The Freight Pod
The Freight Pod is a deep dive into the journeys of the transportation and logistics industry’s brightest minds and innovators. The show is hosted by Andrew Silver, former founder and CEO of MoLo Solutions, one of the fastest-growing freight brokerages in the industry. His guests will be CEOs, founders, executives, and leaders from some of the most successful freight brokerages, trucking companies, manufacturers, and technology companies that support this great industry. Andrew will interview his guests with a focus on their life and how they got to where they are today, unlocking the key ingredients that helped them develop into the leaders they are now. He will also bring to light the fascinating stories that helped mold and shape his experiences.
The Freight Pod
Ep. #12: Drew Wilkerson
What if you could gain insight from a man who started as a sales guy and climbed the ladder all the way to CEO of a publicly traded brokerage? Our guest this week, Drew Wilkerson, takes us on a thrilling journey of his career, and if you're a fan of incredible success stories, you're in for a treat. From his humble beginnings at CH Robinson in 2006, Drew shares how he harnessed the power of relationships and excellent customer service to rise through the ranks to where he is today - at the helm of RXO.
This episode could serve as a masterclass on leadership, as Drew walks us through how he went from being an individual contributor to eventually overseeing 7,500 people today. He talks about the importance of transparency, alignment of employees through a powerful mission and pointed surveys, an open-door policy, and more. It's no surprise Brad Jacobs saw the potential and chose to mentor him, which made him an excellent fit to lead RXO as it was spun-off from XPO as the new asset-light transportation business.
We hit on additional specific topics including managing through COVID, making and communicating difficult decisions around in-office versus remote work policies, dealing with investors in the public eye, and much more.
Enjoy this episode of The Freight Pod.
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*** This episode is brought to you by Rapido Solutions Group. I had the pleasure of working with Danny Frisco and Roberto Icaza at Coyote, as well as being a client of theirs more recently at MoLo. Their team does a great job supplying nearshore talent to brokers, carriers, and technology providers to handle any role necessary, be it customer or carrier support, back office, or tech services. Visit gorapido.com to learn more.
A special thanks to our additional sponsors:
- Cargado – Cargado is the first platform that connects logistics companies and trucking companies that move freight into and out of Mexico. Visit cargado.com to learn more.
- Greenscreens.ai – Greenscreens.ai is the AI-powered pricing and market intelligence tool transforming how freight brokers price freight. Visit greenscreens.ai/freightpod today!
- Metafora – Metafora is a technology consulting firm that has delivered value for over a decade to brokers, shippers, carriers, private equity firms, and freight tech companies. Check them out at metafora.net. ***
Welcome back to the Freight Pod. What's up, Andrew? How you doing.
Speaker 2:I'm doing well. How are you?
Speaker 1:I'm doing great. We're coming off a big Thanksgiving week. I know you spent some time down in Mexico. How was your week?
Speaker 2:It was good I'm down in Mexico with the fam. The cops cooked up quite the Thanksgiving feast. He has turned into quite a chef during COVID. It's made for probably the best turkey I ever had in my life on Thursday. Then I spent Saturday. I played in a pickleball tournament with my fiance as my partner. We played pretty well, but we lost. Then I watched the Michigan Wolverines.
Speaker 1:What's the secret to the turkey? Is there something there?
Speaker 2:I offered to help and I was totally in need of help. I'm not sure what his secret was. All I know is it was the juiciest turkey I've ever had. It was flavorful, it was delicious.
Speaker 1:All right, we'll be waiting for the insights on how to make that happen on the next episode. Until then, one thing people don't realize is that we are both Michigan football fans. You pretty obvious, you went to Michigan, me not so obvious. But how are you feeling about coming off that big win yesterday?
Speaker 2:I was very nervous. We didn't have our head coach. I just my big fear was, if we lost, then they would try to say that the last two wins against Ohio State shouldn't have counted either. I felt like we were really playing for three games. We showed up, we kicked their butts. In three years in a row We've dominated Ohio State and I feel good about it.
Speaker 1:What kind of fan are you? Are you like the guy that's standing up edge of the seat throwing stuff, cursing the world? Give us some insights into Andrew the football fan.
Speaker 2:I mean, I've been that. I'm pretty nervous, nellie. When I'm watching the game I've got negative thoughts running through my mind, like we're going to like when we in the fourth quarter, when we only went up by 10 at the end of the game and or, I'm sorry, when we kicked the field goal to make it a six point game. With a minute left, I just that third and sixth play. I wanted us to throw the ball.
Speaker 1:Yeah.
Speaker 2:You know, just those fears were coming to mind, Like, okay, we're going to give them the ball with a minute left, we're going to march down the field, throw Marvin Harrison Jr a touchdown and we lose by one. And that just was playing in my mind over and over for the last minute. So it's pretty nervous.
Speaker 1:All right. Well, I'm not. I don't know how if I can be as huge a fan, having not gone there, but if you're wondering how I got to that state, I went to Cal State forwards and, like I mentioned before, we like to say that we are undefeated since 92, which is technically true because that's when our D1 football program ended. At that time, I think our claim to fame was Steve Mariucci was a quarterback's coach in the late 80s, and so they had a couple of winning seasons, anyways. So there's shirts going around, undefeated since 92,. But we're a commuter school, great business school, definitely not known for our football or sports, with the exception of baseball.
Speaker 1:My brother ends up going to Michigan. You know, for somebody in California they had the contracts, were on national TV every morning. You know, michigan football was on, no matter how good or bad they were, and this is like the 90s. So they were really good. They won the national title. And you know we're constantly going to bowl games and my brother and I would turn the TV on and we'd see these beautiful uniforms on TV and we're like man, what the hell? What school is this? So you know, we became fans through that. My brother ends up going there. In fact, my dad took them to the Michigan Ohio State game and, forgetting the year, but frigid cold, thinking that he's going to convince my brother to not want to go there because it's so damn cold but he did the complete opposite, as you can imagine, taking him to that rivalry game, he just kind of solidified it for him. So we became fans in that in that way and you know it's been really fun over the years.
Speaker 1:I'm thinking back to my first real big memory, and that was 2011. Michigan stadium had just gotten lights. It was the first game under the lights and of course it's against Notre Dame and they go on to win that game. I think it was a 17 point. Come from behind victory 35, 31. Oh, it was awesome, man. Yeah, denard Robinson, so good time. So that's that's I roll with. I roll with Michigan. So that's it, man. College football we have the playoffs and all that, but we're not ESPN, so we're going to get back into the freight talk, right? So who do we have today?
Speaker 2:Got Mr Drew Wilkerson should be a great episode and let's get it going.
Speaker 1:Let's do it.
Speaker 2:Welcome back to the Freight Pie. We are joined today by Drew Wilkerson, CEO of RxO, the recently spun off asset light business of XPO. Drew started his career at CH Robinson back in 2006. I want to say, maybe within 30 days of when I started my own career in the industry we're going to jump in there. But he spent six years at Robinson before joining XPO and has spent the last 11 years at XPO just building his career, and his kind of meteoric rise from kind of, I guess, what I would call humble beginnings as a sales guy in brokerage to now being the CEO of a publicly traded brokerage is I don't know another word other than phenomenal and one that I think a lot of our listeners who come from the brokerage space are probably quite interested. And so, Drew, welcome to the show. How you doing today.
Speaker 3:Thanks for having me. It's great to be here.
Speaker 2:So let's start here. You started in the industry in November of 2006,. Right, that's right. Do you remember the first load you booked?
Speaker 3:The first load I booked? No, I don't, I don't. It was fairly quick into my tenure because whenever I came on, I do remember that one of our big customers was an auto parks provider and so they were running hot during that time. So all I was supposed to start out doing was tracking and tracing loads, but they ended up because they needed help covering loads, they did let me get out there and cover some loads early on, so I was covering loads by the end of November.
Speaker 2:And what was your kind of feel for this industry? I mean, you came into this. From what I understand, you had no experience or understanding of the space. You just kind of jumped in right.
Speaker 3:Yeah, I mean, I went to the University of South Carolina and I was a public relations major, so I was not supposed to end up in freight or in transportation of any sort of kind. But you know, whenever I left college, I had a friend who said hey, look, don't just go out and take a job, or take the first job that comes at you. Come work for me for a little bit. I know this is not long term, but then you can be strategic in where you go. And so I went on a bunch of interviews and was trying to be really selective on where I was going to go to work. And I had a friend who called me one day and she said hey, listen, I think you'd be really good at this job. Can you build relationships with people? Are you willing to put in a lot of hours? Are you willing to make cold calls? And you know, I went to the interview at Robinson and that would have been in October of 2006 and was working at Robinson not long after that.
Speaker 2:And did you fall in love right away, or what was it about? I mean, you've obviously stuck around for quite a while, so what was it that kind of kept you in the business?
Speaker 3:Yeah, I was hooked right away I mean one.
Speaker 3:I think that just being able to see that early on I could make an impact into the organization, I could go out there and I could.
Speaker 3:I started out more on the carrier side than on the sales side, so I started out building relationships with the carriers and that was a lot of fun for me and I got to understand how important the relationship on the carrier side is is just as important as what you're doing on the customer side. So for me, being able to build up those relationships over time, some of those people that I started talking to in my first few months at Robinson I was still talking to on my last day at CH Robinson, and so just it was friendships that have stayed with me throughout the years small trucking companies that were able to go in there and have an impact for us and you got to watch them grow their company. Some of them went from five trucks to 15 trucks by the time I left. Some of them went from one truck to five trucks, and so it was a lot of fun to see the impact and the growth that you can have, not just on your own organization but on some small businesses around the country too.
Speaker 2:I agree wholeheartedly. I mean I did the same thing. So again, your story, as I researched you is fascinating to me because it feels so similar to mine. I do you know my first load. I remember booking Nina, wisconsin to Mechanicsburg, pennsylvania, on a carrier called Goyan Transportation. We lost like 200 bucks on the load and I was similarly like hooked right away. I was like holy cow, this is crazy. I call this guy, I give him the load, I faxed him a Raycon. We had Zeta Fax was our system, we were using two fax Raycons at the time and it just it's like enthralling.
Speaker 2:But then as you start to work on the carrier side and work with these carriers, especially the small guys, that just the opportunity to meet and get to know these folks who are all over the country. I mean I was sitting in Chicago at a desk and these guys were in, you know, rural Georgia, alabama, Florida. You know picking up loads of Coca Cola. For me it's a fascinating part of the business. So you used, did you spend most of your time at Robinson on the carrier side, or when did did you pivot?
Speaker 3:No. So whenever I came in, I started out on more on the carrier side. But on the early days at Robinson you're actually doing both, so like you would be talking to customers and talking to carriers. And so as I came in I focused more on the carrier side and I had a couple of customers that I was dealing with as well, but actually went up probably two, two and a half years into my time. I went up to what was Chicago central. Like you had Robinson of everything else and then you had Robinson of Chicago central. So I went up to Chicago central and spent a lot of time with the folks there learning about the model that they're running of customer versus carrier.
Speaker 3:And so whenever I came back to Columbia, south Carolina, I put a lot of time and effort into trying to shift our office into focusing on being customer and carrier, because I saw the value of just being focused on one and that you could build deeper relationships on both sides to be able to do that. So whenever we came back and did that, I was on the carrier side. Then I ended up overseeing a group on the customer side as well, and then the last thing that I did at Robinson was. We had a lot of great relationships with customers that have been with us for a long time, but we weren't doing a ton of new sales and bringing on a lot of new customers or at least where I was at we weren't. And so you know, I saw an opportunity to go bring on small to mid-sized customers. We're already doing business with a lot of big customers, but we had opportunities to go out and do business with small to mid-sized customers and we're really able to grow that out over my last year, year and a half at Robinson.
Speaker 2:So for our listeners, he mentioned Chicago central. That is a reference for those of you who have listened to our podcast. For a while we talked about American backhaulers. So American backhaulers was the business that eventually, you know, that office became Chicago Central. And if you remember Ted Allen, when we were talking to Ted he talked about this different energy he felt when he was speaking to someone from that branch. I'm curious did you get a sense of that too? Was there a different vibe there than what you were experiencing in Columbia?
Speaker 3:Well, there was definitely a different vibe. I mean, I would say in the early days it was everybody else versus Chicago central. Whenever you looked at it, really you did not want Chicago central covering your freight. They had a different air about them as the way they went about them. But as I got up and went and spent time with them, they were great people and like they, just they were really good at what they did and so to be able to learn from them and take that back was a huge impact on me and really how I built out my career for the long term. But in the early days there was definitely tension with the rest of the network and what was Chicago central?
Speaker 2:It's funny because that comment resonates with me, because I think about it from the perspective of, like all of the competitors in our space For me I talked about, I used to really dislike CH Robinson when I was at Coyote and it was kind of instilled in me that I just we didn't like them and we thought they were bad. But then you'd meet them and they were good guys, good gals, just like you, trying their best to execute for the customer. But we're also competitive that you just that tension is, I don't know, it's hard to break through. I guess you don't probably have that kind of feeling on the customer side of the business. Do you Like with Niagara's competitors, or is that a feeling?
Speaker 1:You know I can sense the tension, for sure, but we're equal opportunity supplier or base, and so that's how we operate it. We try to keep it all neutral. But I wanted to ask you too, Drew, when did you set your sights on management Right? So you said you had to get a feel for the environment. Your book in loads, you're getting a sense for this is something that you want to do. I think a lot of people in this industry kind of struggle with being an individual contributor. You can make some really great money right From a commission perspective. And so then there's like this, this fork in the road where you have to say, okay, am I going to continue building my book of business or am I going to go the management route? And obviously you went the management route. So can you talk a little bit about what that thought process was like early on? How did you set as the bar for yourself? And then, how did you go about, you know, following that career path?
Speaker 3:Yeah, so I had a manager. His name is Kevin Harthan and he was a great mentor to me at the time. I was working on a kind of a big project with me. We started out ون الحAPPLAUSE taking on and I was booking freight and I was building relationships with a lot of different carriers. He pulled me aside, you know, probably a year or so in, and said, hey, you know what like, can you help others do this, can you help teach others to do it?
Speaker 3:And so whenever I first started out, it was four, five, six people and it was just a pot of us who were in there who were covering freight, and it continued to grow and grow and grow and seeing the results, it really became bought in to seeing the results of not just what I was doing but what the team was doing, and it was never just about one person. And you know we all learned from each other. And, andrew, to your point on being competitive, we were competitive with each other. If we were looking at a lane and you had something that was going from Michigan down to North Carolina, it was competitive to see how deep of a portfolio you could get within that lane and who was going to have the strongest relationships. If a customer called in a load at seven o'clock at night, who's actually the one who had the relationships that was going to be able to cover that? So I think for us, like we all worked together and pushed ourselves to be better at what we were, and for the time that I was there, I mean that office grew exponentially and I learned a lot while I was there about just the value of building deep relationships with the carrier side, but also with the customer side.
Speaker 3:I mentioned Kevin, you know.
Speaker 3:I mean he, whenever I was on the carrier side, he was nice enough to take me on sales calls with him as he went out to new customers, as he went out to some of our long standing customers and I got to see how he interacted with them, the relationships that he was able to form. He got information on bids that nobody else was getting because he had such deep relationships. And that's something that we've tried to carry over here to RXO is you can have deep relationships to where it's not all about the RFP that's going on. It's really about looking at your transportation spend as a whole and how can I go in there and create value through your whole network not necessarily on just point A to point B, but it was.
Speaker 3:Is there a solution as to where I can go in there and look at it and say you know what? You've got this load this eight pallets. You've got this load the six pallets, but they're both shipping full truckload. Can we look at doing a multi-stop solution for you? So what never about saving a money from point A to point B. It was really about going in there and looking at their whole network and seeing how we could drive value into it, and that's something that has really helped build out RXO.
Speaker 2:So I'm curious, as you began your sales career selling into customers. It's obviously a very competitive landscape. There are thousands of brokers. Whether you're at Robinson or XPO, at the end of the day it's the person that's selling. So what was Drew Wilkerson selling to customers when he was going out and meeting with them?
Speaker 3:Well, at Robinson I was selling the largest transportation provider on the truckload side in the industry at that point in time. To your point on brokers, whatever I was at Robinson, it wasn't until my last year, maybe two years, that I even knew there was another broker. I didn't know that.
Speaker 1:Whatever I was going in there.
Speaker 3:I was mainly competing about asset-based carriers. And then you started hearing about or I started hearing about when I was going on sales. Okay, Coyote, they're a big provider out there, and for the first three, four plus years of my time at Robinson, I had no idea that there was anybody else who did what we did. And so getting out there on the sales side it did help me see, like, hey, there's a lot of people who do this, there's a lot of people who do this. Well, what are you going to sell? So we sold at Robinson. We would sell the scale, the capacity that we had, the lane density and portfolio carriers that we had built up across the organization. But you're always also selling yourself.
Speaker 3:I remember one of my first customers was a Justin Time customer and it was plastic models, but if you were late you were shutting down the plan and so, as things would go on, you would have these loads and they were shipping at all hours of the night.
Speaker 3:And so I started sleeping with my cell phone on my chest and I put it on vibrate because I didn't want to wake my wife up right Like I was newly married, and I was like we're sitting going to end well if I wake her up every night. But I learned a lot about customer service that people learn like, hey, you know what, if he tells me he's going to do something, he's going to do everything in his power to make this happen, and I've tried to do that throughout my whole career of customer service matters, the relationships matter, the solutions that you can create for customers matter, and people start to count on the person, but it's not just one person, like where we've gone with it now at R&D. So how do you create layers of relationships throughout the organization so they're really intertwined and they work as one?
Speaker 2:So that takes me back to what was the most challenging customer experience of my life and this was also the most profitable customer experience of my life and it took me to a point where I actually considered giving up the money. I was hauling for a company it was I don't mind sharing, I was hauling for a leadership actually and this was they weren't using a lot of brokers at the time and it was all team loads from Virginia to Florida, north Carolina to Florida, and it was set. I mean, we'd pick up at 2pm, deliver at 4am. Every day same load, same number of loads. But if my driver was two minutes late, my cell phone was buzzing and I, literally at 2am, like four nights a week, I'd get a call and it just was.
Speaker 2:It took me to a point. I had a girlfriend at the time who was like you can't, you can't keep doing this. This is, you can't live like this. I was 24 or something at the time. I was willing to put up with it because at the end of the day, I was selling myself and if I wasn't going to pick up the phone who was? You know, I couldn't ask somebody else to do that part of the job, so that you just brought me back to some some scary times.
Speaker 3:I learned that and you know I mean like my wife and I we got married one over we were 23, we dated long before that, so but you know I didn't live together before that and so like I didn't want her first impressions of like hey, he's going to get up most nights at two, three, four, five in the morning to go take a phone call for you know either a driver who hasn't showed up late, or sometimes they were calling and they'd say like hey, you know what, we had another provider who hasn't showed up on time and is off tracking. We can't track him. Can you have your guy get here early? And so then you start working the phones with the carrier saying like hey, like I know you're supposed to get here at 4am, can you actually get there at three, otherwise we're going to shut the plant down. But that's what made a difference and that's what allowed us to grow, is because they knew that they could call me in the middle of the night and I was going to answer the phone. It was never a question.
Speaker 1:Yeah, drew, I want to summarize this which is selling yourself right, and I, for, as somebody that sit on the other side of the table and heard literally hundreds of sales pitches. You've got the glossy PowerPoint slides, the you know people would print them out and put it in these nice binders with thick paper. You could tell that they spent a lot of money on the different sales approaches that they were taking and the reality is, at the end of the day, all I cared about was the person, and I remember a lot of times they'd bring in this panel of four people. You had the senior sales executive, you had the account manager, you had the capacity person, and my eyes were always trained on the whoever was going to be running the account day to day. And as the sales guy was talking, I was.
Speaker 1:My eyes were on the, the operations the account person getting a sense for. Is he buying what the sales person is saying? Does he actually believe he can execute what this person is saying? Because at the end of the day, that's what it is, and at a company like XPO, rxo, that's a massive company. The name, the brand recognition is there, but at the end of the day, it's those individuals within your organization that are executing the business, and I found so many times that you'd have this account rep, this account executive that would leave the organization and the relationship, the service, everything would fall apart, and it happens so frequently. So I'm curious to get your thoughts on do you think about things like that and how do you overcome those opportunities, like the ones that I'm describing, where there could be this, you know, this dip in service when things change or when personnel changes.
Speaker 3:Yeah, so well.
Speaker 3:First, what I'd say is you know, as you were talking, the thing that kept coming to my mind was it's all about the people, and You're being able to do that within a team environment.
Speaker 3:It's never about one person of what they do, but at times, one person is who represents the company, right? So you know to me, you know what the way we've done it is. Not only are you gonna see the salesperson, but you're also going to have somebody that you're gonna see who's gonna be the key account manager. You're also gonna talk to the person who is doing the tracking and tracing. Like we want you to know the entire parts of the organization so that you can build trust. At the end of the day, the only way people are going to give you more businesses off of having a history with you and Building that trust up over time and like that's that's been the success that we've had. If you look at the ways that we've grown volume, it's all because, like, we've got great relationships with our customers, we've built up trust over a number of years and we've delivered solutions that contribute to their success right Like it's not necessarily all about our success is success.
Speaker 3:It's about delivering solutions that contribute to their success.
Speaker 2:Yeah, I mean, if you can, as a sales guy, put put yourself in the mindset of how do I make that that my customer win? How do I get my customer to get his promotion?
Speaker 3:If you can think about that.
Speaker 2:You're yeah, how do we get Paul promoted? Yeah, that's a winning, that's a winning, winning proposition. So why, let's move to. Let's move to your transition. So at some point you said, you know you, something was interesting to you about XPO. What? Why did you make the jump? How did that come about?
Speaker 3:Well, I wanted to take the next step in my career and you know, my mentor went and he left our South Carolina office and he went to a bigger office in Sartel, minnesota, and I watched him progress. I was like, well, I can do this, I can run an office. And as I started having the conversation with Robinson, like, yeah, you could probably do that. You start off in Europe. And, like I grew up in South Carolina, I'm not moving to Europe like it was. It was hard enough for Brad to get me to Move from South Carolina to Charlotte, north Carolina. I had to convince my wife like you would have thought we were moving across the country and we moved 85 miles, so we weren't gonna do that and it just wasn't a huge interest to me to to shift my life that much From a cultural standpoint. And so, you know, as I started looking out, I looked at a number of different companies and I went and I had an interview with a guy named Greg Ritter and I remember this the only time my wife was like, hey, you probably shouldn't do this because it was Sunday. It was a Sunday morning, I was supposed to go to church with her and I was like, no, no, I think I'm gonna go.
Speaker 3:And I went there. He ate breakfast. I was nervous, so I just had orange juice or coffee or something and like, just I was attracted to what he was selling. He was like, hey, look, I understand what you built at Robinson. You can go, step into a a situation that probably has more stability and has more of a base. But if you come to Xpo, you're gonna have the opportunity to build something from the ground up and be able to build a legacy. And you know, after I taught with Greg, I spent some time with Troy Cooper, who was big into the finance and operations and like he was just such a great person. And then I capped all that off by my interview with Brad and that was the selling point. It was like who better can I learn from in business and in life and somebody who was accomplished as much as he has? And he was nice enough that for 11 years and even today, he took me under his wing and was willing to give me the feedback to help me get better at my job.
Speaker 1:Drew, you're talking about some big names here and before we get into all that, I think if you could lay the groundwork for our listeners on the size of Xpo on that time, because I think it was still at a point Before it went on this huge acquisition spree and things like that. So can you just lay the groundwork for that for the audience?
Speaker 3:It was before the huge acquisition. So Brad started with a company called Express 1 and so it was really. That was an asset-based Expedite company that was built largely off of automotives. We had a small freight forwarding business that was part of CGL, and then you had bounce, which was a pure brokerage, and what we did there and Before I started there had been three cold starts, and I think they were in Ann Arbor, michigan, phoenix and maybe Dallas, and you know that they they started me on a Tuesday.
Speaker 3:I left Robinson. My last day was on a Monday and on a Tuesday I started at Xpo, but that Monday night they announced that they had acquired a company called continental freight. They had an office in Columbia, south Carolina, and then they had an office in North Carolina as well. And so as I came on, you know just the opportunity for growth and to be able to go out there, and it was At that point it was still. It's a huge market and we had no, no loads really at that point, like we started off whenever I thought I don't even think our brokerage was doing a hundred loads per day whenever I came on. So just to be able to really build it from the ground up to where we are today, that our brokerage is over $3 billion, and we've been able to do that in just over a decade. It's been a fun thing to be a part of, but it's also been Great relationships that have built with some of the best people that I've gotten to know in my life.
Speaker 2:And you came in as the president of this of one office, right, how did what did that? What did that office? So that office was doing a hundred? Look like. How did that? Look?
Speaker 3:No, that office was probably doing. It was like a 25 million dollar broker, um, so they were probably doing 30 40 loads a day at that point in time. They had some relationships that were built in South Carolina, mainly um, and it. As I came in, I talked about the interview process. They interviewed me and, with the exception of Brad, I interviewed with everybody at a hotel.
Speaker 3:I didn't go into the office that I was going to be Taking over at that point in time and I went into the office on that Tuesday morning. I pulled up and I was like what did I do? Like they had bars on the window. It was in the middle of nowhere and so, like Greg pulled up not long after me. I was like Greg, like is this the office? He was like, yeah, I was like we had a nice office at see each Robinson because like that's not how it is here, like we have to be able to build into that. And so we built out a great office in columbia. I came up to charlotte where we had Capacity that was being covered out of charlotte. You didn't have a sales side to it yet they were on folding tables. Whenever I came up here for the first time, they were out there in a real office, in real office space, but they were on folding tables. So it was really a part of just being building something from nothing into what we've been today.
Speaker 2:How many people did this seemingly prison like office have in it? Let's see Seven seven or eight, okay, okay, so you're starting with a small team.
Speaker 3:Yeah, you had seven or eight that were in columbia and then you had Three that were in a north carolina satellite office that they had and this is, you know, your first foray into, like, leading a group.
Speaker 2:You're, you've got the big title now, you know, was there any concern for you like I don't know what I'm doing or I'm not ready, or how did you deal with that?
Speaker 3:There was never a concern over like, hey, I'm not ready, because even at Robinson, whenever I left, I was, I was probably leading a bigger team. Now, what I didn't have is I didn't have the p&l experience. I didn't even understand exactly what a p&l was, but that's where I had people like troy cooper who spent a lot of time with me and helped me understand what a p&l was, but not only what a p&l was like. What are the levers that help you move a p&l and be able to see Growth over a certain amount of time? How do you lay out of a roadmap of where you're going over? You know short term the next 90 days but long term, where are you going over the next two, three, four years? Within that?
Speaker 1:true I want to touch on. So you, you, you're talking to greg witter at breakfast. Do you get a sense that you are on Basically like the base of this launching pad of a rocket ship that's about to take off? Um, you know, I just be a little bit more preface on that. You know, I think all three of us have this experience where we end up at these organizations that are just about ready to take off In a really big way, and then just the opportunity from there is just exponential, right? So You're sitting there at this breakfast, great, selling you this great story, I'm sure, right? Um, it was that the impetus for wanting to make the move. And, um, what did you think your career could be? As you're hearing about the vision for what this company could be, yeah.
Speaker 3:So you know, whenever we were sitting there, I got a little bit of the vision sitting there with greg, but I'd say I was still skeptical. It was the conversations with trolling brad. Whenever I looked at what they had done at united reynolds, what brad had done even prior to that at united waste, and I started looking at where all those companies were, that I started to say this could be something special. This could be a massive player in the transportation industry and I've got a part to play in that. And at that point I didn't know where my role would go from there. So, like to say that I came into those interviews and I was like hey, you know what, brad, at some point we're going to do his next big thing and I've got the opportunity to be CEO. I wasn't thinking that at the time. My mind was really set on you know what, like if I come in here and I'm able to build relationships internally as well as externally, I'm able to grow the business, I've got the opportunity to get rewarded and get more opportunity. And that's exactly what happened. Like I talked about starting with the Columbia office and having a satellite office in North Carolina Within six months. Brad called me and said hey, like I want you to come in and start what you're doing in Columbia. I'm seeing the growth there. I want you to do the same thing in Charlotte, because we see Charlotte as what could be a mega hub for us. And so I moved up to Charlotte.
Speaker 3:That's whenever I was talking about making the move from Parksville, south Carolina, to Charlotte, north Carolina, and I came up here and we heard a lot of people and we saw a lot of growth within Charlotte.
Speaker 3:And then I was able to pick up a few more offices and then a few more, and then, before I knew it, I was overseeing half of brokerage and over $500 million in revenue. And then, a couple of years later, I was overseeing all of brokerage and had the opportunity for growth there. And then, right as COVID came on, we had an entity that was North American Transportation. So it was our brokerage group, it was our last mile group, it was managed transportation, it was freight forwarding and we had an intermodal and drainage team as well, which we sold a couple of years ago to STG. But we had those six businesses and I was able to take over P&L responsibility for all of them and at that point, as we were in the middle of COVID, it grew up to where it was about $6 billion in revenue. So it was a huge growth from where I started, of doing 20 loads per day, to overseeing $6 billion in revenue 10 years later.
Speaker 2:Okay, so you just fast tracked us through that career and I appreciate it. Why was it always you right? So in each of these steps, they're saying it's you Drew. It's you Drew, take this, take this, take this. Why?
Speaker 3:Yeah, one. I think you'd have to ask them right Like that. They could give you a better answer for that than I can. But I talked about being able to build relationships with people internally and I think that one. They knew that I was honest, they knew that I was hardworking, they knew that I was going to work for the customer and build longterm relationships.
Speaker 3:There. I had people that had worked with me for a long time, that had followed me. Some of the people that I hired and you probably did this at Coyote as well, that first hiring class we still have people from that first hiring class that I did in Charlotte, north Carolina. They're still here with us today. One of them is a director of operations and oversees a lot of people in Charlotte, north Carolina. So you know, whenever you're able to build trust throughout the organization and then, most importantly, you got to be able to deliver results right, like whenever you start stacking up of how people are performing, where do your results come in line? You can do all of those things right, but you have to have the results that come with it.
Speaker 2:So let's talk about your leadership style. In your mind, how do you think you were able to win over these people and get them to buy into you as Drew, the president of this, and the Nat, and the Nat and bigger and bigger.
Speaker 3:It was the same way that you did it with the customers right, like it was built in trust. If I had a sales rep in the early days who had an issue and they were the ones who were taking that 4 am call and they didn't know what to do, they knew that they could call me and they knew that I would answer the phone and I'd work through the situation with them. So I wasn't going to leave them out there on the island and I would be in the fight with them. The second thing is I mean again those customer relationships. You look at our top customers, our top customers have been with us for 15 years on average. So you know some of that even predates me.
Speaker 3:But being able to go into those organizations and go at the very top of them but all the way down to the people on the docking, having all of those people buy into the vision of where we think that this can go, where the potential value that we think that we can add to your organization, the relationships with the customers, is extremely important To me. Like I tell my kids, like you don't have to make the best grades in school, I don't. That's not something that's going to get me upset if you don't make the best grades in school, but what will make me upset is if you're not able to build relationships, if you're not able to look people in the eye, if you're ever dishonest or disrespectful. You know, those are the things. Do you have common sense about you? Those are the things that will help you go much farther in life than the whatever they're learning in eighth and eighth grade right now.
Speaker 2:Yeah, that makes sense. So in some of the research I did, I saw you talk about the word transparency, which is an important word to me, and I'm curious what that means to you.
Speaker 3:Honesty, telling them what's going on in the world. I mean, right now we're in a difficult freight environment and what's the this? Not only is it a soft freight environment, but it's been a prolonged downturn right and having real conversations with your employees about what's going on and why you're making the decisions that you're making. We've got town halls and in these town halls, like, we don't screen the questions as they come through, we'll let you get on and you can ask whatever you want to ask. And it's our opportunity, because if you're thinking, somebody else is probably thinking it and it's our opportunity to tell people exactly why we've made the decisions that we're gonna make.
Speaker 3:Second is we're not gonna get everything right, but if you're gonna make a mistake, learn from it and be able to be better for it for the next time. I think that one of the things that we talked about earlier was just being able to take feedback. Maybe it was right before we got onto the podcast being able to take feedback from people and surrounding yourself with really good people who are going to give you real feedback and not saying, hey, this is gonna go through one ear and out the other, actually looking at them, listening, caring about what they're talking about and then saying, okay, this is what we can do with that.
Speaker 2:So for me, when we started MOLO, that was my first foray into being a CEO, for sure, but really being accountable for everything and I had a great team that I was doing it with.
Speaker 2:So it wasn't just me, but it was us, and my job was to communicate with and mass and by accident almost I found that transparency was far and away the most important thing that employees wanted.
Speaker 2:So, as you talk about town halls, I would do the same thing every couple of weeks for the first four or five years of our business, as we grew from zero employees to nearly 500, it was just getting in front of them and being as honest as I could be, through the good and the bad and like the bad. When you're talking about things that are challenging, you certainly want to continue to be honest, but I'm curious when the team gets really big, it gets really hard because people have very different perspectives. People have very different, like there are different motives and things that people want in life. And when you're making a decision for 500 people and then a thousand people and you're communicating that, at least, I struggled with it sometimes because I was like I know that there are people listening to this that really don't like what I'm saying. I'm curious how you think about that and how you deal with that at a personal level and as the leader of such a large organization.
Speaker 3:We've got 7,500 people, so there's zero chance of everybody liking what I'm saying or agreeing with what I'm saying. But I think the biggest thing is you know what. We live in a world. You don't have to agree for everything to be okay. Can you align on what the mission is and where you're going and that's where the transparency comes in is like this is exactly where we're going, and one of the things that we've done that has really helped and we stole this from Brad and carried it over into RXO is we sent out a survey and we sent it out every three months and it is three simple questions Rate your job one to 10. If you're not a 10, what can we do to make it a 10? And what can we do to improve the company and what can we do to improve the profitability of the company? And I read every single one of those that come back.
Speaker 3:Now we've got really good engagement scores overall, but you have some people who give you a one, two or three and, like to me, it's an anonymous survey, so you don't know who it is. But if they give you that over an extended time, it probably isn't going to work right, like if somebody puts you as a one, two or three, five quarters in a row. It's probably not a good match and you wish them well. You hope that they have a lot of success, that wherever they go, but it just may not be for them. And then again you lay out the mission and you try to align people to where the mission, what the mission is and where you're going.
Speaker 3:What's the vision? So for us, we publicly put it out there that we're going to be by 2027, somewhere between 475 and $525 million of EBITDA. But internally we've all threw a lot of steps of what that takes to get there and we call it our North Star. And if people aren't aligned to where our North Star is, then we've got to make sure that we get people who are aligned with it. But to your point, you're never going to have out of 7,500 people. I'm never going to have 100% alignment, but I do want to have the mass majority of alignment on where I'm going and where it is, and that's why it's important to track where employee morale is over time and if it shifts, what calls it to shift and do you have to make some adjustments at that point in time?
Speaker 2:The question about what can we do to make the company more profitable is fascinating to me. So we had a similar approach with surveys and I don't think I ever thought about it like that. I always thought about it like how can I make the employees' life better and what can the business be better for you? But what you're doing is you're creating accountability for the employee to feel like they have to play a part in this. How do we make the company more profitable? Because without profitability we're nothing right. So I just think that's fascinating. I mean, is that intentional? I assume?
Speaker 3:Very intentional. I mean, taking market share and growing is one thing, but like we're a publicly traded company, our goal is to make profits. Now, we don't want to make outsized profits, we want to make a fair profit for what we're doing. And to me, like, why come if you're not here to make a profit? Like you're here to provide for your family, you're here to make a living. Being able to see the company do better helps you do better personally. And like to me, like the best commission checks you right are the ones that are really really big, because that normally means that the company is doing well during that same time.
Speaker 1:So, drew, we talked about this a little bit a couple of interviews ago with Mitch Luciano, who also talked about doing surveys. He said sometimes it's as simple as putting an ice machine in, right. Like you know, people want to die, so sometimes things can be really simple. I think a lot of companies do surveys. I've been parts and managed through some of this stuff as well, and I think the big thing for me is that it's one thing to do the surveys, you know, get the employees, team members to do it, get the insights, but then it's like what do you do with that information? Because I think a lot of times it ends up on a deck or it ends up, you know, summarized in some nice PDF file, never to be heard or seen from again, right? So how are you really deliberate in how you go about implementing that feedback so that the team members and employees feel like they're being heard?
Speaker 3:I do it on the town halls and in the town halls I say these are the biggest takeaways that we've got from the survey. This is what's going well. This is where we think we've got opportunity for improvement. This is where we've heard your feedback, but we may be going in a little bit of a different direction. So to me it's just. It goes back to transparency of what are you doing with the feedback. First, you have to tell everybody and be open with it. If somebody wants to write Drew Stinks, then I'll share that with the group, right Like it's not being afraid of what was out there and showing everybody. Of these are the five, 10, biggest takeaways and, with the feedback that we've gotten from you, this is what we're doing from you. We're going to do these top three or four exactly the way that you outlined it, but these bottom ones we may do a little bit differently. And this one down here we don't see the impact to the organization yet, so we're not going to do it at all.
Speaker 2:So this reminds me of another piece of research I saw about your kind of open door policy. 7,500 employees it's pretty hard to have an open door for that many. That was something that but I don't want to. Ok, that's fair. But there's a lot in Charlotte and this was something I felt as a leader. Things got scary for me as we got bigger and bigger, Because it felt like it got really hard to stay connected with people and I tried something where every six months I would email the entire company and say anybody who wants a 30 minute meeting with me can have it, and I had a phenomenal executive team that was able to focus on a lot of the other things, Because I would end up spending three weeks doing nothing but meeting with people and that gave me a really good pulse on the business. I don't know that that was the most effective way to be a CEO at the scale we were at. I'm curious for you how do you manage that? Because that's hard.
Speaker 3:Yeah.
Speaker 3:So for me it goes back to relationships.
Speaker 3:So we've got locations all over the country and it's having key relationships with people who will tell you exactly what's going on in the office in Gainesville, georgia, or Ann Arbor, michigan or Dallas, like these people that I've known for years that will come and say, hey, we're doing really, really well here, but we've got an opportunity here and talk about having an open door policy.
Speaker 3:One of the things that I've always done is I've always had my cell phone on my signature line. I don't want to be hard to get a hold of and so, even if it's just an employee, just that's shooting you a text saying, hey, I don't need 30 minutes, but I need two to tell you something that's going on within the organization, I wouldn't say that I'm as structured with it of, hey, I'm going to block myself off for a few weeks and do the meetings, but there will be somebody that walks in the door today that does not have a scheduled meeting with me to talk about what's going on and they're part of the organization and what is something that we can do to fix it.
Speaker 2:Just knowing that they can do that is got to be a really good feeling as an employee. That alone, I mean. You don't need to have it blocked. You've got a lot of stuff going on, so that's critical.
Speaker 3:Yeah, that's the goal, right. Like I mean, again, I'm doing life with these people. I'm with them every single day and they need to know that I care about them and I want to know the same thing vice versa. Right, it's got to be a two-way street, that we're in this together. I spend more time here than I do at my house, so the relationships that you form here are really, really important, and you have to believe in what you're doing and creating the transparency in the work environment, creating an environment that you're fueling yourself for growth and alignment, for where the team can go, not just now, but where are we going in five years from now? Where are we going to be able to go from 10 years from now?
Speaker 2:I'm curious what's the most impactful? Impromptu meeting that's like, where someone's coming in and been like, hey, this needs to happen, or this that has actually led to you saying, wow, we need to make a change. Is there a story there that you have that is meaningful?
Speaker 3:It's probably a lot. The one that comes to mind, as you said, that is one that was right in the middle of COVID. Everybody who didn't know what to do, they were remote, but our sales leader came in and said you know what? A lot of our customers aren't back in the office. We've got to get in front of them. And so we've got to figure out what we're going to do to get back out on the road right now, like today, because if we go out today and we can get a customer and we can't meet in their office, but we can meet at a Starbucks, we can go have a dinner, and if we're doing this, we're going to be ahead of the game. We're going to continue to build the relationships. So I would say we were very early in getting back out and getting in front of customers during the throws of COVID, and all of that happened just because my sales leader walked in and says this is something that we need to do and we need to do it, like tomorrow.
Speaker 2:I remember doing the same thing. I remember looking up restaurants in these local areas and just trying to get in front of them Because I mean there was just a tiring factor to COVID, I mean.
Speaker 3:And they weren't going to get out of their house at that point, like they were ready to.
Speaker 2:Yeah, I mean it was exhausting and, like I just you know that was leading through COVID was really hard. I'm actually curious because in thinking about hard decisions, you know, I'm assuming that your company went fully remote or a lot remote for a while and then at some point you have to make a decision to bring people back to some extent and that is maybe the hardest decision, or at least the decision that's met with the most dissension that many of us have had to make. How did you think about that with respect to keeping your employees best interests in mind and whatnot?
Speaker 3:Yeah. So I think the first thing is our technology team did a phenomenal job of being able to have people go remote first quickly is what we did Like we made the decision I can't remember say it was on a Thursday or a Friday, but like the next business day we had it where we had been passing out laptops over the weekend that we were able to do that. So I think, first, like our technology team did a phenomenal job to be able to set us up and do that. But second, like I'm an in-office person, like it's what I grew up in it's where I think that you're going to be the most productive. It's where I think that you create the best solutions for the customer.
Speaker 3:I don't care what part of the organization you work in. If you work in technology and you're building product for people, you're going to build better product. If you're sitting around the people who are telling you like hey, as an employee, this is what I need. If you're a customer rep, you're going to do better whenever you're sitting closer to the carrier reps who are negotiating and telling you like hey, like you know what, the market's starting to shift in this. If this is a spot rate, you need to go up or down based off of that, like I, just I'm a huge believer of it.
Speaker 3:So, for myself, there was a small group of us who never went remote, like we came into the office every single day during COVID and I think that being able to set the expectation of that was always our goal, was to be able to get people back in the office, because that's where we feel the most productive. Now, with that, we had to manage through people's justified fears of what they had that was going on. The people lost love, and so we had to show compassion, empathy, flexibility, all of that, and even to this day, you know, I think the one thing that we learned from COVID even though we're back in the office now is managing with more flexibility about what people have going on in their life.
Speaker 2:Yeah, that makes perfect sense. I mean, I think I struggled with this. You know, as I was leading Molo, we were one of the first companies that said you guys can go remote and you don't have to come back. There's a part of me that maybe regrets that decision, you know, I think I think I can't. The struggle I had was I believe that everybody's different and some people are capable of being a better worker at home and if they're in an individual contributor role, I'll never forget this.
Speaker 2:When I was doing those meetings, I had back to back meetings with two different people and I was. I was just like you. I wanted to be in the office every day. So there was that same group of us that was always going in and I had a meeting with a carrier rep and he was in his mom's basement. It was like kind of dark in there and it was over Zoom and he was like his name was Jake and he's like Andrew. I got to tell you I'm so grateful that you guys allowed us to do this, because I'm having the best numbers I've ever had. I'm not distracted at the office Like I just I'm just doing really well.
Speaker 2:And then the next 10 minutes later I meet with another guy who was it? Brendan, I think his name was and he's in the office and he's like this is like when I was at home, like I would get to. You know, I saw my Xbox and I would kind of like be looking at it, thinking about it, and now that I'm back I'm having the best numbers ever. And so when I thought about it on the individual level, the answer was do what is best for you. But I don't think I was doing a good enough job of thinking about it at the company level. And the fact that it gets hard to keep a very good culture when you know when you're continuing, when you're growing very quickly and you're hiring hundreds of people a year and you're putting them into that culture. If it's mostly remote, it's not the same, it just isn't.
Speaker 3:Well, like the example that you gave with Jake, like, I think, one like people. Definitely we have people who would say, like, hey, my numbers have gone up during COVID. Well, that's great. But, like Jake, you're a phenomenal carrier rep and the way that you negotiate loads, the way that you build relationships I need everybody around on the floor to hear you do that. Right, like, so it's not as much of.
Speaker 3:Again, like the way that you said like this, let's look for the individual, but we're always looking at the team, like what is best for team.
Speaker 3:And, as I'm hiring new people in, do they get to learn from Jake or are they learning from the guy that started two weeks before them? And so, again, setting that culture is really important of who, who do you surround yourself with and who are you learning from. And that's been, you know we talked about what has helped me throughout my career is I've been surrounded by really, really good people throughout my career who have had huge influence on me, and I think that you have to do that in any organization that you're building, you have to surround yourself with good people. I'm a firm believer that you'll only be as good as the team that you surround yourself with, and so we look at that all the way down throughout the organization of how good is the team up under you? Who can take your job? Who's going to be there in two years? Who's going to be there in five years? It's really important to build the culture out in the company that way, in my opinion.
Speaker 1:Yeah. So when you talk about surrounding yourself with good people, that really resonates with me in a way thinking about you know how deliberate you are with how you do that. And one of the big components to that is mentorship. And that's really got me thinking about my own career and my own idea around mentorship.
Speaker 1:And I can recall this very specific memory where there was an executive at our organization that was up there doing a quarterly business review and as somebody that was really really well respected and I knew that and I kind of watched him work from afar, but he was all somebody that I said, man, I need to emulate what I'm doing after him. So he gets this presentation and he's talking about how his org is going to be expanding in the next year and he shows that organ. I remember seeing this box underneath him of an open position and immediately something to my brain clicked of okay, yeah, I need to do whatever I need to do to get this role and spend the next couple of years learning from this guy. That's exactly what I remember. As soon as he finished speaking, I said, hey, can we get together soon and talk? And I remember very vaguely we went out and had drinks and I was like, listen, I saw this role underneath your org, like I want this job and that was a start of basically completely transforming my career. So again, that resonates really deeply for me.
Speaker 1:You have a very public and well-known mentor, and that being Brad Jacobs. I mean, this guy just wrote a book for crying out loud. He was just on stage at a conference talking about it. So, to get more specific about Brad Jacobs as a mentor can you talk about? Obviously, this guy is extremely well known, has a amazing pedigree, extremely good track record, but you've got this opportunity to work for this guy. I just kind of shared with you a little bit about my story. Tell me about how you approached working with Brad and getting to a place where he could be a mentor for you.
Speaker 3:Well, the first thing that I'd say is, just outside of being a leader like he's a great person. He's genuine, he's authentic, he cares about you and you can feel that whenever you're sitting in the room with him. So you feel like you've got somebody who has invested in your success overall. So that was the first thing that jumps off the page to you. The second is I remember in the early days of XPO, brad's very big on feedback and it has helped me throughout my career.
Speaker 3:And we were going around the table and everybody would give you a piece of feedback and it got to be my turn and the meeting was almost over. He said, hey, people have to catch flights. Everybody right there is down and we'll give it a drill and he can read it on the plane. And so I remember I put his on the bottom because I actually wanted to see what he said. I want to see what everybody said.
Speaker 3:But I was very interested to see what Brad would say and as I got back on the plane, I unfolded the piece of paper. The only thing that it said was think bigger. And so it's always that challenge of what else can you do, and with Brad, I've learned that it doesn't matter what has happened, it doesn't matter how bad a situation gets, it's what's the opportunity that comes out of that. If I have people that come to me and they're saying you know what X, y and Z is broken, well that's great because that's an opportunity. Look how well we're clicking right now. Can you imagine, whenever you get this fix, how good we're going to be from doing that? And so that's been a huge impact on me that I've learned I'll lead through everything as an opportunity for us in this business.
Speaker 1:So I'm just thinking I'm trying to put myself in your shoes of being on that plane and again you've got this guy with this amazing pedigree. That's written feedback for you. I feel like my chest would be pounding through my shirt and going through that and you open this sheet of paper up. It says think bigger, like in my mind. That's got to be like this. I mean, I'm getting chills just thinking about it. It's got to be this big inflection point in your career where somebody like this, with this track record, looked at you in this very specific way of something much bigger and better than you thought you could be. Can you just speak a little bit more to? What did that do for your psyche and how do you think that that specific moment contributed to the trajectory of your career?
Speaker 3:Well, my first thought was I was like I think I'm thinking pretty big. We're going to grow this place a lot. And so my first thought was all the plane was like all right, how big is he talking about? Where is he talking about in the morning? And so for me, like I did, I went home that weekend and I was like all right, this was my plan. I've got to do a lot more than this, but how am I going to get there? I'm going to surround myself with good people. I'm going to spend more time with customers than what I've ever spent before. It was, I would say it was the most emotional moment in my life, but it was an extremely motivating moment in my life that you've got the opportunity to do something big. What are you going to do with that opportunity?
Speaker 2:So, with all the support you've had from Brad and other leaders like that is RxO. The idea of RxO came to be. Can we talk about that for a bit? The idea of splitting RxO off from XPO? How involved were you in that process? When did you know you were the guy to lead the whole thing? What did that look like?
Speaker 3:Yeah, so it started in the early or really before COVID, but you had heard of COVID, but you didn't really know what it was. And as we got into January of 2020, we announced a plan where we were going to sell or spend four of the five lines of businesses. So you had European transportation, European supply chain, north American supply chain, north American transportation, and then the asset base to the LTL side, and there was a couple of reasons for either selling or spending the different lines of business. The first was, if you looked from a customer synergy and operational synergy, we had multiple business units that were calling on the same customer, so it just wasn't an efficient way to go after it. The technology was built for that specific business unit. Even as you would go look at functions like HR, they were pulled out for each line of business. So, operationally, there wasn't a ton of synergies that we were able to capitalize and grow on.
Speaker 3:The second thing that I'd say is we got a lot of feedback from investors. As a publicly traded company of you know what Like. The story is great and I think that all of these business units are performing well, but as an investor, I don't want to own an asset-based LTL company with a strong brokerage arm, and I was really hoping that you'd have all these operations in Europe. Like I'm not a European investor, I understand what's going on in the US markets and so, as we started looking at it from the investor side, we said, hey, we've got an opportunity for the stock to go up. If we do look at this differently, covid happened. We paused those plans in 2020.
Speaker 3:And then, down the road, we did a spinoff of GXO. Gxo. We ended up putting all of the supply chain businesses together, of European and North American supply chain businesses, and that business was GXO and it's performed remarkably well post their spin. And then at that point we weren't even really having conversations about spinoff. What is RXO now? But about six months down the road, we started saying, hey, we still got this opportunity.
Speaker 3:As we walk into an investor meeting, it would be Brad and Mario and myself and the three of us would sit down and you know be 50 minutes into a 60 minute meeting and there wasn't any questions on what was going on in Brokers. Ltl was what drove the profits for where the company was. So they got the lion's share of the questions and the value was not recognized in what our Brokers team was doing, especially at that time. At that point in time, we were growing volumes over 30% at a year over year basis and had like 20% gross margins, like it was some of the best of what was going on in the industry, but it wasn't necessarily being recognized.
Speaker 3:And so, as we started having a lot of those meetings, it was like this makes sense for us to be able to spin off, and as we did that, brad just said you know, hey, we're going to put the headquarters in Charlotte. He didn't tell me, I had the job first. He said we're going to put the headquarters in Charlotte. And so at that point, you know, I knew that I had a good opportunity to be able to step into the role, and Brad had done a great job of being able to bring me up and not just showing me what was going on in North American transportation, but he involved me in our finance departments, he involved me in our HR and our legal and the investor relations. He really took me under his wing and showed me all the different parts of the organization and how to run it in an efficient manner at scale, and so that was something that was hugely beneficial for me as we, as we did the spin off.
Speaker 2:So you step into your role as CEO of publicly traded RxO. You're not even 40 years old, You've got. You do have that PR background which I'm sensing a little bit. I can. I can sense you know where to take the quit, You're good at this.
Speaker 3:And I'm just curious though, like I'll give Brad more credit for that than I'll get. Then I'll give my PR background.
Speaker 2:OK, that's fair, that's fair. But was there any concern? Like holy cow, this is big Like, was there any imposter syndrome, anything like that?
Speaker 3:There was never like, hey, this is too big. It was like this is awesome, this is going to be a lot of fun. And again I've got this opportunity in front of me. We have this opportunity in front of RxO. What are we going to do with it?
Speaker 3:And we, whenever we did the spin off, it was at an interesting time, right Like it would come off the times of COVID, when everybody was growing volumes.
Speaker 3:Everybody was, for the most part, was profitable and making money.
Speaker 3:But we were starting to enter into the downturn and I remember, like getting on that first earnings call and we knew that our EBITDA was sequentially was going to go backwards. We had just had a great fourth quarter and we knew that in the first quarter it was sequentially going to go backwards by a good amount. But I remember getting onto the earnings call and one of the things I said is this is my favorite part of the cycle because this is what gives us the opportunity to separate ourselves from not just our competitors, but separate ourselves within our customers' carrier base. We knew that this would be an opportunity from carriers consolidating and that if we perform really well in this part of the cycle, that we've got an enormous opportunity. I don't know when the market's going to inflect I think that you've seen a lot of different things out there but when the market inflects, we've got a really good opportunity to go on a very strong run, and the steps that we have taken over the past 12 months have put us in that position.
Speaker 2:So I was thinking it before you even said it.
Speaker 2:But your use of the word opportunity you talk about the mentality that Brad instilled in you of looking at a problem and seeing it as an opportunity.
Speaker 2:When I think about myself and maybe some of my biggest character flaws as a CEO, I let myself emotionally get too involved and when there were things that I thought were going wrong or problems, I did get too focused on it being a problem and the idea to stay in that kind of positive mindset of this is just a situation and we can turn it into whatever we want to. I mean, that is a very important leadership skill that I'm just as I'm listening to you. That's what I'm learning from this that I want to take in whatever I do next. But so I guess I just appreciate that I don't even know if I have a question about it. But let me then ask this. So I want to know personally what's been the hardest part of all this for you. As for Drew the guy, in becoming CEO, dealing with the spin off, all of it Like what's been challenging for you as an individual.
Speaker 3:Yeah, I think it's managing time well, right Like there's only so much time in the day. I know that I'm going to work extremely hard. I know I'm going to put in the hours, but I said earlier, we have 7,500 people across the organization. We've got over 10,000 customers making sure that you're spending your time on the right thing. We now have investors, right Like.
Speaker 3:One of the most important thing for us in that first year was establishing ourselves with the investors, who were not just going to be with us over the next 30, 60, 90 days, but people who understood, who believed in the story and we're going to be with us for the next four or five, 10 years and so being able to manage your time through all of that. And the one thing that I've learned is like you got to be flexible. You have to be agile on how you go through that. I've spent more time with investors this year, but I can promise you, as we head into 2024, I'll spend more time with operations. I'll spend more time with our customers. There will be more employee time than it was looked out there. So it's looking at where you are and how are you spending your time and what's the best use of your time. What's going to be? What can I do today that's going to create the most value for the company?
Speaker 2:Yeah, I mean I would argue that the word investor and customer are interchangeable. At the point that you're at, I mean, they are a customer to you Absolutely. And as I read through the earnings transcript, it's like kind of like. To me it feels like a lot of these guys not necessarily, but like they're almost looking for a gotcha moment, like they're just trying to get you to give them something, and you always got to check them. They're like we don't do that, we don't do this. It's like how do you deal with that? How do you kind of fend them off and navigate that?
Speaker 3:Well, I think one is anticipating the question that's coming and knowing the response and what you're willing to say and what you can't say. Right, Like if somebody is going to ask me, hey, well, pinpoint when the squeeze is going to come on brokerage, and that's not a good thing. When the squeeze comes and you know one, it is a good thing. I know it's on the other side of the squeeze, Like we don't shy away from that, but it's knowing what you're willing to say and what is the story behind what you're going to say and how does it impact them. So you've got the sell side who is asking you the question, but who I'm focused on whenever I'm answering that question is the people on the buy side who are looking to buy the stock for the long term. Is does my answer align with the type of company that they want to invest in? They've got the opportunity to invest in thousands of companies. Why should they invest in RXO?
Speaker 2:Yeah, you know, this does remind me of when Mola was acquired and I got my hand slapped and it deserved a slap. And you know, I was so focused on us growing to the moon and being the biggest baddest out there and I went on a podcast with Ken Adamo of DAT, and this was I don't know how soon after, but it was right after we got acquired. And he's like what's the plan, what are you guys going to do? And I said I want to catch Robinson. I was like I think we can do it. And it was this kind of crazy idea that as a CEO, you want to instill that kind of crazy ambition in your team but as a public company you can't. You know that was a customer of ours at Arkbest. And so I kind of got to like what are you saying about Robinson? What are you doing over there? And I was like, okay, maybe I need some. Like I need I just I get that challenge.
Speaker 3:Now, I definitely had those moments in my career and I think that you know that. As I talked about, you know, three, four years ago, as I first started doing these investor meetings with Brad, some of the most valuable time was the five minutes after the investor walked out of the door and he would take the time to say, drew, like you said, this and like that may work for the short term, but what's your, what's your vision on where this is going for the long term? Are you under promising and over delivering? Are you over promising and trying to build your way into the promise that you put out there?
Speaker 2:So I think I appreciate everything you've said today and I'm going to wrap with two more questions and then Paul's going to give us a recap here. So this is a question that that that kind of hit. Somebody hit me with this when I was at a conference. This was like an introductory question. I just met the guy and, rather than asking me what I do for a living, he said to me Andrew, nice to meet you, can you tell me three things that you want to do that you haven't? It took me, it took me a minute to think of that, but I'm curious and I'll give you the second question if you want to answer that first, because it's a little easier and that's what are three things that you're proud of that you've accomplished?
Speaker 3:Okay, let's take. Let's take the first one. First, three things that I want to do. So I think the first one professionally. We put out there that by 2027, we're going to hit 475 to $525 million at EBITDA. I'm all in on that, like whatever we have to do to be able to hit that. We're going to do. We're going to position ourselves right now. If you look at what we're doing, we're investing during the downturn. There's a lot of companies that aren't there and that is that's fine. That works for their business model. But for me, for where we're going, if I don't invest now, I'm knocking, I'm taking away from the chances of hitting the targets that I put out there. So that that would be number one.
Speaker 3:Number two relates to my kids. Like I, I got some advice early in life and it was like you know how, and it was the right, as we had kids and it's how can you make your ceiling? They're jumping off, point. That's their floor. And so, whether that is my faith, whether that is the way that we're able to build relationships, whether that's what I do in business, like whatever it is, like, how can I build something that's such a high ceiling that my two girls have a high jumping off point from the floor that they're starting with.
Speaker 3:The third is I travel a lot right now, but it's all business travel, like people. The people think that business travel is like hey, you get to go to all these cool cities. No, we go stay at a hotel and I'm walking to the office that's literally right across the street. So at some point in my life I would like to be able to go spend some time in Israel. I'd like to go. You know, just see the history and the things that are in the Bible that have taken place. There is something that I absolutely have a passion for and want to do, and while I was talking about that, I forgot the second question, so I'm going to have you pull it back in that way.
Speaker 2:Let me say I love those answers. I think that's fascinating. The second question what are three things that you're proud of that you've accomplished?
Speaker 3:Yeah. So I think the first would be the team that we have built here right, like, go prior to spend vice president level and above had been here for 10 years, director level and above had been here for eight years. And you know, I talked earlier, it's all about the people I'm the one on the podcast today but, like it is all about what the team has done that has put us in the position to where people are interested in here in the story and what we've got going on. So I think that the team that we have built here is something that is special. I work with some of the best people in the world and so I think that that would be my number one.
Speaker 3:My number two would be, if you look at the growth that we've had and so, like, if you look, I'm going to keep it professionally and I'll try to take the third one to a personal one but if you look at the growth that we've had and you know the brokerage industry is such a great story to be a part of and you know I remember that whenever I started in brokerage that brokers had less than 10% of the four hire trucking market Like I would start out and it was how do I become a backup to the asset based carrier that when they reject the load, it'll come to me right Now? Brokers are over 20% of the four hire trucking market and I think that that's going to grow exponentially over the next five to 10 years. But whenever I think about the growth that they've had, like, if you go to 2013 to 2021, brokerage grew at over a 9% cagger on revenue. Alright, so this team grew at over a 27% cagger during that same time period. So just the growth that we've had. The relationships that we've been able to build have been phenomenal.
Speaker 3:And then the third. I'll go to landing my wife right Like I was extremely fortunate to be outkick my coverage. You know I was.
Speaker 1:You and me both.
Speaker 3:Yeah, I was maybe not the best student growing up, and she forced me to elevate my game as far as what I was doing. She said like hey, if you want to stay with me, you've got to change the trajectory of where you're going. And I've been with her since I was 16. And to be able to hold on to her for all these years is something I'm proud of.
Speaker 2:Okay, so now I see the real seat. We're talking about Brad Jacobs and Brad's great, but I think I just got to what really drove you to get to where you are today, absolutely, absolutely.
Speaker 3:She drives me every day.
Speaker 2:That's awesome. Thank you for that. I appreciate you and your time. So, paul, you want to give us the recap and let's send us on our way.
Speaker 1:Yeah, definitely. But before we do that, I just want to touch on something again, something you said that really resonated with me. You just said how to make your ceiling, your kids, jumping off point, and that's something that just I connect with on a very deep level. It's actually something that I think about with my family, with my kids, every single day. It's really when I think about my professional career, it is my why, and, even taking that a step further, when I think about you know, the, the shoulders that I'm stepping on, my grandparents, my parents, um, to help get me to this point. It's just something that fascinates me. It's something I think about all the time. So I really appreciate you sharing that and knowing that I'm sure, like many of us, that is how we approach business, especially after you have kids, and so thank you for sharing. That was awesome, okay.
Speaker 1:So, in terms of the recap, okay, I have a few things here. Number one selling yourself, building relationships, is the most important quality you can have in business. Two, honesty and transparency is the best policy, especially when faced with hard questions. Three, get a mentor that will help you think bigger. You'll surprise yourself. Did I miss anything?
Speaker 3:That was it. This has been a blast doing the podcast with y'all. Typically, whenever I'm doing these, they're like three or four minutes, so I enjoyed going much deeper with y'all.
Speaker 2:Yeah, definitely. I mean, listen, I didn't know much. I didn't know much about you, I didn't know much about your business. I'm a fan and I hope I get a chance to meet you sometime soon and hang out a little bit. So thank you so much for your time.
Speaker 3:I like that. I enjoyed it All right, guys, let's wrap.
Speaker 2:I hope you enjoyed the episode and we'll see you next week. See ya.
