Ep. #61: Greg Paulson, CEO of Giltner Transportation

In this episode, Andrew sits down with Greg Paulson, CEO of Giltner Transportation, a transportation and logistics company based in Jerome, Idaho. Greg’s journey with Giltner began in 1999 when, as an accountant, he worked closely with then-owner Doug Blevins, who eventually offered him a job. Now, 26 years later, Greg and his wife, Shawna, own and lead the company.

Giltner started in 1980 as a milk tanker transporter and has since expanded into a 300-truck reefer fleet, a $250M brokerage, a $100M factoring business, and an insurance and compliance arm helping small carriers.

In this episode, Greg also shares:

• Hard lessons learned from Giltner’s toughest challenges, including near-bankruptcy in 2003 and how the company rebounded.
• The four pillars of a successful trucking business and his philosophy on business. 
• What he’s learned from running a trucking business, like navigating bid cycles, developing smart bidding strategies, managing the emotional toll of losing key lanes, and why a diversified network is key to long-term stability.
• Operating an asset-based trucking company alongside a brokerage and the pros and cons of company drivers vs. owner-operators.
• Growing a factoring business to 300 trucks without any sales or marketing, just by word of mouth.
• Trucking’s biggest safety challenges today, including the impact of nuclear verdicts and how Giltner is investing in technology to protect its drivers.
• Advice for entrepreneurs looking to start and scale their own trucking businesses.

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*** This episode is brought to you by Rapido Solutions Group. I had the pleasure of working with Danny Frisco and Roberto Icaza at Coyote, as well as being a client of theirs more recently at MoLo. Their team does a great job supplying nearshore talent to brokers, carriers, and technology providers to handle any role necessary, be it customer or carrier support, back office, or tech services. Visit gorapido.com to learn more. ***

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Chapters

• 0:00 Sponsor message and Andrew’s introduction
• 2:28 Greg’s intro to Giltner and Giltner’s early trucking business
• 15:20 The Giltner business today
• 17:34 Which comes first — the customer or the drivers?
• 21:10 Navigating bid cycles
• 26:08 The pros and cons of owner-operators and company drivers
• 35:20 How Giltner’s asset business works with its brokerage
• 48:56 Giltner’s factoring and insurance business
• 55:35 How Greg thinks about Giltner’s growth across business units
• 59:14 The stigma around running a profitable business
• 1:03:42 How Giltner has navigated a difficult last two years
• 1:13:48 How Greg thinks about prioritizing and developing safety
• 1:24:06 Greg’s advice for budding entrepreneurs

Transcript

Speaker 1: 0:00

Hey FreightPod listeners. Before we get started today, let's do a quick shout out to our sponsor, rapido Solutions Group. Rapido connects logistics and supply chain organizations in North America with the best near shore talent to scale efficiently and deliver superior customer service. Rapido works with businesses from all sides of the logistics industry. This includes brokers, carriers and logistics software companies. This includes brokers, carriers and logistics software companies. Rapido builds out teams with roles across customer and carrier sales and support, back office administration and technology services. The team at Rapido knows logistics and people. It's what sets them apart. Rapido is driven by an inside knowledge of how to recruit, hire and train within the industry and a passion to build better solutions for success. The team is led by CEO Danny Frisco and COO Roberto Lacazza, two guys I've worked with from my earliest days in the industry at Coyote. I have a long history with them and I trust them. I've even been a customer of theirs at Molo and let me tell you they made our business better. In the current market, where everyone's trying to do more with less and save money, solutions like Rapido are a great place to start To learn more. Check them out at gorapidocom.

Speaker 1: 1:28

Welcome back to another episode of FreightPod. I'm your host, andrew Silver, joined today by a per usual special guest, mr Greg Paulson, ceo of Giltner Transportation and Giltner Logistics, and we're going to be talking trucking today. How are you, greg? I'm good. How are you? I'm happy to be here. I've done a lot of these interviews I think I'm on this is maybe the 60th or somewhere around there and I've had very few trucking companies themselves like owners, ceos of trucking companies. I've had a few, but not many, and you guys are such an important part of the equation here. So I love the opportunity to get guys like yourself on here and learn more about your journey, more about your business, and you know how you guys have grown from, you know, this kind of mom and pop shop 30 plus years ago to a very kind of mainstay in the industry and a very well-reputed company. So why don't we start with your background? How did you even find your way into trucking? You're an accountant by trade, correct?

Speaker 2: 2:36

Yeah, so the way it all started was. So it's funny. In preparation for this I did do a little bit of reflecting and so I started on April 19th of 99. I was a CPA working for a CPA firm and Giltner was a client of ours. I was 27 at the time, so I was kind of the young accounting guy and they'd send me wherever just because I was young and they could do that. And I kind of hit it off with the owner of Giltner, doug Blevins at the time, and I was spending more and more time there. His books and everything were just a complete disaster and we just hit it off and he offered me a job and so I started on April 19th and so in about a month that'll be 26 years and I was 27 when I started. So one year from now it'll be like half my life so, but it went by like that, you know.

Speaker 1: 3:34

Half your life at one company. So take me back. When was the company first? When did Bob first start the?

Speaker 2: 3:39

company, the company that was like in 1980. And what it was is. He was kind of a milk transporter, a local milk tanker guy, and we have a ton of dairies in the area. He was hauling milk into a little company called Jerome Cheese and they asked if he could take some of the cheese onto Wisconsin, so he bought a couple of refrigerated trucks. There's actually one of the cool things here A while back we were recognizing one of our drivers with 4 million safe miles Tommy Nelson, tommy right, yeah, I saw that I was going to ask about him.

Speaker 1: 4:15

Yeah, that was very cool.

Speaker 2: 4:17

What's funny is the clip we did on the internet is a short clip, but he and I had a long talk about everything. That guy knows more about our history than I do, so really, really cool to have Tommy be part of our team still, um, so we ended up taking uh the cheese back to Wisconsin and then Doug Blevins came on. The company started in 80. Doug came on as the bookkeeper in 90. Doug was amazing at a lot of things, but not bookkeeping and then. But he was really good with people and leadership. I came on in 99 and somehow the trucking company they did some stuff taking the cheese but they really weren't good at refrigerated over the road stuff. So they basically just told Doug to take over payments and he could have it. And there wasn't that many trucks and Doug really built it from about 90 to 99 into a pretty good size company.

Speaker 2: 5:18

We were doing a ton of potatoes out of Idaho going to Texas, potatoes out of Idaho going to Texas, and so then I started and Doug had just really gone crazy and grown it ridiculously fast. And then in about 2003, right, a couple of years after I started, one of our biggest customers took all the potatoes and put them on the rail. One of our biggest customers took all the potatoes and put them on the rail. So we had nothing and we were a one-trick pony and that was all. Doug knew how to do was take potatoes from here to Texas, and then we had some good customers bringing us back and that was completely destroyed. And not only that. He had just upgraded. Volvo at that time came up with the new 770 tractors and they were so heavy that they were just terrible.

Speaker 2: 6:10

Everybody in the whole industry could do about 2,000 more pounds than we could, so we had lost our biggest customer. We had trucks that were too heavy, and then we really didn't know what the hell we were doing. So we were shotgunning trucks all over the country, and that's when I learned how to be a trucker was at that point.

Speaker 1: 6:30

So a couple of things. First, I don't know why I called him Bob. Shame on me. I meant Doug.

Speaker 2: 6:34

There was Bob Giltner was the guy I did see that right?

Speaker 1: 6:37

Yeah, you're right, Sorry. Okay, confirmed Another point you just made. So it's a couple of things. First of all, one of the first lanes I remember moving was that exact cheese lane when I was doing work at coyote for craft foods. At the time it was not craft Heinz, was craft foods when they still owned the snack business with the Mondelēz Um, we helped a lot of their inbound and they had inbound cheese from Jerome, idaho into where in Wisconsin and one of their plants in Wisconsin. I can't remember exactly where, but I do remember moving those loads. So that's funny that you mentioned that.

Speaker 1: 7:18

Also an interesting anecdote for people who don't know. So you're in Idaho, jerome, idaho, I believe, correct? Yeah, which, as far as I know, because I grew up, my first real customer as a sales guy was a company called Ruby Robinson Produce. So I'm a sales guy at Coyote Logistics. I'm like 22 years old, I'm trying to find customers and the first thing I thought to do was go and look at all the old customers that we used to work with that we no longer hauled for. Look at all the old customers that we used to work with that we no longer hauled for. And if you think about why we might no longer haul for them. One of the reasons might be they're not easy to haul for or not great to haul for, and I was like, screw it, I refuse to have no load.

Speaker 1: 7:56

So I'm like I got to find loads. I get in touch with these Ruby Robinson guys who are a produce broker based in Chicago, but a lot of what they're doing are potatoes and onions, and so the first few years of my career like 60 to 70% of the freight I was moving were potatoes and onions, largely out of your area, and so it's not easy freight to move. But secondly, I always thought it'd be great to have a carrier base there because you could just pick off all the freight you want, unless you've got the heaviest trucks, because that's a problem, you know, for some customers not a big deal for the produce guys, the onions, the potato guys. They want to load that thing with every single extra pound they can. Um and and, having a heavy truck that just kind of disqualifies you or at least reduces the price you're getting paid, because a lot of those guys were wanting to pay you per pound, right, right right, right, yeah, so it was brutal.

Speaker 2: 8:51

You were probably better. The cheese thing, that was where we got started, but in all fairness, you were probably better at that than we were, because we never really pulled that off. The potatoes were kind of what we built the company around, but then we kind of messed that up at that time. So then what made it worse is right about that time. For some reason, doug decided to expand and we ended up purchasing the private fleet of a small potato packing plant in Idaho Falls, and we didn't know what we were doing. Our due diligence was terrible. We, we bought this fleet. It was all old, beautiful, gold Peterbilt, so we're like 98s and they were cool looking, but they got terrible fuel mileage. And when you buy a private fleet, all the drivers are spoiled. They just like to go out and come right back. And we didn't realize this because we were have no business buying anybody, but we, um, we bought in like in october, in like march. What year is this?

Speaker 2: 9:52

roughly, the year was about 2003, okay yeah yeah so right years ago, all those drivers had a retention bonus that came due like in March, and we paid this huge retention bonus and then half of them quit. It was, it was just wonderful.

Speaker 1: 10:12

So I feel like, as the accountant as the accountant, that's kind of your job to be, like seeing those things before in the due diligence. We're all young once though, so I get it.

Speaker 2: 10:21

Yeah, I was young and and you got to get your butt kicked a bunch before you really learn to the importance of digging into those things. So, yeah, that was what we were about then and we had to learn how to be truckers and learn about lane density and customer relations and building things that made sense and trading equipment. And we were down for the count for about from 2003 to 2005,. We were done. I mean, I had a bankruptcy lawyer on retention and then we did a bunch of stuff that made it turn around.

Speaker 1: 11:01

So talk about that. Why do you feel like you guys ended up down the bankruptcy path? Just the series of poor decisions and mistakes and kind of well, trucking is like.

Speaker 2: 11:13

A lot of people are going to be able to relate to this right now, because that was a hard time. In trucking, too, it goes in these cycles and that was kind of, and when things are going bad, you lose your money real quick, and we just had a lot of things go wrong all at once. So what I learned the hard way at that time is in order to be successful at trucking, there's four things you got to do. You got to raise rates, increase utilization, cut costs and keep it safe, okay, and so that's kind of what, and it sounds so simple, but you can build a company based around those four things. And so what we ended up doing is we were shotgunned all over the country. We were struggling and what really? We ended up calling all of our lenders and talking to them.

Speaker 2: 12:11

The used truck market was in the toilets and nobody wanted to repossess our trucks. We did call them all the time. I had a. Every day. I managed the books in a way that I had my here's what I must pay like fuel and drivers and everybody, and here's where I put what I'd like to pay like truck payments and trailer payments, and we survived like that for a period of time.

Speaker 2: 12:33

And then we found this customer out of California doing produce and they were in trouble because they couldn't deliver their lettuce on time and their customers were all mad at them and they were losing their customers. And we went in there and service the hell out of that account and they paid us better than everybody else and they they needed us so bad that they just absorbed our fleet and all of a sudden we were doing one thing over and over and it paid good. And then, um, so we had fixed our operations piece and then on the finance piece, we were still struggling in our equipment. Even though we were healthy, it had done so much damage. Nobody was lending us money, so we couldn't get new equipment and the repair bills were starting to kick in.

Speaker 2: 13:18

And then tab bank out of Utah came down. It was actually a guy, jj Singh. He sat down with us and he worked with us and he took over our line of credit and he bought us. Basically he was trying to get big into the equipment space and he got us all new equipment and that just immediately turned us over. So it was the right traffic lanes with some density and all new equipment and a new financing program, and then the trucking company was on solid ground. At that point. It just took years to undo the damage we'd gone through. But then we were solid and we've been operating better. With those lessons we learned the hard way ever since. We're relearning them right now. And getting back to basics, I got some new people that were, uh, having to go back through that and and, but we're in better shape than we've, you know, certainly than we were at that time.

Speaker 1: 14:09

Yeah, I mean great points across the board. I love the kind of four points you mentioned. I'm curious in finding that lettuce customer. They're based in California. You guys are based in Idaho. Were they running you back to your like?

Speaker 2: 14:25

domicile or you were taking loads, it was all west and back. Yeah, yeah.

Speaker 1: 14:33

And did they? Did they run you back or you guys were finding other customers just to get you back down there?

Speaker 2: 14:37

You know, even though we're based out of Idaho, Idaho has some nice traffic lanes, especially now. At that time it wasn't quite as popular a place to get to, but we've never had all of our truckers based out of Idaho. So it's like you don't necessarily get all your trucks home on a regular basis and you don't want all your drivers to live in one place, because then if you have a holiday and you want to get them all home for the holiday, there's not enough freight to get you going, so you want them to be based in your traffic lanes. California is a tough state. There's a lot of special rules to being a trucker focusing on California. At that time there was more freight in California than there is now, so it's just kind of a cycle, but at that time that was the thing that saved us.

Speaker 1: 15:22

And just so I can give the audience an understanding today, what does the Giltner business look like in terms of the overall? Give me just the size and scope of the whole business. We'll backtrack to get to how we got there, but I think it helps for people to understand like what the business is it looks like today.

Speaker 2: 15:37

Yeah, so we're not. You know we're not a huge company. We've got just under 300 trucks and we run primarily out of Idaho. We do a lot out of Arizona, texas. We do a little bit of stuff going back to Florida. We stay away from the Northeast. We do California and the Northwest. That's on the transportation side. The brokerage is about a $250 million a year brokerage. A couple of years ago we were pushing $300 million but things have slowed down a little since then, like everybody. In addition, we have our factoring company which does about $100 million a year in factoring, and then we have an insurance agency and a compliance business where we try to help small carriers buy insurance and be successful.

Speaker 1: 16:30

Got it, thank you. And with respect to the actual trucks you own, can you dive a little bit deeper into what that makeup is? How much of it's all refrigerated, right, or most of it's refrigerated?

Speaker 2: 16:40

It's 100% refrigerated, except for six trucks I got running out of cartersville, georgia that are heavy haul and those guys they got that, all the axles and the peterbilt you know that can do the, you know the 250 000 pound backhoes. Just because I knew a guy and wanted to do that and I kind of backed him and we got that going and he's really, really good at it, but that's only about six trucks. So everything, everything else is refrigerated. Uh uh trailers.

Speaker 1: 17:09

So one thing I'm curious about. It almost feels like a chicken and egg situation. You mentioned both your Cartersville, georgia, uh, one-off six trucks, heavy haul, and then also mentioning how your business is based in Jerome, idaho, but a lot of your trucks or your drivers, I'm sorry are domiciled, probably up the eye, you know, on the west coast, from california up to oregon, washington, whatever. I'm curious, like how you think about the idea of recruiting and and, and you know, securing traffic lanes, like which comes first. Like you know, if you go find the customer and then you go want to find drivers who can run that customer, or you find good drivers and then it's like, ok, I know, this guy lives here, I got to go find him a customer out of there. How does that? How do you think about that kind of problem?

Speaker 2: 17:57

You know you, it is a real problem. It's a chicken or the egg, just like you said, and it requires discipline and patience and really hard work. Right, you know, you get some lanes that go to a place where you really shouldn't be going, but you go there a little bit and then you tell recruiting they can recruit there and all of a sudden they recruit a ton of guys there but you don't have very much freight there and so, before you know it, operations is deadheading guys home and you see these huge deadheads or this crappy freight that somebody took to get somebody home to a place where you shouldn't be going. So it comes down to basics and you want to go to as few places as you can where you can get freight. You shouldn't take freight going somewhere where you don't have freight, somewhere where you don't have freight. We do right now, I want to say, about 22% of our freight is from brokers and the rest of it's direct customer freight. We do probably another 8% where it's like our brokerage feeds our own trucks. So maybe 30% between those two. But most of that you know.

Speaker 2: 19:04

Right now, especially in this market where the spot market is way below the contract market, that is our worst freight, and so we do get a little sloppy. Back in 2000, like 22, it was the spot market was so high. It made you sloppy because you can go anywhere you wanted. And there was, oh look, there's a $3 a mile load. I can get wherever I want from there. I'll just go take these drivers on a joy ride wherever they want to go, we don't care. And we got sloppy. And, uh, this market has made us focus and get back to the basics. And these are our direct customers and if you don't do everything on time you're going to lose them. They're precious. You got to fight for them and you better be on time. And then we got to get away from going to crazy places. We got to pick our battles and get real good at it.

Speaker 1: 19:55

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Speaker 1: 20:52

So density is a word I commonly hear among the carrier community as a fundamental and priority in building out your capacity lanes or your traffic lanes, and I'm curious, like when I think about my engagement with shippers in the past and bear in mind purely as a broker.

Speaker 1: 21:17

So I think it's maybe a different conversation and I don't like to group any of our categories as, like one thing, Like I don't think all brokers are the same, I don't think all carriers are the same, I don't think all shippers are the same by any means, but the idea of being able to like build consistency within a network, in a brokerage, is not as messy If I lose a lane, if you lose a lane, it feels like it can be pretty freaking messy. And if you've got a lane you're running from LA up to Portland and it's got some density to it and you're running five guys a week on that lane and all of a sudden that lane gets pulled in the next bid because of I don't know, one cent a mile, or someone just overlooked it. I'm curious, like, what the experience is like for you and your company as you navigate bid cycles with shippers. Do you see more loyalty or do you have the same challenges that the rest of us kind of have, and just kind?

Speaker 2: 22:23

of. Can you talk a little bit about that? We go through that. You know there's all these basics in trucking that you have to be really good at, and one of the things that we struggled with a little bit was how to properly bid freight.

Speaker 2: 22:37

We had one of our guys kind of pulling rates out of the air and not getting ahead of the market and what the market was doing a couple of years ago. So we did a big bid for one of our customers and because of the way we bid, we got underbid on all the easy stuff and we won the loads that were super, super hard with a bunch of drops, because we underbid those and we overbid everything else, yeah. And so now we did that freight. The OD pairs were okay for us, so the origin destinations were fine, but we didn't perform as well. Then the next two years later we're doing a bid and they look at our performance and we're not on time as much as everybody else was and I don't think they were able to really analyze that. Hey, we had a whole bunch of drops, everybody else had one and it turns out they did better. But you know it is what it is and so we even lost some of those lanes and that particular customer is one we love. This year we really did a good job on their bid and we didn't win much freight, but what we got is perfect and we're going to look good.

Speaker 2: 23:43

It may take a couple more years to get it dialed back in, but we're going to get back in there. So it hurts because these drivers build their lives around your freight. They're real people and they might live out there or you're getting them into a rhythm. They get home every week or every other week or whatever, and they get some consistency in their life and then that gets ripped out from underneath you and then you have empty trucks or you have to go find drivers and that's tough, you know, and so we try really hard to keep the drivers we have and take good care of them. But we have driver turnover and when you have things like major lane changes, that it hurts because you lose drivers.

Speaker 1: 24:28

Yeah, so that was going to be. My next kind of question was have you seen it so directly impactful in that, like you lose a lane and you just immediately lose drivers because there's there's nothing you can do to. You know, all of a sudden you're like hey, you know, I know you've been running LA to Portland for me, but the only load I can offer you is LA to Vegas. And they just say I'll go work somewhere else, I'll, I'll find someone else to drive for.

Speaker 2: 24:51

There's some of that but, generally we try to build most of our lanes, have more than one customer going each way when we're really doing a good job of building it. Um, you know, like you got the Midwest has me but there's like five people that make some really good you know pork and chicken and stuff coming out of the Midwest. Most of it goes to certain locations. So you get good at industries and not necessarily one company. Um, it still hurts because some of those customers you really do fall in love and it kind of breaks your heart when you lose them Cause you get like emotionally that business and stuff. But you, uh, generally you want to be into the markets and lanes bigger than one customer so you can survive some hits like that yeah, the diversification I mean.

Speaker 1: 25:36

It's something I you know. Again, I've only lived on the brokerage side, but it's something I used to say to my sales reps all the time. Is, you know, would you be happy with your book of business if your top customer fired you tomorrow? And if the answer is no, you better get on the phones and go find some more customers.

Speaker 2: 25:52

And I think the same thing I mean one good customer and they just want to sit on their laurels, and that's the like. Success is the enemy of really good success, you know me of really good success.

Speaker 1: 26:08

You know, a hundred percent, a hundred percent. Complacency falls in there, um, but let's let's talk a little bit about kind of the concept of drivers recruiting and I'm also curious about the notion of owner ops versus company drivers. From from what I saw, uh, giltner started as a small business that was only owner operators, um, and maybe tommy was the first company driver, if I saw that correctly in the video or one of the first yeah, um, talk to me. What does the business look like today in terms of owner offers, company?

Speaker 1: 26:38

drivers, and I'm just curious for your general take on what it's like dealing with owner-operator versus company drivers, what the benefits pros cons are to each side.

Speaker 2: 26:46

Yeah, so I love the owner-operator, lease-operator model and I think it's.

Speaker 2: 26:53

You know, when you look at trucking, you handle a whole bunch of money and you keep just a tiny little sliver. So if you do everything right, you get good utilization, the rates are reasonable and you manage your fuel mileage properly and you don't idle your truck all night and you just keep going. The nature of fixed costs and variable costs for a trucker that wants to be a lease operator and do a good job, they can make a lot of money, especially a couple of years ago, right, when the rates were so good. Now they're just doing better than my company drivers for the good guys. But back then we had some guys that made a lot of money and then still left and went on their own because they could do even better. At that time nobody needed shippers. So the lease operator model you know you've got fixed costs and variable costs in trucking, so you've got to get a certain amount of miles. The good lease operators are dedicated to push themselves where they can get those miles. They're paying for the fuel so that they're going to not idle their truck all night and so they just manage their expenses better, their utilization better, and so they just manage their expenses better, their utilization better.

Speaker 2: 28:06

And then one thing that's funny is I always benchmark my company trucks against my owner operators. My owner operators always the better freight their adjusted rate per mile is always better, and the reason is because they'll tell my load planners to. They will argue with the load planners and they won't take a crappy load. And so my load planners. Unfortunately, they use the company drivers as a crutch sometimes and they'll deadhead a company driver to go save this load that we should have probably never taken anyways. If the owner operator doesn't want it, they're probably smarter than you and there's a reason they don't want it. So quit trying to fix the problem with these company drivers.

Speaker 2: 28:43

You screwed up and got that crappy and it's you know. So in a certain extent you know, but we swing in our owner operators company truck numbers. During like 22, when the rates were so high, we swelled our owner operators and our company trucks went way down and then it kind of went off a cliff and it's kind of gone the other way to where we're at about a hundred company and 200 owner operators still primarily owner operators. But we've got a hundred company and we're not that good at managing company drivers. You've got to have driver managers that really watch the utilization and get the drivers to stay out there to hit their goals, and you got to watch their idle time and their fuel and just. You just got to be on them and work with them and set goals and and manage them, and if you're not careful they will lose money.

Speaker 1: 29:34

So a couple of questions coming out of that. One is why would someone choose to be a company driver, Given what you just laid out? If I'm, you know, contemplating coming to work for you as a driver, and my options are company driver or lease donor operator why would I pick the company driver up?

Speaker 2: 29:51

Yeah, Well, one is you know there's a lot of things you don't have to worry about and you don't have to stress quite as much. You get in the truck, you get the miles, you get paid for deadhead, you just drive. You get home, you get health insurance, you get 401k, all those kind of things, and so you can do really well as a company driver also, and especially now that we're getting some lane density back and really trying to get some miles on you and work with you. It's easier, it's faster. And then the owner-operators are the guys that are just going to run a little bit harder and they want the risk and reward of having their own business. At this point it's about six years really, where the owner-operators that run well and the company drivers probably make about the same amount of money, but a couple of years ago the owner-operators made a lot more.

Speaker 1: 30:45

The other question I had coming out of that is when you look at your business and you say, hey, I feel like we need to be doing better with how we manage our company drivers. What are the things that you do strategically to make that happen? How do you make that improvement come to fruition?

Speaker 2: 31:01

Well, it comes back to raise rates, increase utilization, cut costs and keep it safe. So, as far as raising rates, we're going through our traffic lanes and we're analyzing our traffic lanes at a level we've never done before. I'm literally taking every lane and saying what's my revenue for the next 10 days on this lane? And the thing about that is it's not just the one load, it's this load puts you in this place where you got this next load. And we're not just looking at the rate per mile, we're looking at the revenue per day, and so the revenue for the next 10 days on maybe two to three loads put together is X and we're actually finding two loads. We are finding loads that look good but they're not good because you had a better alternative. And so we're analyzing the lanes, improving the lanes to get the utilization and the rate per mile up.

Speaker 2: 31:52

We're going with our driver managers and we're completely redesigning their hours and their accountability. So we had this program with driver managers that were four on, four off, and it created a lack of accountability where trucks would do bad and they were like well, it's only half my fault and it's half this other guy's fault, and now we're going to say these are your trucks and you don't share them with nobody. If they do bad, it's on you. So we can benchmark the trucks against each other, the driver managers against each other. And then we are also. We actually created report cards for every truck, every truck. So we're grading them. You get a grade on your adjusted rate per mile, your miles, your fuel, and we're taking a hard look at all the critical events we get from a safety standpoint how many hard braking, stability warnings, those kinds of things. And so we're just getting diving down with a lot more quality that we're trying to get out of these, each and every driver and every driver manager. So just safety utilization and rates.

Speaker 1: 33:03

So I think that's a really interesting concept of how you're kind of analyzing the opportunity cost of a given lane relative to what other freight could have been considered. That seems like a really challenging thing for someone to do on their own. As you know, it's just a person just know me looking at dat and my customers. So I'm curious like are there, is there technology that you're using today? I mean, it feels like, as we're coming into the age of ai, where there are tools that could be used to do this and and give you as a as efficient of a routing plan as you can get. So what? How does that work on your in your world.

Speaker 2: 33:35

The problem you have is you've got load planners and load planners typically have an area and so they like to hot potato drivers and they're like it's so obvious when you look at the whole picture, the reason you got a good rate from point A to point B is because there's nothing at point B. You send them to the worst place on earth and you think you're a hero, you know, and so if you're not careful, they'll just hot potato your drivers to the worst places and they all think they're amazing. But they're just. It's just. You gotta look at the bigger picture and that's the problem with the load planner setup, where they each have an area.

Speaker 2: 34:14

We are using some software. It's Truckload Wizard, I think, is the name of it, but I think there's a lot of software out there. It's just the concept of the opportunity cost, like you're looking at and really driving in and getting true analytics out of it. We've reached out for some help for some other consulting people and we're starting to see it. We've reached out for some help for some you know some other consulting people and we're starting to see it.

Speaker 2: 34:38

I think there's quite a bit of software out there to help you do that, but we've been at it a long time and we're kind of tapping into some people that can do it better than we ever did it.

Speaker 1: 34:50

Yeah, that makes sense. I'm curious about the notion because part of how I think about the opportunity cost is like there's only so much an asset carrier can do. I just feel like the doors open when you have brokerage involved because there's typically more customers that you can look at more lanes to look at more opportunities, and so if you're trying to understand the true opportunity cost of a given lane, bringing the brokerage into the conversation can be helpful, and I think you said before that about 8% of your loads come from your own brokerage. Can you talk to me a little bit about how the brokerage and the asset work together and like what the benefits are to having the brokerage and and you know I'm curious about how it what it's like selling into customers? I should stop. I got to stop doing this thing where I asked four questions at once. Let's just start with the original one around the brokerage and the asset together.

Speaker 2: 35:44

So the way we started our brokerage was in about 2010,. We had a gentleman come to us. His name is Rob Stevens. He's a great guy and he knew a ton about brokerage.

Speaker 2: 36:02

I had seen brokerages not work with asset-based companies where they didn't respect each other. The asset-based company would look at the brokers and say you guys are not good people and you're just out there taking advantage of people and if you got a good load, I'll just reach over there and take it and it'll be mine because I'm more important. And then the brokers would look at the asset and say, hey, I got this crappy load. Nobody will take it. I'm just going to take one of your trucks and put it on there because it's a dumb load anyways. And so they would cannibalize each other and not respect each other. So we started off the relationship between the two companies with a boundary in the middle. They said we are going to treat these companies as though they're separate companies and then we're going to try to get people to work together because they actually respect each other and they like each other and they understand. But nobody owes the other person anything. It's just because we can work together and you'll both benefit if you work together but you don't have to, and we felt like that was a good approach to start with. The other thing is our agency or our freight brokerage is taken off. But my component to that is I'm really good at back office. I mean I can vet carriers and pay bills and bill customers really well. But we were largely an agency-based brokers to start with and so you get some unique models there. Like half of our brokerage freight is dry van freight, so it doesn't work on the assets anyways, and so that's kind of our foundation. As to the two companies, they really are separate companies.

Speaker 2: 37:36

I actually left the fleet for a period of time and moved the brokers to Twin Falls, which is only about 15 miles away. But I had a bigger recruiting base to hire people and I got very fortunate. I've got Michelle and Karen and Megan that work with me. Those three and then Todd Boffman. Those four people kind of run the brokers. I was fortunate to have a couple of people pop up and that's what allowed it to grow was specializing in the back office.

Speaker 2: 38:06

So how do you get them to work together and how do you get them to sell together? You have to be careful and think that all the way through In a perfect world. You go into a customer and the customer is all open-minded and they say, hey, we got both of these and I'm going to put a lot of it on my trucks. But when you keep giving me freight and I don't have any more trucks, I'll broker it, or I'm going to be brokering it, but I can get my trucks in there.

Speaker 2: 38:31

In reality, the customers want drop trailers. They want all these things that prevent you from being able to broker it. Trailers, they want all these things that prevent you from being able to broker it. And then the customers they wanted assets for a reason, and then they because some broker upset them or vice versa, you know. And so the best relationships are the ones where there's just incredible amounts of transparency and working together. We do a lot of customers where we're literally set up twice, once as a carrier and once as a broker. That way they're not accidentally putting a brokered load on one of my drop trailers or things like that. So it's not easy. You just have to. It's about relationships and people and talking together and figuring out every customer's different, to be honest.

Speaker 1: 39:16

Yeah, I mean, there's so much in there, so much gold in there. Frankly, I appreciate you sharing all that. I think you know. Let's just start with the initial outreach. In that if I email Kraft, for an example, and I'm not hauling for them today, they don't know who I am, and I say, hey, I'm Greg with Giltner Transportation, I have 300 reefers and would love to be a carrier of yours, that email probably has like a 50% response rate maybe. Actually, let me ask you that question what is the typical response rate on a cold outreach on behalf of the asset?

Speaker 2: 39:54

Yeah. So the funny thing about that is all the brokers think oh, if I just had some trucks I'd go. Every customer You're about to expose me, they'd all run through the. You know, I'd go anywhere in the country, they'd open the door and roll out the red carpet and I'd come in with those assets and it's not like that.

Speaker 2: 40:13

Not as much as you would think Uh, not as much as you would think Uh. And so the other thing about the broke or the the asset side is we're seriously only adding like maybe five customers a year. Tops. I don't even. That's just. What I want is either long-term partnerships, I want to be with these customers forever, and so that's you know. I don't even I, as of right now, on my asset side I don't even really have a sales guy. It's just like my, the, the general manager and myself are just kind of dovetailing that in our sales guy. We he, we had a long relationship with a good sales guy but he kind of moved on and started his own business and we just never replaced him. So that's on that side. But we do go work with our brokers a lot and when they have customers, I go around and go meet customers all the time with them and take them to dinner. And when there's an asset play in there, we open the door and do that. We do.

Speaker 2: 41:14

The asset gives you some credibility as a brokerage for a number of reasons. But it's you just you don't want your brokers to go say you're going to get assets all the time and then broker everything, even though a lot of the time they can do a better job of. I've got brokers that do as good a job of performance, of being on time, as the assets could ever do. You know, I've got some really good brokers that just everything's on time. They do a great job. But you don't want to start a relationship off with anything like that. You want to be pretty transparent and you want to say this is what you're going to get, this is how we're going to be successful, because brokers can be so good. You know there's there's a lot of reasons why for a lot of freight, brokers is a better answer and we need to be proud of that and make it happen.

Speaker 1: 42:04

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Speaker 1: 43:02

I love everything you're saying and I respect the hell out of it too. I mean, I just think you're you're hitting the nail on the head because there's problems I could walk through that that are solved by your approach. But I know of a brokerage and multiple who went so far as to buy an asset as as in one asset, so they can say they're asset-based and it's all part of a ploy so that the initial email when they reach out to a shipper, rather than what is now probably a 0.04% response rate for just a broker reaching out to a shipper, cold. They think they can get a 50% response rate if they say I have assets, and you're right that, like shippers, it can be messy, and the right shippers want that overt transparency and they want to understand what every part of your business can do. If the assets can do this, they want you to have a SCAC for that. And if your brokerage can do that, they want you to have a SCAC for that. Because, just like they understand the smart ones, the good ones understand that your cost and the price you need for a Giltner truck to run a load of lettuce from LA to Portland is different than what your brokered cost and rate needs to be. And the right companies have that kind of transparent relationship where you can talk through all of that and set it up in a way where everybody can be happy.

Speaker 1: 44:29

And another point I just think is so interesting is like I always thought as a broker I could outperform every asset. I just thought in general I'm never restricted by resources, whereas an asset, if playing as a true asset, is restricted by resources. There is going to be a time when you've got a potato load picking up in Twin Falls and the driver actually breaks down on the way there and there aren't other asset your own drivers who are in the area and the only option is then to fail on the load or, as a broker, you go find someone else, and that is one part of the equation that just can't be. You can't argue that.

Speaker 2: 45:09

No, no, a hundred percent. There's a lot of the times when the broker can be better, because you're literally dealing with. A thousand trucks are going to hit that market over this weekend and I have four trucks headed that way, if I'm lucky, you know. And. But on the other hand, I mean I can give you amazing consistency on a lane that I'm good at, I've got, you know, every one of my tractors is. You can load it. It's sitting there preloaded. I can monitor that temperature within a three degree temperature range from A to B. I have bells and whistles that go off if the temperature is not right, you know. So in the lanes I'm good at, I can be very competitive, but I can't do it all.

Speaker 1: 45:50

Yeah, so I should have added that. Caveat is that the example I used is like one of the few examples where a broker can offer more than an asset, but in a million other examples the asset can do so much more than a broker in terms of monitoring the temp, consistency on tracking, things like that you can provide. It's much easier for you to provide connectivity through technology that as a broker I've got to take at a minimum extra steps, but maybe I can't do it at all because the carriers are unwilling. It doesn't mean I can't get the load there on time, but there are many parts of service and execution. So we'll say that.

Speaker 1: 46:29

And one more thing I wanted to add to this part of the conversation which I think is interesting. I like how you talked about the idea of two separate companies, two separate entities. That kind of had the line drawn. There's mutual respect and understanding, because I think one of the biggest reasons that the larger asset-based brokers struggle, or the large asset companies that have brokerages, I think one of the big reasons that they have historically struggled is they always prioritize the assets and when you do that you really cripple a brokerage's ability to develop strong relationships with a carrier, for example, um, we'll stick with the potato example. Um, you know, shipping out of Twin Falls to Tampa, florida, to go to a PFG down there or whatever, maybe they have five loads a week of potatoes and during certain times of year there's just way more abundance of that, and from August till the end of the year there's five times, 10 times as many of those loads available.

Speaker 1: 47:38

And so your trucks are busy. There's always something for them to do. But there are certain times of year where there's not as many loads there. And if during those times, let's say, the brokerage has this committed lane from Twin Falls to Tampa and they go find a carrier who's a great carrier, and they support the lane and they run it all year and they always show up, they always are on time. And then all of a sudden, the assets are looking around and they don't have enough trucks. Your own assets, I'm sorry, don't have enough freight and they just go and take that load. They say you know what, forget, the brokerage has that lane, we're going to take it. We got to fill our assets first. The assets are a priority. All of a sudden, that carrier that the broker has a relationship with that they've been supporting all this time they're SOL, they'll always be kind of second fiddle to the broker's owned assets and that's just a disadvantage that's hard to overcome, because if I'm a carrier I'm never going back to that broker on any kind of long-term deal.

Speaker 2: 48:34

And, as you know, like brokers are special people. They're intense and they're competitive and all that stuff. If you treat them like second fiddle, then they don't stand for that. They go become somebody else's broker real quick. So that's something that we learned early on and took advantage of that to build our brokers through people who had been mistreated.

Speaker 1: 48:57

I'm curious about the other parts of your business that you mentioned and I was actually unaware of until today the factoring company and the insurance part of the business you talk about, like when did those come to be, why did you start them and how do they play in the business?

Speaker 2: 49:16

Yeah, so just like a little bit of history on it is so. Doug Blevins and I were partners. We worked together for about 17 years and then he ended up passing away in 2017. And we were super close. He got cancer and it was just a tragic thing. That happened to our business as part of our history and we miss him.

Speaker 2: 49:37

But the factoring is kind of special to me because I started that myself, even though I was just a part owner at Gildner at the time. I've always enjoyed that and factoring came out of a mistake I made and we were actually in the brokerage office in Twin. I hired this young guy to broker for us and his name was Ramon. He was giving loads to a bunch of these Middle Eastern guys and they came in and they were hanging out with us. They just came into our office and I got to know one of them and his name was Roddy and Saeed and I just said, hey, why don't you guys just hang out here? You can just run your truck from right here and you can look at all our freight, and if we can work together, that'd be great. And I learned that they were amazing at getting freight for their trucks and they didn't need any help there, but I could bill customers and pay them. I had a much cheaper cost of capital and I was buying fuel and equipment and tires for a lot less than they were buying. So we just kind of rolled them in and before you knew it I just broke it off into a separate division because we saved them so much money. I didn't charge hardly anything for factoring and it just worked so well. I had a gal by the name of Sierra and I still have her today. She's the reason it's taken off and they were just like family and they came in here. To this day we have spent $0 on marketing or sales or anything for factoring and we've got like 300 trucks we factor and it's 100% word of mouth. And then I was able to take that to my vendors and I didn't want any of them to be concerned. So I laid out everything we were doing because, like, they don't want you to be like an aggregator or somebody that's just giving discounts and stuff. And then we laid out hey, these are my guys, this is what I do for them. They're in here, we literally we talk trucking, we talk freight, we look at all their stuff. I'm helping them, you know, with. At this point it's rolled into where I'm helping them. At this point it's rolled into where I'm helping them with insurance and licensing. I help them get their authority sometimes and they're going wow, that is a lot more than what a factoring company would do. And so we're cool with what you're doing. You keep being part of these guys' lives.

Speaker 2: 51:53

Twin Falls is actually a I think they call it like a refugee community or something, where people from the Middle East were coming here after I can't remember which war it was or whatever. We got a huge influx of really good, super hardworking, super smart Middle Eastern guys and we got into that thread of them and there's a big pocket of them in Twin Falls and also Ohio and they're just good people and it's just grown. And that's what started that I always wanted to have an insurance agency and that's a chicken or the egg problem, because you can't get a good market till you got a bunch of trucks and you can't get a bunch of trucks. So you got to get market and you just have to grind.

Speaker 2: 52:35

I have a Nikki that runs my insurance office. She's a NAMI certified safety supervisor so she's able to talk to these guys and say, hey, the reason you're paying too much for insurance is you got three tickets last year. What the hell are you doing? The only way you're going to save any money is if you get out there and you don't get any tickets and you're run super safe. And then she works with them and she works harder for a one truck guy than anybody would ever do. So it's just all small little companies, but it's it's. Uh, we're. We're doing a lot of good for a lot of people there.

Speaker 1: 53:07

So first question is why did you? Why you said you always wanted an insurance agency why?

Speaker 2: 53:12

You know, I I just think that, um, insurance is such a complicated piece to this business and it's kind of a racket to a certain extent. People pay way too much for insurance and if you're going to be good at trucking, you got to be good at insurance or you'll just give away all your money to insurance. Right now the fleet is basically self-insured because some captives were in with a lot of different layers and a lot of different types of insurance. So I'm a very good insurance buyer and I just was able to take. I knew I could help people if I did that for them.

Speaker 2: 53:46

These small trucking companies. The way people give them insurance is they just say go on my website, you're so small, I'm only going to make you know a thousand bucks on you this year in commission. Just sign up, and I'm not going to make you know a thousand bucks on you this year in commission. Just sign up and I'm not going to spend any time on you. That's the way that everybody services one truck guys. My people go to them and they say come on in here, sit down, let's talk about this. Okay, here's how you look from a safety standpoint. You got to get safer. You can't have any wrecks, you can't have tickets. You got to be good. I'm going to take and put your liability insurance here, I'm going to put your cargo over here and I'm going to get you this Fizdam through this other market. I put it all together and you're saving them. You know, five grand a year and so it's huge for these guys. And then they tell their buddies and then before long you got a real company.

Speaker 2: 54:31

So I just knew I could help people and they needed that help and I was lucky I had, you know, sierra and Nikki to take those two companies and get them going. I've also got, uh, my controller, mandy. She's got a real, she's got a network of people that can finance and we've dipped our toe in helping people finance trucks and trailers and buy some of our used stuff. And we we got our butt kicked pretty good this last year because we financed a bunch of people and then, you know, in the downturn it was just bad timing so and that was good.

Speaker 2: 55:00

It was good for her to have to learn during a hard year and she'll take those lessons and and be. You know she was fairly small so we could take those hits Okay, but it made her good. So we're going to benefit for a lot of years there. But if you look at the whole spectrum of what we're doing to help people, small carriers want to be part of this. You know we can help them with their financing, their billing. We've got freight for them, we got tires, we got fuel and and we actually have people that'll talk to them and help them.

Speaker 1: 55:30

So interesting. I you know I wanted to ask you about you're in several commoditized businesses where it's very competitive and very hard to stand out. My old partner, matt, wanted us to start a factoring company in the last year coming because we have non-compete with freight. And I was just like man, what are we selling? A rate, and it's just so. Frankly, I thought it looked a little boring, but you could say that about trucking, I guess, but I don't know. I just it feels very commoditized, it feels very hard to stand out and what I was going to ask you was like how do you grow the thing, how do you actually make a name for yourself? I feel like I got the answer a little bit, but I'm going to let you try to answer and then I'll tell you what I think the answer is so with all of our businesses.

Speaker 2: 56:19

Here's the thing at giltner, we don't care if we grow. Okay, we want all the companies I've involved in we have a. Our value is we want to be profitable, enjoyable, fulfilling, that complements the rest of your life and improves the lives of others.

Speaker 1: 56:37

Okay, so so that's the second to last one.

Speaker 2: 56:39

Okay so compliments the rest of your life. You said it's basically balanced. We were. Our people have a lifestyle outside of work, um, and then improves the lives of others. We want to be safe. You know we deliver as a company. You know 10 to 11,000 loads a month. That benefits a lot of people and people that are in the freight business, whether you're a broker or trucker. You need to be proud of that. That's a big deal to deliver all that freight. That's what makes America run, you know, and so we're proud of that. So if we do a good job, we want to be profitable. I have to remind my people Sometimes I say profitable first because you don't get to do all the fun stuff. If you're not, you still have to have your eye on the ball and stuff like that. Enjoyable means everybody works together well and we take care of each other. Fulfilling means everybody's growing and we're learning and we're improving and then have a balanced life. You get it. See your kids grow up and stuff like that. And then complimentary, you know, improve the lives of others. You're safe and you deliver a good product to people. You help these small owner operators and the people that you're helping.

Speaker 2: 57:39

My wife and I own the business. We don't spend a ton of money, so I don't have a huge ego. It doesn't matter how big we are. At times I've had a little one and you get humbled real quick when you have those things. They're overrated and so I just get to work with good people and we take care of business. I just get to work with good people and we take care of business. So as far as growth, when you quit worrying about it, it tends to happen. Now I looked at your story. Holy cow, you guys grew. I mean, that is growth Like what both you at Molo and Coyote. That's an incredible growth story how fast that happened. I could never do that. We grew kind of fast, but nothing like that. So it's a hold them or bottle ball game if you want to get a business that can take off and grow at that pace. But we just have nice businesses that we enjoy doing, that we try to get really good at, and then they just naturally grow when we do it right.

Speaker 1: 58:35

Yeah. So the thing I was I mean I love the answer and there's so much good stuff in there and I think what I thought the answer was in terms of like, why you guys have done well with the factory and with the insurance is just because it seems like there's a very intentional effort to do good by people and to help people in ways that others maybe won't go so far, and that kind of oozes out of your other answers, and so I'm not surprised with what you actually said relative to what I thought you'd say, at least what I was hearing in what you said before. It's interesting because profitable there's a stigma around it. Right, it's a simple concept. Right, everyone should look at a business and think, oh, they should be profitable, because if you're not profitable you can't be a business for very long, unless you're doing something like just raising obscene amounts of money and burning it and whatever, whatever. But maybe it's because I'm a broker at heart and brokerage always has this negative connotation that people think you're taking too much of a cut or whatever. That, like I never felt, like I should just overtly say profitable is part of our values or who we want to be, and at molo we had. We had, you know, we grew. So there were definitely points where we weren't profitable. We weren't focused on profit in the first few years, but by the time I was fired we were very profitable. I mean, we were doing very well. So it's interesting though, because I think I never talked about profit publicly with my team, which wasn't the focus. I was so focused on service and execution and I would say that that would lead to profit, but it wasn't, which wasn't the focus. I was so focused on service and execution and I would say that they own that would lead to profit, but it wasn't the focus.

Speaker 1: 1:00:23

And as I've thought about doing this again, you know, whenever my time comes to be able to do it again, I kind of want to make profit, like like you talk about it and it's kind of like the forefront and in. I feel like you can do it in a way that's very responsible and you put it out there to your team like profit is a core. I don't know if value is the right word, but it's a core part of who we are Because, like you said, you can't have all the fun stuff without profit. You can't have. Like you know, you're not going to have the nice Christmas party if the business is improbable. You're going to get a piece of Domino's pizza, right. You're gonna get a piece of domino's pizza, like right, right, and and so I don't know. I just as I think about that like, I want to bring that into my own kind of thought process as I think about my next steps in building a business.

Speaker 2: 1:01:08

One day is like putting profit at the forefront but doing in a way that's not like yeah, like you don't have to be crazy rich and have a yacht or nothing, but you got to make a net income or else we just can't hang out anymore. You know, we want to build a nice business, you want to get paid and it's got to be like everybody has to win. You know, as far as profits as well as you got to make money, the employees got to do good, the carriers, if you're brokering the customers everybody's got to win. And with us, it's most of the things I do, or the sayings that I have they're an and it's not an. Or, especially when I talk about raise rates, increase utilization, cut costs and keep it safe.

Speaker 2: 1:01:51

I don't want people to ever say, oh, you put one of those in front of the other because on trucking it's all of those must happen. There's no this is in front of that, et cetera. That's like me saying would you rather have if you had a car you wanted to drive? Would you rather have gas in the tank or have air in the tires? Well, you got to have both, you know. And so with trucking, you absolutely have no choice. You have to be profitable, but you also have to take safety, and there's not a this in front of that at all. It's both and you just it's a must, and these other businesses are kind of like that too.

Speaker 2: 1:02:24

It's just profit is. There's nothing wrong, you know, being profitable you must be there. It doesn't mean you're greedy and you want to be rich, you don't care about people, it's just. This is a math problem. At some level it's a big equation and and you can't do good if you don't make a profit. But profit is also something to be proud of, because it means you got that, because you did a. You know, think of all those freight you delivered for everybody. Somebody benefited from all that work.

Speaker 1: 1:02:47

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Speaker 1: 1:03:42

There's two things I want to hit on. One is related to profit, the other is related to safety. So we'll start with the profit. How do you navigate profit and making profit in the last two years of the cycle that we've lived through? I want you to talk a little bit about it, because I didn't live through it. I've been talking into a microphone while you guys have all been out there struggling in the market and I'm sorry I'm not in the fight with you all. I wish I was, but I'm not. So I'm curious what has that been like the last two years? All I've heard is it's as bad as it's ever been. And how did you navigate it? What kind of strategically did you do to put yourself in a position to not be back in 2004, again 2005,? Looking at bankruptcy stuff?

Speaker 2: 1:04:22

So each of our businesses is different and the answer to that is a little different for each business. One thing is we've always reinvested our profits for you know, for 40 years back into the business. So right now I have zero lines of credit, everything. We still owe money on our trucks and stuff, but we don't have any lines of credit or anything like that. So we're running I don't know like 30 million in receivables with no lines of credit.

Speaker 1: 1:04:45

So that's not even with no line, no line of credit, with the brokerage on on the float. Really, how, how, how well have you been able to manage, Like, how, how do you, how, what do you? What? If you're comfortable sharing I don't know if not, but like I'm just curious about your um, what that looks like to float in terms of, like, when your days to pay and what you're receiving, and yeah, we, we, uh, we've always wanted to pay carrier super fast.

Speaker 2: 1:05:10

We're like 22 days of pays, our normal pay Plus we do a lot of quick pay. Um, we just retain every penny we ever make in profit and over time you have zero lines of credit. You start slow and you just build that way the entire time and in the good years you put everything away and then you're good for these kinds of years. So, as a company we have, we are actually sitting on it. I'm having to pull some money from brokerage right now to put into trucking, because trucking has lost some money. If you put it all together, they kind of support each other a little bit. Um, so, yeah, we have zero lines of credit. It's something, once you've gotten to zero lines of credit, from being maxed out and it takes, you know, 10 years, 20 years of grinding to get there, but then you it's, it's awesome, it's a nice thing and you can take comfort in that. So that's part of being a stability, a stable company or responsible for a lot of people.

Speaker 2: 1:06:02

So when you look at the different companies and how we survive in these tough markets, you've got our agencies. They just go down to where we make less money on them. But really they've got employees. Most of our agent managers a lot of them are small agencies so they just kind of their personal family kind of takes a little bit of a hit. Some of them have offices. We've got one agency with about 50 employees and they've had to get lean and they've let some people go and kept the good people and got rid of the bad people.

Speaker 2: 1:06:30

We have a number of company stores as well and again, you know it used to be you had a bunch of salespeople that weren't performing. You kept them along just trying to make them. Someday that guy's going to hit big and we got rid of a lot of those. We're also carefully monitoring, just like you would manage a brokerage where you manage everybody's gross profit and if they don't hit their numbers you kind of got to get rid of them. You coach them up or coach them out, so you run your brokerage well like that. We've always kind of ran a very lean back office and so there's not a lot of waste there On the trucking side through these tough years. So trucking is kind of like that story the two guys in the wood and the bears coming at him and the one starts tying his tennis shoes and he says you cannot run the bear. And I go, I know, but I cannot run you Right.

Speaker 1: 1:07:18

And so that is.

Speaker 2: 1:07:19

I cannot survive forever at the rates the way they are right now. I am literally being paid less than it costs me to run trucks and I'm losing money every single month. But I can survive at this level way longer than about, I guarantee you, longer than about 30% of the other trucking companies out there. So by the time I go down, everybody else is long gone, and so that's just how you have to feel. You're like okay, we have to tighten our belts, we have to get super efficient, we're still losing money, but I know everybody else is losing more, so we're going to be okay. We just have to get down the road a little bit and then we're going to be okay. We just have to get down the road a little bit and then we're going to be fine. So it is literally just survival of the fittest. Knowing that I can. I mean, there's guys out there. We have these guys. We say that guy would rather be homeless than chromeless, you know, and he's got these trucks that have all the big pipes and everything, probably getting three miles per gallon. Those guys are in trouble, you know. They just bless their hearts. Those are awesome trucks. I love those guys and they're never going to make it. So there's a bunch of those guys the coolest truckers ever are not going to make it. I'm sorry, unless they got a really cool little lane worked out with something where they get paid a bunch of money. So we have to out-survive people in this marketplace. We know that's going to happen. Things have got to turn and I'm looking at it. We're probably quite a bit lower. I'm finally beating like last year. At this point my rate per mile is higher than it was last year. I'm way below where it was at two years prior to that.

Speaker 2: 1:08:55

Another thing that just happened so okay, so real quick on truck trades is during the good years. Every time my trucks got just a little bit old, I would take them in. They would give me a check for 20 grand. I would give them my old truck, they'd give me a new truck and I'd have the same payments I had with brand new tires, no maintenance. It was awesome, and we started turning them faster and faster.

Speaker 2: 1:09:17

Before long I was turning them in with less than 300,000 miles. They were turning around and selling them for quite a bit more. Things turned and I was financing them at 3% too. Things turned and we were financing at six and a half to seven overnight, and if I wanted to do that, I think they were writing me a check for 10 grand. But now if I wanted to give them a truck, I had to pay them 20 grand, and my new truck had a payment of about a thousand dollars a month more. So, luckily, all of our trucks were so new. We just kept them all and quit trading and we put about 150,000 miles on them since we quit trading, but we're still in good shape. As of right now I'm working with Freightliner and they're doing a deal where they're buying my trucks for what I owe on.

Speaker 2: 1:10:04

Still not, I don't make anything, but it's kind of getting back to where it was, and the only real difference now is that interest rates are still too high. So when you look at as we exit this market where nobody can make any money, that was one of the key things that had to happen was for the used market to get to a decent place, and I think that now you've got banks with a lot of trucks running up and down the road right now that haven't gotten a payment on them for a couple months, and banks are going to get to the point here soon where they're like I can sell that truck if I go repo it and break even. So it wasn't that way before. So they were like okay, just make me a payment when you can. I don't want to take the hit, but now they're to the point that they're going to start repoing those trucks. It'll eventually.

Speaker 1: 1:10:50

That's part of kind of a sign that you know you're at the end of this problem is when banks can repossess trucks, because I'm competing with guys that haven't made truck payments in a while yeah, it's so interesting and it's a challenging concept to like accept is that for you to get where you need to go, you need other people to fail, like you need them to go out of business and and for that, and then enough of them going out. That's what brings the rates back up on one side of the equation, I mean you still need the demand, but you know it's yeah it could be that can happen too yeah, yeah, that would be better, but it isn't happening right now have you?

Speaker 1: 1:11:31

have you heard anything from customers in conversations you're having that? Suggest they they see any signs of that on the demand side? Because there's nothing I've heard that suggests that's there yet.

Speaker 2: 1:11:43

Yeah, you know, a couple of months ago the demand looked like it was tipping up. I mean, I'm sure you're watching all the DAT, contract and spot market charts together. We stay glued to that thing and the spot marks have dropped pretty bad for like two months in a row. So I thought we were headed in the right direction. I thought two months ago we were onto something and now it's turned back. I think you know you're about to go into produce season and I you know it can't last forever.

Speaker 2: 1:12:11

Um, something's going to happen. I don't know. It's a weird time out there and we're just digging in and being entrenched and waiting, um, but we're doing a lot of stuff to fight harder, and it's good. My people need to go through this and they're going to come out of this better, and I needed this for my team to go through this. We're talking about things that they never would have got, the messages that we're going through right now, and so I actually, in a lot of ways, I really enjoy this for our trucking team, and so I actually, in a lot of ways, I really enjoy this for our trucking team, and they're going to come out of this way tougher than they went into it.

Speaker 1: 1:12:44

There's such a valuable lesson for those listening about the power of perspective right here and how Greg's thinking about this stuff, because there there's so much opportunity to bitch and moan about how bad beat, to play the victim and to see the negativity and you know the profit going down and different elements of the business and just be frustrated and annoyed and angry or whatever. But I just love that. You've said multiple times now that you're like happy this is happening because of how it will shape your people to be better business people and better leaders and more capable and adept, and I just love that because I think it's you didn't have to say it out loud Like this is a leadership lesson. But it is absolutely a leadership lesson that anything can be positive if you just look at it through the right lens and see the opportunity in it and then put your people in a position to make the most of that. So I appreciate your perspective. Good, thank you.

Speaker 1: 1:13:48

Now to the other piece. I want to talk about safety and and really I guess I'm curious like how far? What can you really? How have you been able to kind of advance? How have you been able to kind of advance safety in your arena in light of the nuclear verdicts that we're starting to see or continuing to see on the trucking side, like there are some concerns, at least from what I've seen, about people really even questioning the viability of trucking if these nuclear verdicts can continue to be what they are. So I'm curious what your take is on that and how do you think about prioritizing and, I guess, developing safety throughout your business?

Speaker 2: 1:14:30

Yeah. So safety is by far the most stressful thing I deal with, and I've gotten to the point of you can tell me a load was stolen, you can tell me a lot of things bad happened and I don't even flinch. But when you tell me there was an accident and somebody might have been hurt, that wrecks my day, that's the worst thing ever and it stresses me out. So a couple things on that. I've had some of the verdicts that are crazy. I was talking to some guys yesterday In 2017, we wrote a check for $2 million and it wasn't me, it was our insurance carrier, but it was over.

Speaker 2: 1:15:14

The weirdest accident was over the weirdest accident. My driver was going down the road and another car came and hit our truck from the side. Okay, it was in the state of Washington and Washington has a. No, they got this rule and I'll probably mess up the terminology here, but basically, if there's an innocent party in that car, then the way it works is everybody that's at least one percent at fault has to pay the damages based upon where you're where with all the pay, and then you can sue each other to make it equitable. Okay, so there was a guy driving that car clearly wrecked into us. There was a pregnant lady in that car and she ends up two years later at the doctor. She's had this child and this child has all sorts of special needs Okay, lots of problems and she's going. What could have happened? The doctor says God, I don't know, were you ever in an accident? She goes you know there was that trucking accident and they get lawyered up and they come after us and we go.

Speaker 2: 1:16:20

I go to Seattle and it's like two years it's so old by the time it gets to where we're actually going to a mediation over this.

Speaker 2: 1:16:28

But they take my lawyer and a team of people for us. We go in this room, we meet everybody and this young lady starts talking about her daughter and the the work that she goes through raising this child and she just you know if there was ever a mother that could have just melted your heart on the way she talked about her child Um, we, we go through this where everybody's met each other, and she talks about her child. We go in the other room and my lawyer, who had a $250,000 reserve on this claim, goes do not ever let her tell that story in front of a courtroom. And so you had a thing where it was not our on liability, we would have had to prove we were not even 1% liable. And then you had causation. They estimated the level of impact was probably comparable to doing some jumping jacks, and so we Wait, that's how minimal the accident was. Oh, yeah, yeah, it was no big deal.

Speaker 1: 1:17:29

Okay, so this wasn't a big wreck. This wasn't like the car was totaled. No, no big deal at all. Good context.

Speaker 2: 1:17:35

Probably like a pregnant lady doing jumping jacks. I know pregnant ladies who've done those, uh, mud races and you know all that stuff. I know people that have done crossfit. You know pregnant clear up. But it should. It is what it is.

Speaker 2: 1:17:50

The insurance people looked at this I was just in the room at this point is their money. But they said you know they. They said we might win on causation but it's going to cost us five hundred thousand dollars in expert witnesses to get there and we have a chance to settle right now for two million bucks and they took it. So that's when you're talking about nuclear verdicts. That's my horror story. And it all worked out because it was so old by the time it went to that point that it was beyond the point. Like my current insurance wasn't looking back that far. So I never got killed when on renewal because of it. So I never really had to pay for it, but I still had to live through it, you know, and I've had other ones where I've had some accidents, but so that's kind of the nuclear verdicts. I've actually been there and gone through some of those.

Speaker 2: 1:18:39

We have good drivers. We fire drivers that have problems. Here's what I end up with, and something that I talk a lot about is, for some stupid reason, trucks have all this technology you can buy. You can buy collision avoidance on the front and you can buy blind spot monitoring on the passenger side. You cannot buy it on the driver's side. It's not an option to get blind spot detection on the driver's side of your truck for some reason, why I have no idea. Now, if you look at the mirrors that are available to the driver, the blind spot on the driver's side are much smaller than the blind spot on the passenger's side, and so you would think logically your drivers are going to do a better job of monitoring that and really maybe there is no blind spot. Somebody would make that argument. So Freightliner in the fourth quarter of this year is going to add that as an option to the trucks, and they I that's one thing I told them is I will never buy another truck, ever. That doesn't have that Cause I do have some horror stories about blindside.

Speaker 2: 1:19:50

You know I've been going down the road and somebody tried to pass me. I've had drivers go to pass somebody and somebody tried to pass them. At the same time my guy was going the speed limit, so the car that went to pass us had to be flying, but that you know, my trucks have a million pieces of data that come off them and say this is your speed limit, this is when they pushed on the brake, this is when they pushed on the throttle, this is when they turned the turn signal. This is what the driver was looking at, the the car's going to pass me, he's flying, don't have anything. So it's like what you know and it's just. It's a terrible situation and the lawyers are so good and if you're in the wrong jurisdiction you're dead before you even get to anybody looking at it. So it's a. It's a crazy racket.

Speaker 2: 1:20:35

So my new trucks are going to have they've got collision avoidance on the front. They've got blind spot detection detection. They're going to have it on both sides. I've got tire pressure monitoring all the way around. Um, the worst thing, man, if you ever see a steer tire blow on a truck and you watch it through the cameras, that'll, that's not fun. Those steer tires are terrifying when they blow, so you to put good tires on there and monitor them. And then we monitor our drivers, um, so if somebody has a heartbreak or a stability warning, um, or speeding alerts. We have people that watch that full time and we respond to it, we coach them up or we get rid of them. So it's it's a nonstop battle and we try very hard. I'd like to be better at it than we are, but we're as good as anybody and it's just something we focus on all the time. So it's it's it's tough, but that's something you better be really good at if you're going to do this.

Speaker 1: 1:21:34

Yeah, I mean it's it's. I can appreciate how the intensity with which you talk about it because it's clear that it's a priority for you and you kind of walk through all the details and all the controllables that you have and how you focus on them could be on the road. You could be in the midst of another nuclear verdict situation and because of the laws that govern states like washington or alabama is one I know, and there are plenty of others where, even if you cause one percent of the damage, if you have the deepest pockets, you might be paying 100 of the damages. And um, I'm just curious if you think there's a path for that, to like for the um legal aspect of all of this to move more in the trucker's favor down the road, or you think this is just something we're gonna have to live with and be insured well enough to support yeah, I don't know, um, there's.

Speaker 2: 1:22:38

You see things going on. I think texas did a new not too long ago where they made it a little bit harder to do nuclear verdicts. They had some really bad ones over the last couple years and Texas is a fairly conservative state. I don't know it's. Things are going to change and you know it is.

Speaker 2: 1:22:55

If there was anything that terrified me, it would be that you buy insurances, you buy safety things and you're still terrified. That is the most stressful thing in this business by far and I don't know. We're doing the best we can and I hope we can survive because it can take a lot of good people it takes to build these companies and if you drive through Las Vegas or anything, every other sign is on. Hey, if you've been in a trucking accident, let me represent you. There's so much money. I think that there was some reforms in medical liability stuff and all those lawyers moved to trucking and it's a really tough, tough place to be right now. So if there is reform, that'd be great. Um, who knows it's, it's overdue, it'd be nice if there were some kind of limitations on that. At the same time, you know it's, you know we need to be safe. It caused you to be safe, but it's also going to take some good truckers out of business too.

Speaker 1: 1:23:56

Well, um, I appreciate everything you've shared with us today. I think this has been incredibly insightful, and I'm going to end this with just one last question and I'd like to get some advice, especially from someone like yourself. What advice would you give to kind of the budding entrepreneurs, people who want to start their own trucking companies, people who want to start their own brokerages for how they can best position themselves to win in this industry?

Speaker 2: 1:24:28

You know you just want to get good at the fundamentals. Get all the training you can get, go in, enjoy it, because it's fascinating. Like I said, I'm going to be half my life in this, in 419 and 26. And it seems like that, like that's how much there is to learn and that's how much enjoyment you can have, just constantly. You're never going to run out of growth opportunities here, so you can dive in. I mean, you got to be good at sales, you got to be good at safety, you got to be good at accounting and hopefully you got a team. But in the beginning you're probably going to be doing it all yourself. And so identify your weaknesses If you want to grow fast, partner with people if you need to. If you want to, there's people out there if you're really good at one part of it, so get some leadership training, um, and read a lot of books. We do a lot of stuff, um, my team's gone through a bunch of training with Jocko Willink and some of his musters and some of the extreme leadership stuff. Love that guy.

Speaker 2: 1:25:31

And, uh, I think you just got to dig in and realize it's a long-term game. Be conservative, it's. It's a wonderful industry if you just like, if you like pain and you like suffering and you like it's not easy, you know, if you want easy, don't do this. But if you want a crazy ride that's rewarding and and has opportunity, you know, then then great, dig in and enjoy it, but don't, don't think it's going to be easy. And then when you do have good years, you better bank all that you know, because there's bad ones coming. So I think it's I don't know that I have that much advice. It's just too much, but just get after it. That much advice.

Speaker 1: 1:26:08

That was like 10 pieces of great advice, so I don't know about that much. That was a lot, so I appreciate you.

Speaker 2: 1:26:14

Oh, good, good.

Speaker 1: 1:26:24

I, oh, good, good. I appreciate you letting me share. Thank you, and with that, that's all we got from Greg and Giltner Great company. If you're looking for a great asset carrier, hit them up or some brokerage or factoring or insurance. He's got you. So with that, we'll see you next week. Thanks everyone, thank you, you.