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. #24: Dave Broering + NFI buys Transfix brokerage
We are joined this week by Dave Broering, President of NFI Integrated Logistics. Dave takes us through his career journey from being hired at American Backhaulers in 1997, to spending 12 years at C.H. Robinson, before finding his current home at NFI, where he oversees all integrated logistics responsibilities.
NFI just announced it has acquired the brokerage from Transfix and will become it's first partner on the Transfix TMS. We break down how that transaction played out and the strategy for NFI moving forward as a result.
Before that though, we go down a rabbit hole of awesome topics, including:
- Building positive work culture
- Challenges of remote work
- Attracting and retaining Gen Z talent
- Value of transparency in leadership
- Current market dynamics
- Power of relationships
- AI
- Evolution of TMS
- Future of brokerage
So sit back, relax, and enjoy this great episode with Dave.
Follow The Freight Pod and host Andrew Silver on LinkedIn.
*** 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. ***
Hey listeners, before we get started today, I want to give a quick shout out and word to our sponsor, our very first sponsor, rapido Solutions Group, danny Frisco and Roberto Acasa, two longtime friends of mine, guys I've known for 10 plus years, the CEO and COO respectively, and co-founders of Rapido Solutions Group. These guys know what they're doing. I'm excited to be partnering with them to give you a little glimpse into their business. Rapido connects logistics and supply chain organizations in North America with the best near-shore talent to scale efficiently, operate on par with US-based teams and deliver superior customer service. These guys work with businesses from all sides of the industry 3PLs, carriers, logistics, software companies, whatever it may be. They'll build out a team and support whatever roles you need, whether it's customer or carrier, sales support, back office or tech services. These guys know logistics. They know people. It's what sets them apart in this industry. They're driven by an inside knowledge of how to recruit, hire and train within the industry and a passion to build better solutions for success. In the current marketing conditions, where everyone is trying to be more efficient, do more with less near shoring is the latest and greatest tactic that companies are deploying to do so, and Rapido is a tremendous solution for you. So check them out at gorapidocom and thank you again for being a sponsor to our show, a great partner. We look forward to working with you To our listeners.
Speaker 1:That's it. Let's get the show on the road. Hello friends, I'm sticking with the hello friends instead of the welcome back to another episode of the Freight Pod. I don't know. I like it. It's golf season. I'm working on my handicap and working on good guests, working on keeping this podcast moving and shaking and trying to get you an episode once a week, and we're accomplishing that here right now, june. I promise you're going to get four episodes, so one of them is going to be with our guest today, mr Dave Roaring. Welcome to the show, dave. How are you?
Speaker 2:Thanks, Andrew. Good to be here Also working on my Handicap Member guest. Last weekend I think I moved the bar a little bit there.
Speaker 1:Where are we now?
Speaker 2:Nine six.
Speaker 1:Oh yeah, you're better than me.
Speaker 2:Yeah, last year was probably go down as the single best year of golf in my life. I went from a 12 to an eight and then bounced back up.
Speaker 1:Okay.
Speaker 2:My daughter is on the high school golf team and it's bringing me to the golf course a lot more. It's one of these joyous things.
Speaker 1:Yeah, so last year was also the best year of my golf life I think for a different reason. So I got fired from my job and then was able to take my handicap from a 22 to a 17. Just a lot more free time no, daughter, get me out there. Just ample free time and a strict non-compete.
Speaker 2:What I'll tell you you. My thing I learned that is been the difference is I don't swing a full club ever anymore. I have really good eye hand coordination and I never relied on it enough with that. I saw an interview with dustin johnson where they asked him how often he swings full and he said never yeah, I think that makes sense.
Speaker 2:I yeah, I used to think that was just old man golf, and uh, it's definitely not, and it's probably just smart golf yep so, and it's amazing how often I was pin high when I took a little bit more club and trusted my eyes and my hands to match up that need. I'm pretty good at that and I didn't really rely on it nearly enough, and that's the big difference. Now there's finesse associated with, you know, hitting an 85% shot or 90% shot and it's not a perfect science, but yeah, it just makes golf a lot more fun.
Speaker 1:Yeah, I can agree with you there. So I'm just trying to break 90 all the time. I think I've done it five times now. So I agree with you there. So I'm just trying to. I'm just trying to break 90 all the time. I think I've done it five times now. So, um, working on that part of my game, but you all didn't come here to listen to us. Uh, talk about golf. So I'm joined by mr dave broering, who's the president of nfi integrated logistics. And obviously some big news this week with NFI acquiring Transfix's brokerage, and I'm sure our guests want to hear about that. But there's just as exciting stuff in your entire career and we're going to start with the rest of it. I'm going to make the guests my loyal listeners. They're going to wait till the end to get the good stuff on the NFI transfix deal because I think that will put a bow on this episode nicely. But I want to start way back in the early days of your career. How did you find yourself in transportation?
Speaker 2:Well, as you can see on my board back there, it's all about relationships. So I graduated with a degree in English literature from the University of Dayton. I had absolutely no idea what the hell I was going to do with my life. I moved home to my parents, had moved to Naperville Illinois when I was in college, and so I moved to my parents' house. I got a job waiting tables. While I tried to figure out what the hell I was doing, I always had been a waiter.
Speaker 2:I was playing golf ironically in the mornings, most mornings, because I was waiting at night and one of my dad's friends, who was an HR consultant, helped companies grow, scale benefits plans, build 401k, things like that. He had a variable schedule and he asked if I minded if he jumped on to my golf in the morning sometimes, and so we played a bunch of golf that summer. Well, come November of that year, november of 97, he comes in a macaroni grill I was slinging the most amazing factory-driven pasta you can imagine and says you know, I'm working with this great company in the city. I think you're going to be perfect for them and you need to get me your resume because I want to introduce you to them and that turned out to be American Backhaulers. So I went down to Dayton.
Speaker 1:Street and I did an interview with this woman that I think you've met before Marianne, and was she my last name by chance?
Speaker 2:She might At that point I don't know that she did Um. She might might've, might not have Um. I'm not sure if she was your stepmother at that point, yet I think 1998 is what we're talking about.
Speaker 1:Yeah, yeah she, she was at that point.
Speaker 2:December 97. Um, so she offered me the job on the spot and I started in the training class January 12th 1998. Um, the day of infamy, so to speak's been, you know, sort of looking back, never look back. Um, you know, it was funny. I I will probably never forget walking on that floor for the first time in my interview, just like stepping out and, and you know, I don't know how much you remember of dayton, but HR was kind of. Were you ever there?
Speaker 1:I was eight years old. I've definitely been there, but my memory is basically non-existent. So do us all a favor and give us some color commentary on what that looked like, what that world looked like in 1998.
Speaker 2:Yeah, so first of all an old dairy building right, so it used to be milking cows on the first floor and then they would store all the hay on the second and third floors. And so the first floor was now underground parking slash where things went to die that didn't belong in the office anymore. And then the second floor was the office and the third floor became office over time for accounting and stuff. But at the time HR was stuffed in the front corner behind reception and as you come out of that it's sort of you step down two stairs and it's just a big open floor and there's support pillars and stuff but very low knee walls and it was just loud. I mean, I'd seen videos of the stock exchange right, everybody's seen videos of the stock exchange but it really felt like that to me. But at the same time I was looking at all these people and they all looked like me. They were under 30. They're wearing hats. They were comfortable. They're throwing things at each other, they're yelling at each other, they're trying to get stuff done. Obviously had no idea what the hell they were doing. And then up the stairs, in this little glass fishbowl was the training room. That kind of sat there looking down on everything else.
Speaker 2:And so I just I remember coming home that night and my parents saying, you know well, what'd you think? And I was like I don't think I've ever seen anything like that before. Like, well, what, what happened? I was like, well, I took the job on the spot, like I didn't even hesitate. She offered, I accepted, we set a start date and I left. And I'm like what? And so, you know, thus began my life in brokerage and it just it felt like home. I know that sounds cheesy and sort of odd, but it always did.
Speaker 2:And like, for 26 years later, I still love doing this job every day and yeah, I'll be it differently than I did then. But like I still get caught up in customer problems. I still get caught up in issues that I have to step in and help deal with. I was with a customer this morning trying to solve a manual shipment entry problem, like, and it still gets me going, and just something about that right fit, that right thing that really hammered home.
Speaker 2:And I'll be honest with you. I mean I went out to Phoenix for TIA and the guy his name's Andy Kindler, andy who introduced me, I sent him a big bottle of champagne on the 25th anniversary of my starting in the industry and I went out there to the Phoenix and took him out. I will never forget him going out of his way to help introduce me to a place he thought I would fit, and I've been trying to pay that forward for my entire career by trying to connect as many people with as many places as humanly possible where it's appropriate, to make sure that people feel that same value that I got from my friend Andy, who did not need to do what he did.
Speaker 1:That's incredible. Aside from the noise and the atmosphere that you described, can you try to put words into what made American Backhaulers special?
Speaker 2:Yeah, wow, I don't think I've ever had to answer the question this way. You know what I would say is. So one. I mean, I was the first training class to train on Express, so I was coming to the floor with the power of the technology that was going to revolutionize the business. That was floundering around in an old piece of technology. So for me I would answer that question a lot about the technology and the way that they approached the you know, and the way your dad built the system and helped to design around having information more readily available, giving the user to some degree superhuman powers relative to that time and place. But I also think it was they had a formula right they like to hire people who either played college sports or high school sports and were on a team, or they like to hire people that were bartenders or waiters, people who were naturally selling without realizing they were selling, and then really arm them with a lot of information that trained them in the industry, but then throwing them into the fire and saying figure it out.
Speaker 2:And this sort of non-direct sort of mentoring that they did. Where you had this, you were assigned to work for somebody, you learn their business, you manage their business. You learn the business through them. But they were also training you on the business and how to do the business. And you know we lost a really great guy a couple of years ago.
Speaker 2:Kevin Sherwood took his life and Kevin was my first boss when I left and was brought to the floor, and you know I tell people a lot, and especially at that time and, um, when you know, when I for Kevin's funeral or memorial service, I'm probably 30% Kevin Sherwood as a salesperson, right, and he taught me everything there is to know about relationship-based selling.
Speaker 2:He, by the way, never called it relationship based selling. It was always just Mark from Canadian Paper needs this, or Karen needs that, or he knew all of these things about them and those were the things that kept bringing them back. And so I think it was this sort of informal mentoring program that they use to kind of bring people up in the industry, where it's really about reps. Right, it's like you need to have at bats, you need to go through the motions, you need to see these curveballs thrown at you in order to be able to successfully do this for yourself when you get to the point of going on your own, and I think that magic is trapped in. Everybody was aligned on the same goal. Everybody wanted to move freight and make money and they really wanted to provide a solid service that kept the customer coming back. They really want to provide a solid, repetitive service that brought the carrier back and that was unspoken to some degree because it just came out in the wash in the way that they brought people into the business.
Speaker 1:It's so interesting because, as you said, the word that magic, the words that magic my brain was thinking to ask you how do you replicate that Literally, the words that magic, so to speak? Because you are relying on people who have their own responsibilities, that they're incentivized and compensated for, and can you be confident that every person is going to get the same quality experience being mentored? Not everybody's going to make a great mentor, so I'm curious how do you think about trying to recreate that type of magic, you know, 25 years later, in your own business, in your own brokerage, with respect to getting people to be all bought in or all united under the same goal and then being willing to take the extra step to mentor people within the business like that?
Speaker 2:yeah, and, and I'll tell you that, some of my biggest missteps as a young leader, as I joined NFI and I left Robinson 14 years you know, backcrawlers gets bought by Robinson two years into my career. And, by the way, like talk about parables, like I thought the sky was falling, the world was coming to an end because we literally had a dartboard with a Robinson snowflake on it. Like people talk about dartboard material, we actually had a dartboard with a Robinson snowflake on it. Like people talk about dartboard material, we actually had a dartboard with a Robinson symbol on it.
Speaker 2:So like this, is the devil coming to buy us right? And then I spent 12 more years at the devil, which wasn't the devil, and the truth is, in retrospect, having done six direct acquisitions myself and been a party to probably a dozen total here at NFI, they did a great job, like they really did a good job of not destroying something that was incredibly valuable, and they could have theoretically destroyed it and just taken the system because that's what they really wanted anyway. So I think the thing I stumbled on over in my early days here at NFI was trying to recreate that magic, and so I don't think that's the point. It's not about the specific magic that backhaulers had at that time. It's about recreating that sense of belonging for the people that are in your business today, and the average person we're hiring today isn't the same as the average person they were hiring then. And honestly, I don't want the same things from people that I hire today that I worked with at Backhaulers and, as an example, I don't know. I think cursing is totally acceptable here.
Speaker 2:We have a hiring rule. We don't hire assholes. There are lots of them in the brokerage business. There are lots of people that choose to get ahead by stepping on others, by cutting people hard, by taking advantage of shippers or carriers. We don't want to be that company, and I know that means giving up some margin, I know that means giving up some growth. But we want people to want to work together. We want people to want to look across the aisle and see somebody that they would go out for a drink with, potentially, or enjoy playing on a softball team together, and there are people in that business back in my day that I wanted to. You know, I've never been in a fight in my life, but I wanted to take them out back, like, and we got into real big arguments over stuff and things that didn't need to be argued about.
Speaker 2:And so the magic we're trying to create here is that right balance of what you want from your job and what you want from your life, and not everybody wants to run into a brick wall and get bloody every single day trying to make an extra margin dollar. Some do. If you do, there's a place for you here, but if you don't and you just want a good job from a. Some do, if you do, there's a place for you here, but if you don't and you just want a good job from a good company that trains you well, that continues to give you opportunities to grow, but you want to hang it up every day at five and go home and work your 40 or 45, we have that place for you too.
Speaker 2:And what I've seen is like over the years we've seen a lot more of the average skew to that work life balance than I used to experience when I was there and so, like my biggest challenge has been one empathizing with the modern employee and understanding, like if we want to hire and train from scratch, like everybody does in this industry, and bring them in young and teach them the industry does in this industry and bring them in young and teach them the industry and we have to be aware of who they are and what they want to be and find those avenues and outlets for them in that way. And I think we've done a pretty good job of that because we have a really happy, generally happy employee base. We have very low turnover. I think we pay relatively well, which is part of our low turnover, but I also think we work for a really good family business that has great values that you can rely on and that uses a term called API.
Speaker 2:That is not technology. It's assuming positive intent and like treat your peers assuming they're coming at you asking you to help them with something, not because you screwed it up, but because they know you can help solve the problem. And so, like that's the magic we've been, the magic we've been trying to create here. I don't think I can answer whether we have or we haven't. Quite honestly, I think you have to ask our employees. The thing I continue to focus on and what are those metrics that I use to kind of judge, that is, I call our culture a referral culture. We continue to see our employees bringing their friends and family to the business. When that stops happening, then I know we've got a problem right.
Speaker 1:Man, okay, I found our first problem. Our first problem is that I could probably I think we could talk to each other for six hours about this stuff, agreed, I got eight questions that came to mind as you were talking, and then you'd say something that made me push off the last one onto the next one. So I'll go to your last comment, and nothing is ever wrong as true for me as that referral concept. I really felt like at Molo. Our business was at its best when our referrals were through the roof. I mean, everybody was a referral for someone else and that made me feel really good about where our people were, where we stood with our people.
Speaker 1:Because it's a challenge to sit where you're sitting at the head of the table and feel like you're getting fully honest and authentic feedback from everybody all the time, or feel like you have the perfect pulse on. Hey, are my low-level entry-level sorry, not low-level entry-level carrier reps? Are they happy with what's going on? Do they feel like their voice is heard by management? Or, you know, are my operations folks being bullied by their sales reps who are, you know, being rude and disrespectful because they feel some sense of authority over them? Those are things that like can be challenging when you're at the top of the food chain to keep a pulse on all the time. So I think that referral point is a really exceptional one.
Speaker 2:Yeah, and for me it's also it's doubly valuable because when people come into an organization and they already know somebody in the organization, their onboarding into the organization is so much less painful.
Speaker 2:They have somebody they can go to and ask a stupid question that they might feel embarrassed asking a new peer, and so, like you just get this less friction, full like onboarding, where people just cross the business faster and we, by the way, we've never had a referral fee, like we do not have a referral fee inside our business. So like we are not incentivizing our employees to come here other than they know it's a safe business that's growing, that is secure financially and it's a good place to work. And oh, by the way, you know we're in the South Jersey Philly area, where there's just a ton of suburban minded people Because, by the way, I'll jokingly call us the suburban broker we are in the suburbs of every city that we have offices in. We're not in the city, except with the transfix office that's in New York City. We don't have one and we hire these suburban kids and they come in with these different, slightly different sensibilities and we are just. We do really great with them and we are just we do really great with them.
Speaker 1:I have a New York City brokerage. Never made sense to me, I'm sorry. When I first heard about it I was like huh, how are you going to build a brokerage in New York City where everything like your rent costs more than your annual salary as a carrier rep yeah, but what I would tell you is that we won't have a New York office very long.
Speaker 2:Yeah, that makes sense.
Speaker 1:And that's not a surprise to any of our transfix people either.
Speaker 2:I think the days of thinking about that business as a New York City. I mean, look, covid changed everything right. Everybody scattered into the wind and now people are coming back and they have really long commutes and that New York traffic is absolutely miserable, whether you're on a train or in a car. It's just not fun. So we are becoming a better remote culture here, better remote management business. We have three full remote operations today, along with or four technically, uh, along with a full staff in Columbia too. So like we're learning how to do this. Well, we don't have it solved, but we're pretty confident we're going to be able to give the TransFix team in New York a pretty nice quality of life boost by shutting that one down.
Speaker 1:Yeah, how do you think about remote versus in office with respect to brokerage? You know, if you want to take us back to kind of the COVID perspective and then how it's evolved over the last few years.
Speaker 2:Yeah, I mean, you know, look, I'll say that we were lucky. We were going through contingency planning sort of repetitious practicing at that exact time. So we had been in the process of making sure everybody could take their computer home and that they had a working internet connection and they could literally were doing that in February of 2020. So, like, when all this broke, we were already ready to go to the point where our biggest customer, four months later, told us they never even realized that we had sent people home. And so, like, on one hand, we did, I think, really really well with that. And so, like, on one hand, we did, I think, really really well with that. The other hand is, I know that our employees worked a lot harder because it was not as easy to do the job and we were mostly. We had some remote contributors and our software development team obviously had some remote contributors, because that's a little bit more of a remote first culture traditionally than you know, pre post pandemic, but we were mostly in office before and it was not really very successful doing full remote. So we were stumbling and bumbling our way around. I'll tell you, if we didn't have Slack, we'd have been toast. Slack was the game changer saver for us. Slack is sort of pre-integrated into or integrated into our TMS, so it's got a bunch of notifications. We try to get email notifications into Slack. It's more manageable. But if we hadn't had Slack I don't know what we would have done, because the collaboration that was happening in these branches you know we have eight. At the time we had eight branches. Each of those branches looks and feels pretty much exactly the same. Each of them sort of cover about 90% of the freight they source in that office, so but 10% is covered by the network in general. So they're used to working mostly in an office group together collaborating to cover their freight. So like keeping those groups together worked, I think, pretty well and we succeeded there.
Speaker 2:The thing that we really I think we started to see stymied is just people development, and it's much harder to develop people when they're remote. You have to be a lot more purposeful, you have to be a lot more, you have to plan a lot more. You have to, unfortunately, have a lot more structure and focus into the development of people. You can't just get it I call it osmotic learning you can't just get it by sitting on the floor and hearing a bunch of people yelling at each other, talking about the business and then they inquire further.
Speaker 2:It doesn't happen when you're full remote, and I did figure out, though, one way people were doing it is we're a google shop here, so, like gmeets are has been, our anchor for video is there were some teams that were literally logging into a g call in the morning in the morning and leaving it open all day and listening to each other work, which, if you ever wondered why you couldn't get onto a freaking call in 2020 and where the bandwidth was going like, clearly that was a part of it, but uh, the eight hour g meet google hangout was going yeah, yeah, eight hour.
Speaker 2:G meets every day with teams and you know, I give them credit because, like, they're doing a good job and figuring out, like, how to solve the problem. But that would still be my biggest qualm with, even today. My concern about our remote offices is it was the best decision for those teams and, again, no coincidence that these are cities where there's heavy traffic. Right, la, seattle, right, those were logical.
Speaker 2:Our LA team, they went to ground and during the COVID they crushed it. I mean absolutely crushed it, and these people were getting two hours in some cases a day back of their lives, and they give us an extra hour or an hour and a half because they would start working when they would normally get in into traffic and commute, and so we saw this productivity increase and this success. But the truth of the matter was and this is what we're challenging people with today is they were working a lot more, and so it's like is this healthy, is this sustainable? Can people survive grinding in their house 12 hours a day when, yes, they might have been gone for work 12 hours a day? But that car ride is a very different thing than building loads or booking freight or tracking loads or whatever it is. There's a lot more stress and pressure related to that.
Speaker 1:Yeah, it's really hard to come up with a perfect solution here and when I think about what we did. So Molo was a young company in 2020 when the pandemic hit. We started in July of 17. So you know, we were not even three full years old yet when that started and we had 250 or so employees and I was so confident in our culture and you know we obviously didn't have a choice. Everybody had to go remote in March and our business doubled overnight. I mean, we were heavy in food and beverage and with the grocery retailers. So you know all the panic buying that was going on.
Speaker 1:We saw a massive bump in business and the way our team responded just like the way you described was just so impressive and the way customers talked about us just made me so incredibly proud. I mean it truly. Our COVID response is maybe one of what I would consider my proudest achievements in terms of something I've been a part of, because I just it was very impressive. But at the same time, like you said, people were working a lot. They were working way more than they had previously. But what I think about, I don't think I would do it again If I was running a brokerage, if I started a new brokerage one day, I don't think I would try to build it with a remote policy like we had. I was one of the first people or more probably the best way to put it is one of the loudest people, which I think for a long time on LinkedIn I was one of the loudest people in general, but I was especially loud about how much confidence we had in our team and that I was willing to let we were willing to let them work from wherever they want, moving forward, and the perspective we had was they had earned that right and with those people that we had at the time, I 100% had that confidence.
Speaker 1:The challenge is when you go add 250 new people over the next two years or three or 400, wherever the number is and those people don't get the same osmotic learning opportunity that their peers got and they learn things a little differently and they pick up habits that aren't the same as everybody else, and it's harder to spot that they're picking up those habits because they're not in the office.
Speaker 1:And so my big concern has become how do you build culture in a remote environment like that? And I don't think there's a good answer that I've seen where you can just say, hey, yeah, whatever you want, you want to be remote, be remote. And then you have a high level of confidence that you're going to build a team that is well connected and has the right kind of culture. So, like you know, I've kind of 180 on it, not that I'm saying I wouldn't want a team that has flexibility, because I think flexibility is in part the answer, but you have to have a high level of confidence that you can recreate the magic that you want or create the magic that you want. You know, if you take it way back to the backhaulers days and the way you want the mentors taught, there definitely weren't any G meets or Google Hangouts going on and I don't think that the business would have been able to create that kind of magic as well in a remote environment.
Speaker 2:It's tough, I mean what I would tell you is I also think, andrew, you and I are cut from the same old school cloth in that regard, and this is where putting yourself in the employee's shoes today many of our young employees today are used to self-guided learning. Many of our young employees today are used to figuring out a way to solve a problem by looking it up on YouTube or finding something like that and like. That's not a default response that I have Right, I grew up and was trained in the business. Today, like, I'm learning transfix, I'm not doing it by a bunch of Gmeets. I'm going to the offices, I'm shadowing the employees, I'm sitting there at the desk with them. I'm understanding the way they're using the tools and doing the business. But there is another way. The question and it's unanswered and I agree with you with a great result is I don't know yet how to build a great employee development program that is fully remote, and so we've got a mix of both right and like. I don't. You know. We've got in-person offices that really like, and the new one in Atlanta rumbles about as loud as anyone I've seen in the last few years. I walked in there last Tuesday and I was like whoa, this is like 1998. It was rowdy and we've got some that are very quiet and you can hear a pin drop, but yet the people are still doing their work.
Speaker 2:I think the bigger problem is today our employees 30 to 50% of their work is done via video meetings with their counterparts, with employees in other businesses, and that's just a prerequisite for the business. So the truth of the matter is you might've gone to a conference room and done a conference call back in the day today or picked up the phone and called a customer directly. Today people are putting on headsets and they're going down in this tunnel, in this video tunnel, and doing these one-to-ones or group calls that are very different than it used to be, and so I still think there's some shaping that's going to happen here. I don't regret any of the full remote stuff we've got today. We've done a full kind of return back to office for our in-person offices, where we're asking them to be back in the office most of the days of the week, still getting, by the way, way more flexibility than we used to have, and it feels like less flexibility because there are two years in there where we're like free right and felt great and you could do anything anywhere, anytime and nobody needed to know where you work. As long as you could do your job, you did your job.
Speaker 2:But today, as we've come back, what we've also seen is people do enjoy seeing other people in the office.
Speaker 2:People do enjoy the water, cooler conversations, people do enjoy, like, spending time with each other and do miss each other in that regard and that's when you know, to answer your question I think of our business, as in our team here as a community.
Speaker 2:It's not a family, it's a community community, because the community is like minded individuals that see eye to eye, that work together, that respect each other, but they don't go home together. Right, they go to their separate places but they still share the same common desires and traits and so, like community can be in office and remote, and building that community is harder remote in office and remote and building that community is harder, remote and it is harder for our one employee in the Houston Texas market to feel like they're a part of the team. But you just got to be a little bit more prescriptive about that and make sure that you're saying okay, you need to come in the office once a quarter, or you need to come in the office once a month and you need to come spend a week here once a, whatever it is, to just keep them connected in a way that doesn't have them lose sight of that thing that got them there in the first place.
Speaker 1:So I'm curious, because you've talked a little bit or you've made references to kind of this younger generation we'll call them Gen Z, that's the youngest that's now entering the workforce, very different, it seems, than mine and yours and I'm curious how are you being intentional about that and in what ways do you feel like you can attract and retain the Gen Z talent? How do you see them? Maybe? What characteristics are maybe different than other than you know? You mentioned the more interest in a balanced life, which I agree with, and I'm curious what other characteristics you've noticed.
Speaker 2:Definitely not as excited about variable compensation, just like we have 20% of our staff is on commission anymore. We're down to that. Yeah, wow, so we've, we've created some interesting bonus programs for people that we really cause. We really are focused on the relationship. Right, that's, that's what we believe can't be disrupted by technology, and I yeah, I want to puke in my mouth for saying disruption, but it's, it's a real thing, and and the truth of the matter is that, like, relationship trumps that in almost every single scenario. And so we're trying to empower people to build the best relationships they can by taking all these other things out of their way. For some people, that means building great technology and giving them those tools so they can use those tools to get out of their way, and other people, it's creating programs that allows them the ability to sort of self-direct their career to some degree. So another thing, an adjective I would use to describe this, and I don't think it's just Gen Z, to be clear. I think it's your mid-30s millennials and I hate the labels.
Speaker 2:But down to the people we're hiring today, and I don't think it's unilateral. You can't throw a blanket over any of them, but there are some generalized traits. One is they really love transparency. They like to be able to go discover these things on their own, and so we have our entire career path for every role in our organization completely sweated out, including job descriptions. It's all self-discoveral on our internal website and so they can go there and they can look at it. If they're brand new and they started in this operations support role and they want to look at, okay, if I go to the customer side sorry, we say shipper side, we don't believe in calling it customer and carrier, because they're both customers but you go to the shipper side path and they can see exactly what that looks like. Okay, then I go to account coordinator, then I go to ops apprentice, Then I go to and they can know and there's the ideal traits for each of these roles and the things they need to learn, and so like they can go figure out for themselves what the next five years of their career looks like and then they can use that to ask for support in things that they want to learn to get to that thing.
Speaker 2:And so, instead of this sort of like blind pushing everybody to the same end, we've got some people who had a certain point in their career and they're like I'm good, I don't want anything else, I'm fine, right here, I want to do my 45 or my 40 and I'm going to check out and I'm going to give you everything while I'm on the field, going to do my 45 or my 40 and I'm going to check out and I'm going to give you everything while I'm on the field. But when I'm off the field, I don't want anything. And we're fine with that. Because you can't everybody can't be an A player, it's just you can't. You can't build a business full of A players. Everybody's going to be miserable. You're going to lose a ton of people because there isn't roles for everybody at the top and these things do bunch up. And so I'd say transparency is a huge one.
Speaker 2:I blog internally for our teams. I share a lot of financial information with our teams internally, making sure they understand where the company's going, how things are working, and then we have a lot of open feedback loops for people. We use a product called WorkStep, which is for employee feedback that's anonymous. We use Slack. We've got feedback channels in Slack to provide them with the ability to be able to do these things.
Speaker 2:I have an informal well now formal mentoring program that I've built that has about 90 mentoring pairs between senior and junior people, both inside and out of our division, and we do all of these things to sort of give people a lot of opportunities to raise their hand and say I want more and for people to say, no, I'm good, like you got me where I want to be, I'm making a good living, I get my vacation, I can disconnect and feel good. And, by the way, that was the one of the biggest ones for us on the carrier side was figuring out how to get carrier reps a place where they could take a week off. Just take a week off, right, like it's a simple underrated challenge in our industry for those who are unbelievably hard challenge.
Speaker 2:Right and Robinson had a solution back old back collar solution. That was not good, that did not work for me and what we wanted, and we finally came up with a pretty good way of doing it, and a lot of it related to taking the variable compensation in the form of commission on individual shipment. Margin is gone for most of our employees in the brokerage business.
Speaker 1:That's fascinating, and you have given me an entry point to take us back to Robinson, which I want to capitalize on, because I want to talk about that a bit. But before we do, I am curious what do you think is driving this desire for transparency? I have a theory on it and I'm curious what your perspective is.
Speaker 2:I just think they're used to having information at their fingertips at all times. That's it.
Speaker 1:It's entitlement, but it's not like negative entitlement. It's what the iPhone and Google and all of that information has done is. If you want something, it's available to you in four seconds.
Speaker 2:My I don't get judgment based on the information I share.
Speaker 2:I don't get people coming back to me and saying why aren't you doing this or why aren't you doing that, or like that's not what they use the information for, right, like I have 16 and I have a sophomore and senior she's 17, but graduated from high school and like I watched the way I mean they literally have been as good or better a typer as me since they were like five, right, I mean they've been using computers their entire life. They've had a phone in their hand pretty much every waking minute of their fricking lives. Because, by the way, they still respond to Snapchats in the middle of school, which I don't understand how that's happening but like literally all the time, every day, like why would they not want this information in front of them? And they consume it and they move on and they don't necessarily do anything with it other than filing it away in whatever way. They file it away and then it comes back to them, but for them it's a security blanket, it's a it's not a necessarily a trust thing, it's a default, standard expectation.
Speaker 1:It's table stakes. Yeah, yeah, I think I think you kind of said it perfectly. There it's it, there's, there's. I read something recently that suggested every generation is smarter and more capable than the one before it, and I mentioned it to someone and they disagreed. But, like when you look at the youngest generation and think about how technology played in their life versus ours it's not to say it's better, played in their life versus ours, it's not to say it's better. I mean, I loved being 11 years old and spending hours in the street doing imaginative things with my friends. Whether we were recreating old Super Bowls or just playing 21 or whatever we were playing, it didn't matter. I loved that time and I feel like some of that is going away for kids.
Speaker 2:Yeah, but now it's TikTok dances.
Speaker 1:Yes, they're finding their own fun but it's coming with a lot more capability and competency with things that are going to drive all of our businesses forward.
Speaker 2:Yep, and every generation says you know that the next generation is screwed because of some technology that changes it. Right With us it was TV, right With my parents' generation it was radio and cars, with this generation it's phones. And don't get me wrong, there's some real issues around this, but there's plenty of issues around the TV kid generation too. And we're all here, we're doing okay, like life's gonna be okay. By the way, I'm not gonna suggest my kids listen to this podcast because, you know, god forbid they put an hour and a half of their attention against anything. But at the same time, like you know, for me, being transparent feels really good too, because I like to share.
Speaker 2:I don't like like I tell people a lot as they're coming up through our organization into senior leadership. Is that being a senior leader means you have to be able to keep secrets right, wrong or otherwise? You're going to end up knowing information that you can't share with other people until a time, and that's just the nature of the role. And the more senior you get, the more secrets you accumulate, and sometimes you get to talk about those secrets, like TransFix did I want to tell my entire organization, standing on the rooftop screaming up and down that we were going to acquire this great company. Yeah, I did. Could? I Absolutely not. And I had to run around with the you know stealth on and hide what I was doing, because we just didn't want it to be out on the street because, you know, these things get weird. But in the end, like it feels really good to be transparent and share because there's nothing to hide, and in the end, like if you've got something to hide, well that's a whole other issue and that's not my problem. I don't.
Speaker 2:And as a result, it started with just blogging and like sharing my experiences in the industry, so my team, who was young and and new, could enjoy and understand some of this. But it was also a little bit of like establishing street credibility, because in the end, your employees want to know that you, as a leader, actually understand what it means to do the job. And, like I am, I still, to this day, will not hesitate to pull somebody out of the seat and show them how to use the system, and I'm not sure I can do it to the degree of articulation that some of our employees can do it today, but I certainly know how to use Gmail as well as anybody in our organization. I'm as good in Slack as anybody is in our organization and I understand the interplay of our systems as good or better than anybody in my organization. And in the end that I will leave here whenever that is, and often into the future and that will have been my calling card was that I was not scared to do the work. And they don't need you to do the work. They just need to know that you understand the work they're doing and that it is hard and that it does take its toll and it can be stressful Managing the problems in this industry.
Speaker 2:They suck, and there are days where you're ready to just go home and drink a bottle because that's the only way you can forget about the misery of dealing with the uncontrollable. But in the end, that's what we get paid to do, and so I don't know. I can get on my soapbox and rant about this all day long, but I really it's been just this logical and, by the way, my English lit major, my degree there, has been really valuable because I write great emails and good blog posts on first passes and it makes it easier for me to communicate with my teams and to do it on the fly and it's been a really nice little. Oh, look at that. It actually happened to work out for me and these right pieces kind of came together.
Speaker 1:Yeah, I mean I've never connected more with a leadership philosophy than your perspective on transparency and the value it creates for yourself and your team. I mean just hearing you talk about the transfix deal and wanting to tell your team about it. My partner and I made a conscious decision really as soon as we were looking for a strategic partner and again we thought we were looking for a private equity deal, but we knew there was a chance it would be a strategic like arc best. But as soon as that started, six plus months in advance of it happening, we were talking about it in company meetings. I didn't write blogs as much, but I was. I would set up a company meeting every two, three weeks and get on my soapbox and just tell people what was happening, tell them what was going well, what wasn't going well in my opinion, what I was hearing from customers, what I was hearing from employees and things that as a management team we were going to focus on.
Speaker 1:As result of those things, I think when your team believes in you and trusts you, they'll go to the nth degree on your behalf and that trust and buy-in happens by being authentic and transparent about what you're doing, being willing to admit when you're wrong and being willing to highlight the people that are carrying you along the way and I mean I'm pointing out people who are doing well was one of my favorite things to do. I mean, I would literally make company-wide meetings whose sole purpose was to give credit to three or four folks, and I'd reach out to the VPs and directors and say, hey, who's killing it? Who did something fantastic in the last two weeks? And I'd get a bunch of stories and I'd look for three or four that created a theme that I thought was would resonate really well and motivate our team to to take it from the 10th step to the 12th step or from where we were to wherever we wanted to go. And it's all on how you communicate it. And I think being willing to be transparent and authentic and is is just such a recipe for winning.
Speaker 1:And your point about how you shouldn't have anything to hide and if you do, it's another problem I agree it's another problem. We never had to worry about that and I remember someone telling me on my team like I think you're too trusting and I think it's gonna bite you in the ass one day because of how much you're willing to share and I said okay, but I think maybe 5% of people have negative intention. I love the API, assume positive intent, but I think only 5% of the people here aren't aligned on our mission and aren't bought in and trying to do what we're doing and maybe they'll try to hurt me or us with the information I give them. But the impact of those 5% relative to the boost we're going to get from the 95% that are bought in and how much more bought in and how much better their work will be as a result of this relationship we're creating this honest, open, transparent relationship. I'll take that over the risk 100 times out of 100.
Speaker 2:Yep, and I'll tell you the thing I stole this from my brother and then we turned it into this thing that became like Frankenstein over time. During the pandemic my brother did this thing called an Ask Me Anything, and it was just a live sort of session with his software development team and then I turned it into a happy hour and so during COVID we were really struggling to connect. I was struggling to connect right, I missed the teams and I'm one of those people. I'm in every office, used to be in every office every quarter, and then we got a lot of offices and started doing deals and things have spun off the rails. But we would do about every six or eight weeks we would do an Ask Me Anything happy hour and on a Friday afternoon about 4.30, you know, okay, west Coast folks start drinking early and we would send out a Google form and just submit any question personal, about me, about the business, about whatever and I will answer it.
Speaker 2:And literally to this day I've only done maybe. I've only had maybe one or two questions that I refused to answer in public, and they were one was personal and one was just financial information we would never disclose publicly. We would do these and I would. Literally it was like a mailbag and we would get on and we would have a drink and I would talk about the beer I was drinking or if I was drinking whiskey that day, why I was drinking whiskey instead of beer, and we would spend an hour to an hour and a half and like the banter on the, on the zoom chat and just like answering the questions and all these things. Oh, I know one of them. The question I wouldn't answer personally was what the fastest speed I've ever driven in a car? They all know that I'm a bit of a car nut. What's the answer? Not answering that?
Speaker 1:If I give you mine, will you give me yours?
Speaker 2:Nope, 145. It's higher than that, what? Yeah, it's higher than that. So, um, yeah, we'll move on. I have yeah, I have a fun car at home that does push the limits a little bit occasionally. So the uh.
Speaker 2:In the end, though, what I got from it so much was like and I'll never forget this, we were having this starting to come back to work, and it like what's going to happen?
Speaker 2:And like there are these offices that we had made full, remote and and basically, you know, people were asking this question of like, what are we going to do?
Speaker 2:And I said, look, some people are going to come back and some people aren't, and it's not going to be, it's not going to feel fair, right, like it's not level, and like I could tell you it's going to be level, but it's not level.
Speaker 2:And oh, by the way, fair is not a business term. So like I don't want to hear about it, like we're going to do the best we can do for everybody, we're going to try to accommodate whatever we can, but for those of you that were in an office, we're going to ask you to come back if you're in these markets, and that's the way it's going to go, and that live in Timbuktu and are continuing to contribute and they're going to continue to be there and we're not going to call them in because we didn't hire them under that pretense. And it was one of those moments for me where it was like, by the way, one of the hardest things I've done is sitting in a room by myself, basically talking to myself, staring at 300 people on Zoom while drinking and answering really hard questions in front of people.
Speaker 2:But it really energized me and I was like man and I was already in a relief. Well, and it's on the transparent game, but it was like I kind of got to where you got to, which is like, yeah, 5% of the people or 10% of the people aren't going to like what I had to say, but they weren't going to like what I had to say anyway, and in the end, the other 90 or 95% they need to hear that, because it's what they expect from me and that's my job as a leader. I chose to do this. I chose to try to do this thing, build this organization with this team, the way we're trying to do it and chose to go down this. I'll call it a softer path, right, this path of not building the deepest brokerage on the planet and try to just go do the right thing and with good people. And it's harder, right, and in some cases it's easier, because we have great people and we don't term people for, you know, fighting in the street or whatever. But we also have some people that that do mail it in and that really aren't trying, and we have more of those than the average bear, and so we have to figure out what do we do with those and like. So there's trade-offs to it, but it was really what cemented in for me that this was the right way for us.
Speaker 2:And, if you know, I think our retention says that we have the right people in the right seats for the most part and we've been you've been stagnant, slash, shrinking over the last 20 months because the market's been shrinking. We've been getting our ass kicked, like everybody else, but we've weeded out the people that really didn't fit the game. And it's not that we want everybody to be the same, but we just want people to be good people and we want them to want to learn and grow. And then, if they don't, and like I said before, and they say, okay, I'm here, I've hit my kind of career goal for now, like I just want to kind of tread water here Great. We just want to give them the forum to be able to say that, because that's the unsaid thing that drives employers to push good employees out.
Speaker 1:That makes sense. I think I'm going to move off this topic because we'll be here for a minute. Yeah, you wanted to talk about Robinson. Well, I did want to talk about Robinson and I'm debating in my head if I do that or I play into the recession comment that you just made about that. So let's go to recession because I think that's very topical and while I did want this episode to be somewhat of a history lesson, we're going to save that for another time because you've just given me too many good, interesting, relevant things to talk about that are current. So we've obviously been in a very challenging freight environment for the last two years and that was coming off of the best freight environment anyone has ever seen, bar none, and I think that confident can be said with confidence, except for shippers, because they're on the other side of that. But in any case, what decisions have you had to make to manage your business effectively in the last 12, 18 months, in spite of this downturn?
Speaker 2:So the market has always been sort of my thing. What I love about You're a crystal ball guy.
Speaker 1:Is that what you mean?
Speaker 2:Yeah, for our business. I absolutely am, and I have been for a very long time. And I was back at Robinson I was writing a market newsletter quarterly from my customers in 2006, so once okay.
Speaker 1:So I say we're not going to go back to robinson and I ask you a question on the market and you just take me right back to robinson no, we'll go, we'll get out of it. No, I'm kidding, no, I'm just kidding.
Speaker 2:No, please the joy of the role for me always was that you could learn what you wanted to learn and like. What I didn't know about myself and I should have like recognized it was that I do have this entrepreneurial bug right and I do really like building, and I didn't recognize it in myself at Backhaulers and in Robinson even though I was building my portfolio and I was helping to build other salespeople and I was doing these other things. It never really came together in that way, but I was also digging deep in like a tick with my shippers and understanding their business, and that created these organic growth opportunities that led me to having some of the longest tenured customers in the building. Back in the days at Central I didn't lose customers because I was either in services that were too valuable for them to cut or we were so broadly spread out across their organization that they never felt like they could fully hit a jack. But like my average tenure was like nine years when I left after 14 years in the business.
Speaker 1:So can you try to pinpoint the why there, like when you say that you would dig deeper than anyone to understand your customer, like what was going through your mind? Yes, I'm so that's the word I was looking for I'm just insatiably curious. I just want to know why can you talk about what value curiosity brings to an individual in business?
Speaker 2:yeah, I mean, the biggest thing for me was always look as as a salesperson right, Because that is my knitting You're trying to get the customer to talk right. The more they talk, the better off you are, Because that means you're not talking right Because they're not listening. If you're selling, they're not listening. That's just the truth. And in the end, if you can get them to talk, my thing was always freight is like the last extension of a customer's value proposition to their customer.
Speaker 2:In a lot of cases, it's the last touch, it's the final, you know, execution of that sale. And so I would always ask my customers, why do your customers buy your products? And they're like, well, why do you care? And I'm like, well, I'm representing that for you, I'm moving your goods. If I'm calling and scheduling deliveries and I don't understand the sensitivity of the product or the necessity of the product, or how urgently they need it, or the way that they order, like I'm also thinking that's a great lead and I'm going to talk to them about what they do with this too, of course, because I'm, you know, maniacal in that way. But it was really in talking to them about what their value proposition was to the market. I got to learn about 100 different businesses through the course of doing business as a broker, and so I started to realize, oh my God, there's all of this stuff here that I can learn that make me better at what I do and it engenders me more to my customer because they love how interested I am in their business, and it all just stems back to the fact that I really just want to know how things work. That's it Like I.
Speaker 2:One of my biggest customers back in the day was ITW and one of the big manufacturing conglomerate, highly decentralized, but we did this business with this Signode business unit that was pallet banding right, just the most boring, benign middle of the supply chain BS that you you know. But we would move 50 to a hundred truckloads of it a week. Truckloads of it a week. I kept asking, like why does somebody buy metal versus plastic? Why do people buy this gauge versus that gauge? And they'll look at me like what do you care? And I'm like I'm just interested and they're like really, and I'm like that's it, like I just like trying to understand why does Uline buy plastic instead of metal? Does Uline only have you know? Like it just didn't make any sense to me and that's just always the way I've worked. And so, like this business has offered me and getting to the market comment has offered me this opportunity to teach myself a lot of things, and so in the mid 2000s I started to put together especially after Katrina really messed the market up for the first time in a real way Right, and and we were trying to figure out how do we like, what is this and where is it going and how long is it going to last and how do I quote rates to X or Y customer for the next six months or a year? Is it going to go back down? Am I going to overbid Like? And I started looking at these indexes to understand how they worked relative to the supply and demand of this marketplace.
Speaker 2:At the same time, I had one of your previously esteemed guests and a mentor of mine, eddie Leshin, chirping in my ear constantly about the future commoditization of this industry. It's going to come, dave. It's going to come Before we know it. Margins are going to be 8% and we're going to have to figure it out, and it may not be tomorrow, but it's going to happen. Like, you better understand your costs, you better understand your inputs. And so I just kept digging deeper and deeper into this economic side of the business. And then I hit eject. I come to NFI and I'm on my own right. I don't have this corporate machine anymore. I don't have a logistics team in Minnesota. I am literally doing it myself. I don't have a logistics team in Minnesota. I am literally doing it myself. And I am now making a market for five brokers. Right. That day, one right. That's what I inherited was five brokers and over the years. You know, paying a lot of attention to this has been really beneficial to our business.
Speaker 2:So mid 2022, it was very clear this market was coming off the rails right, very clear, and it was just inevitable. And it didn't feel that way, right? But all the indexes, all the data, all the consumption patterns, they were all leading to this and so we stopped hiring very quickly after that and we were very concerned about our pricing strategy. We were very concerned about any rate-related discussions we needed to have. We were paying very close attention to margin at the shipper level. To make sure we understood Because I am not ignoring my previous knitting I used to love a good 30% margin load. I used to love a good 30% margin load, but we try really hard to never get too high on the highs so we don't have to get too low on the lows, and to be more conservative with this, and partially because our ownership expects profitability and success is profitability, not revenue, not volume, not headcount profitability and so we started to really slow down that engine and so, where I might have run with 10% extra bandwidth and personnel for our growth, because we've grown very well over the years, we pulled back on that and so we stopped hiring.
Speaker 2:So, even though we were still adding business in the second half of 22, we weren't hiring to add that business, we were putting it into the existing business and then, starting in 23, we really worked for the first time in our history to really manage out our low performers. We gave everybody a lot of room to figure it out and we read them the riot act and said get on the bus or the bus is going to leave you behind. But we departed. You know, we left about 10% of our staff behind in 2023. And wasn't a number we were trying to hit, it wasn't a goal we had, it was just sort of like you know, look, we've got to figure out a way here to have everybody on the bus using the systems.
Speaker 2:The biggest decision and I'll give an individual who will remain unnamed for now, but a lot of credit for having a conversation with me about we had these eight offices. They're essentially eight fiefdoms. They are eight P&Ls. Everybody's driven sort of at the P&L level from a comp at the leadership level and the individuals were some form of commission and bonus. But we weren't sharing labor across these offices very well and so we had an office in LA that might have needed staff and was going to go hire for that person. But we had an office, maybe in Philly, that had an extra person because an account had gone the way of the dodo and they're not sharing that work. And so I changed the entire structure of compensation to be able to make people and customers and carriers interoperable across offices, because now we know how to be full remote. And so now we've got I don't know what it is we're up to like 10, 12, 14 people that are now working for a different office in the network than the office that was hired they were hired to work for.
Speaker 2:And so we also filled in all these little interstitial spaces, that where people were like looking to hire in one market and there was staff in another market, and where we might've been overloaded with a shipper in this business.
Speaker 2:But we were a little bit light over here. We might move a shipper to another office to see if we could do better with it, or a shipper might have languished here and we're going to move it to another office that has experience. We started to really take the walls down between the business so that they could start to share this and, to be honest with you. I mean we've only put a red number, a negative net income profitability number, on the board one month since then, and so I'm really freaking proud of that. I mean really proud of that. And we have worked our butts off and our employees have worked their butts off. We are 25% more efficient today than we were last year at this time, and that happens by systems, processes, people. You know everything, and it's taken everybody to rally around it and it's taken everybody to understand we're not looking to take anybody's jobs today. We're looking to unemployed future people that we don't want to hire. Figure out how to get more efficient.
Speaker 1:Yeah, I mean, I think that's really impressive, especially this data on one red month. I'm curious because the model of having individual offices that own their own P&Ls so you're essentially creating its own brokerage in Atlanta, another one in Philly, another one in LA what I always would use to sell against that model as a MOLO that was a centralized approach was the fact that you know, joe in Atlanta has ozone trucking that runs from Chicago to Atlanta. He doesn't have a Chicago to Atlanta load tomorrow, but Mike in Iowa City has one of those and is Mike going to get to access that truck? Or is that truck being inefficiently used for some load? That's not best for it.
Speaker 1:And I'm curious how you you know, given your experience specifically at Robinson, who was, you know, the the behemoth I was selling against for a long time with that strategy I'm curious, why did you feel like that was the right strategy for you guys? What are the the benefits that certainly maybe outweigh the, the negatives of feel like that was the right strategy for you guys? What are the benefits that certainly maybe outweigh the negatives of something like that? How do you think about that?
Speaker 2:It's funny because I intended to build one big operating center in Philly, and then the first week I was there, literally, so I inherited one employee in Dallas and I had four plus a group that was sort of peripherally connected on carrier relations and stuff like that that I was kind of responsible for. It was sort of a mixed bag because there was a TM group that existed there. It was a tiny little thing too and they were all in the same space. But at a week one we had acquired a company in 2011, before I joined, that has small transportation group that was brokering freight for a handful of customers and the guy who had gotten control of that through the acquisition had said I'm done with them, I'm throwing it back to the wolves. I lost all the business that I wanted from it and I was like wait what? And like these people are literally just going to get thrown back to this old group. That didn't make any sense for them. So next thing, I know I'm on a flight to LA the following Monday morning and by Tuesday I've got an LA office and I didn't expect to have that and and then I decided well, I'm going this way. Then I made and then I got my first employee hire got the name of Jim McKeever. I had to give him a shout out because he's my. He's still here. Og guy badass carrier rep came from FFP but he was a referral. He was my first hire. He was in Dallas too. I'm like, oh well, I guess I'm just going to have to do a Dallas office. We had an intermodal operation there so I could post up there.
Speaker 2:And then we've acquired a bunch of businesses over the years. So Toronto's an acquisition, hartford's an acquisition, charlotte was partially acquisition, partially organic. Chicago was organic. Portland's an acquisition, like Portland's an acquisition. Seattle's an acquisition. So, like you know, we've just kind of acquired our way to this network. To answer your question, what I would tell you is there's 100% the situation where we're not getting the right trucks with the right loads there's no doubt about that and we're not getting the right loads with the right trucks. Like that's happening. We're trying to close a here in the next three months that's in beta now. That we think is going to be a big win in closing Most of the rest of that, those dark spots down.
Speaker 2:But really for us it's always been about like Robinson created this negative sharing mentality. So there was this idea that a better load was worth less to the rep that was covering it with the carrier side. It was already an inequity in the balance of the way that freight was shared from a margin sharing perspective, because the shipper side carry the receivable and that was a more weighty concept and they paid interest in all that crap. So they get 60% of the margin and and the carrier office got 40% of the margin, whether you were in the same office or whether you were wherever it was at different P&Ls. But you could do what was called sliding the bar and that was changing the weighting of that. So if you had a really great load and you didn't feel like sharing, well, you could slide the bar to 80% and tell the carrier group tough luck, I've got a Baltimore to LA with two bucks a mile in it. I'm not sharing all this with you. Well, that created a lot of animosity between the teams and it was really like a FU right in the face of the people. It's like you're not worth enough here. And so what I did was everything in this business is split down the middle 50-50, no questions asked, no exceptions, period. That's always the way it's been.
Speaker 2:And then what I did was I artificially suppressed early on, artificially suppressed some of the most successful groups landing freight to not allow them to hire the carrier groups in that office, and so I let.
Speaker 2:I really wanted to create the capacity in other markets to keep it spread out across the network. And then the goal was always to take and go build that custom TMS that was going to breed that open network. That prevented those things. Because, you're right, it's a huge issue is you know whether it's a back pocket truck or whether it's you know the right lane or the right person? We still operate with the fabled freight assignment that we used to use all the way back in the day at Robinson, and it's one of those things where I go back and forth on was it a really good thing that I did or a really bad thing I did by introducing that you want to get freight back to the people who covered it most frequently, but at the same time, the possessiveness of that is really cancerous for an organization and can lead to not putting the best truck on the best load right. And if we're going to treat carriers like customers, then we need to be putting the best load on their truck.
Speaker 1:Yep, okay, you hit that nail on the head. I mean, I'm curious, the freight assignments. So people understand, is that? When you say that, do you mean, like you know, as the manager says, you know, hey, dave, carrier rep, you're assigned to work on Atlanta to Jacksonville and Andrew, you're assigned to Atlanta to Charlotte, is that what you mean? And then we have to own that lane, or what do you mean by freight?
Speaker 2:assignment. No, it's based on behavior. So you've booked a lot of freight on this lane for this shipper. You say you get an Atlanta Charlotte, you book it. The next day you get another one. You're going to get the load back because you were the last person that booked it. And it just continues to reward again shipper lane level specific.
Speaker 2:So this is where the and this is where part of the failure is. It shouldn't be shipper lane level specific, should just be lane level specific. But we also want to give people and this is back in the day right, there used to be a thing called juice and it was like going back and adding in a little bit of extra commission for the rep on the other side. You would juice loads to like reward the carrier up for a good cover or whatever it was, but like the assignment was a way to get that load back to the person who could cover it the fastest. And in the end everybody wins if the same carrier takes the same load again. It's easier for the carrier, it's easier for the shipper, it's easier for the broker and if you can get the same group of drivers moving the same set of lanes, they actually even breed habits at the shipper and constant E level as well. That creates a lot of value. That makes that transaction so much more profitable than the average.
Speaker 2:You know, I got to make 10 outbound calls to cover this load, and so it's mostly about trends and repetitiveness. But it also does create some opportunity for cronyism. And this is not an algorithm, right, this is a algorithm. It will become something either dead or different over the course of the next couple of years for us, because it needs to change. But still today, that person who gets a great load can help their buddy out. And maybe there's a great reason for helping their buddy out, right, because he or she covered a tough load the day before and they want to give them a nice rip or an easy layup or whatever it is. But sometimes it's also because they're just giving it to the person they're most comfortable with, when the truth of the matter is that there are three reps that have carriers that are perfect for it that may or may not see that load because they didn't get to the right person.
Speaker 1:Yeah. So this has me thinking a lot, and you know you have that board that's and you referenced it earlier but I forgot. Not everyone will see this, they'll be listening, but what it says is relationships are and it's capitalized in bold all that matter. Relationships are all that matter, and I think that that is very true with respect to brokerage and, I think, life too. But what's going to be interesting, as I think about two things.
Speaker 1:So for one, we had a similar problem. You mentioned cronyism and the idea of kind of and also how you know rep might want to take care of their friends and, you know, give them that good load. And I used to preach the same thing in our business, and relationships are the most important aspect and your internal relationships are as important as your external relationships. In brokerage, it's incredibly helpful for learning how to do the business well, finding the people who are great at it and learning how to replicate what they're doing. A lot of that's predicated on building strong relationships internally, but it can become a problem. And it can become a problem when I guess the way I would put it is an individual chooses their relationship to a person over their relationship to the values of the business and I think that we have to be committed to the idea that we're doing the right thing. We're treating our characters like a customer. I think is a very wise way to run the business.
Speaker 2:We also try to think about our employees. Yeah, exactly, we're a trucking company. There's no option, right? I see how hard it is to're a trucking company like there's no, there's no option, right? Yeah, I see how hard it is to run a trucking company and I see how expensive it is to run a trucking company. There is no way that we can't not recognize that they're just as valuable in this transaction as a shipper is sorry I mean, there are very few things I am more passionate about than the plight of the trucker yeah, I get it.
Speaker 1:I don't understand how that's. The most fundamental problem or a thing that doesn't make sense to me in our industry is how poorly a lot of brokers treat carriers. It drives me up a fricking wall. I just don't understand how you expect to be successful, and I guess it's just this mindset that, look, I'm going to screw over this one guy and he doesn't matter because there's a million other options for me. But if that's your operating principle, like I, you know you. I've always believed this is a small industry. You screw over one person, you might as well screw over a hundred and you're in trouble.
Speaker 1:No asshole policy yeah, I mean that's the right way to think about it, but I don't know. I guess I'm just curious how do you navigate that? How do you, how do you prevent you know people over indexing their friends and and over supporting their friends and giving them the business that you know?
Speaker 2:maybe the right carrier and the right rap should have gotten yeah, look, I mean, our uh monday morning quarterback is really easy to do, right, when looking back at a load and being like you know we had this and this and that and blah blah.
Speaker 2:But in the end, like, I think it's far more good than bad and you manage the bad and you have to work to challenging people to understand that there are these spots where you can do this and then there are spots where you shouldn't and you're making your life more difficult by doing it this way because you're not doing the best for your customer right, whether that's the carrier or whether that's the shipper, and by doing this this way, you're taking care of a selfish little objective that doesn't represent the better company position that we're trying to put everybody in.
Speaker 2:And so, like, toe the line. And if you don't want to toe the line, well, you know, over time we're going to get this to a real algorithm and it's going to be really driven by data, it's going to be really driven by experience and we are going to create some million expertise and really promote some of this. But in the end, again, it's really more about like we want to meet, and this is like if you want to get to the heart of the transfix deal. We want to be able to meet the shipper or the carrier wherever they want to be met and in the end, like we're not going to say what that needs to be because everybody's got their version of that that works for them at the time and the place. But if I can't get the right freight to the right carrier when they told us what they need and they're a partner of ours what the hell am I doing? Like that's part of the transaction process and the cost to serve model that we're working towards really defining our business bias.
Speaker 1:That is a lower cost transaction than giving it to your buddy at the desk next to you or around the corner or in the other office who's got to make 10 outbound calls to try to validate the assignment and then put it on a carrier that might be more expensive and may not want it you know, it's interesting because what I'm curious about and we're gonna this is the last question before we'll move to transfix but and this probably ties into it, maybe in a little bit, but I think about ai in our space and the role it's going to play, and I've seen a number of the recent marketing clips from. I'm going to give shout outs, I guess, to these guys. Fleetworks was one of the companies, I heard another one about Happy Robot, and what I watched was an AI agent or bot, whatever you want to call it taking inbound calls from carriers and vetting the opportunity, vetting if the carriers are fit for the load, and you know, ultimately giving and negotiating, giving rates and negotiating a rate with a carrier, and then they didn't go so far as to book the order, but they got far enough to say, hey, we're ready to book the order. I'm going to now pass you to an agent. This is just iteration one, and the way everyone talks about the way that this technology will advance is it's not going to be like a feather, it's going to be like an anvil. To steal a quote from you.
Speaker 1:Actually, you used that analogy five years ago, and we're going to talk about that later, but my point, though, is I think we are going to see disruption with respect to how traditional brokerages procure capacity from carriers, and the technology is going to. The AI is going to play a pivotal role in changing that, and I guess what I'm curious about is how our carrier reps can stay in business, and really how are their commissions going to change? I think everyone's like AI is coming, but no one's talking about the impact of commission on that or to commission on that evolution, and I think the concept people want to buy into is listen, yeah, your percentage might go down, but you'll be able to do more with less, and so you won't need as much of a percentage because you'll book five times as many loads. But to me, it almost feels like this whole role might change, and I'm curious what your thoughts are.
Speaker 2:Super conflicted on this because and I don't want to be specific to any of the products but I've looked at these products and I don't believe they float right now. I'm not, I am not in any position right now to want to feel like I want to put that in my business and I might die on the relationship bandwagon someday. On the relationship bandwagon someday. Somebody may you know they may put that on my gravestone and say like he died on the relationship hill and you know we respect him for it, but he died. But for now, I don't think carriers really want to hear an AI voice and I think that, yes, it's somewhat indistinguishable, but I think if they knew I mean, look, some of these drivers still use flip phones how are they going to feel about talking to an AI assistant and then passed over? And as soon as they're passed and they realize they were just talking to a computer, are they going to come back for the next transaction? So I like to be a leader. I like to be on the bleeding edge of certain technologies. This is one I'm going to sit out and we're going to let it play itself out.
Speaker 2:I do not believe that it is the highest and best use of AI in our business today. I believe the highest and best use of AI is by getting great use of our data and arming our people with better information to be better at their jobs. Again, better relationships, because I will go back to the first time that I used Express to my benefit, when I was early in my career, managing, like I said, one of your father's old accounts, canadian Paper and the person had called in looking for an update on a load and I said, okay, well, hold on, I'll get it for you. And the person's like no, no, no, I'll call you. You just call me back. That's what she was used to, right? This is Karen. If your dad does care to listen to this, it's Karen from Canadian Paper.
Speaker 1:My dad does not listen to any of my podcasts.
Speaker 2:I'm sure I'll point this one out though. I'm like oh, drivers, whatever. I think it was like an even inbound port here on Michigan load. I hated that location, it was miserable. And he's like there's just this silence on the other end of the phone. I'm like Karen, she's like how did you know that? That's what we're trying to get to Right? That's what we need to get to Take a Right? That's what we need to get to. Is that, you know, take a Bezos-y customer delight, whatever. It is like this, this place, where your customer is just not sure how you did that, but they really liked it. That's what we need to be doing with AI.
Speaker 1:It's not about taking people out of jobs. It's about making people super humans in their jobs. That's the goal. I'm with you. I mean I'm not bought into the hype, and what I do enjoy about it I appreciate your perspective is there are going to be plenty of companies that build it and you can happily sit on the sideline, continue to tend to your relationships and watch others attempt to use it. And if it works great, you can then be the next customer on the list and deploy it how you need to.
Speaker 2:Yeah, and that's the point of building our own systems, right? I mean, when we made the decision to build our TMS seven years ago, whatever it was, we decided that eventually the industry was going to have this huge paradigm shift and when it did, we were going to need to move really quick. And we didn't believe that the TMS that we were in at the time, which was a third-party SaaS product, was going to be able to move with us. And so we're like we don't know what it is and we certainly didn't think it was DFMs at the time. And we can talk about that feather anvil comment, but in the end we knew it would be something eventually that would drive that commoditization that's inevitable for this business because, make no mistake, moving freight is a fricking commodity and like nobody likes to hear it.
Speaker 2:But the truth of the matter is that you, you move a load from St Louis to Chicago Monday through Friday one day every, and move use a different carrier every single day, or a different broker every single day, or a different broker every single day.
Speaker 2:Your price is going to be within three to 5% of each other and the service is going to feel relatively the same. The only thing that makes a difference is the eccentricities of that shipper and constant E of that customer's load, of the way you invoice them, the way you answer their calls, the way you deal with their problems without them dealing with them. That's going to be the difference in the service that feels to the customer, that gets them to come back to you, and not one of the other four providers, and that's the way the big shippers have been using this industry for the last 15 years. I mean, you know it, you had all these customers when you were at Molo, right? I mean, and I don't need to name any of them, you know who they are. It is literally a penny-driven commodities business with the way that they manage transportation, and rightfully so.
Speaker 1:It's funny you mentioned the service piece because yesterday I played in a golf outing and got random this was not a freight-related golf outing and got random this was not a freight related golf on him. But I was randomly paired with the president of uh, one of the large moving companies, and he was asking me about our, but he didn't know our business, but he was asking about and I explained our growth and everything is like okay, but time out, you're just a broker, like how did you what? How did what were you selling? And I was was like service and execution. And he's like okay, like what does that mean? It's all the same and like I completely understand what you're saying and how it largely is commoditized, but in the in, like the little fine details, there are ways to differentiate on how you service and execute.
Speaker 2:I hate to give up my most favorite analogy that I continue to dazzle people with that my brother and I have come up with over the years. But, like, this is no different than the travel industry back at the advent of the internet like I haven't before the internet existed, every business was booking all of their business travel flights, hotels, cars through a travel agent. Right, that was the only real way. Couldn't get a line of credit with the airlines, it was the only way big businesses could do anything, right? Well, the internet comes around and Travelocity and Orbitz and these people start breaking this stuff and you start getting these internet travel agents and people doing things for pennies on the dollar. Well, travel agents didn't cease to exist. Right, they still exist. And, by the way, when I go to Chicago, I make a point of going down. There's a travel agency that still exists on Michigan Avenue just south of Wacker. Right, like, we're talking of easy million dollar a year retail lease and this freaking travel agent is still there. And I keep joking with my brother as long as it's there, we have a job, right? But the truth of the matter is that you know, whether you pick an Anheuser-Busch or a P&G or whoever. They're the big businesses that were consuming travel agents and they're now using Travelocity and Orbitz, and whether it's Emerge or Molo or TransTix or whoever, it is right. But you still have Joe Bob's Widgets out in Wichita, kansas. That's the same as the family in Wichita that wants to go to Jamaica and doesn't want to book a trip online because they don't know what they're doing or they don't trust it, and they go to Apple vacations to buy a package because they know and trust that. That's relationship. That's, whether you call it like small town mentality, whether you call it, you know, small town thinking, like whatever you want to call it.
Speaker 2:The small, medium-sized business in this industry still doesn't have access to all of these trucking companies and all of this technology and all of these tools that make our jobs easy, and we still have a value we can create for them through that. And this is at the center of the thesis for us with TransFix, we want to meet those shippers where they want to be met. In my business, we jokingly are calling it NFI analog, but the legacy business, the non-TransFix business, we're trying to figure out how to refer to these companies internally. We don't do business with a majority of NFI as an entity, our top 25 customers, because our warehousing business we're the fourth largest warehouser, we're the fourth largest dedicated provider, we're the third largest ocean container drayage. Those are the Fortune 250, right, it's all the blue chip customers you can imagine. Those are the polar opposite of who I can succeed with as a non-automated brokerage that is for profit, right, like if I want to go buy a bunch of business and move it for free. Or negative, like then I'll go move freight for one of these big package goods providers, but like that's not who our bread and butter is. And yes, some of those names sit at the top of our roster, but only right by right of being monstrous companies. We'll bill 950 companies this month.
Speaker 2:Right, we do business with a ton of small, medium-sized customers because they continue to come back. They respect and appreciate the relationship. They love the service we give them, they love when we make decisions for them. But we needed the ability to be able to compete in this highly automated, commoditized world. That is here to stay right, whether the players switch out and whether it was Convoy and whoever, and now it's Emerge and whoever, the game is still the same. It's still a commodity, it's still consumed at the pennies level and we wanted a way to lower our cost to serve, bring a highly automated component to the business. We were trending that way with our development team on our roadmap for probably 25, and this opportunity gives us the chance to do it now and and to do it with honestly blown away by the quality of the people that we acquired through this deal, like absolutely shocked by the really really high performing operating company that they have created.
Speaker 1:So you've taken us there and it's time we get there. I mean, we're 90 minutes in and I'm sure for the listeners who largely tuned in for the Transfix info they got a lot of what I thought was fantastic material, so I'm happy about it and I'm happy for this to run long.
Speaker 1:I'm curious. Like you know, I guess we haven't really dissected the deal. It's a fascinating one. It's a little different. I think if someone wasn't really paying attention they might just think you bought Transfix, that's the end of the story, and it's not really what happened. You bought Transfix, that's the end of the story and it's not really what happened. As far as I understand it, you bought the brokerage and you are now their first paying customer on their TMS. Can you walk us through that deal, how it came to be and kind of the strategic approach for you with making that deal?
Speaker 2:It came to be because of freight karma and I believe this is a real thing. Okay, put enough good freight juju out into the world. Good things come back to you and I've randomly ended up hosting a dinner at my Airbnb at TIA because the JW Marriott was too fricking expensive and I'm cheap and so I got an Airbnb around the corner, ended up hosting a small dinner at my Airbnb with Kara Smith Brown from lead coverage and Jonathan Salama, the CEO of Transfix, ended up being at the dinner We've never met before. We did this thing, fun thing called Jeffersonian dinner, where everybody kind of talks around a set of prearranged topics so that it's not a bunch of cloister conversations. So we had five industry topics that we were talking about really great group of people. You know minds across TMS providers, data providers, you know technology providers, a couple of operators and at the end the last question was about what we were most excited about for the next five years in the industry, and I happened to be the last to go, just by right of who they chose to go first, and by the time it got to me, everything had already been said, kind of, and so I made this comment about that I was really looking forward to the continued great unbundling of the TMS and this ongoing thing that's happening where we're productizing all of the little subcomponents of the TMS right, and the system I started on that your dad built express was a mile wide and a mile deep. Right, I had a CRM in there. I had everything I needed that a web browser for lead research and and the email for corresponding with customers. Oh, by the way, a fax machine still, because we were still faxing shit back then. A lot of shit back then. Today to shit back then, a lot of shit back then. Today I'm consuming 14 or 15 individual services that are bolted onto my TMS, and in two years that'll be 20. And those 20 are better than anything I could have built with any speed internally for myself. And so I made this comment, you know, just because I believe this is going to continue to happen. I believe there is an evolution coming in the TMS space.
Speaker 2:If your father does listen to this, he will disagree with me on this point, because mastermind is not that you may disagree with me on that, even at this point, but that comment perked Jonathan up and so he mentioned to me we sat at opposite ends of the table. We did not speak at dinner. He stops me on the way out and says he wanted to chat with me and he wanted to talk to me about the TMS. And in between that their banker reached out to us, knowing we were an acquirer, and asked if we'd be interested in the operating company of the business, company of the business that was. So wednesday night was the dinner. Ubs calls us on thursday and on friday morning jonathan and I had coffee and he's like I want to talk about the tms and I was like I want to buy your operating company. That was 41 days before we closed the business. So we what was?
Speaker 1:how did you know you wanted to buy their operating company? What, um in spot, like I didn't catch that part of the story of why you felt that way.
Speaker 2:I have been for a very long time, so my brother is my best friend, my strategic confidant, my yin right.
Speaker 1:We work together and we talk about Is he older or younger?
Speaker 2:Younger. Okay, he's my younger brother. I feel like that's helpful to know. Yeah, well, and my brother is in this industry because of your father. He interned at Backhaulers Phil is a Michigan grad, your dad's a Michigan grad right, and they bonded and Jeff was like you got to come back when you graduate. My brother was getting this sort of like you know, whatever industrial engineering degree. He didn't know what he was gonna do with his life but started to really get an interest in development and coding and that's how he ended up in this industry in part, obviously, I was there and it was safe and he was my roommate and all that.
Speaker 2:But one of the things that Phil and I have been talking about for a while is like, especially with Convoy and things sort of starting to spiral with the DFMs and none of them really doing what they hoped to do was this idea of where the right place for that digital automation was, and so we believed that it was best companioned with a traditional brokerage and that you needed to be able to do both really well. You needed to be a good operator, but you needed to have the technology to sort of, because we've got a ton of carriers that would love to be able to go to a website of ours and book their own freight. We don't have that in our business today. We have zero carrier related portals of any kind. We don't have an app, we don't have a website, nothing, right. We don't have really a shipper website for them to go and do anything on their side either. They talk about it, but they don't ever need it. And so we knew there was sort of this place and we were starting to sniff around the edge of some marketplace technologies, like Neutral and some of these other ones that are out there, like maybe we co-op this and figure out how to do it.
Speaker 2:And so when this dropped, it was that thing that just clicked. It was like that's how we do it. And so I knew the second that my peer here at NFII TJ, who runs our M&A practice and really kind of leads that team, took the call from yes, he calls me. I was like that's what we have to do, and so I just it clicked for me as one of those moments, andrew, where, like you know, you think about getting lucky and being in the right place at the right time, like just pure, pure dumb luck and being in the right place to have the right conversation. And then, quite honestly, like Jonathan and I really hit it off and he's a good dude and he is a smart guy.
Speaker 2:And so we did a demo the following Tuesday or Monday my brother and I did and we came away from that hour demo and we're like, oh wow, like they have built a real system here. This is not some joke, bs. They slapped together, they really spent their money. Well, it's deep, it is highly capable and it is real. And we were like, holy crap, this is something we can use as a companion to our existing systems.
Speaker 2:And then, over time, as we did the diligence and worked through the deal and Jonathan and I got to know each other. By the way, he in that demo claims and I'm not disputing this claim, I'm just saying who he is to still have more lines of code in production today than any other single developer at Transects. And so you know, jonathan is this expert on the technology side and quite a you know, a real brain when it comes to thinking about how to put these things together. And don't get me wrong, there's spots where the system feels different and maybe a little overdeveloped and like it's not. It's not perfect no is but their claim is real they have 60% of their freight fully automated, no humans touching it, and that's a real number. The problem is that 40% wasn't getting automated anytime soon, and so you need an operating company, and they were building one, and they were building a really good one. But, as everybody knows, time is running out on the venture-funded digital brokerages.
Speaker 1:It's dead. I don't think venture is interested in that anymore. I moderated a panel the other day with great CEOs and Patrick Bobo, also chief legal officer at Multimodal Group, and Patrick Bobo, also chief legal officer at US Multimodal Group. But Matt Pyatt and Cameron Ramsdale, shannon Breen, jason Provancia from Steam just great guys. And my first, this was the day after your announcement.
Speaker 2:This was the Carriers Matter.
Speaker 1:Yeah, the Trucking Matters. It was all a bunch of carriers we were talking to, but my first question to them was, like you know, on the heels of this news is digital freight matters. Is the concept of digital freight brokerage dead or, like the origin players, is that? Are we seeing come out of that era of our industry with respect to some facets of the technology? And I think a big mistake that a lot of the players made was over-indexing on technology and not nearly focusing enough on the operators. Marriage that makes for a great business in our industry of having exceptional, hard-working freight people who understand freight problems and how to deal with them and marrying them up with the technology, which is why I see you know my perspective is it's the companies like nfi that are that are coming in at the end of those journeys. That, I think, is um are able to capitalize.
Speaker 2:Yeah, I mean I um again, I'm looking both ways at every corner. I walked like nearly three miles in Manhattan this morning, uh, because I had the time and it was a gorgeous day and I don't know Manhattan very well, so I'm just sort of getting my sea legs there. But I was looking both ways at every corner Cause I feel like we really are very lucky to be in the position we're in, having got this deal, and we were chosen by them partially because of our brand and our street credibility, but also because they knew we could close a deal and we could do it fast and they wanted to move on and they want to get into their SaaS product and their SaaS strategy and, quite honestly, if their system would have existed when we were looking to build this system we're operating our brokerage in today, our legacy brokerage, we wouldn't have built one. Don't need it.
Speaker 2:And that doesn't mean we don't need the system we've got today and we're going to still continue to develop that because, again, like thinking about it in terms of meeting the shipper or the carrier where they want to be met, there are and we're certainly we're keeping transfix whole. They're going to be the digital group inside of our brokerage. We are already a P&L driven business so it's not hard to keep them alone anyway business. So it's not hard to keep them alone anyway. We're going to connect them in where it makes sense and logical but we're going to put some customers that we have in our business and shippers in our analog business digital legacy business into the digital business because that's where they're going to make the most sense. I'm going to tender 375,000 loads manually this year and next year I'm going to tender 20% less than that manually because I'll have the transfix carrier application to do that with.
Speaker 1:What are the specific functions that within the TransFix product, the technology, the TMS, that are like fully automated, relative to what you're having to do today, and what are the aspects of the business that you're excited to move over there?
Speaker 2:Talk a little bit about that. Yeah, so first is just their the kit. So they really break their business down into three components a shipper application, a tms and a care application. And and that you know the application is not phone app, right, it's ecosystem, it's the browser with the marketplace and it's the phone app for the drivers to get you know, upload their PODs and do tracking and all that. But it's really the shipper lane-based routing guide concept of connecting a carrier to a shipper lane. And so we do a lot of business in my world and what I call dual-sided contracts, so we get a contract for a lane from a customer or from a shipper for a period of time. By the way, 20x plus years of calling it customer and care, I'm still not capable of like defaulting to shipper.
Speaker 1:It's still like I have the same freaking problem and I don't think a ton of people are yeah, go ahead.
Speaker 2:You're right. So so shipper contract rate x. Period period of time six months a year. Whatever Carrier, we do a lot of drop trailers. So carriers dropping a trailer on a lane origin or destination they're committing to that same lane on a rate for that same period of time. We know that carrier is going to take every load on that lane we tendered.
Speaker 2:Yet we are still manually tendering that load every time because we just haven't stopped, we are still manually tendering that load every time because we just haven't stopped. It wasn't the lowest hanging fruit, highest priority for our development team to focus on. And so now, like what my brother and I kind of said, is it advanced our carrier sourcing automation strategy three years overnight, Because now we can say you know, for X shipper on this lane, it's this carrier, it's this rate and it just the load comes in. It's this carrier, it's this rate and it just the load comes in, it's going to tender it right out. Or on this lane I have a group of carriers that like to take it and not.
Speaker 2:Carrier A can't take every load. And so I've got a real routing guide and I'm putting carrier A, carrier B, carrier C at a waiting at a rate and it goes to carrier A and they have X minutes to accept it, right, Typically 30. And it's in a portal, right, they're getting an email and that's got a link and it takes them to the portal and they can accept or decline and then, if they decline, it moves to the next one. I mean, these things are not, they're not like breaking the atom open and putting it back together again, but it it works extremely well, it's highly effective and it gets the freight back to the carrier the way we try to do with freight assignment in a real agnostic way that represents the carrier's best interest and helps project better, consistent service to the customer.
Speaker 1:Yeah, I mean that's a winning strategy. That was something that we definitely focused on. The companies that think about carriers as customers have to move to that model. We were fortunate that Mastermind Mastery had a similar functionality within creating routing guides and automation for them.
Speaker 1:But, like as a broker, if you're going to say that you treat carriers like a customer, I think it's important that you then treat yourself like a shipper and try to set up the same or not necessarily the same, but representative and fair routing guides and opportunities for carriers.
Speaker 1:And I think you can even take it a step further than just being a shipper specific lane. So instead of just saying, hey, crafts, granite City to Groveport, ohio lane that we were awarded 1,000 loans on, I've found three carriers that are committed to 333 each. Boom, boom, boom and it'll be auto-tendered. You could take it a step further and say, okay, molo or nfi ships st louis within 10 miles to groveport area within 10 miles and create routing guys that expand that um, create more density, and it's not the same. It's not. You can't operate drops as easily in this setting, but you can give more consistency to a carrier and say, hey, these are five bundled lanes that are basically the same and they get you from where you're delivering generally back to home generally, and create even better routing guides for them to manage their business.
Speaker 2:Yep. And then the other thing I would add is just sort of, you know if you think about the carrier segment? That we work with. You know, on the on the legacy business. The legacy business is that traditional medium, small, medium-sized carrier, right Like that every broker kind of hangs their hat on. We don't do much with the big carriers, we don't do much with owner-operators, and this gives us an opening to both of those.
Speaker 1:To big carriers Really.
Speaker 2:Oh, big carriers, like in this market, big carriers like getting on the load boards and they'll get on your marketplace and they'll book their own loads, absolutely Wow.
Speaker 1:I didn't know that. I thought the big edge for the DFM, the load boards, was and this was just based on research around mostly convoy. But I've also talked to some folks at Uber and I'm going to I'm working on an Uber episode, hopefully soon where I can get more of that info but was that it's largely tapping into the owner operator network and that they really seem excited about a lot of them. You know you can't generalize fully, but a lot of them are excited about the opportunity to just pop into the app, grab their load, see all the information, especially those that English is not a primary language. Bill Drieger talked about that as something that was really helpful for them. So that makes sense, but I didn't know that the big guys were dabbling in that stuff too.
Speaker 2:I think that may be a transfix type thing to some degree.
Speaker 2:You know, look one of my arguments about if you go back to the blog post with the Feather versus Anvil it was that there were all of these DFMs were chasing the same 500,000 owner-operators and it's like at some point somebody's going to win this game.
Speaker 2:And we were doing this in a pretty large way with Convoy for Brokers last year before they went out, and that was our legacy business's approach to getting owner-operators in our market and it worked really well and the margin was great and the service was wonderful and 95 out of 100 carriers we loaded on Convoy for Brokers were not onboarded or known to us in our system. It was crazy, right, and we have 60,000 carriers onboarded in our system and somehow or another like we'd load 75 to 100 every month that were new to us, and so with this, with Transfix, it gives us that approach in a different way. The other thing that just blew me away about this business that is going to be a difference maker for my legacy business is they're getting about a 55% utilization rate on utilizing the app to track loads the Transfix app to track loads Like it's unreal.
Speaker 1:Does the? Does the platform require a carrier? So if I, if I'm a carrier that wants to book a load in the transfix platform, do I have to do it through the app and therefore?
Speaker 2:okay.
Speaker 1:Interesting Cause. Yeah, okay, cause that was I was. Yeah, okay, because that was I was. I thought that was how you get to that what you were going to say, because my understanding was that some of these, the, the digital platforms, have the highest tracking percentages because the, the drivers, the owner apps, are required to use the app and therefore they just get tracked on the app all the time yeah, no, we don't.
Speaker 2:We kind of they I'm using we already. That's good, it's been a whole week, but they are really trying to meet the carrier where they want to be met on that tracking service. So they've got an ELD integration. They'll do that. If it makes sense to use P44 or four kites or macro point or whatever they'll use that it doesn't. They don't mandate it. They or MacroPoint or whatever they'll use that they don't mandate it. They make it known to the carriers that the tracking experience and oh, by the way, you want to get paid quickly you can upload the POD right from the app for your load and get paid quickly. If you submit the POD via their app, they will email the dispatcher an invoice that correlates with that POD to approve it and it will be submitted within 24 hours of the time the POD is is delivered to us, and so they created a nice little mousetrap. That I think, and I think the user experience is pretty solid there.
Speaker 2:For me it's just like I don't want to talk about tracking anymore. I'm tired of it. I'm just tired of it. Skippers asked for it. They don't use it. Brokers ask for it, they don't use it.
Speaker 2:Carriers get asked for it, the shippers and brokers don't use it and everybody's pissed and it's just like, when can we get over this and just make this table stakes and move on? Like, how do we do this in a way that people aren't shooting each other with things that aren't valuable and so, like, like, for me, I've got a product that'll be. We're working on development with a partner that's going to take a lot of this off the table, and part of this is it now will include the transfix application as part of that, because I think they can bring some real value there. But I really just let's just stop with this. Everybody's got ELDs in the trucks.
Speaker 2:We're not nefariously tracking trucks down the road waiting for them to get empty, looking at what they're doing, building their networks. There are other people who are doing that with other things right now, that are out there that are going to go do that. So the days of back pocket trucks and not knowing what carrier's networks look like and not being a place of strength for a trucking company or a broker those days are going away very quickly for a trucking company or a broker. Those days are going away very quickly, right, and like I said this on an interview I did with a couple of weeks ago. I think the days of the dark corner arbitrage, where the broker has information the carrier and the shipper don't have. Those days are going away very quickly and those are the first signals of this industry getting to a place where it becomes more commoditized.
Speaker 1:Yeah, I thought that was a really interesting point you made in your interview with Craig Fuller in 2018. I jotted down a few notes that I thought would be fun to talk about, but we're past time for that. But you did say that the market this was in 2018 or 2019, so five years ago or whatever it was. So you said the market's moving quicker, data is driving that. Shippers and carriers have better access, which allowed them to react quickly, and shippers on the markets that are going down they're acting more aggressively. And that is where I remember when I started in this industry in 2006,.
Speaker 1:We had a real strategic advantage at Coyote as we were growing relative to a lot of the competitors who just didn't have the information, and Robinson had the most access and the most advantage to knowing the market was turning and if you had a contract rate or even a spot rate that you were getting relatively consistently. There was a period of definitely weeks in some cases months where your margin would go from a period of definitely weeks, in some cases months where your margin would go from a healthy 13%, 14%, 15% to 25%, 30%, just because the market was changing faster than your customer could recognize it and was it nefarious to not share that. It was actually something that I used to sell to salespeople. Like you should be the first to tell your customer the market's changing because you know once they know there's other people who haven't told them and that puts you, you know, a step above them. But at this point it's like they know they know as fast as you do, and sometimes faster.
Speaker 1:At this point, so it is interesting. I'm curious, where do you think that's taking us? I mean, you know you, you mentioned another comment you made from that interview was that you, you, this was the, the, the feather and anvil reference was that you see, margin. You used to think margin might drop like a feather, but now it's way more likely, in your opinion, to drop like an anvil and it's just going to drop.
Speaker 2:And you're, you're a reference point of this pandemic right, yeah, right, yeah, I mean my, my revenue was off 57 from 22 to 23.
Speaker 1:that's wild, that's a lot and like we are revenue per load, tanked too, so like it's not even just like you were losing our volume was flat.
Speaker 2:Our volume was flat like we did not lose really any material volume. But my, here's my hot take, the hot take I think market cycles are dead.
Speaker 2:I think market cycles are dead I think non act of god driven market cycles are dead. And if you look at what's driven the market the last well, at least the last time was the act. And if you look at what's driven the market the last well, at least the last time was the act of God. You look at all of the big swings. They almost always connect to an act of God. Supply and demand shift around, deep freezes and hurricanes and pandemics. They're not really swinging because of massive economical swings and, yes, we had a great recession related one, and that was inevitable. But that was on the back of a Katrina driven. You know, two and a half year long, probably one of the longest prolonged markets we've ever seen. But people keep talking about like when the market's going to turn. When the market's going to turn, what I keep asking my employees is what happens if it doesn't? We have to have a better cost to serve model that supports making money. Now, when the market sucks, sucks. I don't think the market sucks that bad. I would like carriers to make enough money to keep their head above water, but the bankruptcy numbers would tell you that we're kind of still okay. I think there's some. And you hear you know Kima right, he was talking about it. They're not dying. They're not growing the way they were, but they're not dying. And like he's got a lot of mouths to feed there with 500 trucks and so like the cost to operate a truck is way up over the last five years and that you cannot deny, fuel pass-through-ish is at least tolerable and relatively manageable. But like what happens if the market doesn't cycle up 30%? What are these brokers that play in the shadows, who are taking advantage of people, going to do when more and more sunlight is shown on that corner of their market? They're not going to be able to hide, and I am. I am coming for them, right? I'm not coming for Robinson. I'm not coming for Molo at ABF, right, I'm coming for Joe Blow in his basement who drinks beers at VFW with his buddy on Fridays and gets his freight. That's the guy that I want to take out, because I want his buddies five loads a week, I want his buddies 20 loads a week and I want 15,000 of those. That's what we want. And so in the end people can say the market's going to change, and they can.
Speaker 2:I did a blog post for a team the other day. We're not waiting out the market. We're not sitting here biding our time waiting for things to change. We are working aggressively to reduce our costs to serve to make it sustainable. Because, by the way, I'm also for all you shippers that listen to this I'm not trying to get rich here. I'm asking for a 2.5% operating a net income cashflow margin 2.5%. I said that to a customer earlier today and he laughed at me because that number was so ridiculously low. Like this is not like. This game doesn't need to be a shell game. We don't need to hide from our shippers and our carriers what we make. If you create value for them, it all comes out in the wash, and if you don't, then it won't and you'll lose the business.
Speaker 1:So if you create value to necessitate that margin, that profitability, your shipper will stick with you, and if you don't, you're gonna get the boot so the interesting thing in this is a clear focus, and if there's anything that I think, strategically, the digital freight brokers have done to the rest of us, it is laser focus us on our cost to serve, and not that that's something people weren't as focused on, but they showed a light, or they showed an ability to do it at 50% the cost that the rest of us were doing it at, and so the problem, though, is they weren't doing it necessarily successfully, and there are parts of it that certainly were successful, and maybe you know I don't want to be too generic in how I say that, but a better way to put it is one of them went out of business with what I was under the impression was an extremely low cost to serve.
Speaker 1:That, like opened our eyes, and the other just sold their brokerage, because I don't. I frankly think they couldn't necessarily figure that out, but my point, though, to you is where's the balance, and is there a? Is there a potential risk in going too low, where the relationships become harder to sustain?
Speaker 2:Yeah, I mean, and it's the question, right, it's like, where is that break point? What I'll tell you is transfix cost to serve is 40% lower than mine, right, right, and I have talked to now like 17 or 18 of their customers in the last 10 days and I have not yet met one who did not rave about their service not their price about their service, and so like they found this way to blend the two together. I do think it comes back to this idea and I'm calling it the best of both worlds strategy, but it's this idea of giving the shipper and the carrier what they want. Some shippers want low price, relatively consistent, predictable service and decent transparency, and other shippers want take it and make it go away. We want to be able to do both and I think what DFMs weren't good at? They weren't good at the take it and make it go away and they also weren't good at recognizing in that take it and make it go away scenario those are higher margin customers. I have more work I have to do to manage that business. Not every customer can operate on a 9% gross margin or whatever.
Speaker 2:It is right. Like some customers you need to make 15% on because their business is clumsy and clunky and painful and gross, but that's the nature of supply chain, is some of these shippers? They just have ugly business and they have ugly freight and it needs to move, but it needs TLC and it needs special focus and it needs SOPs and it needs people and it needs special focus and it needs SOPs and it needs people, and some of it does not. And being able to do both, which is what we are going to do really, really, really well, is the answer, in my opinion. Now, I'm not positive that I'm pretty much right, but I'm betting a lot on this, not necessarily financially, but career-wise right Because not necessarily financially, but career-wise right Because I've been very public about my disbelief in DFMs and what they bring to the market, value-wise, and I'm not about facing on that, but I'm pivoting and saying, yes, they create value, but it's here and so that digital team that works now inside of our business we're going to empower the hell out of them to continue to do what they're doing really well where it applies, and then to bring them more of that from our network and from our sales team. That fits inside that right. It's not a word, but I've been using it like every day.
Speaker 2:Now that has that right amount of automatability, right. And it's like, okay, well, they're automated and we're going to end up creating like an index of it and making it a word and whatever. But you know, their automate ability factor is 71%, Right, so we're going to put them into into transfix TMS. Their automate ability factor is 12%, okay, we're going to put them into the NFI TMS and we're going to continue to build the NFI TMS and do the things we do well in there. And we're going to continue to work with the Transfix team to build out that TMS, to continue to make it as good as it is and to help them compartmentalize some products so that you can come and buy the Carrier app alone and bolt it onto your existing system. You could come, or you can buy the whole suite of products if you want to.
Speaker 2:It's not a whole all or nothing thing and you know, look, I think that there's a lot of value in it. It's the first TMS I've seen in a long time and I won't throw mastery into this bucket because I've never demoed mastery or mastermind, so not throwing shade there. And I know, jeff, I'm sure it's scalable to the nth degree, but it's really the biggest challenge we'd always seen in looking at the 3PL space from a SaaS products perspective was the scalability of those systems. Can I go from a $50 million broker to a $500 million broker in this system and what I would tell you is they build a really good $200 million brokerage on the back of that system and it could do 10 times that tomorrow.
Speaker 1:Yeah, I mean that was the problem for us at Molo was we didn't. Our initial TMS I thought it was great for what we needed, but the concern was always this thing won't scale, Like we're not going to be able to get to billion plus on this. And you know, I think it's still early in the mastery journey. But I don't bet against Jeff. He wanted to build mastery with what Coyote was first supposed to be, that bazooka software was meant to be marketed to the masses and he thought he could just kind of go compete with robinson with it. And this is his third act building from express to to coyotes tms to now this. And I think he's you know he's a guy who could have retired years ago and said packed it in. And instead he said let me try to address the biggest problem I think our industry has with, which is enterprise scalable tms for the most complex companies, and and that's where he's decided to commit himself the last five years.
Speaker 2:So it's cool to watch, but I still tell people to this day that express, which is now navisphere, is still the biggest, baddest tms on the planet and it's not even close.
Speaker 2:Right like they, everybody's got a really long way to go to get to a place where they can compete with Robinson's tech chops by proxy of co-opting Express. Right Like that system just broke the freaking mold and, like you know, your dad doesn't need to hear it anymore than he's already heard it. But you know, look that thing, it delighted customers in the way that it enabled us as users to be so good at what we did and so much more efficient than we ever thought we could have been, and that was at the center. I mean, I don't think anybody at Robinson's ever taken a look back and looked at the acceleration. But if you look at just the stock price from that line in the sand when they acquired Robinson and you fast forward about a year when we had it rolled, out to the domestic network and then another year later, when your dad finished Europe right, like that's probably mid 2022 or 2002.
Speaker 2:Look at that stock price. For the next 10 years it was out of control, well up to the great recession. Anyway, that is driven by the productivity and margin generation that was falling to the bottom line for the return of the investor's benefit. That was driven by the technology that was there. It can make a difference in this industry. We're getting to the second, third, fourth act, whatever act we're in and we're starting to see this unfold here.
Speaker 2:And I'm not trying to say we kicked off any of that. That's not the point here. What I'm saying is people took a big leap in the DFM space in a new way that we had not seen. With venture capital-led businesses, technology-led businesses, technology-driven businesses. They advanced the progress of this industry materially. They did, and there was no structure or function for highly automated, commoditized transactions before they started attacking the space.
Speaker 2:Now there is, and whether it's uber's internal technology or flexport by proxy of buying convoys, or us with transfix or load smart which, by the way, should not be forgotten as another dfm that is still out there, even though felipe you know who recently you interviewed has got quite the smorgasbord of products out there that make him maybe a little bit less DFM like than some of the other people out there, but, like those people, helped advance the industry. Now the question is can we all co-op versions of this via those or other peripheral products and make the leap to get to a place where a big chunk of this business whether you call it the top 20, 30 percent of the volume in the market becomes a commodity and a service driven business? That's the real question.
Speaker 1:Yeah, and you know I credit Felipe If anything. I feel like he was the first to pivot and recognize like, hey, ok, just trying to be a freight broker like the rest of these guys is not our sweet spot necessarily. He didn't say those words, but that's kind of my perspective of it in that, like he's now built, these other products were acquired with OpenDock that have made an enticing offer to companies and it seems like Transfix is seeing an opportunity to pivot and focus on the core technology they're building. I'm curious, from your perspective, where does this take us in five years? So you know you won't be the only user of their TMS or, I'm sorry or their load board.
Speaker 2:Hopefully, not, hopefully not.
Speaker 1:I guess that would be a different problem if that was the case.
Speaker 1:But as we start to see the convoy for brokers, or Flexport for brokers Hopefully not or executing orders you know, DAT was always just this matchmaker that just showed you the match and did nothing else, which has been a great product for years. Nobody's even come close to disrupting them. This feels like we're getting into that, but at a furtherment of it, in that it's not just saying, hey, here's the match, it's saying here, execute the capacity procurement within this tool. What do you think?
Speaker 2:so I think that cove is cemented in the value of the broker for the shipping community and I think that that ability to reach a broad and diverse carrier network because, like the thing you can't solve for today is we have a highly fragmented dual-sided marketplace You've got a million shippers on one side.
Speaker 2:You've got 135,000 carriers on the other side, not including owner-operators, which accelerates that by another 600,000 individual entities. So you've got nearly a million on both sides and no great way of the two finding each other still to this day, right, and seemingly nothing on the horizon that I'm aware of that is going to propel that to it. So really, what I think is coming over the next five years is I think we're going to see consolidation in the brokerage industry. I don't think that brokers and I think it's going to be in the mid-market space, I think the small ones are going to struggle to compete. That technology is going to continue to make it further and further downstream, right. I mean, we're going to be bringing this technology to all of our small, medium-sized shippers and we're going to continue to pound the pavement looking for the next hundred small, medium-sized shippers that we can land and if they want that technology, they want to build their own loads, they want to go automated with carrier tendering. We'll be able to do all of that with them in a way that a lot of people haven't really ever focused on. Because, by the way, who have the DFMs focused on? They had to focus on the people with the most freight who are willing to take the subsidized rates in exchange for the throughput they needed to build the plane. While they were flying it they never really attacked the SMB space.
Speaker 2:And so you look at that, I think you're going to see a lot of small, medium-sized brokers really struggle to compete. They're going to struggle to afford the technology or put together the technology they need to be able to be competitive and that's going to lead to some consolidation and or what we're seeing through Kevin Hill's brush pass, which is 300, 400 entities disappearing every month. And some of that's bad business people who just never build it for anything long-term, and some of that's people caught in like good people, caught in bad situations, and all of them are not great. But in the end, you know I don't think you said 40,000 brokers the other day on one of your other interviews whether it's 25, whether it's 40, it's still 15,000 more than they probably will be five to 10 years from now right and too many, and some of that is transparency, visibility, availability of data, connectivity, but some of that's just the right technology being there to aid those people in executing those things. And so I still continue to believe that you're going to see the ongoing unbundling of the TMS. You're going to continue to see the democratization of people being able to choose from various technologies across services. Take a Triumph Pay versus an ePay versus a RoadSync Pay. There's four or five free pool auditing solutions now. When HubTrans stood alone eight years ago Look at green screens is now really giving data challenge in the market for pricing technology, and there could be another one coming. I don't know of one, but there could be another one coming. There'll be five of them coming, for that matter, and I'm sure that Sonar would contend that they're in that conversation as well, and so, like, we're going to continue to see these things, but it's going to be around invoice audit. It's going to be around like all these little subcomponents of the brokerage process that continue to make it more and more effective.
Speaker 2:The question is going to become is there a series of TMSs out there that can actually consume all of those integrations? Because all I hear today is integration fatigue. It's death by a thousand integrations out there right now and the amount of tradeoffs that we do internally just to prioritize the right integrations at the right time for the right business. It's hard and to try to catch and we're on the on the aggressive end of that. We consume a lot of early stage tech in the in the small services. Space, like all these brokers that aren't that are going to TIA to try to learn about it. Space, like all these brokers that aren't that are going to TIA to try to learn about it, and they're learning about text locate two years, three years after it came out, or about HubTran five years after it came out. Right, those companies are already way behind. Now try to catch up with integrations and convince a Reva Nova or you know somebody like that to.
Speaker 2:I just want to throw shade at Salesforce. You know, to try to integrate with that product. You can't do it quickly, it's just not possible. And so, like that's where I think this is going to shake out is those who are using the right systems with the right interoperability that put all of the shipment data in one place so that you can see your business moving. Those are the ones that are going to and their customers are going to end up winning, and there are three or four of them out there today, right, obviously, mastermind big qualification, you know. I think that Ty is pretty good. I think Rose Rocket's pretty solid, you know different size businesses.
Speaker 2:And then now you've got Transfix entering the space and honestly I put Transfix and Mastermind in a different sphere. Like there is not another comparable in the space that I'm aware of that isn't a shipper-specific, massive, you know package software solution that costs eight figures or seven figures plus implementation. These systems, like brokers, can't afford that, and so that's why I think this stuff shakes out. I also think that you know we're going to have to become a service providing business and we're going to have to be willing to work for lower margins in more consistent, repetitive spaces and provide more value around just execution than we've ever had to before Used to be. You just show up and existing you could broker some freight. Now you got to be able to provide a service and like those are the ones that are going to retain customers over time. So, um, we're really crushing the time here we, we're done, we're done.
Speaker 1:Listen, there there are a lot of takeaways. One of them is you're, you're going to be a recurring guest. Uh, you know it's funny because I want to move. I've been, I've been told to move to, not move to, but I've been. But I've received feedback that people would like to see panel type stuff and see me have three, four guests on at a time and just let people talk about a topic, and so I'm making efforts to move to that and you're going to be a great, you're going to be one of my calls.
Speaker 2:I love it, I love it. Expect that I love this industry and I love trying to share as much of about it as I can to help other people figure out their way, because that's what I did.
Speaker 1:It's. It's clear in how you talk about. The industry is clear and everything is said. In fact, there was one point about 20 minutes ago where I was pretty fired up, like you were. You were going and I was getting excited. I was like you should maybe change his blogs to speeches and get his team fired up that way. But, um, yeah, man, I really appreciate it. Um, we're gonna call it here two hours and 12 minutes in and this all is unedited, so people are gonna get the whole thing end to end and god help them all I feel sorry for them.
Speaker 2:They have to live, listen to all this oh, please, come on.
Speaker 2:I think I think they're gonna love it you know I love it and you know I love it, and hopefully that passion you know comes through for others and they can find, you know I just I always say, like, my takeaway has always been like, find a way to be passionate about what you do, because people buy that and you don't have to do what you love.
Speaker 2:I mean, I did not grow up wanting to be a freight broker or or a leader for that matter. Right, I've, I've backed my way into all this shit, but I found a way to find those things that I love about the business. That has stoked that fire for me and makes working 70, 80, 90 hours a week, whatever I work, feel like nothing and, like you know, I'm an hour late for a company event and I'm going from there, from here to there, and you know where. I'm going to be there until 10 o'clock and I can get up and do it all over again tomorrow and I will do it with a smile on my face and I will jump out of bed and I'm lucky to have that. But there's a way to find that in a lot of the things that you do. You just got to go looking for it 100%.
Speaker 2:Thanks for having me on with that.
Speaker 1:We're going to call it. Thank you to our listeners, those of you who are still here I think I bet most of you are still here and there's a way for me to check that too. And here's here's what I'll say. You know, I've had a number of guests who tell me after their their episode comes out, that they have a lot of people reach out to them and some even asking for jobs. My guess is because I think that you showed some stuff here that I think people appreciate. So I really appreciate you and thanks everyone. Thanks man.
Speaker 2:See you, you.
