1 00:00:07,880 --> 00:00:11,000 Speaker 1: Hi everyone, this is Lee Clasgow when We're Talking Transports. 2 00:00:11,119 --> 00:00:14,920 Speaker 1: Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:15,120 --> 00:00:19,680 Speaker 1: Lee Clascow, Senior Freight transportation logistics Analysts at Bloomberg Intelligence, 4 00:00:19,960 --> 00:00:23,120 Speaker 1: Bloomberg's in house research arm of almost five hundred analysts 5 00:00:23,120 --> 00:00:27,000 Speaker 1: and strategists around the globe. Quick public service announcement before 6 00:00:27,000 --> 00:00:30,560 Speaker 1: we dive in. Your support is instrumental to keep bringing 7 00:00:30,640 --> 00:00:34,280 Speaker 1: great guests and conversations to you, our listeners, and we 8 00:00:34,320 --> 00:00:37,200 Speaker 1: need your support. So please, if you enjoy this podcast, 9 00:00:37,560 --> 00:00:40,440 Speaker 1: share it, like it and leave a comment. Also, if 10 00:00:40,440 --> 00:00:44,040 Speaker 1: you've got ideas, feedback, or just want to talk transports, 11 00:00:44,200 --> 00:00:46,159 Speaker 1: I'm always happy to connect. You can find me on 12 00:00:46,159 --> 00:00:52,760 Speaker 1: the Bloomberg terminal, on LinkedIn, or on Twitter at logistics Lee. 13 00:00:53,000 --> 00:00:56,080 Speaker 1: Today's episode is a first for Talking Transports. We recorded 14 00:00:56,080 --> 00:01:00,920 Speaker 1: the episode at SMC three's Jumpstart conference, and it's my 15 00:01:01,000 --> 00:01:05,120 Speaker 1: fireside chat with Adam Miller Night Swift CEO, a position 16 00:01:05,120 --> 00:01:08,240 Speaker 1: which he's held since February of twenty twenty four. Adam 17 00:01:08,360 --> 00:01:13,400 Speaker 1: served in several accounting and finance positions since joining Night Transportation. 18 00:01:13,800 --> 00:01:16,360 Speaker 1: In two thousand and two, he was named CFO of 19 00:01:16,480 --> 00:01:20,520 Speaker 1: Night Transportation twenty twelve, and was appointed to CFO of 20 00:01:20,680 --> 00:01:23,600 Speaker 1: night Swift following the merger between the two companies in 21 00:01:23,640 --> 00:01:27,520 Speaker 1: twenty seventeen. Night Swift trades under the ticker and k 22 00:01:27,880 --> 00:01:30,880 Speaker 1: n X and as a market cap around nine billion dollars. 23 00:01:31,080 --> 00:01:35,920 Speaker 1: The company provides truckload less than truckload, intermodal and logistics services. 24 00:01:36,440 --> 00:01:39,880 Speaker 1: It generated around seven and a half billion dollars last year. 25 00:01:40,240 --> 00:01:42,839 Speaker 1: You know, your company is a very interesting one because 26 00:01:42,880 --> 00:01:48,720 Speaker 1: you've been so active in growing your LTL business, you know, 27 00:01:49,800 --> 00:01:51,640 Speaker 1: and it's really interesting because you're one of the few 28 00:01:51,680 --> 00:01:55,680 Speaker 1: companies that have a full truckload network and a lesson 29 00:01:55,720 --> 00:01:58,880 Speaker 1: truckload network. Can you talk about, you know, the kind 30 00:01:58,920 --> 00:02:02,760 Speaker 1: of benefits that you have operating these two separate networks. 31 00:02:02,800 --> 00:02:06,320 Speaker 1: What benefit that brings tonight Swift and tonight Swift customers. 32 00:02:06,160 --> 00:02:08,440 Speaker 2: To be able to have access to the truckload bids 33 00:02:08,960 --> 00:02:10,720 Speaker 2: that I think a lot of the LTL guys always 34 00:02:10,720 --> 00:02:13,720 Speaker 2: wish they had that could potentially help them with creating 35 00:02:13,760 --> 00:02:16,080 Speaker 2: back calls or things that will allow their network to 36 00:02:16,120 --> 00:02:19,440 Speaker 2: be far more efficient and on the truckload folks, we 37 00:02:19,440 --> 00:02:21,240 Speaker 2: were kind of thinking the same thing, like, is there 38 00:02:21,280 --> 00:02:24,920 Speaker 2: some freight out there that could support you know, you know, 39 00:02:25,040 --> 00:02:28,160 Speaker 2: to help optimize our network. You know, what we found 40 00:02:28,240 --> 00:02:30,560 Speaker 2: is that they're actually very different. I mean that was 41 00:02:30,760 --> 00:02:34,720 Speaker 2: maybe one of our biggest appreciations, how different the businesses 42 00:02:34,800 --> 00:02:39,640 Speaker 2: operate LTL versus truckload. But we are figuring out ways. 43 00:02:39,720 --> 00:02:42,880 Speaker 2: It's hard work, we're using technology, we are figuring out 44 00:02:42,880 --> 00:02:45,679 Speaker 2: ways that we can help support each other when it 45 00:02:45,840 --> 00:02:50,320 Speaker 2: makes sense. Ultimately, we really liked coming from a truckload 46 00:02:50,360 --> 00:02:53,680 Speaker 2: side like the LTL network, because it was far less 47 00:02:53,680 --> 00:02:57,720 Speaker 2: cyclical to truckload and in the trucklom market, we know 48 00:02:57,840 --> 00:03:01,120 Speaker 2: there's ebbs and flows and they can be dramatic at times, 49 00:03:01,200 --> 00:03:04,519 Speaker 2: and LTL we always like the public grapts showed LTL 50 00:03:04,600 --> 00:03:06,639 Speaker 2: rates went up, you know, really have gone up every 51 00:03:06,720 --> 00:03:08,600 Speaker 2: year since two thousand and nine, and I think that 52 00:03:08,760 --> 00:03:12,040 Speaker 2: was really attractive to us. But I think we're we're 53 00:03:12,080 --> 00:03:14,520 Speaker 2: still figuring out how we can be better together to 54 00:03:14,520 --> 00:03:18,040 Speaker 2: create win wins. And I think we're we're looking at, 55 00:03:18,400 --> 00:03:20,720 Speaker 2: you know, again, technology that allows us to give us, 56 00:03:20,840 --> 00:03:24,040 Speaker 2: you know, visibility into how we can optimize both networks. 57 00:03:24,360 --> 00:03:27,680 Speaker 2: The teams are very collaborative, they work very closely together 58 00:03:28,280 --> 00:03:31,239 Speaker 2: and and you know, we're continuing to figure out how 59 00:03:31,280 --> 00:03:33,400 Speaker 2: we can we can help each other. You know, we 60 00:03:33,520 --> 00:03:36,640 Speaker 2: have seen you know, the larger some of the heavier 61 00:03:36,680 --> 00:03:41,360 Speaker 2: shipments can flow back and forth, which trucklow prices are cheaper. 62 00:03:41,440 --> 00:03:43,520 Speaker 2: You know, though you know, customers will shift some freight 63 00:03:43,640 --> 00:03:46,320 Speaker 2: that direction when it makes sense. But there isn't a 64 00:03:46,400 --> 00:03:49,320 Speaker 2: lot of freight that is shared that goes back and 65 00:03:49,360 --> 00:03:53,240 Speaker 2: forth on a consistent basis other than maybe the heavier freight. 66 00:03:53,320 --> 00:03:55,960 Speaker 2: But but again, we're still kind of learning how we 67 00:03:56,040 --> 00:03:59,680 Speaker 2: can leverage the two segments and ultimately to be able 68 00:03:59,680 --> 00:04:03,400 Speaker 2: to grow than to grow them effectively over time. I 69 00:04:03,400 --> 00:04:05,960 Speaker 2: think one thing that has helped is as we've grown 70 00:04:06,160 --> 00:04:09,960 Speaker 2: LTL and now we're near a nationwide network, we've been 71 00:04:10,000 --> 00:04:13,200 Speaker 2: able to lean on some of our larger truckload customers 72 00:04:13,360 --> 00:04:16,760 Speaker 2: who typically like to deal with the nationwide LTL providers, 73 00:04:16,760 --> 00:04:20,520 Speaker 2: to give us an opportunity with Triple A Cooper to 74 00:04:20,880 --> 00:04:23,880 Speaker 2: now bid on business that ultimately we would have had 75 00:04:23,920 --> 00:04:25,839 Speaker 2: a chance to, you know, three or four years ago. 76 00:04:25,880 --> 00:04:28,720 Speaker 2: So I think that's that's been exciting development over here 77 00:04:29,520 --> 00:04:30,120 Speaker 2: the last. 78 00:04:29,960 --> 00:04:33,359 Speaker 1: Year, you know, the truckland and lesson truckload space. Obviously, 79 00:04:33,400 --> 00:04:36,960 Speaker 1: it's been difficult times during this current freight recession. You know, 80 00:04:37,000 --> 00:04:38,760 Speaker 1: what are you guys doing to kind of mitigate that 81 00:04:38,839 --> 00:04:43,800 Speaker 1: weak demand, whether it's technology, network optimization or dealing, you know, 82 00:04:43,960 --> 00:04:46,800 Speaker 1: trying to get your employees a little more productive. What 83 00:04:46,839 --> 00:04:48,640 Speaker 1: are the main levers that you guys are pulling to 84 00:04:48,680 --> 00:04:50,360 Speaker 1: mitigate these headwinds. 85 00:04:50,800 --> 00:04:54,479 Speaker 2: It's certainly been a challenge really over the last three 86 00:04:54,560 --> 00:04:57,279 Speaker 2: or four years on the truckload side, and more recently 87 00:04:57,320 --> 00:05:00,560 Speaker 2: we've felt some sweetness in demand on the LTL front. 88 00:05:01,400 --> 00:05:04,800 Speaker 2: So you know, hey, there's no silver bullet. It's just 89 00:05:05,120 --> 00:05:08,760 Speaker 2: good old fashioned hard work and diving in to your 90 00:05:08,800 --> 00:05:12,400 Speaker 2: P and L and focusing on any lever you can 91 00:05:12,480 --> 00:05:15,640 Speaker 2: pull from a cost perspective, and really that's we got 92 00:05:15,680 --> 00:05:19,080 Speaker 2: to be focused on controlling what we can control, and 93 00:05:19,160 --> 00:05:21,039 Speaker 2: it has to be kind of cultural. It has to 94 00:05:21,080 --> 00:05:24,240 Speaker 2: be something that your people are focused on on the 95 00:05:24,400 --> 00:05:27,920 Speaker 2: at the ground level, at every single terminal. And so 96 00:05:28,200 --> 00:05:30,760 Speaker 2: the levers you pull a little bit different between truckload 97 00:05:30,839 --> 00:05:33,760 Speaker 2: and LTL. On the on the LTL front, it's really 98 00:05:33,800 --> 00:05:37,400 Speaker 2: focused on labor efficiency. Uh. You know, in our case, 99 00:05:37,440 --> 00:05:41,320 Speaker 2: we've been building out our network, we've been growing quite rapidly, 100 00:05:41,480 --> 00:05:44,520 Speaker 2: and so whenever you grow, you know, you put some 101 00:05:44,640 --> 00:05:47,560 Speaker 2: pressure on margins because you're adding costs before you have 102 00:05:47,600 --> 00:05:50,400 Speaker 2: the shipment volume. And so that's been a bit of 103 00:05:50,400 --> 00:05:53,800 Speaker 2: a challenge as you know, particularly in the this last year, 104 00:05:54,160 --> 00:05:56,200 Speaker 2: and so the team's done really well in terms of 105 00:05:56,240 --> 00:06:00,680 Speaker 2: trying to manage through that and again managing our labor efficiency. 106 00:06:00,760 --> 00:06:03,760 Speaker 2: And we continue to do that and without you know, 107 00:06:04,520 --> 00:06:07,479 Speaker 2: putting ourselves at a position where we do see demands 108 00:06:07,480 --> 00:06:09,280 Speaker 2: start to come back that we're in a position to 109 00:06:09,320 --> 00:06:11,480 Speaker 2: be able to service the freight effectively. So we're trying 110 00:06:11,520 --> 00:06:16,000 Speaker 2: to be very disciplined and balancing our approach there on 111 00:06:16,080 --> 00:06:18,760 Speaker 2: the truck lit side. It's been a challenge for quite 112 00:06:18,800 --> 00:06:22,240 Speaker 2: some time, and so we're we're focused on being efficient 113 00:06:22,320 --> 00:06:26,200 Speaker 2: with our equipment, having the right trailer detractor ratio. We're 114 00:06:26,520 --> 00:06:30,520 Speaker 2: working on leveraging technology to make us more efficient with 115 00:06:30,839 --> 00:06:35,160 Speaker 2: you know, AI allows us to do some some agentic 116 00:06:35,279 --> 00:06:38,440 Speaker 2: agents that you know, allows us to be more efficient 117 00:06:38,560 --> 00:06:42,320 Speaker 2: with you know, our our vendors and even with our drivers. 118 00:06:42,839 --> 00:06:46,000 Speaker 2: But ultimately it's going through every line item on the 119 00:06:46,000 --> 00:06:48,320 Speaker 2: P and L and try to pull out everything you 120 00:06:48,360 --> 00:06:51,039 Speaker 2: can on the cost side to try to navigate what's 121 00:06:51,080 --> 00:06:53,680 Speaker 2: been a really tough environment, but it does seem like 122 00:06:54,080 --> 00:06:56,359 Speaker 2: the worst is behind us and we may may be 123 00:06:56,400 --> 00:06:59,320 Speaker 2: in a better position here in the in the in 124 00:06:59,360 --> 00:07:02,120 Speaker 2: the near term, particularly on how capacity has come out 125 00:07:02,120 --> 00:07:04,159 Speaker 2: of the network, most most recently. 126 00:07:04,080 --> 00:07:08,240 Speaker 1: Right fingers crossed. You know you mentioned technology. You know, 127 00:07:08,440 --> 00:07:11,200 Speaker 1: if a public company starts talking about AI, they tend 128 00:07:11,200 --> 00:07:14,240 Speaker 1: to get an extra turn on their stock. So let's 129 00:07:14,240 --> 00:07:17,640 Speaker 1: talk about AI for a little bit. What is the 130 00:07:17,720 --> 00:07:21,119 Speaker 1: biggest thing that you think AI can bring to bear 131 00:07:21,280 --> 00:07:24,680 Speaker 1: to your LTL network, your truckload network, or the things 132 00:07:24,680 --> 00:07:27,760 Speaker 1: that happen, you know in the back office. Where's AI 133 00:07:27,920 --> 00:07:30,280 Speaker 1: really going to benefit a night swift in the next 134 00:07:30,400 --> 00:07:32,360 Speaker 1: twelve to twenty four months. 135 00:07:32,160 --> 00:07:36,280 Speaker 2: That's a great question. You know, we're still still learning 136 00:07:36,320 --> 00:07:39,000 Speaker 2: what tools are available, what we can create in house, 137 00:07:39,200 --> 00:07:43,000 Speaker 2: and really how to leverage the technology. I look at 138 00:07:43,160 --> 00:07:46,800 Speaker 2: it as tools that enable our people to be better 139 00:07:46,920 --> 00:07:50,760 Speaker 2: what they do, not necessarily to replace them. And I 140 00:07:50,760 --> 00:07:54,040 Speaker 2: think where we've found some good wins are just repetitive 141 00:07:54,080 --> 00:07:58,400 Speaker 2: tasks or just you know, conversations where a driver may 142 00:07:58,440 --> 00:08:01,520 Speaker 2: call in and just needs to request for some information 143 00:08:01,680 --> 00:08:04,320 Speaker 2: that happens on a regular basis. How do you build 144 00:08:04,360 --> 00:08:07,440 Speaker 2: tools that allow that to be very easy for a 145 00:08:07,560 --> 00:08:11,840 Speaker 2: driver or even one of our vendors from a logistics standpoint, 146 00:08:12,200 --> 00:08:14,760 Speaker 2: third party carrier to call in and get the support 147 00:08:14,800 --> 00:08:17,480 Speaker 2: that they need. And so I think that's been kind 148 00:08:17,480 --> 00:08:19,960 Speaker 2: of the early place we've we've focused. And again that's 149 00:08:20,080 --> 00:08:23,640 Speaker 2: using the the agents that can really I mean, it's 150 00:08:23,800 --> 00:08:27,520 Speaker 2: incredible how real they sound and how natural the speech is. 151 00:08:28,080 --> 00:08:30,200 Speaker 2: In many cases you may not even realize that you're 152 00:08:30,200 --> 00:08:33,120 Speaker 2: speaking to an AI agent. And the tools are just 153 00:08:33,360 --> 00:08:37,160 Speaker 2: rapidly developing, and so our focus is how to make 154 00:08:37,280 --> 00:08:42,400 Speaker 2: us incrementally better it a return on the investment. You know, 155 00:08:42,600 --> 00:08:44,319 Speaker 2: you could do a lot of cool things that may 156 00:08:44,360 --> 00:08:46,160 Speaker 2: not give you the best return, and it takes a 157 00:08:46,240 --> 00:08:48,600 Speaker 2: lot of time and energy. So we've created a team 158 00:08:48,640 --> 00:08:51,600 Speaker 2: of people that then every idea that comes in, we 159 00:08:51,720 --> 00:08:55,000 Speaker 2: score it at a certain level to ensure that we're 160 00:08:55,080 --> 00:08:57,720 Speaker 2: we're investing in the right the right areas. And we've 161 00:08:57,720 --> 00:09:03,840 Speaker 2: got probably five major initiatives that again helps just improve 162 00:09:04,000 --> 00:09:08,000 Speaker 2: the the communication and the efficiency of working particularly with 163 00:09:08,280 --> 00:09:12,080 Speaker 2: our drivers and then with some third parties. Haven't done 164 00:09:12,080 --> 00:09:14,000 Speaker 2: as much on the customer front yet. Not sure that 165 00:09:14,040 --> 00:09:17,400 Speaker 2: we trust the tools quite yet to inter interact with customers. 166 00:09:17,400 --> 00:09:19,319 Speaker 2: But I think that that may be coming as as 167 00:09:19,320 --> 00:09:21,319 Speaker 2: the tools develop and we get more comfortable with them. 168 00:09:21,440 --> 00:09:23,839 Speaker 1: And are you building these tools internally or is this 169 00:09:23,920 --> 00:09:27,360 Speaker 1: something you're leveraging on off the shelf type products. 170 00:09:28,200 --> 00:09:30,880 Speaker 2: Yeah? Both, Really, there are some really good off the 171 00:09:30,960 --> 00:09:34,319 Speaker 2: shelf products that I think they're kind of you we're 172 00:09:34,400 --> 00:09:36,560 Speaker 2: using each other to develop the tools, like they have 173 00:09:36,640 --> 00:09:39,160 Speaker 2: an idea, but we we've helped them with with the 174 00:09:39,240 --> 00:09:41,880 Speaker 2: testing and feedback from our teams. And then we have 175 00:09:42,000 --> 00:09:45,960 Speaker 2: some tools that we've developed, you know, in house that 176 00:09:45,960 --> 00:09:49,360 Speaker 2: that are more proprietary that you know we're we're doing 177 00:09:49,360 --> 00:09:51,040 Speaker 2: that as well. So I think it's it's got to 178 00:09:51,080 --> 00:09:54,640 Speaker 2: be an approach you take in with with really leveraging 179 00:09:54,679 --> 00:09:57,280 Speaker 2: both third parties as well as controlling what ease is 180 00:09:57,360 --> 00:09:58,240 Speaker 2: most important to you. 181 00:09:59,280 --> 00:10:02,560 Speaker 1: So obviously you guys talked about your aspiration to build 182 00:10:02,559 --> 00:10:05,760 Speaker 1: a national ltail network. You guys are almost there. How 183 00:10:05,760 --> 00:10:08,600 Speaker 1: do you expect to get over the finish line? Is 184 00:10:08,600 --> 00:10:12,840 Speaker 1: it through acquisitions, partnerships, organic growth? How are you about 185 00:10:12,880 --> 00:10:15,480 Speaker 1: to you know, fill in the gaps where you need 186 00:10:15,480 --> 00:10:15,960 Speaker 1: to be filled? 187 00:10:16,559 --> 00:10:19,400 Speaker 2: Yeah, that's a great question. We get that quite often, 188 00:10:20,600 --> 00:10:24,600 Speaker 2: you know, we We've grown very rapidly, as I mentioned before, 189 00:10:24,720 --> 00:10:27,880 Speaker 2: over the last couple of years, and so right now 190 00:10:27,920 --> 00:10:30,760 Speaker 2: we're kind of taking a breather as we you know, 191 00:10:30,880 --> 00:10:34,560 Speaker 2: developed some density in the terminal network that we have currently, 192 00:10:35,280 --> 00:10:37,720 Speaker 2: and so that's going to take you know, probably this year. 193 00:10:37,840 --> 00:10:40,440 Speaker 2: We'll see you know that hopefully see that demand kind 194 00:10:40,480 --> 00:10:43,600 Speaker 2: of fill in, and then we'll look at what's the 195 00:10:43,679 --> 00:10:48,360 Speaker 2: right approach to extend our reach into the northeast. A 196 00:10:48,400 --> 00:10:51,400 Speaker 2: few years ago, I would have said most likely it's 197 00:10:51,440 --> 00:10:54,160 Speaker 2: going to be an acquisition, and that was because there 198 00:10:54,240 --> 00:10:58,040 Speaker 2: just wasn't as the properties available to be able to 199 00:10:58,400 --> 00:11:01,360 Speaker 2: grow and to do that organically in a reasonable timeframe, 200 00:11:01,920 --> 00:11:05,400 Speaker 2: and to do it in a cost conscious way. That's 201 00:11:05,520 --> 00:11:07,480 Speaker 2: changed over the last couple of years, and so there 202 00:11:07,480 --> 00:11:10,080 Speaker 2: are properties available that if we wanted to grow, we 203 00:11:10,120 --> 00:11:12,400 Speaker 2: could right now. But we're taking a little bit of 204 00:11:12,440 --> 00:11:15,160 Speaker 2: a breather to get our margin back to where we 205 00:11:15,480 --> 00:11:18,400 Speaker 2: would like it and and to help from a cash flow, 206 00:11:18,440 --> 00:11:22,160 Speaker 2: from a from a leverage perspective, to improve our balance sheet, 207 00:11:22,520 --> 00:11:24,600 Speaker 2: not that it's in bad shape, but you know, we 208 00:11:24,600 --> 00:11:27,360 Speaker 2: we we wanted to to not stretch too much on 209 00:11:27,400 --> 00:11:30,600 Speaker 2: the balance sheet front. So I think you know, we'll 210 00:11:30,640 --> 00:11:32,520 Speaker 2: still look at M and A as a as a 211 00:11:32,559 --> 00:11:36,000 Speaker 2: potential opportunity, but but hey, there's risk that comes with that, 212 00:11:36,040 --> 00:11:39,040 Speaker 2: and we've learned that over the years. You know, LTL, 213 00:11:39,960 --> 00:11:41,640 Speaker 2: you know, M and A is very different than truckload. 214 00:11:41,679 --> 00:11:44,320 Speaker 2: On the truckload side, we've found, hey, we can buy companies, 215 00:11:44,360 --> 00:11:48,240 Speaker 2: have them stand alone, leverage best practices, help them improve 216 00:11:48,280 --> 00:11:50,520 Speaker 2: the business. We tried to do that to a certain 217 00:11:50,559 --> 00:11:53,080 Speaker 2: extent with LTL, but we realized it needs to be 218 00:11:53,160 --> 00:11:56,079 Speaker 2: one network. It needs they need to be SYNCD up 219 00:11:56,120 --> 00:11:59,560 Speaker 2: on one system. And so you know, we've kind of 220 00:11:59,559 --> 00:12:02,840 Speaker 2: adjust our strategy. So just recently, we we've pulled all 221 00:12:02,880 --> 00:12:05,199 Speaker 2: the brands that we had, the three brands and under 222 00:12:05,200 --> 00:12:08,400 Speaker 2: one umbrella that's you know, Triple A Cooper And so 223 00:12:08,480 --> 00:12:11,719 Speaker 2: as we look towards you know, building out into the Northeast, 224 00:12:11,920 --> 00:12:14,920 Speaker 2: you know, I feel more confident doing it with you know, 225 00:12:15,120 --> 00:12:17,400 Speaker 2: organically than maybe I would have a few years ago. 226 00:12:17,520 --> 00:12:20,160 Speaker 2: But again, we would we would be open to both, 227 00:12:20,880 --> 00:12:24,320 Speaker 2: but but hey, I think, uh, you know, you know, 228 00:12:24,360 --> 00:12:26,160 Speaker 2: we got to get our march back to where we 229 00:12:26,200 --> 00:12:28,920 Speaker 2: feel comfortable and then then we'll start growing. That's most likely, 230 00:12:29,280 --> 00:12:30,600 Speaker 2: you know, something we look at next year. 231 00:12:31,320 --> 00:12:33,720 Speaker 1: You know, you've made a lot of LTL acquisitions and 232 00:12:33,760 --> 00:12:36,559 Speaker 1: truckload acquisitions. Uh. That's one of the fun things about 233 00:12:36,559 --> 00:12:39,720 Speaker 1: covering your company as an analyst. Keep us on our toes. 234 00:12:40,160 --> 00:12:42,400 Speaker 1: On the LTL side, you know, you bought a lot 235 00:12:42,400 --> 00:12:46,199 Speaker 1: of different businesses, family businesses. Obviously that there was some 236 00:12:46,760 --> 00:12:49,600 Speaker 1: cultural alignment with Night's weft. How do you align all 237 00:12:49,640 --> 00:12:54,040 Speaker 1: those different cultures into one LTL organization, Uh that that 238 00:12:54,080 --> 00:12:54,640 Speaker 1: you're building. 239 00:12:55,640 --> 00:12:58,760 Speaker 2: That's hey, great question. It's not easy to do. I 240 00:12:58,800 --> 00:13:01,400 Speaker 2: think it's just taken step back. I mean when we 241 00:13:01,760 --> 00:13:05,880 Speaker 2: purchased lt L, you know, our first acquisition that was 242 00:13:05,960 --> 00:13:08,920 Speaker 2: you know, Triple A Cooper two thousand and twenty one. 243 00:13:09,880 --> 00:13:12,199 Speaker 2: You know, a couple of months into it, we realized 244 00:13:12,360 --> 00:13:17,920 Speaker 2: how different LTL and and truckload really operate. I mean 245 00:13:17,960 --> 00:13:22,440 Speaker 2: they look similar, but they execute very differently. And and 246 00:13:22,480 --> 00:13:24,800 Speaker 2: so we you know, learned a lot over the last 247 00:13:24,840 --> 00:13:27,400 Speaker 2: several years. But but we've had just a great team 248 00:13:27,920 --> 00:13:31,840 Speaker 2: at Triple A Cooper that to help, you know, build 249 00:13:31,880 --> 00:13:34,360 Speaker 2: out this network and and to you know, as we've 250 00:13:34,360 --> 00:13:37,520 Speaker 2: brought on other you know, other companies to help create 251 00:13:37,559 --> 00:13:41,440 Speaker 2: some cultural alignment. But it's not without some challenges. You know. 252 00:13:41,480 --> 00:13:44,480 Speaker 2: I think any time that you buy company and you've 253 00:13:44,480 --> 00:13:47,400 Speaker 2: got to rip out their their you know, previous system 254 00:13:47,440 --> 00:13:49,520 Speaker 2: and put a new system in, there's a lot of 255 00:13:49,600 --> 00:13:53,679 Speaker 2: change that's required, and and you know, people react differently 256 00:13:53,720 --> 00:13:57,480 Speaker 2: to change. And you know, our our folks had to 257 00:13:57,559 --> 00:13:59,160 Speaker 2: kind of work through that, and there was a lot 258 00:13:59,160 --> 00:14:01,440 Speaker 2: of training that was needed. And when you do that, 259 00:14:01,480 --> 00:14:05,160 Speaker 2: there's a lot of cost. But hey, my great team 260 00:14:05,200 --> 00:14:07,520 Speaker 2: have kind of worked through some of those challenges, and 261 00:14:07,640 --> 00:14:09,960 Speaker 2: like I said earlier, we pulled all those companies under 262 00:14:09,960 --> 00:14:12,960 Speaker 2: one umbrella to give a little bit more clarity to 263 00:14:13,080 --> 00:14:17,720 Speaker 2: our customers and really to our people about you know, 264 00:14:17,800 --> 00:14:22,000 Speaker 2: the connecting network that we have. But it's you know, 265 00:14:22,040 --> 00:14:24,640 Speaker 2: it hasn't been easy, and I think you know, another 266 00:14:24,680 --> 00:14:27,880 Speaker 2: thing we realized is that that with the customers on 267 00:14:27,920 --> 00:14:31,920 Speaker 2: the LTL front versus truckload is just how different the 268 00:14:31,920 --> 00:14:36,040 Speaker 2: the bins get scrutinized. I remember a meeting with with 269 00:14:36,080 --> 00:14:38,160 Speaker 2: one of our large customers on the truckload side, and 270 00:14:38,200 --> 00:14:40,520 Speaker 2: we were talking through their truckload bid and I think 271 00:14:40,560 --> 00:14:43,800 Speaker 2: they bid their freight maybe every six months. I mean, 272 00:14:43,840 --> 00:14:47,160 Speaker 2: they do it quite frequently. And then they mentioned that, 273 00:14:47,280 --> 00:14:49,840 Speaker 2: you know, doubt given our scale, we would have a 274 00:14:49,920 --> 00:14:52,480 Speaker 2: chance to bid that with our LTL business. And I 275 00:14:52,600 --> 00:14:54,960 Speaker 2: just asked her, you know, how often do you bid 276 00:14:54,960 --> 00:14:57,160 Speaker 2: the LTL And she looked, she says, you know what, 277 00:14:57,200 --> 00:14:59,320 Speaker 2: it's been about ten years since we did a Nashville 278 00:14:59,320 --> 00:15:02,240 Speaker 2: bid on the LTL front. I'm like, oh my gosh, 279 00:15:02,520 --> 00:15:04,800 Speaker 2: I've I only dreamed to have that on the truckload side. 280 00:15:04,880 --> 00:15:07,280 Speaker 2: Just how much pressure that we get on the cost side. 281 00:15:07,480 --> 00:15:09,240 Speaker 2: And so I've learned like on LTL, if you do 282 00:15:09,280 --> 00:15:12,200 Speaker 2: a really good job and you have great relationships, you 283 00:15:12,800 --> 00:15:15,800 Speaker 2: not that you don't renegotiate bids or your your rates, 284 00:15:15,840 --> 00:15:17,880 Speaker 2: but you may not have the same pressure on the 285 00:15:17,960 --> 00:15:19,840 Speaker 2: national bids. And not all customers are like that. But 286 00:15:19,880 --> 00:15:22,240 Speaker 2: this was one that was a little bit surprising to me. 287 00:15:22,320 --> 00:15:25,040 Speaker 2: But hey, again, one of the reasons we liked having 288 00:15:25,040 --> 00:15:27,280 Speaker 2: it be LTL business in our portfolio. 289 00:15:28,120 --> 00:15:31,360 Speaker 1: You know, so does does owning all these assets. I'm 290 00:15:31,400 --> 00:15:33,360 Speaker 1: assuming it really helps on the cost side when it 291 00:15:33,360 --> 00:15:35,920 Speaker 1: comes to procurement. Can you talk a little bit about, 292 00:15:35,920 --> 00:15:38,600 Speaker 1: you know, how that you're benefiting from your scale and 293 00:15:38,680 --> 00:15:40,480 Speaker 1: these tucking acquisitions that you're doing. 294 00:15:41,400 --> 00:15:47,000 Speaker 2: Yeah. Absolutely, When we acquire company, we set up synergy 295 00:15:47,040 --> 00:15:50,520 Speaker 2: teams that allow us to help support each other right 296 00:15:50,560 --> 00:15:54,760 Speaker 2: to to you know, you're sharing best practices, looking at 297 00:15:54,840 --> 00:15:57,800 Speaker 2: you know, how you approach the market. Truckload is different 298 00:15:57,800 --> 00:15:59,760 Speaker 2: because we have all these different brands doing the same 299 00:15:59,800 --> 00:16:03,640 Speaker 2: thing on the LTL front and truckload we don't really 300 00:16:03,680 --> 00:16:06,280 Speaker 2: help each other as on the market side, other than 301 00:16:06,400 --> 00:16:08,840 Speaker 2: just ensuring that we have the right discipline, the right 302 00:16:08,880 --> 00:16:11,920 Speaker 2: principles in place, but there's not as much sharing in 303 00:16:12,000 --> 00:16:14,600 Speaker 2: terms of the information that helps each other. The one 304 00:16:14,680 --> 00:16:18,440 Speaker 2: area that obviously there's there's certain opportunities would be on 305 00:16:18,480 --> 00:16:21,520 Speaker 2: the procurement front. So the first thing we do is 306 00:16:21,600 --> 00:16:24,880 Speaker 2: we take you know, we review all the major spend 307 00:16:24,960 --> 00:16:28,400 Speaker 2: we have and look at equipment, you know, fuel, you know, 308 00:16:28,480 --> 00:16:32,040 Speaker 2: any major vendor on the IT front, and we go 309 00:16:32,320 --> 00:16:36,400 Speaker 2: and we bring a centralized procurement team in and we 310 00:16:36,520 --> 00:16:39,120 Speaker 2: go to the market as one company when we go 311 00:16:39,200 --> 00:16:43,560 Speaker 2: buy equipment and all the major you know items. That 312 00:16:43,600 --> 00:16:46,040 Speaker 2: doesn't mean you don't make decisions locally about what you 313 00:16:46,120 --> 00:16:49,240 Speaker 2: want and how you want it, but we always package 314 00:16:49,280 --> 00:16:53,120 Speaker 2: the entire deal as one company, and you know, it 315 00:16:53,320 --> 00:16:56,760 Speaker 2: makes a big difference on the cost front. And every 316 00:16:56,840 --> 00:16:58,800 Speaker 2: time we go in and buy a company. We can 317 00:16:58,880 --> 00:17:02,080 Speaker 2: compare what they're currently spending on on the major items 318 00:17:02,080 --> 00:17:04,240 Speaker 2: and what we can you know, you know, purchase those 319 00:17:04,240 --> 00:17:07,840 Speaker 2: for and there's a significant difference between them and and 320 00:17:07,920 --> 00:17:10,040 Speaker 2: so you know, certainly that's one of the first things 321 00:17:10,040 --> 00:17:11,600 Speaker 2: we do. That's one of the funnest things we do 322 00:17:11,640 --> 00:17:15,680 Speaker 2: because it's you know, there's easy wins. Now, hey, our 323 00:17:15,760 --> 00:17:17,840 Speaker 2: vendors may not like that, but it may not be 324 00:17:17,880 --> 00:17:20,760 Speaker 2: fun for them, but hey, there's easy wins to pick up. 325 00:17:20,760 --> 00:17:22,720 Speaker 2: And the company that would buy and immediately starts to 326 00:17:22,760 --> 00:17:24,800 Speaker 2: get the benefit of being part of our network. 327 00:17:25,000 --> 00:17:27,879 Speaker 1: And just a quick peer currment question, are you guys 328 00:17:27,880 --> 00:17:29,720 Speaker 1: doing much in terms of pre buy ahead of the 329 00:17:29,960 --> 00:17:33,000 Speaker 1: new VPA engines in twenty twenty seven, Well. 330 00:17:33,040 --> 00:17:37,280 Speaker 2: We typically don't pre buy it just you know, it 331 00:17:37,320 --> 00:17:40,040 Speaker 2: gets it would get our perturement just out of cycle 332 00:17:40,080 --> 00:17:42,400 Speaker 2: in terms of the average age, and then you get 333 00:17:42,400 --> 00:17:47,520 Speaker 2: these hills and valleys and in terms of the capital 334 00:17:47,600 --> 00:17:51,360 Speaker 2: requirements for each year. So we like to keep our cycle, 335 00:17:51,840 --> 00:17:53,879 Speaker 2: you know, in a certain range. Right now, we're in 336 00:17:53,920 --> 00:17:56,960 Speaker 2: a five year cycle for trucks, and and you know 337 00:17:57,000 --> 00:17:59,200 Speaker 2: in the past we were four. We had to change 338 00:17:59,240 --> 00:18:01,399 Speaker 2: that because of the U equipment market got a little 339 00:18:01,400 --> 00:18:03,919 Speaker 2: tough at four years, and so we we're taking some 340 00:18:04,000 --> 00:18:06,520 Speaker 2: losses on equipment, so we've moved that out to five years, 341 00:18:06,840 --> 00:18:09,320 Speaker 2: but we try not to deviate too much from that. 342 00:18:09,880 --> 00:18:12,879 Speaker 2: It's just it's interesting to see how each OEM is 343 00:18:12,880 --> 00:18:17,639 Speaker 2: going to approach the new requirements. I think some have 344 00:18:18,800 --> 00:18:22,280 Speaker 2: expressed they've had, you know, less expensive ways to address 345 00:18:22,280 --> 00:18:24,399 Speaker 2: it than others, and so there's a bit of a 346 00:18:24,400 --> 00:18:26,800 Speaker 2: way to see in terms of what the price is 347 00:18:26,800 --> 00:18:27,399 Speaker 2: going to look like. 348 00:18:28,040 --> 00:18:30,919 Speaker 1: Right, So we look at the demand backdrop. The ism 349 00:18:31,800 --> 00:18:35,359 Speaker 1: ISM Manufacturing Index, which is a good proxy for LTL demand, 350 00:18:35,440 --> 00:18:38,560 Speaker 1: has been contraction territory for the last thirty six of 351 00:18:38,640 --> 00:18:42,320 Speaker 1: the last thirty eight months. We've been in a quote 352 00:18:42,359 --> 00:18:44,840 Speaker 1: unquote freight recession for about I think four years now. 353 00:18:45,800 --> 00:18:48,080 Speaker 1: You know, what are you guys seeing both on the 354 00:18:48,240 --> 00:18:52,320 Speaker 1: LTL and TL side and are there any major differences 355 00:18:52,359 --> 00:18:54,520 Speaker 1: between those two markets when you're looking at demand. 356 00:18:56,440 --> 00:18:59,280 Speaker 2: Well, I think the major difference is, you know, the 357 00:18:59,440 --> 00:19:03,560 Speaker 2: lt L is not nearly as cyclical as truckload, and 358 00:19:03,920 --> 00:19:07,000 Speaker 2: really that's because of just how fragmented the capacity is 359 00:19:07,000 --> 00:19:09,720 Speaker 2: on the truckload side. You don't have that on the 360 00:19:09,840 --> 00:19:12,840 Speaker 2: LTL front, I think the top ten LTL priders make 361 00:19:12,920 --> 00:19:15,879 Speaker 2: up probably seventy five percent of the market, where if 362 00:19:15,880 --> 00:19:18,560 Speaker 2: I look at the top ten truckload companies, they're still 363 00:19:18,640 --> 00:19:22,360 Speaker 2: less than ten percent. So I think certainly truckload has 364 00:19:22,440 --> 00:19:27,000 Speaker 2: a lot more volatility in the cycles. You know, as 365 00:19:27,040 --> 00:19:30,520 Speaker 2: you mentioned, we're in a real tough for session here 366 00:19:30,560 --> 00:19:33,600 Speaker 2: for the last three plus years. But what I've seen 367 00:19:33,840 --> 00:19:36,480 Speaker 2: is but a lot of the efforts from this administration 368 00:19:37,359 --> 00:19:40,159 Speaker 2: around kind of cleaning up some of the capacity that 369 00:19:40,240 --> 00:19:44,560 Speaker 2: came into the space that was just not compliant with laws, 370 00:19:44,560 --> 00:19:46,760 Speaker 2: it may not be the safest capacity on the roads. 371 00:19:47,200 --> 00:19:50,280 Speaker 2: They're working towards, you know, removing a lot of those 372 00:19:50,359 --> 00:19:53,200 Speaker 2: maybe bad actors out of our space. And that's starting 373 00:19:53,240 --> 00:19:58,440 Speaker 2: to have an impact on the supplied demand balance in 374 00:19:58,520 --> 00:20:02,360 Speaker 2: the truckload space. And I think what I'm finding is 375 00:20:02,400 --> 00:20:05,679 Speaker 2: we moved into the early first quarter here, we're seeing 376 00:20:06,240 --> 00:20:09,240 Speaker 2: you know, a better market. We're seeing you know, more 377 00:20:09,320 --> 00:20:12,840 Speaker 2: turndowns in the in the market. Even with demand not up, 378 00:20:12,880 --> 00:20:15,320 Speaker 2: you're still seeing more rejections, which just tells you there's 379 00:20:15,320 --> 00:20:19,040 Speaker 2: not as many trucks out there chasing the freight that's available. 380 00:20:19,080 --> 00:20:22,679 Speaker 2: So I'm a bit encouraged about what the future holds 381 00:20:22,680 --> 00:20:24,440 Speaker 2: on the truckload side. Now, Hey, it's still going to 382 00:20:24,520 --> 00:20:27,320 Speaker 2: take some time to kind of work through the excess 383 00:20:27,359 --> 00:20:30,119 Speaker 2: capacity that's in the market, because, hey, we dug a 384 00:20:30,160 --> 00:20:32,879 Speaker 2: big hole on the truckload side. You know. I go 385 00:20:33,040 --> 00:20:36,359 Speaker 2: back to you know, twenty twenty one, when the market 386 00:20:36,440 --> 00:20:39,960 Speaker 2: was just booming because of you know, the on the 387 00:20:40,000 --> 00:20:44,840 Speaker 2: demand side, and we brought so many trucks into the network, 388 00:20:45,119 --> 00:20:47,600 Speaker 2: probably double the amount we issued, double the amount of 389 00:20:47,600 --> 00:20:50,440 Speaker 2: CDLs that we typically would would issue, and a lot 390 00:20:50,480 --> 00:20:52,959 Speaker 2: of them were the non domicile CDLs, a lot of 391 00:20:53,119 --> 00:20:56,760 Speaker 2: you know, immigrants coming across into the into our country 392 00:20:56,800 --> 00:20:59,679 Speaker 2: to operate in that what was a great space at 393 00:20:59,680 --> 00:21:02,320 Speaker 2: the time. And then as soon as the economy opened 394 00:21:02,400 --> 00:21:06,520 Speaker 2: up in twenty twenty two, the demand for goods fell 395 00:21:06,640 --> 00:21:09,120 Speaker 2: as everyone was, you know, shifting their dollars to services. 396 00:21:09,200 --> 00:21:12,239 Speaker 2: Yet we had brought in record amount of capacity, so 397 00:21:12,359 --> 00:21:15,960 Speaker 2: the dynamic between supply and demand was just so far off, 398 00:21:16,440 --> 00:21:18,600 Speaker 2: and so we've been kind of digging out for quite 399 00:21:18,600 --> 00:21:20,800 Speaker 2: some time, and it feels like we're finally making some 400 00:21:20,960 --> 00:21:24,280 Speaker 2: traction there. So I'm encouraging on the truckload side. Now 401 00:21:24,400 --> 00:21:26,760 Speaker 2: LTL we've seen a dip in demand. I think the 402 00:21:27,640 --> 00:21:30,879 Speaker 2: drop in shipment volumes from third quarter to fourth quarter 403 00:21:31,080 --> 00:21:33,880 Speaker 2: was was, you know, more severe this year than we'd 404 00:21:33,880 --> 00:21:36,879 Speaker 2: seen in previous years. And as you mentioned, yeah, I 405 00:21:36,920 --> 00:21:40,040 Speaker 2: think it takes the ism you know, manufacturing to start 406 00:21:40,040 --> 00:21:43,080 Speaker 2: to improve to see some more support on the LTL front. 407 00:21:43,400 --> 00:21:46,040 Speaker 2: But I don't see it nearly as dramatic in terms 408 00:21:46,080 --> 00:21:50,000 Speaker 2: of the change in pricing or demand on the LTL 409 00:21:50,040 --> 00:21:51,560 Speaker 2: front like we do on the truckload side. So I 410 00:21:51,560 --> 00:21:54,000 Speaker 2: think LTL we'll be able to work through it. Again, 411 00:21:54,080 --> 00:21:56,800 Speaker 2: you have to really, you know, manage your labor and 412 00:21:57,280 --> 00:22:00,800 Speaker 2: be as efficient as you can. But you know, demand 413 00:22:00,880 --> 00:22:03,240 Speaker 2: so far in the first quarter has been been better 414 00:22:03,320 --> 00:22:05,480 Speaker 2: than what we saw in the in the fourth quarter. 415 00:22:05,520 --> 00:22:08,159 Speaker 2: So I'm still still bullish that that LTL is going 416 00:22:08,160 --> 00:22:09,080 Speaker 2: to see some recovery. 417 00:22:09,880 --> 00:22:12,399 Speaker 1: And then on the supply side, you know, you mentioned 418 00:22:12,440 --> 00:22:16,239 Speaker 1: you know, the federal government they're cracking down or you know, 419 00:22:16,480 --> 00:22:20,320 Speaker 1: at least on the enforcement of English language proficiencies, non 420 00:22:20,400 --> 00:22:25,080 Speaker 1: don the stile CDLs, driving schools. You know, what, what 421 00:22:25,080 --> 00:22:27,120 Speaker 1: do you think is going to have the biggest impact 422 00:22:27,160 --> 00:22:29,800 Speaker 1: on supply and is this going to be structural or 423 00:22:29,840 --> 00:22:32,880 Speaker 1: do you think it's going to be more cyclical where 424 00:22:32,920 --> 00:22:35,400 Speaker 1: we could see an influx of drivers coming back into 425 00:22:35,440 --> 00:22:39,440 Speaker 1: the market, you know, if rates were were a little 426 00:22:39,440 --> 00:22:41,120 Speaker 1: more robust than they are today. 427 00:22:41,920 --> 00:22:45,639 Speaker 2: Yeah, I think a truckload will always have some level 428 00:22:45,680 --> 00:22:49,720 Speaker 2: of cyclicality, just because it's low barriers to entry to 429 00:22:49,760 --> 00:22:52,800 Speaker 2: get into the trouboat space. And so as if rates 430 00:22:52,840 --> 00:22:56,960 Speaker 2: really improve and and truckers can get onto load boards 431 00:22:56,960 --> 00:22:59,240 Speaker 2: and make a good living, they're gonna they're gonna we're 432 00:22:59,240 --> 00:23:02,000 Speaker 2: gonna see capacity the ads, and so we'll always have 433 00:23:02,119 --> 00:23:03,800 Speaker 2: some level of that. I don't think it'll ever be 434 00:23:03,880 --> 00:23:06,840 Speaker 2: as severe as what we saw during COVID because of 435 00:23:06,920 --> 00:23:10,440 Speaker 2: just how demand, you know, grew so rapidly and then 436 00:23:10,520 --> 00:23:13,720 Speaker 2: how capacity grew so so rapidly got us so out 437 00:23:13,720 --> 00:23:17,199 Speaker 2: of balance. But we'll always have some cycles. Now. I 438 00:23:17,240 --> 00:23:20,600 Speaker 2: think what you know this administration is doing is about 439 00:23:20,600 --> 00:23:24,360 Speaker 2: the most welcomed change that I've seen in the last year. 440 00:23:24,440 --> 00:23:27,600 Speaker 2: And I think it's a very common sense approach from 441 00:23:27,640 --> 00:23:31,280 Speaker 2: the dot N and FMCSA to help clean up some 442 00:23:31,400 --> 00:23:34,639 Speaker 2: of the unsafe capacity in our industry. And I know 443 00:23:34,680 --> 00:23:36,639 Speaker 2: there's a lot of things that we're doing around the 444 00:23:36,920 --> 00:23:42,200 Speaker 2: English proficiency you know non domicile CDLs and cleaning up 445 00:23:42,240 --> 00:23:44,760 Speaker 2: some of the non compliant you know CDL mills or 446 00:23:44,760 --> 00:23:47,160 Speaker 2: schools that are out there. I think all of them 447 00:23:47,200 --> 00:23:50,760 Speaker 2: together collectively will start to have a meaningful impact. I 448 00:23:50,800 --> 00:23:53,760 Speaker 2: think just one on its own probably not enough to 449 00:23:54,040 --> 00:23:56,360 Speaker 2: make a dent. To make a dent, but I think 450 00:23:56,400 --> 00:23:58,480 Speaker 2: what we're doing collectively is going to make us a 451 00:23:58,640 --> 00:24:04,520 Speaker 2: much stronger industry, a safer industry, and probably creates a 452 00:24:04,520 --> 00:24:08,640 Speaker 2: bit more balance in the network to where smaller carriers 453 00:24:08,640 --> 00:24:10,480 Speaker 2: out there that are trying to do it the right way, 454 00:24:10,480 --> 00:24:14,560 Speaker 2: that really that by real insurance, that that operates safely, 455 00:24:14,640 --> 00:24:18,360 Speaker 2: that appreciate the hours of service, they just cannot make 456 00:24:18,440 --> 00:24:20,959 Speaker 2: it in this market because they don't have some of 457 00:24:21,000 --> 00:24:24,720 Speaker 2: the you know levers that we would have, as you mentioned, 458 00:24:24,840 --> 00:24:27,080 Speaker 2: just what we can do from a procurement standpoint, and 459 00:24:27,080 --> 00:24:29,520 Speaker 2: the savings we get on some of the major items. 460 00:24:29,720 --> 00:24:32,320 Speaker 2: These small carriers they don't have that ability. And if 461 00:24:32,359 --> 00:24:35,800 Speaker 2: you're fifty trucks, you've got to have a terminal, you know, 462 00:24:35,840 --> 00:24:39,040 Speaker 2: you've got to have you know, you have to be compliance, 463 00:24:39,520 --> 00:24:42,879 Speaker 2: you have to have you know, technology, When just the 464 00:24:42,960 --> 00:24:45,679 Speaker 2: small independent operators. They live in their truck. I mean, 465 00:24:45,720 --> 00:24:48,240 Speaker 2: they just have such an advantage over these these other 466 00:24:48,280 --> 00:24:51,320 Speaker 2: small carriers, and so it's sad to see so many 467 00:24:51,400 --> 00:24:53,959 Speaker 2: of them that have failed or had to shrink dramatically 468 00:24:54,119 --> 00:24:58,399 Speaker 2: or ultimately just exit the industry. These are quality carriers 469 00:24:58,400 --> 00:25:00,480 Speaker 2: that we want to be successful. So I think the 470 00:25:00,560 --> 00:25:04,800 Speaker 2: work from this administration is very welcomed and we could 471 00:25:04,840 --> 00:25:08,840 Speaker 2: be more supportive, and I look forward to just seeing 472 00:25:08,840 --> 00:25:10,720 Speaker 2: that continue into twenty twenty six. 473 00:25:11,280 --> 00:25:14,440 Speaker 1: You know, shifting gears a little bit. You know, we 474 00:25:14,520 --> 00:25:18,720 Speaker 1: talked earlier about AI. So other technological developments include autonomous 475 00:25:18,720 --> 00:25:22,600 Speaker 1: trucking and electrification. Where does Knight sit on that? Are 476 00:25:22,640 --> 00:25:26,760 Speaker 1: you guys actively participating and testing these new technologies? Do 477 00:25:26,840 --> 00:25:30,280 Speaker 1: you think they're real or do you think these technologies 478 00:25:30,320 --> 00:25:34,320 Speaker 1: are you know, ten twenty years out versus just over 479 00:25:34,359 --> 00:25:34,880 Speaker 1: the horizon. 480 00:25:35,480 --> 00:25:39,199 Speaker 2: Well, so we have been participating in them some I 481 00:25:39,240 --> 00:25:41,879 Speaker 2: wish we maybe hadn't. We did have an investment in 482 00:25:41,920 --> 00:25:45,600 Speaker 2: an autonomous company as that was just rolling out. Learned 483 00:25:45,600 --> 00:25:48,320 Speaker 2: a lot. Cost me fifty million to learn that, So 484 00:25:48,560 --> 00:25:53,080 Speaker 2: there's probably chiger way to learn about the autonomous technology. 485 00:25:53,680 --> 00:25:57,160 Speaker 2: Here's what I've said to people ten years ago. Autonomous 486 00:25:57,200 --> 00:26:00,359 Speaker 2: trucks for two years out. Ten years from now, Tom's 487 00:26:00,359 --> 00:26:03,359 Speaker 2: trucks will be two years out. I think there's just 488 00:26:03,440 --> 00:26:06,280 Speaker 2: so much to be done with that technology to really 489 00:26:06,320 --> 00:26:10,560 Speaker 2: eliminate the driver. And it's just there's so many things 490 00:26:10,600 --> 00:26:13,000 Speaker 2: that you're just you can't anticipate that you're going to 491 00:26:13,119 --> 00:26:16,280 Speaker 2: encounter over the road. I think it's great technology. I've 492 00:26:16,320 --> 00:26:18,879 Speaker 2: been in several of them. I think they're probably ninety 493 00:26:18,920 --> 00:26:21,960 Speaker 2: five percent of the way there. It's just that other 494 00:26:22,080 --> 00:26:25,880 Speaker 2: five percent may be impossible or so expensive to try 495 00:26:25,920 --> 00:26:28,320 Speaker 2: to account for. And so if you still have to 496 00:26:28,320 --> 00:26:31,040 Speaker 2: have a driver who's picking up a load, staging it, 497 00:26:31,359 --> 00:26:33,520 Speaker 2: or delivering a load, if you do ramp to ramp, 498 00:26:34,280 --> 00:26:36,800 Speaker 2: that's the most expensive leg when you're paying a driver. 499 00:26:37,160 --> 00:26:39,880 Speaker 2: I mean I probably have to pay that driver fifty 500 00:26:39,960 --> 00:26:42,679 Speaker 2: to one hundred dollars, paying on what market they're in 501 00:26:42,760 --> 00:26:45,239 Speaker 2: to pick up a deliver a load. And so when 502 00:26:45,280 --> 00:26:48,320 Speaker 2: autonous trucking, they want to charge you on a per 503 00:26:48,400 --> 00:26:51,960 Speaker 2: mile basis for leveraging the system. And so to move 504 00:26:52,000 --> 00:26:54,120 Speaker 2: a load with an auto des truck where you still 505 00:26:54,160 --> 00:26:58,800 Speaker 2: have drivers picking up and delivering probably costs forty percent 506 00:26:58,880 --> 00:27:01,639 Speaker 2: more that just had a driver full time in the 507 00:27:01,680 --> 00:27:04,879 Speaker 2: truck unless it's a really long link the haul, and 508 00:27:04,920 --> 00:27:08,320 Speaker 2: then you're competing with the rails for that type of frase. 509 00:27:08,359 --> 00:27:10,399 Speaker 2: So I just I don't think the economics work, and 510 00:27:10,440 --> 00:27:13,640 Speaker 2: I still think that the technology may not ever get there, 511 00:27:13,680 --> 00:27:16,679 Speaker 2: but hey, we're watching it. I think I like the 512 00:27:16,720 --> 00:27:20,080 Speaker 2: technology to harvest some of that to make the truck safer. 513 00:27:20,600 --> 00:27:23,680 Speaker 2: I think that's a real opportunity. It's just these companies, 514 00:27:23,680 --> 00:27:25,760 Speaker 2: they don't get the premium, they don't get the multiple 515 00:27:25,800 --> 00:27:29,439 Speaker 2: for the investment if it's not taking the driver completely 516 00:27:29,480 --> 00:27:31,840 Speaker 2: out of truck and fully autonomous. So we're working with 517 00:27:31,920 --> 00:27:34,720 Speaker 2: our OEMs to ensure that we harness some of this 518 00:27:34,760 --> 00:27:39,720 Speaker 2: technology that's been built again to implement to the trucks 519 00:27:39,720 --> 00:27:42,200 Speaker 2: to make them safer. And I think that'll be maybe 520 00:27:42,200 --> 00:27:45,440 Speaker 2: the best value we get out of the effort around 521 00:27:45,440 --> 00:27:52,200 Speaker 2: autonomous from an EV standpoint. We have ten trucks, maybe 522 00:27:52,240 --> 00:27:56,520 Speaker 2: fifteen trucks. We call them yard art because they sit 523 00:27:56,600 --> 00:27:58,720 Speaker 2: in most of the yards and they look really nice, 524 00:27:58,720 --> 00:28:03,880 Speaker 2: but they're just not as useful in terms of over 525 00:28:03,920 --> 00:28:08,399 Speaker 2: the road long haul transportation. They've got range issues, the 526 00:28:08,560 --> 00:28:13,199 Speaker 2: weight issues, they're very expensive. I think there's some application 527 00:28:13,320 --> 00:28:17,480 Speaker 2: for them maybe in maybe local dedicated routes. You still 528 00:28:17,520 --> 00:28:20,520 Speaker 2: don't have customers who will pay a premium to have 529 00:28:20,680 --> 00:28:22,760 Speaker 2: electric vehicles. They want you to have it, so it 530 00:28:22,800 --> 00:28:24,680 Speaker 2: helps their sustainability initiatives. 531 00:28:25,160 --> 00:28:25,320 Speaker 1: You know. 532 00:28:25,359 --> 00:28:30,680 Speaker 2: I talked to a large manufacturer about two months ago 533 00:28:30,720 --> 00:28:33,280 Speaker 2: and she was asking me, hey, do you have any 534 00:28:33,280 --> 00:28:37,320 Speaker 2: customers who will pay for you know, sustainability in terms 535 00:28:37,359 --> 00:28:40,640 Speaker 2: of electric vehicles, And I said, well, five years ago 536 00:28:40,720 --> 00:28:46,400 Speaker 2: it was zero and as of now it's doubled since then. Oh, 537 00:28:46,480 --> 00:28:49,000 Speaker 2: it is milaying now. Now I do feel like a 538 00:28:49,120 --> 00:28:53,160 Speaker 2: hybrid has a chance of being successful. The challenge is 539 00:28:53,440 --> 00:28:57,280 Speaker 2: certain states just wanted to go from diesel to no emissions. 540 00:28:57,440 --> 00:29:00,720 Speaker 2: They didn't take the natural progression of with the hybrid, 541 00:29:01,520 --> 00:29:03,720 Speaker 2: and so I think some of these onms we're trying 542 00:29:03,720 --> 00:29:06,240 Speaker 2: to really work with them to maybe make the investments 543 00:29:06,240 --> 00:29:09,080 Speaker 2: on building out something that that can make sense from 544 00:29:09,080 --> 00:29:13,040 Speaker 2: a hybrid perspective. It's just this previous administration want to 545 00:29:13,080 --> 00:29:15,120 Speaker 2: know part of that it was electric vehicles or nothing. 546 00:29:15,800 --> 00:29:18,440 Speaker 2: So hopefully maybe there's more of a common sense approach 547 00:29:18,440 --> 00:29:21,960 Speaker 2: here on going forward. But right now, both of those 548 00:29:22,000 --> 00:29:24,880 Speaker 2: technologies are our real challenge and I don't think that 549 00:29:24,920 --> 00:29:27,120 Speaker 2: they have a lot of application in our business right now. 550 00:29:28,000 --> 00:29:31,720 Speaker 1: So as a leader of a large public transportation company 551 00:29:31,720 --> 00:29:34,680 Speaker 1: in night Swift, you know, obviously some of your time 552 00:29:34,720 --> 00:29:38,120 Speaker 1: has spent talking with investors. What's the hardest thing that 553 00:29:38,440 --> 00:29:42,040 Speaker 1: you are trying to let the investment community know about 554 00:29:42,160 --> 00:29:45,760 Speaker 1: night Swift in terms of your your story. 555 00:29:45,960 --> 00:29:49,480 Speaker 2: I think it's it's really the size and scale and 556 00:29:49,480 --> 00:29:52,719 Speaker 2: flexibility that we can create for customers and what that 557 00:29:52,880 --> 00:29:58,720 Speaker 2: means when the market begins to improve. You know, we've 558 00:29:58,760 --> 00:30:02,560 Speaker 2: been really focused, particularly on a truckload side around kind 559 00:30:02,560 --> 00:30:05,320 Speaker 2: of one way over the road services that we have 560 00:30:05,480 --> 00:30:07,920 Speaker 2: dedicated about thirty percent of what we do is dedicated. 561 00:30:08,240 --> 00:30:11,440 Speaker 2: Seventy percent is you know, one way over the road capacity. 562 00:30:12,080 --> 00:30:16,040 Speaker 2: That was the most valuable capacity during the pandemic and 563 00:30:16,160 --> 00:30:18,560 Speaker 2: in good times that is the most valuable capacity, and 564 00:30:18,680 --> 00:30:21,000 Speaker 2: we do really well with it. We can be very 565 00:30:21,000 --> 00:30:24,440 Speaker 2: profitable at how we operate it. Over the last three years, 566 00:30:25,000 --> 00:30:28,720 Speaker 2: that's been the most commoditized capacity because that's where all 567 00:30:28,760 --> 00:30:31,680 Speaker 2: the one or two truck operators that came in, they 568 00:30:31,720 --> 00:30:33,840 Speaker 2: go to brokers and that's how they access to market. 569 00:30:33,960 --> 00:30:36,360 Speaker 2: They're doing over the road one way trucking. They're not 570 00:30:36,440 --> 00:30:40,720 Speaker 2: doing dedicated they're not you know, working and specialized. They're 571 00:30:40,760 --> 00:30:42,760 Speaker 2: not you know, working with the parcel companies. I mean, 572 00:30:42,800 --> 00:30:46,920 Speaker 2: they're they're doing the one way truckload moves. And that's 573 00:30:46,960 --> 00:30:50,160 Speaker 2: why those rates have been absolutely crushed over the last 574 00:30:50,400 --> 00:30:53,600 Speaker 2: you know, three years, down twenty percent, while costs have 575 00:30:53,760 --> 00:30:58,520 Speaker 2: not budged since the pandemic. So I think what we 576 00:30:58,600 --> 00:31:00,920 Speaker 2: want to say we have not run away from that market. 577 00:31:01,080 --> 00:31:04,240 Speaker 2: A lot of carries in our space they diverted away 578 00:31:04,280 --> 00:31:07,080 Speaker 2: from one way trucking to dedicate it or other places 579 00:31:07,120 --> 00:31:09,719 Speaker 2: because of how difficult it's been. And so when the 580 00:31:09,760 --> 00:31:13,440 Speaker 2: market turns, that capacity is going to be at a premium, 581 00:31:13,640 --> 00:31:16,040 Speaker 2: and I think we will be in a great position 582 00:31:16,600 --> 00:31:19,280 Speaker 2: to be able to, you know, bring value to our 583 00:31:19,280 --> 00:31:22,520 Speaker 2: customers as well as improve the margins of our business. 584 00:31:22,840 --> 00:31:24,920 Speaker 2: We also like the fact that we've got this lt 585 00:31:25,080 --> 00:31:28,160 Speaker 2: L business that's growing and that doesn't have the same 586 00:31:28,400 --> 00:31:31,920 Speaker 2: cyclical nature as truckload, and as we as we improve 587 00:31:31,960 --> 00:31:35,760 Speaker 2: the margins of that business, that now layers on a 588 00:31:35,920 --> 00:31:39,640 Speaker 2: very consistent revenue and operating income and cash flow stream 589 00:31:40,120 --> 00:31:43,240 Speaker 2: in our business. While we have the cycles in truckload 590 00:31:43,240 --> 00:31:46,200 Speaker 2: to navigate through That should help you know, create more 591 00:31:46,240 --> 00:31:49,640 Speaker 2: consistent revenue and earnings. It ultimately should be a better 592 00:31:49,720 --> 00:31:52,760 Speaker 2: multiple on the stock price. It's just now we just 593 00:31:52,800 --> 00:31:54,720 Speaker 2: have to see how that how that can play out 594 00:31:54,720 --> 00:31:58,360 Speaker 2: and demonstrate that. But I think that's that's what we're 595 00:31:58,400 --> 00:32:00,520 Speaker 2: trying to convey, is that we we are position a 596 00:32:00,520 --> 00:32:04,920 Speaker 2: bit differently than than our than our peers. Also the 597 00:32:04,920 --> 00:32:07,320 Speaker 2: fact that we have all these different companies, which gives 598 00:32:07,400 --> 00:32:09,960 Speaker 2: us a different view of the market. I could come 599 00:32:10,000 --> 00:32:12,840 Speaker 2: in every morning and I can look at what's the 600 00:32:12,880 --> 00:32:18,040 Speaker 2: freight dynamic at Swift versus Knight versus US Express, and 601 00:32:18,080 --> 00:32:21,320 Speaker 2: when I see market trends across both, then I know 602 00:32:21,400 --> 00:32:23,240 Speaker 2: what's happening. I know there's a change in the market, 603 00:32:23,280 --> 00:32:26,080 Speaker 2: and we can approach that market very differently rather than 604 00:32:26,160 --> 00:32:29,080 Speaker 2: just being an anomaly in one market because of a 605 00:32:29,080 --> 00:32:31,960 Speaker 2: shift with the customer or where our capacity is. That 606 00:32:32,000 --> 00:32:35,200 Speaker 2: gives us insight that others don't have. And we're building 607 00:32:35,200 --> 00:32:39,600 Speaker 2: now technology where I can balance these companies by sharing 608 00:32:39,640 --> 00:32:42,840 Speaker 2: freight across our networks. Where none of our peers really 609 00:32:42,840 --> 00:32:46,320 Speaker 2: have that, you know, opportunity because they don't have the 610 00:32:46,400 --> 00:32:49,440 Speaker 2: multiple brands like we would have at scale, So I 611 00:32:49,440 --> 00:32:52,600 Speaker 2: think there's a lot that differentiates us, but again we 612 00:32:52,640 --> 00:32:54,480 Speaker 2: have to you have to be able to demonstrate this 613 00:32:54,600 --> 00:32:57,479 Speaker 2: and execute in a better environment and then show that 614 00:32:57,480 --> 00:32:58,760 Speaker 2: that's a bit more sustainable. 615 00:32:59,000 --> 00:33:03,000 Speaker 1: So, you know, you mentioned just earlier that your scale, 616 00:33:03,200 --> 00:33:09,040 Speaker 1: your diversity of services is really a competitive advantage. Are 617 00:33:09,120 --> 00:33:12,760 Speaker 1: there any spots of the freight transportation logistic markets that 618 00:33:12,920 --> 00:33:16,640 Speaker 1: night Swift is not in that you know, you guys 619 00:33:16,720 --> 00:33:20,120 Speaker 1: think is an interesting sub segment of the market that 620 00:33:20,960 --> 00:33:24,840 Speaker 1: your scale could could really make a difference in getting 621 00:33:24,840 --> 00:33:25,720 Speaker 1: into those markets. 622 00:33:26,280 --> 00:33:29,160 Speaker 2: Well, I would say there's one that we're in, but 623 00:33:29,320 --> 00:33:31,760 Speaker 2: just in a very niche way, and that's in warehousing. 624 00:33:32,440 --> 00:33:35,120 Speaker 2: And so you know, we bought a company called Hayes 625 00:33:35,160 --> 00:33:37,320 Speaker 2: that has a real kind of niche that we did 626 00:33:37,360 --> 00:33:39,960 Speaker 2: with one customer and we've been trying to grow that 627 00:33:40,680 --> 00:33:43,240 Speaker 2: and I feel like that could be an opportunity to 628 00:33:43,560 --> 00:33:48,320 Speaker 2: really expand and then couple our other services with the warehousing. 629 00:33:48,360 --> 00:33:50,600 Speaker 2: So we've just got a test right now where we 630 00:33:50,680 --> 00:33:54,360 Speaker 2: have a customer where we bring in their freight from 631 00:33:54,360 --> 00:33:57,320 Speaker 2: the port with our with our port drayage company or 632 00:33:57,400 --> 00:34:01,160 Speaker 2: that that works with our night company, and then manage 633 00:34:01,200 --> 00:34:04,760 Speaker 2: the warehousing with our our you know, Hayes company, and 634 00:34:04,800 --> 00:34:08,759 Speaker 2: then do some of the LTL and and intermodal with 635 00:34:08,880 --> 00:34:12,200 Speaker 2: Triple A Cooper and our Swift Intermodal. So being able 636 00:34:12,239 --> 00:34:16,280 Speaker 2: to package all these different services together for a customer 637 00:34:16,320 --> 00:34:17,919 Speaker 2: where a lot of times they would use a three 638 00:34:17,920 --> 00:34:20,120 Speaker 2: pl we would then p set together. We can do 639 00:34:20,239 --> 00:34:25,000 Speaker 2: that with all of our own company assets and provide 640 00:34:25,000 --> 00:34:27,799 Speaker 2: them some additional value with those assets and probably give 641 00:34:27,840 --> 00:34:30,879 Speaker 2: them a better cost point as well. And so that's 642 00:34:30,880 --> 00:34:33,480 Speaker 2: an area where I feel like we have we're just learning, 643 00:34:33,640 --> 00:34:37,319 Speaker 2: but there's some opportunity to expand that and and and 644 00:34:37,400 --> 00:34:39,600 Speaker 2: kind of build out kind of our own kind of 645 00:34:39,640 --> 00:34:41,400 Speaker 2: three PO that we do with our own assets. 646 00:34:42,080 --> 00:34:45,880 Speaker 1: So within the rail industry there's a big merger pending 647 00:34:45,920 --> 00:34:48,480 Speaker 1: merger happening, and you guys are in the intermodial space. 648 00:34:49,840 --> 00:34:52,520 Speaker 1: What are your thoughts on the merger between Union Pacific 649 00:34:52,520 --> 00:34:57,440 Speaker 1: and Norfolk Southern And how is it is it impacting you? 650 00:34:57,440 --> 00:34:59,960 Speaker 1: You know, the kind of the drama that's playing out 651 00:35:00,200 --> 00:35:03,200 Speaker 1: at the STB as it relates to this transaction. 652 00:35:04,760 --> 00:35:07,040 Speaker 2: Yeah, I'll be careful how much I say on this, 653 00:35:07,360 --> 00:35:12,359 Speaker 2: but look, we are we partner with the up and 654 00:35:12,440 --> 00:35:16,000 Speaker 2: the folks Southern and so that is our network on 655 00:35:16,040 --> 00:35:19,279 Speaker 2: the intermobile front, and so I think this merger I 656 00:35:19,280 --> 00:35:22,600 Speaker 2: think would bring some additional value to what we can 657 00:35:22,719 --> 00:35:26,440 Speaker 2: offer a customer in terms of just streamlining that transportation. 658 00:35:27,400 --> 00:35:29,920 Speaker 2: And so you know, for me, I look at it 659 00:35:29,960 --> 00:35:33,320 Speaker 2: as this is a great way to speed up transit 660 00:35:33,400 --> 00:35:37,200 Speaker 2: times and offer great service to a customer that may 661 00:35:37,239 --> 00:35:40,040 Speaker 2: not exist today because they don't want to carry the 662 00:35:40,040 --> 00:35:42,480 Speaker 2: inventory as long as they would have to given the 663 00:35:42,480 --> 00:35:45,160 Speaker 2: current transit times, and if we could speed that up 664 00:35:45,160 --> 00:35:47,399 Speaker 2: by a day or two, then they would look at 665 00:35:47,400 --> 00:35:50,480 Speaker 2: intermotial as a real option. So I think it could 666 00:35:50,520 --> 00:35:53,200 Speaker 2: be good for the industry. I think it could be 667 00:35:53,320 --> 00:35:57,120 Speaker 2: good for what we can offer at Swift Intermodal. But 668 00:35:57,520 --> 00:35:59,720 Speaker 2: I know there's a lot of other folks who feel 669 00:36:00,040 --> 00:36:04,279 Speaker 2: could feel differently and be concerned about the size of 670 00:36:04,840 --> 00:36:08,440 Speaker 2: what that remaining rail would look like. But ultimately I 671 00:36:08,440 --> 00:36:10,880 Speaker 2: think it would help the industry and I think it 672 00:36:10,880 --> 00:36:12,320 Speaker 2: would really help our customers. 673 00:36:12,719 --> 00:36:15,879 Speaker 1: So your acquisition strategy in the LTL space was very 674 00:36:15,880 --> 00:36:18,000 Speaker 1: different than what you guys do in the truckload space. 675 00:36:18,000 --> 00:36:21,320 Speaker 1: And the truckload space, it seems like you buy underperforming 676 00:36:21,960 --> 00:36:25,400 Speaker 1: networks and you use your best practices at night Swift 677 00:36:25,440 --> 00:36:28,960 Speaker 1: and bring them up to the industry your company average 678 00:36:28,960 --> 00:36:32,480 Speaker 1: in terms of profitability. Where LTL, you know, you obviously 679 00:36:32,640 --> 00:36:35,280 Speaker 1: bought strong companies and you know they still can benefit 680 00:36:35,360 --> 00:36:38,600 Speaker 1: from your size and scale, but you bought good networks 681 00:36:38,640 --> 00:36:43,080 Speaker 1: to begin with. Is it that much more difficult integrating 682 00:36:43,239 --> 00:36:46,800 Speaker 1: a truckload carrier than it was integrating the LTL carriers 683 00:36:46,800 --> 00:36:47,600 Speaker 1: into one network? 684 00:36:47,960 --> 00:36:50,920 Speaker 2: Well, I just think on the truckload side, there's maybe 685 00:36:51,000 --> 00:36:54,719 Speaker 2: not as much value of going through the process of 686 00:36:54,800 --> 00:36:58,520 Speaker 2: changing over the entire system to align with what your 687 00:36:58,560 --> 00:37:01,440 Speaker 2: existing system is. There's not as much value there as 688 00:37:01,480 --> 00:37:04,480 Speaker 2: there is an LTL. On the LTL front, what were 689 00:37:04,560 --> 00:37:07,520 Speaker 2: our appreciation is that a customer wants one pro number, 690 00:37:07,960 --> 00:37:10,200 Speaker 2: they want it, they don't they prefer not to have 691 00:37:10,320 --> 00:37:14,600 Speaker 2: to interline, and they really liked, especially those the larger customers, 692 00:37:14,600 --> 00:37:17,279 Speaker 2: they really like to have one network that they're freight 693 00:37:17,320 --> 00:37:20,120 Speaker 2: flows in. And so that's why the LTL front it was, 694 00:37:20,280 --> 00:37:22,000 Speaker 2: you know, that was a risk we were willing to 695 00:37:22,040 --> 00:37:25,880 Speaker 2: take to make the system conversion. On the truckload side, 696 00:37:26,400 --> 00:37:28,880 Speaker 2: there's just not as much value. They can operate, you know, 697 00:37:28,960 --> 00:37:32,200 Speaker 2: independently and have their independent systems that doesn't mean that 698 00:37:32,239 --> 00:37:35,719 Speaker 2: we don't collaborate, and we are building systems that have 699 00:37:35,880 --> 00:37:38,759 Speaker 2: built systems over the top of the native system of 700 00:37:38,800 --> 00:37:41,640 Speaker 2: each business that allows us to connect and communicate and 701 00:37:41,680 --> 00:37:45,520 Speaker 2: read and write two different systems. I just look at 702 00:37:45,560 --> 00:37:49,160 Speaker 2: a system conversion is almost like open heart surgery for 703 00:37:49,200 --> 00:37:51,360 Speaker 2: a company like you would only do it if you 704 00:37:51,360 --> 00:37:53,400 Speaker 2: felt like you really had to, because there's just so 705 00:37:53,520 --> 00:37:57,680 Speaker 2: much risks that that occurs when you change out your 706 00:37:57,800 --> 00:38:00,200 Speaker 2: entire system, just from the training of people, the way 707 00:38:00,239 --> 00:38:03,040 Speaker 2: you communicate with customers, and so you only do it 708 00:38:03,080 --> 00:38:06,120 Speaker 2: when you know there's there's real value in what you 709 00:38:06,160 --> 00:38:08,560 Speaker 2: can create. And so that's why the LCL front we 710 00:38:08,600 --> 00:38:10,359 Speaker 2: knew we need to do that. We do that very 711 00:38:10,400 --> 00:38:13,319 Speaker 2: early in the transaction. I think the last one we 712 00:38:13,360 --> 00:38:16,120 Speaker 2: did it was completed in three or four months. I mean, 713 00:38:16,160 --> 00:38:19,120 Speaker 2: that's a that's a that's a real rush pace. But 714 00:38:19,239 --> 00:38:21,239 Speaker 2: because it brings so much value, that's why we do it. 715 00:38:21,280 --> 00:38:24,200 Speaker 2: On the trucklet side, we we don't we don't see 716 00:38:24,200 --> 00:38:26,600 Speaker 2: the additional value. So we just learn how we connect 717 00:38:26,640 --> 00:38:28,640 Speaker 2: in and we can, you know, help each other with 718 00:38:28,680 --> 00:38:33,399 Speaker 2: our different systems. Communicate certainly, but but but don't make 719 00:38:33,440 --> 00:38:37,040 Speaker 2: that investment in time and risk of changing over systems. 720 00:38:37,800 --> 00:38:40,920 Speaker 1: So a stronger spot truckload market kind of ripples across 721 00:38:41,000 --> 00:38:44,279 Speaker 1: all modes of transportation. You know, on your earn this 722 00:38:44,400 --> 00:38:47,680 Speaker 1: call last week, I guess you were kind of cautiously 723 00:38:47,719 --> 00:38:51,120 Speaker 1: optimistic that the turn is coming. What is the number 724 00:38:51,120 --> 00:38:53,560 Speaker 1: one or number two thing? Uh, you know, one or 725 00:38:53,560 --> 00:38:55,560 Speaker 1: two things that you guys are looking at to give 726 00:38:55,600 --> 00:38:58,359 Speaker 1: you a good idea that you know, in fact, this 727 00:38:58,480 --> 00:39:00,640 Speaker 1: is not just a blip but a true recovery in 728 00:39:00,680 --> 00:39:01,560 Speaker 1: the spot market. 729 00:39:01,840 --> 00:39:04,360 Speaker 2: Yeah. I always like the term cautiously optimistic. It's like 730 00:39:04,440 --> 00:39:06,600 Speaker 2: saying something with like not saying anything at all. 731 00:39:06,640 --> 00:39:09,640 Speaker 1: But if you want to call that recovery right now, 732 00:39:09,680 --> 00:39:11,040 Speaker 1: you're going to recall it. You can call it if 733 00:39:11,040 --> 00:39:11,360 Speaker 1: you'd like. 734 00:39:12,960 --> 00:39:15,120 Speaker 2: We've seen a lot of head fakes, right, so I 735 00:39:15,480 --> 00:39:20,160 Speaker 2: resist calling an influction. Yet. You know, we look a 736 00:39:20,200 --> 00:39:22,360 Speaker 2: lot of different data points. Some of them are internal, 737 00:39:22,440 --> 00:39:24,920 Speaker 2: as I mentioned, we have, you know, different networks that 738 00:39:24,960 --> 00:39:29,240 Speaker 2: provide us insight into you know, supply and demandage certain markets. 739 00:39:29,719 --> 00:39:31,879 Speaker 2: And so that's certainly a data point that we'd look 740 00:39:31,920 --> 00:39:35,680 Speaker 2: at on a really on a daily or weekly basis. 741 00:39:36,000 --> 00:39:38,560 Speaker 2: I think we look at you know, third party data 742 00:39:38,600 --> 00:39:40,439 Speaker 2: as well. And so I think some of the things 743 00:39:40,440 --> 00:39:43,040 Speaker 2: that are telling is if you look at what you know, 744 00:39:43,800 --> 00:39:47,080 Speaker 2: low count looks like, or shipment count, and you see 745 00:39:47,080 --> 00:39:49,520 Speaker 2: how that compares you over year, and then you look 746 00:39:49,560 --> 00:39:55,160 Speaker 2: at rejections and how that's trending. And when demand isn't lifting, 747 00:39:55,200 --> 00:39:59,200 Speaker 2: it's not growing yet rejections are. That would tell you. 748 00:39:59,400 --> 00:40:03,560 Speaker 2: That would tell me that capacity is exiting the market 749 00:40:03,680 --> 00:40:06,480 Speaker 2: because there's there's customers are it's not as easy for 750 00:40:06,560 --> 00:40:09,640 Speaker 2: them to find trucks for their frames. Now if you 751 00:40:09,680 --> 00:40:13,920 Speaker 2: see demand lifting and and rejections holding flat, I tell 752 00:40:13,920 --> 00:40:16,719 Speaker 2: you that, hey, there's still excess capacity out there that 753 00:40:16,760 --> 00:40:19,200 Speaker 2: we need to work through. So to me, as I 754 00:40:19,320 --> 00:40:22,120 Speaker 2: look at obviously the spot to contract rate is another 755 00:40:22,160 --> 00:40:25,839 Speaker 2: one that that delta as that tightens as rejection, as 756 00:40:25,880 --> 00:40:29,879 Speaker 2: rejection rates grow without even a delifting demand, that would 757 00:40:29,880 --> 00:40:32,720 Speaker 2: tell me we're getting to a closer balance between supply 758 00:40:32,800 --> 00:40:35,719 Speaker 2: and demand with really it's more supply driving it than 759 00:40:35,840 --> 00:40:39,399 Speaker 2: than demand, which is more sustainable. I think that's when 760 00:40:39,400 --> 00:40:41,840 Speaker 2: this supply exits because I think what again this this 761 00:40:41,880 --> 00:40:43,920 Speaker 2: administration is doing, is that kind of shut off the 762 00:40:43,960 --> 00:40:47,680 Speaker 2: funnel on the front end, cleaning up people that shouldn't 763 00:40:47,719 --> 00:40:50,560 Speaker 2: be in this space that that are. And and so 764 00:40:50,680 --> 00:40:53,760 Speaker 2: I think as those as that you know, capacity exits, 765 00:40:53,840 --> 00:40:56,399 Speaker 2: it's somewhat structural in nature in terms of that type 766 00:40:56,400 --> 00:40:59,560 Speaker 2: of capacity. Doesn't mean that others couldn't come in that, 767 00:40:59,680 --> 00:41:02,160 Speaker 2: you know, under a normal CDL. I just think there's 768 00:41:02,160 --> 00:41:04,359 Speaker 2: not a real demand for that right now, given where 769 00:41:04,440 --> 00:41:08,200 Speaker 2: rates are. But hey, I'm hopeful that you know, some 770 00:41:08,239 --> 00:41:09,960 Speaker 2: of the signs we're seeing in the third party data 771 00:41:10,000 --> 00:41:13,080 Speaker 2: as well as our own data tells us that you know, 772 00:41:13,120 --> 00:41:14,480 Speaker 2: we have better days ahead of us. 773 00:41:15,120 --> 00:41:18,040 Speaker 1: Got ya. So there are a lot of students here 774 00:41:18,200 --> 00:41:21,040 Speaker 1: at the conference from the University of Tennessee their supply 775 00:41:21,160 --> 00:41:24,640 Speaker 1: chain program. What piece of advice would you give, you know, 776 00:41:25,400 --> 00:41:29,480 Speaker 1: the college grads looking to get into the freight transportation world. 777 00:41:29,960 --> 00:41:32,359 Speaker 2: Well, this wouldn't be a great message as I'm doing 778 00:41:32,360 --> 00:41:36,600 Speaker 2: this remotely, right, Be with your leaders, be with your boss, 779 00:41:36,800 --> 00:41:41,600 Speaker 2: learn as much as you can, and be comfortable being 780 00:41:41,640 --> 00:41:45,800 Speaker 2: uncomfortable if that makes sense. Like, have an opinion on things, 781 00:41:46,000 --> 00:41:49,080 Speaker 2: vet it, share it. It's okay to be wrong, but 782 00:41:49,680 --> 00:41:52,680 Speaker 2: stretch yourself. I mean, I think that that's so important. 783 00:41:53,160 --> 00:41:55,239 Speaker 2: And and hey, I think the first phase of your 784 00:41:55,239 --> 00:41:58,520 Speaker 2: career is going to be about just working hard because 785 00:41:58,520 --> 00:42:00,480 Speaker 2: you're not going to know much right, You're to learn. 786 00:42:00,520 --> 00:42:03,480 Speaker 2: But the first phase is just work hard and eventually 787 00:42:03,480 --> 00:42:06,399 Speaker 2: you will learn. Your second phase will be, hey, you're 788 00:42:06,440 --> 00:42:09,480 Speaker 2: you're working smarter and still hard. You always have to 789 00:42:09,520 --> 00:42:12,080 Speaker 2: have that. And if you can at that point start 790 00:42:12,120 --> 00:42:15,239 Speaker 2: to build some leadership skills, then your next phase could 791 00:42:15,280 --> 00:42:18,399 Speaker 2: be you know, a leader where you're influencing across your 792 00:42:18,719 --> 00:42:22,240 Speaker 2: entire company. But all starts with getting on the ground floor, 793 00:42:23,200 --> 00:42:25,840 Speaker 2: learning as much as you can, being in the office 794 00:42:25,880 --> 00:42:28,360 Speaker 2: and just you know, willing to put the time and 795 00:42:28,400 --> 00:42:28,920 Speaker 2: commitment in. 796 00:42:29,760 --> 00:42:32,000 Speaker 1: So you talk about you know, being in office and 797 00:42:32,080 --> 00:42:35,240 Speaker 1: you know working with leaders, which is obviously very important. 798 00:42:35,719 --> 00:42:38,719 Speaker 1: During your career, was there one mentor that you had 799 00:42:38,800 --> 00:42:42,440 Speaker 1: that really, you know, changed the trajectory of your career 800 00:42:42,640 --> 00:42:47,520 Speaker 1: and you know, just your thoughts on transportation. 801 00:42:48,239 --> 00:42:52,520 Speaker 2: Yeah, I mean absolutely. I started my career at night 802 00:42:52,560 --> 00:42:56,080 Speaker 2: transportation in two thousand and two, and so I've had, 803 00:42:56,280 --> 00:42:59,480 Speaker 2: you know, the pleasure to work closely with Kevin Knight 804 00:42:59,640 --> 00:43:04,120 Speaker 2: for twenty plus years and I've just found from him, 805 00:43:04,320 --> 00:43:09,080 Speaker 2: like what intensity and accountability can do to help, you know, 806 00:43:09,160 --> 00:43:12,040 Speaker 2: improve a business. I mean He's a guy that just 807 00:43:12,360 --> 00:43:15,920 Speaker 2: every day he reads everything that's out there in the market, 808 00:43:16,200 --> 00:43:18,360 Speaker 2: he applies it to how this could work for a business. 809 00:43:18,520 --> 00:43:23,839 Speaker 2: He's so intentional, He's very intense sometimes that that you know, 810 00:43:23,960 --> 00:43:26,640 Speaker 2: not everyone can take him on that in that front, 811 00:43:26,440 --> 00:43:29,680 Speaker 2: but man, he's someone that just does not let anything 812 00:43:29,719 --> 00:43:32,479 Speaker 2: get in his way. And so I tried to learn 813 00:43:32,520 --> 00:43:35,839 Speaker 2: from him and apply that in my own way. But 814 00:43:35,920 --> 00:43:39,960 Speaker 2: really driving accountability to your people, trusting your leaders, but 815 00:43:40,080 --> 00:43:44,799 Speaker 2: being balanced, you know, in terms of how you make decisions, 816 00:43:45,320 --> 00:43:47,600 Speaker 2: engaging with people. I mean, these are all things that 817 00:43:47,600 --> 00:43:50,759 Speaker 2: I've just witnessed him do and try to apply that 818 00:43:51,560 --> 00:43:54,440 Speaker 2: on a daily basis with our teams and continue to 819 00:43:54,480 --> 00:43:55,359 Speaker 2: learn and grow from it. 820 00:43:56,040 --> 00:43:58,799 Speaker 1: I hope you enjoyed our conversation. Thank you for tuning in. 821 00:43:59,080 --> 00:44:02,000 Speaker 1: If you like the episode, please subscribe and leave a review. 822 00:44:02,480 --> 00:44:05,520 Speaker 1: We've lined up a number of great guests for the podcast, 823 00:44:05,760 --> 00:44:11,359 Speaker 1: so please check back to hear conversations with C suite executives, shippers, regulators, 824 00:44:11,400 --> 00:44:14,880 Speaker 1: and decision makers within the freight markets. Also, if you 825 00:44:14,920 --> 00:44:18,520 Speaker 1: want to learn more about the freight transportation markets, check 826 00:44:18,560 --> 00:44:21,839 Speaker 1: out our work on the Bloomberg Terminal at Bigo and 827 00:44:21,880 --> 00:44:25,319 Speaker 1: on social media. This is Lee Klaskau signing off and 828 00:44:25,360 --> 00:44:28,200 Speaker 1: thanks for talking transports with me. Talk to you next week.