Ep. #81: Chris Ceausu, CEO, White Arrow

Freight is a physical business, but the decisions that make or break a carrier feel more digital every month. I sit down with Chris Ceausu, CEO of White Arrow, to unpack what it really takes to run a complex transportation network across intermodal reefer containers, cross-dock facilities, volume LTL consolidation, and a supporting freight brokerage. If you’ve ever wondered why two carriers can run “the same lane” and get totally different results, this conversation makes it painfully clear: cost allocation, process design, and execution are the whole game.

We get into the hard stuff operators don’t love to say out loud: how margin compression forces brutal pricing choices, why asset utilization can matter more than almost any overhead cut, and why trying to “predict the market” often feels like trusting a Ouija board. Chris shares how he evaluates signals like the CASS Freight Index and utilization data, why he’s working to reduce exposure to the most cyclical truckload segments, and how a network with multiple touchpoints creates both service advantages and operational risk.

Then we get into AI in logistics, not as a buzzword, but as a tool that can ingest real operational data, summarize call drivers, and speed up building internal workflows. Chris explains his “own the core, plug in the rest” tech strategy, why security is a serious concern when you connect AI to sensitive systems, and why execution is the only thing that ultimately matters. If you lead in trucking, brokerage, supply chain, or transportation procurement, you’ll leave with practical ideas on tech, pricing, and building teams that can adapt fast.

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Thanks to our sponsors:

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Transcript

Sponsor Message On AR Automation

SPEAKER_00 0:00

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Meet Chris And Set The Frame

SPEAKER_01 1:33

I'm looking forward to this because I think you got like a brokerage background. I was exposed to brokerage in the 90s. And I kind of went out and built. Yeah, that was my yeah. So I'll go into my background, but I was exposed to brokerage and then started just building the asset side. So it's I'm looking forward to this from that perspective because you have a totally different view. And I you know I watched a podcast, and you have it's like I love it and I hate it, right? But it's cool because I learned and hopefully vice versa. That's what I'm that's what I'm looking forward to.

SPEAKER_00 2:09

It yeah, I think you're my it's at least third, maybe fourth trucking executive I've had. And I do really look forward to these conversations because even if I ask you the same questions that that that I asked uh Harman from Chima um or um Giltner, like at any of the like there's there's so many ways to skin the cat, right? And the way you do business is very different than the way Giltner does and Chima does, and anybody else. And the same thing's true of brokerage, even though you know sometimes it feels like we're all the same on the brokerage side. Um everybody's kind of got their own spin on why they do what they do. And so it's interesting to hear the story. That's why we're here, right? I agree.

SPEAKER_01 2:54

So with that, it's a it's an interesting industry. Everybody kind of bulks everything up into one, but I would argue it's very fragmented, very unique to each organization.

SPEAKER_00 3:05

Yeah, well, I think that's the way our brains are wired, is to simplify things as much as possible so that we can better understand them. I remember I didn't learn much in college, but I do remember in one class they were talking about how like we when when you see someone for the first time, your brain automatically makes like hundreds of assumptions about them that you don't even realize you're making. And it's just the way that our brains like consume the world. Like there's just there's too much to take in. So our brain, I guess, fills it in for us with assumptions about people. And and I think that's like it would be too hard to think about brokerage and trucking if we actually thought every trucking company and every broker were uniquely different and offered a very unique set of services. It'd be too hard to like comprehend what everybody does versus saying, you know, the brokers are the middlemen who do XYZ and the carriers are the they've got the trucks and they charge XYZ on these prices, you know. But but it is true, and especially your business, Chris, is is as far as I know, and we're gonna learn more, it's it's a little more complex than the typical over-the-road trucking company. Unfortunately, yes. Did you say fortunately or unfortunately?

SPEAKER_01 4:26

Unfortunately, unfortunately. No, I I would agree. That's that's probably our biggest hurdle. That's you know what I have to admit, that's managing that complexity is very difficult. And that's that's that's what we struggle over with every day. It's crazy. Somehow I don't know how I rationalize it, I don't know why or how. But no, I sure we'll go with that. No, you know what it does. I have fun doing it, probably not that much fun in the last four years, but uh I enjoy the pain, I suppose, from an asset side. And that's the difference. But back to your thing about uh kind of the way we see people. I I would argue, I would not argue, but I would say, yeah, it's it's context, right? We come in with our own filters, and that's that's honestly what what I like uh when I watch your podcast, is like because you you know you dive into the the filter side of the of hey, you know, I have my views because of the way I came up in the world, and you have yours because of the way you came up in the world, and and that's the beauty, because if everyone just agrees with everyone, you just have you know boring monotony, everything's the same. So that's that's the fun part. That's that's what I enjoy. And it's and you know what, it's educational, right?

SPEAKER_00 5:45

Yeah, anyways. Okay. I'm glad that we started this conversation the way we did because I the reason that I initially reached out to you is because I follow you, I think, on Twitter. And oh, I'm sorry. That's yeah, right. I I'm not good at Twitter. I mean, I've I've I've made a fool of myself a few times on Twitter, but I follow you on Twitter and you're an opinionated individual. You've got and and not in a bad way. And you've got perspective, you've got thoughts that you're happy to share with the world. And I remember reading them and thinking this should be a fun guy to just sit and talk to. And given that I have this pseudo job where I sit and talk to people, I feel like I should do it with him uh about his his life, his business. And, you know, I typically start the show by I typically start the show the same way every time. I say, welcome back to another episode of the Freight Pod. I'm joined today by a special guest. And, you know, it's funny, you mentioned before we started recording, you mentioned you just started messing around with Claude, and I did the same. My brother did the same. I got a vo I got a phone call from an agent that Claude created, I guess, that just and this wasn't the best executed phone call because I didn't answer the first time. It called five straight times, and even after I answered one of them, it called me back and tried to do the same thing. But in the in the the point of this was the agent that my brother had created on Claude had digested a bunch of episodes of the Frey Pod and was just calling to give me feedback on it. So I answered the phone, and this robot starts just like, hey Andrew, just want to give you some feedback on your podcast. For one, stop using filler words. Uh, I counted that six out of every thousand words you use is an um, and that's not good. And frankly, if I'm being honest, I thought six out of a thousand is a good number. Uh yeah, I think didn't think it was that much. But the other thing it said was uh you introduced every episode by saying we've got a special guest. And if you say every guest is special, then none of them are special. And I thought that was funny because I knew that that was happening. I've but I just what other way am I going to introduce someone? You know, that everyone's special. But I say all of that, that long-winded nonsense, to say that I do think this will be a somewhat different kind of conversation, a little bit more back and forth, where I just want to get to know you and like your perspectives on the industry. And so I do think this episode will be a little special. And to start, I didn't introduce the episode the way I normally do. So um I am joined by Chris, whose last name I won't even attempt to guess. Like how how do we say your last name? Chaoshu. Chowsu. Chooshu. Yeah, it's don't worry. My kids can't even say it, so you're fine. I could I could see that. So where are you from, Chris? Romania. Romania. Okay, wonderful. And you are the CEO of White Arrow. Yep. All right. So let's start with an easy one. You're I know your business. What? What do you got? No, your point. One thing, you said Clawed.

SPEAKER_01 9:02

I'm I'm messing around with open claw. The what you that other crap, it's a whole ah, yep, okay. I botched that. But it's fine. Sorry. Let's get on to the thing. I wanted to you gotta moderate, but no.

Learning AI Tools And Data Feeds

SPEAKER_00 9:16

Um I appreciate you correcting. We could start there. What what are you doing at Open Claw? Uh let's not.

SPEAKER_01 9:23

This is not a tech kid thing. Let's talk about trucks. Uh yeah, it's actually wild. Um I'm I'm doing so since Sunday, I've been learning a lot. I will leave it at that from a technical perspective, which is really cool. Because like we have developers and all this stuff, but I'm always not, you know, I'm second, whatever, I don't know much, whatever. I just understand system architecture and stuff like that. And I just started messing around with this thing, and I'm like, it it's wild. Like today, just look at my feed. I I pulled data from our system, I set up an API, pulled in data from our call uh dial pad, which is like uh whatever, and aggregated and was able to get different feeds from it, like hey, what's going on with like the top things in in the in the things, how many calls, what's the biggest issues? It's it's pretty crazy. Just aggregating data for my daily briefing, right? That's the basic stuff. But I think going on to other stuff and building apps is kind of wild, just vibe coding, but it's a it's a wild copy. I have I don't golf, I I play around with this stuff. My wife's like, Why are you doing this all night? I'm like, babe, I just pretend I'm golfing.

SPEAKER_00 10:35

Yeah, I I think she's thinking about it incorrectly if she's questioning that, because I I appreciate that you have the fortitude and wherewithal to do that. Because for me, and this was a question I was gonna ask, are you it does does technology come easy to you?

SPEAKER_01 10:58

You know, I mean, I grew up in the 90s, right? I remember my dad, you know, I I had to argue with my dad and beg him to buy me a computer, right? Go to Costco, buy a computer, and I really had fun with it back in those days, you know, in a DOS prompt type environment. So I was kind of exposed to that, but I like it, and that's probably again, it's kind of my background and you know, built business around that kind of stuff. So is it you know what? It's like not really, but I think what I would argue is I I think in life I was always I've learned to teach myself stuff. So from that perspective, I would say, yeah, you know, I can kind of it's kind of fun learning stuff. And that's that's actually what I've been doing the last three days. But it's like you know, I'm just going 25, I'm up till God knows what time. It's it's super dumb.

SPEAKER_00 11:47

It's dumb. No, I don't I I don't think it's dumb. I think it's one of the smartest, most effective uses of your time. And and my perspective on this is for one, I'm someone who technology does not come easy to. You know, I I I I'm the furthest thing from from uh a techie, whatever, however you want to say it. And that's it, it creates a little bit of fear for me long term, because it feels like this is clearly the direction society is going in with respect to every industry that this is this is the focus. And I guess what I think is interesting is I'm curious if you feel like it's your responsibility. You know, you're the CEO of your company, and your company will be impacted by the advancement of AI. And the question is just like, will you be one of the companies that's like at the forefront and and you know, leveraging it to be the best possible trucking company you can be, or will you be a laggard who's behind because you don't trust it or you don't want to change like that's past trusting it?

SPEAKER_01 12:59

You don't have a choice, right? Yeah, we're still past trusting it. It's like Google. Google knows everything about me, right? Um I think you know it's funny because I'm fortunate enough to be in a in a CEO peer group, and over the last seven years or maybe even eight years, I've learned a lot from these guys. Some of the guys are really tech background guys. Orange County, people don't realize there's a lot of tech here. Uh one of the guys was one, you know, one of the original guys that uh built WebEx, right? And that ran that thing. He and he and I've learned so much from him. But again, what I would say, like so you talk about, you know, I think a year, two years ago we're talking about AI, I was like, what the hell is that? But what I would say is look, we're gonna move very quickly over the next couple of years and month months, weeks, weeks, months, and years from a technical technology perspective, but we're in the early stage. So to say is you know, are we gonna be leader? It's like uh you know, it's completely like there was a hundred Facebooks before there was one. It's complete who knows where the hell things are how things are gonna land. It's a complete wild card. So who knows? It's like maybe you are, maybe you just don't realize. Like, you know what I mean? It's too, and that's the problem with technology. And you look, that's what America kind of it's like the wild, we're still the wild west. You look at America versus Europe. Europe is like everything is like in a box, say they'll don't try autopilot until it's like, you know, whatever on the Teslas or whatever in America, it's like okay, you just put your autopilot driving to a wall. So we are the Wild West, and that's the spirit, which is beautiful and amazing, but it's also super unwhatever. You know, you don't know what's gonna land, but it's great because it advances things.

SPEAKER_00 14:45

Yeah, it's a great point because yeah, that spirit breeds innovation. I mean, it it it creates such an it's it's it's such a massive sandbox that we're all playing in that you could try whatever you want. And I guess that's what I think is really interesting because today I'm not in a position where I'm making decisions around technology that make or break my business. You know, I'm not writing six-figure, seven-figure checks to software companies or AI companies to give me the new voice bot or to automate XYZ. But you are in that seat, and you make a great point that it's like what looks great today might look archaic in six months. And so I'm curious from your perspective, for there are plenty of I think CEOs and decision makers who listen to the show that are sitting in your seat who run trucking companies. There are plenty who run brokers, and there are plenty of shippers trying to decide who among these providers they should they work with. How do you think about making a decision around a technology partner in this environment when you do think that things could change on a dime? That you know, you might be committing to a contract or a service with a provider that six months or a year from now, that service might be like five times better by someone else. Like, how do you think about evaluating in that environment?

SPEAKER_01 16:14

Um so we used to use an off-the-shelf TMS up until uh in one form or another, we had to reiterate and reiterate, and then basically we're like just threw it away and built our own stuff. We take the approach of build your own just because, and that's not again, a trucking company should be an a broker should be able to go out and pick up an off-the-shelf application and then just morph it to their business and it works. Unfortunately, for I think our thing is unique because of our business flows and whatever. We build the core and then like we started a brokerage, I don't know, a year and a half. No, sorry, 2021, 2022. And we took our core, we took our core system. Yeah, we took our core system, built a dispatch board, and then we're not gonna build a carrier workflow. We just went out and used parade, right? Just integrate parade because I I don't want spend, I don't want our guys to sit there and spend it, but it's a it's built as a plug-and-play. So I can use parade tomorrow, I can use whatever the hell tomorrow from that carrier procurement side. So it's all own the core and then plug and play everything else. When you're building stuff integrating, you always want to make sure that it can be unplugged from your whatever, right? So hey, use green screens today, use somebody else tomorrow, use DAT, use this, you that. It don't matter. That's that's kind of the way I look at it. It's like own the core. That said, it's very expensive, or at least it was very expensive. I think that's changing very quickly. But that's because of our unique business. A trucker tends to do stuff as a trucker, as a trucker. And yes, there's unique things within that, but 90% of the stuff is gonna fit in the box. For us, I would probably say 40% fit into an off-the-shelf TMS system. If that, it was probably 20%. So we were forced to build. I didn't want to, I I think it's dumb to be in tech.

SPEAKER_00 18:06

So before I dig in on that comment, I uh will you give a 30,000-foot view of what White Arrow does? Like what just high level about your business, you know, tractors, trailers, employees, and like what's unique about how you move freight.

SPEAKER_01 18:25

Yeah, so I would say three different divisions. Asset truckload. So we have facilities. So let's start with the top line. Asset truckloader uh refrigerator primarily, uh, less than truckload and consolidation. That kind of falls onto the other thing. So think large retail consolidation, and then the freight brokerage. We started uh the uh freight brokerage small a few years ago. That's no fun. That side of it. Now let's talk about the the asset side. Um, you know, terminals on the West Coast, LA Stockton, Portland, Chicago, Skaukas, New Jersey, Springfield, Massachusetts, and those are all cross-stock facilities with our own employees on on site and all that stuff. So we can we run a cross country. We've got local trucks, our own, and then we outsource to kind of drain. We run a container fleet, right? That we uh own re own refers and some dry vans and some trailers that about 650 units that run cross-country on the rail, and then we basically make the deliveries. We contract with the shipper door to door. A lot of brokers use us in that volume LTL world. That's a segment of our business. But again, a consolidation for major retailers. We run some of that stuff nationwide, but we stick to the core lanes that we run.

Volume LTL Costs And Complexity

SPEAKER_00 19:41

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SPEAKER_01 21:14

I don't know. These days everybody's doing it. It'd probably argue that's the case in the 90s. I don't think so anymore. Because you've got truckload guys that's picking stuff up in the route, or you've got other guys that's kind of like sticking to their that's doing things, especially but it's a very it's niche from a margin perspective because people don't understand their costs. And that's what we're seeing in that space. Um which is great. You that's like you know, it's great service and low cost with the other peer with some of our peers. I don't think they're making any money, so we stick to our hard margins, right? 'Cause we know our cost, and that's you know, we have a hard line. Sorry.

SPEAKER_00 21:56

Is is that the hardest part of managing that type of business? Really truly understanding your costs and end. Yeah, that's the problem with our business as a whole.

SPEAKER_01 22:07

Because, right? Hey, we should just stick it in one lane, simple, easy peasy, to train our people and to do all that stuff. But we don't because we we have all this broad services and think temperature control, drive freight, truckload, less than truckload, even in the common carrier. We play in the common carrier space on an LA to Jersey, LA to Chicago, vice versa. We're we'll go head to head with the common carriers. So it's so broad, so that makes it very difficult to have a shipment level cost, and then to be able to give that to a customer, whether it's in a contractual manner, right? So if you're doing for, I don't know, XYZ, whatever company, or you know, a broker that goes to our website and pulls a spot rate in real time. Because you got to have your cost, then you got to have define a definition of the market and provide that to someone that goes on our you know another website or pulls an API or whatever, has an SMC3 you know tariff in place with us to get that. It's very difficult. And then to manage those those margins, very difficult, versus a truckload world. It's easy. My cost per mile is X. I'm gonna charge X. I got a head hall and a backhaul, and then you just start to kind of pull in the pieces.

SPEAKER_00 23:22

Yeah, because it seems like with your business, there are so many touch points for a specific order that it's hard to necessarily attribute the cost evenly. If you, you know, your your Springfield facility might have touched something on the truck, your your you know, I don't know, NorCal facility might have touched something and and something went on the rail. It's like there's there's just different touch points there that are creating their own cost items for you.

SPEAKER_01 23:51

And that's the problem. Allocate that cost to hey, what's my cost, like on the street? What's my rail cost? And you get into the rail cost, what's my crossdown cost in Chicago, right? Because we own all those things. We're not outsort, like we're doing every piece. It's probably not the most efficient from a cost perspective thing, but you want to probably go to my background, to control the cross down in Chicago, to cross it faster, to pick up the shipment, to prioritize the guaranteed service versus the economy service. It gets really it's too much at times.

SPEAKER_00 24:25

But how do you how do you manage that in terms of like defining? Sorry that it's so broad, but like I let me give you some context to to understand how the answers. How do you like manage the overarching strategy? You know, as you sat down with your team and thought, we want to grow in 2026, we need to make more money and we want to grow our business. How do you look at the whole thing and say, these are where we should focus?

SPEAKER_01 24:55

Uh we stick to our lane, right? And it's our think of, you know, again, the lanes that we service, we do really well, and we stay away from we're not in, we don't go to the southeast, right? We stick to the lanes that we do, so we have density because that's how we're able to uh increase profitability, right? Density in that world, right? More freight going to San Diego on a truck versus one pallet out of LA. That's that. The the then we have these service levels, guaranteed premium in the economy. And we have to have that to compete with the with the with the things. So you have the service levels, but from a growth perspective, we're focusing right now, we're focusing the spot market side and all that is gonna do what it's gonna do, right? It has high highs, right? It's almost like truck truckload world. You have years when you just you do really well, and you have years when you do really bad. And we've had four years of doing really bad. And I've been doing this for a long time. It's very difficult. I know now in the brokerage world, the guys see it, we see it on the asset. Although we're asset light, you know, it it's still it's no fun. Let's say I haven't have a good time.

SPEAKER_00 26:10

Yeah, um I mean that that's the last you joined when did you join the business around 2000?

SPEAKER_01 26:18

Um my father and I had a partnership until about 97, 98. And then we kind of I mean, we had like 15 trucks at that time, and we kind of you know, I was still managing his trucks because I was like I was a kid, you know, working out of my basement or whatever the equivalency of it. And um we we split up there so but I've always ran the business, and then I had to manage, you know. And in 2000, we incorporated him just completely. Well, I've always ran my father's my father had like a few trucks, he retired like in 2018. He was driving across country until 2018. He he retired because he's like, Oh my god, this ELD stuff is coming and I can't do this. Boy, was he wrong? But I mean, I think it was like you know, in the same late 70s.

SPEAKER_00 27:05

Yeah, it was time. Yeah. But do you you know it's been 26 or something years that you've been running White Arrow. It's been a long time. Yeah, so you said the last four years. Have they definitively been the worst?

SPEAKER_01 27:24

Yeah, but in a way it's because maybe I just understand the business more, right? We went through 08-09, right? Yeah, we weren't as big, uh, but still ignorance was probably it served me well around there. Um 2015 was really hard times. I that probably one of the worst times I had to lay people off. That was really bad on our side, difficult because the market was going down, and a huge component of our cost is rail, and the railroads were increasing prices, that didn't go well for us. Um that was probably my most difficult thing because I had to lay people off. From the so from a difficulty people perspective, I would say 2015, and we were it was not a pleasant time. Um, but from a financial pure like losing shit tons of money the last four years have been pretty horrific. But we came off of a wonderful time where we had we printed cash, so we had a lot of money to burn, and we still do to a point. I feel I I think we're in a good financial position, but it's uh like mentally, it's like you can't fathom these numbers. I I don't I don't even comprehend. I can't even tell my wife she would like fucking beat me. Keep that between us and the audience.

Pricing Strategy In A Downcycle

SPEAKER_00 28:41

Yeah, just less than a few people. Um so how do you manage through such a challenging, turbulent time? You know, like when you think about the last couple years, when you're deciding, do we cut costs, do we hold the line? We've got this kind of stash of cash from the early COVID years that were really, you know, fruitful.

SPEAKER_01 29:05

But I'm just curious, like, how what how do you think about those big decisions in times like these so we we did some cap, so we were cash, we were basically uh let me reflect we were debt-free around 2022, the beginning of 2022, and we went out and then a substantial capex went out and buy equipment, uh, containers and tractors, and just went pretty nuts with the intent knowing that it l your cost of goods in our industry is so high that I could cut all my staff and it's like a rounding number, right? It's it's it's really is it's all it's all cost of managing the cost of goods, right? And one decimal of a percentage is you know million bucks a quarter or whatever, right? Significant. So it it's the capex and re right, servicing the debt. That's the biggest thing. Um the top line piece is difficult, and the problem with this cycle is that we had margin compressions, and the simplest form I can explain that is hey, you're billing two dollars and fifty cents a mile, all of a sudden you gotta bill$1.75. You gotta that's the biggest thing. Again, uh, you know, two cents of that is is your whole staff, you know, right? It don't matter, like it's not relevant. Um it's all about, and this is why I'm involved on the pricing reports directly to me, and that's probably my biggest headache. It's all about, I'll give you an example. In 2020, I thought the market was gonna flip, and we held hard on our contractual pricing going into it. Yeah, exactly. Big mistake. Buying business, our top line just burned, right? Because we're servicing that debt, especially since we did a CapEx, right? It's okay. It was it's no fun, but it was okay. Uh so um then going into 2025, we've got a guy that's running sales now and his CRO, is a little bit smarter than me. Um he went out and he he forced me to decrease pricing to increase volume, which is the right thing to do because you got to move those assets, right? It's asset utilization is the most thing, important thing. So that's the biggest factors that has it that makes a dent. This year I'm doing exactly what we did in 2024, and uh we'll see how it plays out. So far, it's been really good, right? We had a lot of, you know, so you've got this period, you know, last two months of the year, and then kind of like January where you have a lot of annual RFPs, and we went hard on our pricing, and a lot of people fired us, a lot of people cut our volume, and some of those people came back within like the 15 days after you know their January one when shipper came back and basically gave us the freight and says made some some excuse. Probably uh that's the problem. So, how do you manage margins? I think that's the biggest bang for my time, right? Versus making sure that a customer service rep is more productive and puts five loads versus three loads a day or a minute, whatever.

SPEAKER_00 32:23

So interesting. I mean, because I didn't say anything, but you mentioned pricing reports directly to you, and you just mentioned the best use of your time is basically on pricing. I just haven't heard that before. Makes sense, but I haven't heard that before from a trucking CEO that like they've spends their focus is so much there. Um how do you think about the strategy around that then? Because I think what you were suggesting when you said I did the same thing in 24, you were either talking about spending a bunch of cash or you were talking about holding your rates. Increasing and holding pricing. Okay, so that's what I'm talking about. You were talking about the latter. That's fine. But we were talking about two things. So so you know when you came into like as we get towards the end of last year and these RFPs are coming out and you're going through it with your team, how do you come to the decision that we should hold slash increase rates? Like because there's there's not a magic eight ball. And everybody thinks they have the answer. And I think there's one of the things I've found interesting about some of your Twitter posts about is around this kind of notion of predicting the future on pricing and stuff like that. I feel like I've seen something before.

SPEAKER_01 33:34

I call it a Ouija board.

SPEAKER_00 33:36

Just get a Ouija board.

Reading Signals And Managing Risk

SPEAKER_01 33:38

Uh yeah, I don't know. I've done everything wrong, some I'm the wrong guy to ask. You know, I at the end of the day, it's gut. Like I screwed up bad in 24. I not only held pricing, but I increased pricing, which was completely the wrong thing to do. Right? We moderated and came down in 2025 because you know, or some of our people forced me to, which was the right call in hindsight. Uh this year, I don't know. I'm helding to my uh it's a gut call. But look, from a long-term strategic thing, the only thing we're doing is we're minimizing our exposure to truckload, which is very cyclical, and this volume LTL segment because that that goes hand in hand with truckload. So it has high highs. When things are good, it's amazing. And my dead grandmother can run a you know 500 fleet trucks trucking company and you know make cash. And uh, you know, and when it's bad, it's bad. So it's preparing wintering, you know, preparing for the bad times. Honestly, I went out in 2024 and acquired, you know, bought a significant CapEx, and um I I I did the numbers. I'm like, oh, the cycle's gonna be a year and a half, whatever, we're gonna service this debt, no problem. I don't have to go, you know, pull cash from other places to throw it in the furnace, as I call it, uh, to run the business. And that was a big ass mistake, right? Um there isn't really, because you don't know. I mean, no one knows, right? Where's the market gonna go? And it's like it's like sentiment. Do you know where the stock market's gonna go? Nobody knows. It's all sentiment. Um fortunately or unfortunately, we've got a lot of capacity in the market right now, right? And I think that's going away. I think it's gonna overcorrect, which is not good for anyone. Like too much capacity is getting pushed out. Then you look at the Cas freight index, those our freight volumes are at 2,009 levels, man. Right? It's crazy when you if you measure it by Cas index.

SPEAKER_00 35:33

Why don't people talk about that more? I feel like that is the what do they call it, the canary in the coal mine that tells you what's really gonna happen. Like when freight volumes are that low, uh everyone's preaching this recovery that's happening this year. Everyone says 2026, we've been saying that triple last year. I know, and I don't believe it. But it just doesn't make sense to me that all of a sudden there's all this freight. You know, I get if tariffs like really created a push, but it feels like even that would be temporary because it's just about getting the inventory in. So I don't know. I mean, because I've seen I think I've seen you talk about maybe used truck sales or things like that, but like what other data points are you looking at to try to come up with your gut feeling of things are improving or things are staying the same or they're getting worse?

SPEAKER_01 36:24

I think it's different signals. CAS freight index is probably one of them, but look, I think we all got blinded by this massive amount of capacity that came in our industry in the last what three, four years. Um I don't think it's one signal. Uh FDR puts out a lot of data. I look at that. FDR's got a good uh truck utilization one. That's a really good one. But again, it's just everyone's got a Ouija board. I don't know. You trust who whose Ouija board are you gonna trust? It's just sentiment, it's gut at the end of the day. You just measure the market. That's why honestly I like Twitter because you you I uh you you get a lot of sentiment from it.

SPEAKER_00 37:04

I mean, is there something you can do to kind of offset that need to make a bet? You know, because like is is there's what can you do to leverage or put yourself in a position where you're not so reliant on the Ouija board, you know, as as the minimize exposure to truckload.

SPEAKER_01 37:24

That's what we're doing. So over the years, we're growing our true less than truckload business. We run a consolidation for a large retail comp customer nationwide, uh, the um both dry and refrigerated. So that's that piece, right, is not you don't have too many guys you're competing with in that space, and your costs are very low because we have lots of density in that. Um and continue to kind of grow that common carrier. It's easy to go up against a common carrier and and win on efficiencies, right? But it's difficult to go up against an over-the-road guy. Like we've been losing, like it's wacky. We have customers that tell us run this freight in brokerage from California to New Jersey, run it on brokerage. I don't want it on your assets while we have a container stacked that are stocked in facility, and we run it on the brokerage, and we you make a higher margin on our brokerage than running it on our assets, but then you know, somebody's got to pay the bills on those, you know, you got to service that debt. Um that's the biggest thing is right, minimize the exposure to truckload. Truckload. Because it's man, when it's good, it's good. When it's bad, it's bad. But again, now you have to remember that we're in a different, I gotta shut off all my notifications. Uh so we're we're in a different segment. We we play in this long haul east-west. You know, this would be the dumbest advice to some guy that's running from North Carolina to Atlanta or something or to Florida, right? Completely different markets, but the space or dedicated, you know, you're going from a regional distribution center to a store for a shipper, totally different markets. Like you're gonna look at me like I'm an idiot. But when you're playing in this non-regulated, non-specialized market, it's just kind of the, you know, you're up, you know, you're we're competing with, you know, whoever.

Avoiding Volatility With Contract Freight

SPEAKER_00 39:23

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SPEAKER_01 41:36

No, so look, we don't have exposure to that kind of business, right? We're not in the produce market. We're not in the produce. We're not we don't ship produce, although shippers, produce guys have been coming to us lately just because of some of our intermodal peers have been parking their assets on purpose. Um we fo that's why we focus on contractual business and guys that are shipping whatever, right? Something constant, and you try to have a different dialogue. And then the way you manage that is hey, you know, I'll move that for whatever 400 bucks a year round, knowing that the exposure is up, you know, there. It's really just staying away from that. But yeah, maybe that's is that kind of answer your question?

SPEAKER_00 42:25

Yeah, it does. I mean, it does. I I I mean, there's some there's there's even even if you're not in produce, there's still some volatility, but I was just curious. I mean, it your answer makes sense that you just generally are you're not looking to be in the most volatile parts of the market, is the answer, I guess. Is is you know, that's not you're not trying to win on the volatility. But you're affected by it. You're you're certainly affected by it. You can't run the lanes and not be affected by it.

SPEAKER_01 42:50

Um that customer comes to us and says, run it on your brokerage because it's cheaper and faster.

SPEAKER_00 42:55

Like, what I mean that's where there's value in having the brokerage, right? Because your your name and the core of your business gets a phone call, right? Because you're an asset-based carrier that has a facility in California and New Jersey and you do some of this stuff with the intermodal partners, it makes sense that someone would think, huh, we have produce to ship. Why don't we call these white arrow guys? They have trucks, they move to California, they move to Jersey, they could probably do both. And that's where it's valuable to be able to say, hey, you know, that does while that doesn't align with our core business, we have a brokerage that can support this for you. And even if on the brokerage you're the same as the 40,000 other people doing the same thing, but still it's it's because people know who you are that you probably get that opportunity.

SPEAKER_01 43:38

Yeah, it gets a little bit easier. I agree. Uh I would add one extra caveat to that. Uh yeah, I was talking to a friend of mine maybe six months ago, and he was telling me, I used to drive a truck, but I stopped driving a truck when O.J. Simpson was getting chased. No, my last trip uh when I was driving a truck was OJ Simpson was getting chased around LA. I was in Tennessee going eastbound. To New York driving produce. So what is that, 30 some years ago? When I was driving, right? The produce rates back then. So my friend goes, hey, I'm paying these guys 8,400 bucks or something on a produce load from California to New York. This was like six months ago. I'm like, I was listening to him. I'm like, okay. I'm like, dude, do you realize that that was the rate that I was getting 30 years ago? Your truck is, you know, my truck was$92,000 back then, and that was like a top-of-the-line Kenworth. Now that truck's like$200,000. Um, the trailer was$4,200,$42,000, excuse me. That trailer's like$80,000 now. And the fuel was 92 cents in Oklahoma City, right? The you the costs have more than doubled versus the rates have not. So it's very difficult. Look, our segment, again, specifically our segment, we and we operate in one of the some of the worst climate, is is not pleasant. So the only thing we do is when you said, hey, we truly don't have very many truckload customers that ship from LA to New Jersey. We just stay completely away from it. We're gonna run less than truckload, we're gonna run other deals. Like you got to be able to put those assets in places where you can get last couple of years, we've been moving stuff in just Chicago to the northeast and stuff like that, or southeast or whatever, truckload business just to truckload intermodal business, I should say.

SPEAKER_00 45:23

Yeah. I mean, has it been easy to repurpose the assets and get away from truckload and into doing more of the LTL consolidation, things like that?

SPEAKER_01 45:32

Um yes, because it just comes natural to us, right? Our consolidation business just works really well, and we have systems in place to make it work really well. But the tr like this volume LTL that might, you know, a lot of brokers use this on from LA to New York, LA to Chicago, take LA to Chicago or vice versa, to Northern California or the Pacific Northwest. There's a lot of players in those markets that don't know their costs, and they're gonna do it for a lower price and probably provide a better service unless they fail, right? Failure rate might, you know, we're gonna be more consistent, but we're we call more money. So why would you not ship? So that segment has been pretty beat up. I can't argue with someone that ships on somebody else. That makes sense.

SPEAKER_00 46:20

Where do you think the most opportunity exists today in freight? That's a very bloated question. I know. I've got my own idea of an answer. I I wanted to start broad on purpose. I'm gonna narrow if I don't like your answer.

SPEAKER_01 46:41

The most opportunity, I think that's unique to the operator. You know, you can argue, you know, Martin's gonna do dedicated and they're gonna be that's their deal, right? And they go sell a dedicated operation. Um for us, it's going head to head with a common carrier because we have naturally lower cost in a in our core lanes, or just building out these like consolidations, one specific one for targets, right? Like legit. So we have so much density in that that just our cost is so low that we can do that, but that's just unique. So, like you know, you you get you know, five guys in a room, five truckers in a room, it's gonna be five different answers. It's unique to everyone's operation.

SPEAKER_00 47:28

So, specific to your operation, what about reefer LTL?

SPEAKER_01 47:35

Uh, our target consolidation is temp control, if that's what she's doing. Is it really? Oh, yeah. Um, yeah, both on the food side and on the dry side, protect from freeze. We do a lot of confectionery.

SPEAKER_00 47:46

Then to to zoom out for a second and just focus on the theme I wanted to get to, which was Reef for LTL. How do you view the Reef for LTL landscape in the industry in general? Is it one that's well serviced? Is it one that's well there's a there's plenty of capacity on, or is it a golden opportunity for whoever maybe is the best operator to figure out how to kind of scale a refer LTL solution?

SPEAKER_01 48:12

You know, refer my view on Refer LTL is given for our network, is probably it has to be very selective of the customer base. And what I mean by that is naturally these you're going into these grocery out stores, right? And if your cost structure, we run W-2 drivers, right? We operate in California, New Jersey, Massachusetts, like they're least regulated. Oregon to do business. Illinois is the least regulated state that we operate in, okay? All right, so you start there, and then that's getting really crazy. So when you're paying a W-2 driver by the hour to go sit at Kroger or some, what's that mud something in Mayer, Mayer, right? Meyer to go sit there eight hours to deliver one pallet of reefer LTL, you gotta be a freaking moron. Um, but if you have a structure that you're paying something to make that final mile on some guy that's gonna go sit there and just eat it on some owner operator or some not owner operator, an outside carrier that's going to Mayer with 20 other shipments or something, that makes sense. But we're not structured that way because we need the visibility to that final mile. Remember, we run everything into end our own assets. Or we do we don't call it brokerage on the regional side, but if you ship something from LA to Meyer, what was it? May May Meyer, whatever, Meyer, right? That final mile from Chicago to Michigan, I think they have a DC or something, I can't remember, may run on a white arrow truck or it may run on an outside carrier. We don't call that brokerage, but it is brokerage. It's Trey, exactly. But that driver is gonna have like either run our app on it so we have visibility to the location. So we're not gonna find some guy that's I don't know, Bob's trucking that's delivering all the time into that company. We're just not gonna put it on there, even though it might be a lower cost, because we need that visibility that in and out time so we can provide it to the customer, which is good and bad, I suppose.

SPEAKER_00 50:07

Yeah, because it it's me, I mean, I I I I refer LTL has always fascinated me, but never in a way where I thought I saw a good solution for it, because you need the scale and the density to really be able to make it work. And you also have to deal with the competing that you have to deal with the challenge of some products you can't put together, right? You know, you have different temperatures and and different issues that could could arise. And there's just like there's there's insurance issues and and concerns around like, you know, you were at a mire and there were the the guy was sitting with his doors open for four hours and someone else's product got messed up. Who's at fault for that? Um, so like I get why it's a really challenging problem to try to tackle, but as I think about the people in companies who I've met, it's like yours is as close, your business is as close to one that's almost set up in a way where it could scale to support Reef for LTL.

SPEAKER_01 51:11

Because of it, you selective with your customer base. Again, I can't send a W-2 driver and sit there because I would get I wouldn't have a job, right? Um the problem is, and this is this is why I think that space is always gonna be fragmented. To do it at scale, like look, to go run a 50 truck operation and do that and to manage it like you know on a shipment level, great. But to do that at scale is virtually impossible. And we try, good or bad, we have a systematic approach to things, right? We don't everything is a systematic, structured thing. So to create a process around multi-temp and to actually execute that in a day in and day out with you know all different warehouses and different people and different things, you know, it's psychotic, very difficult. And one guy forgets to scan a pallet while it's going outbound or something, it's nuts. You have no idea, right? We have a lot of guardrails in place. Like this is why we built out like we we owned the whole infrastructure. It's a freaking nightmare, though. Because you don't want something to go the wrong temperature, you don't want something to go to you know, you know, consolidation in Chicago gets put on whatever you put a pallet that's going to the LA on uh PNW truck and going to Portland or something.

SPEAKER_00 52:27

That's a really expensive mistake.

SPEAKER_01 52:31

We used to do that a lot. And we put a lot of guardrails in place where you how do you control a warehouse guy that's loading stuff at 2 a.m. on our cross stock in Chicago to make sure that that one pallet, the dude's gotta scan it. And if he's not scanning it, that thing's not gonna bill out the trailer on the rail. It's gonna stop you from billing because there's one pallet of a freaking port one freight on the LA truck or vice versa. So it's stuff like that that you gotta be like psychotic about. So I would say very difficult to manage at scale, would be my answer. Yeah, great opportunity. I think it's amazing to succeed in that. You got I don't think I don't think it's scalable unless you have we're trying. And trust me, we do it, but we're sticking to that confectionary space. Uh, because it's more forgiving.

SPEAKER_00 53:22

Yeah.

SPEAKER_01 53:22

Right. But we are we're going into the you know, we're going into there more and more. But it's select your customer base and just be disciplined. But it's difficult. And just last summer, somebody put in so we specifically, particularly on the spot side, we don't allow any freight under 40 degrees, specifically for that reason, because anything below 40 is is a problem. And we had some guys put some freight through our spot stuff. We didn't know it. That was I think it was meat or something, and it ended up from North Cal to, I can't remember where it's going, Jersey, I think. They said, Oh yeah, you can run there at 40, it was supposed to be 35, and then we're you know, we're buying the damn thing.

SPEAKER_00 54:09

Very difficult to manage. That's right. I feel like frozen would be easier because it just gotta stay frozen. So we were like messing with the in-between numbers.

SPEAKER_01 54:19

I agree. You know what's crazy about frozen? We were running some data because we've got so we have these reefer containers which we run these slim line units on. So we're doing some analysis on fuel consumption between frozen and like believe it or not, perishable 55 degrees. I'm sorry, not perishable, but protect from freeze around 55, 65 degrees. And and that 3235. And what we're finding is the fuel consumption at at frozen is better than it is at 35 degrees. It's wild. I'm like, how is that even possible? I um I don't know. That's what the data was telling us. It was crazy. Interesting. It's weird, weird, but we do run stop and start. So maybe I don't know. It's weird, but yes, I would agree with you. But that freight goes tends to go more into grocery outlets, which we're not really equipped for because of the W-2 situation. So then you gotta call it Dre, you call it whatever you want to call it. Those guys are running a white or trailer or container to that delivery, to that final mile to the guy in Michigan, but you still gotta compensate that driver for sitting there eight hours to deliver one pallet.

SPEAKER_00 55:31

Yeah, I'm trying I'm trying to think if there's a different route where you do it, where you focus on you want to create a drop and hook scenario, but to do that, you would need to have enough density to not drop one pallet when you show up to the mire in Michigan. You would need to have a truckload of pallets.

SPEAKER_01 55:51

And then we have a structure in place.

SPEAKER_00 55:55

But you gotta have the density. Yeah, that's actually you need the density because you can't show up with one pallet to do the drop and hook. I mean, that that doesn't work.

SPEAKER_01 56:04

We have processes in place to not deliver that one pallet and hold it for to increase the volume to go into that receiver. But at what point do you pull the trigger? You're gonna have some service level agreement with your customer. So then if that density, if they're not delivering on volume, which whatever, then you're your SOL, you still got to deliver it, right? So, in theory, in an RFP process, you can examine that historical data from a shipper or a customer, and you can say, yes, in theory, it makes sense or whatever, but then maybe you don't get the full award or something happens, and it it's that's why you got to obsess over your PL.

SPEAKER_00 56:39

This is where the AI should help. The I say the AI, but this is where AI should help. Because I think the biggest the biggest inhibition of creating a solution that actually works here is a lack of shippers working together. And what I mean by that is like if you could create a larger pool of freight to put the puzzle pieces together with, I think you could develop the density, right? And it so what I mean by that is like if you're thinking about Meyer, but you could also parlay that with all of their vendors that manage their own freight into Meijer. So you're not just getting the stuff Meyer manages, you're also getting the stuff that others manage going to Meyer, and you put all that on one in one sandbox to play with. I think you've got an opportunity. You could take it even further if you could mess, if you could mix Meyer and Kroger and Target and all one together.

Why Shipper Procurement Breaks Networks

SPEAKER_01 57:42

Let me let me go ahead. Yeah, sorry. Yes, in theory, that's a really good idea. In reality, I'll give you an example. We had a shipper or customer that had a bunch of freight out of Alabama, right? We're trying to do this consolidation thing, and they give us the historical data, and we say, great, here's the price. We take all the lanes to all the DCs. It was a target deal. We take all the lanes. Some analysts thought it was a really good idea to split up that that volume out of the origin. We're like, you can take it back. We don't need it. We can't handle it because I priced it as I need to run a truckload into Alabama or whatever, I'm not Michigan, I'm Mississippi or Alabama or something, origin, to be able to truck that up to Chicago to our DC to then spread it into the DC, you know, to the network. You can't give me half the volume. It's all or nothing. And I go back to the decision making of a lot of shippers has been handed to an analyst, which is good in a way, but it's also bad in a way. You know, you go back 20 years ago, you had some dude that was making the decisions, it was like great, and you had to have that conversation with him. But now it's some analyst, you know, analyzing some data set on freaking some BI tool that's like this makes sense this way, which is completely nuts.

SPEAKER_00 59:03

Well, I think that's where the how matters. It's it's like it's a good or it's bad that they're at they give it to an analyst. It just depends how do they analyze it? Because if they go, if they analyze it on a what's best for this specific lane by itself as its own independent situation, then yes, you know, giving it to carrier X might make sense. But if you think of the hundreds, if not thousands, of iterations, and some of these potential outcomes are based on pooling it all together, and that might lower the overall cost per lane by three cents if you pool it. If they're analyzing it like that, then it can make sense. But the point that you're making is that's not how it's done, more times than not. It's that's sales dialogue, right?

SPEAKER_01 59:51

And reaching the year of the decision maker to say give it all or nothing is nuts. Right? We just had a customer come to us, I think it was a couple weeks ago, a week or two ago, significant award, and because I'm actually our sales leader, uh he's very adamant about dialogue with the customers and all this stuff. They went through the whole spiel or whatever, da-da-da. And then they tender us like it was like four million dollars worth of business. We don't do that. Like, we don't do this. Like, what are you doing? We're intermodal. You got the wrong guy. Thank you, but so after you're having dialogue, no one's listening. You're you could talk to it's I have 20 other examples like that.

SPEAKER_00 1:00:47

Okay, let's take a quick time out and give a shout out to one of our sponsors, 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, which 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 Icaza, 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 Rappido are a great place to start. To learn more, check them out at gorapido.com. That's gorapido.com. Now, let's get back to the show. Yes, I agree. And and that is a a point of contention that the conversation you have in the in the in the sales effort is very different than the contract you receive on the routing guide. Um and I get it because they're having the same conversation with 20 or 30 other folks, and um it's three or four or six or twelve weeks later that they actually commit the prices and the lanes to the carriers, so they probably don't even remember what they told you. Exactly. Um, but it is uh I think there's a significant flaw in how shippers procure transportation because you're just rarely getting the best of everyone's abilities. Like it's rare that you're getting a like so it's rare that White Arrow is getting tendered all the lanes that are the best fit for them and also the best fit for the shipper. It's usually one-sided, and it's not even I don't even know that you would argue, I would argue it's it's the best fit. I think a lot of times it's the lowest paper cost or the most benchmarking tool and told them to do that.

SPEAKER_01 1:03:19

And that's the crazy part. It's really look, I don't think the the right way is the and I you know 20 years ago, some dude just making a decision based on the way, you know, I like you or I don't like you, right? I don't think that's the right way. But like, how do you bring all this the data analytics? I love data. I yeah, I live and die in data, and that's that's but holy shit, you have to be able to like our people in pricing, and we have a lot of processes and stuff, and what I find is like you you need the experience because you can have all the data analytical skills that you want if you don't understand the business to say, I can take that Alabama freight and run it as a truckload because your historical data shows that you're shipping on average 20 pallets at a time and run it into our DC and Chicago and then you know split it from there. Like, that's a operational awareness that a data analyst uh tends never to have. And how do you design a process around that so a data analyst can do so it's funny, yeah. Um one of the things I am like hands-on when it comes to LTL, uh we have tools and processes in place for pricing truckload, but the LTL kind of it's back on my plate, and I'm directly handling a lot of the data stuff. I'm trying to design a process and I'm gonna try to do it with some form of you know, applying I don't know, I have some ideas. Yes, bringing the data analytical skills and then the business knowledge and aggregating that I'm not a AI is not magic, it's just a tool, but how do you apply those two things together? I'd argue you could probably do it.

SPEAKER_00 1:05:07

Yeah. I yeah I agree, it's not magic. I do feel like one of the things AI is good at is connecting dots. And like if you can put the right data in front of it, it can connect dots a lot better than you and I can staring at an RFP spreadsheet for XYZ shipper. Like to me, that's where I think there actually is an opportunity for AI to meaningfully improve the industry is is the way that shippers and carriers and brokers all look at RFPs and do it. I don't I don't know the answer yet, but I do know that this kind of siloed each person looks at it and gives their perspective, and then someone makes a decision looking at it with each carrier's numbers next to it. Like that does not tell the numbers tell a story, they don't tell a full enough story for. For effective solutions. And you know, maybe this is why brokers exist, is because that specific thing can't be solved super easily is creating that by that thing, I mean like creating an efficient freight network, um, whether it's for one shipper or aggregating shippers, whoever it is.

SPEAKER_01 1:06:21

I have one word for you execution. I was reading, I think it was a Wall Street article or something. The large shipper uh or excuse me, companies are adapting AI, but what they're doing is they're going out and hiring these uh Deloits or these consulting companies to do it. That the consulting company, hey, I want AI implemented in my uh organization, and you go hire Deloitte, you're paying them, you know, they're incentivized to rack up your hourly billing or whatever, right? Um, their incentive is to bill as much as they can, because you know, you can argue whatever, one thing or another. Execution is the key. Like, then this is why I think the technology piece has to be owned by the individual businesses. And look, even though I'm fortunate enough to have a dev team, very good, whatever, but what are they gonna get pissed if they're watching this? They're very good. But um and I probably have a lot more resources than than than a lot of the people because I uh I have to. It's a core competence for us just because of the business complexity. It's very difficult to execute from the crap I'm thinking in my head to the actual reality or you know, the operational flows of how do you make sure that you have a notification when a reefer container in gates into the rail ramp and it's got the fuel levels are too low, and there should be a notification, and they should stop the you know, the freaking the they should be calling the railroad to not not move that unit or something, right? How do you build that complexity into an operational workflow and times that by 1000? Good luck. And then you've got to pay some consultant or some dev, you know, tech team or whatever execution. So maybe AI, I don't know. Open claw is my answer. So look, I've been uh it's actually kind of uh since Sunday I'm learning to code. I tilted up three APIs already. I don't know shit about coding, and they work.

SPEAKER_00 1:08:21

I mean, I I think that's you know, I read there was that guy, Matt Schumer, and I don't even know if his name deserves to be said on a show like this, but like he I think that was his name. I could be wrong, but he had this post on Twitter that he wrote an article that went super viral. I think when I read it, 80 million people had already read it. And it was kind of like this doomsday AI is taking 50% of jobs and all this. You know, that was his joke. And bear in mind, he's an AI CEO, so like he's a little take his opinion with a grain of salt. But I say all that to say one of the things he suggested was like, yeah, you know, this tough AI, it's coming at a rate that you know is it's advancing at a rate that we have not seen before, and and it will only continue to advance. But you should not worry because it's still so early. If you just spend an hour a day messing around with AI tools, within a year, you'll be further along than 99% of the world. And so I think there's there's something to be said about even with zero coding experience like you and I have, just getting into the tools, messing around with them, learning about them, even as hard as it may be for someone like me to learn this stuff, it's worth our time because it's it's it's going to be embedded in the day-to-day of our life, and it's better to understand it and and know how to apply it than it is to be scared of it and sitting on the sideline. Oh, yeah. You're dead. You're dead, completely unaware of it.

SPEAKER_01 1:09:48

That said, I don't think there's a it's like the internet in the early 90s. You don't know, you know, in 2025, you're gonna have some app on your phone, whatever. No one in their wildest dreams imagined that that mobile would be a thing, right? In the 90s. Um, it's the same thing. The only thing is, and this comes from smart the guys in my peer group that run actual SaaS companies. This is not gonna be a 30-year thing. This is gonna be a five-year thing. In five years, the world is changing in a major way, probably sooner. Look, last three days of my life, literally, I've been up since like last night I went to bed at 2 a.m. I went and got the stupid Mac Mini and installed this open claw and the I don't know, just it's all hypey and shit on the oops, this I don't know if I can cuss, sorry, on the internet. It's complete whatever. But looking at it, the crap I was able to do in the last couple of days is wild. Like my wife's like, Why are you what are you doing? Why are you up? Why are you not sleeping? I have been like it's insane. I I'm baffled by it. And in a way, I'm kind of like subscribing, you know, drinking the Kool-Aid right now. But and I'm at a point where I'm taking, look, I'm building ingestion points, right? But remember, we have a tech stack, so I know the architecture, I know all this stuff, so I'm building, hey, take, you know, a simple example, right? Ingest your um, you know, VoIP data, right? Your phone, right? Your cloud-based phone system data, and plug it into some data storage warehouse, and then have AI analyze and aggregate that. I've been ingesting all these points, and this morning, literally, I I I did that and actually I put a tweet out. It's wild the shit I was getting. I'm like, this is nuts. But that's an ingestion. So these things are really good for analyzing data. But like, okay, great, cool, wonderful. All right, it's a cool Google search, you know, Google search of 2026, right? It's Google of 2026. How do you build apps around that? So I'm like, okay, and I'm toying around right now, and this is the our tech guys have been asking him questions because there's you know, but again, security. This open claw thing is a nightmare. For the do not I uh do not install it if you don't comprehend in what you're doing. Do not mess with it, make sure that things locked down, it's nuts.

SPEAKER_00 1:12:19

You just mean in your business and in giving it sensitive information. You're not saying you're just specific to that.

SPEAKER_01 1:12:26

Yeah, it already has your specific information. The security things, I'm not even gonna get into it. It's it's like you're playing with the loaded. I think uh Eloh must put out a thing, you know, you're giving a monkey a machine gun.

SPEAKER_02 1:12:35

That's what you're doing.

SPEAKER_01 1:12:37

That's probably the best description of it, right? I would argue you're giving uh you know 20 marquees, you know, AK-47's fully loaded. Um but you know, you're able to like more or less. So one point I'm doing right now is I have all these ingestion points. I'm basically we use uh chat, uh, I'm sorry, we use uh Google chat for like an internal support team. You build a bot with the internal knowledge base and you basically support for internal, like you know, IT support and stuff like that. I don't know, I'm playing around with it. It's it's pretty wild. I don't it's pretty nuts. Because you build, right? We as the business owners build the um what's the right term for technical specs and operational specs for an application? Well shit, you feed these things that and the damn thing builds it. You go from oh, I'm thinking about this to execution in you know three hours and deployment two hours later. It's wild.

SPEAKER_00 1:13:38

Yeah. But it's like you know based on your tweet from today, it's largely been a an effective data aggregator and an analyst for you. It's a data analyst. It's it's it's you know, you're pumping your stuff into it and it's spitting back out. Here are the numbers you got for your call activity today, and billing disputes, documentation gaps, that's what you've used it for thus far.

SPEAKER_01 1:14:05

Uh uh. Yeah, to a point. But I'm ingesting data. Uh uh, I think it's building apps is gonna be pretty interesting. You're already looking, I don't remember what I put. I've moved on.

SPEAKER_00 1:14:20

Yeah, that's fair. So I guess when you you know, we you just said it you know, from I think one of your why not you didn't say YPO, but whatever your CEO peer group that you're in, one of the guys said, This is a five-year thing where the world's gonna meaningfully change. Let's assume that is true. As a CEO of a company that is like so rooted in in like the physical economy of like physical movement of goods, equipment, mil hundreds of millions of dollars of equipment costs. How do you think about a five-year horizon for for like your strategy, your focus, knowing that you have this idea in your head that five years from now the world looks very different? Like, how do you strategically approach that kind of uncertainty? That's a good question.

Redesigning Work Around Process Mindset

SPEAKER_01 1:15:14

Probably the best question that's worth just coming on for this question. Um good luck. No, look. I would say, how do we simplify our people's work? How do we get our people not to press numbers on a keyboard or to stare at a screen and actually get them to actually move things forward rather than just sitting there and doing repetitive tasks that are mindless? Right? Data entry as an example is the worst damn thing. Like, how do you streamline that? How do you get your people instead of doing data entry, even EDI and all these other tools? How do you simplify those processes and let them, I don't care, watch YouTube for half the day and have double the production, right? How do you get them to and it's it's a it's a people mindset, and that's what I struggle with with I don't struggle with our people, that's what I try to do, teach them like please move things forward, but that requires a different type of an employee set, different employee class of employees. So that's how I look at it, right? You're simplifying. I think these tools are gonna simplify our lives. It's gonna make I hate dispatching trucks. How do you simplify? Like you look at one of our dispatchers calling guys, texting guys, hey, you got your work, you got your stuff for tomorrow, you know what you're doing, da da da da da, and then following up on them. It's all repetitive monkey repetitive stuff that does not need to be done. 80% of the work for everybody. How do you get them to focus on decreasing costs, making things more efficient, moving things forward? I think that's the key, but it requires a different set of mindset. Dispatchers, for the longest time we'd hire dispatchers like experienced truck dispatchers. Those guys, none of them would last more than three months with us because they're like, oh my God, I can't do stuff the way I want to do stuff. Because to us, it's like everything is a process at our organization, right? We're just it's a process. You're moving loads on a board or you're doing whatever. It's all very like process oriented. So we have to hire people from outside the industry that are like, okay, this is what we do, I guess. But it's also a double-edged sword because these people like, you know, they don't go elsewhere because they they're like, oh my God, this is crazy. I don't want to go dispatch trucks in this manner. This is nuts. So they end up like just sticking, you know. So it's a different mindset of employee. Does that answer your question?

SPEAKER_00 1:17:50

Or maybe you dive in. Yeah, I mean, it it it answers part of it. It answers part of it. I mean, you're you're you're acknowledging that. I think maybe you said it, maybe you didn't, but essentially what you're saying is some of the roles in your business, I don't think will they exist in a few years to be done by the people doing them today. And you're essentially saying that means that it's your responsibility to elevate these individuals and like elevate their skill set or find others that can like move the ball more, you know, like make a bigger impact outside of kind of the check-ins and the moving of the mouse from one side to the other type deal. Um, so like I think that's important. And and this is one of the things that I thought was a really interesting take about this whole the world's changing in five years is it is way easier for the human mind to look at what currently exists and see how that will negatively impact it by change than it is to look at what does not yet exist and see how that will positively grow and be created by change. So, what I mean by that is it's way easier to look at your business and say, if we if AI advances over the next five years at the rate we think, these dispatch roles will not be needed to be done the way they're done today. That's like looking at that, you know, this job won't be like it'll be done by AI. It's harder to say once AI is capable of doing all these things, what can we build next? Like what can we create? What can white arrow do next? Because it that that takes a lot more creativity. Um, so that's the hard part of the question that that I don't have an answer to, and and I didn't hear it in yours because it's hard, is like we don't know what the technology necessarily looks like yet. We know we have a general idea, but we don't know exactly how it's gonna play out. Therefore, we don't know what the next opportunity will be for White Arrow or for my next freight brokerage, whatever it may be. You know, you get what I'm saying?

SPEAKER_01 1:20:11

Yes. And that's where it's our job and our our we have to teach our people to move things forward. I think that that's the key. Right? How do you get out of that repetitive task stuff? And that's very difficult because people, and myself included, like I I have my routine, and when you step out of your routine, you're like, oh my god, this is nuts.

SPEAKER_00 1:20:35

Yeah.

SPEAKER_01 1:20:37

It's it's gonna be interesting, but it's coming. Oh, what I would add to that is great. It's kind of like the RFP thing that you were saying earlier. This sounds really cool. Good luck. I want to see implementation. I don't think we're gonna implement. And maybe I'm gonna pound my chest and say we're the best, but uh we're not, right? Um it's nice to have an idea. It's a totally different thing to execute on that idea, and that's very difficult. Who's gonna execute? You know, I think we're gonna get in the way as humans. Like on paper, this stuff sounds really cool. In reality, I don't think it's gonna happen. Execution, how do you do that? How do you take our industry that's so fragmented, right? Not you know, you put five guys in a room, they're do five different things. Well, I don't care if they're doing the LA local business, right? I don't know what the right answer is.

SPEAKER_00 1:21:40

Yeah, getting everybody to march to the beat of the same drum is really hard. And and especially when you're talking about like the companies that have the most to gain from some of these kind of efficiency measures are the largest ones because they have the most data, they have the most freight. You know, if you were talking about some kind of consolidation process or um shippers working together, anything like that. Um, you know, basically to create scale across the freight networks by bringing more providers or shippers, whatever, together. The the biggest challenge is typically going to be all the red tape and bureaucracy that you just run into at these big companies. Like it might seem like a great idea on paper, but then when you want to execute it, and now you've got to ask XYZ Fortune 100 retailer to to agree and actually move the ball forward. It's like, how many issues are you gonna run into before you can even get through the contract? Right. Like that's I think that's one of the reasons why our industry is is so resilient, is the fragmentation from from the onset, it just creates opportunity for people because the the industry is almost forever inhibited by fragmentation. Like the you can only become so efficient as an industry when you're as fragmented as as the industry is. Maybe I'm wrong, but I think that's that's just generally because it's absolutely right.

SPEAKER_01 1:23:10

And even you know, you look at the technology side, you know. I think it was uh one of the CEOs of one of these SaaS companies in our uh TMS system said it, you know, these TMS systems are an exception management systems. Uh it all depends on how much exceptions you stick into them. So it's it's all exception management. It's all exception management. And the then you gotta manage them the chaos. So you know, I don't know. It's gonna be interesting. I think it's fun. We're living, I think we're living in amazing days. I think it's gonna be a lot of fun, but it's also gonna be I don't know. It's gonna be interesting.

SPEAKER_00 1:23:48

Yeah, I mean, I think the the last thing I would add to that too is the exception is the rule. So, like, yeah, it's it there there are exception management systems, but like the exception, it's not like we're talking about exception management where the exceptions are happening one percent of the time. The the exceptions happen uh uh robustly and and in a way that like if if you don't deal with them effectively, that's why you don't exist in business anymore. Like that's it's such a crucial part of this business. It's all people care about. You know, you're only as good as your last load.

SPEAKER_01 1:24:22

Yeah, it's true. Exactly. Yeah, you get this so many times you get fired for one mistake. Doesn't matter if you do it. You can wipe your butt with it. Yeah, wipe it, yeah. Yeah, okay. I don't know. It's tough, it's gonna be interesting. It's look, it's definitely interesting. I think it's a tool. I think look, it's gonna do a lot of things, whether it's we're gonna see a lot of changes. Some people are gonna be more ready than others, and sometimes, you know what? Doing it picking up the phone and doing it manually probably is the most efficient way in a lot in some cases.

SPEAKER_00 1:24:58

I don't know. Yeah, put that on your next investor deck for uh some AI business. Doing it manually is the best way. People that'll get you a fat series A.

SPEAKER_01 1:25:13

I don't know. Some of these guys, I mean in the tech side of our industry, it's so it's it's I'm not, you know what, I'm gonna be quiet. Careful. Careful getting me started. Yeah. Now, at the end of the day, look, we're just, you know, we move freight, man. Let's just be realistic. We all are in this thing to just get the freight, the most cost-effective manner from point A to point B. And how we do that, it's very, you know, everyone's gonna do it their own way. With AI. Moving forward.

unknown 1:25:42

Yeah.

Closing Thoughts And Next Time

SPEAKER_01 1:25:44

We have some robots to run across the country with a paladin freight. It's coming. Oh, yeah. I can't wait. Yeah, you see, yeah. Okay. This is becoming an AI show. Let's move on. Yeah, we're done.

SPEAKER_00 1:25:55

No, we're done. We're an hour, we're an hour 20 in to AI. Whatever we see. I don't know if we accomplished what we set out to do today. I don't remember what we talked about much. I'm gonna find out when I run through it again. I think you did great. Um, but I do think uh we gotta call it here, and uh I'll probably have you come back sometime and we could talk about things that aren't AI related. Oh well.

SPEAKER_01 1:26:19

Yeah, let's do that. No, it's it's you know, it's definitely gonna be interesting. I don't know. It's yeah, it's fun.

SPEAKER_00 1:26:29

I think you'll make a great panel guest. I think I should have you come on on a panel with three or four other folks and we can start debate and stuff. I feel like you'd have a lot of kind of hot takes and opinions. Opinions.

SPEAKER_01 1:26:41

I was hoping to discuss assets versus brokerage. That was that was the main thing. I was hoping to learn how to build a great brokerage from you.

SPEAKER_00 1:26:51

You can call me later and I'll I can give you some perspective there.

SPEAKER_01 1:26:54

But that's tell you on trucking.

SPEAKER_00 1:26:57

This is uh part of my problem is I don't like set a full like conversational schedule. So, you know, I like to just talk about whatever we talk about. And and I enjoyed the conversation, even though we didn't do a whole broker versus asset thing.

SPEAKER_01 1:27:10

Yeah, that's that was my main that's I think that's what we're I think that's what we should have been saying. That's what I was in as far, not this whole AI PS. Well, this is what you got.

SPEAKER_00 1:27:20

An AI show. To our listeners, next time we will talk broker vs. AI, broker vs. Broker vs AI, the next uh UFC match. Um all right, we stop sounding like an idiot. We to everyone who's listening, still if you are thank you.