 00:15:08,560 --> 00:15:11,400 Speaker 2: lot of technology, and we have a team that really 274 00:15:11,440 --> 00:15:13,800 Speaker 2: works side by side with our customers to try to 275 00:15:13,840 --> 00:15:16,960 Speaker 2: optimize based off of what they're trying to achieve. What's 276 00:15:17,000 --> 00:15:20,520 Speaker 2: differentiated though, is having that internal capacity to lean on. 277 00:15:20,960 --> 00:15:23,160 Speaker 2: We know how to operate a freight network, we know 278 00:15:23,240 --> 00:15:26,520 Speaker 2: how to operate an expedite, we know a truckload brokerage, 279 00:15:26,560 --> 00:15:30,840 Speaker 2: so we have that expertise by owning and operating those 280 00:15:30,920 --> 00:15:34,520 Speaker 2: assets that it really brings a lot of credibility to 281 00:15:34,600 --> 00:15:37,520 Speaker 2: our customers and we can leverage multiple different sources of 282 00:15:37,560 --> 00:15:40,800 Speaker 2: capacity to achieve the outcome that they're trying to achieve. 283 00:15:40,920 --> 00:15:44,040 Speaker 2: So I view it as really differentiated, and that's why 284 00:15:44,040 --> 00:15:48,400 Speaker 2: we've seen significant growth since we organically stood that up 285 00:15:48,400 --> 00:15:52,040 Speaker 2: in twenty seventeen from zero and now we're in the 286 00:15:52,080 --> 00:15:54,480 Speaker 2: three to four hundred million dollar range. So it's been 287 00:15:54,520 --> 00:15:55,360 Speaker 2: a great growth store. 288 00:15:55,680 --> 00:15:59,720 Speaker 1: And so, you know, a customer of yours within managed transportation, 289 00:15:59,880 --> 00:16:01,920 Speaker 1: is it all across the board from like, you know, 290 00:16:01,960 --> 00:16:05,920 Speaker 1: a large national retailer all the way down to like 291 00:16:05,960 --> 00:16:09,520 Speaker 1: a small, you know, mom and pop shop somewhere or 292 00:16:09,640 --> 00:16:12,480 Speaker 1: is there like a sweet spot where you know, someone 293 00:16:12,480 --> 00:16:14,520 Speaker 1: that has I don't know, a twenty five million dollar 294 00:16:14,640 --> 00:16:17,680 Speaker 1: transportation spend or a ten million dollar transportation spend. 295 00:16:18,200 --> 00:16:22,440 Speaker 2: Yeah, generally it's mid market to enterprise type customers. So ten, 296 00:16:22,600 --> 00:16:24,920 Speaker 2: ten million, five million and above is kind of where 297 00:16:24,920 --> 00:16:28,280 Speaker 2: we're at. So if you're in the SMB space, generally 298 00:16:28,320 --> 00:16:31,840 Speaker 2: there's not enough density or volume where you can have 299 00:16:32,000 --> 00:16:33,960 Speaker 2: as much of an impact. You know, we do have 300 00:16:34,040 --> 00:16:37,520 Speaker 2: some smaller customers that utilize them, but generally kind of 301 00:16:37,520 --> 00:16:40,480 Speaker 2: that sweet spot's in the five to fifty million range. 302 00:16:40,720 --> 00:16:43,600 Speaker 1: So on the less than trucklouts side of the LTL side, 303 00:16:43,760 --> 00:16:47,680 Speaker 1: the ISM recently went into expansion territory I think was 304 00:16:47,720 --> 00:16:49,440 Speaker 1: the first time it did that in twelve months, and 305 00:16:49,480 --> 00:16:51,760 Speaker 1: it's been a contraction territory for thirty six in the 306 00:16:51,840 --> 00:16:54,600 Speaker 1: last thirty nine months. And the ISM is a pretty 307 00:16:54,640 --> 00:16:58,800 Speaker 1: good barometer of future LTL demand. So does the last 308 00:16:58,840 --> 00:17:02,480 Speaker 1: reading get you really excited or what are your feelings 309 00:17:02,680 --> 00:17:06,520 Speaker 1: about you know, the number and what it might mean 310 00:17:06,560 --> 00:17:07,840 Speaker 1: for demand going forward. 311 00:17:08,720 --> 00:17:13,879 Speaker 2: Yeah, I watched the PMI housing markets truckload by rates, 312 00:17:13,960 --> 00:17:17,040 Speaker 2: you know, all the typical indices that you would expect 313 00:17:17,080 --> 00:17:20,280 Speaker 2: and when you think about just what's going on, what 314 00:17:20,359 --> 00:17:23,520 Speaker 2: we're trying to determine is that real or is that 315 00:17:23,840 --> 00:17:26,560 Speaker 2: you know, head fake quote unquote. So because we've seen 316 00:17:26,560 --> 00:17:28,360 Speaker 2: it go up a few times to your point over 317 00:17:28,400 --> 00:17:30,680 Speaker 2: the last three or four years, and then it goes 318 00:17:30,760 --> 00:17:33,760 Speaker 2: right back down, So I think with more certainty in 319 00:17:33,800 --> 00:17:37,800 Speaker 2: the market this year that I hope it's going to continue. 320 00:17:37,960 --> 00:17:40,800 Speaker 2: On the demand side of things, another area we're focused 321 00:17:40,840 --> 00:17:43,240 Speaker 2: on is supply. There's a lot going on to the 322 00:17:43,240 --> 00:17:46,200 Speaker 2: supply side as well, because I think you need both 323 00:17:46,280 --> 00:17:49,240 Speaker 2: sides of the equation to go up. So if PMI 324 00:17:49,400 --> 00:17:53,000 Speaker 2: stays above fifty, obviously it's a great leading indicator. And 325 00:17:53,040 --> 00:17:56,720 Speaker 2: we've built our business and invested throughout this downturn to 326 00:17:56,760 --> 00:17:58,960 Speaker 2: make sure that we're positioned when it does turn. So 327 00:17:59,000 --> 00:18:01,560 Speaker 2: it does get me excited, but we also to my 328 00:18:01,640 --> 00:18:03,840 Speaker 2: earlier point, we're not waiting on a market turn and 329 00:18:03,880 --> 00:18:07,480 Speaker 2: waiting on that. Our pipeline is at a multi year high, 330 00:18:07,480 --> 00:18:10,160 Speaker 2: and we continue to focus in those areas. But we've 331 00:18:10,200 --> 00:18:14,800 Speaker 2: also invested a lot from a tech standpoint, network, doors, equipment, 332 00:18:14,960 --> 00:18:17,479 Speaker 2: all these other areas that when it does flip, we 333 00:18:17,520 --> 00:18:19,879 Speaker 2: are positioned better than at any point in our history, 334 00:18:19,920 --> 00:18:22,600 Speaker 2: so I'm super excited if it continues to stay above fifty. 335 00:18:23,920 --> 00:18:27,280 Speaker 1: So you know, you guys, when you reported when our 336 00:18:27,320 --> 00:18:32,879 Speaker 1: best reported the LTL, you provided some January stats and 337 00:18:32,920 --> 00:18:35,679 Speaker 1: those kind of are outperforming or peers. You know, your 338 00:18:35,760 --> 00:18:39,359 Speaker 1: daily shipments increased three percent, your weight per shipment rose 339 00:18:39,440 --> 00:18:43,200 Speaker 1: five percent, your daily tonage increased eight percent. What's what's 340 00:18:43,280 --> 00:18:46,080 Speaker 1: kind of driving that out performance? Where I guess because 341 00:18:46,080 --> 00:18:48,520 Speaker 1: you're obviously winning share, Where are you winning share? 342 00:18:49,440 --> 00:18:52,679 Speaker 2: Yeah? I would say some of that is the comp 343 00:18:52,720 --> 00:18:56,119 Speaker 2: as well. So January last year, when you think about 344 00:18:56,119 --> 00:18:59,520 Speaker 2: what happened last year with all this, we had pretty 345 00:18:59,520 --> 00:19:01,840 Speaker 2: bad Janie where as far as winter storms as well, 346 00:19:02,680 --> 00:19:05,840 Speaker 2: so we didn't have as much truckload rated shipments. So 347 00:19:05,880 --> 00:19:08,680 Speaker 2: those are there are small number of shipments in our network, 348 00:19:08,760 --> 00:19:11,240 Speaker 2: but they're they're very heavy and they contribute to that 349 00:19:11,320 --> 00:19:14,399 Speaker 2: weight for shipting piece. So last year we had a 350 00:19:14,440 --> 00:19:16,880 Speaker 2: lower mix of that. And then as this year happened, 351 00:19:17,160 --> 00:19:20,159 Speaker 2: the weather kind of hitting just one big you know, 352 00:19:20,640 --> 00:19:23,479 Speaker 2: you know event versus spread out throughout the year. So 353 00:19:23,520 --> 00:19:26,600 Speaker 2: some of it's a comp standpoint, and then some of 354 00:19:26,600 --> 00:19:30,000 Speaker 2: our dynamic transactional shipments have trended a little bit heavier. 355 00:19:30,080 --> 00:19:33,280 Speaker 2: So really, what what I think about is what we 356 00:19:33,320 --> 00:19:38,800 Speaker 2: did last year. We restructured our commercial structure. We aligned sales, yield, 357 00:19:38,880 --> 00:19:42,720 Speaker 2: customer service, marketing, all those commercial functions under one leader, 358 00:19:43,240 --> 00:19:46,240 Speaker 2: and that's really drove our pipeline to hit you know, 359 00:19:46,400 --> 00:19:48,679 Speaker 2: multi year highs, and that's why we're seeing growth in 360 00:19:48,680 --> 00:19:52,800 Speaker 2: our core business with our customers. So I think that 361 00:19:53,359 --> 00:19:56,439 Speaker 2: we've continued to see success with the commercial effort, although 362 00:19:56,480 --> 00:20:00,000 Speaker 2: the comp was a little you know, challenging or different 363 00:20:00,040 --> 00:20:02,000 Speaker 2: for it, you know, just because the weather patterns and 364 00:20:02,040 --> 00:20:04,520 Speaker 2: now that's shaped up. But I feel really good about 365 00:20:04,520 --> 00:20:07,400 Speaker 2: what we're doing to grow our core business. It's really 366 00:20:07,440 --> 00:20:11,440 Speaker 2: across the board. With thirty thousand customers, we're grown with SMB, 367 00:20:11,600 --> 00:20:14,119 Speaker 2: we're grown with the middle market, and then some of 368 00:20:14,200 --> 00:20:18,119 Speaker 2: those larger customers they're really utilizing that managed service and 369 00:20:18,160 --> 00:20:20,840 Speaker 2: that allows us to grow ABF if we need to 370 00:20:20,920 --> 00:20:24,639 Speaker 2: choose that source of capacity that works best in that 371 00:20:24,720 --> 00:20:25,800 Speaker 2: customer supply chain. 372 00:20:26,359 --> 00:20:28,920 Speaker 1: Right, And you know, you guys talk about dynamic pricing 373 00:20:29,400 --> 00:20:32,760 Speaker 1: at ARC PASK, can you talk about what actually is 374 00:20:32,800 --> 00:20:34,600 Speaker 1: that and how are your customers leveraging it? 375 00:20:35,640 --> 00:20:40,400 Speaker 2: Yeah, so dynamic pricing. We started that really in Earnest 376 00:20:40,400 --> 00:20:44,760 Speaker 2: in twenty nineteen. So, and what dynamic pricing is is 377 00:20:44,840 --> 00:20:48,480 Speaker 2: it's based on real time market conditions and it helps 378 00:20:48,560 --> 00:20:51,960 Speaker 2: us fill capacity in our network by allowing more flexible 379 00:20:51,960 --> 00:20:56,560 Speaker 2: and responsive rates. So there's this area of the market 380 00:20:56,600 --> 00:21:00,320 Speaker 2: that we really weren't tapping into, i would say, and 381 00:21:00,359 --> 00:21:04,400 Speaker 2: those are customers that are quoting every single shipment. They're 382 00:21:04,400 --> 00:21:08,960 Speaker 2: making shipment by shipment by two shipment moves, so they're 383 00:21:09,000 --> 00:21:12,440 Speaker 2: more likely to leverage that dynamic pricing. So the majority 384 00:21:12,520 --> 00:21:16,000 Speaker 2: of our business is core LTL customers who you know, 385 00:21:16,040 --> 00:21:19,160 Speaker 2: we do a yearly contract with, you know, negotiate rates, 386 00:21:19,200 --> 00:21:23,239 Speaker 2: have routing guides, all that, but that demand fluctuates up 387 00:21:23,240 --> 00:21:27,200 Speaker 2: and down every single day. So we develop dynamic because 388 00:21:27,200 --> 00:21:30,040 Speaker 2: we're trying to level out some of that fluctuation in 389 00:21:30,080 --> 00:21:32,800 Speaker 2: the market. And what it's done is it's allowed us 390 00:21:32,800 --> 00:21:35,560 Speaker 2: to meet customers where they want to be met through 391 00:21:35,600 --> 00:21:38,919 Speaker 2: these digital channels and being able to optimize their shipments 392 00:21:39,240 --> 00:21:42,639 Speaker 2: on a day by day basis. So what's important for 393 00:21:42,720 --> 00:21:45,840 Speaker 2: everybody to understand is we optimize our mix on a 394 00:21:45,920 --> 00:21:49,080 Speaker 2: daily basis when we base it on what the market 395 00:21:49,160 --> 00:21:51,679 Speaker 2: is giving us and what available capacity we have in 396 00:21:51,720 --> 00:21:55,800 Speaker 2: the market. So as that shipment pool you know, has grown, 397 00:21:55,880 --> 00:21:58,920 Speaker 2: that quote pool, we've been able to see our pricing 398 00:21:59,000 --> 00:22:01,560 Speaker 2: improved by about fits fifty percent because we need the 399 00:22:01,560 --> 00:22:05,080 Speaker 2: same level of shipments. But as you have more opportunities, 400 00:22:05,119 --> 00:22:07,320 Speaker 2: you get to fill the right parts of your network 401 00:22:07,400 --> 00:22:10,760 Speaker 2: on the right day. So we see a lot of 402 00:22:10,760 --> 00:22:13,080 Speaker 2: peers using three pls to do that. But like I 403 00:22:13,080 --> 00:22:16,160 Speaker 2: said earlier, we're the three pl So we're trying to 404 00:22:16,520 --> 00:22:19,000 Speaker 2: you know, level out those fluctuations we see in our 405 00:22:19,040 --> 00:22:21,400 Speaker 2: core business. So if you look at our results over 406 00:22:21,440 --> 00:22:25,280 Speaker 2: the long term, the investments in technology, dynamic, all these 407 00:22:25,320 --> 00:22:28,160 Speaker 2: things have really helped us get to a better spot, 408 00:22:28,160 --> 00:22:31,520 Speaker 2: which allows us to reinvest back into the business as 409 00:22:31,560 --> 00:22:33,920 Speaker 2: we expand that core pool and grow that core business. 410 00:22:34,880 --> 00:22:39,600 Speaker 1: So currently, at least according to Transport Topics, our best 411 00:22:39,640 --> 00:22:43,440 Speaker 1: is the eighth largest LTL carrier based on revenue. You know, 412 00:22:43,480 --> 00:22:47,639 Speaker 1: there's been a lot of consolidation in this space. Does 413 00:22:47,960 --> 00:22:51,280 Speaker 1: do you guys look at your LTL business and want 414 00:22:51,280 --> 00:22:54,480 Speaker 1: to get bigger or you just want to slightly grow 415 00:22:54,560 --> 00:22:55,480 Speaker 1: more than the market. 416 00:22:55,840 --> 00:22:59,439 Speaker 2: Yeah, I would say that our strategy always starts with 417 00:22:59,480 --> 00:23:02,199 Speaker 2: our customer first, So We don't want to grow just 418 00:23:02,280 --> 00:23:05,480 Speaker 2: for growth's sake, right, so we want to make sure 419 00:23:05,480 --> 00:23:08,119 Speaker 2: that we have profitable growth so we can continue to 420 00:23:08,160 --> 00:23:12,560 Speaker 2: invest back into those customers. So I wouldn't say there's 421 00:23:12,600 --> 00:23:15,600 Speaker 2: an inherentent strategy to say, hey, we want to be 422 00:23:15,760 --> 00:23:18,760 Speaker 2: top five or else. We want to focus on what 423 00:23:18,800 --> 00:23:22,399 Speaker 2: do our customers need and that should lead to growth ultimately. 424 00:23:22,560 --> 00:23:25,840 Speaker 2: So we when we had our investor day last year, 425 00:23:26,240 --> 00:23:29,720 Speaker 2: we really outlined our main initiatives around our three strategic 426 00:23:29,760 --> 00:23:33,399 Speaker 2: pillars growth, efficiency, innovation, and the growth side of things. 427 00:23:33,440 --> 00:23:36,400 Speaker 2: Really where we're focused is growing that core LTL business, 428 00:23:36,400 --> 00:23:39,400 Speaker 2: which we did a great job last year doing expanding 429 00:23:39,440 --> 00:23:42,080 Speaker 2: that quote pool so we have more opportunities within our 430 00:23:42,080 --> 00:23:46,160 Speaker 2: transactional markets, continuing to grow managed solutions and that's where 431 00:23:46,160 --> 00:23:49,399 Speaker 2: we've seen double digit growth and really excited about the 432 00:23:49,400 --> 00:23:52,040 Speaker 2: future there, and then really focused on that S and 433 00:23:52,119 --> 00:23:55,120 Speaker 2: B business within truckloads. So it's kind of coming from 434 00:23:55,160 --> 00:23:58,719 Speaker 2: all areas and really what we're focused on is that 435 00:23:58,840 --> 00:24:01,960 Speaker 2: profitable growth side of things, partnering with customers over the 436 00:24:02,040 --> 00:24:04,880 Speaker 2: longer term, because we want to be there at good 437 00:24:04,920 --> 00:24:07,119 Speaker 2: times and in bad for our customers. So we really 438 00:24:07,200 --> 00:24:11,200 Speaker 2: value those long standing relationships, So I just. 439 00:24:11,160 --> 00:24:15,480 Speaker 1: Want to pivot a little bit and start talking about technology. Obviously, 440 00:24:15,560 --> 00:24:20,080 Speaker 1: technology is becoming more important, and especially with the asset 441 00:24:20,119 --> 00:24:23,439 Speaker 1: light or not asset business, probably even more important. I 442 00:24:23,560 --> 00:24:26,280 Speaker 1: just got back from Manifest in Vegas. Luckily I didn't 443 00:24:26,280 --> 00:24:29,359 Speaker 1: lose too much money, but you know, our best was 444 00:24:29,400 --> 00:24:32,879 Speaker 1: there and they had a pretty big presence. Can you 445 00:24:32,960 --> 00:24:36,040 Speaker 1: talk about, you know, the technology that you're bringing to 446 00:24:36,240 --> 00:24:42,120 Speaker 1: customers to help them be more efficient or lower their costs. 447 00:24:42,760 --> 00:24:46,359 Speaker 2: Yeah. Yeah, So we've invested in tech in a long time, 448 00:24:46,400 --> 00:24:49,600 Speaker 2: and I appreciate you know, saying you noticed our presence 449 00:24:49,640 --> 00:24:54,760 Speaker 2: there at Manifest, because we want our customers our employees 450 00:24:54,800 --> 00:24:57,560 Speaker 2: to view us as a tech forward organization because we are. 451 00:24:58,280 --> 00:25:01,200 Speaker 2: We invest about one hundred and seventy five million dollars 452 00:25:01,200 --> 00:25:04,760 Speaker 2: annually into technology. We have a team of in house 453 00:25:04,840 --> 00:25:08,240 Speaker 2: technologists of a little bit over five hundred people, so 454 00:25:08,920 --> 00:25:11,920 Speaker 2: just a very talented group, and they partner directly with 455 00:25:12,000 --> 00:25:16,200 Speaker 2: our business to develop some of the industry leading techs. 456 00:25:16,240 --> 00:25:20,600 Speaker 2: So we've invested a lot that when I think about customers, 457 00:25:21,359 --> 00:25:24,639 Speaker 2: we have a ton of examples, so CRO or city 458 00:25:24,680 --> 00:25:28,679 Speaker 2: route optimization. We're using AI to reduce manual tasks. Really 459 00:25:28,720 --> 00:25:32,200 Speaker 2: that's around routing our drivers in the most efficient way 460 00:25:32,680 --> 00:25:35,000 Speaker 2: to make sure that we're making our deliveries within the 461 00:25:35,040 --> 00:25:38,560 Speaker 2: appointment windows our customers request, as well as be there 462 00:25:38,640 --> 00:25:40,560 Speaker 2: for when we need the pickups to make sure we 463 00:25:40,600 --> 00:25:44,359 Speaker 2: don't have any missed pickups. So by optimizing those city routes, 464 00:25:44,359 --> 00:25:48,879 Speaker 2: we've really improved the customer experience there. Truckload side really 465 00:25:48,920 --> 00:25:53,040 Speaker 2: around covering freight, improving buy rates. What we've done there 466 00:25:53,119 --> 00:25:55,640 Speaker 2: is improve our op income by about two point five 467 00:25:55,640 --> 00:25:59,480 Speaker 2: million dollars last year because we've continued to digitize the 468 00:25:59,520 --> 00:26:03,560 Speaker 2: truckload experience. So we have about thirty AI agents who 469 00:26:03,560 --> 00:26:07,960 Speaker 2: are doing document processing, automated quoting, all those different things 470 00:26:08,000 --> 00:26:11,520 Speaker 2: through various channels, and we've seen the success through that. 471 00:26:11,880 --> 00:26:14,640 Speaker 2: We rolled out EVA a few years ago, and that's 472 00:26:14,680 --> 00:26:17,280 Speaker 2: our virtual agent, so customers can call in if they 473 00:26:17,280 --> 00:26:20,560 Speaker 2: have basic inquiries and they don't have to wait on hold. 474 00:26:20,600 --> 00:26:23,480 Speaker 2: They can get those answers directly from an AI agent 475 00:26:23,920 --> 00:26:27,320 Speaker 2: pulling data from the systems. We have really excited about 476 00:26:27,359 --> 00:26:29,879 Speaker 2: launching our best View next year. We announced that an 477 00:26:29,920 --> 00:26:33,640 Speaker 2: investor day publicly. That's going to be a customer platform 478 00:26:33,960 --> 00:26:37,080 Speaker 2: that really when you think about the way our company 479 00:26:37,160 --> 00:26:40,520 Speaker 2: was built, coming up as an LTL carrier and transforming 480 00:26:40,560 --> 00:26:44,359 Speaker 2: into a logistics company. We needed our customer platform to 481 00:26:44,480 --> 00:26:47,359 Speaker 2: be a logistics company platform, so you'll be able to track, 482 00:26:47,520 --> 00:26:51,280 Speaker 2: quote book, all of those various things through one platform. 483 00:26:51,680 --> 00:26:54,040 Speaker 2: And we have it in beta right now about eight 484 00:26:54,119 --> 00:26:57,520 Speaker 2: hundred customers using it and the feedback has been incredible. 485 00:26:57,600 --> 00:27:00,159 Speaker 2: So really looking forward to rolling that out around the 486 00:27:00,200 --> 00:27:03,960 Speaker 2: May timeframe. But we've done a lot around customers and 487 00:27:04,080 --> 00:27:07,160 Speaker 2: technology and we continue to advance in that area. 488 00:27:07,359 --> 00:27:09,480 Speaker 1: So you know, when you talk about truckload, you're talking 489 00:27:09,480 --> 00:27:11,080 Speaker 1: about brokerage mostly. 490 00:27:11,040 --> 00:27:15,200 Speaker 3: Yeah, brokerage, Yeah, yeah, So you know that that's obviously 491 00:27:15,600 --> 00:27:17,600 Speaker 3: you know, some of your peers and some of the 492 00:27:17,680 --> 00:27:20,760 Speaker 3: leaders in that space of talk about AI a lot, 493 00:27:20,840 --> 00:27:22,680 Speaker 3: and you know some other things. 494 00:27:23,000 --> 00:27:26,720 Speaker 1: Can you talk about, you know, some of the specifics 495 00:27:26,720 --> 00:27:29,040 Speaker 1: that you're doing with AI. You know you mentioned the 496 00:27:29,080 --> 00:27:32,720 Speaker 1: thirty agents. What are you able to do from a 497 00:27:32,720 --> 00:27:36,920 Speaker 1: productivity side, like are you guys growing faster then you're 498 00:27:36,920 --> 00:27:41,920 Speaker 1: able to have to you know, grow headcount because obviously 499 00:27:41,920 --> 00:27:44,120 Speaker 1: that that's an important aspect of the business. 500 00:27:44,720 --> 00:27:48,240 Speaker 2: Yeah, I view it in kind of twofold, So I 501 00:27:48,359 --> 00:27:50,679 Speaker 2: view it in the productivity side, but also on the 502 00:27:50,720 --> 00:27:54,679 Speaker 2: customer side. So I really view twenty twenty five as 503 00:27:54,720 --> 00:27:57,119 Speaker 2: a kind of a foundational year for AI. For us, 504 00:27:57,160 --> 00:28:01,000 Speaker 2: we've been using AI in our business for over twenty years. Really. 505 00:28:01,080 --> 00:28:04,280 Speaker 2: The hype has come around the generative AI, so but 506 00:28:04,440 --> 00:28:07,200 Speaker 2: ultimately I always go back to first, you got to 507 00:28:07,280 --> 00:28:10,399 Speaker 2: understand your processes. You know, you can't just put AI 508 00:28:10,520 --> 00:28:12,800 Speaker 2: on top of something and expect it to work. You've 509 00:28:12,800 --> 00:28:15,280 Speaker 2: got to understand your processes and make sure that you 510 00:28:15,359 --> 00:28:18,720 Speaker 2: have good data. So we invested in a data team 511 00:28:18,720 --> 00:28:22,520 Speaker 2: in twenty eighteen and that really has become, in my opinion, 512 00:28:22,600 --> 00:28:27,359 Speaker 2: a strategic advantage for us. So our teams they basically 513 00:28:27,440 --> 00:28:29,640 Speaker 2: throughout last year and they're going to continue this year. 514 00:28:29,680 --> 00:28:32,600 Speaker 2: They've gone in each area of the business and said, hey, 515 00:28:32,600 --> 00:28:35,760 Speaker 2: where can we utilize technology to improve you the revenue growth, 516 00:28:35,760 --> 00:28:39,680 Speaker 2: efficiency or cost to serve or improve customer experience. So 517 00:28:39,720 --> 00:28:42,560 Speaker 2: I feel like we're still early innings in a lot 518 00:28:42,560 --> 00:28:46,760 Speaker 2: of those areas. But AI initiatives aren't managed separately, they're 519 00:28:46,760 --> 00:28:49,800 Speaker 2: considered in all the initiatives. So I know it's kind 520 00:28:49,800 --> 00:28:52,800 Speaker 2: of the buzzwords and what's going on, but there's a 521 00:28:52,840 --> 00:28:55,560 Speaker 2: lot of other tech as well. That's having an impact. 522 00:28:55,600 --> 00:29:00,000 Speaker 2: So when I think about within our brokerage operation, first 523 00:29:00,160 --> 00:29:03,640 Speaker 2: really excited about welcoming Mac Pinkerton to our organization. He 524 00:29:03,760 --> 00:29:07,719 Speaker 2: started in January. He was the president of North America 525 00:29:07,800 --> 00:29:12,280 Speaker 2: Surface Transportation for CHR for many years, and he was 526 00:29:12,320 --> 00:29:14,760 Speaker 2: with me doing the campus visits this week and talking 527 00:29:14,800 --> 00:29:17,640 Speaker 2: with employees and getting to know people. And he's really 528 00:29:17,680 --> 00:29:20,520 Speaker 2: looking at our technology roadmaps to say, what do we 529 00:29:20,560 --> 00:29:22,880 Speaker 2: have in motion and what else could we do to 530 00:29:22,880 --> 00:29:28,120 Speaker 2: add value? So good few good examples really around quote augmentation. 531 00:29:29,000 --> 00:29:32,120 Speaker 2: We augmented about one hundred and twenty thousand emails, so 532 00:29:32,160 --> 00:29:34,000 Speaker 2: we just couldn't get to the emails that were coming 533 00:29:34,040 --> 00:29:37,320 Speaker 2: in to provide our customers with a quote. Now we're responding, 534 00:29:37,680 --> 00:29:40,760 Speaker 2: responding to a vast majority of those quotes. We cut 535 00:29:40,800 --> 00:29:43,840 Speaker 2: our abandonment rate in half. We'd post a load on 536 00:29:43,880 --> 00:29:46,120 Speaker 2: an external board, we get a ton of phone calls. 537 00:29:46,120 --> 00:29:48,600 Speaker 2: We didn't have enough people to answer those calls. We 538 00:29:48,640 --> 00:29:51,160 Speaker 2: implemented the AI phone agent, and now we've cut that 539 00:29:51,200 --> 00:29:54,640 Speaker 2: abandonment rate in half and we're servicing real carriers who 540 00:29:54,680 --> 00:29:58,880 Speaker 2: are calling in wanting to service that load. So just 541 00:29:58,960 --> 00:30:01,960 Speaker 2: a few examples. I think we're kind of early stages, 542 00:30:01,960 --> 00:30:03,560 Speaker 2: and I think Ma's going to help us take it 543 00:30:03,600 --> 00:30:04,360 Speaker 2: to the next level. 544 00:30:05,400 --> 00:30:08,240 Speaker 1: Roughly, how much in capbecs does our best spend on. 545 00:30:08,200 --> 00:30:12,040 Speaker 2: Tech About one hundred and seventy five million each year. 546 00:30:12,320 --> 00:30:15,680 Speaker 1: Right, Obviously that's probably a small percentage of your overall 547 00:30:15,720 --> 00:30:18,560 Speaker 1: cap backs since you know you do have an acid 548 00:30:18,600 --> 00:30:22,080 Speaker 1: based network, just shifting gears to that a little bit. 549 00:30:22,480 --> 00:30:24,320 Speaker 1: Do you have any thoughts on the twenty twenty seven 550 00:30:24,360 --> 00:30:27,280 Speaker 1: EPA complyingt trucks. Are you guys planning on pre buying 551 00:30:27,360 --> 00:30:27,680 Speaker 1: at all? 552 00:30:28,520 --> 00:30:31,760 Speaker 2: Yeah, the regulations still aren't kind of clear. There's a 553 00:30:31,760 --> 00:30:34,800 Speaker 2: lot going on there, so we work closely with our OEMs, 554 00:30:34,920 --> 00:30:37,959 Speaker 2: our engine partners. We talked through a lot of that. 555 00:30:38,120 --> 00:30:41,960 Speaker 2: So we will place a limited number of early production 556 00:30:42,120 --> 00:30:45,960 Speaker 2: spectrucks into the fleets. We want to test and evaluate 557 00:30:46,640 --> 00:30:48,800 Speaker 2: what's going to happen with those in the real world. 558 00:30:48,880 --> 00:30:52,080 Speaker 2: So we've invested in our fleet for many years, been 559 00:30:52,240 --> 00:30:54,280 Speaker 2: very disciplined to have one of the youngest fleets on 560 00:30:54,320 --> 00:30:58,240 Speaker 2: the road, so that allows us the flexibility to moderate 561 00:30:58,280 --> 00:31:02,840 Speaker 2: truck versuses during this initial rollout, So we don't plan 562 00:31:02,960 --> 00:31:05,600 Speaker 2: on a big pre buy strategy because we've continued to 563 00:31:05,640 --> 00:31:09,680 Speaker 2: invest throughout the year, but having that younger fleet allows 564 00:31:09,760 --> 00:31:13,200 Speaker 2: us to do that. So no big pre bridal pre 565 00:31:13,280 --> 00:31:14,800 Speaker 2: buy low in advance, gotcha. 566 00:31:15,440 --> 00:31:17,720 Speaker 1: So you know I mentioned that was a manifest and 567 00:31:17,800 --> 00:31:20,560 Speaker 1: you know there's were a lot of autonomous trucking companies 568 00:31:20,640 --> 00:31:24,960 Speaker 1: out there kind of showing what they can do. Is 569 00:31:25,000 --> 00:31:29,840 Speaker 1: our best testing, you know, these emerging technologies like autonomous 570 00:31:29,880 --> 00:31:32,160 Speaker 1: trucking or electric vehicles. 571 00:31:33,000 --> 00:31:36,240 Speaker 2: Yeah, we're not We're not currently testing any autonomous trucks. 572 00:31:36,280 --> 00:31:38,840 Speaker 2: We're keeping our eyes on the developments there and everything 573 00:31:38,840 --> 00:31:41,560 Speaker 2: that goes on. I think we probably still have a 574 00:31:41,600 --> 00:31:44,920 Speaker 2: long way to go from a regulatory standpoint on autonomous 575 00:31:44,960 --> 00:31:47,880 Speaker 2: trucks driving down the road, So keeping our eye on there, 576 00:31:47,920 --> 00:31:51,160 Speaker 2: but not piloting anything. On the EB side, we are 577 00:31:51,240 --> 00:31:54,800 Speaker 2: piloting a lot of different technology there. So we piloted 578 00:31:55,080 --> 00:31:58,760 Speaker 2: the Class eight test La Semis last year. It performed 579 00:31:58,840 --> 00:32:02,320 Speaker 2: very well, So that was our first Class eight EV pilot. 580 00:32:03,120 --> 00:32:05,040 Speaker 2: We've we've done a lot of straight trucks and we 581 00:32:05,160 --> 00:32:08,280 Speaker 2: owned straight trucks and yard tractors and forklifts at several 582 00:32:08,280 --> 00:32:11,720 Speaker 2: locations so and those have worked out well in our operations. 583 00:32:11,760 --> 00:32:16,400 Speaker 2: So We have multiple ev straight trucks and yard horses 584 00:32:16,400 --> 00:32:20,200 Speaker 2: throughout our network, so really we want to continue to 585 00:32:20,320 --> 00:32:22,640 Speaker 2: test in that area and that's why we did that 586 00:32:22,720 --> 00:32:27,640 Speaker 2: Tesla test. But we always want to prioritize reliability, cost, discipline, 587 00:32:27,760 --> 00:32:31,200 Speaker 2: operational readiness to ensure that we can support our customers 588 00:32:31,240 --> 00:32:33,440 Speaker 2: regardless of what it is. So yeah, we're we're continuing 589 00:32:33,480 --> 00:32:34,520 Speaker 2: to test in those areas. 590 00:32:34,680 --> 00:32:36,760 Speaker 1: And was the Tesla was that a line haul or 591 00:32:36,800 --> 00:32:38,400 Speaker 1: was that a pickup and delivery? 592 00:32:38,760 --> 00:32:40,760 Speaker 2: Yeah, it was a line haul unit. So we did 593 00:32:40,760 --> 00:32:46,160 Speaker 2: a three week pilot between in Nevada to California at 594 00:32:46,200 --> 00:32:48,840 Speaker 2: our service center, so that allowed us to utilize some 595 00:32:49,000 --> 00:32:53,040 Speaker 2: just off site superchargers. Averaged about three hundred and twenty 596 00:32:53,040 --> 00:32:55,840 Speaker 2: one miles a day, about forty five hundred miles on 597 00:32:55,920 --> 00:32:58,880 Speaker 2: the tractors, and they've performed very well. So a little 598 00:32:58,920 --> 00:33:02,520 Speaker 2: different for our drivers because the seats in the middle 599 00:33:02,520 --> 00:33:04,400 Speaker 2: of the truck. I don't know if you've ever been 600 00:33:04,440 --> 00:33:06,960 Speaker 2: in one of the Tesla Class eights, so there's not 601 00:33:07,040 --> 00:33:10,320 Speaker 2: a traditional you know, driver side and passenger side, so 602 00:33:10,360 --> 00:33:11,960 Speaker 2: it took a little bit of train and get used to. 603 00:33:12,080 --> 00:33:16,120 Speaker 2: But driver acceptance was really good, so I'm super excited 604 00:33:16,160 --> 00:33:17,400 Speaker 2: about a potential future there. 605 00:33:17,760 --> 00:33:20,680 Speaker 1: Yeah, we were just talking about EPA compliance and you know, 606 00:33:20,760 --> 00:33:25,600 Speaker 1: you said, the regulations really aren't that clear. Obviously, regulations 607 00:33:25,640 --> 00:33:29,200 Speaker 1: plays a big role in the transportation market. The federal 608 00:33:29,240 --> 00:33:33,040 Speaker 1: government has been kind of focused on non domicile CDLs 609 00:33:33,160 --> 00:33:38,320 Speaker 1: and drivers schools and English language proficiency for drivers. Can 610 00:33:38,320 --> 00:33:40,680 Speaker 1: you talk about, you know, from your advantage point, how 611 00:33:40,720 --> 00:33:43,680 Speaker 1: that's been impacting the trucking markets and some of the 612 00:33:43,680 --> 00:33:44,720 Speaker 1: other markets that you touch. 613 00:33:45,520 --> 00:33:48,440 Speaker 2: Yeah, it kind of goes back to what I said earlier. 614 00:33:48,480 --> 00:33:52,040 Speaker 2: The truckload market still has too much capacity out there, 615 00:33:52,520 --> 00:33:54,880 Speaker 2: but in the fourth quarter and then what we saw 616 00:33:54,960 --> 00:33:57,800 Speaker 2: so far in the first quarter, we saw the truckload 617 00:33:57,840 --> 00:34:02,080 Speaker 2: market start to see some margin compression. And some of 618 00:34:02,120 --> 00:34:06,160 Speaker 2: it's probably because of the enforcements actions you mentioned, whether holidays, 619 00:34:06,160 --> 00:34:08,960 Speaker 2: there's a lot of things going on. So some of 620 00:34:09,000 --> 00:34:11,880 Speaker 2: the stories we read are the same you read obviously, 621 00:34:12,000 --> 00:34:14,880 Speaker 2: and when you think about all the things that are 622 00:34:14,960 --> 00:34:18,200 Speaker 2: going on, whether it's the non domicile drivers, the English 623 00:34:18,239 --> 00:34:23,440 Speaker 2: language proficiency, or the CDL schools that really could impact supply, 624 00:34:23,680 --> 00:34:25,640 Speaker 2: I think we're in the early innings of a lot 625 00:34:25,680 --> 00:34:29,040 Speaker 2: of that. But what you've been seeing the past three 626 00:34:29,120 --> 00:34:32,680 Speaker 2: or four weeks is truckload rejection rates are going up. 627 00:34:32,719 --> 00:34:36,439 Speaker 2: You know, there's been just this reduction in capacity because 628 00:34:36,440 --> 00:34:39,000 Speaker 2: of Class eight tractor buying. I know the last month 629 00:34:39,080 --> 00:34:41,960 Speaker 2: or two has been better than that, But I think 630 00:34:42,000 --> 00:34:44,600 Speaker 2: it's going to take a little bit of both. It's 631 00:34:44,640 --> 00:34:47,080 Speaker 2: going to take the demand increase, and that's why we're 632 00:34:47,120 --> 00:34:50,800 Speaker 2: hopeful that the PMI continues. We're also going to continue 633 00:34:50,800 --> 00:34:53,520 Speaker 2: to see supply come out. So some of these regulatory 634 00:34:53,600 --> 00:34:57,320 Speaker 2: things I think are positive for the industry because really 635 00:34:57,360 --> 00:34:59,960 Speaker 2: it's about safety, right, So can we make the road 636 00:35:00,040 --> 00:35:03,080 Speaker 2: it's more safe for our drivers out there? And we 637 00:35:03,120 --> 00:35:05,360 Speaker 2: feel like that the industry is going to feel pressure 638 00:35:05,400 --> 00:35:07,799 Speaker 2: from those changes. But I go back to what we've 639 00:35:07,840 --> 00:35:12,400 Speaker 2: invested in. We have our own driver development program. We 640 00:35:12,480 --> 00:35:14,920 Speaker 2: have forty of our own schools set up on site. 641 00:35:14,920 --> 00:35:18,520 Speaker 2: We've graduated over one thousand CEL applicants. So as that 642 00:35:18,640 --> 00:35:21,960 Speaker 2: capacity tights, we have an avenue to get people trained, 643 00:35:22,280 --> 00:35:24,719 Speaker 2: get them their CDL and allow them to go into 644 00:35:24,719 --> 00:35:27,000 Speaker 2: our trucks, and that's been really successful for us over 645 00:35:27,040 --> 00:35:27,480 Speaker 2: the years. 646 00:35:27,480 --> 00:35:30,160 Speaker 1: So most of the people that are going to your 647 00:35:30,520 --> 00:35:33,440 Speaker 1: internal CDL schools, those are folks that are working like 648 00:35:33,520 --> 00:35:35,719 Speaker 1: the docks, the cross docks, and they're like, have an 649 00:35:35,719 --> 00:35:36,800 Speaker 1: interest in becoming driver. 650 00:35:37,320 --> 00:35:40,720 Speaker 2: Yep, that's correct. Yeah, Yeah, we've been doing it about 651 00:35:40,719 --> 00:35:43,879 Speaker 2: ten years now and we've had about a thousand people 652 00:35:44,120 --> 00:35:47,320 Speaker 2: go through that, so pretty rigorous one on one program, 653 00:35:47,400 --> 00:35:51,359 Speaker 2: but they go through all the background checks certified by 654 00:35:51,400 --> 00:35:53,640 Speaker 2: the state, by the federal government, and it's been a 655 00:35:53,680 --> 00:35:57,279 Speaker 2: really good program because those dock employees know what they're 656 00:35:57,280 --> 00:36:00,279 Speaker 2: getting into. They like the company, like our culture, like 657 00:36:00,320 --> 00:36:03,320 Speaker 2: service in our customers. So as they get their CDL, 658 00:36:03,480 --> 00:36:06,160 Speaker 2: they get, you know, to advance in their career progression, 659 00:36:06,560 --> 00:36:10,280 Speaker 2: but they also get to get all expenses paid CHL 660 00:36:10,360 --> 00:36:12,160 Speaker 2: as well, because that's what we do to train them 661 00:36:12,239 --> 00:36:14,400 Speaker 2: up and get us ready for the next upside. 662 00:36:15,120 --> 00:36:19,120 Speaker 1: So your LTL business, you guys are a unionized car carrier. 663 00:36:19,440 --> 00:36:24,960 Speaker 1: Are there any challenges associated with that, whether it's recruiting drivers, costs, 664 00:36:26,440 --> 00:36:29,759 Speaker 1: you know, I guess, like, what are the challenges relative 665 00:36:29,880 --> 00:36:32,280 Speaker 1: to you know, one of your peers that's non union. 666 00:36:33,040 --> 00:36:36,600 Speaker 2: Yeah, I would say that the challenge really is a 667 00:36:36,680 --> 00:36:39,000 Speaker 2: little bit of the cost structure piece that you mentioned. 668 00:36:39,040 --> 00:36:43,400 Speaker 2: So we've said publicly that we have a pension cost 669 00:36:43,480 --> 00:36:46,880 Speaker 2: that our competitors don't have. That adds about six hundred 670 00:36:46,920 --> 00:36:51,319 Speaker 2: basis points to our operating ratio. But I also view 671 00:36:51,360 --> 00:36:54,000 Speaker 2: that as an opportunity like we do any challenge. So 672 00:36:54,440 --> 00:36:57,200 Speaker 2: when you look at our driver turnover, we just we 673 00:36:57,239 --> 00:36:59,439 Speaker 2: don't have much of it. So I believe we lead 674 00:36:59,480 --> 00:37:02,320 Speaker 2: the industry there. When you look at our benefits package, 675 00:37:02,400 --> 00:37:06,200 Speaker 2: it's industry leading as well. So we've done hiring events 676 00:37:06,200 --> 00:37:09,400 Speaker 2: throughout the country. We had to hire in sell Chicago 677 00:37:10,040 --> 00:37:13,480 Speaker 2: about five six months ago as just retirements and things 678 00:37:13,520 --> 00:37:16,719 Speaker 2: like that took on. We had over six hundred applicants 679 00:37:16,719 --> 00:37:20,040 Speaker 2: show up for only twenty positions available. And that just 680 00:37:20,080 --> 00:37:23,040 Speaker 2: speaks to the reputation in the marketplace. And then I 681 00:37:23,120 --> 00:37:25,560 Speaker 2: go to all the claims awards we win in the 682 00:37:25,640 --> 00:37:28,720 Speaker 2: service and our reputation as a premium carrier out there. 683 00:37:29,080 --> 00:37:32,640 Speaker 2: It's because our people have twenty and thirty years of experience. 684 00:37:32,760 --> 00:37:36,480 Speaker 2: They know our customers freight, they have relationships. I talk 685 00:37:36,560 --> 00:37:39,279 Speaker 2: to drivers all the time that have our customers cell 686 00:37:39,320 --> 00:37:42,120 Speaker 2: phone numbers and they call them directly to say, Hey, 687 00:37:42,120 --> 00:37:43,759 Speaker 2: you got some free today or what can I help 688 00:37:43,800 --> 00:37:47,359 Speaker 2: you with? So I think from a customer experience, a 689 00:37:47,400 --> 00:37:51,319 Speaker 2: premium carrier standpoint, it's really beneficial for us to have 690 00:37:51,360 --> 00:37:52,480 Speaker 2: a long tenured staff. 691 00:37:53,000 --> 00:37:55,920 Speaker 1: So is there anything facing supply chains on your radar 692 00:37:55,960 --> 00:37:57,160 Speaker 1: that we haven't discussed yet. 693 00:37:58,200 --> 00:38:00,600 Speaker 2: I think we've hit on a lot of things that 694 00:38:00,640 --> 00:38:02,880 Speaker 2: are going on. I kind of go back to that 695 00:38:03,040 --> 00:38:06,640 Speaker 2: technology and AI and just everything that's going on in 696 00:38:06,640 --> 00:38:09,640 Speaker 2: that space. There just continues to be a lot of 697 00:38:09,680 --> 00:38:14,040 Speaker 2: developments in that area. So the pace of innovation and 698 00:38:14,120 --> 00:38:17,760 Speaker 2: just so many unknowns out there, we're trying to focus 699 00:38:17,800 --> 00:38:20,560 Speaker 2: on what's real and what's hype. You know, can we 700 00:38:20,640 --> 00:38:24,000 Speaker 2: make smart, grounded decisions based off of what's going to 701 00:38:24,000 --> 00:38:26,000 Speaker 2: improve and then this is the way it is today, 702 00:38:26,480 --> 00:38:28,359 Speaker 2: what's it going to look like three to five years 703 00:38:28,400 --> 00:38:31,120 Speaker 2: from now. So we've seen good success with what we've 704 00:38:31,120 --> 00:38:34,600 Speaker 2: implemented thus far, but it just continues to go faster 705 00:38:34,719 --> 00:38:38,160 Speaker 2: and faster, and then ultimately we already discussed, but what 706 00:38:38,400 --> 00:38:42,160 Speaker 2: happens with the supply and the regulatory landscape something we 707 00:38:42,200 --> 00:38:44,760 Speaker 2: continue to keep our eyes on because things just continue 708 00:38:44,800 --> 00:38:47,120 Speaker 2: to change. But we've been doing this over one hundred years, 709 00:38:48,280 --> 00:38:50,759 Speaker 2: and in my experience, when we get through one of 710 00:38:50,800 --> 00:38:53,840 Speaker 2: these turbulent times, we come out so much stronger on 711 00:38:53,880 --> 00:38:56,640 Speaker 2: the other side because of our people and our relationships 712 00:38:56,680 --> 00:38:59,560 Speaker 2: with customers. So I'm super excited about the future, regardless 713 00:39:00,120 --> 00:39:01,120 Speaker 2: everything that's going on. 714 00:39:01,200 --> 00:39:04,719 Speaker 1: So in the beginning, you know, I did the introduction. 715 00:39:04,960 --> 00:39:07,080 Speaker 1: You know, I mentioned that you joined the company as 716 00:39:07,080 --> 00:39:10,920 Speaker 1: a trainee. I guess it was nineteen twenty years ago. 717 00:39:11,080 --> 00:39:12,000 Speaker 2: What made you. 718 00:39:11,880 --> 00:39:15,319 Speaker 1: Decide is that you wanted to get into transportation. 719 00:39:16,320 --> 00:39:20,120 Speaker 2: Yeah, I honestly, it's kind of a crazy long story, 720 00:39:20,160 --> 00:39:22,120 Speaker 2: so I won't go into all the details. But I 721 00:39:22,239 --> 00:39:25,840 Speaker 2: found out about the company through my best friend getting 722 00:39:25,840 --> 00:39:30,239 Speaker 2: married and his brides made of honor just started at 723 00:39:30,239 --> 00:39:32,040 Speaker 2: the company and said, hey, you should check this out. 724 00:39:32,040 --> 00:39:35,320 Speaker 2: And I was getting ready to graduate college, so started 725 00:39:35,400 --> 00:39:38,160 Speaker 2: right out of college. Didn't know anything about logistics prior 726 00:39:38,239 --> 00:39:41,160 Speaker 2: to the company, and started as a management trainee, like 727 00:39:41,239 --> 00:39:44,520 Speaker 2: you said. And I remember the very first shift I worked. 728 00:39:44,560 --> 00:39:47,880 Speaker 2: I spent twelve hours on the dock, looked down at 729 00:39:47,880 --> 00:39:49,799 Speaker 2: my watch and it was like five minutes went by. 730 00:39:50,000 --> 00:39:51,680 Speaker 2: And now I was just hooked. I was like this 731 00:39:52,440 --> 00:39:55,640 Speaker 2: fast paced, solving challenges, working together with people who are 732 00:39:55,719 --> 00:39:58,800 Speaker 2: values aligned with me. I just I was just hooked, 733 00:39:58,800 --> 00:40:01,240 Speaker 2: and I haven't looked back. So I've been here eighteen 734 00:40:01,320 --> 00:40:04,880 Speaker 2: years now going on nineteen, but coming from the field 735 00:40:04,960 --> 00:40:08,840 Speaker 2: and seeing firsthand everything that our frontline teams go through, 736 00:40:09,440 --> 00:40:12,200 Speaker 2: whether as drivers spend six weeks on the road or 737 00:40:12,280 --> 00:40:16,319 Speaker 2: dock workers and you know, inclement weather or being in 738 00:40:16,360 --> 00:40:18,960 Speaker 2: sales and being told no, I've done about every job, 739 00:40:19,440 --> 00:40:21,680 Speaker 2: and I have so much respect for the grit and 740 00:40:21,760 --> 00:40:24,880 Speaker 2: dedication that our people have. So and I've been in 741 00:40:24,920 --> 00:40:28,480 Speaker 2: the corporate office now six years. So what I've realized 742 00:40:28,520 --> 00:40:31,759 Speaker 2: as I've moved here is everyone at our company works 743 00:40:31,800 --> 00:40:35,480 Speaker 2: incredibly hard and has such an important role in making 744 00:40:35,520 --> 00:40:38,080 Speaker 2: sure that we continue to all, you know, strive towards 745 00:40:38,080 --> 00:40:41,520 Speaker 2: those longer term goals. So yeah, I started write out 746 00:40:41,520 --> 00:40:43,400 Speaker 2: of college and have a look back, and I've enjoyed 747 00:40:43,440 --> 00:40:44,200 Speaker 2: every minute of it. 748 00:40:44,600 --> 00:40:47,920 Speaker 1: All Right, great, You know, I like to ask my 749 00:40:48,080 --> 00:40:50,960 Speaker 1: guests this final question, you know, if they have a 750 00:40:51,000 --> 00:40:54,680 Speaker 1: favorite book about the transportation industry or leadership they read 751 00:40:54,880 --> 00:40:57,600 Speaker 1: over the years. It's kind of you know, still resonates today. 752 00:40:58,880 --> 00:41:01,759 Speaker 2: Yeah. I read a lot of books, and I read 753 00:41:01,800 --> 00:41:04,160 Speaker 2: a lot of books preparing for this role as well. So, 754 00:41:05,080 --> 00:41:08,200 Speaker 2: but one of my all time greats is called The 755 00:41:08,200 --> 00:41:11,359 Speaker 2: Five Graces of Life and Leadership by Gary Bernson. He's 756 00:41:11,400 --> 00:41:14,839 Speaker 2: the CEO of Corn Fairy. Judy and I actually read 757 00:41:14,840 --> 00:41:17,920 Speaker 2: this book together as we were working on the transition, 758 00:41:18,480 --> 00:41:21,600 Speaker 2: but I constantly go back and reference it. So it 759 00:41:21,640 --> 00:41:24,600 Speaker 2: doesn't talk about logistics at all. It's more it's more 760 00:41:24,640 --> 00:41:29,520 Speaker 2: about leadership lessons, stories about personal growth. And that's just 761 00:41:29,680 --> 00:41:31,480 Speaker 2: it's a very short read. You can get through it 762 00:41:31,480 --> 00:41:33,920 Speaker 2: in one afternoon, to be honest with you. But but 763 00:41:34,000 --> 00:41:36,719 Speaker 2: it's just always really stuck with me. It's when you're 764 00:41:36,880 --> 00:41:40,279 Speaker 2: when you're experiencing, you know, challenging times or all that, 765 00:41:41,120 --> 00:41:43,080 Speaker 2: some of the notes from that book just always take 766 00:41:43,160 --> 00:41:45,680 Speaker 2: me back and really ground me. And then I'm currently 767 00:41:45,760 --> 00:41:49,719 Speaker 2: rereading The Five Dysfunctions of a Team, you know, as 768 00:41:49,719 --> 00:41:52,040 Speaker 2: I've moved into this new role. I read that book 769 00:41:52,120 --> 00:41:55,279 Speaker 2: years ago, wanted to kind of reread it because as 770 00:41:55,320 --> 00:41:56,840 Speaker 2: I move into the new role, I wanted to be 771 00:41:56,880 --> 00:41:59,880 Speaker 2: purposeful about the way I developed my own team, develop 772 00:42:00,040 --> 00:42:02,919 Speaker 2: our people. Because at the end of the day, if 773 00:42:02,960 --> 00:42:06,279 Speaker 2: we all are working together, pulling on that same end 774 00:42:06,320 --> 00:42:09,120 Speaker 2: of the rope, we're dang hard to beat. So we 775 00:42:09,200 --> 00:42:11,560 Speaker 2: always say, or I always say, and so does one 776 00:42:11,560 --> 00:42:15,160 Speaker 2: of our vice presidents of change management. We move at 777 00:42:15,200 --> 00:42:18,399 Speaker 2: the speed of trust. So having teams that trust each 778 00:42:18,440 --> 00:42:21,719 Speaker 2: other allows us to move so much faster as an organization. 779 00:42:21,880 --> 00:42:23,880 Speaker 2: So I do a lot of reading around trust and 780 00:42:23,960 --> 00:42:27,040 Speaker 2: team development. It just always is fascinated. 781 00:42:27,520 --> 00:42:31,280 Speaker 1: All right, great, I have to check those two out, seth. 782 00:42:31,440 --> 00:42:32,840 Speaker 1: I really want to thank you for your time and 783 00:42:32,880 --> 00:42:35,120 Speaker 1: your insights today, and also I want to wish you 784 00:42:35,320 --> 00:42:37,239 Speaker 1: all the luck in your new role there at our 785 00:42:37,320 --> 00:42:39,799 Speaker 1: best perfect nankfully all right, and I want to thank 786 00:42:39,800 --> 00:42:42,200 Speaker 1: you for tuning in. If you like the episode, please 787 00:42:42,200 --> 00:42:45,640 Speaker 1: subscribe and leave a review. We've lined up a number 788 00:42:45,640 --> 00:42:47,640 Speaker 1: of great guests for the podcast, so please check back 789 00:42:47,640 --> 00:42:51,759 Speaker 1: to your conversations with C suite executives, shippers, regulators, and 790 00:42:51,800 --> 00:42:54,960 Speaker 1: decision makers within the freight markets. Also, if you want 791 00:42:54,960 --> 00:42:58,279 Speaker 1: to learn more about the freight transportation markets, check out 792 00:42:58,280 --> 00:43:00,560 Speaker 1: our work on the Bloomberg Terminal, at b I go 793 00:43:00,880 --> 00:43:04,080 Speaker 1: and on social media. This is leeklas Gal signing off 794 00:43:04,120 --> 00:43:06,480 Speaker 1: and thanks for talking transports with me. Talk to you 795 00:43:06,520 --> 00:43:10,160 Speaker 1: next week. Bye.