WEBVTT - TriumphPay Expands Payments to Include Mexican Pesos

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>This is Bloomberg BusinessWeek inside from the reporters and editors

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<v Speaker 2>who bring you America's most trusted business magazine, plus global business,

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<v Speaker 2>finance and tech news as it happens. Bloomberg Business Week

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<v Speaker 2>with Carol Messer and Tim Stenebek on Bloomberg Radio.

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<v Speaker 3>Well, we just talked about JB Hunt. Shares are lower

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<v Speaker 3>in the after hours by about three point four percent.

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<v Speaker 3>The company did report estimates for intermodal revenue, dedicated revenue,

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<v Speaker 3>operating revenue. Should note that all came in below estimates.

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<v Speaker 3>First quarter earnings per share also falling below estimates. We

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<v Speaker 3>do love talking about trucking and we love talking about logistics,

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<v Speaker 3>Carol absolutely. I mentioned that yesterday when we talked about

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<v Speaker 3>to Greg Hewitt over at DHLLL Express, the US step

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<v Speaker 3>around exactly. We actually couldn't get enough yesterday, So back

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<v Speaker 3>with us. Melissa Foreman, President at Triumph Pay. It's a

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<v Speaker 3>payment platform that connects broker, shippers and carriers, a division

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<v Speaker 3>of TBK Bank and part of the publicly traded Triumph Financial,

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<v Speaker 3>which has about one point eight billion dollars market cap.

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<v Speaker 3>Most of joining us this afternoon from Dallas, Melissa, good

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<v Speaker 3>to have you back with us. I do want to

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<v Speaker 3>get to the news that you guys have in just

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<v Speaker 3>a moment. But first, given what we just heard from

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<v Speaker 3>from JB. Hunt, give us an update on your business.

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<v Speaker 3>What are you seeing in terms of what trucks are

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<v Speaker 3>going where right now?

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<v Speaker 4>Yeah, I thank you one, thank you for having us back.

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<v Speaker 4>We're always happy to be here. But we're hearing and

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<v Speaker 4>seeing the same things that everybody else has. It is

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<v Speaker 4>a rough freight marketplace right now, and the recession is real,

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<v Speaker 4>and it's just you know, when you look at Q one,

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<v Speaker 4>it was one of the softest ones we've seen, you know,

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<v Speaker 4>some of the normal seasonality feels like it had come

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<v Speaker 4>back and then dropped away again. So you know, it's

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<v Speaker 4>really hard to predict and project what's happening. It just

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<v Speaker 4>knowing that this recession has been lingering for as long

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<v Speaker 4>as it has. I think we're in what month, twenty four,

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<v Speaker 4>twenty five of it. It's just rough on everybody.

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<v Speaker 3>When you say recession, are you talking about a trucking

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<v Speaker 3>recession or economy wide recession?

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<v Speaker 1>Yeah, freight recession.

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<v Speaker 3>Freight recession.

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<v Speaker 5>Okay, what does that mean? Is there just too much

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<v Speaker 5>competition out there. I mean, that was some of the

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<v Speaker 5>concerns going into the JB Hunt numbers.

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<v Speaker 4>Yeah, I think that what is happening right now is

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<v Speaker 4>you just have a gluttony of capacity in the marketplace.

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<v Speaker 4>And so with all that capacity, these carriers trying to

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<v Speaker 4>hold on and survive till twenty five, I think is

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<v Speaker 4>the mantra it. You know, they're just there's too much

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<v Speaker 4>capacity in order to make the rates competitive and profitable

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<v Speaker 4>for them to operate. So that's depressing the average invoice price,

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<v Speaker 4>which makes it rough on everybody in the industry.

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<v Speaker 5>Is that just left over from the pandemic? Is that

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<v Speaker 5>what this is about?

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<v Speaker 1>Or what?

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<v Speaker 4>It's really hard to tell, you know, certainly, at the

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<v Speaker 4>peak of the pandemic, we had, you know, some of

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<v Speaker 4>the best times in transportation, and then there was the

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<v Speaker 4>this leveling or reset of what is the new norm?

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<v Speaker 4>And I just I don't think we'd figured out what

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<v Speaker 4>that is yet.

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<v Speaker 3>Okay, So I was just gonna ask the same thing

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<v Speaker 3>that Carol just asked, which is, you know, is it

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<v Speaker 3>just that we bought everything we needed during the pandemic?

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<v Speaker 3>We don't need any more touches? Yeah, but it's hard

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<v Speaker 3>to see that two years.

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<v Speaker 5>Out from rails or even years.

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<v Speaker 3>Or is it or or has our has our spending

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<v Speaker 3>shifted to services?

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<v Speaker 1>I think it's a little bit of both.

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<v Speaker 4>You know, we all certainly spent a lot of a

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<v Speaker 4>lot of money on products during the pandemic because services

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<v Speaker 4>weren't an option, and there was also, you know, some

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<v Speaker 4>misbalances in inventories. And what I think we're hearing in

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<v Speaker 4>the market more recently is some of the inventory restocking

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<v Speaker 4>is starting to happen.

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<v Speaker 1>So that is a good sign.

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<v Speaker 4>But certainly services I think have taken a higher priority,

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<v Speaker 4>just you know, as people have kind of gotten back

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<v Speaker 4>out into the world. You were talking about business travel

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<v Speaker 4>as an example earlier in your segment on how that's

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<v Speaker 4>up right, So travel, I think across.

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<v Speaker 1>The board seems to be up. I know the planes

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<v Speaker 1>are full when I'm on.

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<v Speaker 4>Them, and so the services and experiences I think are

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<v Speaker 4>still taking a higher precedent.

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<v Speaker 5>Well, so, what can you tell us about route differentials

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<v Speaker 5>in the trucking industry, because I do wonder if there

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<v Speaker 5>are certain routes where they are getting the rates and

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<v Speaker 5>certain where they're not. What can you tell us about that?

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<v Speaker 4>Yeah, I would say I'm not an expert on specific

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<v Speaker 4>lanes or commodities, but I do know where carriers have

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<v Speaker 4>the buying power and the density, they're able to still

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<v Speaker 4>negotiate the longer term contracts, and so you know, that's

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<v Speaker 4>certainly a place to focus and where you can garner

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<v Speaker 4>the rates that make sense for you to be profitable.

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<v Speaker 3>So I want to talk a little bit cross border

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<v Speaker 3>because you guys have some news when it comes to

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<v Speaker 3>what's going on in Mexico. And what's so interesting is

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<v Speaker 3>is Carol, we've talked about this quite a bit over

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<v Speaker 3>the last few months. From the idea interesting exactly. You know,

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<v Speaker 3>I don't necessar suspect. I think we can't. To a

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<v Speaker 3>certain extent, we can call it near shoring. To a

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<v Speaker 3>certain extent, we can call it, you know, a return

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<v Speaker 3>to what happened during the nineties in the United States

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<v Speaker 3>before we saw a lot of manufacturing move to China

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<v Speaker 3>and other parts of the just when NAFTA was a

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<v Speaker 3>one exactly. And I want so so Melissa, tell us

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<v Speaker 3>exactly what's going on when it comes to what's happening

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<v Speaker 3>with cross border right now.

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<v Speaker 4>Yeah, I think, as as you mentioned, like, we're seeing

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<v Speaker 4>a lot more manufacturing go back to Mexico and as

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<v Speaker 4>you said, it was there back in the times of NAFTA.

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<v Speaker 4>I remember that very well and all of the business

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<v Speaker 4>that was going across the border, and we're there again,

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<v Speaker 4>and there's so much opportunity to be able to help

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<v Speaker 4>support transportation specifically in that space. We have you know,

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<v Speaker 4>carriers at our clients and brokers at our clients that

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<v Speaker 4>are have set up shop on both sides of the

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<v Speaker 4>border and just trying to take advantage and leverage the

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<v Speaker 4>efficiencies that that that brings them and the you know

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<v Speaker 4>efficiency gains and costs and in time, yeah, go ahead.

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<v Speaker 1>I would say to do that, though you have.

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<v Speaker 4>To also be able to make payments to those carriers

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<v Speaker 4>in preferably the currency that they prefer, and it's really

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<v Speaker 4>hard right now.

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<v Speaker 1>There's not a lot of density and being able to do.

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<v Speaker 4>Mexican payso payments too small carriers in the space, and

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<v Speaker 4>so we saw this as an opportunity to one support

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<v Speaker 4>and kind of get ahead of where the growth is

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<v Speaker 4>going for cross border operations, but also to meet our

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<v Speaker 4>customers where they need us to, and that's to be

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<v Speaker 4>able to pay their carriers in the currencies they prefer

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<v Speaker 4>with the dollar softening a little as compared to paesos,

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<v Speaker 4>more and more carriers have been asking our clients to

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<v Speaker 4>be paid in Mexican payso and they didn't have the

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<v Speaker 4>opportunity to do that before. So it was causing some

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<v Speaker 4>capacity issues for them and carry relationship issues.

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<v Speaker 1>So we wanted to bring that to market.

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<v Speaker 3>Carol, you might remember the big take that we did

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<v Speaker 3>back in September all about how Mexico has passed to

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<v Speaker 3>become the US the largest US trading partner. Happened back

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<v Speaker 3>in twenty twenty three. Pretty well, Well, Teresa, is the

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<v Speaker 3>question most of why, why is this something that you

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<v Speaker 3>were only able to do just now? You know, if

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<v Speaker 3>there has been so much going to Mexico, why were

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<v Speaker 3>you able to do this years ago?

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<v Speaker 4>Yeah, It's it's complex, and we've been building out our

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<v Speaker 4>payments network for the last several years and expanding into

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<v Speaker 4>multiple currencies. You know, we started with you know, the

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<v Speaker 4>US dollar, moved into Canadian dollars as our clients asked

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<v Speaker 4>for that.

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<v Speaker 1>Now we're getting asked for Mexican pesos.

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<v Speaker 4>But the regulatory and compliance components of what goes into

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<v Speaker 4>that is pretty complex, and so we started this effort,

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<v Speaker 4>you know, at the beginning of last year, and it

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<v Speaker 4>just takes time to get it done and to do

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<v Speaker 4>it well. And so that's why we're we're launching when

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<v Speaker 4>we are. It's just the effort that goes into it.

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<v Speaker 4>We anticipate being able to move and releasing European and

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<v Speaker 4>Asian payments towards the later part of this year as well.

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<v Speaker 5>How much is this business pick depth since you guys

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<v Speaker 5>have started.

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<v Speaker 4>You know, we are not executing payments yet, okay, So

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<v Speaker 4>we expect to have the ability to support that for

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<v Speaker 4>our customers by the end of Q two, so the

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<v Speaker 4>end of this quarter, and then work with them and

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<v Speaker 4>their integrations with their TMSs and accounting systems to turn

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<v Speaker 4>it live. So we haven't but when we're talking to

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<v Speaker 4>our clients, what we're hearing from them is about on average,

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<v Speaker 4>five percent of their business is now being done in

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<v Speaker 4>Mexico and they're having to turn business away because they

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<v Speaker 4>don't have a good payment option. And so our hope

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<v Speaker 4>is that in our expectation is that as we launch

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<v Speaker 4>these new capabilities, it's going to give our customers the

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<v Speaker 4>competitive advantage.

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<v Speaker 1>To be able to move into those markets more deeply.

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<v Speaker 5>Are these truckers, these drivers making the same kind of

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<v Speaker 5>money that other drivers are making.

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<v Speaker 1>I don't have an answer to that. I'm just curious.

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<v Speaker 1>I'm curious. If you don't, yeah, sorry, I'm not.

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<v Speaker 5>We love picking your brain because you do know so

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<v Speaker 5>much about this industry.

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<v Speaker 1>So forgive me. I know what I've thought about that averages. Well,

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<v Speaker 1>what's the.

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<v Speaker 5>Platform goes up? Like, you're probably gonna have a lot

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<v Speaker 5>more information, but it is fascinating because I am curious

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<v Speaker 5>about the level of activity and the dynamics of that

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<v Speaker 5>market in particular, so really interesting stuff. Promise you'll come

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<v Speaker 5>back once the platforms up and running and we can

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<v Speaker 5>kind of dig a little bit more into what you

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<v Speaker 5>guys are seeing. Always appreciate it. Such a timely interview.

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<v Speaker 5>We're telling our producer, this is the perfect interview to

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<v Speaker 5>have after we were talking about JB. Hunt, just to

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<v Speaker 5>get your perspective on what you see as great.

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<v Speaker 3>Also, I just want to say shout out to Melissa

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<v Speaker 3>Foreman's tech team or whoever set up this shot. You know,

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<v Speaker 3>Melissa herself. She's got a microphone on. It looks like

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<v Speaker 3>she's in a studio. It's like perfectly lit. I mean

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<v Speaker 3>you know, it's like we take like three or four people.

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<v Speaker 5>To everybody who comes on our area.

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<v Speaker 2>Yeah.

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<v Speaker 5>Please, wondering Melissa Foreman be Well, Tuxian president of Triumphey

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<v Speaker 5>in Dallas