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Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transport Podcast.

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Speaker 1: I'm your host, Lee Klasgau, Senior freight transportation logistics analysts

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Speaker 1: at Bloomberg Intelligence, Bloomberg's in house research arm of almost

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Speaker 1: five hundred analysts and strategists. Before diving in a little

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Speaker 1: public service announcement, your support is instrumental to keep bringing

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Speaker 1: great guests onto the podcast, and we need your support,

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Speaker 1: so please, if you enjoy the podcast, share it, like it,

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Speaker 1: and leave a comment. Also, if you have any ideas

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Speaker 1: for future episodes or just want to talk transports, please

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Speaker 1: hit me up on the Bloomberg terminal, on LinkedIn or

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Speaker 1: on Twitter at Logistics League. Now onto our episode, We're

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Speaker 1: delighted to have Scott Preno, CEO of ITS Logistics, the

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Speaker 1: nineteenth largest freight broker according to Transport Topics. Scott has

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Speaker 1: been in the transportation logistics industry for more than thirty years.

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Speaker 1: Prior to joining Its in twenty nineteen, Scott held positions

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Speaker 1: at Redwood Logistics, Freak Quote, CRST Logistics, Night Transportation, and

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Speaker 1: C A.

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Speaker 2: Robinson.

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Speaker 1: He also served as a board member for the Transportation

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Speaker 1: Intermediaries Association. Thanks for joining the Transports podcast.

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Speaker 3: Scott, thanks for having me. Liam happy to be here.

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Speaker 1: And I also read on your bio that you played

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Speaker 1: baseball at Southeast Missouri State. I did, yes, And so

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Speaker 1: are you rooting for someone in the World Series?

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Speaker 3: No, I mean I live in the West and a

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Speaker 3: lot of folks in our office are Dodger fans.

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Speaker 1: Ok.

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Speaker 3: You know I could see myself doing that, but I

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Speaker 3: grew up in Missouri, So I'm a Cardinals fan of

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Speaker 3: the corps and just disappointed that they're not being represented

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Speaker 3: in the playoffs this year.

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Speaker 2: So you don't have a dog in this hunt, all right?

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Speaker 3: Well, there are a couple of Cardinals playing for the

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Speaker 3: Dodgers that apparently weren't good enough for the Saint Louis team,

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Speaker 3: but they could help the Dodgers get to the World Series,

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Speaker 3: so happy for them.

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Speaker 1: Well, at the time of this recording, the Dodgers are

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Speaker 1: up there three nothing.

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Speaker 2: So you're with its logistics.

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Speaker 1: It's not a household name to everybody, So why don't

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Speaker 1: you tell us a little bit about the company?

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Speaker 3: Sure? We are twenty five years in business, founded in

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Speaker 3: the Reno area, started out as a regional trucking and

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Speaker 3: warehousing business and really began investing in scaling the brokerage

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Speaker 3: part of the organization thirteen fourteen years ago. Since that time,

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Speaker 3: have grown fully organically. We've never purchased anybody, have grown

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Speaker 3: into a little over a billion dollars or revenue. We

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Speaker 3: call ourselves a modern three pl with an asset smart strategy,

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Speaker 3: assets smart being you know, we bring our own assets

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Speaker 3: to play and assets can be a lot of things. Trucks, trailers, armisane,

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Speaker 3: distribution centers, technology, chassis, drop yards and of course people.

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Speaker 3: You know. See, we pool all those assets and aggregate

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Speaker 3: them with our business partners assets to bring solutions to

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Speaker 3: our customers that we believe resonating in the marketplace.

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Speaker 2: So why don't you talk about the assets that you

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Speaker 2: do have.

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Speaker 3: So we have a little over three thousand trailers that

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Speaker 3: are ITS branded. You know, when you combine those with

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Speaker 3: you know, all of the trailing capacity that our capacity

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Speaker 3: or carrier partners bring to the table, it's a very

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Speaker 3: formidable stack that we that allows us to play. We

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Speaker 3: believe in a tam of freight that's not generally accessible

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Speaker 3: to a regular freight brokers, which is not a bad thing,

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Speaker 3: it's just a different market that we play in. We

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Speaker 3: also have four million square feet of omnichannel distribution space

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Speaker 3: in three markets Reno, Northern Nevada, Indianapolis in Dallas. These

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Speaker 3: are strategically placed to give us access to ninety five

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Speaker 3: percent of the domestic US population within two days. We

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Speaker 3: do have about fifty of our own trucks that operate,

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Speaker 3: you know, in serving these local markets and dedicated capacity

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Speaker 3: you know around those areas. That footprint will likely grow

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Speaker 3: in the future as we get closer to ports into

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Speaker 3: you know, maybe the southeast Northeast areas that we aren't

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Speaker 3: touching quite yet. Over time, we do about a quarter

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Speaker 3: billion dollars of can what we call container management business,

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Speaker 3: which is true uh dury age container management around all

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Speaker 3: US ports. That business is is a good kind of

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Speaker 3: fit for our warehousing and distribution business as you know,

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Speaker 3: you know, goods are coming in going into smaller sizes

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Speaker 3: and getting distributed out to our customers. And then we

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Speaker 3: also now have a final mild business which for US

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Speaker 3: is reselling lt L and small parcel out of those

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Speaker 3: buildings and starting to create some pool distribution opportunities that

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Speaker 3: are unique I think in the marketplace, given our footprint.

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Speaker 3: So it's a it truly is an investment in in

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Speaker 3: the business, in our customers, in our customer solutions, and

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Speaker 3: not generically a you know, pure you know you call

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Speaker 3: we haul kind.

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Speaker 1: Of business, right, So you're more than more than a

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Speaker 1: freight broker. So you're specializing in a lot of different markets,

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Speaker 1: it seems, can you talk about a little bit about

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Speaker 1: the markets of your special sure.

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Speaker 3: We are are We feel like our footprint plays and

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Speaker 3: any supply chain that has a what do you call

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Speaker 3: a middle mile situation. We are heavy in e commerce.

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Speaker 3: The last number I saw was roughly forty percent of

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Speaker 3: our revenue would come in the e commerce vertical. We

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Speaker 3: also do a significant amount of brick and mortar retail.

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Speaker 3: We're in food and beverage, general manufacturing and automotive are

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Speaker 3: are kind of core areas.

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Speaker 1: And you know, when you're when you're talking about you know,

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Speaker 1: you mentioned that you have a lot of you know,

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Speaker 1: omni channel warehouse capacity. I think you mentioned four million

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Speaker 1: square feet. What's your typical customer that's that that's using

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Speaker 1: you for that service?

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Speaker 3: We I like the service because it kind of gives

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Speaker 3: you an access to what we call emerging supply chains.

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Speaker 3: So you know, some people have ten thousand square feet

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Speaker 3: and they and they have no distribution channel. We're helping

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Speaker 3: some customers integrate into the Amazon network up to customers

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Speaker 3: that are taking up north of five hundred thousand square feet.

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Speaker 3: The key thing is is that we allow them to mature.

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Speaker 3: I think in some areas of their supply chain management

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Speaker 3: that they wouldn't have access to otherwise, especially on their own.

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Speaker 2: Right.

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Speaker 1: Then, you mentioned earlier you know your growth has been organic,

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Speaker 1: and I think I mentioned that you were the nineteenth

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Speaker 1: largest freight broker and growing. You know, is there a

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Speaker 1: reason why you haven't looked at M and A. Is

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Speaker 1: it because you haven't seen anything you want? Because I mean,

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Speaker 1: you are in a lot of different businesses and an

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Speaker 1: acquisition will probably give you scale quickly.

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Speaker 2: So is there a reason why you've decided to go organic?

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Speaker 3: The main reason has been we've averaged over forty percent

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Speaker 3: low count growth for over a decade. Okay, so we

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Speaker 3: have so much going on organically that we've now kind

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Speaker 3: of matured the business from a technological perspective. I think

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Speaker 3: today we've got a platform that's capable of doing and

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Speaker 3: if we need to. We're financially healthy. We have a very

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Speaker 3: strong balance sheet, We've just launched some new services that

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Speaker 3: at some point could I think utilize M and A

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Speaker 3: to grow, but it's not core to our strategy. G Like,

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Speaker 3: our core strategy is organic growth. And then if we

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Speaker 3: you know, let's say we want to add a cross

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Speaker 3: border business, which I think giving an automotive vertical that

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Speaker 3: we have and we're getting pulled there by a lot

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Speaker 3: of our customers. You can see something like that accelerating

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Speaker 3: in an M and A in an M A way.

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Speaker 3: But we feel we can do everything we want to

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Speaker 3: organically if that's the that's the best thing for our business.

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Speaker 1: Yeah, and so you know, you mentioned, you know, really

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Speaker 1: strong organic growth, so you're obviously taking share. Besides having

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Speaker 1: an incredible CEO. What else is the secret sauce that

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Speaker 1: is allowing you guys to win so much? Chhare as

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Speaker 1: a technology is the bundling of services?

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Speaker 2: What is it?

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Speaker 3: Well, first off, it's it's much less about me and

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Speaker 3: more about our team. And I think the the thing

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Speaker 3: that drives organizations, our culture. In our our we're not

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Speaker 3: a traditional customer, sales, carrier, sales, you know business. We're

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Speaker 3: very much a team based organization. All of our business lines,

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Speaker 3: whether they're asset or not non asset report through the

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Speaker 3: same leadership group that our secret sauces. That are the

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Speaker 3: folks that manage our business on a regular, everyday basis,

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Speaker 3: that manage the teams and manage customers. That's what the specialize.

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Speaker 3: We have very low turnover from an eritry perspective, we're

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Speaker 3: probably in the forty percent range overall. And you know,

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Speaker 3: these people get trained and develop and we've promoted gosh,

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Speaker 3: three hundred people in the last three years to leadership

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Speaker 3: positions organically within the within the company. So the special

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Speaker 3: lies in there, and that's actually what's driven our service mix.

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Speaker 3: I think our culture has been so much about human

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Speaker 3: relationships and connectivity that it's allowed us to move quickly

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Speaker 3: and dive into services that I think a lot of companies,

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Speaker 3: you know, in our space may not get into. We've

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Speaker 3: taken the risks, we've taken the chances, and it's paid

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Speaker 3: off because of the culture and service I think we

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Speaker 3: provide for our customers.

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Speaker 1: You know, you mentioned the low turnover of forty percent,

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Speaker 1: So people that might not be familiar with the broker

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Speaker 1: generes to be, they might be like, wow, forty percent

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Speaker 1: a lot, what what is a typical broker turnover, would you.

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Speaker 3: Say, in my past, it's generally eighty to ninety percent,

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Speaker 3: and most of that happens in the early in the

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Speaker 3: early years, right. I mean, if you're a for lack

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Speaker 3: of a better word, I don't mean to offend anybody

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Speaker 3: with this, but if you're in a synchrosome environment where

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Speaker 3: you're hired and you've got to produce, and you're either

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Speaker 3: a customer or a carr of sales rep, and you're

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Speaker 3: literally by yourself trying to find your way in the world, right,

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Speaker 3: I think that that is a harder road to ho

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Speaker 3: We feel like we've we've built a model that you know,

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Speaker 3: not that it's not hard, but it's it's definitely more

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Speaker 3: team oriented. And and that model, I think generally leads

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Speaker 3: to an experience that doesn't quite feel so cutthroat, but

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Speaker 3: it's it's supportive in nature. It's a we do a

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Speaker 3: ton of training and then within the teams, you know,

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Speaker 3: they really I mean it's it sounds corny, but they

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Speaker 3: care for each other. Yeah, you know, and they and

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Speaker 3: if somebody is not pulling along, they'll they'll rally around

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Speaker 3: those individuals and do what they can to pick them up.

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Speaker 2: How do you measure your employees?

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Speaker 1: And I know you have a bunch of different businesses,

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Speaker 1: so I'm sure there's a lot of different KPIs that

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Speaker 1: you look at. But like, broadly speaking, what are you

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Speaker 1: focused on when you're making sure that you know your

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Speaker 1: people are productive.

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Speaker 3: There's a lot of KPIs around efficiency and around you know,

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Speaker 3: in this is one of the hard things if you're

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Speaker 3: in a business that's you know, the person is only

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Speaker 3: impacting their own effort, and you can look that across

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Speaker 3: multiple people. It's easy to say loadser person per day

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Speaker 3: is your number. We track that number. But there's a

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Speaker 3: lot of KPIs that we track that are team oriented.

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Speaker 3: They're efficiency oriented. Some teams are more efficient than others

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Speaker 3: because of their business mix. Some teams have you know,

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Speaker 3: we look at profitability a lot as an aggregate total

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Speaker 3: labor percentage of revenue. We have business that's not purely

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Speaker 3: brokerage business that has to counter you know, include the

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Speaker 3: fact that you're moving networks and you're handling goods, and

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Speaker 3: so all those metrics come together in a way that

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Speaker 3: as long as the end of the day are labor

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Speaker 3: percentage of revenue, labor percentage of operating margin in our

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Speaker 3: in our in our volume growth is outpacing our cost structure.

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Speaker 3: We feel pretty good about about that. We don't get

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Speaker 3: we don't get mired into local person per day statistic.

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Speaker 3: And then the biggest I think justification of it is

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Speaker 3: is we we have to keep growing teams. And so

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Speaker 3: we love the metric on the promotion side of it

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Speaker 3: because it shows us that people aren't sagn it. There's

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Speaker 3: there's a career path, there's an opportunity, and they continue

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Speaker 3: to grow within those opportunities.

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Speaker 1: And you know, this wouldn't be you know, a podcast

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Speaker 1: about freight and brokerage and trucking if we didn't talk

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Speaker 1: about fraud, because that seems to be a big issue

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Speaker 1: that's increasing over time. How do you guys protect against fraud?

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Speaker 1: Can you maybe anecdotally tell like a crazy story, because

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Speaker 1: every time I talk to someone in the brokerage industry,

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Speaker 1: the story or is the stories get crazier and crazier

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Speaker 1: in terms of we've seen Yeah.

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Speaker 3: I mean I don't have a specific one that I

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Speaker 3: think is any more outlandish or crazy than the other

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Speaker 3: ones that you seen. But you know the main thing

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Speaker 3: is that every anytime markets get like they are. Now,

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Speaker 3: this issue arises and folks get desperate, and when you

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Speaker 3: start to have challenges and profitability, people will do a

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Speaker 3: lot of things that that you may not like to

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Speaker 3: to try to you know, win the game in some way.

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Speaker 3: We have recently integrated new technology into our into our

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Speaker 3: ecosystem that goes as part of our our procurement process

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Speaker 3: that you know, takes some of the guesswork out of

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Speaker 3: the out of the equation, if you will. I mean

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Speaker 3: doing that, we had to purge probably eighty five percent

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Speaker 3: of our of our carrier base and have them restart

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Speaker 3: and re certify under the under updated qualifications. And I

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Speaker 3: think as a trend that's going to happen more over time.

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Speaker 3: You know, the more information is available, the more the

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Speaker 3: industry digests data, the more customers have access to data.

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Speaker 3: Requirements in the space are going to continue to evolve,

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Speaker 3: and I think people need to be really capable of

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Speaker 3: evolving along with those qualifications. So we've we've done that.

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Speaker 3: We've we've integrated multi factor authentication all of our technology.

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Speaker 3: So whether you're a carrier, you know, get getting involved

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Speaker 3: in our with our loop application, our customers or internal employees,

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Speaker 3: it's all multi factor authentication. Now we've we've redone our

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Speaker 3: carrier contracts and one of the big things for us

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Speaker 3: is about half of our freight is managed in some

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Speaker 3: sort of draw capacity, whether it's an i TS trailer

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Speaker 3: or a carrier trailer. And I think the more you

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Speaker 3: have the trailer visibility, the harder it is to have

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Speaker 3: loads stolen if you will, still can happen, obviously, but

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Speaker 3: we have a better way, a better opportunity to track

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Speaker 3: that trailer and equipment then if it's a live, live,

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Speaker 3: lack of connected situation with the provider, right.

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Speaker 1: And you mentioned in that in that answer, technology and

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Speaker 1: technology tools A bunch of times can can.

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Speaker 2: You talk about?

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Speaker 1: I t S's technology platform is a proprietary.

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Speaker 3: It is a hybrid of our own development work and

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Speaker 3: third party platforms. Our core TMS is proprietary, and we

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Speaker 3: spent the last three or four years building it. And

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Speaker 3: the reason we did is we sat down a few

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Speaker 3: years ago and looked at the marketplace and what was

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Speaker 3: available to us and realized that, you know, none of

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Speaker 3: us could name any business that went from zero to

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Speaker 3: a billion organically on someone else's tech, right. And I

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Speaker 3: think the reason for that is, like I mentioned, earlier.

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Speaker 3: These businesses are are very unique in there and they

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Speaker 3: have our specifically, so we built a system that's got

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Speaker 3: the you know, kind of from front to back, the

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Speaker 3: container management tools, the visibility on containers, the durage functionality

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Speaker 3: that seamlessly plays into the network over the road functionality,

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Speaker 3: building in asset management tools, you know, whether it's repairs

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Speaker 3: and maintenance, and starting to lean into you know, the

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Speaker 3: AI and m L world to assist with network optimization,

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Speaker 3: the balancing of the of our networks. Obviously, we're trying

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Speaker 3: to take as much friction as we can out of

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Speaker 3: the transactional nature of the business. But at the end

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Speaker 3: of the day, our our goal of technology is to

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Speaker 3: you know, enable human connection, not to remove humans from

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Speaker 3: from the transaction. I think that's a we feel a

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Speaker 3: competitive advantage of ours. I talked about culture earlier and

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Speaker 3: how much how important it is to our relationships with

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Speaker 3: our business partners. We're not trying to to disintermediate those, right,

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Speaker 3: we want those to get strong and to collaborate, and

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Speaker 3: because that's where the real innovation comes and that's one

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Speaker 3: of the things that we believe keeps us in a

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Speaker 3: position to take share into and to earn more business

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Speaker 3: from our customer base.

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Speaker 1: And can you do that while also automating more Yeah, absolutely.

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Speaker 3: There's there's up in every day. If you look at

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Speaker 3: all the clicks that people put through in their daily lives,

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Speaker 3: there's always a chance to to to move that down.

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Speaker 3: What we'll never do is automate customer service. We're not

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Speaker 3: going to automate you know, a conversation with one of

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Speaker 3: our business partners that that, to me and to us

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Speaker 3: as a leadership team is so counterintuitive to what we

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Speaker 3: believe is the special of our organization and the special

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Speaker 3: not just organization, but our customers and our carriers and

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Speaker 3: our business partners that everyone puts so much into the

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Speaker 3: services they provide. We believe that to extract the value

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Speaker 3: out of that collaboration, you have to have a connection there, right.

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Speaker 1: Yeah, It's been very interesting for my Ivory Tower to

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Speaker 1: see the evolution of the.

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Speaker 2: Freight brokerage industry.

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Speaker 1: You know, a couple of years ago, one thought that

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Speaker 1: tech would win and he didn't need people. But it

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Speaker 1: seems like the real winning strategy is some sort of

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Speaker 1: a hybrid between people in tech. It seems like that's

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Speaker 1: what's going on in its.

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Speaker 3: I think so I don't believe. I'm not a believer

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Speaker 3: that AI is going to take everybody's job. I think

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Speaker 3: AI is going to enhance people's lives in ways that

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Speaker 3: we don't even know yet. But the most important thing

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Speaker 3: we don't want to give up is that human connection

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Speaker 3: because that, to us is where they real specialize. And

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Speaker 3: I think if you look at we talked a little

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Speaker 3: bit about, you know, the specialization within freight brokerages, they're

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Speaker 3: typically a mirror to their customer base. And so you know,

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Speaker 3: if you're you're manufacturing that cup on the desk and

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Speaker 3: I'm manufacturing this mouse and all these things that are happening,

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Speaker 3: everyone does business a different way. So having one cookie

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Speaker 3: cutter approach that says we're going to take all this

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Speaker 3: information together and layer one technology solution over it and

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Speaker 3: link everyone, link everyone to just be efficient, I just

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Speaker 3: don't see that as a as a plausible reality.

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Speaker 2: Right.

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Speaker 1: So you know, at it TS you you get to

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Speaker 1: see a lot of different perspectives in terms of what's

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Speaker 1: going on the freight market. You know, you mentioned truckload, Drayage, LTL,

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Speaker 1: parcel intermodal, So you know, what are you guys seeing

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Speaker 1: in terms of the markets, the freight markets. What's going

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Speaker 1: on from I T.

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Speaker 3: S's perspective, Well, I think we're somewhere in the sixth

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Speaker 3: or seventh inning of the market that we're in because

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Speaker 3: of how disruptive things got during COVID and how and

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Speaker 3: how let's just call the high point of the market got.

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Speaker 3: My personal opinion is about half of this down cycle

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Speaker 3: is the reversion to the mean, which would mean that

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Speaker 3: you're you know, if a typical downcycle lasts eighteen to

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Speaker 3: twenty four months in a in a negative state, I

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Speaker 3: guess then you would if half of the current cycle

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Speaker 3: was reversion, right, you probably got a third of it left.

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Speaker 3: So I'm not sitting here predicting that, you know, the

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Speaker 3: market's gonna flip middle of next year. I personally don't

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Speaker 3: feel like there's a flip happening. I think it's more

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Speaker 3: of a gradual, you know, kind of lean out of it.

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Speaker 3: There's not gonna be an aha moment that says, hey,

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Speaker 3: we're back. But I think you'll see some strength happen

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Speaker 3: slowly throughout the balance of twenty twenty five.

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Speaker 1: And what are you guys seeing in rates when you're

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Speaker 1: talking to customers? Are you seeing year of a year

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Speaker 1: increases or are you still seeing decreases?

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Speaker 2: You're seeing flat.

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Speaker 3: Still seeing customers doing everything they can to to drive

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Speaker 3: as competitive rates as possible. You know, the it's a

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Speaker 3: it's a it's not fair to any customer to say, well,

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Speaker 3: this customer pays more than market because they want to

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Speaker 3: be a ship or of choice. Everyone wants to have

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Speaker 3: the right rates for their business at the right time.

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Speaker 3: I think the customers that we have that are you know,

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Speaker 3: looking at the looking at the cycle as because what

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Speaker 3: you have seen is a consolidation of suppliers. So the

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Speaker 3: rates I don't think really have changed materially, but you're

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Speaker 3: the supplier. Consolidation is absolutely happening. So what happens in

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Speaker 3: a market where that gets harder to accomplish? You know?

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Speaker 3: That's why I think the the colors come out, if

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Speaker 3: you will, of the folks who only play the market

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Speaker 3: versus giving folks a chance to navigate that along with

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Speaker 3: your with your customer base. So I in some to

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Speaker 3: answer your question, we're not seeing rate increases for next year.

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Speaker 3: We're seeing, you know, if anything, rates being closer to

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Speaker 3: as close as static as possible.

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Speaker 1: Right, And when you're saying you know supply you're talking

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Speaker 1: about the capacity to truckload capacity?

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Speaker 2: Is it when you mentioned the supplay?

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Speaker 3: Yeah?

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Speaker 2: And on the intermodal side, what has been going on there?

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Speaker 1: You know a couple maybe like eighteen months ago. Service

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Speaker 1: has been so good. We all know the rail service

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Speaker 1: has improved considerably. You know, how would you rate how

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Speaker 1: your rail partners are doing? And can you will maybe

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Speaker 1: talk about, you know, where you see your intermodial business,

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Speaker 1: you know long term, because you know, we view intermodal

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Speaker 1: as a great circular play.

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Speaker 3: Growth, we are not doing much. I don't think we

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Speaker 3: do enough in that space for me to be a

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Speaker 3: good barometer of the market. As a person who's been

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Speaker 3: in the art industry for thirty plus years, my observation

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Speaker 3: there is, for the right use case, intermodal is fantastic.

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Speaker 3: You know, it's consistent. It may not have ninety seven

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Speaker 3: percent you know service all the time, but from a

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Speaker 3: durable goods perspective, I think it's amazing. The challenge with

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Speaker 3: that space is as consumer dynamics continue to evolving, change

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Speaker 3: and it isn't quite as bad as it was three

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Speaker 3: years ago. I think people are going from just in

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Speaker 3: case to just in time to back to just in case.

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Speaker 3: As inventory has become more dynamic and move and change,

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Speaker 3: which I think is going to be a hallmark of

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Speaker 3: future supply chains. It makes it mold to play a

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Speaker 3: little harder because the way you have to divert product

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Speaker 3: within the longer length of hall that you're that you're

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Speaker 3: managing on the rail. So I think there's always gonna

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Speaker 3: be a play a great place for it. I love

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Speaker 3: the I love it as a business, just it doesn't

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Speaker 3: match with I think our brand of logistics and more

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Speaker 3: of the flexible supply chain model.

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Speaker 2: Right okay.

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Speaker 1: And then on the you know, back on the on

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Speaker 1: the truckload market, you know you mentioned it sounds like

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Speaker 1: you know, you're looking for mostly flat rates into next year.

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Speaker 2: You know, which I would.

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Speaker 1: Say is relatively conservative or bearish.

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Speaker 2: I don't know.

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Speaker 3: I don't know if I would. All I'm seeing is

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Speaker 3: based on the RFPs that are happening today. That's what

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Speaker 3: we're seeing. You know, there's another season coming here in

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Speaker 3: the in the spring that that could change that. Obviously,

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Speaker 3: I think we're at a we're at a place where

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Speaker 3: year over year rates have started to show signs of

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Speaker 3: leveling out. Election yeers are always difficult. You never know

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Speaker 3: how things are going to play. Typically, the markets stronger

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Speaker 3: after the election, regardless of who wins, which side wins,

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Speaker 3: So I think you could see some positive ittivty next year,

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Speaker 3: which might drive early bids next year to see some

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Speaker 3: percent of rate increase. Shippers aren't dumb. They know that

437
00:22:32,600 --> 00:22:35,879
Speaker 3: there's that there's a there's an end to the downward trend,

438
00:22:36,520 --> 00:22:38,600
Speaker 3: and and folks are trying as hard as they can

439
00:22:38,640 --> 00:22:41,000
Speaker 3: to manage against that trend. So I don't want to

440
00:22:41,080 --> 00:22:45,560
Speaker 3: leave the impression that we're selling cheap by being flat.

441
00:22:46,320 --> 00:22:48,360
Speaker 3: My point point mainly is that every ship that we're

442
00:22:48,359 --> 00:22:51,399
Speaker 3: talking to is trying to maintain a landed cost of

443
00:22:51,440 --> 00:22:54,719
Speaker 3: goods in an environment where they don't believe consumer demand

444
00:22:54,760 --> 00:22:55,800
Speaker 3: is going to stay that strong.

445
00:22:56,840 --> 00:22:58,879
Speaker 1: And then I guess on on rates.

446
00:22:59,480 --> 00:23:00,639
Speaker 2: You know, do you know?

447
00:23:00,680 --> 00:23:04,680
Speaker 1: You mentioned all the organic growth that you're doing. It's

448
00:23:04,680 --> 00:23:07,440
Speaker 1: a very competitive kind of kind of market.

449
00:23:08,160 --> 00:23:11,360
Speaker 2: Are are you guys? You know? Are you are?

450
00:23:11,359 --> 00:23:14,000
Speaker 1: You? Would you how would you consider your margins relative

451
00:23:14,080 --> 00:23:14,960
Speaker 1: to peers?

452
00:23:15,160 --> 00:23:18,080
Speaker 3: I think we you know, our business if you look

453
00:23:18,080 --> 00:23:22,120
Speaker 3: at the tam of opportunity, you know, regardless of most

454
00:23:22,359 --> 00:23:26,480
Speaker 3: if you combine the distribution verticals and the transportation verticals.

455
00:23:26,480 --> 00:23:29,919
Speaker 3: You're looking at a one point for trillion dollar marketplace.

456
00:23:30,960 --> 00:23:34,840
Speaker 3: We feel that our TAM is that whole marketplace. If

457
00:23:34,840 --> 00:23:38,080
Speaker 3: you're looking if you're competing in the freight brokerage market,

458
00:23:38,119 --> 00:23:40,920
Speaker 3: that's roughly what three hundred billion is three hundred and

459
00:23:40,920 --> 00:23:43,440
Speaker 3: fifty billion, So I think, you know, we play in

460
00:23:43,480 --> 00:23:46,880
Speaker 3: a TAM that's a little larger. So regardless of the

461
00:23:47,840 --> 00:23:51,160
Speaker 3: of where the market rates are, you know, and roughly

462
00:23:51,480 --> 00:23:54,960
Speaker 3: seventy percent of our businesses from a contract or committed

463
00:23:55,080 --> 00:23:58,760
Speaker 3: kind of state. You know, we can't control those factors.

464
00:23:59,080 --> 00:24:01,640
Speaker 3: We can control our the efficiency of our of our

465
00:24:01,880 --> 00:24:04,800
Speaker 3: of our deliverable, the service of our deliverable, and how

466
00:24:04,840 --> 00:24:07,240
Speaker 3: the customer values are our services.

467
00:24:07,800 --> 00:24:08,240
Speaker 2: Gotcha.

468
00:24:08,520 --> 00:24:11,200
Speaker 1: So at the time of recording, it's you know, late

469
00:24:11,280 --> 00:24:14,919
Speaker 1: late October, we're heading into the peak season. What are

470
00:24:14,920 --> 00:24:17,240
Speaker 1: your customers telling you about peak are you seeing?

471
00:24:17,680 --> 00:24:19,800
Speaker 3: We're seeing some pockets that are pretty exciting. I think

472
00:24:19,840 --> 00:24:24,280
Speaker 3: the the some of the retail areas feel pretty good.

473
00:24:25,520 --> 00:24:28,120
Speaker 3: If you're I think one of our customers I mentioned

474
00:24:28,160 --> 00:24:32,080
Speaker 3: the other the other day, if you're at the top

475
00:24:32,119 --> 00:24:36,600
Speaker 3: of the market from a brand perspective or more of

476
00:24:36,640 --> 00:24:41,000
Speaker 3: the value brands, those two feel like they're strong. If

477
00:24:41,000 --> 00:24:43,800
Speaker 3: you're a middle brand, you know that. I think that's

478
00:24:44,000 --> 00:24:46,680
Speaker 3: kind of a struggling you know place, and struggling is

479
00:24:46,680 --> 00:24:48,679
Speaker 3: a relative word. I don't have any statistics to give you,

480
00:24:48,720 --> 00:24:51,119
Speaker 3: but it seems like to be better in the value

481
00:24:51,160 --> 00:24:56,760
Speaker 3: buy or the the high end buy. But in most

482
00:24:56,760 --> 00:25:00,800
Speaker 3: of our verticals we're seeing we're seeing reason confidence that

483
00:25:00,840 --> 00:25:02,960
Speaker 3: will be at least as good as last year, if

484
00:25:03,000 --> 00:25:03,840
Speaker 3: not a little bit better.

485
00:25:04,359 --> 00:25:07,600
Speaker 1: Okay, but last year was kind of a I mean

486
00:25:07,640 --> 00:25:10,680
Speaker 1: outside of your because you're I mean you're growing a lot,

487
00:25:10,760 --> 00:25:12,879
Speaker 1: because you're growing a lot, but like last year was

488
00:25:12,880 --> 00:25:14,200
Speaker 1: a relatively muted peak.

489
00:25:14,280 --> 00:25:16,639
Speaker 3: Ye, and I think general consumer demand is going to

490
00:25:16,640 --> 00:25:20,040
Speaker 3: be sluggish, Okay, all right, but I think there's pockets

491
00:25:20,080 --> 00:25:23,280
Speaker 3: within all of that that are that are still high points.

492
00:25:23,320 --> 00:25:26,359
Speaker 3: And we have some customers who are who are living

493
00:25:26,359 --> 00:25:28,159
Speaker 3: in that, and we have some that are not. You know,

494
00:25:28,200 --> 00:25:29,720
Speaker 3: it's a it's a it's a pretty it's a pretty

495
00:25:29,720 --> 00:25:30,200
Speaker 3: even mix.

496
00:25:30,600 --> 00:25:30,840
Speaker 2: Right.

497
00:25:31,600 --> 00:25:34,439
Speaker 1: So can you talk, uh, I guess more broadly about

498
00:25:34,480 --> 00:25:38,320
Speaker 1: the brokerage market, you know, maybe how you see it,

499
00:25:39,080 --> 00:25:41,520
Speaker 1: how it's how it's evolved, and how you see it

500
00:25:41,560 --> 00:25:42,960
Speaker 1: evolving in the years to come.

501
00:25:43,440 --> 00:25:48,000
Speaker 3: Yeah, I think the there's so many. Like we said

502
00:25:48,040 --> 00:25:52,040
Speaker 3: we said earlier, I've I've been fortune and unfortunate to

503
00:25:52,080 --> 00:25:55,119
Speaker 3: see technologies that go as far back as the fax

504
00:25:55,200 --> 00:25:59,280
Speaker 3: machine in our business, through TMS is, through digital freight brokerages,

505
00:25:59,400 --> 00:26:02,480
Speaker 3: through you know, all of these buzzwords that go on

506
00:26:02,720 --> 00:26:04,800
Speaker 3: and at the end of the day, this is why

507
00:26:04,840 --> 00:26:07,400
Speaker 3: I feel great about this industry in total, is that

508
00:26:07,800 --> 00:26:10,360
Speaker 3: it always evolves to meet the need of the customer

509
00:26:10,920 --> 00:26:13,239
Speaker 3: and there's not a widget or or something that's going

510
00:26:13,280 --> 00:26:16,200
Speaker 3: to change that. Some of the biggest things I've seen

511
00:26:16,280 --> 00:26:19,520
Speaker 3: is do as an industry is absorb and handle data.

512
00:26:20,200 --> 00:26:23,399
Speaker 3: You know, making decisions fast. You know, customers need to

513
00:26:23,480 --> 00:26:27,639
Speaker 3: be able to plan their world, and the faster and

514
00:26:27,680 --> 00:26:30,560
Speaker 3: more flexible you can give them a solution to do that,

515
00:26:30,960 --> 00:26:34,440
Speaker 3: to meet their need and to bring creativity and solutions

516
00:26:34,480 --> 00:26:37,000
Speaker 3: to them. You know that That's probably the biggest thing

517
00:26:37,000 --> 00:26:39,960
Speaker 3: I've seen, and that's been through the ability to take

518
00:26:40,000 --> 00:26:42,760
Speaker 3: all these data points that are visible to everybody, but

519
00:26:42,840 --> 00:26:45,000
Speaker 3: bring them together into a story that actually gives you

520
00:26:45,160 --> 00:26:48,040
Speaker 3: a solution for the customer. The second thing I think

521
00:26:48,160 --> 00:26:52,080
Speaker 3: is that same data management piece, the ability to get

522
00:26:52,280 --> 00:26:56,080
Speaker 3: teams and people up to speed now versus when I started.

523
00:26:56,760 --> 00:26:59,360
Speaker 3: I mean they're use me as an example. I think,

524
00:26:59,400 --> 00:27:02,360
Speaker 3: get my first from for almost seven years. You know,

525
00:27:02,600 --> 00:27:05,680
Speaker 3: now if someone doesn't get promoted in eighteen months, they're

526
00:27:06,040 --> 00:27:07,159
Speaker 3: wondering what the heck's going on.

527
00:27:07,840 --> 00:27:11,080
Speaker 1: So you can in most industries, absolutely, But I.

528
00:27:11,080 --> 00:27:13,720
Speaker 3: Think that's a macro thing that the freight brokerage business

529
00:27:13,800 --> 00:27:17,280
Speaker 3: has adopted. Alongside of everything else. You still can't there's

530
00:27:17,280 --> 00:27:21,119
Speaker 3: still no substitute for seeing market cycles move and change,

531
00:27:21,119 --> 00:27:24,080
Speaker 3: which you just can't an eighteen month cycle. But you

532
00:27:24,080 --> 00:27:27,600
Speaker 3: can teach someone the basics, you can give them tools

533
00:27:27,600 --> 00:27:29,560
Speaker 3: to help them them engage learning. I think the people

534
00:27:29,560 --> 00:27:31,800
Speaker 3: who are coming into the industry today are more apt

535
00:27:31,840 --> 00:27:36,000
Speaker 3: to consume information than we were thirty years ago as well,

536
00:27:36,040 --> 00:27:39,680
Speaker 3: so that's been a big driver one of the things

537
00:27:39,680 --> 00:27:43,520
Speaker 3: going forward, I guess the two things. I do believe

538
00:27:43,600 --> 00:27:45,359
Speaker 3: that the models of the future are going to be

539
00:27:45,400 --> 00:27:48,840
Speaker 3: hybrid in nature, whether it's a carrier offering asset light

540
00:27:48,880 --> 00:27:52,919
Speaker 3: solutions or an asset business offering asset based solutions. I

541
00:27:52,960 --> 00:27:56,439
Speaker 3: do think that there's a convergence of that coming together

542
00:27:56,920 --> 00:28:01,080
Speaker 3: that we feel we're well pus positioned in to take

543
00:28:01,119 --> 00:28:04,920
Speaker 3: advantage of. But I think the customer base there is

544
00:28:04,960 --> 00:28:09,080
Speaker 3: a place in our in our market for the true live,

545
00:28:09,160 --> 00:28:14,160
Speaker 3: live ad hoc load that is easier to match through

546
00:28:14,160 --> 00:28:19,040
Speaker 3: technology than a sophisticated solution that we've been talking about

547
00:28:19,040 --> 00:28:21,600
Speaker 3: on this podcast. I think that that is going to

548
00:28:21,640 --> 00:28:24,080
Speaker 3: be there. But I think if you want to play

549
00:28:24,200 --> 00:28:26,919
Speaker 3: in the in the larger TAM, I think you have

550
00:28:27,000 --> 00:28:30,240
Speaker 3: to have a hybrid solution. And the challenge in that

551
00:28:30,440 --> 00:28:34,440
Speaker 3: for freight brokerages is going to be running a business

552
00:28:34,600 --> 00:28:38,600
Speaker 3: where capital actually costs money. Yeah, you know, for twenty years,

553
00:28:38,680 --> 00:28:42,520
Speaker 3: you know, you had almost zero interest and these businesses

554
00:28:42,560 --> 00:28:45,440
Speaker 3: all have a negative float. So now that that interest

555
00:28:45,720 --> 00:28:48,480
Speaker 3: or that the money costs money, the investments in technology

556
00:28:48,480 --> 00:28:50,760
Speaker 3: and the investments in capacity, the investments that you need

557
00:28:50,800 --> 00:28:54,600
Speaker 3: to do to deliver on a hybrid solution are going

558
00:28:54,640 --> 00:28:57,000
Speaker 3: to be more challenging because of the cost of capital.

559
00:28:57,400 --> 00:28:58,520
Speaker 3: So you've got to be able to run them in

560
00:28:58,520 --> 00:29:01,040
Speaker 3: an efficient way that whether you can generate enough profitability

561
00:29:01,040 --> 00:29:04,040
Speaker 3: to afford to go to that place. And I think

562
00:29:04,080 --> 00:29:08,400
Speaker 3: you'll see the great businesses who have great customer relationships

563
00:29:08,400 --> 00:29:12,080
Speaker 3: that drive innovation and drive and drive stickiness. We'll be

564
00:29:12,120 --> 00:29:14,320
Speaker 3: able to do that because they'll earn their margins through

565
00:29:15,080 --> 00:29:18,480
Speaker 3: through service versus because you know more than your customer

566
00:29:18,480 --> 00:29:20,840
Speaker 3: and you just create a margin out of that. And

567
00:29:20,880 --> 00:29:23,160
Speaker 3: that's that's probably the most interesting thing in the freight

568
00:29:23,160 --> 00:29:25,080
Speaker 3: brokers business I would see going forward is where interest

569
00:29:25,160 --> 00:29:28,280
Speaker 3: rates lie and how you can invest in the platforms.

570
00:29:28,120 --> 00:29:31,080
Speaker 1: Roughly, like how much do you guys spend your what

571
00:29:31,200 --> 00:29:32,240
Speaker 1: is your capex budget?

572
00:29:32,280 --> 00:29:32,960
Speaker 2: Is it? Is it?

573
00:29:33,160 --> 00:29:34,920
Speaker 1: Do you measure as a percent under revenue?

574
00:29:34,960 --> 00:29:36,040
Speaker 2: Like how do you measure that?

575
00:29:36,160 --> 00:29:39,320
Speaker 3: We We're just dollar I can't share that share the

576
00:29:39,360 --> 00:29:42,200
Speaker 3: actual numbers there. I mean from a technology perspective, where

577
00:29:42,360 --> 00:29:45,040
Speaker 3: we're well invested, very little tech debt. We have you

578
00:29:45,040 --> 00:29:46,720
Speaker 3: know a little over one hundred people that work on

579
00:29:46,800 --> 00:29:51,320
Speaker 3: technology within our organization. You know, where we try to

580
00:29:51,400 --> 00:29:54,760
Speaker 3: do our assets like trailers as much as from a

581
00:29:54,800 --> 00:29:57,760
Speaker 3: flexible solution as possible from you know, we lease a

582
00:29:57,800 --> 00:30:00,360
Speaker 3: lot of those trailers versus you know, the ca appital

583
00:30:00,440 --> 00:30:03,360
Speaker 3: to buy them because we we match some of those

584
00:30:03,800 --> 00:30:06,600
Speaker 3: to the to the commitments from the customer side. But

585
00:30:06,640 --> 00:30:09,239
Speaker 3: as that as that grows in scales, I mean, as

586
00:30:09,360 --> 00:30:11,520
Speaker 3: markets move and change the future, you don't know how

587
00:30:11,560 --> 00:30:14,040
Speaker 3: that's going to react. But you know, we're not a

588
00:30:14,040 --> 00:30:17,880
Speaker 3: capital heavy business. You know, our free cash flow numbers

589
00:30:17,920 --> 00:30:21,040
Speaker 3: are as stronger or stronger than I think anyone that

590
00:30:21,080 --> 00:30:24,280
Speaker 3: I know of in our space, especially in a hybrid situation.

591
00:30:24,440 --> 00:30:28,560
Speaker 3: So you know, we're we're definitely asset light. It's what's

592
00:30:28,560 --> 00:30:30,960
Speaker 3: why we call it asset smart. The areas where it

593
00:30:30,960 --> 00:30:33,600
Speaker 3: requires us to be that provider we are and where

594
00:30:33,640 --> 00:30:36,640
Speaker 3: it doesn't require that we bring in solution. It's different.

595
00:30:37,120 --> 00:30:39,840
Speaker 1: Who do you view as your closest peers, whether it's

596
00:30:39,840 --> 00:30:41,520
Speaker 1: public or private companies.

597
00:30:42,000 --> 00:30:45,160
Speaker 3: You know, I think the from a service mixed perspective,

598
00:30:45,680 --> 00:30:48,400
Speaker 3: you know, Landstar is pretty close, way different model. You know,

599
00:30:48,480 --> 00:30:50,280
Speaker 3: from an agent base, we're not. We have no agents

600
00:30:50,320 --> 00:30:52,480
Speaker 3: in our in our network, but you look at pure services,

601
00:30:52,960 --> 00:30:55,640
Speaker 3: you know they're they're there. On the NASA light side,

602
00:30:55,720 --> 00:30:58,440
Speaker 3: RX would be a good one. You know, they're comfortable

603
00:30:58,480 --> 00:31:00,320
Speaker 3: in the in the trailer space and they have a

604
00:31:00,360 --> 00:31:04,080
Speaker 3: final mile business that I think that that that's probably

605
00:31:04,120 --> 00:31:08,440
Speaker 3: the best comparison on the on the brokers side, right, and.

606
00:31:08,480 --> 00:31:11,720
Speaker 1: Ark is getting a little bigger with the Coyote Coyote acquisition,

607
00:31:12,960 --> 00:31:15,520
Speaker 1: so you we're going going back to the broker market,

608
00:31:15,560 --> 00:31:19,240
Speaker 1: you know, and you mentioned that the relatively low turnover

609
00:31:19,320 --> 00:31:22,280
Speaker 1: that you have a relative to your peers. When you

610
00:31:22,360 --> 00:31:26,320
Speaker 1: guys hire brokers, are you hiring mostly entry level people?

611
00:31:26,360 --> 00:31:29,400
Speaker 1: Are you hiring people with significant about experience? Like what

612
00:31:29,440 --> 00:31:31,240
Speaker 1: do you guys prefer to do to when you bring

613
00:31:31,280 --> 00:31:32,600
Speaker 1: in people into its?

614
00:31:32,720 --> 00:31:37,800
Speaker 3: We prefer the first, the lesser experience person. We want

615
00:31:37,800 --> 00:31:41,080
Speaker 3: to teach them our our way of doing things. Doesn't

616
00:31:41,080 --> 00:31:42,560
Speaker 3: mean we doesn't mean you can't be successful in our

617
00:31:42,560 --> 00:31:45,160
Speaker 3: business if you have experience coming into it, but we

618
00:31:45,200 --> 00:31:48,240
Speaker 3: really look for the core, like what's in the core

619
00:31:48,280 --> 00:31:50,080
Speaker 3: of the person more than anything else, whether you come

620
00:31:50,120 --> 00:31:53,240
Speaker 3: from experience or not. As a percentage of who we

621
00:31:53,280 --> 00:31:55,760
Speaker 3: bring in, there's more on the lesser experience side for sure.

622
00:31:57,240 --> 00:32:01,680
Speaker 3: But as long as as you have adaptability, honesty, and commitment,

623
00:32:01,800 --> 00:32:04,000
Speaker 3: I think at the core of your of your DNA,

624
00:32:05,120 --> 00:32:07,680
Speaker 3: we believe we can offer you an opportunity at a

625
00:32:07,760 --> 00:32:09,720
Speaker 3: career path. That's that's pretty amazing yep.

626
00:32:10,160 --> 00:32:12,280
Speaker 1: So as a as a private company, you obviously have

627
00:32:12,280 --> 00:32:13,800
Speaker 1: a lot of flexibility. You don't have to manage the

628
00:32:13,800 --> 00:32:15,640
Speaker 1: business quarter to quarter. It could be a little long

629
00:32:15,720 --> 00:32:18,040
Speaker 1: term in nature in terms of your vision. So what

630
00:32:18,160 --> 00:32:20,840
Speaker 1: is the vision for its logistics longer term.

631
00:32:21,160 --> 00:32:24,160
Speaker 3: You know we are This is a little selfish on

632
00:32:24,440 --> 00:32:27,400
Speaker 3: my part, but you started the podcast by saying we're

633
00:32:27,440 --> 00:32:30,320
Speaker 3: relatively unknown brand. We've been using the term internally. We're

634
00:32:30,320 --> 00:32:33,160
Speaker 3: trying to go from unknown to known, So you know,

635
00:32:33,240 --> 00:32:35,560
Speaker 3: there's a I don't like to put a number out

636
00:32:35,600 --> 00:32:37,560
Speaker 3: there where we're going to be in three years. I

637
00:32:37,560 --> 00:32:40,520
Speaker 3: don't want to limit what our possibilities are. But I

638
00:32:40,920 --> 00:32:43,840
Speaker 3: see this as being, you know, a couple of years

639
00:32:43,880 --> 00:32:46,240
Speaker 3: from now, if we meet again, we're not going to

640
00:32:46,240 --> 00:32:49,560
Speaker 3: be the unknown entity, right that's so unknown to known

641
00:32:49,640 --> 00:32:51,440
Speaker 3: is definitely there. I think we're going to be a

642
00:32:51,480 --> 00:32:54,760
Speaker 3: multi billion dollar platform that that gets talked about like

643
00:32:54,800 --> 00:32:57,760
Speaker 3: the JB Hunts, like the rxos, like the chrs. I

644
00:32:57,760 --> 00:33:00,840
Speaker 3: think we're going to be one of those brands. I feel.

645
00:33:00,960 --> 00:33:03,120
Speaker 3: I don't want to sound cocky or anything, but I

646
00:33:03,120 --> 00:33:05,080
Speaker 3: think we're on a trajectory that that that gets us

647
00:33:05,120 --> 00:33:05,760
Speaker 3: to that place.

648
00:33:06,840 --> 00:33:09,360
Speaker 1: Okay, well, I do hope we meet again, so just

649
00:33:09,520 --> 00:33:12,120
Speaker 1: you know, but besides that, so would that be like

650
00:33:12,160 --> 00:33:14,560
Speaker 1: with one of the goals to be a public company,

651
00:33:14,880 --> 00:33:17,880
Speaker 1: or do you see yourself getting sold to somebody like

652
00:33:18,040 --> 00:33:19,800
Speaker 1: or you're just gonna you know, we don't, we.

653
00:33:19,760 --> 00:33:21,920
Speaker 3: Don't look at it that way. I mean, we're there

654
00:33:21,920 --> 00:33:23,960
Speaker 3: are so many things outside of our control, right, you know,

655
00:33:24,040 --> 00:33:26,640
Speaker 3: and and we focus on every single day is building

656
00:33:26,640 --> 00:33:30,280
Speaker 3: the best business that we can. We are privately held today,

657
00:33:30,680 --> 00:33:34,360
Speaker 3: you know, those don't last forever, you know, so there's

658
00:33:34,400 --> 00:33:36,280
Speaker 3: there's always We're I think we're on our third different

659
00:33:36,280 --> 00:33:39,680
Speaker 3: ownership structure since you know, since the inception of the business.

660
00:33:40,120 --> 00:33:43,840
Speaker 3: So there there's gonna be a trajectory that that continues,

661
00:33:43,880 --> 00:33:46,600
Speaker 3: and there'll be a future new ownership structure at some point,

662
00:33:47,080 --> 00:33:49,640
Speaker 3: whether that's public or private. You know, we're just we're

663
00:33:49,680 --> 00:33:51,480
Speaker 3: not even thinking about that. We're just we're just heads

664
00:33:51,520 --> 00:33:53,000
Speaker 3: down and building a great business.

665
00:33:53,080 --> 00:33:54,720
Speaker 2: And are the founders still involved?

666
00:33:54,880 --> 00:33:59,320
Speaker 3: No, no, no, they they did their thing and you know,

667
00:33:59,400 --> 00:34:02,880
Speaker 3: startups a great you know, Wheel in Motion, and now

668
00:34:02,880 --> 00:34:04,720
Speaker 3: are enjoying the fruits of that labor.

669
00:34:04,720 --> 00:34:07,560
Speaker 1: All right, Well, that's fantastic. And so you know, is

670
00:34:07,600 --> 00:34:10,640
Speaker 1: there anything else facing the freight transportation logistics industry that's

671
00:34:10,640 --> 00:34:12,440
Speaker 1: on your radar that maybe we did talk about?

672
00:34:12,760 --> 00:34:15,880
Speaker 3: You know, I think there's a we talked about, you know,

673
00:34:15,960 --> 00:34:19,600
Speaker 3: running a business with cost of capital changing, you know, frankly,

674
00:34:19,640 --> 00:34:22,640
Speaker 3: I I don't want to see trades inter trates go

675
00:34:22,719 --> 00:34:25,480
Speaker 3: back to zero because I think it's a healthier economy

676
00:34:25,520 --> 00:34:28,960
Speaker 3: if you if you have you know, running a you know,

677
00:34:29,080 --> 00:34:32,000
Speaker 3: three to five percent kind of marketplace. I think that

678
00:34:32,120 --> 00:34:35,080
Speaker 3: makes businesses have to be a little more frugal and

679
00:34:35,120 --> 00:34:38,960
Speaker 3: a more and more responsible. But the things I think

680
00:34:39,000 --> 00:34:41,080
Speaker 3: that are that are coming into the industry, I think

681
00:34:41,160 --> 00:34:46,760
Speaker 3: insurance is a big is a big deal, especially for carriers.

682
00:34:46,800 --> 00:34:49,560
Speaker 3: The cost of insurance, the cost of you know, having

683
00:34:49,600 --> 00:34:53,640
Speaker 3: to having to you know, protect yourself against frivolous legal

684
00:34:54,200 --> 00:34:57,600
Speaker 3: fair or legal activity. You know, not that people shouldn't

685
00:34:57,640 --> 00:35:00,239
Speaker 3: get protected, but the cost of that, and and the

686
00:35:00,239 --> 00:35:02,960
Speaker 3: way that that industry is moving, I think is a

687
00:35:03,000 --> 00:35:09,680
Speaker 3: real headwind for the industry. Electrification is not as viable

688
00:35:09,840 --> 00:35:12,200
Speaker 3: in my opinion as I think everyone wants it to be.

689
00:35:12,360 --> 00:35:14,280
Speaker 3: Just the cost of energy, the cost of the equipment,

690
00:35:14,280 --> 00:35:17,800
Speaker 3: the cost of changing equipment, the cost of materials, and

691
00:35:17,880 --> 00:35:20,879
Speaker 3: then you got to manage labor. You know, we didn't

692
00:35:20,920 --> 00:35:22,839
Speaker 3: talk a lot about labor and the trucking business, but

693
00:35:23,840 --> 00:35:28,960
Speaker 3: you know, all of your costs can't accelerate at a

694
00:35:29,040 --> 00:35:31,600
Speaker 3: level that's passed where rates are, and I think that

695
00:35:31,680 --> 00:35:35,040
Speaker 3: this whole settling situation is going to have an impact

696
00:35:35,040 --> 00:35:37,920
Speaker 3: in the marketplace. And what do you do when the

697
00:35:37,920 --> 00:35:40,200
Speaker 3: impact happens. I don't think that rates can just immediately

698
00:35:40,200 --> 00:35:43,160
Speaker 3: go back up twenty or thirty percent and be sustainable

699
00:35:43,239 --> 00:35:48,600
Speaker 3: from an inflationary perspective for the consumer. So somewhere, rates, insurance,

700
00:35:48,640 --> 00:35:51,200
Speaker 3: and equipment have to find a way to fall in

701
00:35:51,280 --> 00:35:54,400
Speaker 3: line to where the money mechanics make sense for the

702
00:35:54,400 --> 00:35:58,839
Speaker 3: people who are producing goods to keep general industry or

703
00:35:58,960 --> 00:36:01,320
Speaker 3: economic inflation from going out of control.

704
00:36:02,560 --> 00:36:05,520
Speaker 1: And you know just a little bit about you, I guess, So,

705
00:36:05,760 --> 00:36:08,960
Speaker 1: so how did you get into the transportation industry?

706
00:36:09,560 --> 00:36:12,960
Speaker 3: Well, I mean I played baseball in college. I had

707
00:36:13,239 --> 00:36:17,399
Speaker 3: I had no plan for college, and when baseball didn't

708
00:36:17,400 --> 00:36:18,920
Speaker 3: work out, I got a I got a random call

709
00:36:19,000 --> 00:36:22,640
Speaker 3: from a recruiter at c. H. Robinson basically saying, how'd

710
00:36:22,640 --> 00:36:24,439
Speaker 3: you to make eighteen to five and have a company car?

711
00:36:24,600 --> 00:36:25,320
Speaker 2: Yeah? Sold?

712
00:36:26,040 --> 00:36:27,680
Speaker 3: I didn't know what they did. I had no idea.

713
00:36:28,360 --> 00:36:31,840
Speaker 3: I'm very fortunate, lucky to have found that organization and

714
00:36:32,080 --> 00:36:33,680
Speaker 3: being able to live in that space for as long

715
00:36:33,680 --> 00:36:36,000
Speaker 3: as I did. And you know who knew at that

716
00:36:36,080 --> 00:36:37,600
Speaker 3: point it was going to be a thirty one years

717
00:36:37,640 --> 00:36:38,720
Speaker 3: later and we'd be sitting here today.

718
00:36:38,880 --> 00:36:39,080
Speaker 2: Yeah.

719
00:36:39,200 --> 00:36:41,319
Speaker 1: I find either you're born into it or you fall

720
00:36:41,360 --> 00:36:46,120
Speaker 1: into it one of the others. What's your what's your

721
00:36:46,160 --> 00:36:49,600
Speaker 1: favorite thing about, you know, running a large transportation company

722
00:36:50,080 --> 00:36:50,520
Speaker 1: the people.

723
00:36:50,719 --> 00:36:53,480
Speaker 3: Yeah, and I think, you know, we get we're so

724
00:36:53,640 --> 00:36:55,640
Speaker 3: lucky as an industry to come in contact with so

725
00:36:55,680 --> 00:36:59,960
Speaker 3: many different types of industries, types of people. But specifically

726
00:37:00,080 --> 00:37:04,160
Speaker 3: for me, I get so much you know, joy out

727
00:37:04,440 --> 00:37:06,440
Speaker 3: out of being a part of what is happening at

728
00:37:06,440 --> 00:37:10,680
Speaker 3: its and seeing people grow and develop, seeing us in

729
00:37:10,760 --> 00:37:15,240
Speaker 3: power futures and seeing all the promotions and people getting

730
00:37:15,239 --> 00:37:18,839
Speaker 3: more responsibility, and our customers having confidence in them and

731
00:37:18,880 --> 00:37:22,239
Speaker 3: growing teams. That stuff, to me, I just think never

732
00:37:22,239 --> 00:37:24,680
Speaker 3: gets old. And it's so fun to be part of that.

733
00:37:25,080 --> 00:37:25,440
Speaker 2: Gotcha.

734
00:37:25,480 --> 00:37:27,840
Speaker 1: And I always like to ask this of guests, and

735
00:37:27,840 --> 00:37:29,799
Speaker 1: I think it's fantastic because this is we're doing this

736
00:37:29,880 --> 00:37:30,600
Speaker 1: live and studio.

737
00:37:30,680 --> 00:37:32,040
Speaker 2: Not all of them are live in studios.

738
00:37:32,040 --> 00:37:36,359
Speaker 1: So thanks for coming in today. Do you have like

739
00:37:36,480 --> 00:37:40,080
Speaker 1: a favorite book about the freight markets or leadership that

740
00:37:40,160 --> 00:37:42,560
Speaker 1: you kind of maybe it's not quite your Bible, but

741
00:37:42,920 --> 00:37:45,799
Speaker 1: it's something that you know really made an impression on you.

742
00:37:45,840 --> 00:37:48,880
Speaker 3: Probably the business book that made the biggest impact on

743
00:37:48,960 --> 00:37:51,200
Speaker 3: me was a book called The Five Dysfunctions of a

744
00:37:51,239 --> 00:37:56,520
Speaker 3: Team by Patrick LENCIONI and I probably read it. It's

745
00:37:56,520 --> 00:38:00,279
Speaker 3: got to be twenty years ago, but the dynamics of

746
00:38:00,040 --> 00:38:03,799
Speaker 3: of being part of a team and building trust and

747
00:38:03,960 --> 00:38:05,880
Speaker 3: you know, the simple way that that book is written.

748
00:38:05,920 --> 00:38:07,799
Speaker 3: All of his books are written that way. You know

749
00:38:07,840 --> 00:38:10,759
Speaker 3: that that book is phenomenal. And then we have a

750
00:38:10,800 --> 00:38:13,080
Speaker 3: couple at its that we use a lot of ones,

751
00:38:13,400 --> 00:38:18,880
Speaker 3: Extreme Ownership by jock O Willock. He's a seal and

752
00:38:18,920 --> 00:38:22,680
Speaker 3: it was really amazing. It's an amazing book. And then

753
00:38:23,000 --> 00:38:26,439
Speaker 3: I'm a sucker for all the ones that are talking

754
00:38:26,440 --> 00:38:29,040
Speaker 3: about culture and energy and yeah, you know we use

755
00:38:29,040 --> 00:38:31,080
Speaker 3: one called the energy bus in our in our business

756
00:38:31,080 --> 00:38:33,560
Speaker 3: a lot. But you know, but for me, the most

757
00:38:33,640 --> 00:38:35,879
Speaker 3: formidable book I read was The fidess Functions of a Team.

758
00:38:36,160 --> 00:38:38,719
Speaker 1: Gotcha, Well, that's that's great. And do you do you

759
00:38:38,719 --> 00:38:40,600
Speaker 1: get to do anything fun outside of work? Are you

760
00:38:40,680 --> 00:38:41,680
Speaker 1: just working all the time?

761
00:38:42,040 --> 00:38:44,200
Speaker 3: No? I mean, I you know, we we try to

762
00:38:44,800 --> 00:38:47,280
Speaker 3: have one of these we talked about in our businesses.

763
00:38:47,719 --> 00:38:50,120
Speaker 3: I mean, you're the custodian of your batteries, So you

764
00:38:50,560 --> 00:38:53,200
Speaker 3: can't just work twenty four to seven, although this is

765
00:38:53,200 --> 00:38:56,040
Speaker 3: a business that demands your attention twenty four to seven.

766
00:38:56,120 --> 00:38:58,120
Speaker 3: So I like to get out and play a little golf.

767
00:38:58,400 --> 00:38:59,759
Speaker 3: My wife and I do a lot of hiking. Our

768
00:38:59,800 --> 00:39:03,239
Speaker 3: kids older, so so we have an opportunity to do

769
00:39:03,280 --> 00:39:06,319
Speaker 3: that and hopefully we can do it for a lot

770
00:39:06,360 --> 00:39:07,480
Speaker 3: of years to come right.

771
00:39:07,560 --> 00:39:08,520
Speaker 2: And what's your handicap.

772
00:39:09,680 --> 00:39:10,760
Speaker 3: It's in the single digits.

773
00:39:10,840 --> 00:39:12,680
Speaker 2: Oh, there you go. I guess you get to play

774
00:39:12,680 --> 00:39:14,000
Speaker 2: a lot of golf. Where you live right now in

775
00:39:14,040 --> 00:39:14,840
Speaker 2: Reno area.

776
00:39:14,760 --> 00:39:16,799
Speaker 3: We have it's it's Renal is an amazing place to live.

777
00:39:17,040 --> 00:39:18,799
Speaker 3: And you get two hundred and eighty days a year

778
00:39:18,800 --> 00:39:21,160
Speaker 3: of sunshine. You got awesome height. It's one of the

779
00:39:21,200 --> 00:39:24,400
Speaker 3: reasons that we my wife and I chose its we

780
00:39:24,400 --> 00:39:26,680
Speaker 3: were going through our process was, yeah, we wanted a

781
00:39:26,680 --> 00:39:29,880
Speaker 3: location that we didn't want to live in a giant metropolis. Again,

782
00:39:30,600 --> 00:39:32,239
Speaker 3: we wanted to be able to get We wanted to

783
00:39:32,280 --> 00:39:34,720
Speaker 3: go in fifteen minutes, and we wanted a place ahead

784
00:39:34,719 --> 00:39:36,720
Speaker 3: of a lot of sunshine. We could hike a lot.

785
00:39:37,000 --> 00:39:38,920
Speaker 3: We like the dry so it's it's you know, it's

786
00:39:38,920 --> 00:39:42,120
Speaker 3: a mountain climate. But yeah, lots of options to be

787
00:39:42,239 --> 00:39:44,239
Speaker 3: outside year round and reno and we love that.

788
00:39:44,560 --> 00:39:45,040
Speaker 2: Awesome.

789
00:39:45,840 --> 00:39:50,279
Speaker 1: I am a multiple of your handicap. Anyway, I really

790
00:39:50,280 --> 00:39:52,799
Speaker 1: want to thank you for coming in today, Scott. I

791
00:39:52,840 --> 00:39:54,400
Speaker 1: really appreciate your time and your insights.

792
00:39:54,400 --> 00:39:56,520
Speaker 3: It was great, awesome. Thanks for having me. We appreciate it.

793
00:39:56,560 --> 00:39:58,200
Speaker 1: But I also want to thank you for tuning in.

794
00:39:58,280 --> 00:40:01,040
Speaker 1: If you liked the episode, please subscribe and leave a review.

795
00:40:01,440 --> 00:40:04,000
Speaker 1: We've lined up a number of great guests for the podcast,

796
00:40:04,360 --> 00:40:08,719
Speaker 1: so check back to her conversations with C suite executives, shippers, regulators,

797
00:40:08,719 --> 00:40:11,759
Speaker 1: and decision makers within the freight markets. Also, if you

798
00:40:11,800 --> 00:40:14,879
Speaker 1: want to learn more about the freight transportation markets, check

799
00:40:14,920 --> 00:40:17,480
Speaker 1: out our work on the Bloomberg Terminal at Big and

800
00:40:17,600 --> 00:40:20,680
Speaker 1: on social media. Take care and let's keep those supply

801
00:40:20,760 --> 00:40:29,920
Speaker 1: chains rolling. Take everyone, bye bye,