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Speaker 1: Hi everyone, this is Lee Clasgow when We're Talking Transports.

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Speaker 1: Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,

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Speaker 1: Lee Clascow, Senior free transportation logistics analysts at Bloomberg Intelligence,

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Speaker 1: Bloomberg's in house research arm of almost five hundred analysts

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Speaker 1: and strategists around the world. A quick public service announcement

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Speaker 1: before we dive in. Your support is instrumental to keep

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Speaker 1: bringing great guests and conversations to you, our listeners, and

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Speaker 1: we need your support, so please, if you enjoy this podcast,

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Speaker 1: share it, like it and leave a comment. Also, if

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Speaker 1: you've got ideas, feedback, or just want to talk transports,

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Speaker 1: I'm always happy to connect. You can find me on

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Speaker 1: the Bloomberg terminal, on LinkedIn, or on x at Logistics Leak.

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Speaker 1: I'm very excited to have with us today. Thomas Masalon,

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Speaker 1: President and partner of Pinch Transport, a Houston based oil

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Speaker 1: field transportation and logistics company specializing in flatbed LTL services,

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Speaker 1: intermot drage, freight brokerage, and bulk transportation. With nearly twenty

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Speaker 1: years of experience in the oil and gas operations, logistics,

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Speaker 1: supply chain management, and organizational leadership, Thomas is a proven

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Speaker 1: track record of building businesses, driving growth, and delivering operational excellents.

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Speaker 1: He holds a BBA in Supply chain Management from the

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Speaker 1: University of Texas at Austin, so Go Longhorns, Right, Yeah,

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Speaker 1: I hope them. Yeah, thank you so much for joining

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Speaker 1: us today, Thomas.

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Speaker 2: Thanks for having me. Lee.

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Speaker 1: So we met a couple months back at a Tremble

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Speaker 1: event in New Orleans, and you know, I was talking

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Speaker 1: to you for a while and you told me your

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Speaker 1: company does flatbed LTL and I was like, I didn't

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Speaker 1: know there were such a thing. So could you tell

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Speaker 1: us a little more about Pinch Transports.

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Speaker 2: Yeah, sure, so it is. It is a little bit

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Speaker 2: of a niche. We provide LTL service primarily to the

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Speaker 2: oil and gas community, the oil service community. So we

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Speaker 2: have tool terminals throughout the US and Canada, UH in

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Speaker 2: every major oil and gas basin in US and Canada,

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Speaker 2: and we we provided a scheduled service, just like you

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Speaker 2: are probably familiar with with other lt L providers, whether

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Speaker 2: it's SAIA or Old Dominion UH and UH it's it's

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Speaker 2: you know, supports those those service companies operations. They have

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Speaker 2: a lot of tools that are utilized UH in the

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Speaker 2: field on a relocation for example, that our rental tools

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Speaker 2: or tools that are reused multiple times, and we provide

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Speaker 2: that that service to them to their shop, bring delivering

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Speaker 2: the tool to their shop, that tool gets used in

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Speaker 2: the field and then it comes back to one of

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Speaker 2: their shops and in one of our various locations throughout

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Speaker 2: the country to get refurbished, rebuilt and ins and out again.

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Speaker 2: So uh, it's it's uh, like I said, it is

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Speaker 2: a little bit of a niche. But the equipment is

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Speaker 2: requirement is for open deck typically and it's it's business

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Speaker 2: that we've we've built over over you know, the last

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Speaker 2: few decades. That's been a nice niche for us.

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Speaker 1: So, so PINCH is a private company. Is it family owned?

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Speaker 1: Is it private equity? What's the ownership structure?

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Speaker 2: Family owned business, same family ownership for nearly fifty years now, uh,

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Speaker 2: and the family family ownership group is really have logistics,

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Speaker 2: you know, and all all the businesses have been logistics

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Speaker 2: and trucking related businesses. Over over the course of fifty years,

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Speaker 2: we've been involved in local delivery, air free retail distribution,

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Speaker 2: fracts and in bolt distribution, intermodal drayage, brokerage, so it's

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Speaker 2: pretty pretty diverse we utilize, we have, we have some

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Speaker 2: of those still have some of those pieces and service

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Speaker 2: offerings under the current umbrella, the Pinch Transport umbrella today.

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Speaker 2: But our primary business is this LTL flatbed company, and so.

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Speaker 1: That business, you know, I'm assuming you know, you look

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Speaker 1: at some of the publicly traded peers on the lt

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Speaker 1: L side, is it a business that's more profitable or

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Speaker 1: less profitable? I would imagine that there's given the specialty

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Speaker 1: that involved.

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Speaker 2: You guys were able.

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Speaker 1: To for you know, charge a kind of a premium

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Speaker 1: price for what I would assume is a premium service.

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Speaker 2: Yeah, yes, I mean, so we're fortunate to be profitable.

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Speaker 2: It's been a challenging environment for you know, the trucking

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Speaker 2: sector for the last few years. But we are fortunate

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Speaker 2: to be profitable, you know, I think because it is

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Speaker 2: a little bit niche and it is very tied to

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Speaker 2: oil and gas, which for the last three or four

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Speaker 2: years has been relatively steady. You know, the last you know,

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Speaker 2: twenty one twenty two, coming out of the pandemic and

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Speaker 2: into twenty three, the oil and gas industry was was

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Speaker 2: really booming at that time, twenty four to twenty five

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Speaker 2: kind of a steady, steady period of time, some decline,

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Speaker 2: but relatively steady. So we've we've been able to benefit

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Speaker 2: from that and the activity levels in that sector have

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Speaker 2: have benefited our business.

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Speaker 1: And so you look at the broader LTL space that

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Speaker 1: they've had a lot of tonnage declines over the last

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Speaker 1: numerous quarters. Are you guys able to grow given the

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Speaker 1: nest that you're in.

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Speaker 2: We have, We have been able to grow. It's been

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Speaker 2: through acquisition. We've consolidated. I mean, if you if you

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Speaker 2: look at the only gas base, look at the logistics space,

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Speaker 2: there's been a lot of consolidation over the last few years.

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Speaker 2: We're certainly part of that, and we've been on the

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Speaker 2: acquiring side. That's benefitted our business. The volume, you know,

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Speaker 2: has helped us continue to deliver the service that our

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Speaker 2: customers require. And it's a lot more beneficial to us

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Speaker 2: if we're sending a truck to Midland with ten thousand pounds.

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Speaker 2: With forty thousand pounds is of course to pose to

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Speaker 2: ten thousand pounds. So consolidation was really out of necessity,

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Speaker 2: but we were in a fortunate situation in which we

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Speaker 2: were able to do those deals. And expand our market coverage,

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Speaker 2: spend our service offerings to our customers, and keep the

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Speaker 2: business strong and profitable.

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Speaker 1: When you see a certain price in oil, is there

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Speaker 1: like a certain threshold where all of a sudden business

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Speaker 1: starts increasing, Like is it sixty dollars a barrel or

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Speaker 1: seventy dollars a barrel.

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Speaker 2: It needs to stay within that, you know, just such

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Speaker 2: as sixty or seventy or eighty. You know, that's one thing.

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Speaker 2: But if there's forecasts that if the future's contracts look

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Speaker 2: like oil is going to stay in the eighty dollars

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Speaker 2: range for a twelve month period an eighteen month period,

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Speaker 2: those are positive signs for us as a service company

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Speaker 2: to the wool field because we know that that's going

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Speaker 2: to drive activity at the at the beginning of the chain,

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Speaker 2: which is you know, the operators, the Exxon Mobiles of

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Speaker 2: the world, the Knico Phillips of the world, those operators

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Speaker 2: that are you know, drilling the wells, completing the wells.

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Speaker 2: When we see that sustained kind of seventy five to

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Speaker 2: eighty five dollars range, that's a that's a good healthy

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Speaker 2: place I think for everyone to be. It starts getting

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Speaker 2: a little bit nerve wracking when you're on the other

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Speaker 2: end of that coin, when you're in the environment where

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Speaker 2: we're in today and we have been for like the

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Speaker 2: last year or so, when it's you know, between fifty

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Speaker 2: and sixty five dollars a.

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Speaker 1: Barrel, right, and I guess that anything undred and fifty

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Speaker 1: five dollars a barrel is bad news.

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Speaker 2: For extended periods of time. It can be, you know,

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Speaker 2: it can be. I mean, it's great. It's good for consumers, uh,

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Speaker 2: you know, for all of us. It's good for general business.

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Speaker 2: You know, it's not not great for folks tied so

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Speaker 2: directly to oil and gas. But you know, at PITCHED,

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Speaker 2: we we try to diversify uh, you know, our service

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Speaker 2: offerings through our our intermodal drayage company and through our

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Speaker 2: brokerage business to help us kind of level load those

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Speaker 2: the volatility that comes with you know, servicing, you know,

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Speaker 2: an industry like oil and gas.

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Speaker 1: Yes, so the LTL business leadst the traditional LTL business

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Speaker 1: has had pretty good pricing because it's it's relatively a

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Speaker 1: consolidated and rational market. You know, you've seen mid single

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Speaker 1: digit and revenue for one hundred weight excluding fuel search

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Speaker 1: arges for the publicly traded carriers. Does that flow through

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Speaker 1: into your business or is pricing more competitive? You know,

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Speaker 1: do you have a lot of competition out there or

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Speaker 1: is it just one or two players that are doing

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Speaker 1: what you guys do?

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Speaker 2: Yeah, I think I think from a broad base, we

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Speaker 2: really don't have we have a lane competition, So we

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Speaker 2: may have competition within a lane from Houston to midlind

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Speaker 2: or Houston to Oklahoma, or some of the Canadian lanes

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Speaker 2: from Edmonton down to Houston and whatnot, but you know,

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Speaker 2: across the board, for our entire service network, we really

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Speaker 2: don't have competition. Our customer base. They're out there trying

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Speaker 2: to win work. Yeah, they they have a very competitive

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Speaker 2: market that they're they're operating in, and they're very cost conscious.

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Speaker 2: So we try to be really good partners with them

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Speaker 2: and are cognizant of how large of a piece of

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Speaker 2: their cost structure the legit sticks makes up. It may

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Speaker 2: not make a very large piece for you know, the

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Speaker 2: world company, but for some of these service companies it

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Speaker 2: is a big piece. So we try to we keep

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Speaker 2: that in mind. And you know, we're fair and we

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Speaker 2: appreciate our customers and we work with them and we

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Speaker 2: know that sometimes they're in they're in maybe a tougher

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Speaker 2: battle than we are with their competition, and we're we're

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Speaker 2: aware of that and we acknowledge it.

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Speaker 1: So you know, we don't have to look much further

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Speaker 1: if you're looking at, you know, the media about even

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Speaker 1: if it's outside the niche transportation media outlets about you know,

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Speaker 1: what's going on on the supply side and trucking, whether

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Speaker 1: it's non domicile cd ls or English language proficiencies increase

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Speaker 1: e l D standards. Is that impacting your business?

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Speaker 2: I would say parts of it, yes, you know, certainly

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Speaker 2: on the drage intermotial side, I feel like that's the

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Speaker 2: lowest barriered entry truck in the thirties. And so you know,

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Speaker 2: in the post COVID or during COVID post COVID logistics boom,

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Speaker 2: when there are a lot of capacity entered the marketplace,

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Speaker 2: you know, anybody that had a truck was getting into it.

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Speaker 2: Don't like anyone that had a truck would get into

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Speaker 2: drage because it's a power only move effectively, it's pretty

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Speaker 2: easy to get into. And so once once the world

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Speaker 2: kind of got back to normal, that market seemed very depressed.

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Speaker 2: And I would say over the last six and nine months,

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Speaker 2: we've kind of seen some pricing come back there in

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Speaker 2: a positive way for us. So I think it's it's,

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Speaker 2: you know, kind of industry or service level specific, but

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Speaker 2: we certainly do see, you know, some of this attrition

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Speaker 2: of the supply and that's reflecting in pricing and you know, availability, capacity, availability.

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Speaker 1: Right in your dra age business, did you guys own

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Speaker 1: own Do you have company drivers or is it independent contractor?

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Speaker 2: How do you primarily independent contractors? We do have some

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Speaker 2: company drivers, but we're eighty eighty five percent independent contractor.

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Speaker 1: And that's like going in and out of the port

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Speaker 1: of I guess Houston.

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Speaker 2: Port of Houston, Real Terminals in Dallas Worth, Real Terminals

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Speaker 2: in Houston.

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Speaker 1: Out of all your businesses, where is the growth coming from?

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Speaker 1: The organic growth coming from? Because you did mention that

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Speaker 1: you guys do do some M and A.

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Speaker 2: You know, the organic growth for us has really been

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Speaker 2: the brokerage business. General freight feels like it's starting to

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Speaker 2: improve to me. We've also seen growth in our dedicated

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Speaker 2: trucking services. We have we have some customers that are

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Speaker 2: building out infrastructure and inspecting infrastructure, pipeline, infrastruy ructure, throughout

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Speaker 2: the United States that has that business has grown for us,

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Speaker 2: that service line has grown for us, and it's really

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Speaker 2: I think a byproduct of what's going on in you know,

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Speaker 2: the AI boom. The infrastructure that's needed, the transfer of

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Speaker 2: energy to support the energy demands of these data centers

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Speaker 2: has required this build out and there's there's a lot

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Speaker 2: of equipment that's need, a lot of logistics behind, a

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Speaker 2: lot of robust supply chains that are needed to support uh,

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Speaker 2: this kind of new world that we're in. And we've

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Speaker 2: we've been able to benefit from that just you know,

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Speaker 2: organically from our customer's growth and we've grown with them.

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Speaker 1: And is that a AI related demand. Has that been

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Speaker 1: mostly in Texas.

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Speaker 2: Or is it it's it's uh, it's in Texas. A

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Speaker 2: lot of the in the kind of in the Midwest,

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Speaker 2: the Ohio River Valley area. A lot of these data

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Speaker 2: centers are being placed in areas where there's low cost

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Speaker 2: to energy. And you know, in the Northeast you have

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Speaker 2: one of the most prolific natural gas basins in the

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Speaker 2: world in the Marcellus and Utica shale, and so there's

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Speaker 2: there's a lot of build out of data centers and

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Speaker 2: infrastructure required to make those dinerships data centers run. And

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Speaker 2: so we're we've been we've been benefiting from that organically.

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Speaker 1: You know, you mentioned the energy boom from AI. Are

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Speaker 1: you guys leveraging any sort of AI machine learning and

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Speaker 1: I'm assuming given your size, it's mostly off the shelf

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Speaker 1: stuff or are you guys building it in house?

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Speaker 2: We've done a combination. Uh so, we we do have

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Speaker 2: some off the shelf AI as we're on the on

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Speaker 2: the safety side with the camera systems that we use

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Speaker 2: in our our trucks. We have driver facing and board

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Speaker 2: facing cameras, and the driver facing cameras have AI capabilities

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Speaker 2: that will notify our personnel if and when you know

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Speaker 2: the drivers, the habits of their how they how quickly

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Speaker 2: and how often they blink their eyes. If that, if

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Speaker 2: that pattern becomes you know, elongated, then AI will notify

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Speaker 2: us that maybe this driver is getting drowsy, maybe you

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Speaker 2: should call him, maybe you should tell him to take

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Speaker 2: a break, or you know, the AI the camera can

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Speaker 2: notice that the driver didn't buckle his seat belt, things

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Speaker 2: like that. So that's off the shelf AI technology that

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Speaker 2: we're utilizing today. We've implemented some through through partnerships and

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Speaker 2: development ourselves to help on the order entry side and

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Speaker 2: on the accounts payable side to automate order creation within

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Speaker 2: our t ms as well as payables payables on on

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Speaker 2: on the AP side. We're we're doing that today, uh,

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Speaker 2: through a combination of you know, off the shelf and

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Speaker 2: then also some i'll call it, you know, collaborative development. Yeah.

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Speaker 1: You know, when I think of AI, obviously, I think

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Speaker 1: a lot about the brokerage industry of C. H. Robinson

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Speaker 1: out there that talks about you know, what they're doing

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Speaker 1: and that coupled with their management techniques, you know, as

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Speaker 1: a as a broker a like are you do do

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Speaker 1: you operate in kind of niche markets or are you

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Speaker 1: do you do broad freight? And then like how does

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Speaker 1: a small brokerage kind of compete with these large companies

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Speaker 1: with with huge pockets.

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Speaker 2: Yeah, now that's so, you know, our brokerage company is

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Speaker 2: really a it's really boutique, you know it It operates

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Speaker 2: as a relief valve for our st companies. So you know,

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Speaker 2: we we're not we're not shopping the load boards typically

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Speaker 2: you know, good good piece of the revenue is just

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Speaker 2: overflow capacity that our asset companies can't handle, which creates

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Speaker 2: a really nice kind of white glove service to our

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Speaker 2: customers because you know, they get to deal with one party.

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Speaker 2: Our customers have very high service demands and so they

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Speaker 2: know that if our brokerage company is handling the move

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Speaker 2: that they're going to adhere and they understand, you know,

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Speaker 2: that the standards that they expect because you know, we

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Speaker 2: we we handle that business on the asset side. Now,

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Speaker 2: we do we do we do some project work and

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Speaker 2: that's where we've seen some of the improvement in the

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Speaker 2: pricing over the last you know, nine months or so.

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Speaker 2: But really, you know, we're we're we're very white glove,

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Speaker 2: very boutique. We we service our asset customers with that

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Speaker 2: brokerage it's a it's a reallyefoul you know for that

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Speaker 2: for those asset companies.

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Speaker 1: And then you know, on your fleet, you know, you're

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Speaker 1: talking about your assets roughly how many trucks do you

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Speaker 1: guys operate two D and fifty? Are you thinking about

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Speaker 1: the EPA twenty twenty seven engines or are you thinking

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Speaker 1: about maybe like pre buying or that's like you're just

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Speaker 1: going to continue to do what you guys do.

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Speaker 2: You know, so historically we we lease. We have full

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Speaker 2: service leases on most of the assets that we have

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Speaker 2: under management. Okay, through through a few of the acquisitions

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Speaker 2: we've made over the years, we have acquired we have

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Speaker 2: acquired trucks and and have used those trucks and maintained

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Speaker 2: those trucks ourselves, but that really isn't our core competency.

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Speaker 2: We kind of, you know, we've decided to follow this

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Speaker 2: leasing full service lease model or a leasing or not

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Speaker 2: leasing model. So I kind of push it off. I

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Speaker 2: push it off on them Lee. You know, they they

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Speaker 2: they I don't want to have to guess about what

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Speaker 2: the EPA, the government's going to do. You know, they'll

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Speaker 2: you know, they're going to be much closer tied to that.

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Speaker 2: And you know, that's kind of the model we've always

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Speaker 2: we've had that model, and it's worked for us, and

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Speaker 2: because of the and you know, the service intensity that

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Speaker 2: that is required and for most of our customer base

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Speaker 2: on the oil and gas side, you know, it's worked

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Speaker 2: for us. And you know, it's kind of to me.

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Speaker 2: It's it's something that we stay close with them and

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Speaker 2: we monitor it, but it's something that we rely on

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Speaker 2: their expertise to kind of guide us.

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Speaker 1: There, and like how long do you guys keep a

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Speaker 1: truck for on these leases?

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Speaker 2: You know, typically the leases are anywhere between five and

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Speaker 2: seven years. Sometimes we're able to negotiate clauses that allow

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Speaker 2: us to opt out a little earlier than that or

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Speaker 2: early exchange for a newer unit, but you know, typically

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Speaker 2: it's five or seven and it's a new truck. I mean,

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Speaker 2: that's if you're going to own a truck, that's probably

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Speaker 2: all you want to keep it in service for before

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Speaker 2: you you know, go through assets position. You know, we're

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Speaker 2: we're running on the road primarily. It's it's it's not

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Speaker 2: really a lot of idle and engine hours that are

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Speaker 2: associated with with these with these units, so that that

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Speaker 2: that works for us, you know that that that term

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Speaker 2: you know, and and kind of the structure that we

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Speaker 2: the least structures that we have in place, you know,

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Speaker 2: have have worked for us over the years.

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Speaker 1: And are they these mostly day cabs or do you

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Speaker 1: have sleepers as well?

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Speaker 2: Day cabs and sleepers? You know, we we've got the

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Speaker 2: regional network, which you know, I call anything within within

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Speaker 2: six hundred miles of Houston, which includes Midland, Oklahoma City,

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Speaker 2: Lafeya Louisiana, Dallas. You know, those we're going to run

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Speaker 2: primarily with with daycaps. But then we have our long

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Speaker 2: haul network where we service the Rocky Mountains, Casper, Wyoming, Willison,

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Speaker 2: North Dakota, Calgary and LaDuke, Alberta, and West Virginia, Ohio,

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Speaker 2: Pennsylvania up in the northeast. That's where we're going to

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Speaker 2: run sleeper units.

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Speaker 1: You know these well I need to tell you, but

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Speaker 1: like fracking wells, you know they obviously they need a

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Speaker 1: lot of stuff to work, whether it's sand and water

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Speaker 1: and chemicals. Do you guys bring that stuff as well?

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Speaker 2: Yeah, So we have a division we haul fraxand in

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Speaker 2: West Texas, South Texas, East Texas, North Louisiana. I spent

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Speaker 2: you know, seven years in that world. Had we had

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Speaker 2: a we had a company called Sandbox Logistics. There was

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Speaker 2: a last mile frak Sanne delivery company that we we

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Speaker 2: started back in twenty twelve and sold it in twenty

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Speaker 2: six team to US Silica, a mining mining company, sand

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Speaker 2: mining company. So I'm very familiar with that space and

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Speaker 2: and we have relationships in that space and knowledge of

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Speaker 2: that space, and uh we still we still provide those

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Speaker 2: services today. Uh.

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Speaker 1: At pitch and then like in addition to the tool,

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Speaker 1: as you mentioned, like what other things are you bringing

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Speaker 1: to the wells?

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Speaker 2: Yeah, so there's valves, wellheads, mud motors which are looked

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Speaker 2: like you know, the rotors and staters, and we're taking

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Speaker 2: pipe to location. It's if you were if you come

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Speaker 2: to our to our yard, you'd see a lot of

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Speaker 2: really cool, interesting equipment that's you wouldn't believe would be

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Speaker 2: used out on a on a drilling location or or

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Speaker 2: frack or fract location.

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Speaker 1: And just a dumb question because you're not backing this

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Speaker 1: up to a loading dock. How does this stuff get

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Speaker 1: on and off the trucks when you're at these you

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Speaker 1: know sites.

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Speaker 2: Yeah, so we're we're you know, there's there's forklifts, uh,

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Speaker 2: you know, varying sizes of forklifts depending on the size

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Speaker 2: of the equipment. But I mean it's all legal loads.

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Speaker 2: It's just it doesn't it's not well suited to be

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Speaker 2: drug out of a you know, fifty three foot drive

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Speaker 2: man or a twenty six foot box truck. You know,

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Speaker 2: this this stuff is finished material and may be coated

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Speaker 2: and maybe chrome plated. You know, you can't be drugged

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Speaker 2: across the floorboards of a trailer and damage. So it

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Speaker 2: needs to be it needs to be able to be

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Speaker 2: you know, loaded and unloaded, especially lt L when you're

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Speaker 2: working around other customers. Great, it needs to have the

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Speaker 2: capability that the open deck provides, uh, to you know,

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Speaker 2: loaded and unloaded from the sides and however, but it's

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Speaker 2: it's it's just uh, you know, an eight thousand pound

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Speaker 2: forklifts maybe at thirty thousand pound forklift, you know, just

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Speaker 2: depending on the size of the material.

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Speaker 1: And I would I guess your drivers probably make a

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Speaker 1: little more than the average just given the additional work

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Speaker 1: and and and safety that they have to be here too.

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Speaker 2: Yeah, I mean, we we were very stringent, you know

391
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Speaker 2: in the criteria that we follow for for our our

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00:24:29,240 --> 00:24:34,199
Speaker 2: driver qualifications, our hiring process, and we need we need

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Speaker 2: drivers that have experience with flatbed and strapping strap strapping

394
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Speaker 2: this equipment down because you know, it's it's high value

395
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Speaker 2: equipment and it's also can be very dangerous if it

396
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Speaker 2: were to come loose on the road, and we can't

397
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Speaker 2: we can't have that. So, yeah, the driver requirements are

398
00:24:57,640 --> 00:25:01,480
Speaker 2: a little bit more stringent. We have to you know,

399
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Speaker 2: adhere to that and to ensure that you know, we

400
00:25:04,920 --> 00:25:07,800
Speaker 2: operate safely and you know, folks on the road when

401
00:25:07,800 --> 00:25:09,959
Speaker 2: we're going when we're down the road, going down the road,

402
00:25:10,080 --> 00:25:11,200
Speaker 2: they're they're safe as well.

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Speaker 1: And what what are your core customers telling you about demand?

404
00:25:14,560 --> 00:25:17,480
Speaker 1: Because you know we discussed it. It does have to

405
00:25:17,480 --> 00:25:20,600
Speaker 1: do with the prices of oil, Like are they are

406
00:25:20,600 --> 00:25:23,879
Speaker 1: they feeling anxious now or are they talking about, you know,

407
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Speaker 1: needing more capacity.

408
00:25:27,760 --> 00:25:32,560
Speaker 2: You know, most of our core customers are feeling like

409
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Speaker 2: twenty six is going to look pretty similar to twenty

410
00:25:35,720 --> 00:25:39,359
Speaker 2: twenty five. Yeah, they're feeling on the on the our

411
00:25:39,400 --> 00:25:42,840
Speaker 2: flat that lt L side, it's mostly tearing by hole

412
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Speaker 2: and gas. You know, that's generally the commentary that we

413
00:25:47,359 --> 00:25:52,679
Speaker 2: hear in the you know general freak through brokerage and

414
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Speaker 2: through intermodal. I feel more optimistic that that you know,

415
00:26:00,119 --> 00:26:04,439
Speaker 2: supply is starting to maybe leave the market and you

416
00:26:04,480 --> 00:26:09,200
Speaker 2: know demand is increasing on that front. On those fronts,

417
00:26:10,240 --> 00:26:13,000
Speaker 2: you know, the Port of Houston we saw a three

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Speaker 2: percent increase in container traffic twenty four versus twenty twenty five.

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Speaker 2: So I think, you know, those things are positive for

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Speaker 2: us on on the in those sectors.

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Speaker 1: Do you do you have any thoughts on the potential

422
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Speaker 1: for rail consolidation. Are you are you servicing you know,

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Speaker 1: both up and be an s F.

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Speaker 2: Yeah, motor rams, Yeah, we service both ramps. You know,

425
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Speaker 2: I don't I haven't heard or I don't know if

426
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Speaker 2: that will impact us. You know, I haven't heard anything

427
00:26:52,920 --> 00:26:56,439
Speaker 2: that would make me think that it would. But but

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00:26:58,640 --> 00:27:01,200
Speaker 2: you know we we we currently service both.

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Speaker 1: What are kind of like, you know, looking forward at

430
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Speaker 1: some of the exciting developments within the freight markets that

431
00:27:07,760 --> 00:27:10,959
Speaker 1: you're excited about, you know, outside the overall freight cycle.

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00:27:11,560 --> 00:27:15,120
Speaker 1: You know, is it new technology whether you know, I'm

433
00:27:15,160 --> 00:27:19,920
Speaker 1: assuming you guys aren't experimenting with autonomous trucking or anything

434
00:27:19,960 --> 00:27:22,920
Speaker 1: like that, but like, are you looking at evs or

435
00:27:22,960 --> 00:27:25,520
Speaker 1: anything else that you're kind of looking at?

436
00:27:25,640 --> 00:27:32,320
Speaker 2: The electric trucks and the autonomous trips. I find a

437
00:27:32,359 --> 00:27:36,160
Speaker 2: hard time. I think that you know, there's a right

438
00:27:36,200 --> 00:27:39,960
Speaker 2: tool for every job and maybe for the right you

439
00:27:40,000 --> 00:27:44,600
Speaker 2: know sector, Those things will work for us, as you

440
00:27:44,760 --> 00:27:47,680
Speaker 2: kind of mentioned already, I mean, the drivers are strapping

441
00:27:47,720 --> 00:27:51,960
Speaker 2: and restrapping and unstrapping freight. That's going to be kind

442
00:27:51,960 --> 00:27:55,840
Speaker 2: of hard to do with nobody in the truck. But

443
00:27:56,000 --> 00:27:58,879
Speaker 2: I think, you know, for from an exciting standpoint. I

444
00:27:59,200 --> 00:28:02,600
Speaker 2: do think that you know, AI gets a lot of

445
00:28:04,240 --> 00:28:07,480
Speaker 2: publicity now and a lot of hype, but I think

446
00:28:07,520 --> 00:28:11,040
Speaker 2: you can do some pretty pretty simple things on that front.

447
00:28:11,359 --> 00:28:14,480
Speaker 2: And whether there's not just technology, you know, in general,

448
00:28:14,840 --> 00:28:18,600
Speaker 2: I think we're always looking for ways we can get

449
00:28:18,640 --> 00:28:23,120
Speaker 2: more efficient and use technology to become more efficient. And

450
00:28:23,400 --> 00:28:27,400
Speaker 2: whether it's AI or anything else, those are the exciting

451
00:28:27,440 --> 00:28:31,520
Speaker 2: things that that I'm looking for and in my position

452
00:28:31,720 --> 00:28:34,640
Speaker 2: at running this company is how can we get more efficient?

453
00:28:35,480 --> 00:28:38,479
Speaker 2: And how do you know, knowing that we operate in

454
00:28:38,480 --> 00:28:45,960
Speaker 2: a cyclical industry, with cyclical markets and volatile markets, how

455
00:28:45,960 --> 00:28:50,880
Speaker 2: do you weather those storms and find and the only

456
00:28:50,880 --> 00:28:53,200
Speaker 2: way to do that is really to be efficient in

457
00:28:53,240 --> 00:28:54,160
Speaker 2: the way that you operate.

458
00:28:54,680 --> 00:28:58,480
Speaker 1: So, you know, fraud has become, you know, an increasingly

459
00:29:00,040 --> 00:29:03,280
Speaker 1: problem within within the freight markets, within trucking, especially in

460
00:29:03,320 --> 00:29:06,920
Speaker 1: the broker industry. What are you guys doing to kind

461
00:29:06,920 --> 00:29:09,960
Speaker 1: of try to fight fraud or do you have systems

462
00:29:10,000 --> 00:29:12,240
Speaker 1: in place or are these systems that are like off

463
00:29:12,280 --> 00:29:12,760
Speaker 1: the shelf?

464
00:29:13,040 --> 00:29:15,600
Speaker 2: Yeah, I mean, so we we we use some off

465
00:29:15,600 --> 00:29:20,240
Speaker 2: the shelf products that that help us identify you know,

466
00:29:20,320 --> 00:29:23,920
Speaker 2: double double broke. You know folks that are are being

467
00:29:23,960 --> 00:29:29,040
Speaker 2: flagged as have a propensity for maybe double brokery and

468
00:29:29,280 --> 00:29:34,640
Speaker 2: maybe I have you know, we're always monitoring insurance certificates

469
00:29:34,680 --> 00:29:40,040
Speaker 2: and and where if those are valid, and you know,

470
00:29:40,160 --> 00:29:45,920
Speaker 2: monitoring if if if you know, truck counts on fmcsa

471
00:29:46,160 --> 00:29:50,640
Speaker 2: matchup with the trucks that are actually insured from these carriers.

472
00:29:50,680 --> 00:29:53,040
Speaker 2: So we do those things. I think we do a

473
00:29:53,040 --> 00:29:57,160
Speaker 2: really good job. I mean, we're we have sixteen hundred

474
00:29:57,160 --> 00:30:00,840
Speaker 2: carriers and our brokerage network, but we're really we're really

475
00:30:00,840 --> 00:30:03,400
Speaker 2: because I said it's so white bluff kind of boutique,

476
00:30:03,640 --> 00:30:06,080
Speaker 2: there's really only maybe a couple of hundred that were

477
00:30:06,160 --> 00:30:09,760
Speaker 2: consistently using. So we have a relationship with them and

478
00:30:09,800 --> 00:30:12,920
Speaker 2: we we know those carriers and those truckers well, so

479
00:30:13,000 --> 00:30:17,040
Speaker 2: we we haven't seen, you know, the freight fraud that

480
00:30:17,080 --> 00:30:19,960
Speaker 2: maybe some of the big shops like a CH or

481
00:30:20,000 --> 00:30:23,000
Speaker 2: a TQL maybe I've seen over the last few years.

482
00:30:23,120 --> 00:30:23,760
Speaker 1: Well that's good.

483
00:30:24,200 --> 00:30:27,160
Speaker 2: I mean we're just like anybody, any business, any individual.

484
00:30:27,200 --> 00:30:32,720
Speaker 2: I mean we've had some crazy uh scams and phishing

485
00:30:32,720 --> 00:30:36,280
Speaker 2: attempts via emails and things like that that have taken

486
00:30:36,320 --> 00:30:40,680
Speaker 2: place that we've had to you know that we've recognized

487
00:30:40,800 --> 00:30:46,160
Speaker 2: but you know, from the freight fraud standpoint, we've we've

488
00:30:46,160 --> 00:30:48,760
Speaker 2: been able to knock on wood stay out of that.

489
00:30:49,080 --> 00:30:51,480
Speaker 1: So what kind of inflationary pressures are you dealing with

490
00:30:51,480 --> 00:30:53,840
Speaker 1: on the cross side? What are what are kind of

491
00:30:54,160 --> 00:30:58,520
Speaker 1: the line items that are increasing more and kind of

492
00:30:58,880 --> 00:31:01,600
Speaker 1: is there anything you can do to mitigate those increases?

493
00:31:02,000 --> 00:31:04,600
Speaker 2: Well, I mean, I'm sure you know, if you talk

494
00:31:04,640 --> 00:31:08,520
Speaker 2: to any anyone in the trucking business, you know that

495
00:31:08,680 --> 00:31:14,080
Speaker 2: that hasn't you know, Equity stake it insurance has become

496
00:31:14,200 --> 00:31:17,640
Speaker 2: over the last few years, one of the biggest inflationary

497
00:31:18,000 --> 00:31:21,479
Speaker 2: costs and it's it's it's a big it's a big issue.

498
00:31:21,760 --> 00:31:24,280
Speaker 2: It's a big issue. I mean, the the amount of

499
00:31:24,320 --> 00:31:29,400
Speaker 2: carriers that write insurance for trucking companies has dwindled, so

500
00:31:30,040 --> 00:31:33,959
Speaker 2: the available market is not there, so there's limited competition

501
00:31:34,720 --> 00:31:38,600
Speaker 2: the excess market. So you know, we a lot of

502
00:31:38,600 --> 00:31:43,760
Speaker 2: our customers require excess umbrella coverage on top of our

503
00:31:44,360 --> 00:31:51,040
Speaker 2: general and autoliability. That has become prohibitively expensive. Not just

504
00:31:51,080 --> 00:31:54,040
Speaker 2: in trucking, that's across the board. I mean property insurance,

505
00:31:54,400 --> 00:31:58,080
Speaker 2: excess coverage has gotten really expensive over the last few years,

506
00:31:58,120 --> 00:32:04,440
Speaker 2: and it's just I think it's it's put a lot

507
00:32:04,520 --> 00:32:07,240
Speaker 2: of small trucking companies out of business, and it will

508
00:32:07,280 --> 00:32:10,920
Speaker 2: put more small and mid sized trucking companies out of business,

509
00:32:11,760 --> 00:32:16,080
Speaker 2: uh going forward. I mean it's it's I heard time

510
00:32:16,080 --> 00:32:17,040
Speaker 2: and time again.

511
00:32:17,640 --> 00:32:21,200
Speaker 1: Right, And then the litigators are out there looking for cases,

512
00:32:21,280 --> 00:32:26,000
Speaker 1: and sometimes they're even being financed by uh, you know,

513
00:32:26,400 --> 00:32:30,200
Speaker 1: private equity in Texas and last time was there there's

514
00:32:30,240 --> 00:32:33,560
Speaker 1: some very funny billboards on the highways and and TV

515
00:32:33,640 --> 00:32:35,600
Speaker 1: commercials on on the local network.

516
00:32:36,120 --> 00:32:39,640
Speaker 2: Yeah, don't get me started. Uh, They're everywhere. And that's

517
00:32:39,680 --> 00:32:43,200
Speaker 2: that's part of the problem, I know. You know, Texas

518
00:32:43,240 --> 00:32:48,840
Speaker 2: has has made made an effort to try to reform

519
00:32:48,960 --> 00:32:52,320
Speaker 2: some of that. Some states some states have also tried

520
00:32:52,320 --> 00:32:55,040
Speaker 2: to make an effort to reform uh some of that.

521
00:32:55,240 --> 00:32:59,520
Speaker 2: But you know, it's when there's when there's Wall Street

522
00:32:59,760 --> 00:33:02,400
Speaker 2: money behind it and private equity money behind it, it's

523
00:33:02,400 --> 00:33:05,000
Speaker 2: pretty hard to fight. And then when the you know,

524
00:33:05,160 --> 00:33:10,560
Speaker 2: planting attorneys are kind of joined at the hip with

525
00:33:10,640 --> 00:33:16,320
Speaker 2: maybe some of these with the local the local judges,

526
00:33:16,640 --> 00:33:19,120
Speaker 2: it becomes a tough battle, you know, and you know,

527
00:33:19,480 --> 00:33:21,720
Speaker 2: we all pay for that at the end of the day,

528
00:33:21,960 --> 00:33:24,200
Speaker 2: you know, I mean we're all paying for that because

529
00:33:24,240 --> 00:33:27,560
Speaker 2: it's just going to become more expensive for the truckers

530
00:33:28,360 --> 00:33:32,800
Speaker 2: to move goods and goods around, and ultimately consumers pay

531
00:33:32,840 --> 00:33:33,040
Speaker 2: for that.

532
00:33:33,440 --> 00:33:35,960
Speaker 1: So, you know, how did you get into the trucking industry?

533
00:33:35,960 --> 00:33:37,040
Speaker 1: Were born into it?

534
00:33:37,120 --> 00:33:37,360
Speaker 2: Did you?

535
00:33:37,560 --> 00:33:38,680
Speaker 1: Did you stumble into it?

536
00:33:39,240 --> 00:33:40,640
Speaker 2: So? I grew up in it. You know, I kind

537
00:33:40,640 --> 00:33:45,640
Speaker 2: of mentioned that. We we been been involved in a

538
00:33:45,640 --> 00:33:50,360
Speaker 2: lot of trucking companies and logistics businesses over the years.

539
00:33:51,000 --> 00:33:51,120
Speaker 1: Uh.

540
00:33:51,920 --> 00:33:57,880
Speaker 2: So I grew up in it. Sure, I was never

541
00:33:57,920 --> 00:34:01,720
Speaker 2: going to get get in it. And I after I

542
00:34:01,720 --> 00:34:04,560
Speaker 2: got out of college, I started working in the one

543
00:34:04,600 --> 00:34:10,120
Speaker 2: gas industry and uh I did that for a few years,

544
00:34:10,880 --> 00:34:15,240
Speaker 2: and uh one of my my partners stay at pitch

545
00:34:15,680 --> 00:34:18,920
Speaker 2: uh reached out to me in regards to I mentioned

546
00:34:18,920 --> 00:34:23,440
Speaker 2: the sandbox business. He reached out to me to ask

547
00:34:23,480 --> 00:34:25,280
Speaker 2: me if I would come help him build that company.

548
00:34:26,560 --> 00:34:30,359
Speaker 2: And uh I had a big logistics component to it,

549
00:34:31,760 --> 00:34:36,319
Speaker 2: you know, it was practicing logistics. Uh also heavily tied

550
00:34:36,320 --> 00:34:41,960
Speaker 2: to the woolfield. So we uh we did that. We

551
00:34:42,080 --> 00:34:46,680
Speaker 2: we we did did well on that venture. And UH,

552
00:34:46,920 --> 00:34:49,080
Speaker 2: you know, now I can't get out of the trucking business.

553
00:34:49,080 --> 00:34:50,000
Speaker 2: I guess.

554
00:34:53,640 --> 00:34:55,640
Speaker 1: You know, I usually at the end of the conversation,

555
00:34:55,680 --> 00:34:57,600
Speaker 1: I'd like to ask, uh the guests if they have

556
00:34:57,640 --> 00:35:00,600
Speaker 1: a particular book about transportation or leadership that's kind of

557
00:35:01,120 --> 00:35:04,719
Speaker 1: resonated with them over the years. So anything for you.

558
00:35:05,280 --> 00:35:07,279
Speaker 2: I like. You know what a book that I like

559
00:35:07,640 --> 00:35:14,719
Speaker 2: is the Prize Daniel Jurgen. So it's it's actually about

560
00:35:15,040 --> 00:35:17,239
Speaker 2: the history of oil. So it goes back to like

561
00:35:17,320 --> 00:35:22,640
Speaker 2: the eighteen fifties. H and uh. But you know, there

562
00:35:22,719 --> 00:35:28,320
Speaker 2: was such a huge logistics and infrastructure component to the book,

563
00:35:29,280 --> 00:35:32,279
Speaker 2: you know, with the shipping lanes that were necessity that

564
00:35:32,320 --> 00:35:37,239
Speaker 2: were needed and created by uh, you know, BP and

565
00:35:38,120 --> 00:35:42,400
Speaker 2: Rockfeller and and then you know the rail lines that

566
00:35:42,480 --> 00:35:47,480
Speaker 2: then became integrated into you know, standard oil and John D. Rockfeller.

567
00:35:47,719 --> 00:35:52,000
Speaker 2: So there's there's a huge logistics component you know, tied

568
00:35:52,120 --> 00:35:56,400
Speaker 2: into uh, the history of oil. And I think it

569
00:35:56,800 --> 00:36:00,480
Speaker 2: kind of it's coming, you know, full sir. You know

570
00:36:00,520 --> 00:36:06,040
Speaker 2: I mentioned AI earlier, and how you know, really the

571
00:36:06,080 --> 00:36:08,680
Speaker 2: winners in that space are going to be the folks

572
00:36:08,719 --> 00:36:13,560
Speaker 2: that figure out the supply chain, the infrastructure on providing

573
00:36:13,560 --> 00:36:17,880
Speaker 2: the energy to support the demand that these data centers

574
00:36:17,920 --> 00:36:22,759
Speaker 2: require and that this technology boom requires and that's going

575
00:36:22,840 --> 00:36:26,520
Speaker 2: to take you know, we're both robust supply chains and

576
00:36:28,080 --> 00:36:31,920
Speaker 2: strong logistic networks. And I think there's a lot of

577
00:36:31,920 --> 00:36:35,920
Speaker 2: correlation between that book. It's a long book, and you

578
00:36:36,000 --> 00:36:38,799
Speaker 2: watch the documentary, it's eight parts, it's like eight hours long,

579
00:36:39,000 --> 00:36:42,160
Speaker 2: but it's really good. But there's a lot of correlation.

580
00:36:42,239 --> 00:36:44,040
Speaker 2: You know, you can see something that happened one hundred

581
00:36:44,040 --> 00:36:48,080
Speaker 2: and fifty plus years ago that it's still you know,

582
00:36:48,239 --> 00:36:50,120
Speaker 2: very relevant today.

583
00:36:50,560 --> 00:36:53,040
Speaker 1: Great, well, Thomas, I really want to thank you for

584
00:36:53,040 --> 00:36:56,239
Speaker 1: your time and insight today. I really appreciate learning more

585
00:36:56,280 --> 00:36:57,560
Speaker 1: about the business.

586
00:36:57,280 --> 00:36:57,680
Speaker 2: That you're in.

587
00:36:57,880 --> 00:37:00,200
Speaker 1: I appreciate Lee, thank you, and I also want to

588
00:37:00,239 --> 00:37:02,120
Speaker 1: thank you for tuning in. If you liked the episode,

589
00:37:02,160 --> 00:37:04,960
Speaker 1: please subscribe and leave a review. We've lined up a

590
00:37:05,000 --> 00:37:07,160
Speaker 1: number of great guests for the podcast, so please check

591
00:37:07,239 --> 00:37:12,080
Speaker 1: back to hear conversations with C suite executives, shippers, regulators,

592
00:37:12,120 --> 00:37:15,400
Speaker 1: and decision makers within the freight markets. Also, if you

593
00:37:15,440 --> 00:37:18,560
Speaker 1: want to learn more about the freight transportation markets, check

594
00:37:18,560 --> 00:37:21,640
Speaker 1: out our work on the Bloomberg Terminal at BIGO and

595
00:37:21,719 --> 00:37:25,080
Speaker 1: on social media. This is Lee Glasgow signing off and

596
00:37:25,120 --> 00:37:27,439
Speaker 1: thanks for talking transports with me. Talk to you next

597
00:37:27,440 --> 00:37:35,480
Speaker 1: week bye