Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg BusinessWeek inside from the reporters and editors
Speaker 2: who bring you America's most trusted business magazine, plus global business,
Speaker 2: finance and tech news as it happens. Bloomberg Business Week
Speaker 2: with Carol Messer and Tim Stenebek on Bloomberg Radio.
Speaker 3: Well, we just talked about JB Hunt. Shares are lower
Speaker 3: in the after hours by about three point four percent.
Speaker 3: The company did report estimates for intermodal revenue, dedicated revenue,
Speaker 3: operating revenue. Should note that all came in below estimates.
Speaker 3: First quarter earnings per share also falling below estimates. We
Speaker 3: do love talking about trucking and we love talking about logistics,
Speaker 3: Carol absolutely. I mentioned that yesterday when we talked about
Speaker 3: to Greg Hewitt over at DHLLL Express, the US step
Speaker 3: around exactly. We actually couldn't get enough yesterday, So back
Speaker 3: with us. Melissa Foreman, President at Triumph Pay. It's a
Speaker 3: payment platform that connects broker, shippers and carriers, a division
Speaker 3: of TBK Bank and part of the publicly traded Triumph Financial,
Speaker 3: which has about one point eight billion dollars market cap.
Speaker 3: Most of joining us this afternoon from Dallas, Melissa, good
Speaker 3: to have you back with us. I do want to
Speaker 3: get to the news that you guys have in just
Speaker 3: a moment. But first, given what we just heard from
Speaker 3: from JB. Hunt, give us an update on your business.
Speaker 3: What are you seeing in terms of what trucks are
Speaker 3: going where right now?
Speaker 4: Yeah, I thank you one, thank you for having us back.
Speaker 4: We're always happy to be here. But we're hearing and
Speaker 4: seeing the same things that everybody else has. It is
Speaker 4: a rough freight marketplace right now, and the recession is real,
Speaker 4: and it's just you know, when you look at Q one,
Speaker 4: it was one of the softest ones we've seen, you know,
Speaker 4: some of the normal seasonality feels like it had come
Speaker 4: back and then dropped away again. So you know, it's
Speaker 4: really hard to predict and project what's happening. It just
Speaker 4: knowing that this recession has been lingering for as long
Speaker 4: as it has. I think we're in what month, twenty four,
Speaker 4: twenty five of it. It's just rough on everybody.
Speaker 3: When you say recession, are you talking about a trucking
Speaker 3: recession or economy wide recession?
Speaker 1: Yeah, freight recession.
Speaker 3: Freight recession.
Speaker 5: Okay, what does that mean? Is there just too much
Speaker 5: competition out there. I mean, that was some of the
Speaker 5: concerns going into the JB Hunt numbers.
Speaker 4: Yeah, I think that what is happening right now is
Speaker 4: you just have a gluttony of capacity in the marketplace.
Speaker 4: And so with all that capacity, these carriers trying to
Speaker 4: hold on and survive till twenty five, I think is
Speaker 4: the mantra it. You know, they're just there's too much
Speaker 4: capacity in order to make the rates competitive and profitable
Speaker 4: for them to operate. So that's depressing the average invoice price,
Speaker 4: which makes it rough on everybody in the industry.
Speaker 5: Is that just left over from the pandemic? Is that
Speaker 5: what this is about?
Speaker 1: Or what?
Speaker 4: It's really hard to tell, you know, certainly, at the
Speaker 4: peak of the pandemic, we had, you know, some of
Speaker 4: the best times in transportation, and then there was the
Speaker 4: this leveling or reset of what is the new norm?
Speaker 4: And I just I don't think we'd figured out what
Speaker 4: that is yet.
Speaker 3: Okay, So I was just gonna ask the same thing
Speaker 3: that Carol just asked, which is, you know, is it
Speaker 3: just that we bought everything we needed during the pandemic?
Speaker 3: We don't need any more touches? Yeah, but it's hard
Speaker 3: to see that two years.
Speaker 5: Out from rails or even years.
Speaker 3: Or is it or or has our has our spending
Speaker 3: shifted to services?
Speaker 1: I think it's a little bit of both.
Speaker 4: You know, we all certainly spent a lot of a
Speaker 4: lot of money on products during the pandemic because services
Speaker 4: weren't an option, and there was also, you know, some
Speaker 4: misbalances in inventories. And what I think we're hearing in
Speaker 4: the market more recently is some of the inventory restocking
Speaker 4: is starting to happen.
Speaker 1: So that is a good sign.
Speaker 4: But certainly services I think have taken a higher priority,
Speaker 4: just you know, as people have kind of gotten back
Speaker 4: out into the world. You were talking about business travel
Speaker 4: as an example earlier in your segment on how that's
Speaker 4: up right, So travel, I think across.
Speaker 1: The board seems to be up. I know the planes
Speaker 1: are full when I'm on.
Speaker 4: Them, and so the services and experiences I think are
Speaker 4: still taking a higher precedent.
Speaker 5: Well, so, what can you tell us about route differentials
Speaker 5: in the trucking industry, because I do wonder if there
Speaker 5: are certain routes where they are getting the rates and
Speaker 5: certain where they're not. What can you tell us about that?
Speaker 4: Yeah, I would say I'm not an expert on specific
Speaker 4: lanes or commodities, but I do know where carriers have
Speaker 4: the buying power and the density, they're able to still
Speaker 4: negotiate the longer term contracts, and so you know, that's
Speaker 4: certainly a place to focus and where you can garner
Speaker 4: the rates that make sense for you to be profitable.
Speaker 3: So I want to talk a little bit cross border
Speaker 3: because you guys have some news when it comes to
Speaker 3: what's going on in Mexico. And what's so interesting is
Speaker 3: is Carol, we've talked about this quite a bit over
Speaker 3: the last few months. From the idea interesting exactly. You know,
Speaker 3: I don't necessar suspect. I think we can't. To a
Speaker 3: certain extent, we can call it near shoring. To a
Speaker 3: certain extent, we can call it, you know, a return
Speaker 3: to what happened during the nineties in the United States
Speaker 3: before we saw a lot of manufacturing move to China
Speaker 3: and other parts of the just when NAFTA was a
Speaker 3: one exactly. And I want so so Melissa, tell us
Speaker 3: exactly what's going on when it comes to what's happening
Speaker 3: with cross border right now.
Speaker 4: Yeah, I think, as as you mentioned, like, we're seeing
Speaker 4: a lot more manufacturing go back to Mexico and as
Speaker 4: you said, it was there back in the times of NAFTA.
Speaker 4: I remember that very well and all of the business
Speaker 4: that was going across the border, and we're there again,
Speaker 4: and there's so much opportunity to be able to help
Speaker 4: support transportation specifically in that space. We have you know,
Speaker 4: carriers at our clients and brokers at our clients that
Speaker 4: are have set up shop on both sides of the
Speaker 4: border and just trying to take advantage and leverage the
Speaker 4: efficiencies that that that brings them and the you know
Speaker 4: efficiency gains and costs and in time, yeah, go ahead.
Speaker 1: I would say to do that, though you have.
Speaker 4: To also be able to make payments to those carriers
Speaker 4: in preferably the currency that they prefer, and it's really
Speaker 4: hard right now.
Speaker 1: There's not a lot of density and being able to do.
Speaker 4: Mexican payso payments too small carriers in the space, and
Speaker 4: so we saw this as an opportunity to one support
Speaker 4: and kind of get ahead of where the growth is
Speaker 4: going for cross border operations, but also to meet our
Speaker 4: customers where they need us to, and that's to be
Speaker 4: able to pay their carriers in the currencies they prefer
Speaker 4: with the dollar softening a little as compared to paesos,
Speaker 4: more and more carriers have been asking our clients to
Speaker 4: be paid in Mexican payso and they didn't have the
Speaker 4: opportunity to do that before. So it was causing some
Speaker 4: capacity issues for them and carry relationship issues.
Speaker 1: So we wanted to bring that to market.
Speaker 3: Carol, you might remember the big take that we did
Speaker 3: back in September all about how Mexico has passed to
Speaker 3: become the US the largest US trading partner. Happened back
Speaker 3: in twenty twenty three. Pretty well, Well, Teresa, is the
Speaker 3: question most of why, why is this something that you
Speaker 3: were only able to do just now? You know, if
Speaker 3: there has been so much going to Mexico, why were
Speaker 3: you able to do this years ago?
Speaker 4: Yeah, It's it's complex, and we've been building out our
Speaker 4: payments network for the last several years and expanding into
Speaker 4: multiple currencies. You know, we started with you know, the
Speaker 4: US dollar, moved into Canadian dollars as our clients asked
Speaker 4: for that.
Speaker 1: Now we're getting asked for Mexican pesos.
Speaker 4: But the regulatory and compliance components of what goes into
Speaker 4: that is pretty complex, and so we started this effort,
Speaker 4: you know, at the beginning of last year, and it
Speaker 4: just takes time to get it done and to do
Speaker 4: it well. And so that's why we're we're launching when
Speaker 4: we are. It's just the effort that goes into it.
Speaker 4: We anticipate being able to move and releasing European and
Speaker 4: Asian payments towards the later part of this year as well.
Speaker 5: How much is this business pick depth since you guys
Speaker 5: have started.
Speaker 4: You know, we are not executing payments yet, okay, So
Speaker 4: we expect to have the ability to support that for
Speaker 4: our customers by the end of Q two, so the
Speaker 4: end of this quarter, and then work with them and
Speaker 4: their integrations with their TMSs and accounting systems to turn
Speaker 4: it live. So we haven't but when we're talking to
Speaker 4: our clients, what we're hearing from them is about on average,
Speaker 4: five percent of their business is now being done in
Speaker 4: Mexico and they're having to turn business away because they
Speaker 4: don't have a good payment option. And so our hope
Speaker 4: is that in our expectation is that as we launch
Speaker 4: these new capabilities, it's going to give our customers the
Speaker 4: competitive advantage.
Speaker 1: To be able to move into those markets more deeply.
Speaker 5: Are these truckers, these drivers making the same kind of
Speaker 5: money that other drivers are making.
Speaker 1: I don't have an answer to that. I'm just curious.
Speaker 1: I'm curious. If you don't, yeah, sorry, I'm not.
Speaker 5: We love picking your brain because you do know so
Speaker 5: much about this industry.
Speaker 1: So forgive me. I know what I've thought about that averages. Well,
Speaker 1: what's the.
Speaker 5: Platform goes up? Like, you're probably gonna have a lot
Speaker 5: more information, but it is fascinating because I am curious
Speaker 5: about the level of activity and the dynamics of that
Speaker 5: market in particular, so really interesting stuff. Promise you'll come
Speaker 5: back once the platforms up and running and we can
Speaker 5: kind of dig a little bit more into what you
Speaker 5: guys are seeing. Always appreciate it. Such a timely interview.
Speaker 5: We're telling our producer, this is the perfect interview to
Speaker 5: have after we were talking about JB. Hunt, just to
Speaker 5: get your perspective on what you see as great.
Speaker 3: Also, I just want to say shout out to Melissa
Speaker 3: Foreman's tech team or whoever set up this shot. You know,
Speaker 3: Melissa herself. She's got a microphone on. It looks like
Speaker 3: she's in a studio. It's like perfectly lit. I mean
Speaker 3: you know, it's like we take like three or four people.
Speaker 5: To everybody who comes on our area.
Speaker 2: Yeah.
Speaker 5: Please, wondering Melissa Foreman be Well, Tuxian president of Triumphey
Speaker 5: in Dallas