The Freight Pod
The Freight Pod is a deep dive into the journeys of the transportation and logistics industry’s brightest minds and innovators. The show is hosted by Andrew Silver, former founder and CEO of MoLo Solutions, one of the fastest-growing freight brokerages in the industry. His guests will be CEOs, founders, executives, and leaders from some of the most successful freight brokerages, trucking companies, manufacturers, and technology companies that support this great industry. Andrew will interview his guests with a focus on their life and how they got to where they are today, unlocking the key ingredients that helped them develop into the leaders they are now. He will also bring to light the fascinating stories that helped mold and shape his experiences.
The Freight Pod
Ep. #87: Jett McCandless announces LSP44, the AI agent and infrastructure company built for logistics service providers
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The freight market changes fast, but a lot of broker operations still look the same: endless check calls, status emails, manual appointment scheduling, missing PODs, and a nonstop flood of “where’s my order” messages. We sat down live with Jett McCandless, founder and CEO of Project44, to make a major announcement and dig into the why behind it: LSP44 is launching as a dedicated business built specifically for logistics service providers, including 3PLs, freight brokers, and freight forwarders.
We talk through the history that led here, from Project44’s early LSP roots to the hard lessons of selling into shippers with entrenched EDI teams and slow enterprise change management. Jett shares what changed when capital stopped being “free,” how prioritization decisions damaged LSP relationships, and how product reliability helped drive a dramatic NPS turnaround. The big takeaway: LSPs buy and use technology differently because their product is the service, and they need infrastructure that plugs into their operating system and scales without adding overhead.
Then we get tactical on logistics AI. Where do AI agents belong in the workflow, and where are they just an expensive band-aid? Jett breaks down the API-first approach, the gaps agents should fill, and the orchestration layer that constantly tests vendors, routes tasks to the best performer, and delivers outcomes without forcing customers to manage a fragmented tech stack. We also dig into trust, data rights, and why “cool demos” are getting replaced by brutal ROI questions across the industry.
If you care about freight visibility, AI automation, TMS strategy, and what the next decade looks like for domestic brokers versus global forwarders, this one goes deep. Subscribe, share with a broker operator who’s tired of vendor sprawl, and leave a review with the one freight task you’d automate first.
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Sponsors And Opening
SPEAKER_00Hold up. Wait a minute. Let's give a quick shout out to our sponsor. CloneOps.ai. Logistics moves fast. There are calls to make, updates to send, documents to track. Your customers are always waiting. Cloneops.ai helps teams stay ahead with a platform that can be white labeled and a marketplace of AI agents built for real logistics operations. Inside the Clone Ops Marketplace, you'll find agents for tracking, documents, after hour support, finance workflow, fraud prevention, and more. These agents plug into your workflows and existing systems to handle the repetitive tasks, whether it's making calls, sending emails, replying to texts, gathering info, or writing updates. Your team stays in control with real-time visibility into every interaction. And because the AI is always turned on, operations keeps moving even when your team can't. A standout is carrier screening plus voice ID, which ties a voice to a DOT number and alerts your team when that same voice appears across different or multiple DOT numbers, helping catch fraudsters before they cause damage. No one else has this. And for companies building a long-term AI strategy, CloneOps.ai gives you the ability to white label, build, own, and control every AI use case across your business. And this team is run by David Bell, founder and leader who I've known for years, a good friend of mine, and someone who, frankly, anything he touches in this industry turns to gold. I trust him with what he's building here. If you're ready for automation that supports your people, visit clone ops.ai. Now let's get back to the show.
Live With Jeb McCandless
SPEAKER_00Which brings me to what we're actually going to talk about. We are, I guess, recording the podcast, right? So um I'm here today with Jeb McCandless, uh founder and CEO of P44 for the second time, round two. Thank you. Thanks for having me on.
SPEAKER_01New location this time.
SPEAKER_00New location. We're live from the P-44. Is this the Experience Center? Is that what it's called?
SPEAKER_01Yeah, or we could just call it like your new podcast studio.
SPEAKER_00I listen, there's there's a very real possibility that this becomes my new podcast studio because this place is sweet. And uh this is the second, this is the first, I guess, episode that will come out of me recording live in person, but it's the second one I recorded a week after we released this. I'll come out with the Tom Madonna episode that I recorded a few weeks ago. And it's so much more fun just like sitting face to face with someone and talking about whatever, whether you're talking about it doesn't matter, the nonsense we were talking about five minutes ago or what we actually came here to talk about. Um so what we did come here to talk about is uh I guess you could call it a pivot or a a uh a new path forward for your business. Um and I'll allow you to kind of make that announcement here.
SPEAKER_01Yeah, great. Well, you know, you mentioned you have Tom, Tom, and dying on. I'm certainly glad that uh mine's gonna be released before his because the the man is an absolute legend. Some people actually don't know this, and it actually ties really well into the story. Worldwide
P44 Origin And First Customers
SPEAKER_01Express was the first customer of Project 44. Really? Yeah. Okay, perfect. And prior to us having a product or anything like that, went to Tom, went to Mike Grayson. I said, hey, I've got this idea. We should build this one-to-many API platform. And that way you don't have to make all these bespoke connections to your carriers. And you know, like Tom and those guys, like one of the things that they are just the best at is selling. And tech has, I think, probably always been a little bit secondary to them, but without a doubt, the best in the industry at selling. And he says, okay, I'm like kind of interested in it. And he's the type of guy that kind of, if he sees um someone, I guess it was young talent then, he's like, hey, I'll I'll make a bet. So they wrote, I was so excited. He wrote me a check for like a hundred thousand dollars.
SPEAKER_00As an investor.
SPEAKER_01No, no, as first customer. Customer, okay. First customer, because he's not a guy that like writes checks with strings of check or anything like that. He just like generally wants success and he's like a really, really great guy. So he writes a check for $100,000 and says, hey, let me use this product once it's actually built. And that was our first check. Second check was from Blue Grays, and the third check was from DSV.
SPEAKER_00Those are some good companies to get in the bed with early.
SPEAKER_01Yeah, awesome. I mean, they were all really, really amazing. Bobby Harris is amazing. And then the guy's name was Soren at DSV. He retired now, but amazing, amazing group. But that that takes us back to where we are now. The original part of the company was to be data as a service. And when I worked at Global Trans and I worked at Yellow, what I noticed at all these places is that this lack of connective tissue between us, which is a 3PL and the Keras, was just awful. And you basically back then could hard code it every $500,000 of revenue. You needed to have another FTE on the operation side doing the dispatch, doing the tracking, finding out where things were at. And if you could get people that were really talented, there'd end up being like some platinum desk or something, and like maybe they'd handle a little bit larger book, they'd get a $5,000 a year base bump. And then also maybe they'd have fewer accounts such as you give this platinum-like service. Because, you know, these three PLs were essentially mechanical turks. And if Sally left or Bob, one of these talented people, you could actually see degradation of the account might be be at risk. Well, I thought that was also silly. And then when you looked at other industries, fintech, payments, communication, everyone else had this one-the-many API platform. I said, great, like let's build that. And we did really well. The first 100 customers were all logistic service providers. Um, excuse me, the first 82 out of the first 100 were all logistic service providers, uh, which was exciting. But as you know, is once you get below like the you know 150, 200 LSPs, it starts getting pretty, pretty thin from a size standpoint.
SPEAKER_00Yeah, the tail's long.
SPEAKER_01Yeah. And so we said, okay, we're going out and sell to the shippers. And I'll never forget, I was at Sherwin Williams in Ohio. I go in, I'm so proud of this. I've got all this, like,
Shippers Meet The EDI Wall
SPEAKER_01I feel like bike bike proud. Echo's using the product, everyone, right? Coyote's using the product, everyone that's like the dream, all the entrepreneurs, everyone I dreamed of competed against when I was a three PL. Everyone's using this. And they they bring in their EDI guy. We talk, they try to explain to him what middleware is and how this all works. And they say, hey, uh, okay, sounds kind of interesting. And then this gray-haired guy comes across at the end of the meeting and he goes, grabs me by the shoulder, he looks me in the eyes, and he says, Son, I just spent seven years building our EDI team. I retire in nine months. Get the fuck out of here. He waited till everybody was gone. And I was like, huh, I think we got a problem. Because the shippers would bring in their EDI guy, and I would try and replace that. So you don't need all this anymore. You could just use this API platform. It's so much, it's so much better. Anyways, so that that went on for a long time. And we started selling the shippers and LSPs. And what ended up happening, um, you know, at the high water mark, remember when when capital used to be free and money grew on trees? Yeah. I mean, we had a we had a burn profile, let's just say. I mean, it was it was healthy, it was over 100 million a year. Wow. And um, but we were expanding like crazy globally. I mean, every market, every country, we had offices and operations to service all these shippers, these big, huge global supply chains. And as the market started to want more prudent use of capital, we had to cut back. And I had to make a decision of we need the cash flow positive. And we have the LSPs that have been amazing, help build the network, and we're infrastructure essentially for them, and then you have the shippers. And I basically had to make a decision of if you upset Toyota or Starbucks or Amazon or any of these kind of global 2000 companies, you're probably never getting back in again. And you know this as a broker. Yeah. If I upset an LSP or something, I could probably go in, apologize for my sins. And if I have real tech innovation that can provide real value, they'll probably let me back in the door. So, in a way, this is my first public apology to all the LSPs. I apologize for my sins.
Burn Cut And LSP Apology
SPEAKER_01Now, uh, so we focused on that, that, that, that, that shipper, and a couple of things happened over the last couple of years. That was in 2023. Our MPS with the LSPs got so bad. I mean, this is like embarrassing. It was negative 32.
SPEAKER_00Really? So what was driving that? That was because you were kind of removing or deprioritizing them at the time, or like why was the MPS getting so bad?
SPEAKER_01Part of it is as we rationalized our spend, we had to pull headcount out of certain places, sales, customer success. That, you know, $100 million plus burn wasn't just tech. I mean, it was a lot of a lot of it was tech. Uh, but even like the personas and the PIRs or the product improvement request, um, all these types of things, you rationalize the cost. But we were still investing in hardening the product and making it better overall for them to use. And through these last couple of years, the MPS from the LSP uh is now positive 34. Oh, wow. So without sales reps, without CS people, just the product getting that much better. The tech just is doing the work. Yeah. The problem is when you look at the next evolution of what the LSPs really want, how they use our platform is so much different than how a shipper does. A shipper is interested in how do they reduce the inventory, how do they have this multimodal stitching together and optimization of modes and lead times, uh, improve working capital. These are really atypical conversations when you're meeting with LSPs. LSPs, they're, as you know really well, the product is the service they're providing. And so when they use us, they use as an infrastructure. They plug us into their existing, what they would call TMS, I'd really call it an operating system.
SPEAKER_02Yeah.
SPEAKER_01And they use that. Well, there's some there are some features that um are missing off of that for really the next generation uh of what of what they wanted to evolve into. And so that's why that MPS score uh wasn't wasn't that amazing back then, and then the lack of account support and everything that we that we put on. But we've been able to really improve
LSP44 Launch And Company Split
SPEAKER_01that. Like I said, that's a huge swing on MPS. And now um we're starting a new business called uh LSP44. And this is a dedicated sales team, marketing team, uh RD team specifically for the LSPs, but that can use the underlying infrastructure that we built. The carriers and the uh agents and all that infrastructure, and they can go out and build really specific uh personas.
SPEAKER_00So this is like a full split, right? Two completely separate companies now. Is that what we're talking about? Like P44 will be its own entity and LSP44 will be its own entity?
SPEAKER_01Yeah, yeah, exactly. Yeah, yeah. P44 that's focused on the on the shippers, Project 44. Yep. And that's basically most of the infrastructure you see here. Most of the branding, if you go to our website, it's actually difficult to find things for LSP, despite that still being actually a really good-sized uh revenue business for us. It's it's still probably in separately one of the largest businesses in the in the logistics tech. Um and then you have LSP 44, its own tech team, its own culture, its own uh completely different setup, uh, but that uses that underlying technology underneath.
SPEAKER_00And will you still be like the captain of both ships then?
SPEAKER_01Yeah, I'm gonna I'm gonna try to try to do it. We'll see how it goes. Uh, but see if I can be the CEO of both both companies.
SPEAKER_00You think that'll be hard?
SPEAKER_01Yeah, I'm not sure it'll be harder than 2023, though.
SPEAKER_00But so 2023 is when you kind of got the kick in the ass of like, it's an uh like this, you call it a burn, I call it a forest fire, I think. But like it's time to contain the forest fire. Is that kind of when that kind of awakening moment came where they were like, you gotta really cut back?
SPEAKER_01Well, you would say, like, they said, like, you know, you have a board and you have investors in and everyone, and we all agreed that to grow and that would build this huge carrier and data data mode. We built the world's largest logistics data graph. It's without question, it's the largest in the world. And we knew that's what would be the value, and we knew connecting to all these carriers would be extremely valuable. Um, and that's when you take the venture, that's what you're trying to do, is you're trying to change your growth curves and you're trying to build ahead. And if you look at it now, I don't have any regrets with it, but no one else is gonna get a billion dollars to go build that network.
SPEAKER_00Yeah, that that kind of pursuit is, I think, long gone.
SPEAKER_01So the mode is built. Like everyone else there, you could buy four or five, six, seven of our next competitors, and after you're done monkeying around with that acquisition in two or three years, you wouldn't even be caught up to where we were, you know, three years ago. So it's like a real data mode. And when you think about AI and agents and what everyone wants to do and have predictive and uh autonomous or agentic, and we could talk about all these all these things and what they mean to everyone. Well, you have to have the context and you have to have a semantic layer. And so you have to have this data that flows through. And one of the things that's unique about that platform that we built is that we take um ownership of that data as it goes to the platform in order to build products for our customers. And that's really, really unique. Like no other TMS has those type of data agreements either.
SPEAKER_00Yeah. So in preparing for this, I looked back at our conversation from from a it was a little over a year ago. June, I think the episode came out June 24th or 25th of last year. So a year and two or three weeks. And that was right at the time that you had said you were pivoting away from the LSPs. Oh, interesting. Right. And and I think it
LSP Tech Needs Stack Consolidation
SPEAKER_00was, you know, one of the things you said was it's it's LSPs are harder to sell technology to. Yeah. Um, and I'm just curious, like, when did you make the decision that, you know, what we actually should be servicing these these companies and that like this is and and that this is the right way to do it, to split off and do kind of its own empty. Like what kind of drove that decision?
SPEAKER_01When when it so when I I get I'm really fortunate, I get to go like to the coolest, most amazing shippers in the world. Like any Yeah, I'm jealous of that. And and any shipper that you can think of, any whatever phones in your pocket, shoes you have on, car you drove today. Carhartt, I saw you were pretty proud of that. Oh yeah, that was cool. That was uh yeah, thanks. Thanks, thanks for that. That was cool. Um, like that's those those are all our customers. And I go to those meetings, I could see our team show up really well and drive that sales process really well, and the product presents excellent to that. And that that comment I would have made about a year ago would have been for a couple years before of just watching us just stumble and and and fall and fail. And watching our SEs, which drive the demos and our sales reps and our collateral, just fall really flat with who that LSP is and how they buy. The sales cycle for a uh shipper is about a year. So it's it's a pretty long cycle. And most what we focus on is the global 2000s. You're talking tens of thousands, hundreds of thousands of employees these companies have. And they move at a certain pace, they buy in a certain in a certain way. If I go and sell to uh you know a top 100 LSP, they can basically make a buying decision today, especially if it adds a lot of value. Maybe they say, yeah, start a pilot or something tomorrow, but as fast as you can kind of organize, they're they're interested if that's a better service they can provide at a lower at a lower price. And and shippers don't operate that way. They maybe been around for 100 years or 500 years and they're very risk adverse. And transportation is a supporting function to the product that they're trying to do, and there's there's processes and things internally and procurement people to deal with. When I was at a um at a LSP, a company that we were talking about before the before the mics went live, I just watched this LSP that we have a great relationship with that has a tech stack that's really fragmented. And this is back probably in March. And they have SMC3 for LTO, and then they have kind of the usual suspects for the aging companies, and then the usual suspects on the truckload visibility thing. And I'm just watching our team kind of stumble, stumble through this and talk about reducing inventory and emissions and scope three and stuff. And this is mostly a domestic ground transportation company. I'm like, okay, all right, it's embarrassing, but like, all right, I'm like, I'm learning, like, let's see what's happening here. I know these people and and everything. And walk out and everyone's like, well, the LSPs, like, well, what I really want to do is I want the the winners in the LSPs, and this is one of the top ones in the world, they want to consolidate their tech stacks. For a while there, there was this kind of this pride of authorship. Can I build it? You know, should I build it? And what's gonna happen, in my opinion, is that, and I'd be curious to hear your opinion on this, is these really well capitalized, really well-run LSPs are gonna acquire, they're gonna build, they're gonna consolidate even more and more. Whoever has the best tech stack is gonna be more efficient and be able to provide a better service, be able to procure carriers better and cheaper and win. And so I think that smart LSPs realize that now. And let's use LSP as an umbrella term for broker, 3PL, freight forwarder, uh, third-party um logistics uh where.
SPEAKER_00Yeah, we maybe should have said LSP stands for logistics service providers, which I assume a lot of our audience will know, but it's a podcast thing where you got to remember to like do the basic stuff. So it's shame on us, shame on me for not doing that seven minutes ago or 12 minutes ago, whenever.
SPEAKER_01Keep going. It's it's a good call, and I should have done it. So these um these logistics um uh service providers, they want to consolidate their tech stacks. They want speed now. They realize that trying to take these MCPs, trying to take uh different databases and pull all these things together that aren't next necessarily congruent, that there's that's not there's no competitive advantage anymore. The question is, is like, how can they go out there and sell to more product, use the relationships, select the best carriers at the best price, and deliver that? And while they're monkeying around with all these deconsolidated uh tech stacks, they're not gonna win. Well, we have all of those companies: Macro Point, Trucker, Tools, pick your favorite aging company. I won't pick it on too much because I invested in a lot of them. Um SMC3, that's all in one tech stack. It's all already connected together. It's all been normalized, harmonized, there's context for anything. So if you have you probably did a little bit of LTL uh brokerage, you you have that all that headache of like a missed pro number the next day, and like people in the Philippines are chasing this down. Our system can already see if you use our API to dispatch that 5% of them didn't go through. They know which 5%. The agents uh call, all you have to do is press a button. The agent calls or emails the carriers, pulls all the information, brings it back together, can redispatch the shipment all together. And for the 3PL, all they have to do is literally just click a button and turn that on. They don't have to prompt, they don't have to prompt engineer, they don't have to hire teams, they don't have to work through TMS, it's all already built into the platform.
SPEAKER_00So help me like understand at a at a at a um pretty rudimentary level, just for especially for the audience that who knows who's listening to this, but like if I'm if I'm um Jones Logistics, I don't know why it took me so long to come up with a fake brokerage name. Um if I'm Jones Logistics, and that's not even a fake one, that's a real one. So if I'm if I'm freight pod logistics, uh golf, man. Too much golf. Too much golf and pickleball. I need to get back in the damn game. 115 days or 111 from when we released this. That's what really a non-gapete's about. It's just like trying to get your brain into mush. It is. Yeah, I you know what that's a great point, and mine is pretty mushy. Are you paying more every time your freight volume grows? That's not scale, that's overhead. Bitfreighter is the freight integration platform built for transportation. Connect shippers directly into your broker TMS and automate the life of your loads from quoting to communication to execution. Replace those unpredictable EDI costs with fixed-rate connectivity and use live quote to move from waiting to winning. With thousands of pre-built integrations on Bitfreighter, you're not looking at another integration project. You're looking at turnkey shipper connections. Reduce manual work, create more opportunities, and grow without transaction penalties. Bitfreighter is the only platform that connects you to all of your shippers, allowing you to automate quoting through invoicing with both Shipper Connect and Live Quote. Go to Bitfreighter.com to learn more now. I met with this company yesterday that I was I'm thinking about you know doing some deal to work with them, and they're asking me these questions like, so you know, when you were scaling and you did you and you were gonna manage this part of the business, like, how did you do this, this, then this? And I'm like, that was seven years ago. You know, I don't fucking remember. Like, so you're you're right. Um, but back to the point.
LSP44 APIs Plus Agents Explained
SPEAKER_00So I'm freight pod logistics, and and I'm calling you saying, like, what can you do for me? Like, what exactly is the product that you're offering, and like how is it how how am I deploying it in my business?
SPEAKER_01Yeah. So uh LSP44 is an AI native agent, an API infrastructure company.
SPEAKER_00Okay.
SPEAKER_01So we basically have all the global connectivity to all the carriers in the world through APIs. Now, those APIs don't always work right because um all the carriers are on their own technology journey, and some are really advanced with their APIs and some are not so advanced. Some don't even have APIs right now. But generally speaking, most of them have some type of API connectivity right now. Now, because they can't they can't, since many of them don't have an API that gives the full access from rate quote to invoice across the logistics workflow, you have to have agents that are enhancing, augmenting, or subsidizing uh the that APIs when they fail or when they don't exist. So that's what LSP 44 is. It's that infrastructure they can plug into their TMS, their Salesforce, their accounting system, whatever, whatever it is that um that the LSP has. You know, when Molo was was Was out there. You guys had phone calls you'd make to carriers for check calls, you'd do rate rate bookings, confirmations, track and tracing, check calls, and all that. All of it. Essentially, all that stuff now is just fully automated through an API urine agent. So when you're thinking about like building your next company or someone that's operating right now, they could just think about they don't need so many of those positions anymore, or they don't uh they can repurpose those folks to do uh more meaningful things.
SPEAKER_00Can you elaborate on the piece that you said you're connected to every carrier in the world? I assume that's a little bit of hyper hyperbole. Is it you're talking about the LTL carriers, or you're talking about like actual truckload carriers that you can get connected to? Yeah. Like, you know, my my owner operator, AIM Freight Trail Logistics in Marietta, Georgia, Peter Achukwu. Like you're not connected into him, right? Like, help me understand a little bit more what you mean by that.
SPEAKER_01Yeah.
SPEAKER_00So I I did say essentially every carrier.
SPEAKER_01No, no, but but it's it's it's a fair point and something that's that's exciting to unpack. Um we have we have we're connected to over 5,100 APIs. And these APIs go into, it could go into a TMW system, a cloud system, an AS400, any third-party proprietary system, and uh, you know, over 1,500 different uh telematics uh uh that that are out there. And then of course we have a mobile app that has functionality. But to put that in perspective, there's there's less than five, uh excuse me, less than 10 companies in the entire world that have 5,000 APIs, and none of them are in transportation logistics. We're talking AWS, GCP. So from an architectural standpoint, this is like a truly remarkable thing to have in logistics. There's over 102,000 carriers that if you just drop the name into our platform, it's instantly connected that within a second. It's very possible that this this carrier in Tennessee is actually connected. Um and it would be connected in a second.
SPEAKER_00It's also possible that it's um And it would be connected to like what like what's an example for a small carrier of how it would already be connected? Like what what which of their systems would it likely be connected into?
SPEAKER_01What they would probably call their TMS, I would call it an operating system. Um so it could be like say McLeod, or it could be um their telematics that they're that they're operating, could be SAMSAR, it could be something else. There's 15, believe it or not, it's 1,500 telematics now.
SPEAKER_00So the ELD providers you guys are connected into as well? Yeah. Okay, so that makes a lot of sense then. I didn't connect that dot.
SPEAKER_01Yeah, there's there's about 280,000 carriers we're connected to right now. Um and sometimes people go, well, you know, there's there's a million or there's two million. It's like, yeah, I know, but I'm telling you, like that a lot of those guys are subcontracting for their companies or they're not driving that that often. Oh um, but like basically if you if you bring a carrier and you say our platform is very much like a BYOB, but it's a BYOC, bring your own carrier, you can connect into that carrier um essentially immediately. Now it's interesting is that because that network is so big, that's all reusable. So then if broker A has that network and then uh the shipper has it, and then broker B has it, all of that um is already connected once broker A uh puts puts that in. Now, again, that's on the API, which is that's the I I know it's really cool to talk about agents and everything right now, and they are cool and they can do some really magical things, but an API is a much more cost-effective way to transmit data back and forth. Like the average ping right now on the system, I think is like 11 minutes. If you're just talking about like GPS coordinates, could you imagine if an agent was calling you every 11 minutes for a status call? Like the carrier would be like, dude, stop answering that.
SPEAKER_00No, yeah, block block analytics.
SPEAKER_01Block, it's done. So, you know, and when you talk about doing ETAs and you're talking about like doing analytics or performance or predictability or doing smart geo fences at origin or destination, you need this constant uh ping so that you can like build these, build these analytics products. So if the carrier doesn't have an API, or maybe they have an API and maybe part of their logistics workflow, they don't have an API like for a rate quote. Well, we have the agents that can connect uh that will connect either voice or message to that carrier also. So essentially that means that you can come to our platform and immediately, whether it's through an API or an agent, you'll be connected to every carrier for almost every use case uh that you need to run a brokerage.
SPEAKER_00Yeah, I was gonna, that was gonna be my next question. Is like what if we were to just go through the functions of of operating a load? Like let's let's actually go through them and tell me which which of these functions like I guess LSP 44 can fulfill. So it starts with a shipper, uh, Coca-Cola puts a load on their spot board, maybe they do maybe on their API pricing board. Uh and I'm I'm connected in there as Freight Pod Logistics. Um are you quote are you doing quoting there?
SPEAKER_01You can, yeah. With agents, yeah. So we're talking truck truckload right now. Yeah, yeah.
SPEAKER_00So it's start with truckload, sure.
SPEAKER_01Domestic truckload, yeah.
SPEAKER_00So so you have agents that are are doing the I guess truckload quoting. Yeah. Okay. And then obviously accepting tenders. Yep. Very doable. Uh building tenders. Yep. So it can build the load, scheduling the loads. Yes. So it's in in in what way? So like if we go through the various ways of scheduling, um, let's say they have a TMS like Blue Jay.
SPEAKER_01It can go still in business?
SPEAKER_00They are. I don't know. It might be called something else these days. Uh sorry, cheap shot. Yeah, yeah, yeah. I wasn't ready for that. I always liked using Blue Jay. It was a good interface for as a broker. Um, I'm all the people in Holland. Yeah, the system, yeah. I'm gonna I'm gonna so they're on a TMS. Um but it can it can obviously, I'm sure the easiest is for it to talk to the systems and and just schedule through there.
SPEAKER_01If it's a facility that you have to call, is it Yeah, an agent agent can do that, or if that's an appointment scheduler and it has an API, the system can can communicate either way. Or or send an email.
SPEAKER_00Okay, so it can do all the various scheduling requirements. Um how about booking a load?
SPEAKER_01Yeah. LTO, ocean, truckload, rail, air.
SPEAKER_00And all of it on truckload, what does it look like for it to book a load? Is it similar to the like the happy robots in Fleetworks who are like making outbound calls to carriers and offering them loads and negotiating, that kind of deal?
SPEAKER_01Yeah, so the way our our agents things work is I kind of think agents themselves will be somewhat commoditized. Um when you're talking about like like um doing a lot of things. Like let's say booking booking a load. So in November of or October of 24, when I was looking at at these agents, I kind of thought to myself, are we uniquely positioned to go out there and try to make these agent calls sound very human-like? What I realized is like I don't think that we are. Like that's probably gonna be ground zero for that's probably gonna be in San Francisco. And, you know, coming out of Stanford and you're talking about like um doing, you know, basically you're at the research level of AI. And we're headquartered in Chicago. We've got really amazing engineers in San Francisco too, but we're we're not on the, we're not on that much of the tip of the of the spear.
SPEAKER_00Uh, you know, and it's a little outside of like there are there are people who are gonna go get hundreds of millions just to focus on that problem. That's right. And you've got this infrastructure like very like context-based in our space that feels like it makes more sense to be a tag along there.
SPEAKER_01But you're you're exactly right. I think that the the data that we have, the context, is way more interesting and way more valuable than the actual agent technology itself.
SPEAKER_00And certainly if you're trying to figure out how to use $100 million without starting a forest fire.
SPEAKER_01So essentially what we built is uh is a harness. And the the thing, the thing of that is we said, hey, there's gonna be dozens and dozens of agent startup companies in in this industry. Why don't we build this engine that can uh analyze, optimize, and orchestrate the agents? So what we did is we said, here's all the reasons like where APIs fall, or all the reasons where APIs aren't aren't working. Like I'll give you a great example. The first very first use case was when we're doing visibility for full truckload, the number one reason why that that API fails is it's a bad truck number. So it means broker, broker, carrier A, they dispatch, they call and they say, great, that's truck number, you know, one two one one, two, three. And we could see it like five, you know, it closes at five. At five, five thirty, we're looking for truck one, two, three, the API is, and like nothing, nothing, nothing. And so before agents, what would happen is that would just be a failed visibility thing that happened. Now what we do is we take that air code at like 530 and we say, Oh, let's just call the dispatcher uh for truck one to three. The agent calls the dispatcher and says, Hey, I'm calling on behalf of uh the freight pod logistics. There's a load of coffee going from point A to point B. And can we have the truck number? Disparator's like, oh yeah, like Frank broke down, so I sent Bob and the truck number is XYZ. So the agent goes, hey, thanks a lot. Takes that truck number XYZ, hands it off to the API. Now the API can start that ping every seven minutes, and just bam, bam, bam. So now you can do this really high quality predictive ETA. It was the very, very first use case. So we built this harness or this engine for optimization, orchestration, and we said, let's just be able to do business with any agent company that's out there. And we have all these use cases, and we have, you know, hundreds of these things now of all these use cases and all different languages all around the world for shipping schedules and uh for vessels, for air freight booking, for air freight rate quote, for a POD, for uh a truckload, for all these things all around the world, everything you can think of. And we will just run A-B tests constantly with all these different vendors. And we'll see which then this is what these we'll see whichever one's best, and then we're like figure out how to partner with it. And the interesting thing came back is nobody was the best at everything. Not a single one. So if it was a Russian carrier and it was a POD, company vendor A may be really good. If it was a Russian carrier and there's a rate negotiation, another carrot, another one might be better. And the other thing that happens is they're all at different price points on how they charge and how they cost. So inside this harness, inside this engine, we keep track of success rate, cost, you know, uh however the billing is that we get from them. And then we just optimize for each individual use case and prompt for all these different third-party aging companies out there. Now that got a little bit uh more complicated because we noticed there was one aging company that was less expensive and they were a bit of a breakout company in some use cases that were really, really core day-to-day. They weren't the best at the really exotic stuff, but they were really good at kind of the meat and potatoes stuff. That company is Lunapath. So we acquired them last year. And the best way to think of them is kind of like it's kind of like Amazon's basics. It's like, well, if it's black yoga pants and we'll use Lunapath because it's three bucks an hour or something like that to like operate this thing. And if it's something more exotic that's off the beaten path or where Lunapath just can't seem to get it done, then we're using some of these other really sophisticated companies. But the way people should think about agents is they have all different skills, kind of just like humans do, at least at where we are right now.
SPEAKER_02Yeah.
SPEAKER_01And just like you're probably, I would say, one of the best freight brokers leaders in the world. Might be a little rusty for being on the sideline, but let's but I don't want you doing surgery on me. But if I got a load to move, I'm gonna call Andrew. And that's the same thing with an agent. Like to people oversimplify it and they think, well, that's a really good agent. And it's like, yeah, for doing surgery. But if it's just if it's moving a load, you need you can have a lower price one
Harness Orchestrates Agents For Outcomes
SPEAKER_01do something. And maybe it's even better at a lower price.
SPEAKER_00That's fascinating. So in this context, is the broker seeing inside the harness on a load-by-load, or even like uh on some basis where they are, I guess, seeing the agents and the prices and saying, okay, like Lunapath is the best price now, or or I guess it's LSP 44 is Lunapath, whatever you're calling it. Like, let's use that one for check calls and then let's use the more exotic one for carrier negotiation. Or is that like decision point being made by within by LSP 44? Like, how does that kind of work?
SPEAKER_01Uh they never know which which third party agent that we we did, and they're not ever subject to all this variable different pricing either.
SPEAKER_00Okay.
SPEAKER_01They just pay for the outcome. So our system optimizes, uses the lowest cost, best, best, best carrier, and it's constantly you gotta remember there's 4.6 million unique shipments a day that go through Project 44. So the size and scale where we can run these agents, and then and it does vary by week and by day, and like which carriers and which dispatchers, like if it's an LSP, if it's a shipper, which dispatcher is working at night? Like, is that a Spanish-speaking dispatcher versus an English one or whatever it is? Like it all varies, and the system is always trying to uh optimize and orchestrate uh the absolute best outcome. So the broker, again, all they have to do is click one button and just say, I want that use case turned on, and everything else is like magic behind the scenes.
SPEAKER_00So are there brokers actively using LSP 44 today, or is it is it like this announcement is the beginning of that?
SPEAKER_01Yeah, so uh LSP 44 is a pretty sizable company. If you measure it by by revenue or shipment count, um nine out of the top 10 LSPs in the world already use LSP 44.
SPEAKER_00Of the top, are these the top like which list is this from? Armstrong's okay. So is that the top like freight brokers or which or uh that that was top LSP?
SPEAKER_01I'll have to look on freight brokers, but it's probably pretty pretty high concentration up there.
SPEAKER_00So yeah, so if if it's not at the top 10, we at least know like some of the top freight brokers are in there, if we're thinking kind of from that lens. For sure. Um and like to what end are are these companies using it? Like are they using each of these fun? I mean, we went through basically every function that every task that is required to operate a brokerage, we pretty much went through. Other than other than selling the shippers, we didn't go through that. Can it do that?
SPEAKER_01Uh no, we could not sell the shippers.
SPEAKER_00I I assume not. No, we cannot.
SPEAKER_01But um Yes, the question, uh the the question is is well then why are there so many people and like where where's the disconnect from the two things? Is what I'm saying.
SPEAKER_00Yeah, essentially I'm just curious, like what how how deep are they right now with it? Is it testing or is it they're really seeing a path to letting this thing uh operate their brokerage, essentially?
SPEAKER_01So uh and as a clarifying point, so these LSPs came in when we were selling Project 44. And you might remember at the beginning I said, hey, we just did a really bad job of servicing these LSPs.
SPEAKER_00For sure.
SPEAKER_01And, you know, it turns out that if you don't have a sales rep or a CS person on an account, that that's not a good strategy for growing an account base. For sure. Um, and so for one year, we basically had one person covering these, you know, 250 LSPs that we have globally. And so basically he's just like a fireman with a garden hose and like goes around. Now with LSP 44, you have a full sales team built out, CS team. You have 16 forward-deployed engineers that uh are meeting with the customers and showing them how this all works. So the platform can do it. The LSPs are often doing it because we just turn on a lot of the agents too uh for the companies. A lot of the LSPs might not even know, like right now, that they had you know 150 more successful uh pro numbers or or truck numbers. We just turn on it. We haven't been charging anybody for it. And uh now we're going back to the customers and saying, hey, here's all the results. This is turned on, here's a new branding. By the way, here's a sales rep that's absolutely amazing, human being, you know, to talk to you to help work. It is a human being to start with. Yeah, yeah. Jet, apologize for for my sins. Thanks for bearing with me. This is gonna be a transformative thing. You don't need to set up these 10 different vendors anymore. It's all built in one platform.
SPEAKER_00And what does the Delta look like in terms of you know, real impact? Like what what like do you have any examples of like real tangible improvement from what this looked like before to what it looked like now in some kind of any of these tasks that they're doing?
SPEAKER_01Yeah, I think I think I think they're pretty significant. So if I look at the agent uses, although, like I said, a lot of the LSPs probably don't even know we have the agents turned on for them to go do this work because without until the official launch will be the day this podcast comes out. Um and you know, they may have mixed feelings about Project 44, but actually look at the use case, fit despite no the no sales reps, no CS people probably likely calling on them over the last couple of years, 50% of the agents that are used in the platform, uh, and I think we're the largest usage of agent of any logistics tech company in the world, are all actually all on the LSPs. So it's actually a huge, huge impact that's already happening there.
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ROI Proof And WISMO Reduction
SPEAKER_00think in some of the notes that that uh your team sent me, there was something around like auto resolution and uh W I S M O reduction. What do you know what I'm talking about there? No 60% plus W I S M O reduction.
SPEAKER_01W I W I S M. I don't know. Doesn't Rogan have like a guy that pulls pulls pulls data, yeah. What's the guy's name? Like Jamie or something?
SPEAKER_00Yeah, uh hey, guy in the clouds. What's the Wismo reduction?
unknownYeah.
SPEAKER_01Oh, what Wismo?
SPEAKER_00Wismo? Yeah, yeah, Wismo. That's what I spelled out. W-I-S-M-O.
SPEAKER_01Yeah, yeah. I mean that's that's what that spells out. That's gonna be not great on camera. For me, not even.
SPEAKER_00We'll see how where this answer goes and then we'll maybe revert back.
SPEAKER_01Uh yeah, where's where's where's my order? Uh where's my order? Yeah. Okay. So a bit a big reduction in in where's my order. But I think I think when we're just talking about what we're I think we're gonna see is with these LSPs, as we go around and talk to all of them and we show them the art of the possible and how easy it is to just turn on a button and have these agents work. I think they're they're just gonna be, I already know the couple calls I've been on, they're just blown away. And because the reality is most of these LSPs have agent and AI fatigue already. Think about the innovation bell curve. That's what I think is fascinating. If we look at it for the whole industry, the first movers and the early adopters are always the LSPs. The shippers, there's a few shippers that come in there, but generally speaking, the shippers are the early majority, the laggards.
SPEAKER_00Yeah.
SPEAKER_01And the late, excuse me, the late majority. So they were the first ones to kind of use the agents. There's kind of like then this troth of disillusion right now. Maybe they spun up 10 projects, and what they start getting into is like getting the context, building the semantic layer, putting all these pieces together, trying to prioritize it with tech stack, deprecating tech stacks from acquisitions that they have. It just all kind of gets like too mushy. And just being able to go in and just press a button is incredible.
SPEAKER_00Do you think this replaces for a lot of LSPs, brokers, freight forwarders, like their need to work with some of the agent businesses that are out there, whether it's for track and trace or um carry negotiation, things like that?
SPEAKER_01Does it replace like workforce, workforce reduction?
SPEAKER_00No, no, no, not employees. I'm talking about like right now, every broker has two or three probably contracts out with, they're likely some test contracts with AI companies that are they're they're testing them on track and trace, they're testing them on um care negotiation, they're testing them on billing. Like it is is your kind of vision that this becomes the one-stop shop where you don't need any of that anymore.
SPEAKER_01Yeah, it it doesn't really make sense to do that. If you think about actually basically Does it make sense to keep doing that yourself? Yeah, to keep this fragmented uh tech stack. Thanks, thanks for clarifying. Like if you think about pretty much all the examples you just gave, they're all related to other parts of the logistics workflow, and they work a lot better if there's an API involved. So, you know, it's it's it's kind of silly to take this database and and and this system, and then have an agent company come in and try to like bolt this on and like pull this data out and try to get context from that. And then once you have that, then send it back into this system and then let the system run again, and then bolt on another AI agent from a third party vendor that doesn't understand the process to like do this all again. Like it sounds cool when everyone's got budget for AI right now, but the hard questions are being asked right now, like show me the ROI. And they're they're they're a little tough to come by sometimes. Yep. And it's because how messy all this is. So being able to streamline this is going to be faster ROI and much and uh and just a better, much better outcome. And the other thing I think happens is that because agents are so cool or look what I can do. I think you gave the example of track and trace. Yeah. Like it is so silly that there is agents doing track and trace calls for carriers that have APIs. Like what an expensive waste of money for everybody. Like indirectly you're increasing your carrier rate because they have to have more people answer the phones or the the email. Somebody would say oh no they have an agent company and that'll all work out. Like agents are expensive. APIs are cheap to pass back and forth.
SPEAKER_00Yeah. Where where would the this is our helper? Thanks. This is the Jamie guy. This guy's the best you were supposed to give us the where's my order when we yelled out to you.
SPEAKER_01Jamie's the best Craig's the best. Who who are you uh who'd you used to uh who were your roadie for?
SPEAKER_00Uh yeah I believe that if you know if you were in the camera I hopefully we got a shot of you in the camera while you were giving the water that'll that'll make sense for the ACTC Rolling Stones. Thank you for the water I appreciate it. Yeah thanks Craig. How are we doing on time by the way? It's four? Okay. See I like that this is like the authentic nature where you know it doesn't have to feel like we can't talk to the break the fourth wall or whatever they say we look right at the camera like we're gonna keep going for you guys um until we got to leave which we've got a little time.
SPEAKER_01So what was I just thinking about um we're just about these like smaller startups um think about this too these these smaller startup aging companies yeah most of them are burden right and the reality is is that I think they're gonna probably struggle to meet some of their next milestones. Some of them are doing pretty well and some of them are going to actually like struggle. So if you're if you're running your your next brokerage 2.0 and I come in and I say hey I've got a lot of capital on the balance sheet. I've got the best investors in the world Goldman Sachs, Insight, Tomo Bravo, we're a venture backed growth company that's playing for a multi-year decade the company's cash flow positive LSP 44 is cash flow positive we have all this data all this context everything's already set up for you the prompting's already done all you have to do is press a button and then you have agent startup over here it's like hey what's going on you say how much cash you got in the back they go we got we got a lot you go how much I go 11 million bucks it's like dude you can't you can't survive a bad winter with that yeah you got you're burn you're burning cash so when that company gets acquired by let's say uh another another broker competitor right because you know C.H. Robinson and Kuganago and DSV all these big guys they're gonna start acquiring these companies as they as they become desperate. Well they're gonna have all your data of your of your brokerage and all your black books all your contact like that's a big problem for you.
SPEAKER_00Yeah there there's already I don't want to say the name of it out loud because it just I don't know it wouldn't feel right but one of the AI agent companies out there I already know has planned to like leverage all the data across the brokers and essentially create their own LSP to serve the shippers directly.
SPEAKER_02Yeah.
SPEAKER_00Um and so I'm not a big fan of theirs and and you know I I think enough brokers know about that that that it won't uh they won't get very far but it's you want to give them a plug? No I don't want to give them a plug I don't want to spread the word it's like it's so close you know the amber alert the um the the uh the instigator in me always wants to but I'm really practicing not instigating.
SPEAKER_01Oh did you find like God or religion?
SPEAKER_00Zen, you know no I I have not um I think it's I think it's just enough reflection and enough you know the other I guess benefit of of a non-compete is it forces you to kind of sit with yourself more. Yeah um and I'm not my best version of myself when I'm out on LinkedIn starting fights with people uh every day um I know a lot of people enjoy it I I I've gotten people who told me like you know I miss that side of you and I'm like yeah but you just like to be entertained you know and I don't want to be the class clown anymore. So yeah um but in any case uh back to the more meaningful discussion point I I am curious um what am I curious about so um what the hell my brain is so mush um I was thinking about what you were just saying about the small guys undercapitalized no no the oh I do enjoy that you can kind of fuck up and just like sit with it for a minute that's the Joe Rogan style where it's like you can just kind of sit with it and be okay with it. So um the thought I had was around you're splitting the company into two um LSP is starting as this kind of behemoth it feels like just like coming into the space to eat everybody's lunch well capitalized and I think it also helps so much to be you and and I think this is true for a lot of people in our industry. I think it'll help in some cases for me coming back from the space like this this industry like for people who have put in the work and really developed the network like it's just a lot easier to make phone calls to people you know and and and you know um repent for your sins and and and and have them take the phone call right um and I just think about that in comparison to the the 25 year old genius genius like give him credit super smart Stanford grad whatever he is who's coming into the space with 11 million dollars behind him and is banging on doors trying to get opportunities they just they don't they don't they're not gonna have the same leash I think that you or I might have um and I guess what I'm curious is like if I and and I don't know how well you want to answer this but I just was thinking about it like I don't know why for I've I've been watching a lot of Game of Thrones so like I'm constantly thinking about like war and like every you know which house are you in and just like if if I'm in you know house uh Heronhall or whatever and and we're the 11 million dollar guy who's got smart team and and I see you come in and you're like on you're the Targaryens you got all the dragons like you're dominating you know and it's like how do they sell against this? Like how do they how do they stand a chance in this because like they just don't have the data. They don't have the context that you do like what what could go wrong I guess like why wouldn't this work?
SPEAKER_01Well I you know I I appreciate the way you frame that I mean ultimately for us it'll come down to execution you know can we can we execute I I think we can um I've seen Project 44 execute for the most sophisticated supply chains in the world I mean I think we would if I was to show you a list of customers um you maybe saw when you walked in on the on on the wall there. You know Apple's tried to build it Amazon's tried to build it Google these are the best tech companies in the world and they've all you know selected us for for a reason um that we could just build it bigger better faster and we have more data than even the best tech companies are able to to to to to get I think those companies um at the end of the day Art Meschler if you know him uh said this really well that one man's platform is another man's feature and that's essentially what these are these startups agent companies are just a feature in the platform. You can do it with an API which is much better but if we need an agent to help out we can do that. If you want the predictive analytics we can do that if you want LTL we have that you want truckload we have that you know even at I don't know if this is true for Molo but even if you go to domestic 3PL they always seem to have like 1% of the revenue with like air and ocean um which is a hassle and it doesn't get serviced well and it kind of they don't want to do it but it kind of puts everything in jeopardy and um it's like great well we could service that and then because you have the largest freight forwarders like Couganogle and DSV and all those types of companies use Project 44 too it's like those are world class products that we have that easily can plug into that domestic broker and immediately create parity of world class. And the other works too these uh freight forwarders that are world class international operations can plug into maybe say an LTL agent or API we have and have it be just as good as the best LTL broker in the in the world.
SPEAKER_00I guess another question that just came to mind is I was talking about the company I didn't want to name who's you know got these ambitions to eventually just become an LSP, you've essentially described that today you're already in bed with the Fortune 2000. You're in bed with the largest shipper spend network on the planet and you've built out within LSP 44 the ability to do every task that's required of a brokerage. Why not just move the freight yourself?
SPEAKER_01Well one uh we have a lot of contracts that present us for prevent us from doing that second thing is um a lot of the CEOs of these LSPs are actually really good friends of mine also some of the folks we were talking about before and after um I was laughing at one of these uh Asian companies the other day they they're like their big stick is like we studied the industry for like two months or something or two years or something like that and I think our marketing team's gonna put someone that's like wow well Jed fucking lived it for a quarter of a century. Like that's that's cute. Like why don't you go you know that's that's nice. So I mean this is this is the community that that I'm in and I know know really well but I don't think that I think there's a big gap between automating a lot of the processes that happen behind the scenes and actually running and operating um a third party logistics brokerage. There's more that goes to them than just efficiencies. If that was the if that wasn't the case and we would have seen APIs themselves just disintermediate. But we actually saw was think about this when we started the company in 2015 every LSP except for one that didn't use that doesn't use project 44 fell off the top top 10 list and every LSP that moved up to the top top 10 list used project 44.
SPEAKER_00What what's saying causation or whatever is saying it's because of P44.
SPEAKER_01Yeah it may be true that there is no direct correlation between Project 44 what's now LSP 44 in that I I I I could make I could make you I could maybe chalk it up to there's a culture more of innovation and and change um and then I would I would say that we are a strategic weapon. And there's a lot more money to be made doing that than there is trying to actually go and compete with them. And you see this all the time with like the hyperscalers and stuff like what you really want to make the most amount of money for your shareholders and at the end of the day I'm beholden to the shareholders is like you want to spin the meter. The fastest way for me to spin the meter is to sell the product to people that already have distribution. Yeah not go out and go go compete with them.
Data Trust And Startup Risk
SPEAKER_01Your dad said something a long time ago uh his famous quote used to be there always has to be somebody to answer the phone at 2 a.m when a reefer breaks and there's a load of strawberries in there. I don't know if you ever heard him heard him say that.
SPEAKER_00Yes I've heard wrong yeah so it is though can it be an agent?
SPEAKER_01I don't know there's a long way to go before you know you got a million dollars on the ride and you got a contract that's worth $50 million with with with with someone in this is this is imperfect technology and it will be for quite some time and technology has bugs and AI is difficult to predict and it's really great in a lot of ways. But to say it's an absolute substitute in all in all instances would just be not not not living in in in reality. Perhaps in 15 25 50 years it's difficult for me to predict the world and what it'll be like then um but you know so I think that when I think about like what an LSP is is is doing and and and perhaps perhaps even um if I show you the technology we have you will come to that same conclusion. You'll go well this is this is a 3pl everything technology like why why doesn't it um why isn't it can why why why why isn't it going that path and it's like well what is what is on the really tactical LSPs or or brokers or whatever I bet you it does put those guys out of business. And we've seen this for the last decade like if you're if the only if the only relevance you have is a small broker is a small black book if you can't cover bounce loads if you don't know more carriers than just a handful to go to if you can't incentivize good reps and good carrier reps I mean you you go out of business as technology matures. But if you can build something really substantial then I think you get in a really strong spot. Now I do think that domestic brokers just in general are going to really struggle in the future.
SPEAKER_00And the reason I I I say that expand on that. What do you mean by that domestic brokerages in in the future like what just like if they only move domestic truckload freight or pretty much all domestic brokers are going to struggle?
SPEAKER_01If I wouldn't want to be a brokerage that was thinking about only or 3PL or LSP whatever you want to call it that's only thinking that I'm gonna be a domestic ground transportation guy for the next decade. I think you're in really big trouble with that. Why? Well one of the things is I t I tend to think of this industry as like it has like a social hierarchy. And if we were to draw a little triangle up here at the very very top we'd have the consumer and the consumer is is what everyone cares about. Then you probably go e com then you go retailer then maybe you have um uh manufacturer distributor and then you probably go like to freight forwarder and then maybe LSP um somewhere in there you might get in like the ocean steamship lines like CMA or Marisk or something like by the way we could have a whole podcast about that. I totally did not understand that that part of the social hierarchy. And then you get to the bottom of like the really small fragmented carrier and that's it. Whether we like it or we don't like it you can see who can who can charge fines and penalties and fees to one another we can basically build this social hierarchy. Got it now I understand what we're saying. Okay. So when I'm at Project 44 and I go into a global 2000 company and they have some type of initiative they want to digitalize their their supply chain and they want to use project 44 for rate quotes and optimization and RFPs and visibility and all this type of stuff there has to be some type of collaboration with the carrier uh to get that all up and running live and and everything kind of kind of kind of working um when it's a domestic carrier and they're not compliant the Global 2000 goes huh I don't really like that. Let me send an email to Bob I said Bob you then the RCS team comes back in a month later and shows them all the reports and all their carriers and says like here's the compliance of the carrier it's not not that good. They're only at 42% compliance and I think and the guy just looks and he goes huh well all right that's not a big deal uh give them 50% less business and if they can't handle that we're give them less business uh even even next year work them out of the system. It's like oh that's not a super sticky product.
SPEAKER_00No.
SPEAKER_01And that those people when it's a freight forwarder and they're doing customs and they're operating across international and that freight forwarder is not in compliance Bob looks at him goes huh that sucks. And every once in a while really aggressive Bob will like put pressure and do all these types of things. But at the end of the day it's almost a stalemate and because that Global 2000 in most cases realizes that the cost of having customs screwed up and this stuff all caught up and um on these international is like enterprise threatening. And so that that is going to take a long time to digalize, going to take a long time before anybody's willing to put that at
Domestic Broker Future And Power Hierarchy
SPEAKER_01risk. So my advice to anybody out there that's uh that's running a domestic brokerage is start getting really good at customs and start um or or buy a boat and be an ocean carrier.
SPEAKER_00Yeah you could because no nobody will ever forget the numbers that we saw during COVID when ocean carriers were I mean I had never even thought about ocean carriers before until we saw what they were charging for a box on on on one of their uh one of their ships. Like the numbers were staggering.
SPEAKER_01I don't know if I should share this story but um I underestimated the ocean carriers and I thought you know most of the truck carriers and LTO you can work with them and you can come to like some type of conclusion of like transmitting data and things and some are more particular than others. Eventually you can get to it and the carriers I would think would be the most difficult are the ones that are the most the most difficult usually like a duopoly type situation or something. The ocean carriers some of them not all of them don't care at all. I remember we made this like passionate thing it's like well like you have one ocean carrier it was like we have 762 customers that are asking for you to transmit data to us. Like all and you looked at brand and you're like oh my God like who like there's like you know how are you gonna say no to this like $25 trillion of like enterprise value in these these companies it's like I think it was like some like 18% of their entire revenue or containers containers I don't know the revenue but containers and they were like don't care what are they gonna do and I was like well that that's the that doesn't make sense that's not how business is supposed to organize the customer and they're like we don't care.
SPEAKER_00Tough shit. Yeah yeah I mean that's it's interesting because as you were explaining this hierarchy and I really started to understand it. And the example I think you gave was really prudent about Bob and and his ability to pull my truckload domestic business like that versus the customs guy. I mean it really comes down to a competitive landscape I think more than anything because well two things I mean one is like the complexity to make a change which is it's not complex to to hit a button on your routing guide and get rid of someone and add freight pod logistics or vice versa. But it is just in in in the world we're playing in in in domestic ground transportation, there's a million players and so like if you're not like cream of the crop and and I guess your point is even like even at the cream of the crop you're still pretty replaceable um by the next guy in line.
SPEAKER_01So yeah because what what happens on the domestic side is that well what happens it's it's really on all the modes is that the initiative if we just take like one of the digitalization parts let's talk about like visibility if you just take that the initiative that Bob at the Global 2000 shipper has to lower his inventory and improve his cash on cash is much greater than 2% or 5% transportation cost.
SPEAKER_02Yeah.
SPEAKER_01When you're talking about we have one um we have one one shipper it's called uh Elcon it's uh Ice and they're about $11 billion revenue they're on record and they took $130 million of uh inventory out of their system and improved their service levels by using our product. So if you think about that any carer that's not willing and we're we're put that name aside right now but any carer that's not that's blocking an initiative like that is someone that has to go.
SPEAKER_00Yeah.
SPEAKER_01Regardless if they're a penny cheaper or you know it's like well bring the next guy in for the penny more because you can make it up on the inventory and on the service levels. Because if you can make it up on the service levels well then you can sell sell more product and beat your competitor. That could be a little tougher uh to to to measure it directly but when you're at the C suite and you're talking when those numbers you are at the C suite yeah they realize that the better they could service the customers the
Project44 TMS Vision And Data Rights
SPEAKER_01more they can sell.
SPEAKER_00Can P44 essentially become the TMS for these shippers at some point?
SPEAKER_01Yeah so our our platform when you look at Project 44 that is um what that really is and you're see us go to go to market with this uh probably later this year that is an intelligent logistics operation orchestration system and in there there are four main product families there's a TMS there's visibility there's yard operations and then there's last mile now do you actually need all those names and all those product families probably not but the reality is is that there's budget that's associated with that and people understand what those are but at the end of the day being able to service across that entire logistics and even supply chain workflow except for the demand planning and order management piece like is extremely powerful. I think we have the best TMS in the world like hands down like we can we could show in fact we had a a company in here today and we were talking to them about it and here's one reason I know that no TMS in the world can compete with us. We can put it aside like the architecture, we're the best. We could say that we're our TMS is an AI native product which just means a lot of agents actually write the code for it so we can spin up code like at a mind poppingly fast like like thing. But you almost can't even distribute as fast as you can build it.
SPEAKER_00Yeah.
SPEAKER_01But the real thing is that none of those TMSs have any data rights. Okay. So when you're talking about upstream and logistics workflow, and you want to make the best decision for the carrier, who has the best physical on-time performance, who's most likely to show up on this rainstorm today, the tornado that was in Ohio, which carrier is being the least amount impacted by them, who has a good rate, who has the best safety records, who's like taken action since uh the Montgomery uh lawsuit, like all these variables that are there. The TMSs don't own the data to be able to make that those decisions intelligent. Some of that stuff they might, but the really big things like on-time performance and uh for arrival and departure and digital scores, they don't own that. So that means that you're left with um the decisions you make are always less than what they can be if you use Project 44's TMS. Because we have all that context and because we have the ownership of that data, we can help make those informed decisions.
SPEAKER_00Yeah, that makes sense.
SPEAKER_01So think think think about you. You you were a good operator and you had a really good score. Uh I've I've looked at it in our platform before.
SPEAKER_00Yeah, our team was good at operating. I wasn't a good operator, but I was good at working with a team of good operators.
SPEAKER_01Yeah. I saw an entrepreneur the other day said, Well, I'm not even employable, but he did really well because I'm not employable.
SPEAKER_00Why do you think I'm gonna sit out three and a half years? I was firable. Not employable.
SPEAKER_01It's like, yeah, well, hire hire an amazing, amazing team. Um well, when I looked at like your your score, you're really great, but you probably you would go in and you would explain why you were good and people would believe you and maybe have some type of experience. Now you could really just walk in with your Project 44 scorecard and say, I can show you that I'm the top 1% in quantifiable uh numbers.
SPEAKER_00Yeah, I'm just gonna take this clip from here when I open my next brokerage and just bring that and just be like, see, he just said I'm top 1%. And you're probably on his platform if you're Fortune 2000. So uh believe him.
SPEAKER_01Let's let's let's do it. And we'll have the screen pop up.
SPEAKER_00So I'm curious, like on the LSP side, obviously you're in with nine of the top ten LSPs, and and you know, it seems like it's a business that is geared toward larger providers. At least you described earlier that in in the past life, I guess being as part of Project 44 when you were serving the LSPs, you recognized it was way harder to serve the long tail. And the long tail is extremely long because it starts after like company number 200. Yeah. Right. Um when you think about LSP 44's future, what is what is the market? Is it the top 200 and that's where you're gonna honey hole and build? Or is it is is there a uh is is there a guy in his mom's basement who's got some customers who can do a lot because he's working with you?
SPEAKER_01So at the high water mark, we had probably 600, maybe 700 LSP customers. Okay. And we didn't renew a lot of their contracts.
SPEAKER_02Yep.
SPEAKER_01Um there were a lot of rumors about like why that was happening. But basically what it was is that we were having negative gross, gross margin on them. And um, and the challenge with these kind of these smaller companies, and I have a lot of empathy for them, and it's not it's not all of them, but most of them never bought technology before. Um and what they have bought is not like traditional, like how technology is is is bought, which is one of the reasons that you actually don't see um a lot of technology companies in this industry at scale because the buyer of the technology is not a typical buyer. And so they're kind of buying, they think they're buying more like a custom dev shop. So it's kind of really difficult to build a platform. The second thing is they usually don't have like a project management or program management team to actually implement these types of things and handle the change management that's happening there. If I was to draw a triangle and I was like one, 10, 100 rule, when you use project 44, you can basically repurpose these hundred people upstream to one if you can get it right with the APIs and the in and the agents. And that's a really super powerful thing to do, but you have to understand like how can you actually make that that change management? The larger LSPs tend to be better at changing at changing that out. Um, and quite honestly, I just got a little bit tired of some of the smaller guys. It's like they write you a check for the one the one's classic. He wrote a check for, well, he didn't even ever pay, but he signed a contract. He signed a contract for $12,000 and he wanted to onboard 19,762 carriers. I'll still remember it. And he was screaming at me the next week because they weren't all onboarded. Now, the art the interesting thing is nowadays, was as mature as our technology is, we could probably actually do that. But back then, like it was like, dude, this is like a pretty big, it's a pretty big lift. The network wasn't as big, the platform had more friction to onboard these. And I just don't think you get that, at least back then you wouldn't have got that with like a more mature uh LSP. They're like, okay, this is the 80-20 rule. Yeah, we might do business with 19,000.
SPEAKER_00But we're really that's like let's do business, we mean like 14,000 of them we've done one load with in the last year. Right. 5,000 we use twice a week or more. Those are the ones we need.
SPEAKER_01And this guy was adamant. And we said, well, can you give us the volume? Like that's proprietary. And it's like, well, I don't know, we're gonna like have it anyways. We have way more interesting data. It's like, well, let us focus on which one of these 19,000, you know, let's get the first 200 or 500 signed up. Like, we can do that in a week. And it was like this huge argument. I use all of them all the time. And it's like, well, I don't know, I've been around the block. I'd I'd be surprised by that. It's possible, but the you can't use all of them every week and have the revenue that you have.
SPEAKER_00Yeah, I was gonna say the math doesn't really math unless this company is a lot larger than you're letting on.
SPEAKER_01Right. Then it's not a $12,000 bill.
SPEAKER_00Well, yeah, the bill should be a lot larger unless you've really fucked up. Yeah, which maybe that's why it wasn't making money. Because you were charging a tenth of what you should have been.
SPEAKER_01Yeah, so so the so the question is like, will we go downstream? I don't know. The platform is more mature to do it, but most when when you look at this big consolidated tech stack with all of these visibility across all the modes, the execution, the intelligence, the automation, you know, all these agents that we have in the platform now, these are really, really meaty deals on that top, you know, whatever 2250. Like I said, I think it's about 260 right now. Um and like that, that it's LSP 44 is already bigger than any agent company out there, and it's profitable. And, you know, sure, do I think you can be a billion dollars in revenue? Like, yeah, probably. You know, uh, I don't know. I gotta think about how ambitious I want to be.
SPEAKER_00Yeah. It's hard to be everyone for everything, or everything for everyone, whatever the saying is.
SPEAKER_01So both are true.
SPEAKER_00Yeah, it is true. Um and so I think maybe recognizing that prevents you from having to do another Maya culpa in two years or something. I'm regarding I get to come back and do another episode. Yeah, for sure. What do you think? Where do you see like five years from now, like where do you see these businesses, both of them, L LSP 44 and Project 44?
IPO Path And Founder CEO
SPEAKER_01Uh well, I think uh Project 44 is probably on a path to to IPO. Uh, I mean, if we just look at what it is and how it was engineered to do, it's um, and that's not a destination, it's just it's just a milestone.
SPEAKER_00No, yeah, it's the same.
SPEAKER_01The size of it, the scale. Um, there are there are you know private equity groups that are large enough to to invest in it and and keep going with it, but um I'm not really a private equity type of guy. Um, you know, what I have right now is a lot of venture capital and growth guys, and they play a totally different game than the private equity guys. So, you know, the next, the next, the next, next place we would go would be there. But there are companies like Stripe um that have gotten gone a long way without an IPO. Um and you know, I guess I guess we're seeing, and so some folks say, well, why why do it at all? And it's like, well, at some point, the capital on your table and your employees want some type of liquidity event. And so you need some type of event, you know, need. It's nice for everybody to have their their their their capital un unlocked in some type of way, a portion of it. And so there really aren't very many venture companies that are that are big enough for as valuable as the company is now. Um and then so the IPO is the is the path.
SPEAKER_00Do you feel like you're ready to be a public CEO? Or do you think that's when you maybe bring someone else in?
SPEAKER_01You know, I I tried, I never brought in a prof like what they call a professional CEO, um, but I did bring in a lot of professional people. And I would say um there is a lot of correlation to like the tough years and um those kind of those those folks that you bring in. I mean, chief of staffs and people and you know, this stuff and that stuff. Like, I don't know, I don't know, a bunch of uh higher it out. Maybe I'll start listing names at the end.
SPEAKER_00Is there a correlation between you saying chief of staff and then your chief of staff walking out of the room? He's like, I'm already fired. I just started a week ago. I'm just kidding.
SPEAKER_01Yeah, yeah. No, I mean, obviously, uh, I mean, I love having a chief of staff because I get so much, so much leverage on it. And you know, a good executive should get a lot of leverage off their of their chief of staff, but you also can get it to where it's just empire building, it's not not not effective at all.
SPEAKER_00Yeah. So it's interesting because like I I I've always been told too, like, I, you know, I think you and I are similar in some ways in that like we say it how it is, and and I think I appreciate that about you. I appreciate both times we've had these conversations because there's nothing I think you're afraid of me asking or that you're afraid to answer. But I think that could get public CEOs in trouble, you know. Um this just the kind of uh not wild, wild west, but just you know, the the non-scripted, like there was nothing as I don't listen to many uh public um transcripts of these quarterly earnings, but there was a time where I was listening to some for you know work reasons, and I couldn't stand it. I I could because you could you knew the buzzwords that they were throwing out that that were not even applicable to the business, but like they knew if they set them that got the earnings or that got the stock to look a little better. And you're just like it's so much theater. Um and I don't see you as a big theater guy.
SPEAKER_01Yeah, you know, I probably have to it's it's certainly a couple a couple years out. I guess I'm encouraged by that. There's there there are people. One, I think if you're a founder, you can get away with more.
SPEAKER_00Yeah.
SPEAKER_01And generally speaking, founder, founder-led tech companies perform significantly better than hired CEO uh companies. So what is that role? Or do they have someone in a president role or CEO role that maybe isn't even operating day-to-day as a CEO? Um, perhaps. Uh there's so many different ways you can put the put the puzzle together.
SPEAKER_00Yeah, and you also strike me though as the kind of guy who likes a good challenge. And so if someone tells you, I don't think you can do it, I think like me, it's like, well, let me show you how I can. It might not look like what you think it should, but I think I can do it in a way that it's effective.
SPEAKER_01Fortunately, a lot of founders right now that are public CEOs are kind of paving paving the path. I mean, Mutt Musk is pretty out there.
SPEAKER_00Yeah.
SPEAKER_01I mean, he's good point. But I mean, I don't know how many lawsuits that guy has.
SPEAKER_00A lot. A lot. Yeah. But um, so can could is it doable for Project 44 to go public while LSP 44 remains private? Like they're separate, fully separate enough that that can be executed, or would LSP 44 be going public with that in in that in this setting, whether it's in three years, five years, or whatever?
SPEAKER_01They're separate businesses right now. Uh, we would have to do some some work to have that exact exact thing unfold. I would say is that we are taking the steps uh to create that type of optionality. Okay. Uh but right now what we're mostly focused on is how do we provide the most most value to the customers um and and the shareholders. And the reality is that that MPS score went up so much just by improving the platform and having one sales rep named John Hartman who was who was awesome. Shout out, John. Uh yeah, remarkable. And then when you have now this dedicated team that's that's starting this month and uh CS and tech and these 16 forward-deployed engineers, like I think we're gonna get remarkable um results.
SPEAKER_00That's awesome. Well, we're coming up on time here. Um is there anything we didn't discuss that you want to hammer out for a couple minutes?
SPEAKER_01I think I think we're good. Next time, you're now on compete's over.
SPEAKER_00Yeah. So let's let's 115 days. We sit back down and let's have some fun.
SPEAKER_01Like let's let's talk about it. Let's let's do some plugs.
SPEAKER_00I'm down. You can you can interview and I'll uh I'll answer the question. We can talk about whatever. We can have a whole team up here. We'll get Tom up and uh maybe I don't know, have some fun.
SPEAKER_01Yeah, Tom, Tom's amazing. Um, cool. If you want to use this or anything, let me know. Uh anytime. This this this stage. We're gonna, I think we're gonna make this like a permanent permanent thing in one of the spaces in the back or something.
SPEAKER_00Yeah, I mean, this is awesome. This is really cool.
SPEAKER_01Just pull pull it together so we're not to set the camera during the whole time.
SPEAKER_00Well, audience, I always forget it's hard to remember the audiences there when you're sitting like this. Uh, thanks so much for listening. This was the official announcement of uh LSP 44. I'll throw the hat on now. So we're nice.
SPEAKER_01It looks good on you.
SPEAKER_00Uh thank you. And uh we'll see you next week with another live or another in-person episode with Tom Bad.