Supply Chain Saga

Welcome to Supply Chain Saga, the podcast that takes you on a journey through the interconnected world of supply chain and logistics. Join us as we unravel fascinating stories and engage with thought leaders, innovators, and operators who are revolutionizing this dynamic industry. Each episode brings you fresh insights, explores cutting-edge trends, and uncovers the technologies that are shaping the way we move goods and ideas across the globe. Whether you're a seasoned professional or simply intrigued by the complex networks that power our modern lives, Supply Chain Saga offers an enriching and enlightening exploration into the ever-evolving realm of supply chain management. Tune in, and let's embark on this epic adventure together!

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Supply Chain Saga

How to Build a 3PL from Scratch with BJ Patterson | Supply Chain Saga Ep. 001

January 13, 2023 • Mark Taylor

0:00 | 1:22:22

BJ Patterson, founder and CEO of Pacific Mountain Logistics, shares 32 years of warehousing and logistics experience. BJ started as a temp at Target's 1.3-million-square-foot DC in Fontana, California, moved through Walmart and NFI, then launched his own 3PL during the 2009 recession. He breaks down how to think about supply chains as a pipe rather than a chain, why the best operators make their clients look like heroes, and how to build a 3PL operation from an empty box.

TOPICS COVERED: 
- The "supply pipe" concept and why thinking in continuous flow changes inventory planning 
- Going from corporate logistics at Target and Walmart to running your own 3PL 
- Starting a logistics company during the 2009 recession and why downturns lower the barrier to entry 
- Primary, secondary, and tertiary distribution markets in the US 
- Why warehouse automation augments workers rather than replacing them 
- Building the ideal 3PL: 250-300K SF, omnichannel clients, wraparound services 
- What separates a good warehouse from a great one 
- Why most 3PL operators don't truly understand their per-client profitability

CHAPTERS: 
0:00 Introduction 
4:40 The "Supply Pipe": Flow-Through vs. Stock Inventory 
8:23 BJ's Origin Story: Target, Walmart, and NFI 
12:28 Make Your Client Look Like the Hero 
21:50 The Entrepreneurial Seizure: Starting Pacific Mountain Logistics 
27:54 Today's Market vs. 2008 
38:05 Southern California Warehouse Market 
44:30 The Amazon Effect: How E-Commerce Changed Warehousing 
49:45 Warehouse Automation and the Labor Gap 
58:00 How to Build the Ideal 3PL 
1:09:57 Good vs. Great Warehouses 
1:14:48 3PL Predictions for the Next 5 Years

ABOUT THE GUEST: 
BJ Patterson is the founder and CEO of Pacific Mountain Logistics, a full-service 3PL in San Bernardino, California, with 32 years in warehousing and logistics including senior roles at Target, Walmart, and NFI.

KEY TERMS: 
3PL, third-party logistics, warehouse operations, supply chain, Pacific Mountain Logistics, Inland Empire, omnichannel fulfillment, e-commerce fulfillment, warehouse automation, autonomous mobile robots, distribution markets, starting a logistics company, per-client profitability, warehouse labor shortage, FBA prep

Supply Chain Saga is produced by Mark Taylor, CEO of Warehouse Republic, a 3PL serving omni-channel e-commerce brands that sell through marketplaces like Amazon, Walmart, and Shopify, as well as retail partners like Nordstrom, Scheels, and Bass Pro Shops.

Website: warehouserepublic.com
Podcast: supplychainsaga.com
LinkedIn: linkedin.com/company/warehouse-republic
Host: linkedin.com/in/marktaylor

Have a logistics question? Email mark@warehouserepublic.com

Mark (00:00:03):
Hello, and welcome to the first episode of Supply Chain Saga. I'm Mark Taylor, the co-founder and c e o of Warehouse Republic, a third party logistics company that specializes in e-commerce. Today I'm interviewing BJ Patterson. BJ is the founder and c e o of Pacific Mountain Logistics, a full service, three pl located in San Bernardino, California. BJ is highly respected in the industry, and I'm excited to have him on the show. So let's get started. Yeah. They've made getting into podcasting and everything like that. Extremely. I mean, very, very easy.

B.J. (00:00:37):
That's, it's really cool. I wouldn't know where to start.

Mark (00:00:40):
Yeah. So a little bit of the fun little, like, I mean, they've even got this thing set up to like, have intro music, <laugh>, little little noises. So that's how they do all that stuff. Yeah, I like that. Yeah, it's funny. It's good. Yeah. Got a lot of all, all the good stuff.

B.J. (00:01:00):
Oh my gosh, that's crazy.

Mark (00:01:02):
This one, it runs off of a little micro SD card in the back, and then, uh, it allows you to set just basically everything. I mean, you can, that is so cool. Yeah. So anyway. Well, let's get going. Uh, great. Thank you for being here. I'm happy we're able to make up.

B.J. (00:01:17):
Thanks for having me. Yeah, ab absolutely. Uh, let's go ahead and start with, just go ahead and introduce yourself. Hi, am the BJ Patterson. I'm the c e o and founder of Pacific Mountain Logistics. Uh, we're a third party logistics company based in San Bernardino, California, the Inland Empire Logistics Mecca of the universe.

Mark (00:01:37):
Yep. Uh, I would also say the best operator I have, the, the pleasure of knowing and meeting.

B.J. (00:01:44):
Well, thank you. I I'll Well, thank you for that. The, um, you know, I mean, it's, it's kind of funny. I always say that, um, you know, you don't find logistics. Logistics finds you, you know, I, not too many kids are sitting there in their high school class saying, man, I can't wait to be a logistician someday. Right. And then all of a sudden, wow. 32 years later, you know, you're like the old man on the block, <laugh>.

Mark (00:02:10):
So, with that said, how did it find you?

B.J. (00:02:13):
Where like, it's really funny. It, um, it was a temp job. You know, it's, it's really true. You know, I had, um, I had gotten outta the military. I had done some of this stuff, and, uh, quite frankly, I was going through a divorce and was trying to, I was lining up another job, you know, was gonna take me back overseas. And, and, um, and, and a friend called me and said, Hey, uh, could you help me out? The guy I was in the service with and called me up and said, can you help me out? And said, what's that? And he said, I need you to work in a warehouse for me. Warehouse. I don't know anything about warehouse. I mean, you know, my vision of a warehouse that time was some tin building with a bunch of diesel foreclosed running around in it. And long story. But, uh, he, uh, he talked me into it. I went and talked to him. It was Target with their Fontana, 1.3 million square foot distribution center in Fontana, California. Um, and, uh, they needed someone to work. Uh, Friday, Saturday, Sunday, Monday night, he said, Hey, you, you're divorced. You don't have a life. So <laugh>, so that's, you know, why don't you work those nights? I said, well, well, I'm never gonna have a life. I'll work those nights. Ah, it's just a temp job. Just four months. Right. So, uh, four months turned into six years and, and, uh, kind of got me addicted to the whole logistics thing. 1.3 million square feet.

Mark (00:03:37):
And this is what? 1989? 1990?

B.J. (00:03:41):
.Ok. 1992 Yeah. So 1.3 million back in that time was as big. It was as big it was. There was no, it was one of the few million square footers on the west coast at the time. There were a few, but not very many. I mean, you could count 'em on two hands at the most. I mean, there just weren't very many around. They, and, and they all had names like Target or Walmart or Kmart on 'em. That's the really, that's the only ones that had those bigger buildings at the time. It was, and, and you know, it's kind of funny too, is we had, and we bragged that we had 18 miles of conveyor, you know, in there.

(00:04:17):
And so, um, yeah. In, in, in today's environment, I mean, it, it just, it was so arcane, but at the time, it was state of the art. Everything we were doing was state-of-the-art stuff. And, and, uh, it's kind of funny to go look at today's warehouses and, you know, while they've changed in some aspects, some aspects are exactly the same, they haven't changed at all.

Mark (00:04:43):
What would, gimme some of the: this has really changed. This has not changed at all.

B.J. (00:04:48):
Well, if you go to your, your, what I would call your shipper warehouses, right? Your targets warehouse, you know, uh, the thing that hadn't changed is the sorting and, and the way they manage that. Uh, the things that have changed is much more flow through inventory, not as much stock inventory, you know, obviously the pandemic taught us that maybe they should stock a little more, but, uh, I mean, yes, I mean, it's much more flow through much more just in time today than it was back then, back then when it was primarily pool stock, mostly going to stock, and then pulling from stock to fulfill and, and, you know, to supply the storage. Whereas now it is, you know, very little polls from stock. Majority of it just comes in on a truck, goes straight out.

Mark (00:05:37):
Hmm. And so the ultimate storage end up ending up being the retail location itself.

B.J. (00:05:44):
Yeah. And so it's like, that's kind of your store and a a actually, if they, I mean, if they, you know, if they work it the way they would love it, the store is the, the ship that it's on, the truck that it's on. You know, that transition is the storage. And, you know, just think of it as a pipe, right? So that supply chain, everybody calls it supply chain, and they're really, the, the best terminology would be the supply pipe. Think of it as a pipe. And they're constantly feeding the one end of the pipe. And you're hoping that the flow out the other end is the same flow that sales at, at the rate of sales.

(00:06:18):
So, um, ideally, you know, the, the pipe, this, this flow, that's your storage, ideally. Now, again, that works great until there's a disruption, a pandemic may, you know. Sure. It just so happens to happen. And so now you've got this pandemic, and now, oh my gosh, I don't have anything in storage. And everybody wonders why, oh my gosh, we're out of everything. Well, because we didn't really plan, because you can kind of take that back to 2008, you know, when the Lehman brothers, everything went off the cliff in 2008, all these retailers got caught with so much inventory, they became inventory shy. So what was quote unquote just in time, which really wasn't, we, we jokingly said, just became just late. Everything now is just late <laugh>. I mean, so in, and to some degree, you know, prior to 2008, uh, retailers had a very, very low tolerance for outta stock.

(00:07:18):
I mean, that's all they focused on. They didn't care what it cost them. They didn't want a bare shelf in a store. Now you go to stores today, you, you know, with, with a few exceptions, but not many. And you see the amount of inventory in the stores is so much lower, and, and they have a much higher tolerance to out stocks because then they instruct you to your website. You know, just buy it online. You don't have it here today. So they've cut down a number of SKUs in the stores, and they've limited their inventory in stores and pushed that backup stream to these warehouses that we're sitting half empty. And now they've pushed that backup stream and trying to force people to buy online and buy through that channel, rather through the store.

Mark (00:08:00):
Hmm. So it's interesting. So when you think of it as the pipe, then the container ship is a part of the storage. Mm-hmm. <affirmative>, the sortation warehouse is a part of the storage. The truck's taking it from the water, it's part of the storage.

B.J. (00:08:14):
Your think of it as your rolling warehouse, right? The ship, it's a storage, it's your storage, it's the container on that vessel, you know, that's all storage, it's temporary storage. Right.

Mark (00:08:24):
So, backing up a little bit, how did we go, how'd you go from four months to four years and then a career?

B.J. (00:08:32):
Well, I mean, I think, you know, a couple things. First off, I think logistics is addicting. You know, if, yeah. Particularly if you're a problem solver, if you like to solve problems, logistics is an awesome way to do it. I mean, that's what you do as a, you know, if you're working in warehousing or trucking or any other aspects of it, you're constantly solving problems. Mm-hmm. <affirmative>. And the ones that the person that is most successful is the one that can solve the most problems. Mm-hmm. <affirmative>. And so, you know, working at Target, I just became addicted to this problem solving, and I was successful. I, you know, I got promoted quite a bit there. And then I did the unthinkable one worked with Walmart after that, which is almost like, you know, an American going to work, or actually more like a Soviet going to work for America. I think that's the way they looked at it. <laugh>, you know, like a, some Soviet spy. Cause they used to work for Target.

Mark (00:09:22):
How many, years was it before you could, uh, go back to your target colleagues and have a polite cup of coffee?

B.J. (00:09:28):
Um, it, it was the Walmart people that treated me crappy <laugh>. Right. Frankly, the target people. Like, like, man, this guy's are weird over there. But yeah, they, the Walmart people, I was wor they kept acting like I was still with Target or something. Like I was there to steal their secrets. And, um, but, uh, you know, you, you work that retail, you know, but I always had an entrepreneurial bent to me, you know, I liked that. And, and, and, and you can only go so far in corporate logistics, you know, Walmart, target, you know, they, you know, in order to keep things consistent throughout the organization, look, here's how we do it, don't change it. And that just didn't fit me. So I got myself into the third party side of it, you know, the, you know, working for N F I and, and that's when you learn the entrepreneurial side of it, you know, how to, how to make money at this and how to solve those problems, but do it in a profitable way rather than just solving 'em to solve them.

Mark (00:10:28):
So what was it like going from the behemoth of, like you said, the corporate logistics where look, you know, you're gonna get promoted if you execute our process better than anybody else? Executes the process mm-hmm. <affirmative>, uh, to then getting, what were you recruited to identify? Yeah, yeah. Okay. So then being recruited into this entrepreneurial environment, and they say, okay, we want you to help look for how to do this better.

B.J. (00:10:53):
Yeah. It's, it's so much better. You know, I, I look back and, and, uh, it, it's just so much more fun. Yeah. You know, it, it's, uh, you know, I was very fortunate. I worked for a big, uh, three PL that, uh, you know, gave me a lot of latitude. You know, they did, I mean, they intended, they expected everyone, it, particularly at my level, to be entrepreneurial and to look for ways and how to do it better and how to do it, you know, uh, more cost effectively and, and quite frankly, how to, how to get revenue out of it, how to, how to do that.

(00:11:28):
And the other thing is, you know, you go to, even though, you know, the company at NFI know it's who I was working for. I mean, it was a big company, but still, you, they got you involved and you were able to get involved in all kinds of other aspects of the business that typically at a corporate, you know, it's either your job or it's not your job. Right?

Mark (00:11:49):
Right.

B.J. (00:11:49):
It's like corporate real estate. They have, they have real estate people. They would never, ever, ever talk to an operator about a real estate solution. Whereas you go to three PL and like, Hey, we need another building. Well, you better go find one <laugh>, you know? Yeah. You know what I mean? You, you, they, you know, you learn about leases, you learn about all these other aspects of the business that if you're in that corporate world, you just, you just don't get your, I mean, it's very rare that you get to get to touch all those different pieces of the deal.

Mark (00:12:19):
Yeah. You know, so, and again, this, you know, you go back to the original thing of problem solving mm-hmm. <affirmative>.

B.J. (00:12:26):
So it takes problem solving to a new level, because now you're able to learn how to, you know, make things again profitable, I mean, and, and entrepreneurial and, and learn new ways to create revenue, revenue streams and, and look for new, new problems to solve. And, and now you're working with clients, okay, how can I help this client? I mean, the best way to make money is to be, is to make your client look like a hero. Mm-hmm. <affirmative>. Right? So you look at that, whoever you're dealing with, the VP of logistics of for a company or the purchasing, whoever they are, if you approach every day of, was my goal is to make that guy a hero in his company, then I'm golden. You know, I'm golden with them.

(00:13:10):
Uh, and now every time he has a problem, he calls me, I've become the subject matter expert. He calls me, and every time he calls me with a problem, that's a potential revenue stream for me. Mm-hmm. <affirmative>, you know, he, I don't want him calling a consultant. I don't want him calling somebody else. I want him to call me. Right. You know, call in. If I call BJ call, you know, and, and say, look, I want to, you know, I, I have this problem. How do I solve it? And you say, okay, I got this. I, you know, I can call my trucking partners. I can call this guy, I can call that guy, we got this for you. Don't worry about it. So, when you're dealing with somebody inside a company, like, let's say it's a, somebody in purchasing somebody at the, you know, VP of supply chain ops, whatever it may be in a larger company, and it's like your goal is to make them look good.

Mark (00:13:56):
Do you, does it alter when you're actually speaking with the owner and the owner is, you know, it's, it's not about looking good, it's about making the business better.

B.J. (00:14:04):
Well, I mean, I think that, you know, if you take that same attitude with the owner, look, now my goal is not to make you look good. My goal is to make your business run better. Right. Eh, look, my goal is to, you know, look, you know, the, I think Warren Buffet said, you know, pigs get fat. Hogs is slaughtered. Right? So, look, my goal is to reduce your costs. Okay? That may reduce a little bit of my revenue, but my long-term goal here is to be, you know, indispensable to you mm-hmm. <affirmative>. And if I become indispensable to you than long term, I'm gonna make a lot more money than trying to just get fat off of one or two deals.

(00:14:41):
Right. So that owner needs to know that I'm there looking out for his best interest. Right. And if I'm looking out for his best interest, he's gonna keep coming back to me. And by the way, you know, owners sometimes open other companies or, or this purchasing manager skips and goes to another job when he gets that other job, first thing you do is gonna call me. Mm-hmm. <affirmative> say, Hey, BJ, can you help me out over here? I need to look like a hero at my new job. Right. And I know BJ makes me look like a hero, you know? And so if you take that approach, that look, your job is to make them look good, you know, it's not to, to get over on them. It's not to, you know, try and, you know, you don't have to whine and dine people. You just have to, you know, sometimes it's no, no more complicated than just doing what you said you're gonna do.

(00:15:24):
Right. Right. He doesn't, you don't have to overcomplicate it, but, but knowing that that guy can call you and trust you, that you're gonna do everything you can to make you know better for him. Yep. That's what matters. And not that you're going to, you know, gorge him. He knows he, he's not gonna call you if you're gonna gouge him every time. You know, he comes to you and you're gonna try to get rich off of every deal. It's the long term vision. Look, long term, I, I gotta be there for you.

Mark (00:15:50):
Right. So I, there's an interesting, um, like the way you came up, you mentioned military service mm-hmm. <affirmative>. And I feel like what, what really helps, uh, probably helped you in that, uh, in the corporate, I mean, obviously you're very smart, capable, hardworking, but there's also that kind of like fitting within the mold and doing things as they're supposed to be done, certainly was probably pretty finely honed at the time coming out of the military mm-hmm. <affirmative>.

(00:16:18):
And so you have these nice, you know, this kind of, it really does make sense to go from, you know, military service up to corporate ware, uh, logistics, corporate warehousing. And then now you make the jump, um, to this more entrepreneurial role. What is it like, so what were the things that, you know, there's this saying, it's like, what got you, what got you, uh, here won't get you there. Right? Yeah. So what was the thing, what were the things that you had to change, not only in your thinking, but what were some of the key, like how did you become good at logistics? Because obviously before that you were good at logistics, but also at logistics while following orders. And then now in kind of this newer role, certainly you have a, uh, a direction that you're going, but, well, yeah.

B.J. (00:17:04):
You know, I think it's, um, you know, I would say it to anybody, it's a willingness to learn and listen. Right? You gotta, you know, a mentor mine many years ago said, you gotta wake up every morning trying to know what you don't know. Hmm. Right. So if you know what you don't know, and you're willing to go out and ask questions and, and listen and, and, and, and learn from everybody, I mean, you know, there's so many different aspects to logistics, and I've been very fortunate to have been sometimes dropped in the deep end of water. And some of those different forms, whether it's, uh, drayage or long haul trucking, or LTL trucking or, or warehousing and e-commerce, fulfillment. I mean, there's so many different aspects and Sure. And I think the, the, the true person wants to be successful has to be, you know, first off, know that they don't know it. Admit to that they don't know it, and then go seek out and find the guy that does know, or a gal that does know, and ask em and learn from em.

(00:18:02):
You know? I think that's the thing. And I, I think that if you want to be successful and you wanna take that next sleep, you have to be a, you know, I call it a learner for life, right? You gotta always wanna learn something new. And that's where I've been very fortunate and very fortunate sometimes, you know, I just dropped in the deep end, Hey, here, this is, figure it out. You know? And then on some cases, you know, it was, you know, leases, you know, I sat next to my boss and he walked through a lease with me and said, okay, here's, here's a guy who's been doing it for most of his life, and he's walking me through, this is what you look for. This is what you, you're, this is the watchouts. Here you go. Here you go. And you gotta soak that in.

(00:18:40):
You gotta, you know, take that and run with it. Uh, trucking, you know, got dropped off and hey, you need, you're in charge of this terminal now. What, what do you mean? You know what the heck a terminal is? And so you go in there and you leverage the people that are working there. And you don't go in there too big for your britches and, and know, admit what you don't know and, and ask questions. And you find that most these people love teaching you, you know, I mean, I've sat with dispatchers and say, I don't know how to, I don't know how the hell you do this. Show me. And they'll show you they, they're proud of what they do, and, and just be willing to be humble and talk to 'em and learn from 'em. And it's awesome. It's, so, again, that's, I think that's what I love about this industry is there's, I mean, there's something new to learn every day.

(00:19:26):
Mm-hmm. <affirmative> every day and from every day and, and from anybody, uh, you know, you don't know who it is. It's like, I love touring warehouses. It's, I'm a total warehouse nerd. I love touring warehouses because I can't recall ever touring a warehouse no matter what size. They didn't see something went, oh, that's a pretty damn good idea. I like that. And it's usually something that somebody there on the floor came up with or some supervisor came up with. It's not some crazy wazoo engineering thing. It's some simple thing that some warehouse, you know, worker or person just said, here's a better way to do it. And you see that and go, well, that's a good idea. I mean, and, and I can't remember walking the warehouse, but I didn't see at least one thing going, well, that's a good idea. <laugh>. You know, and, and so there's always something to learn if you approach it from that.

(00:20:18):
You know, it's like, you know, I, I think the biggest leap for me was when I leapt out of even the three PL world started my own company. Right. You know, because you just don't know how many hats are to wear until all of a sudden you gotta wear all of 'em. Yep. You know, you, I think, you know, particularly, you know, as a VP level kind of guy and had been for a number of years, and, and you, you forget that what you're relying on all these different people that are, you know, doing these ancillary, you know, functions all around you. Mm-hmm. <affirmative> making your life better every day. And then you go into the, you know, true entrepreneurial world where it's now, it's you. There are no, I don't have a risk manager handling all the insurance stuff. Yep. You don't have an HR person, you don't have.

Mark (00:21:05):
Right. Illegal. I mean, you might not do all your legal, but you're doing a lot more legal than you were beforehand.

B.J. (00:21:10):
Oh, yeah. Yeah. I mean, you're reading through all your contracts, you're doing the HR piece to the extent that you can, or finding the person who can do it and understanding what, how to coach 'em. It's right. It's everything. It's wearing a bunch of hats. It's a bunch of hats. And, and, um, and also, you know, you find those things that, like throughout your career, you never really did get into like, right. Like I was a career operator. I was a career operator my entire career. I was never a sales guy. Mm-hmm. <affirmative> never once. I mean, I had sales guys that reported to me at different points and, and my career, but I was never the sales guy. And now guess what? I'm the sales guy.

Mark (00:21:50):
So I do wanna back up, cuz this is an interesting thing. It's like, it's, it's, you start of being exactly what you said that operator, you know, you're, you're kind of marching in line and then you get a little more entrepreneurial and then you just full on going do the entrepreneurship thing. Right. How, like, what was it, when did you start feeling like, I'm gonna do this, I I'm gonna do this for myself.

B.J. (00:22:13):
Uh, were there any stops between N F I and other logistics companies? Yeah, I mean, you know, I think that like a, probably a million guys out there, you started Newling on a business plan. Mm-hmm. <affirmative>, you know, I don't even remember the first year I did it, but, you know, probably five or six years before I started the company, I started, you know, on my off hours, sitting around noodling on a business plan, putting a business plan together, because I'm thinking, I'm figuring this out and wow, if I can make money for, you know, someone else, why couldn't I do this for myself?

(00:22:46):
You know? So, you know, and always say that. I think a lot of times it just has to be that impetus, that thing that pushes you off the edge, right? Mm-hmm. <affirmative>. So you have this business plan, you've been dreaming about it and thinking about it like a lot of guys do, you know? And then I left and if I worked, went to work for a private equity firm. And, um, you know, I, it was just one of those things that, uh, you know, circumstances let it, I was traveling 99.9% of the time. I was working, you know, a hundred hours a week. And how was your family? Uh, life, it was terrible life. Terrible. It was probably on the verge of divorce. I mean, it was, it was horrible. I mean, it was horrible. And, and then you throw right in the middle of all that, uh, 2008 crash and, and I'm, you know, run, I'm, now, I'm big wi I'm the COO of this company.

(00:23:35):
And, and like, oh my gosh. It's, it's nuts. And, and, and, and I'm never home. Yep. I'm never home. I, and I tell this story a lot that, you know, I was, it was May of 2009 and, uh, I'd been gone for, I dunno, three or four weeks I'd been gone from home and my wife is, uh, on the phone. I'm at the Newark, New Jersey airport. And, uh, the, uh, my, my wife's on the phone giving me the play-by-play of my youngest son's baseball game. Mm-hmm. <affirmative>, it's playoff game. And, and, uh, you know, he, they win the game and, oh, hey babe, I gotta run. She hangs up. I, you know, we'll call you later. Hangs up. Everybody hear everybody's screaming and laughing and going crazy in the background. And when she hung up, I said, this sucks. And the guy crossed me. I was in the Delta lounge there, and the guy crossed me goes, I agree.

(00:24:31):
I said, did I say that out loud? And he goes, you know, something sucks <laugh>, you know, and, and honestly, I just, that night it was that, it was that that pushed that, look, I'm, I'm missing out on everything. And, and, uh, you know, come on, you, you can do better than this. So I literally stayed up all night long and wrote myself out of a job at my company. I wrote a whole new organizational plan, wrote myself out of a job, you know, presented it to the, the managing partner and my boss, and said, you know, I'm just kind of done. And he's, and, and, and, and to be very fair, they were very good to me and we worked through it. But, uh, that's what I just said, you know, I gotta go do something. And then, you know, I went and hiked the Pacific Crest Trail for a while, and I, you know, for a day and came up with the idea of, uh, Pacific Mountain Logistics.

(00:25:24):
And, and, uh, that's where the name comes from, this hiking on the Pacific Race Trail.

Mark (00:25:29):
That's cool.

B.J. (00:25:30):
And, um, yeah, it's kinda, you know, it's kinda, um, it's been, been a rollercoaster ride since then, but, uh, that was 2009. And so I started the process of putting the company together, and then we were operating in, uh, January 20 What month? In 2009. That was May. Well, they, I, I filed all the paperwork in July. Got it. Okay. I, I filed the, filed for the D B A and the L L C in July. I got the L L C in September, I think like September 9th when all the paperwork came back. And then, um, and then I was, we were, we did our first shipment, uh, January 2nd, 2010, January 4th, excuse me. January 4th, 2010. Yeah.

Mark (00:26:16):
Did you raise money or did you, How'd you get it off the ground?

B.J. (00:26:19):
Well, uh, originally outta my, outta my, you know, my, uh, savings and back pocket, we shoes streamed it. You remember, this is 2009, nobody's lending, you know, anybody, anything. Um, uh, then I brought in a partner, um, trying to, I think about February of 2010, I brought a partner in to help. The upside is in, in, in, uh, 29, 2009, 2010. If you fog a mirror, they'd lease you a building. You know, they <laugh>, you know, there was, there was building and equipment and stuff around. Very cheap. And, and part of the impetus too was I'd read, you know, a million self-help books that talked about, you know, businesses that opened up during a recession because the barrier entry barrier to entry was very low. Yep. Couldn't have been much lower than it was in 2009. I mean, you'd talk to somebody about putting something in a warehouse and they would just, you know, they were clamoring to you, you know, oh, take mine, take mine.

(00:27:17):
You know, and, and also talent. I mean, there was a lot of talent around, you know, underutilized or not utilized. And so getting quality people was, you know, an, an easier thing. Um mm-hmm. <affirmative>, I mean, it was tough. I mean, we certainly bootstrapped it and, you know, we got some money here and there air, uh, from, you know, like I said from my partner, brought some money to the table. But yeah, for the most part, you know, we just, some loans and a lot of savings and wiping out your 401k and, and, um, you know, and it's, it's worked out.

Mark (00:27:52):
That's outstanding.

B.J. (00:27:54):
How do so comparatively, and I mean, I I, I do think there's a lot to be said for, uh, it's a lot easier to start a business when everybody's hungry. Yeah. Yeah. That's a great, uh, it's a great thing.

Mark (00:28:09):
How do you see, so I mean, we're, you know, depending on which news article you read on any given day today, it's, we're headed for doom and gloom, and then, ah, well maybe it's not as bad as we thought. Uh, you know, we're seeing kind of these real, these kind of big waves, like these, almost like these sign functions going up and down and up around with what's going on. So how do you, how do you think the, um, the environment is different today than it is in 2008?

B.J. (00:28:36):
Um, you know, it's several things. First off, you know, uh, I think the biggest difference today versus, you know, any other time is that, you know, credit's been tight since 2008. You know, the, they, the freewheeling credit has never really come back. Not like it was 2005, 2006, where, you know, again, if you could, you know, put together hundred cents at loan you a million dollars, you know, and, and put you in a house that no, you had no chance of ever really being able to afford.

(00:29:08):
And so, you know, I don't think credit's ever loosened up that much since then. So I don't think you have a much of bad credit out there. Um, then you look at unemployment numbers, unemployment numbers, I mean, the petition patient rate is still so pathetically low and there's so many jobs out there, you know, unlike 2008 when, I mean the, you know, the unemployment rate was double digit and, and climbing, right? Mm-hmm. <affirmative>. So, so everybody has jobs. I mean, so it's not like that's their, you know, housing hasn't fallen off the cliff. And from everything I've read and everyone I've talked to, no one believes it will, because inventory is still painfully low. It, we never really recovered from the pandemic. You know, the construction never caught up, you know, due to supply issues and labor issues and, and, and so on. So it's not like there's a big glut of houses out there.

(00:30:04):
So that's not gonna cause housing to fall off the cliff. I think it'll, it'll moderate and it'll come down. The interest rates are going to force that, that way. And so you back that up into the rest of the economy is so the housing market doesn't fall off the cliff, then, you know, your home improvement stays pretty good because people start to stay put a little bit when housing's expensive and housing's still very, you know, pricey. So people stay put and so they fix up what they have versus buying something new so that, you know, it bodes well for your home improvement, which I think people don't realize how big a chunk that is of the Yeah. The economy, you know? So, you know, uh, people have been pin up, so obviously travel and leisure is doing really well. And, and, and all things point to that.

(00:30:53):
I mean, at some point fuel has to come down. I mean, you know, that's probably the, the thing that's causing the most, you know, consternation out there is, you know, travel and leisure would be doing much better if the fuel prices would come down.

Mark (00:31:07):
Oh. I mean, with that said, I mean, I paid below four today at the, at the pump down the road, and, and we're in, we're in, you know, sunny southern California and stuff.

B.J. (00:31:15):
Right. And, and, and, and gas is, diesel is staying up there though, and that's diesel is. Yeah. And that's, that's what has kept the, the overall freight rates from coming down dramatically is, uh, diesel has just has been stubborn sticking that, and I just drove across, you know, half the country and it's the same price, doesn't matter where you go. Yeah. I mean, diesel's, you know, is still in that, you know, mid fives, you know mm-hmm. <affirmative>,Uh, all the way across the country. So even in Texas, I never, yeah. Uh, jam.

Mark (00:31:43):
Absolutely. Well, gas was much cheaper in Texas, and gas I think was 2 69 when I left, uh, about a week ago.

B.J. (00:31:49):
Yeah. Yeah. I saw that just two weeks ago in Texas. So, so, you know, but so the fuel prices come down at, at, at bodes well for the, you know, travel and leisure section. You know, restaurants have, you know, they've rebounded quite a bit and, and you don't see a lot of that, you know, mitigating, uh, so while I do think we're in for, you know, a little bit tougher than what we've had, I mean, we've been on a pretty good role here, <laugh>, um, you know, and you're starting to see volume drawback, you know, durable goods and have drawn down and you've seen some, you know, delay of purchasing.

(00:32:24):
But you know, you, you, you got this artificial spike in 2021, which, you know, it's kind of hard for everybody to understand. I mean, this was not normal. The government threw so much money into the economy and everybody went out and spent like, you know, like a girl getting ready for prom, you know, everybody went and spent so much money. You know, 2020 is a, is an arc, and 2021, excuse me, is a, is an anomaly and Yep. And so, you know, I think the inventory lot is people, people did their production planning around that 2021 spike and planned based on that. And you get into 2022 when things are a little bit back to normal. Right. And now you have this big inventory glut Yep. Because you just made too much. Yep. Right? It's not that the economy's bad, it's just getting back to normal and all this, you know, government funding money is out of the equation, or at least is leaking out of the equation for now, <laugh> for now.

(00:33:26):
Right. <laugh>. And so, you know, once you get that out of the equation, you get back down. I, I think what we're seeing is just a return more to a normal economy. Normal. Yeah. Yeah. Not a, not a off the chart. I mean, supply chains are starting to open up, and so car availability, you know, they're, you know, so car presses are coming back down to Earth mm-hmm. <affirmative>, and that's just an availability thing. It's not that, it's not that, oh my gosh, you know, the car market's crashing. No, it's not. It's just now you can actually find a car. Yep. You know, it was an availability issue, not a, you know, so, so all the, to me, I look at it and see all these artificial spikes that were just, you know, ballooning things up are going away, and we're, and, and yes, it may be a recession in terms of comparing it to 2021, but let's compare things to 2019.

(00:34:15):
I think that's where you go back and say, let's compare to 2019 and see where it is. And, and I think you can see it's still moderate to good, decent growth over 2019, and we're just back down to a more normal pace. That's, that's the way I see it. And, and that's, you know, reading and talking to a lot of people that are way smarter than me. Um, I think that's the, to me, from what I understand, that's the consensus. We're just kinda get back down to a more normal pace. You know, they'll, they'll keep raising the interest rates, which look, we've gotten a little drunk on cheap money. Yeah. Right. Absolutely. So the entire world has gotten a little drunk on cheap money. So, you know, if, if the interest rates leak up to eight, 9%, it's probably not the end of the world.

(00:35:01):
And they'll, you know, get things back, kinda a steady state and they'll come back down. Sure. We're not seeing the 1980s with 18, 19% interest rates, fortunately.

Mark (00:35:14):
Yeah. Um, so it's interesting because what I'm seeing in this is bringing it back. I mean, that was an excellent, I think, view of like macroeconomic trends and everything, and that plays so much into how we, you and I plan for our businesses mm-hmm. <affirmative>. And so now I'm looking at the Chinese numbers going down for the, for the, uh, exports. We're seeing a lot of big drops in exports. Uh, we're seeing the Port of California is heralding themselves for getting, uh, you know, they have no container ships waiting mm-hmm. <affirmative>, like they're right. They're, they're on time. And I'm like, oh, I mean, you know, a lot of those got offset to the East coast, which is they did, which is now consequently having issues, major issues, <laugh>. But like, uh, I think I haven't been, I haven't seen recently, but I think Savannah was up forties, fifties.

B.J. (00:35:59):
Yeah. Uh, off offshore waiting to get in and, and, and, and to put things in perspective, 40 vessels off of, off of Long Beach in LA is two weeks worth of work. Mm-hmm. <affirmative> 40 vessels off of Savannah is about seven weeks worth of work. <laugh>. I mean, so, I mean, you always gotta put things in perspective. I mean Right. 40 vessels off la Long Beach isn't really not that big a deal. Right. 40 vessels off of Savannah is a huge deal. Right. You know, Charleston even a bigger deal. Yep. You know, so, you know, this diversion, and I've talked to some retailers that did this, that diverted to the East Coast, and they're all re regretting it because East Coast just can't handle it. I mean, particularly smaller ports.

(00:36:45):
I mean, you get outside of New York, New Jersey, all these other ports are just not, they're landlocked. They don't have the capabilities that you have in Long Beach la and, and so the product was on the water longer, it cost them more to get there, and now it's hung up. Yeah. You know, I, I'll leave their name out. I talked to a big retailer who says, you know, they asked me maybe 20 to 25% of their Christmas just wasn't even gonna make it Wow. Because they shipped it to the East Coast, you know, and that's just, you know, the, that's the, the risks they took.

Mark (00:37:19):
Right. So, you know, and you mentioned this, uh, at one of the, the longer, I think it was two or three times ago, we met, and you mentioned that what we'll see is we'll see the east coast cooling, and that'll cool. And then it'll basically take about a year and then we'll see the West coast start to calm down. Yeah. You still think that's, uh, where we're headed?

B.J. (00:37:40):
Absolutely. I mean, you know, I always judge, it's funny, you can judge the market by who's calling you, right? Mm-hmm. <affirmative>. So, you know, I think for the, you know, at least a year there, you know, the, I don't think the real estate guys even had an outbound line. They weren't calling anybody, you know, so 'em Yeah. They're calling, they're emailing, they're sending you flyers, you know, you're getting flyers outta Chicago and Kansas City and Phoenix and Dallas and, and a few other areas. You're not seeing a lot still in Southern California. Southern California's still tight. And it's gonna, quite frankly, I I I just think Cal Southern California's gonna be tight forever. Yeah. Yeah. I really, you know, I think a lot of people thought that, and me included, I think thought that there'd be a much greater easing of the inventory glut during Christmas than there has been.

(00:38:30):
Um, and yeah, we've got a couple weeks left to go, but, you know, there's really hasn't been much easing and, and, uh, there's so much pen up demand here that, you know, I was talking to a large real estate guy the other day, and, you know, he's seeing some easing in that 200,000 square foot, you know, to a hundred, a hundred to 200,000 square foot range, he said, but anything over three 50 or above, they, they, there is none. There's no availability and there's no forecast availability, anything that's under construction's already spoken for. Yeah. He said, you know, there just isn't. And, and quite frankly, they're running out of decent land to build on. Well, they're running out of permitting. I mean, you know, California in the Nibis and the, the warehouse moratoriums and all those things, it's just kind of coming to, to roost.

(00:39:22):
And so, you know, well, I think a lot of people felt like Southern California would ease at some point. Uh, don't know that that's true anymore. I, I, the people I talked to, and again, I talk to people that are way smarter than me that say it's just, you know, there's all the indicators say no. Now, some of these other outliers, you know, I think you and I have talked before, you know, you have your major markets, right? The, I call 'em the primary distribution points mm-hmm. <affirmative>, which in my brain or you know, long, you know, the southern California, Chicago, the Lehigh Valley, Pennsylvania, that area there, Pennsylvania, you know, a little bit, New York, New Jersey. But, you know, I really like that Lehigh Valley area. I mean, if you, if you were gonna only have one warehouse in the United States, I would have it one of those three markets mm-hmm. <affirmative>,

(00:40:14):
You know, and so, um, and then you get your secondary markets, you know, Kansas City, St. Louis, Indianapolis, Dallas, um, Memphis, and the torques people that things Memphis should be a primary. It's not, uh, not, not in my brain. Um, Atlanta, you know, the, to me, those are all secondary markets.

Mark (00:40:37):
Um, Phoenix, nav, Nevada, Phoenix, and Vegas.

B.J. (00:40:39):
Yeah. I, I actually put Phoenix in Vegas in a tertiary, I wouldn't even think I'd put 'em secondary. Uh, I really wouldn't. I mean, and again, and, and that's a big generalization, you know, it really depends on what you're distributing and how you're distributing it. Well, if you're doing parcel, a hundred percent b2c Yep. Yeah. Then Phoenix and Vegas make it a little more sense. Uh, but if you're doing mainline distribution, retail type distribution where you need LTL and truckload Yep. Those become problematic. You know, you gotta look for that east and west and north and south, you know, corridors to, to run out of. So then my question becomes, I mean, as long as Southern California stays extremely tight, then I mean, your next closest markets are Phoenix and, and, uh, Vegas. Yeah. Phoenix, Vegas. You've got, you know, you're gonna start seeing some movement in the Central Valley of California. Right. You know, move up there.

Mark (00:41:34):
Yeah. And they've got that, uh, the new inland port that was just approved Yeah. You know, a few months ago.

B.J. (00:41:40):
Yeah. We'll see how that plays out. But, um, yeah, I mean, so you'll see that, you'll see more into Phoenix and, and Vegas, I think, I think you're gonna see more into Phoenix first. I mean, Vegas seems to be, you know, struggling to, to get buildings built over there. Um, you know, a lot of pinup demand in Vegas and Right.

Mark (00:42:01):
Well, the thing, the thing I think Phoenix and even Tucson has going for it is proximity to Mexico.

B.J. (00:42:08):
Mm-hmm. <affirmative>. Absolutely. And, and the more nearshoring you get, the more the reliable that becomes. And, and quite frankly, coming across the Gallis area, you know, is way easier than coming up through, you know, San Lucero or Oai Mesa Crossing. Mm-hmm. <affirmative>. So way easier to get into Phoenix and go through Naali than it is to come up through San Diego, through either Oai or San Lucero, or, right. So yeah, the, you're, and you're absolutely right. I mean, Phoenix is a great market if you're coming up outta Mexico, um, you know, the Dre into there is expensive. And again, it kinda comes back to there's not a lot going back and Right. They used to have a big yard there, um, Hagen when Hagen was, you know, still assumed ship line, you know, they were terminating boxes over there because there was so much waste paper coming out of Phoenix going, uh, going, um, abroad.

(00:43:03):
But ever since China quit taking our waste paper, that that market's kind of dried up. Hmm. But, um, but no, I mean, I, you're spot on. And again, you know, you generalize, I generalize and say, okay, these markets are great, but again, goes to, you gotta look at what your specific needs are. I mean, again, if you're, if you're doing b2c, you know, you, you, you know, one of these secondary markets were great for you because pricing is usually a little more accommodating. And if I'm shipping out parcel, who, as long as I'm close to an airport, you know? Right. Who really cares. Um, you know, that's where you're, you know, you know, you then you just start looking at population trends and where can I be, you know? So, um, Vegas makes a decent, you know, sense and Phoenix makes good sense. Indianapolis, uh, I like Kansas City, St. Louis. I think those are both great markets. Right. Um, you know, so you, you look at what you're doing specifically versus, you know, just generalized. But the other thing is, most, a lot of people not a companies don't have the sophistication to split inventory. Right. It takes a lot of sophistication to splitting inventory across the country. Um, and, uh, you, you, you gotta re-look at that. So you're only gonna have one warehouse. You want to be in the most cost effective, you know, place you can be.

Mark (00:44:31):
Yep. Really enjoy that perspective. I wanna switch gears a little bit.

B.J. (00:44:35):
Okay.

Mark (00:44:36):
So when you launched, what year was it that you launched Pacific Mountain?

B.J. (00:44:40):
2009.

Mark (00:44:41):
Okay. So 2009. From 2009, when you got going, when did you really start seeing some of the big changes in how people were operating or have tried to operate warehouses? Um, would've been some, I mean, I know there's of course the Amazon effect that enabled, um, third party sellers and everybody to be an entrepreneur.So with much Right. You know, much less, uh, of a, of a barrier to entry. What have been some of the changes, I guess you've seen in the last 10, 15 years?

B.J. (00:45:12):
Well, I mean, you know, you go through these cycles, right? So I, uh, I used to always jokingly say, you know, when I first got into business, you know, the, uh, uh, shipping a chase was shipping a gross, and most people don't even know what a gross is anymore. You know, and first thing you saw over the last 15 years was how that shippable unit size has shrunk so much. You know, the, you know, as retailers got rid of their back rooms, they didn't want, you know, they didn't want 12, they didn't want 144 for sure. They wanted just enough to fit on the shelf. Right. So just enough to fit on the shelf.

(00:45:49):
That's it. And so you, you know, one thing you saw in just in warehousing in general was that pack size, you know, reduce, and then you get B2C comes along and now you, you only wanna ship one of them, right. And you wanna repack it, you know, even so, you know, there's just a spin sh big shift in, you know, you know, you went from truckload to L t l to, you know, uh, like early on when I was first in the business, you know, it was really rare to ship less than a pallet. You know, if a retailer was gonna buy a pallet, I mean, they needed to buy at least a pallet's worth, you know? And, um, and even before that, you know, it was buy a truckload worth, you know, then, okay, I'll let you buy a pallet's worth. And now then a case worth or, or layers worth, you know, you know, we used to have layer limits.

(00:46:41):
You had to buy an entire layer, and now it's, can I buy one of those? You know? And, and so, you know, that's been a big change. Right? And then how, where else particularly just focus on the third party side of it, you know, you had a lot of, a lot of people have gotten in the business and, and you know, at third party logistics, you know, you've got everything from the Gxo and NFIs of the world to the, you know, you know, Bob and Tom's warehouse, you know, Bob and Tom were truckers who had some customers say, Hey, can you store this stuff for us? Yeah, sure. You know? Mm-hmm. <affirmative>, and, and they're running it with a yellow notepad and, and you know, shipping orders out, you know, so, you know, you have this gamut. Now come about 2000, I'll call it about 2014, is when you really saw this surge of these new, you know, um, you know, fulfillment houses, you know, you know, kind of following that, that model of, you know, one price, here it is, we'll process it no matter what kind of thing.

(00:47:49):
And it's really, you know, it's funny, when I first started the company, I got a lot of advice from people who said, you gotta do e-commerce, E-commerce, E-commerce, E-commerce. So I was very fortunate. I knew some guys and I traveled around and went to a few different e-commerce warehouses and talked to them. They were owners and taught them what they thought. And, and the thing was, all of them said, Hey, can you teach us how to do retail compliance stuff, <laugh>. He goes, we're not making any money at this e-commerce thing. Um, you know, it's, it's a very tricky business model to do straight e-commerce. Um, and so, uh, I think there's a lot of people in that space. I think there's a lot of people in that space that don't make money, you know? And the people that do make money are making it on the arbitrage off of parcel rates, cuz you got some crazy parcel volume or there's some parcel deal.

(00:48:41):
Um, you know, but that, you know, that's, you know, still a very, very strong market. But, but what you look at still, I mean, all e-commerce, you know, fulfillment is still less than I think today is still less than 22% of the total distribution market. So you've got this whole, you know, you know, more than two thirds of the market that is still retail distribution, you know, and, and, and it comes in different phases now, now with the, you know, Amazon, FBA, you're still shipping, it's like shipping retail compliant, but you're shipping to Amazon for e-commerce fulfillment, but you're just fulfilling their warehouse, you know? And so it's still, l t l is still pallets and still, you know, but the makeup of those are very different than they were before. You know, a lot of case pick a lot of each pick still, even in that e even in that retail distribution, you're still doing a lot of, a lot of each and a lot of handling, uh, robotics have come a long way in the last 15 years.

(00:49:48):
You're seeing more and more of that, particularly in the 3PL space. A lot of the autonomous bots that, you know, two person and two, two, you know, either product to person or person to product kind of thing. Um, you know, so that's, you know, very flexible. It's better than conveyors in a lot of cases, particularly in 3PL gives a lot more flexibility. I

Mark (00:50:13):
think this is an interesting point here because, you know, just to say it a little bit more blatantly, everything here, it's not replacing workers, it's reducing, you can reduce your workforce to a poten to a, to an extent, but this is more about, about productivity. Yeah. This is about augmentation more.

B.J. (00:50:29):
Right. More than replacement. And, and I think that you're, you're right, Mark, that's a, a really good point to make. And, and it's one of my soapbox items, is that, look, you know, 30, 25 years ago, we were talking about how there was gonna be this gap in labor when all the baby boomers retired mm-hmm. <affirmative>,

(00:50:49):
And now not just the baby boomers, but you got the whatever Gen Y I don't know, I can't get lost in all those. I think it's x, y, X. Yeah. Whatever. Yeah. Yeah. So, you know, and millennials and all this other stuff, but, but we knew that there was gonna be a labor shortage cause the baby members didn't have any kids. Right. You know, so we knew that there was gonna be a labor gap 25 years ago. We said that, and I think the first, I can remember the first conference I was in, they were talking about how are we gonna deal with this labor gap that's gonna happen. Now, the, the myth was most people thought that was 20 30, 20 35. That was always the conversation. But now this covid comes along and it ex exacerbates the whole issue. You know, a lot of early retirements, people getting outta the workforce.

(00:51:36):
And now, so you have a low workforce participation rate along with this labor gap. So this idea that automation's gonna replace everybody is insane. It's, it's barely, barely gonna help make up for the gap in labor shortage that's already there. Mm-hmm. <affirmative> by making people more productive. And, and quite frankly, you know, I've heard, heard someone say the other night at a, at a event, reduce the suck in the building, right? Mm-hmm. <affirmative>, so make the work suck less. Yeah. You know, so it's gonna, it's gonna help and augment the worker and help them be more productive and, and take some of the more what we'll call mundane tasks out of the way. Right. You know, so this idea that it's gonna replace workers is crazy. And if anything, it's going to increase the number of higher paying jobs because now someone's gotta work on 'em.

Mark (00:52:27):
Yep.

B.J. (00:52:27):
And someone's gotta program those silly things. They don't just, you know, they're not programmed themselves yet.

Mark (00:52:32):
Exactly. And so it's interesting that the first economically viable robot that Boston Dynamics came out with was stretch the, uh, I think that's what they're calling Yeah. The, the container unloader. Yep. Which is using suction technology and can, I mean, and of, in, in any warehouse, I feel like I would prefer to sweep the floors than unloaded container <laugh>.

B.J. (00:52:53):
You're not alone. I, I mean, you're not alone.

Mark (00:52:56):
Yeah. And I mean, and, and I've, I've been in the can before. You have, I mean, it is, that is, that is a hard job. I don't care.

B.J. (00:53:02):
You know, there's the, there's no reducing the suck in that one. That's right. And so to have this robot come in and augment the workforce, I mean, they still, I still think they still gotta sort it.

(00:53:13):
They're still gonna have to do, they're still probably gonna have to, you know, a lot of cases palletize it and sort it and, and label it and, and receive it. I mean, but, uh, un wedging that top card Oh, gosh. Off the, you know, at the top from the top of the container. It's pretty crazy.

Mark (00:53:27):
It's, yeah. So it's interesting. And I, I find with the automation that, that, what if, you know, I went to modex, I think it was in March, I believe it was in, uh, in Atlanta. And the thing I find very interesting is that everybody is focused on the automation around the individual pick or bin pick. Nobody's focusing on the actual automation around pallets. Mm-hmm. <affirmative>. And so when, you know, in, in warehousing, I think there are a couple tenants maximize your cube. Uh, so use as much possible spaces you can use, you know, floor, ceiling, wall to wall. And then also you want to reduce the amount of walking mm-hmm. <affirmative> for, for your employees.

B.J. (00:54:08):
Travel time.

Mark (00:54:09):
Travel time. And that's what a lot of those kind of like segue looking bots, I think six river systems.

B.J. (00:54:14):
Yeah. Six river, there's a bunch of 'em. There's a bunch of them fetch robotics. Right.

Mark (00:54:19):
But what's interesting is, is you don't see people, very many companies trying to eliminate aisles, trying to, uh, it's like those, those certainly help with the amount that you can, the amount of, like, the amount of walking that's happening in your building. And maybe your aisles can go a little bit smaller. You can have now a lot more, uh, levels to your pallets, but there's still a significant amount of space that's left. Yep. And I've, I've, I've always been surprised that there's not more automation around the actual pallet and the, at the carton and, uh, around the carton side of things.

B.J. (00:54:53):
Yeah. I mean, you see that, like in the grocery industry, they've got some pretty neat automation stuff at the pallet level. Uh, there's some of those autonomous spots that, uh, you know, you can, um, you know, they'll, they'll go storage, loading a loading the, uh, pallet on a truck, you know, they've got conveyor tops and they'll slide the pallet right off the top. Mm-hmm. And there's some of that, um, that's expensive though, still. And, and you gotta have the right size building. You know, that's the other thing, you know, a lot of this automation, you know, it's about getting the right circumstance, the right customer, the right, you know, setup to use it. Um, but you know, so much of the automation, then you go to this automation that is in my mind, you know, semi useless. You know, you, I've been to leave their name out of it, a really highly automated warehouse, and they have auto tapers, and then they had five people with tape guns in their hands going around fixing the <laugh>, the boxes coming outta the auto tapers. And you, it's like, well, what the, what is that? I said, oh, we just, we can't keep mechanics and gotta adjust these things. And Okay, so why don't you just have people taping them then? Yeah. You know, and, and auto labelers and some of those same issues. And, you know, I, I'm, I'm against automation for the sake of automation. Right. I like automation that works. And automation that, you know, that's one of the autonomous spots are nice because they're kind of like a conveyor, but they're more flexible mm-hmm. <affirmative>, because I can change the pattern and can send them wherever I want. I don't have this big monument thing that's in the way a conveyor. Um, they're pretty good. In fact, I saw one, a demonstration one the other day. It was a, a trash bot. And so what they were doing was they were working in an area that had a lot of, they were de trashing this stuff and, and repacking, and it had a bin on it.

(00:56:50):
And, and you throw it in the bin, and the thing understands when the bin's full and it goes to the dumpster, dumps it and comes right back, you know, automatically don't have, no one has to engage in anything.

Mark (00:57:03):
And so no longer on, uh, at 3:00 PM do you have the two guys that are going around unload longer. Right.

B.J. (00:57:08):
This one just goes and does it and knows one that it's full and, and, and dumps it. So there's a lot of really cool unique things, you know, in that environment that, again, reduce the suck, you know, but, you know, go to some of these highly automated warehouses that Amazon operates and they say, wow, this is one of our most automated facilities, and and it only has 800 people that work here. Okay. <laugh>. I mean, okay. How automated is it? I mean, it, it, you know, distribution is still gonna require people to be involved in some point.

(00:57:42):
Right. Um, you know, we're just not to that point. But again, you know, you look at the labor shortages there are today, I think what they say yesterday, 10 million jobs unfilled nationwide. So you need the automation to feel like Yeah. Yep. To enhance it.

Mark (00:57:59):
So let's just, uh, let's say you're planning, you've got a 10 year plan mm-hmm. <affirmative>, you don't have Pacific Mountain Logistics, but you've got a box. How big is the box? How are you gonna build it out? And how are you, what, what kind of customer set are you gonna put in there? Like how, how do you, how do you go from an empty box to a business that you think is your ideal mix based on all of your experience?

B.J. (00:58:23):
Well, I mean, you know, I think the ideal box is at, you know, 200, 250,000 square feet. Um, if you're starting off, I mean, if you've got scale, you might go to three 50, you know, but I, I've found that everything over three 50, you know, there's some diminishing returns there, but two 50 to 300 probably if I was, you know, gonna, you know, start fresh and start over.

(00:58:52):
No, I mean, that was probably where I'd be, I would, I would have a, you know, a mix of clients that are primarily omnichannel. You know, I, I don't, I, I just don't like the, you know, from a profitability standpoint in a business standpoint, the pure B2C players, there's just too much volatility in that market and too much commoditization in that market. So it's really tough to be consistently profitable with, its only b2c. So I like the, you know, call 'em omnichannel or, you know, supportive e-commerce, what you wanna call it. But, and we have a, you know, I have plenty of those clients now that are shipping big box retailers. They're drop shipping, you know, through Amazon. They're shipping Amazon and they're doing their own b2c. You know, that, that multifaceted client mm-hmm. <affirmative>, that's what you're looking for. Um, you know, you know, the holy grail is counter cyclical business, you know, patio furniture, you know, in the spring and, and, uh, coats and, and, uh, jackets in the, in the fall kind of thing.

(00:59:58):
You know, so you, you're always looking for those counter clients. I like, you know, I, I kind of fell into it, but, you know, it's, uh, a food component. It gives you, you know, that year round cashflow, year round business mm-hmm. Uh, yep. Also forces you to keep your warehouse clean. Yeah. Uh, so you knows I'm a big fan of that. But, um, you know, those omnichannel clients, that's what you're, I'm looking for. I'm looking for those that, you know, and also you want that wraparound, you want a client that I can help 'em with their transportation. I can help 'em with their, you know, their, all their different services they need, you know, and you're trying to wrap around that client as much as you can. So in, in that vein, once you've got your warehousing piece taken care of within,

Mark (01:00:41):
and I know you're such a fan of very narrow aisle,

B.J. (01:00:44):
<laugh> I hate, that stuff.

Mark (01:00:45):
So, okay, so this is a question. I mean, if, if you, if the idea is to maximize the cube, why don't you do it by having more narrow aisles?

B.J. (01:00:55):
Again, I go back to, I want that mix of omnichannel, right? Okay. So omnichannel, you know, retail, they're gonna turn, it's gonna be higher velocity. And the very narrow aisle is just not conducive to high velocity, uh, unless it's completely automated, you know? So, um, you know, I call 'em turtle trucks, so it's turret trucks, they're just not very fast. Or you can't move a lot of freight in very narrow aisle. Um, you know, you, you pick up maybe, you know, 15, you know, if you're in a 40 foot clear building, you know, you, you may pick up an extra 20%, you know, a storage. Um, but what does that cost you in labor? Yeah.

(01:01:37):
You know, that labor component's not going away. And to me, very narrow oil, unless, you know, and you go back to, I don't want to client the stores or stuff. I don't want a client at turn. But if I'm, um, saying, you know, if I've got 150,000 SKUs and I'm storing, you know, less than half a case of every sku, hey, maybe ver all works.

Mark (01:02:00):
But in that case, um, I think you would almost want to go with something like one of the solutions, like the modular storage based thing mm-hmm. <affirmative> like AutoStore, for instance.

B.J. (01:02:08):
Yeah, yeah, exactly. They would be, I mean, in that, you, you're not gonna get better compression than that. You're not gonna get better space U utilization. No. And, but if I'm, um, if I'm a, a logistics knucklehead starting to start a 3pl, you know, those things require a lot of capital investment.

Mark (01:02:27):
They do.

B.J. (01:02:28):
And, uh, while they're, they're really good. And if I'm a shipper, and I can guarantee I've got volume on those that fits those for mm-hmm. <affirmative> evermore, that's great. But if I'm a 3PL and you signed a three year deal with me, and I'm gonna invest, you know, a million half dollars in a, in a modular system, $2 million, you know, more likely, um, you know, that payback can, you know, can be crucial. Mm-hmm. <affirmative>, you know, so you gotta look at it that way too, from, from a business standpoint, from a, you know, an entrepreneurial standpoint. You know, what's my biggest payback? You know, and, and labor is a consistent cost. I'm gonna have Yeah. You know, I can, I can set my pricing. So the building pays for itself. I got, that's not that hard to do. Um, but if I put a very narrow aisle, it's really tough to relay a warehouse and the labor expense to me outweighs the space you gain.

Mark (01:03:27):
Right. So I've, I've looked fairly extensively into it. And you're not far off at 27% is a, is what you're supposed to gain. Yeah. And over a 10, I mean, no, that's looking at a 10,000, uh, square foot block. Uh, as, for instance, it would allow you to put, let's say if you could get a hundred pallets in there now, you can get 127. Um, so I mean, to your point, it, it helps. But at, you know, what are the, what are the downsides? And I think you, you summed 'em up very well. Um, so then as we look in, all right, so you've got your customers now, the next question was, what's the first wraparound service you put around your warehouse, your storage, your in and out?

B.J. (01:04:07):
Well, I mean, I think the, you know, the first thing you do is you gotta get that, you know, software integration with them, right?

(01:04:14):
Mm-hmm. <affirmative>. So you want that hook in into a client. You want, you want your software to be fully integrated. Yes. Absolutely. I mean, that's, to me, that's the first and foremost. And, you know, some people skirt around that and, and don't force that, but you gotta force that. Make sure that, and you know, and, and that is a service, and that is something that, you know, some people just aren't very good at making sure happens. And then, and then you go for the transportation.

Mark (01:04:40):
Got it. And LTL ftl, or does it matter?

B.J. (01:04:44):
All of it. I mean, whatever they're doing, you know, drayage, you know, out of the port, you know, if they don't have door-to-door contracts, if they have door to port or wherever they have, I mean, you know, inbound, I want to handle their inbound, you know, I want to handle all their outbound, I can, you know, it, it becomes difficult, you know, some of these clients, you know, like Amazon and so on, you know, they're managing their own transportation, collect freight, but all that discretionary freight, and I want all of it.

Mark (01:05:11):
So what's interesting about, about the Amazon thing you bring up, and this is, this is we've learned, um, so we've got some customers that use, you know, our third party, we'll work with global tranz we'll work with CH Robinson, whoever it may be, to gain, um, you know, to get a, you know, full truckload from here to ONT eight, for instance. And the real, it's like the prices aren't too different just right off the cuff, like when you look at 'em. But where the customers really end up getting hosed is detention fees at Amazon <laugh>. Because if you're doing a full truckload, it is almost unheard of that they're gonna get unloaded at the time that they're supposed to get unloaded and they're not gonna have detention time. And so, but whereas you use that, if a customer uses Amazon partner transportation, it's the, the big blue truck, they don't get charged detention time.

(01:06:02):
Amazon understands that this is the rate. And so it's, there's this very, very interesting.

B.J. (01:06:07):
Well, they're trying to force you into using their Of course they are. Yeah. You know, I mean, and yeah, I'd probably do the same thing.

Mark (01:06:14):
Yeah. I mean, it's, it's, I mean, it's, it's evil. Genius smart.

B.J. (01:06:18):
It really is <laugh>, you know, I mean, so, um, you know, the, there's always those risks. Yeah. You know, and you wanna do the right thing by your client of course. But you know, the more you can wrap around, you know, the better you can get. Yeah. And, and again, also, you know, forget the, just the business side of it, the more you wrap around, the more you understand your client, the easier it is for you to help them. Mm-hmm. <affirmative> easier it is for you to work through the problems together and understanding what their issues are.

(01:06:51):
And, and so, you know, the, the upside for the client is now you're more invested in them than you would've been otherwise.

Mark (01:06:59):
Right.

B.J. (01:07:00):
And, and understanding every facet of their business, you know, so, you know, we, we even try to get in on the steamship line stuff if we can. Mm. You know, through our partner, you know, freight forwarder partners. So, you know, again, the more you know the, the more you can help 'em.

Mark (01:07:16):
Right. So what is the very first, and I mean, I'm, this can be very light automation. What's the very first piece of automation? Whether it's pallet wrapping machines, whether it's, uh, anything.

B.J. (01:07:30):
I mean, I, I hate pallet wrapping machines. Yeah. Yeah. Because unless you're gonna have 20 of them, 30 of them, you know, everybody's gotta drive to a specific point. Hmm. And, you know, unless you're doing something that requires really heavy wrap, you know, uh, I've found most hand wrap can, can compete, um, and it's flexible and it's, you know, wherever you want to be.

(01:07:55):
You know, the automation piece I think that gets overlooked is the data automation, you know, the making sure that your WMS is doing everything you can do, you know, RF guns in the warehouse and scanning things in and outta location, not, you know, limiting all those manual events Right. That happen, scanning onto a truck, you know, uh, cameras on trucks. So, you know, I can prove that I loaded this, loaded this time. And then, you know, uh, I think cameras on, on trucks now is a big deal. And so that's just aims down at every single uhhuh <affirmative> when something backs up. Yeah. Well, on the inside too. So on the inside, being able to see in that truck and say, look, this time this truck was here and I loaded, I scanned it on, and here's a picture of me putting it on.

Mark (01:08:41):
Yeah. So that's, that's, that might be a better, that's, that's so in the, in the nuts and bolts, that might be better to talk about off offline.

B.J. (01:08:49):
Yeah. But, uh, but, but you know, automation, you know, first off data automation, right. Systematic automation, you know, and then, you know, then you start looking at things like box rectors. If you're doing a lot of, a lot of repack and you're, you, you start talking about the autonomous spots, I think to me, they, they lead the, you know, they lead the pack and their, their flexibility, you know, so I have 15 of 'em, you know, Monday I need all 15 on Tuesday, I only turn on eight of 'em on Wednesday, I turn on seven of 'em. And, you know, and, and they give you that bandwidth, you know, and, and travel time is a, is a eater, you know, and, you know, and, and anytime someone travels outside their area, and then it's never as simple as just travel out and travel back, you know, they're gonna see a friend, they're gonna stop off the restroom, they're gonna, you know, there's all those things, those little minor productivity eaters that are in that.

(01:09:47):
But if you keep them in their work area and the bots are doing all the traveling back and forth, I mean, that's, that's a big productivity game.

Mark (01:09:55):
Yeah. What separates a good warehouse from a great warehouse?

B.J. (01:10:02):
You know, uh, you know, it sounds silly to say this, but you know, organization, you know, really does having a plan, knowing where things are and having, you know, putting things away with a plan, um, clean warehouse, you know, I always say that you can't tell if things are wrong, if everything, you know, um, if everything isn't clean, you know, in a warehouse, everything should have a place and it should be in its place. And when I walk a warehouse, it should be very easy to tell if something's out of place. Hmm. You know, and if everything's put away like it's supposed to be, everything is where it's supposed to be.

(01:10:41):
It's very easy to tell when things are skew and, you know, and, and so the great warehouses, you know, have, and, and I'll go back to this, it's the people, you know, the great warehouses have good people. That question, why is that there? Why is that there? You know, there's only two safe places for, for freight and a location and on a track. Yeah. And everything in between, you know, things happen and things go wrong. And so, you know, you need to have a clean, organized warehouse so that when your supervisor, your manager, whoever's walking the building, it's easy to see something outta place. And you have people that question it. Why is that outta place? Right. And so, to me, that's the biggest delta between a good warehouse and a great warehouse is a great warehouse stays clean and organized. People, you know, don't accept things out of place, and they question when things are outta place.

(01:11:39):
Um, you know, a, a good warehouse, eh, they, they, they try. Yeah. You know, and, and to me, and, and again, it's the simple things, you know, it's, uh, I had a mentor mine tell me once, it's never the elephants that get you, it's the nats, you know, it's the little things that you let slide and you just let slide and let's slide. They, they eventually suck the blood outta you. I

Mark (01:12:04):
think there are, in this, in this vein and all of our previous conversations, there are two big things that have come that are kind of in this, like, uh, on this topic, one of which you said. It's like, especially as we go into a re potentially a recession, and, and really more, as you established, maybe a normalization, um, but you always make your biggest detrimental mistakes when everything is slow.

B.J. (01:12:26):
Yeah. That's absolutely true.

Mark (01:12:28):
Yeah. And then the other thing that you've al you've, you've always told me is, uh, so few operators actually understand their costs.

B.J. (01:12:36):
Right. You've gotta understand your costs. You gotta, I mean, you gotta live it and breathe it. Yeah. And understand every, every, every penny that's spent out there, you better know it and understand it, and particularly when it's gonna slow down, because, you know, things happen. I mean, everything is cyclical. I don't care. You know, you, it's, you know, it is all saying it's never as good as you think it is. It's never as bad as you think it's Right. Right. So, and, and, and we've been riding a high for the last couple years. I mean, even through Covid and mm-hmm. <affirmative>, all that, I mean, you know, again, I, that, um, government money, you know, it's floating out there. But, um, as we slide back down, I mean, you're, you're fine as long as two things. One, you didn't get drunk on that free money and, and spend it willy-nilly. Uh, uh, and, and secondly, you know, your costs. And you can understand as you ratchet down, as volume slows, you know where the pinch points are and where the things, you know, the discretionary money is and how to control it and take it out. And you know, what your profitability is for a client. I mean, that's the other thing. It's really key, particularly in the three PL world, when you have multiple clients in a building, it's, that's probably the holy grail, is making sure that you know what clients are profitable and, and tracking that all the time. Because you gotta remember, you know, you have several micro economies in your building. Each one of those clients is fighting their own battles with their sales and what they're doing. And if, if you don't watch that, and on top of that, you know, next thing thing, you know, now they're unprofitable because they've changed or their clients have changed, or, you know, their, their sales have changed, they're not turning like they were.

(01:14:20):
And, and if you're not watching it all the time, it can get away from you really quickly. And next thing you know, that's impacting your bottom line because you weren't walking, watching what they were doing. So that's really important, that understanding your costs and understanding how that's in fact affecting each one of your clients individually.

Mark (01:14:41):
Hmm. Okay. So, and I'll, I'll say this is gonna be the last question. <laugh>, uh, looking into your crystal ball the next five years, what are we in, what are we in for?

B.J. (01:14:53):
You know, I would say that, um, it's good to be in logistics. I mean, I think the industry is really, to me, you know, it's really funny, you know, when I first, you know, for the first probably 20 years of my career, I spent, you know, people asked me what I did. I spent the next 30 minutes trying to explain it to 'em, <laugh>, you know.

(01:15:12):
Um, and, uh, so, you know, I, I jokingly say logistics finally got sexy, you know, so now that they, I can't realize time they turn on the news, they didn't say supply chain at least once in the, in the telecast. So, you know, I think logistics is a good space to be in as particularly as retail morphs. I mean, I, I think the death of brick and mortar is widely overstated, and I think that's, uh, brick and mortar retail is not dead by any stretch. Um, but you know, the emphasis on logistics and the emphasis on how things get to where they are, is it, that's, I don't think that's falling out of focus anytime soon. So it's a good time to be in the industry. It's a good time, you know, from a career standpoint. Um, from a business standpoint, I think over the next five years, it's gonna continue to morph, um, automation become more and more of a factor.

(01:16:09):
Um, you're gonna see, you know, you know, there's always cost realizations, right? So I always say that the cycle is, you know, that everybody's trying to cover their balance sheet, and the next thing know everybody's trying to spend, they go, they have too much money on their balance sheet, you know? And, and so you'll see this ebb and flow of, of outsourcing and sourcing of logistics. But, you know, I think as you move forward, and particularly with this, you know, still a large number of people working remotely Yep. Uh, the reticence to bring logistics back in house, I just don't, I don't see that. And I've seen some telltale signs of people that are trying to push it away, push it away. They don't, they don't want that, you know, they don't want that liability on their own. They want somebody else doing it. So I think you'll see continued growth on the three PL side.

(01:17:00):
You'll see more consolidation, you know, you're gonna see the bigger guys gobbling up the smaller guys. You know, that that trend, I don't think is gonna stop anytime soon. Um, but I think the next five years, normalization of the economy, um, you know, higher interest rates will stick around for a few years. You know, at least two or three, which I don't know that that's a bad thing. Again, the drunk on low money on, on, on cheap money, I don't know that that drives the best, uh, practices. Sure. You know, businesses, I think, you know, you'll, I think the next couple of years you'll see some weeding out of some of your bad actors and the guys that just don't run quality companies. I think you'll see some of that. Um, and that slack will be picked up by the better operators. Yep. Uh, I think some of these, I call 'em money eaters.

(01:17:49):
These, some of these startups that are out there, quote unquote, you know, you know, changing the landscape or, you know, or disruptors. I think those will disappear, you know, as people are gonna, as money's not cheap anymore. I think these guys out there that are just eating up money from people, I think they'll, there'll be some consolidation in that environment. And a lot of those guys will go the, the way the Doto bird, they probably all went in v and a too, probably all went v and a. That's their problem right there, <laugh>. But I mean, I think that's what you're gonna see the next five years.

Mark (01:18:23):
I would be remiss. And so I lied. That's not my last question. This'll be one of the last questions.

B.J. (01:18:27):
That's fine.

Mark (01:18:28):
Uh, Amazon warehousing and distribution came out, or they're in the process of rolling out, uh, I don't know a ton of details, but it seems like, you know,

B.J. (01:18:37):
They're trying to do a 3PL

Mark (01:18:39):
Yeah. Effectively. And, uh, I don't know how many hundreds of millions or how many millions of square feet they have, but I'm guessing it's all inland, I'm guessing. Uh, it's still not gonna be cheap. No. And it seems like to me, I don't know what your read is on it, but it seems like this is them overcommitting to a lot of square footage. And then now what in the heck do we do with it?

B.J. (01:19:03):
Right. You know, there was an article that came out, you know, a few weeks ago that said they were gonna send all this square footage is a sublease. Um, and, uh, and that was, you know, you talked to the guys in the know and he went, no, no, no, they're not, you know, basically they overbuilt and, and it's really funny. I had a great perspective, I'll, I'll leave his name out of it, but he's a big player in the real estate marketing does a lot of business with Amazon.

(01:19:31):
He said they overbuilt their labor bandwidth. So they had buildings, but they just didn't have the bandwidth on the management side to get 'em open. Hmm. You know, they were, they were behind recruiting and management and they just didn't have the bandwidth to open them. So it wasn't so much just a pullback of space, but is also pullback of resources. So they basically, they felt like they were spread too thin. Right. And so, you know, I'll, I'll, you know, Amazon's Amazon and, you know, I, I, yeah, I'm critical enough of them in general, but, you know, I think if they get into the 3PL space, it'll be, uh, you know, the one thing that Bezos set up is a siloed sections of, you know, everything's a silo. So it's easy to try it and unplug it. You know, my, my opinion is they'll, they'll try that and they'll unplug it pretty quick cuz they'll find that, you know, they don't have that product profitability to offset their, their logistics inexperience.

(01:20:37):
Uh, I, I'm sorry. They're not, there's a lot of people out there that have forgotten more about logistics than Amazon knows. Yeah. You know, I, I, I, I mean, Walmart could teach 'em a lot about logistics.

Mark (01:20:49):
Yeah. I'm, I'm sure they could.

B.J. (01:20:51):
And, and I don't, I don't see them as some crazy, you know, awesome logistics provider. And so I think they get into the three pl space and they'll find that they're, they're not as good as they think they are.

Mark (01:21:05):
Well, I think that's a great place to, uh, to end it <laugh>. Uh, I've thank you so much.

B.J. (01:21:13):
Oh, thanks for having me. This is awesome.

Mark (01:21:15):
This is, this is fun. I'm, I'm looking forward to, you know, getting more into it. Pick your brain on some other people I should probably talk to. Yeah. It'll be awesome. Yeah. I mean, it's, I I love it because we're able to kind of get in the nuts and the bolts and Yeah.

B.J. (01:21:28):
You get Summit ho on this thing. What's that? Gotta he get Summit Hog on this thing?

Mark (01:21:31):
Oh, he's, he's coming next. There you go. Yeah. Summit Summit's got a great perspective. All that's,

B.J. (01:21:36):
uh, he does, it does.

Mark (01:21:37):
That's how you and I met.

B.J. (01:21:38):
Yep. Smart kid. And, and, uh, no, that's, you know, I mean, and, and I think this is a great format and there's a lot of smart guys out there doing this and gals that are, you know, way smarter than me that, um, you know, that, look at all this from different angles. You gotta look at the real estate guys. You gotta look at the development guys. You gotta look at the 3PL guys and you gotta look at the shipper guys. So they got a very different perspective too.

Mark (01:22:03):
Yeah. Well, it's a pleasure. I really appreciate it.

B.J. (01:22:07):
It's always good to talk to a fellow Texan.

Mark (01:22:09):
Absolutely. All right. With that said, uh, thank you.

B.J. (01:22:13):
Thank you.

Mark Taylor

Host