1
00:00:02,440 --> 00:00:06,760
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

2
00:00:08,119 --> 00:00:13,000
Speaker 2: This is Bloomberg BusinessWeek inside from the reporters and editors

3
00:00:13,039 --> 00:00:17,280
Speaker 2: who bring you America's most trusted business magazine, plus global business,

4
00:00:17,320 --> 00:00:21,000
Speaker 2: finance and tech news as it happens. Bloomberg Business Week

5
00:00:21,239 --> 00:00:25,440
Speaker 2: with Carol Messer and Tim Stenebek on Bloomberg Radio.

6
00:00:26,360 --> 00:00:29,440
Speaker 3: Well, we just talked about JB Hunt. Shares are lower

7
00:00:29,480 --> 00:00:32,159
Speaker 3: in the after hours by about three point four percent.

8
00:00:32,720 --> 00:00:38,199
Speaker 3: The company did report estimates for intermodal revenue, dedicated revenue,

9
00:00:38,200 --> 00:00:41,840
Speaker 3: operating revenue. Should note that all came in below estimates.

10
00:00:41,880 --> 00:00:46,000
Speaker 3: First quarter earnings per share also falling below estimates. We

11
00:00:46,080 --> 00:00:50,199
Speaker 3: do love talking about trucking and we love talking about logistics,

12
00:00:50,240 --> 00:00:52,920
Speaker 3: Carol absolutely. I mentioned that yesterday when we talked about

13
00:00:53,240 --> 00:00:56,440
Speaker 3: to Greg Hewitt over at DHLLL Express, the US step

14
00:00:56,480 --> 00:00:59,600
Speaker 3: around exactly. We actually couldn't get enough yesterday, So back

15
00:00:59,640 --> 00:01:02,600
Speaker 3: with us. Melissa Foreman, President at Triumph Pay. It's a

16
00:01:02,640 --> 00:01:06,000
Speaker 3: payment platform that connects broker, shippers and carriers, a division

17
00:01:06,000 --> 00:01:09,400
Speaker 3: of TBK Bank and part of the publicly traded Triumph Financial,

18
00:01:09,640 --> 00:01:12,839
Speaker 3: which has about one point eight billion dollars market cap.

19
00:01:13,120 --> 00:01:16,080
Speaker 3: Most of joining us this afternoon from Dallas, Melissa, good

20
00:01:16,080 --> 00:01:17,920
Speaker 3: to have you back with us. I do want to

21
00:01:17,959 --> 00:01:20,480
Speaker 3: get to the news that you guys have in just

22
00:01:20,520 --> 00:01:23,000
Speaker 3: a moment. But first, given what we just heard from

23
00:01:23,040 --> 00:01:25,800
Speaker 3: from JB. Hunt, give us an update on your business.

24
00:01:25,880 --> 00:01:28,200
Speaker 3: What are you seeing in terms of what trucks are

25
00:01:28,200 --> 00:01:29,080
Speaker 3: going where right now?

26
00:01:30,200 --> 00:01:32,440
Speaker 4: Yeah, I thank you one, thank you for having us back.

27
00:01:32,440 --> 00:01:36,480
Speaker 4: We're always happy to be here. But we're hearing and

28
00:01:36,480 --> 00:01:39,160
Speaker 4: seeing the same things that everybody else has. It is

29
00:01:39,319 --> 00:01:43,360
Speaker 4: a rough freight marketplace right now, and the recession is real,

30
00:01:44,360 --> 00:01:46,640
Speaker 4: and it's just you know, when you look at Q one,

31
00:01:46,880 --> 00:01:49,080
Speaker 4: it was one of the softest ones we've seen, you know,

32
00:01:49,160 --> 00:01:52,320
Speaker 4: some of the normal seasonality feels like it had come

33
00:01:52,360 --> 00:01:54,760
Speaker 4: back and then dropped away again. So you know, it's

34
00:01:54,920 --> 00:01:57,600
Speaker 4: really hard to predict and project what's happening. It just

35
00:01:58,080 --> 00:02:00,800
Speaker 4: knowing that this recession has been lingering for as long

36
00:02:00,840 --> 00:02:03,040
Speaker 4: as it has. I think we're in what month, twenty four,

37
00:02:03,240 --> 00:02:06,000
Speaker 4: twenty five of it. It's just rough on everybody.

38
00:02:06,520 --> 00:02:08,600
Speaker 3: When you say recession, are you talking about a trucking

39
00:02:08,639 --> 00:02:11,639
Speaker 3: recession or economy wide recession?

40
00:02:12,040 --> 00:02:13,160
Speaker 1: Yeah, freight recession.

41
00:02:13,280 --> 00:02:14,000
Speaker 3: Freight recession.

42
00:02:14,040 --> 00:02:15,760
Speaker 5: Okay, what does that mean? Is there just too much

43
00:02:15,760 --> 00:02:17,360
Speaker 5: competition out there. I mean, that was some of the

44
00:02:17,360 --> 00:02:19,560
Speaker 5: concerns going into the JB Hunt numbers.

45
00:02:20,560 --> 00:02:23,240
Speaker 4: Yeah, I think that what is happening right now is

46
00:02:23,280 --> 00:02:26,440
Speaker 4: you just have a gluttony of capacity in the marketplace.

47
00:02:26,919 --> 00:02:30,400
Speaker 4: And so with all that capacity, these carriers trying to

48
00:02:30,440 --> 00:02:33,040
Speaker 4: hold on and survive till twenty five, I think is

49
00:02:33,080 --> 00:02:36,240
Speaker 4: the mantra it. You know, they're just there's too much

50
00:02:36,240 --> 00:02:39,840
Speaker 4: capacity in order to make the rates competitive and profitable

51
00:02:39,840 --> 00:02:43,440
Speaker 4: for them to operate. So that's depressing the average invoice price,

52
00:02:43,480 --> 00:02:45,800
Speaker 4: which makes it rough on everybody in the industry.

53
00:02:45,960 --> 00:02:48,000
Speaker 5: Is that just left over from the pandemic? Is that

54
00:02:48,040 --> 00:02:48,760
Speaker 5: what this is about?

55
00:02:48,800 --> 00:02:49,000
Speaker 1: Or what?

56
00:02:50,760 --> 00:02:53,560
Speaker 4: It's really hard to tell, you know, certainly, at the

57
00:02:53,720 --> 00:02:56,320
Speaker 4: peak of the pandemic, we had, you know, some of

58
00:02:56,360 --> 00:02:59,880
Speaker 4: the best times in transportation, and then there was the

59
00:03:00,200 --> 00:03:03,120
Speaker 4: this leveling or reset of what is the new norm?

60
00:03:03,160 --> 00:03:04,840
Speaker 4: And I just I don't think we'd figured out what

61
00:03:04,880 --> 00:03:05,520
Speaker 4: that is yet.

62
00:03:06,600 --> 00:03:08,160
Speaker 3: Okay, So I was just gonna ask the same thing

63
00:03:08,200 --> 00:03:10,360
Speaker 3: that Carol just asked, which is, you know, is it

64
00:03:10,400 --> 00:03:13,600
Speaker 3: just that we bought everything we needed during the pandemic?

65
00:03:13,639 --> 00:03:16,040
Speaker 3: We don't need any more touches? Yeah, but it's hard

66
00:03:16,040 --> 00:03:17,360
Speaker 3: to see that two years.

67
00:03:17,080 --> 00:03:19,400
Speaker 5: Out from rails or even years.

68
00:03:21,200 --> 00:03:24,160
Speaker 3: Or is it or or has our has our spending

69
00:03:24,200 --> 00:03:25,280
Speaker 3: shifted to services?

70
00:03:26,480 --> 00:03:27,800
Speaker 1: I think it's a little bit of both.

71
00:03:28,000 --> 00:03:30,520
Speaker 4: You know, we all certainly spent a lot of a

72
00:03:30,560 --> 00:03:33,760
Speaker 4: lot of money on products during the pandemic because services

73
00:03:33,760 --> 00:03:36,760
Speaker 4: weren't an option, and there was also, you know, some

74
00:03:36,840 --> 00:03:41,120
Speaker 4: misbalances in inventories. And what I think we're hearing in

75
00:03:41,160 --> 00:03:44,640
Speaker 4: the market more recently is some of the inventory restocking

76
00:03:44,720 --> 00:03:45,720
Speaker 4: is starting to happen.

77
00:03:45,760 --> 00:03:46,840
Speaker 1: So that is a good sign.

78
00:03:47,800 --> 00:03:51,120
Speaker 4: But certainly services I think have taken a higher priority,

79
00:03:51,240 --> 00:03:53,160
Speaker 4: just you know, as people have kind of gotten back

80
00:03:53,160 --> 00:03:55,760
Speaker 4: out into the world. You were talking about business travel

81
00:03:56,040 --> 00:04:00,520
Speaker 4: as an example earlier in your segment on how that's

82
00:04:00,600 --> 00:04:02,720
Speaker 4: up right, So travel, I think across.

83
00:04:02,440 --> 00:04:04,200
Speaker 1: The board seems to be up. I know the planes

84
00:04:04,240 --> 00:04:05,080
Speaker 1: are full when I'm on.

85
00:04:05,080 --> 00:04:08,720
Speaker 4: Them, and so the services and experiences I think are

86
00:04:08,760 --> 00:04:10,360
Speaker 4: still taking a higher precedent.

87
00:04:10,440 --> 00:04:13,800
Speaker 5: Well, so, what can you tell us about route differentials

88
00:04:14,080 --> 00:04:16,080
Speaker 5: in the trucking industry, because I do wonder if there

89
00:04:16,080 --> 00:04:18,919
Speaker 5: are certain routes where they are getting the rates and

90
00:04:19,000 --> 00:04:22,440
Speaker 5: certain where they're not. What can you tell us about that?

91
00:04:23,400 --> 00:04:25,640
Speaker 4: Yeah, I would say I'm not an expert on specific

92
00:04:25,720 --> 00:04:29,279
Speaker 4: lanes or commodities, but I do know where carriers have

93
00:04:29,480 --> 00:04:33,200
Speaker 4: the buying power and the density, they're able to still

94
00:04:33,440 --> 00:04:37,880
Speaker 4: negotiate the longer term contracts, and so you know, that's

95
00:04:38,040 --> 00:04:41,880
Speaker 4: certainly a place to focus and where you can garner

96
00:04:42,279 --> 00:04:45,800
Speaker 4: the rates that make sense for you to be profitable.

97
00:04:47,240 --> 00:04:48,960
Speaker 3: So I want to talk a little bit cross border

98
00:04:49,040 --> 00:04:51,000
Speaker 3: because you guys have some news when it comes to

99
00:04:51,240 --> 00:04:53,719
Speaker 3: what's going on in Mexico. And what's so interesting is

100
00:04:53,720 --> 00:04:55,440
Speaker 3: is Carol, we've talked about this quite a bit over

101
00:04:55,440 --> 00:04:59,440
Speaker 3: the last few months. From the idea interesting exactly. You know,

102
00:04:59,440 --> 00:05:02,160
Speaker 3: I don't necessar suspect. I think we can't. To a

103
00:05:02,200 --> 00:05:04,080
Speaker 3: certain extent, we can call it near shoring. To a

104
00:05:04,080 --> 00:05:07,040
Speaker 3: certain extent, we can call it, you know, a return

105
00:05:07,080 --> 00:05:09,400
Speaker 3: to what happened during the nineties in the United States

106
00:05:09,440 --> 00:05:12,239
Speaker 3: before we saw a lot of manufacturing move to China

107
00:05:12,240 --> 00:05:14,720
Speaker 3: and other parts of the just when NAFTA was a

108
00:05:15,080 --> 00:05:18,840
Speaker 3: one exactly. And I want so so Melissa, tell us

109
00:05:18,839 --> 00:05:21,040
Speaker 3: exactly what's going on when it comes to what's happening

110
00:05:21,080 --> 00:05:22,159
Speaker 3: with cross border right now.

111
00:05:23,160 --> 00:05:25,440
Speaker 4: Yeah, I think, as as you mentioned, like, we're seeing

112
00:05:25,480 --> 00:05:28,760
Speaker 4: a lot more manufacturing go back to Mexico and as

113
00:05:28,800 --> 00:05:30,839
Speaker 4: you said, it was there back in the times of NAFTA.

114
00:05:30,880 --> 00:05:34,640
Speaker 4: I remember that very well and all of the business

115
00:05:34,680 --> 00:05:37,279
Speaker 4: that was going across the border, and we're there again,

116
00:05:37,320 --> 00:05:39,560
Speaker 4: and there's so much opportunity to be able to help

117
00:05:39,560 --> 00:05:44,479
Speaker 4: support transportation specifically in that space. We have you know,

118
00:05:44,560 --> 00:05:47,120
Speaker 4: carriers at our clients and brokers at our clients that

119
00:05:47,160 --> 00:05:49,039
Speaker 4: are have set up shop on both sides of the

120
00:05:49,040 --> 00:05:53,680
Speaker 4: border and just trying to take advantage and leverage the

121
00:05:53,760 --> 00:05:57,240
Speaker 4: efficiencies that that that brings them and the you know

122
00:05:57,320 --> 00:06:01,880
Speaker 4: efficiency gains and costs and in time, yeah, go ahead.

123
00:06:02,240 --> 00:06:03,560
Speaker 1: I would say to do that, though you have.

124
00:06:03,560 --> 00:06:07,040
Speaker 4: To also be able to make payments to those carriers

125
00:06:07,160 --> 00:06:10,839
Speaker 4: in preferably the currency that they prefer, and it's really

126
00:06:10,880 --> 00:06:11,480
Speaker 4: hard right now.

127
00:06:11,480 --> 00:06:13,839
Speaker 1: There's not a lot of density and being able to do.

128
00:06:15,000 --> 00:06:18,800
Speaker 4: Mexican payso payments too small carriers in the space, and

129
00:06:18,880 --> 00:06:22,640
Speaker 4: so we saw this as an opportunity to one support

130
00:06:22,760 --> 00:06:24,719
Speaker 4: and kind of get ahead of where the growth is

131
00:06:24,800 --> 00:06:29,440
Speaker 4: going for cross border operations, but also to meet our

132
00:06:29,440 --> 00:06:31,599
Speaker 4: customers where they need us to, and that's to be

133
00:06:31,600 --> 00:06:34,760
Speaker 4: able to pay their carriers in the currencies they prefer

134
00:06:35,320 --> 00:06:38,600
Speaker 4: with the dollar softening a little as compared to paesos,

135
00:06:39,040 --> 00:06:42,200
Speaker 4: more and more carriers have been asking our clients to

136
00:06:42,240 --> 00:06:45,040
Speaker 4: be paid in Mexican payso and they didn't have the

137
00:06:45,080 --> 00:06:48,160
Speaker 4: opportunity to do that before. So it was causing some

138
00:06:48,160 --> 00:06:50,600
Speaker 4: capacity issues for them and carry relationship issues.

139
00:06:50,839 --> 00:06:52,279
Speaker 1: So we wanted to bring that to market.

140
00:06:52,400 --> 00:06:54,080
Speaker 3: Carol, you might remember the big take that we did

141
00:06:54,120 --> 00:07:00,400
Speaker 3: back in September all about how Mexico has passed to

142
00:07:00,400 --> 00:07:04,360
Speaker 3: become the US the largest US trading partner. Happened back

143
00:07:04,360 --> 00:07:07,560
Speaker 3: in twenty twenty three. Pretty well, Well, Teresa, is the

144
00:07:07,640 --> 00:07:09,680
Speaker 3: question most of why, why is this something that you

145
00:07:09,720 --> 00:07:11,560
Speaker 3: were only able to do just now? You know, if

146
00:07:11,840 --> 00:07:14,200
Speaker 3: there has been so much going to Mexico, why were

147
00:07:14,240 --> 00:07:15,640
Speaker 3: you able to do this years ago?

148
00:07:16,920 --> 00:07:19,760
Speaker 4: Yeah, It's it's complex, and we've been building out our

149
00:07:19,800 --> 00:07:22,840
Speaker 4: payments network for the last several years and expanding into

150
00:07:22,920 --> 00:07:25,560
Speaker 4: multiple currencies. You know, we started with you know, the

151
00:07:25,680 --> 00:07:29,720
Speaker 4: US dollar, moved into Canadian dollars as our clients asked

152
00:07:29,720 --> 00:07:30,040
Speaker 4: for that.

153
00:07:30,480 --> 00:07:32,520
Speaker 1: Now we're getting asked for Mexican pesos.

154
00:07:33,200 --> 00:07:37,000
Speaker 4: But the regulatory and compliance components of what goes into

155
00:07:37,040 --> 00:07:41,200
Speaker 4: that is pretty complex, and so we started this effort,

156
00:07:41,480 --> 00:07:43,400
Speaker 4: you know, at the beginning of last year, and it

157
00:07:43,520 --> 00:07:45,560
Speaker 4: just takes time to get it done and to do

158
00:07:45,600 --> 00:07:49,040
Speaker 4: it well. And so that's why we're we're launching when

159
00:07:49,040 --> 00:07:51,160
Speaker 4: we are. It's just the effort that goes into it.

160
00:07:51,400 --> 00:07:55,920
Speaker 4: We anticipate being able to move and releasing European and

161
00:07:55,960 --> 00:07:58,720
Speaker 4: Asian payments towards the later part of this year as well.

162
00:07:58,840 --> 00:08:00,800
Speaker 5: How much is this business pick depth since you guys

163
00:08:00,800 --> 00:08:01,760
Speaker 5: have started.

164
00:08:02,760 --> 00:08:05,440
Speaker 4: You know, we are not executing payments yet, okay, So

165
00:08:05,920 --> 00:08:08,720
Speaker 4: we expect to have the ability to support that for

166
00:08:08,760 --> 00:08:11,000
Speaker 4: our customers by the end of Q two, so the

167
00:08:11,080 --> 00:08:13,600
Speaker 4: end of this quarter, and then work with them and

168
00:08:13,640 --> 00:08:17,440
Speaker 4: their integrations with their TMSs and accounting systems to turn

169
00:08:17,480 --> 00:08:20,480
Speaker 4: it live. So we haven't but when we're talking to

170
00:08:20,520 --> 00:08:24,640
Speaker 4: our clients, what we're hearing from them is about on average,

171
00:08:24,680 --> 00:08:27,680
Speaker 4: five percent of their business is now being done in

172
00:08:27,720 --> 00:08:30,960
Speaker 4: Mexico and they're having to turn business away because they

173
00:08:31,000 --> 00:08:34,680
Speaker 4: don't have a good payment option. And so our hope

174
00:08:34,720 --> 00:08:37,640
Speaker 4: is that in our expectation is that as we launch

175
00:08:37,679 --> 00:08:40,920
Speaker 4: these new capabilities, it's going to give our customers the

176
00:08:40,960 --> 00:08:42,320
Speaker 4: competitive advantage.

177
00:08:41,920 --> 00:08:43,760
Speaker 1: To be able to move into those markets more deeply.

178
00:08:43,840 --> 00:08:46,240
Speaker 5: Are these truckers, these drivers making the same kind of

179
00:08:46,240 --> 00:08:48,040
Speaker 5: money that other drivers are making.

180
00:08:50,240 --> 00:08:52,280
Speaker 1: I don't have an answer to that. I'm just curious.

181
00:08:52,320 --> 00:08:55,079
Speaker 1: I'm curious. If you don't, yeah, sorry, I'm not.

182
00:08:55,360 --> 00:08:57,160
Speaker 5: We love picking your brain because you do know so

183
00:08:57,240 --> 00:08:58,760
Speaker 5: much about this industry.

184
00:08:58,480 --> 00:09:02,319
Speaker 1: So forgive me. I know what I've thought about that averages. Well,

185
00:09:02,360 --> 00:09:02,600
Speaker 1: what's the.

186
00:09:02,600 --> 00:09:04,760
Speaker 5: Platform goes up? Like, you're probably gonna have a lot

187
00:09:04,800 --> 00:09:07,240
Speaker 5: more information, but it is fascinating because I am curious

188
00:09:07,280 --> 00:09:10,480
Speaker 5: about the level of activity and the dynamics of that

189
00:09:10,559 --> 00:09:14,600
Speaker 5: market in particular, so really interesting stuff. Promise you'll come

190
00:09:14,640 --> 00:09:16,960
Speaker 5: back once the platforms up and running and we can

191
00:09:17,080 --> 00:09:18,920
Speaker 5: kind of dig a little bit more into what you

192
00:09:18,920 --> 00:09:22,360
Speaker 5: guys are seeing. Always appreciate it. Such a timely interview.

193
00:09:22,600 --> 00:09:25,120
Speaker 5: We're telling our producer, this is the perfect interview to

194
00:09:25,200 --> 00:09:27,400
Speaker 5: have after we were talking about JB. Hunt, just to

195
00:09:27,440 --> 00:09:29,600
Speaker 5: get your perspective on what you see as great.

196
00:09:29,760 --> 00:09:32,160
Speaker 3: Also, I just want to say shout out to Melissa

197
00:09:32,200 --> 00:09:36,160
Speaker 3: Foreman's tech team or whoever set up this shot. You know,

198
00:09:36,400 --> 00:09:39,440
Speaker 3: Melissa herself. She's got a microphone on. It looks like

199
00:09:39,480 --> 00:09:42,720
Speaker 3: she's in a studio. It's like perfectly lit. I mean

200
00:09:43,679 --> 00:09:45,760
Speaker 3: you know, it's like we take like three or four people.

201
00:09:45,559 --> 00:09:48,199
Speaker 5: To everybody who comes on our area.

202
00:09:48,320 --> 00:09:48,520
Speaker 2: Yeah.

203
00:09:48,559 --> 00:09:54,200
Speaker 5: Please, wondering Melissa Foreman be Well, Tuxian president of Triumphey

204
00:09:54,520 --> 00:09:55,120
Speaker 5: in Dallas