September 9, 2025 • 44 mins
Some brokers are generating strong organic growth despite the tepid freight environment. Expansion can come from a strong service offering, lower costs to serve and shippers’ tendency to reduce the number of providers when trucking capacity is loose. In this episode of the Talking Transports podcast, Matt Pyatt, Arrive Logistics CEO and co-founder, joins Lee Klaskow, Bloomberg Intelligence senior transportation and logistics analyst, to explain how the company grew its truckload brokerage business 35% year over year in a challenging freight economy. Pyatt also discusses leaning on technology for productivity gains and driving costs per load down beyond the 40% achieved over the past 36 months. The conversation also covers consolidation, opportunities, challenges and fraud in the freight brokerage industry, as well as the importance of being relentless in business.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Hi everyone, this is Lee Clasgow when We're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Klaskow, senior freight, transportation and logistics analysts at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the globe. A quick public service announcement
before we dive in. Your support is instrumental to keep
(00:27):
bringing great guests and conversations to you, our listeners, and
we need your support. So please, if you enjoy this podcast,
share it, like it and leave a comment. Also, if
you have any ideas, feedback, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn, or on x at Logistics Lee
and We're delighted to have with us. Matt Piat back
(00:48):
onto the podcast. He is the CEO of Arrived Logistics,
a firm he co founded in twenty fourteen. Arrive is
the thirty fifth largest logistics company and the eleventh biggest
freight broker to transport topics. Welcome back to the podcast, Matt.
Speaker 2 (01:03):
Thanks Lee, and look forward to our conversation. Last year,
I think it went pretty well, so hopefully can add
some value to your listeners this time.
Speaker 1 (01:09):
I'm sure you will. And just you know, I mentioned
on the intro that Arrive is a broker freight broker.
You know, could you provide a little more background into
the company before we delve into the markets.
Speaker 2 (01:23):
Yeah, absolutely, so, as you said, Arrive was found in
twenty fourteen. You know, we primarily focus on the middle
mile part of the supply chain in North America, and
so originally we did a lot of transactional freight in
the United States that has since grown to now a
heavy balance of contractual and transactional, and then we have
recently moved into Mexico and Canada. You know, we really
(01:45):
don't touch anything in the air, we don't touch anything
on the ocean. We are very primarily focused on full
truckload transportation and recently have gotten into a few other
modes like partials. In a very small presence in the
LTL market, but you know, ninety plus percent of revenue
is that truckload market.
Speaker 1 (02:03):
Okay, And just everyone is not familiar with kind of
the lingo here, so you can just explain what the
middle mile is in transportation. Yeah, So middle mile.
Speaker 2 (02:14):
You know, the way we kind of think about that is,
you know, bringing it from distribution center to retailer or
from manufacturer attribution. And so when you see the eighteen
wheelers on the highway, you know that is primarily what
we're focusing on. We're not delivering to the end user,
you know, appliances. We're really focusing on the entire buyout
of the truck and moving it from point to point.
Speaker 1 (02:37):
Do you guys do you do you guys keep track?
Like what's the average length of hall of a typical shipment.
Speaker 3 (02:42):
That's a great question.
Speaker 2 (02:43):
Every single broker and every single asset based carrier would
probably answer that a little bit differently. It depends on
the customer mix, your modal mix, the type of freight
that you're moving. But at an aggregate level, you know,
depending on the market, we're as low as six hundred
and fifty miles and we're as high as seven hundred
and fifty miles on an average you know length. You know,
obviously the regional shorter length of haul is historically more
(03:06):
conducive to the asset based carriers. They really dominate that region. Also,
the digital brokers that still are around have tried to
build their business on that regional you know, more local
freight as well, and so we're really you know, more
instrumental in that middle mile seven hundred, you know, thousand
type mile move right.
Speaker 1 (03:24):
And you know, you mentioned, you know the fact that
ninety percent of your revenue is tied to the full
truckload market. But you're, you know, you're you're growing these
other markets. Is the growth in those other markets like
LTL or partial or maybe cross cross border, are those
growing more than your traditional business?
Speaker 3 (03:43):
You know, it's crazy.
Speaker 2 (03:44):
You know, I'd sit here and tell you I wish
that our modes were growing at a higher percentage. Our
dry truckload business is so strong that we're growing, you know,
we're up almost thirty five percent year every year in volume,
and when you compare that to a lot of our
peers that are your negative or flat, we feel very
very confident our ability to drive that, you know, drive
(04:05):
that truckload market. And so our other modes are growing
very quickly, but they're actually growing about thirty percent year
over year, and so you know, it's just it's hard
to keep up with, you know, our core competency that's
got a lot of really good momentum.
Speaker 3 (04:19):
But yeah, they're growing. They're growing a great clip.
Speaker 2 (04:21):
And I wish they were growing even faster, but you know,
at an aggregate level, they're pretty close.
Speaker 1 (04:26):
Yeah, you know, you mentioned you know, the market is
not really growing. Uh, it's you know, depending on you know,
which broker you talk to. Most of the legacy ones
that have been around for a while, are you know,
down single digits to up single digits and volumes? What
what is driving the thirty five percent year of year
growth in the full structload drive in business? I mean,
obviously you're winning share from from somebody, so you know,
(04:50):
and also if you can just tell us what's the
secret sauce.
Speaker 2 (04:53):
You know, we could spend the next hour talking about
a lot of the different things that we're doing that
we think are making a difference. But you know, I'll
start like an industry level and basically say some of
the themes that we're seeing our provider consolidation and so
a lot of shippers when the market is really tight,
like during COVID, they add a bunch of providers to
their network. And then as markets you know, settle in
(05:15):
and the market gets a little easier for the shippers,
they start to consolidate their providers, and so you know,
really focusing on not being consolidated, so being a provider
that offers really great service that they can rely on.
They want to be able to work with you know,
five or ten providers instead of fifty providers, and so
when that consolidation happens, you know, that's that's an opportunity
to pick up market share. Another trend we're seeing in
(05:37):
the industry pretty you know, regularly is what I would
consider centralization of decision makers. And so the transportation markets
heavily fragmented both from an assets and from the shippers
and then from a decision maker decision maker standpoint, and
we're starting to see a lot of companies start to
centralize procurement, and you know, when that happens, it typically
(05:58):
you know, forces consolidation in their provideider base. And so
that's a big driver to it. And really it's just
the maturation of our salesforce and the maturation of our
customer relationships. And so when you look at a Arrive,
we've only been in a business for eleven years, and
if you look at everyone that's bigger than us, they've
been in business twenty thirty forty to fifty plus years, right,
and so they've already got a very mature workforce and
they've got very mature relationships, and so they're playing more
(06:20):
defense versus offense. And so you know, we can talk
about the maturation of our workforce. Let's start there. The
average rep at arrive is like two and a half
to three years of tenure. And so we've built our
entire business on like this cohort model where we know
exactly what type of productivity we get based as people
mature through the cohort curve. Right, we know there's going
to be attrition, but we know that at month twelve
(06:42):
they're going to bring an x amount of loads per
day by month twenty four, thirty six, and forty eight,
And so we've been accurately able to accurately forecast where
our loads are going over a very long duration of
time because of how accurate our cohort model is. And
so really what you're seeing is just the maturation of
all these cohorts, of all these people that we hired
in twenty eighteen, twenty nine, twenty twenty twenty one, twenty two,
they're all continuing to mature and they'll continue to take
(07:04):
more and more market share as they become more mature
as a sales rep. That's one way that we've had
a lot of successes. A lot of those investments that
we've made over the last five years are really come
to fruition. And then the other one is just the
maturation of our accounts, right, and so we look at
like at SMB, mid market and enterprise customer and three
very different lights. And we know that first year, the
average enterprise customers going to give us like four loads
(07:25):
a day. By month, by year five that at that
same customers will give us sixteen loads a day. And
so you've got this massive amount of customers that we've
landed over the first eleven years of our company that
are just really maturing through that curve with their experience
have arrived. And so as long as we offer great prices,
we offer great service, we're going to continue to expand
our market share within all of these customers. And so
(07:46):
it's really the aggregation of just doing things the right way.
It's like hiring people really well, training people well, and
then servicing our customers really well. And so if you
do all those three things, you're able to continue to
take market share, you know, even in the most challenging markets.
And you know, obviously if the market it was more
in the broker favor, our growth would be even higher. Right,
Like when we think of like the managed goals that
we look at, you know, we know that the percent
(08:08):
achievement of that managed goal and a tough market, it's
can to be lower than it is in a good market.
And so like we've just gotten really really dialed in
understanding what our productivity curves look like. And so that's
really led to a lot of our success that arrived.
But at the end of the day, it's a people business.
Technology is a huge part of our success as well,
but it's really just hiring good people, training people well,
and servicing your customers. And there's a lot of opportunity
(08:29):
to grow. And so that's kind of the way we
look at the market. It's so big, it's so fragmented.
Speaker 1 (08:34):
Yes, it's two follow ups on that, you know, you mentioned,
you know, when you hire somebody and you kind of
know their productivity, if they're going to they're gonna last,
you know, after the first twelve months. Because obviously there's
a lot of chre in this because it's a you know,
it's a challenging business. It's it's it's uh, it's it's
it's calling people and and and and asking for their business,
which obviously isn't easy. So are you are you hiring
(08:56):
people with limited brokerage experience beforehand or are you hiring
people with experience? So kind of what is your target
new employee? Uh, that's on the broker side.
Speaker 2 (09:07):
So I would say when you look historically over the
first eleven years, ninety seven percent of our hires have
no experience whatsoever. And so, you know, when we were
growing quickly, we definitely went and hired some experienced people
to help us, you know, scale our business, to help
us you know, have more mid level management. But at
this point, you know, if you look today, I bet
(09:29):
if we hire seven hundred and fifty people, maybe ten
of them have experience, and so that that's going to
continue to trend in that direction. You know, we're very
confident in our ability to hire people that have no
sales experience, people coming out of college that want to
get a career in sales. You know, it's really easy
and like I'm not you know, throwing shade at other
people's business model, but going in overpaying someone that's got
(09:51):
five years of experience to move their book of business
over it's really easy. I mean, we could go do
that to all of our competitors, but that's not our strategy.
Our strategy is, you know, go hire your people, bring
them out of college, put them through the best in
class sales training, have them to think about the job
the way we wanted to think about it, and it's
very scalable and repeatable. The way that we do are hiring,
(10:11):
our training, and so you know, that is our strategy.
It's going to continue to be our strategy. You know
a lot of people are like, oh, you're gonna go
buy a bunch of companies. You know, obviously there's a
lot of companies looking to sell right now with how
challenging the market is, but you just pick up bad
habits and so we prefer to you know, hire people
and go to ourselves.
Speaker 1 (10:26):
Yeah, and you know, you did mention that the market
is extremely fragmented, which which it is, but there are
some people talking about it becoming a little more or
less so because consolidating that market is obviously going to
be very, very very difficult to do. Do you see
more consolidation, whether that's through M and A activity or
just people being pushed out of the market because they
(10:48):
just can't compete because they don't have the capital to
invest in the technology that you probably really need to
be successful in this business today and tomorrow versus you know,
ten years ago.
Speaker 2 (10:59):
So I'm I'm always a believer that consolidation is a
very logical outcome for our industry. With that said, there's
a large tale of shippers the SMB market. There's hundreds
and hundreds of thousands of shippers that small brokers can
continue to survive on for a very long time. And
so I think what you're going to see is consolidation
within the enterprise market, right the companies that are very
(11:20):
educated in buying transportation, that have high requirements for service,
have high requirements for integrations and capabilities.
Speaker 3 (11:27):
I believe that the.
Speaker 2 (11:28):
Top five or ten brokers are going to take the
vast majority of that market share over the coming five
to ten years. And so I do believe the big
will get bigger. You know, I kind of look at
European transportation companies as these huge conglomerates that are massive,
and in North America you don't have that many of them.
Speaker 3 (11:44):
You've got JB. Hunt, You've got H.
Speaker 2 (11:46):
Robinson, You've got a few others, But you don't have
those twenty billion dollar companies in North America. But I
do believe that the big will continue to get bigger.
I think at the end of the day, technology is
a deflationary product, and it's going to cause rate deflation
or time. We're not great inflation, but margin compression. But ultimately,
as long as you can get more efficient internally and
you can take cost out of your cost structure, it's
(12:08):
okay that margin compression happens, right, because you can still
put the same amount of profit to the bottom line
even if margins get compressed, if you get more and
more efficient from a technology perspective and from a rep
perspective as well. And so you know, I'm a big
believer that you know, the investments that we make in technology,
we're taking cost out of our business. We're going to
pass those back onto shippers over time, right, And so
(12:28):
I do believe that that in among itself, will cause
consolidation providers because the people that aren't investing in technology,
that don't have the efficiency that we're having, and we're
seeing they're not going to be able to compete on
a rate perspective, because what they need to charge to
make their margin is going to be significantly more than
what I need to charge to make the same margin
to the bottom line.
Speaker 1 (12:48):
So would you be surprised or not surprised if you
sew more deals like the RXO Coyote transaction. I guess
that's a year ago that when that happened. Were you
expecting the big getting bigger just by taking share?
Speaker 2 (13:02):
I think it's a combination of both, right. I think
there is only a few companies in the industry that
has proven to be able to grow organically. You know,
TQL is the top of that list. They've been around
for thirty years. Ken and Carey have done a really
good job over there of building like an unbelievable business organically.
And then I think there's a lot of companies in
the top ten that haven't proven to be able to
(13:23):
grow organically. And even with these industry trends, you know,
organic growth is tough, especially private equity owned or publicly traded,
because it requires investments, right, and so our investments aren't
in CAPEX. Our investments are into people, and those people
have a drain on your P and L, right, and
so it's really hard for the public companies to grow
organically because you've got to be able to invest through
(13:44):
the entirety of a cycle. And as you know, this
cycle is very volatile, right, and so a lot of
people like to make investments when the cycle is good
and they stop making investments when it's bad. Well, you
can't grow like that, and so I think that the
companies that have to hit those earnings or they have
to hit certain covenments because they're probably equity owned with
you know, a lot of leverage, it's really hard to
do that organically. And so they're going to grow inorganically.
(14:05):
And there's a lot of good platforms out there that
we see popping up that are fifty million, two hundred
and fifty million of revenue that they're seeing their writing
on the walls and they're looking to get out. And
I think you're going to see a lot of that
consolidation happening over the next five years, and that's going
to be in the form of M and A for
the bigger people.
Speaker 1 (14:21):
And so, you know, you mentioned, you know, the difficulty
of private equity and publicly traded companies might have versus
somebody that doesn't have those sort of constraints. Can you
talk about you know, arrives ownership. Who owns a arrive
So it's a conglomerate. There's a bunch of investors we've got.
We've got a private equity group called ATL Partners. They're
(14:43):
a minority owner in the company, which we've we've said
that publicly before. They're co investors are BCI which is
a Canadian pension fund, Bawl Post which is a hedge fund,
and TAMASK which is a Singapore sovereign wealth fund. And
so that aggregate of investors as a minority holder. We've
got to great growth equity firm that we brought on
back in twenty seventeen that's been with us for a
(15:03):
long time called lead Edge Capital.
Speaker 3 (15:05):
They're spectacular.
Speaker 2 (15:06):
And then we've got two seed investors that are the
founders and still the CEO of Nutrable, which is see.
Speaker 3 (15:13):
For the energy dree company.
Speaker 2 (15:15):
And so we've got a lot of you know, we're
it's like a democracy on our board, which is a
good thing, right and you know there's not one person
that controls, you know, all the decision making, which has
allowed us to really have good, healthy debates at the
board level. It allows us to kind of hear everyone's
side of the argument and give a lot of different perspectives.
And so, you know, we feel really good about where
our ownership is today. You know, doesn't mean things change
(15:37):
every you know, as you know with investors and with
private equity and growth equity and everyone else, they have
different you know, timing dynamics with their funds, and so
inevitably there will have to be something that gets done
to you know, align the timelines going forward.
Speaker 3 (15:50):
But we feel really confident where we are today.
Speaker 1 (15:53):
All right, great, you know we were talking a little
bit about technology. Uh so it arrived? Is your technology
proprietary kind.
Speaker 3 (16:01):
Of what is it?
Speaker 1 (16:02):
What does it allow you to do that you know
is helping you win so much share?
Speaker 2 (16:08):
Yeah, I mean at the end of the day, when
we look at technology, yes, arrives, technology is proprietary. We
always look at the buy versus built. There's definitely things
that we buy slash partner with people that are building
something they specialize in. Right when you look at you know,
the AI trends and you look at voice AI and
you look at all the different things that are coming out.
You know, we definitely partner on some of it and
(16:28):
then we build some of it right, But historically, you know,
there's three main verticals that we invest in. Number one
is connectivity to our customer. Too is connectivity to our carrier,
and three is just internal rep efficiency. And so I
would say eighty to ninety percent of our technology is
actually focusing on internal efficiency and automation and decision support
because the connectivity to the customers and the carrier is
(16:50):
actually pretty quite easy. A lot of apisz dis you know,
customers want you to put the information in their systems.
They don't want to go to your system, especially within
the enterprise market. You know, we build unbelievable carrier facing
technology that we feel is best in class, but there's
only so much technology we need to build to you know,
integrate with our carriers. And so really now it's all
about like, how do we build a better system internally
(17:12):
to to where we can ramp up our employees faster.
We can prevent them from making bad decisions, we can
help them make better decisions. We can automate the manual
tasks that no one wants to do anymore, whether it's
tracking and whether it's load building, whether it's getting invoices,
settling invoices, answering questions, whether it's you know, scheduling all
sorts of different parts of the life cycle that are
(17:33):
very menial. And so really that's kind of the way
we focus our technology. And so, like, look everyone in
the top three or four or five truckload brokers, and
you made a comment earlier where you said, we're like
the eleventh biggest according to Transport Topics, and you know,
transport topics when they look at brokers, they look at
all brokerage. I kind of compare myself to like the
truckload market, and so because that's all we do. And
so we think we're the fourth or fifth largest truckload
(17:56):
broker in North America, and that's just truckload going in
terms of how much truckload wyting we move every single day.
And so when I look at the people we're competing
with in that market, you know, I think we all
have great technology.
Speaker 3 (18:08):
I think we all have different.
Speaker 2 (18:09):
Flavors of how we've built out what the user experience
looks like. But the end of the day, we're matching
loads and trucks, right, so we've got great algorithms that
have pricing science behind it, so we know what our
costs are going to be on carriers based on lead time,
based on how much volume. Because what's crazy people don't
even think about it. But if we have like seventeen
loads on Chicago going to the northeast on a day,
we're quoting all those loads very differently. We're quoting that
(18:31):
incremental eighteenth load differently than we quoted the first load.
If fifteen of the seventeen are already covered, we're going
to quote the eighteenth different then at thirteen of the
seventeen are covered. And so there's just so much that
goes into the algorithms that really look at the internal
dynamics of our marketplace. Our marketplace being the loads that
we already own, and so a lot of stuff we're
building errors around data, around pricing, around what is our
carrier costs going to be? When should we take an offer,
(18:53):
When should we not take an offer? How should we
you know, we negotiate on an offer. If we get
a carrier offer that comes in that's a thousand bucks,
we try to push the nine hundreds. We take nine
to seventy five, And so that's really the technology that
we're building is how do we become more efficient and
make smarter, faster decisions so that our employees are more productive.
Because at the end of the day, the easiest way
to look at productivity is the number of loads per
(19:13):
day per head, right And so at the end of
the day, if you're able to get more out of
your people, and you can get loads per day per
head as a function of because of your average rep
ten years higher, but you can also get loads per
day per head because your technology is better. And so
really that's the way we look at technology investments. You know,
it's a never ending roadmap. There's so much opportunity for
us to do more and build better technology. But we
(19:33):
feel very confident. I mean, we've taken our cost per load,
like our cost to serve down significantly in the last
thirty six months. I'd say we've probably lowered our cost
per load by over forty percent in the last thirty
six months right now, and so we're going to continue
to hammer on that every single day. And so we
think that's the only way you're going to survive over
the next five to ten years is building technology that
(19:55):
hammers down your cost per loads, that you can serve
your customers better and so that's interesting.
Speaker 1 (20:00):
So you're taking out the cost of load considerably. You know,
have a couple questions related to that. A how like
what are the what have been the biggest wins in that?
And then also are you like, you know, taking that
savings and passing it along to your customers And that's
kind of how you're winning the share, you know, because
(20:22):
maybe you're you're able to offer something at a less
price but still make the same amount of money because
you know, your cost structure is different.
Speaker 2 (20:28):
Yeah, I mean, it's it's a delicate balance, right, Like
you know, if we take hypothetically five dollars out our constructure,
are we passing that back on to the customers immediately?
Speaker 3 (20:35):
Probably not.
Speaker 2 (20:35):
Right at the end of the day, arrive as a
fast growing company that is at around industry average margins,
but we have to continue to expand our earnings. Right,
We're very fortunate that we're profitable. We're never not going
to be profitable going forward, but you know, we want
we want to get to where C. H. Robinson is,
where you know, at the bottom of the cycle there's
still you know, four percent evada.
Speaker 3 (20:57):
You know, we're not quite there yet. Now.
Speaker 2 (20:59):
Function of that is, you know, we're reinvesting a lot
back into the growth of the company, but obviously we
just have to continue to improve and so you know,
we're not turning around and you know, all of a
sudden lowering all of our rates overnight to our customers.
But I do believe that over the next five to
ten years that as you you know, for every ten
dollars you cut out of your cost structure, you're probably
giving the vast majority of that back to the customers
(21:20):
over time. It's it's not that fluid of a market
where it happens instantaneously. But yeah, I do believe, Like
let's just make up an example and use hundred percent.
Let's just say the industry average cost forload is one
hundred percent today. If that one hundred percent becomes seventy percent,
I do believe a lot of that savings goes back
to the shippers over time. And so, you know, is
it happening overnight. No, But you know that's why we
(21:42):
continue to get more and more profitable. We're getting better
operating leverage as a company, and that's part of maturing
as an organization, right, Like you know, you can look
at Uber freights, you know, public earnings, and you can
see that they haven't really cracked the code of profitability.
You know, they obviously have to work on their cost structure,
they have to work on their margins, and like the
common of those two things are the only way you
can survive long term.
Speaker 3 (22:02):
And we're doing the exact same thing.
Speaker 1 (22:04):
So what was the biggest I guess things that you've
taken out of on the cost side through technology.
Speaker 2 (22:13):
So when you think about taking out, I don't look
at as taking out I look at as getting more productivity, right,
And so let's just make up a number.
Speaker 3 (22:19):
Right.
Speaker 2 (22:20):
Let's say when you're doing a million loads, you're investing
I'm just making this up hypothetically, fifty million dollars in technology.
So you're spending fifty dollars per load on technology. But
if you're doing three million loads and you're still investing,
you know, sixty million, now you're only spending twenty dollars
per load, right, and so you just picked up thirty
dollars of operating leverage over time because you're doing more
(22:41):
as an organization. And so a big part of cost
structure improvements is really around like load growth, right, if
you're able to grow your loads and you're not, you know,
increasing your operating costs at the same rate, you're picking
up a lot of operating leverage at the same time.
It's rep productivity, right. So when we look at how
many loads per day is the average rep doing that
is a big driver cost per load coming down. So
(23:02):
you're not like firing people to take cost out, You're
just getting more productivity out of them. And so you
have more loads and less cost because the cost of
the offex isn't going up at the same rate. And
so when you think of technology where it's really driving
cost per load down, it's increasing productivity of the people
we have. And so we're continuing to add bodies constantly,
but we're adding bodies at a significantly slower rate than
(23:24):
we are adding volume. And so that is what technology
is helping us do.
Speaker 1 (23:28):
And you know you did mention the number of loads
per day per head. Do you have any stats on
there or where you are and kind of where you
hope to be?
Speaker 2 (23:36):
Yeah, So I will answer the question in ten different
ways because it's just impossible not to. You know, we
kind of look at that in a lot of different ways.
Do we look at loads per day per rev Gen employee.
Do we look at loads per day per total employee.
Do we look at loads per day per total employee
excluding everyone that's in training, because if we hire six
hundred people in the summer, it's going to move that
number down, right, And so it's a very volatile stat
(23:58):
depending on how you look at it.
Speaker 3 (24:00):
So if you look historically, I would say the truckload.
Speaker 2 (24:03):
Now this is the problem is I'm in truckload, so
I speak truckload lingo. Historically you would say three loads
per day per head is kind of like where you
needed to be, right, So if we have two thousand people,
you better be at six thousand loads a day. Well,
we're north of that, and so you know we are.
We believe that in that stat that stat we'll get
to five loads per day per head, it will go
to six loads per day per head. And now once
(24:24):
again that's including all employees. That's talking track and trace employees,
technology employees, that's every single person in the organization. But
if you look at just Rebgen, you know our Rebgen
productivity is going to be way north of ten loads
per day per head because you have all the support
staff that goes in behind that, and so you know,
that's kind of the way. It's a really tricky question.
And when we look at our annual operating plan, we
(24:44):
literally have those ratios literally fifteen to twenty different ways
and making sure that we're getting operating leverage on every
single department within the company. Right, Are we getting operating
leverage on technology, are getting operating leverage on ARP? Are
we getting on legal and compliance? And so everything we're
doing is trying to get operating leverage on all of
our different departments.
Speaker 1 (25:02):
So you mentioned three loads per day, maybe getting to
six loads, that was industry average storage. That's industry average,
got you? So, I guess more specifically unarrived, do you
guys have any any goals that you want to share
in terms of, you know, how much you want to improve?
You don't have to give specific numbers per head, but like,
(25:23):
you know, do you want to should that number? Should
should that stat for you guys double in the next
ten years, next five years, next three years, tomorrow north.
Speaker 2 (25:32):
Of three and a little bit under four today, I
would say in the next like three to four years,
you want to be north of five to the mid fives.
You know, kind of the way we look at is
by twenty thirty twenty thirty one, we're very confident we
could be moving north north of fifteen thousand loads a day,
and so we want to continue to make sure we're
making the right investments. And you know, there's obviously a
(25:53):
difference between optimizing productivity and optimizing growth and profitability. Right,
they're kind of like at an intersection of each other.
If you want to optimize productivity metrics and you want
to optimize profitability, then you're going to minimize long term growth, right,
And so there's always a delicate balance of when we're
looking to optimize these these different metrics and what the
right timing of that is is So if we want
(26:14):
to continue to grow at fifteen or twenty percent of them,
you know every single year when we think the market's
growing three or four percent, we're never going to really
optimize that ratio until we're willing to pull back on
our growth investments. And so that's kind of the balance
that we look at between you know, maximizing profitability and
maximizing productivity.
Speaker 1 (26:33):
So we can't talk about the brokerge industry, or trucking
or or technology without adjussing fraud kind of what are
you doing with that aspects? How are you combating fraud
which has become an increasing problem for the freight markets.
Speaker 2 (26:48):
Yeah, fraud is a massive issue, and you know, it's
a lot of the articles that you're reading online. You know,
there's a lot of you know, different perspectives of what
we can do to improve as an industry, and so
Arrive has spent a lot of time and energy investing
in different you know, integrations, whether it's using highway, whether
it's really tightening up our own internal SOPs. We have
(27:08):
an entire fraud detection team of former detective that literally
you know, tracks downloads and works with local law enforcement
to recover stone loads. That typically was something we used
to outsource. But it really just comes down to like
really good internal control right at the end of the day.
Are you doing your diligence. Are you making sure that
you're loading a carre that you know and you trust.
(27:29):
Are you making sure that the dispatcher is who they
say they are, Are you working with cares that are reputable.
There's just so many different things that we can do
as an industry to really crack down on it. Yes,
there's the technology and there's the people that are coming
from all over the world that are you know, trying
to hack into people's emails and get into the care reportals.
There's things we're going to prevent that. But at an
aggregate level, I mean, we definitely were a victim of
(27:51):
fraudulent thefts over the course of the last couple of years,
But the last six hundred thousand loads that Arrive we've
had zero fraudulent thefts, and so we feel really confident
that we're getting ahead of it, that we're investing in
the right tools, the right resources, building the right teams.
But I don't see this trend going anywhere anytime soon,
especially where rates are in the industry. And so I
think we as an industry, you know, whether it's DAT,
(28:14):
whether it's you know, truck truckers, truck stop, whether it's highway,
they all need to you know, pitch in and make
sure they're working on different compliance tools that allow us
to be more successful as an industry as well.
Speaker 3 (28:24):
And so it's a team sport.
Speaker 2 (28:25):
And so we do feel that Arrive has got a
good handle on it, but for us to do it,
it's taking out a lot of capacity.
Speaker 3 (28:31):
We're having to be extremely strict on.
Speaker 2 (28:33):
What we're doing day to data and make sure that
our customers aren't at risk.
Speaker 1 (28:37):
Gotcha, and let's let's, I guess talk about the truckload market.
Since you know, as you mentioned, most of your businesses
in the full truckloak market. What what are you guys
seeing from your vantage point? You know, the recovery and
rates have been extremely slow, probably a lot slower than
most of us thought it would be twelve months ago.
(28:58):
If you can just give us a little update on
you know, what you're seeing in the truckload market.
Speaker 2 (29:02):
Now, Look, I think I've always been very hesitant to
call a market turn. You know, over the last two
or three years, I've been very vocal and a lot
of you know, closed sessions and open sessions, whether it's panels,
et cetera. That the most important indicator is, you know,
what is the delta between spotting contract rates? And the
delta between spotting contract is still significant and so you know,
(29:24):
the tenor rejections are low, the delta between spotting contract
is is high. You know, the market, in my opinion,
is not in a position to be disrupted. Yet we
need to see more capacity exit and we need to
see more demand return to the market. You know, obviously freight, freight,
waves and DAT and there's so many different great data
providers out there that all have a different spin on it,
(29:45):
but they're all pretty much in agreement that you know,
capacity is pretty much consistent, it's not exiting at the
rate that we thought it would be, and demand is
being destructed. And so the combination of those things you
are going to lead to continuing challenging environment. And so
for us, you know, we love when the market's in
our favor. We obviously grow more, we can take more
(30:05):
market share, we can get in with more customers. But
the end of the day, like we we're accepting the
reality that we're in and we just have to improve
as an organization. Right the only things that we can
control is we can get better as a company. We
can hire better, train better, have better relationships with our customers,
have better relationships with our careers, build better technology, take
costs out of our cost structure, and just get better.
(30:27):
Because sitting around hoping for the market to change is
a fool's game. And so you know, we're very we're
very comfortable in the market that we're in. We're getting
better every year. And so, look, I'm not going to
sit here and say that twenty six is the year
for the industry to change. I think there's a lot
of unknowns. I think federal regulation is the only thing
that could change it on a dime, and that will
(30:48):
be that will be really interesting what the administration does
with you know, the English English proficiency, you know, the
non documented drivers, and there's a lot of stuff going
around with you know, and world right now. I think
that would be catastrophic to rates for the shippers, and
so I don't know if they're going to make a
hard stance on that and cause rates to double overnight.
(31:11):
And so it's going to be an interesting next six
months twelve months in the industry. But without any like
crazy federal regulation, I don't see demand returning fast enough.
I don't see drivers exiting fast enough to create any
type of real volatility without some help.
Speaker 1 (31:26):
Yeah, we recently had Derek Leathers from Warner Enterprises on
the podcast and he noted that, you know, he thought
that if you know, true enforcement, it could take five
to fifteen percent of the capacity out of the market,
which would obviously bode well for rates. You mentioned the
spread between spot and contractual is there is there a
(31:46):
spread where like when you see that spread, you're like, oh,
the market's tightening or this the spread needs to narrow.
Speaker 2 (31:53):
It needs to narrow, and so look it. If you
look back historically, it's always within us a much closer range.
I think, I don't have the most recent data, but
you know DAT puts this out consistently. I haven't looked
at in the last couple of weeks, but it's been
in the thirty thirty set range.
Speaker 3 (32:09):
Right.
Speaker 2 (32:10):
Typically, what you see that as in the teams when
the market is more prime for a disruption, Because what
has to happen for a freight market disruption is that
the market in the spot market has to have better
rates for a long enough period of time that asset
based carriers are willing to give back contractual freight and
force shippers to rebent.
Speaker 3 (32:29):
Right.
Speaker 2 (32:29):
And so a one week blip or a two week
blip of tightness where the contracts in the spot they
get close, but they never actually cross. Carriers aren't going
to go give back that contract for a one or
two week blip. It needs to be a sustained disruption
where the carriers actually believe they can go back to
the shippers and get more money, right, and so we
just haven't seen any period of sustained disruption, whether it's
(32:51):
demand driven or capacity driven. And so really what we're
seeing is kind of like a flat market. I mean,
it's been almost dead flat the last twelve to eighteen months.
Speaker 3 (33:00):
Kind of continuing.
Speaker 1 (33:02):
Yeah, you know, you mentioned some of the stuff that's
going on with regulations and the Trump administration. Obviously they've
been a lot more protectionists in nature than past administrations.
And in the beginning you also mentioned the fact that
you guys are you know, growing your your Mexico Canadian
(33:22):
cross border business, has the tariffs and that more pro
protectionist stances impacted those businesses.
Speaker 2 (33:30):
You know, we've seen periods of volatility around like leading
up to when they're going to go into effect, but honestly,
from our our scale, you know, we're moving hundreds of
truckloads per day in Canada and Mexico, not thousands. You know,
we're not seeing any crazy, you know, volatility in those markets. Also,
I think that shippers are just you know, they're kind
(33:51):
of waiting and seeing, right. I think that's kind of
the nerave that we're hearing from everyone is you know,
no one knows what the next you know step looks like.
I think everyone it's hard to pivot your supply chain overnight,
and so, you know, do I believe that long term,
you know, Mexico and Canada should be a winner and
there should be more freight opportunities in those markets if
the tariffs continue to hold. Yes, But I don't think
(34:11):
anyone's confident that there's any kind of sustainability or consistency
to what we're seeing from the administration. So I think
it's just a lot of weight in seeing We're not
seeing any crazy volatility in either of those markets.
Speaker 3 (34:23):
It's kind of business as usual.
Speaker 1 (34:24):
And you know, you mentioned on the beginning of the
conversation how you know arrive was really more focus on
the transactional market, and you've moved more and more into
contractual markets. Could you talk about, you know, what the
shippers are telling you guys on the contractual business about
(34:45):
peak or you don't really have that kind of visibility
from shippers. They'll just come to you when they need you.
Speaker 2 (34:54):
Yeah, I mean it depends, Like Broadbrush, we have a team.
I mean, we see hundreds and hundreds of shippers every
single month. We have a team of what we call
executive sponsors, and they're all former directors or vps at
Fortune five hundred companies that have come over to the
broke side and they basically travel and see customers for
a living. And so we do get a lot of
different feedback. And I would tell you not any customer
(35:15):
tells you the same. I think, you know, when you
work with thousands and thousands of customers, you see a
little bit of trends, but it really is dependent, Like
even within the retail you're getting different feedback, right, And
so I think it's kind of all over the board.
Speaker 3 (35:30):
I think if you look at the data, though, if
you look.
Speaker 2 (35:32):
At like the freight freight waves data around and bound containers,
it would probably tell you that there's not going to
be much of a peak season this year. But look
at the end of the day, you know, things can
change in a hurry. But you know, I think the
data would suggest less of a peak this year. But look,
we saw some serious rate volatility around Labor Day, right,
(35:53):
and so the market is potentially in a position that
you could see some volatility with any kind of hiccup,
And so we're kind of waiting in seeing but you know,
if you're a pure data and looking at it from
that lens, I think you would probably air on the
side of a very small peak season.
Speaker 1 (36:07):
And are you guys seeing anything different when you guys
are looking to hire new folks? Just given this seems
like the job market is deteriorate a little bit over
the last couple of months. Is it easier for you
guys to bring people in or do you do you
get more applicants?
Speaker 2 (36:23):
Yeah, so it's a great question. And so you know,
we hire, like I said, almost entirely out of college.
And so we're onboarding the vast majority of our employees
in January, February, a little bit of March, and then
almost the rest May, June, July, August, September. And so
if we're not, if our offers aren't out in Q
four Q one, those summer roles are hard to hire
(36:44):
because we have to go outside of our profile and
we typically don't like to do that. And so it
will be a really good indicator I think in Q
three and Q four of this year how the acceptance
rate is for next summer, right, because I think that's
when you know it will be our people on college
campus this quarter. Are they actually at the career fairs?
Are they extending offers on the entry level? So I
think it's too early for us to tell. We're just
(37:06):
I think last week we just started ramping up our
college presence for this semester, and I think we'll be
able to tell very quickly on how quickly people are,
you know, applying, how quickly they're accepting their their their offers,
and then you know how much volume we're getting that
in that perspective, So I probably be able to answer
that better in a month.
Speaker 3 (37:23):
Or's right?
Speaker 1 (37:24):
And are there are there certain universities or colleges that
you guys focus on that if you've had like success,
like like these are the folks that are the most
prepared for a job at Arrive.
Speaker 3 (37:36):
Yeah.
Speaker 2 (37:36):
We we are very data focused and so we have
a profile by roll, so customer sales, carrier, sales operations.
They're all very different personalities, different you know, backgrounds, different universities,
and so we we have a very strict you know
program that we've put in place.
Speaker 3 (37:54):
Now, what's crazy is like sometimes.
Speaker 2 (37:55):
Schools do really really well and then all of a
sudden we start to see them fall off. And so
we'll rotate them out and bring in a new school
that's like in like an incubation period. And so you know,
we've got a lot of core schools. I mean what
I would tell you generally speaking there, we do a
lot in the Midwest. A lot of our hiring comes
out of the Midwest, and we relocate those people to Austin,
to Phoenix, to Tampa. We obviously have two offices already
(38:17):
in the Midwest and Columbus in Chicago, and so you know,
I would say the vast majority of our campuses are
in that part of the world. We are, you know,
pretty big in the Texas market. You know, we have
a few schools that we really like in Texas. We
like some schools in Louisiana. But outside of that, it's
it's heavy Midwest.
Speaker 1 (38:35):
Right, And just one more on this system, Just curious,
do you look at people with like logistics majors or
miners or you're interested more it's more about that personality.
Speaker 2 (38:45):
Yeah, honestly, majors. There's not a lot of people that
have logistics majors. So for like customer and care sales,
we're seeing more like sales focused, you know, sales major
sales miners operations. We definitely take people that have more
of a background apply chain, people that want to you know,
do more problem solving for a living, and so those
are going to be the roles that we would probably
see those majors. But our salespeople, you know, there, they're salespeople, right.
(39:10):
They don't care if they're selling logistics or insurance or
wealth management.
Speaker 3 (39:13):
They just want to do.
Speaker 1 (39:14):
Sales right, right. And so let's talk about the future
because you know, I know you said you don't like to,
you know, to tell the future, but or predict the future.
But you know, you mentioned the fact that you're the
fourth or fifth largest truckload broker in North America. Where
do you think a Arrive's going to be in three
years from now as an organization.
Speaker 2 (39:36):
Well, look, the people ahead of us are big, right,
You've got h Robinson, You've got TQL, and now you.
Speaker 3 (39:43):
Have RXO Coyote. Yeah.
Speaker 2 (39:45):
RXO Coyote integration definitely punted our ability to take what
we would consider the third spot for a period of time.
That was a pretty big merger of two really well
run companies. And so look for us, we're not paying
attention to that. We are very focused on playing our
own game. I'm very confident, like I said earlier, by
twenty thirty, twenty thirty one will be north of fifteen
(40:05):
thousand truckloads per day. You know, we're going to continue
to build great technology, hire great people, and we're going
to continue to service our customers. I mean, I think
if you look at the last three years, we're at
thirty eight here of the Year awards for Fortune five
hundred shippers, and I think that's more than those three
companies combined. I'm not sure, but I think it is.
And so we're going to continue to focus on offering
(40:27):
the best service that we can. And we think we're
going to be very very successful from now and into
the future if we do, if we focus on what matters,
which is delivering great service and great products to our customers.
And so, look, we obviously want to continue to climb
that leaderboard. We want to have, you know, optionality, whether
we want to go public in twenty thirty or twenty
thirty one, or we want to stay private. We want
(40:47):
to just keep our options open. And the only way
we can do that is by performing every single year.
And so that's what we'll do.
Speaker 1 (40:52):
Gotcha And I'm sorry if I missed this. You know,
you said fifteen thousand loads per day by twenty thirty,
twenty thirty one, So what what would that imply the
growth at.
Speaker 2 (41:04):
When we look at our growth over the next five years,
we're looking in like the high teens. You know, it's
it's a lot easier to grow when you're moving you know,
one hundred thousand loads a year. But now that we're
you know, almost you know, almost two million loads, it's
still a lot of growth when you're growing at that rate.
And so you know, that's kind of like when we
(41:24):
look at our five year perspective, we're mid teens growth
rate every single year.
Speaker 3 (41:29):
Right.
Speaker 1 (41:29):
So, besides coming on the Talking Transports podcast, what is
your favorite thing to that you know about your current role?
Speaker 2 (41:37):
So I think it's a combination and I love By
the way, if you look at me, I hardly do
any podcasts, so I guess that's a testament to your podcast.
But no, I usually like to keep a super low profile.
I really get energized by operating every single day. I'm
not one of those founders that likes to be out
of the business. I like to be extremely in the business.
So what drives me and keeps me excited every day.
(42:00):
Like it's just there's hundreds of things that arrive can
do better. And so we have such a great team.
My leadership team is all bought in. We're not a
team that's you know, taking days.
Speaker 3 (42:08):
Off to go golf. We're all in it every single day.
Speaker 2 (42:11):
We have a lot of fun together and there's just
so much opportunity to improve his organization that that's what
keeps me going. And you just have to be relentless,
right like, and I think that's our personality.
Speaker 3 (42:20):
We show that.
Speaker 2 (42:21):
You know, yeah, we're up thirty five percent year over year,
but we should be up forty We should be up
forty five. We should hire better, we should train better,
we should have better retention, we should have better growth
in our modes. And so for me, I just like
you know, building and finding the problems and you know,
identify them and solving them. And so you know, that's
what we do and I think we do it better
than almost anyone in the business. And we're not scared
to make changes like a lot of people, Oh, we
(42:42):
can't change that, it's going to create disruption. It's like
once you figure something's not working, you just you change it,
you make it, you make it better, and you move on.
Speaker 3 (42:49):
And so you know, that's what keeps me going every day.
Speaker 1 (42:51):
All right, great, well, I wish you luck on your
growth story and also I look forward to checking in
with you down the road to see, you know, if
you get to those levels that you've you've carved out
for yourself or the targets you've carved out for yourself
in twenty thirty twenty thirty one. So and again, Matt
so much. I really want to thank you so much
for your time and your insights today. I really appreciate it.
Speaker 2 (43:12):
Appreciate you giving me the opportunity be on here and
it's not if okay, we're very confident what we're doing.
It's a win, so okay, and all sincerity. I really
appreciate the opportunity. And you know, reach out to me
if you ever have any other questions. But thanks a
lot for the time.
Speaker 1 (43:26):
All right, Thanks so much, Matt, and I want to
thank you for tuning in. If you liked the episode,
please subscribe and leave a review. We've lined up a
number of great guests for the podcast, so please check
back to your conversations with c suite executives, shippers, regulators
and decision makers within the freight markets. Also, if you
want to learn more about freight transportation markets, check out
our work on the Bloomberg Terminal, at big and on
(43:48):
social media. This is Lee Glasgow signing off and thanks
for talking transports with me. Talk to you next week. Bye,
Hi everyone, this is Lee Clasgow when We're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Klaskow, senior freight, transportation and logistics analysts at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the globe. A quick public service announcement
before we dive in. Your support is instrumental to keep
(00:27):
bringing great guests and conversations to you, our listeners, and
we need your support. So please, if you enjoy this podcast,
share it, like it and leave a comment. Also, if
you have any ideas, feedback, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn, or on x at Logistics Lee
and We're delighted to have with us. Matt Piat back
(00:48):
onto the podcast. He is the CEO of Arrived Logistics,
a firm he co founded in twenty fourteen. Arrive is
the thirty fifth largest logistics company and the eleventh biggest
freight broker to transport topics. Welcome back to the podcast, Matt.
Speaker 2 (01:03):
Thanks Lee, and look forward to our conversation. Last year,
I think it went pretty well, so hopefully can add
some value to your listeners this time.
Speaker 1 (01:09):
I'm sure you will. And just you know, I mentioned
on the intro that Arrive is a broker freight broker.
You know, could you provide a little more background into
the company before we delve into the markets.
Speaker 2 (01:23):
Yeah, absolutely, so, as you said, Arrive was found in
twenty fourteen. You know, we primarily focus on the middle
mile part of the supply chain in North America, and
so originally we did a lot of transactional freight in
the United States that has since grown to now a
heavy balance of contractual and transactional, and then we have
recently moved into Mexico and Canada. You know, we really
(01:45):
don't touch anything in the air, we don't touch anything
on the ocean. We are very primarily focused on full
truckload transportation and recently have gotten into a few other
modes like partials. In a very small presence in the
LTL market, but you know, ninety plus percent of revenue
is that truckload market.
Speaker 1 (02:03):
Okay, And just everyone is not familiar with kind of
the lingo here, so you can just explain what the
middle mile is in transportation. Yeah, So middle mile.
Speaker 2 (02:14):
You know, the way we kind of think about that is,
you know, bringing it from distribution center to retailer or
from manufacturer attribution. And so when you see the eighteen
wheelers on the highway, you know that is primarily what
we're focusing on. We're not delivering to the end user,
you know, appliances. We're really focusing on the entire buyout
of the truck and moving it from point to point.
Speaker 1 (02:37):
Do you guys do you do you guys keep track?
Like what's the average length of hall of a typical shipment.
Speaker 3 (02:42):
That's a great question.
Speaker 2 (02:43):
Every single broker and every single asset based carrier would
probably answer that a little bit differently. It depends on
the customer mix, your modal mix, the type of freight
that you're moving. But at an aggregate level, you know,
depending on the market, we're as low as six hundred
and fifty miles and we're as high as seven hundred
and fifty miles on an average you know length. You know,
obviously the regional shorter length of haul is historically more
(03:06):
conducive to the asset based carriers. They really dominate that region. Also,
the digital brokers that still are around have tried to
build their business on that regional you know, more local
freight as well, and so we're really you know, more
instrumental in that middle mile seven hundred, you know, thousand
type mile move right.
Speaker 1 (03:24):
And you know, you mentioned, you know the fact that
ninety percent of your revenue is tied to the full
truckload market. But you're, you know, you're you're growing these
other markets. Is the growth in those other markets like
LTL or partial or maybe cross cross border, are those
growing more than your traditional business?
Speaker 3 (03:43):
You know, it's crazy.
Speaker 2 (03:44):
You know, I'd sit here and tell you I wish
that our modes were growing at a higher percentage. Our
dry truckload business is so strong that we're growing, you know,
we're up almost thirty five percent year every year in volume,
and when you compare that to a lot of our
peers that are your negative or flat, we feel very
very confident our ability to drive that, you know, drive
(04:05):
that truckload market. And so our other modes are growing
very quickly, but they're actually growing about thirty percent year
over year, and so you know, it's just it's hard
to keep up with, you know, our core competency that's
got a lot of really good momentum.
Speaker 3 (04:19):
But yeah, they're growing. They're growing a great clip.
Speaker 2 (04:21):
And I wish they were growing even faster, but you know,
at an aggregate level, they're pretty close.
Speaker 1 (04:26):
Yeah, you know, you mentioned you know, the market is
not really growing. Uh, it's you know, depending on you know,
which broker you talk to. Most of the legacy ones
that have been around for a while, are you know,
down single digits to up single digits and volumes? What
what is driving the thirty five percent year of year
growth in the full structload drive in business? I mean,
obviously you're winning share from from somebody, so you know,
(04:50):
and also if you can just tell us what's the
secret sauce.
Speaker 2 (04:53):
You know, we could spend the next hour talking about
a lot of the different things that we're doing that
we think are making a difference. But you know, I'll
start like an industry level and basically say some of
the themes that we're seeing our provider consolidation and so
a lot of shippers when the market is really tight,
like during COVID, they add a bunch of providers to
their network. And then as markets you know, settle in
(05:15):
and the market gets a little easier for the shippers,
they start to consolidate their providers, and so you know,
really focusing on not being consolidated, so being a provider
that offers really great service that they can rely on.
They want to be able to work with you know,
five or ten providers instead of fifty providers, and so
when that consolidation happens, you know, that's that's an opportunity
to pick up market share. Another trend we're seeing in
(05:37):
the industry pretty you know, regularly is what I would
consider centralization of decision makers. And so the transportation markets
heavily fragmented both from an assets and from the shippers
and then from a decision maker decision maker standpoint, and
we're starting to see a lot of companies start to
centralize procurement, and you know, when that happens, it typically
(05:58):
you know, forces consolidation in their provideider base. And so
that's a big driver to it. And really it's just
the maturation of our salesforce and the maturation of our
customer relationships. And so when you look at a Arrive,
we've only been in a business for eleven years, and
if you look at everyone that's bigger than us, they've
been in business twenty thirty forty to fifty plus years, right,
and so they've already got a very mature workforce and
they've got very mature relationships, and so they're playing more
(06:20):
defense versus offense. And so you know, we can talk
about the maturation of our workforce. Let's start there. The
average rep at arrive is like two and a half
to three years of tenure. And so we've built our
entire business on like this cohort model where we know
exactly what type of productivity we get based as people
mature through the cohort curve. Right, we know there's going
to be attrition, but we know that at month twelve
(06:42):
they're going to bring an x amount of loads per
day by month twenty four, thirty six, and forty eight,
And so we've been accurately able to accurately forecast where
our loads are going over a very long duration of
time because of how accurate our cohort model is. And
so really what you're seeing is just the maturation of
all these cohorts, of all these people that we hired
in twenty eighteen, twenty nine, twenty twenty twenty one, twenty two,
they're all continuing to mature and they'll continue to take
(07:04):
more and more market share as they become more mature
as a sales rep. That's one way that we've had
a lot of successes. A lot of those investments that
we've made over the last five years are really come
to fruition. And then the other one is just the
maturation of our accounts, right, and so we look at
like at SMB, mid market and enterprise customer and three
very different lights. And we know that first year, the
average enterprise customers going to give us like four loads
(07:25):
a day. By month, by year five that at that
same customers will give us sixteen loads a day. And
so you've got this massive amount of customers that we've
landed over the first eleven years of our company that
are just really maturing through that curve with their experience
have arrived. And so as long as we offer great prices,
we offer great service, we're going to continue to expand
our market share within all of these customers. And so
(07:46):
it's really the aggregation of just doing things the right way.
It's like hiring people really well, training people well, and
then servicing our customers really well. And so if you
do all those three things, you're able to continue to
take market share, you know, even in the most challenging markets.
And you know, obviously if the market it was more
in the broker favor, our growth would be even higher. Right,
Like when we think of like the managed goals that
we look at, you know, we know that the percent
(08:08):
achievement of that managed goal and a tough market, it's
can to be lower than it is in a good market.
And so like we've just gotten really really dialed in
understanding what our productivity curves look like. And so that's
really led to a lot of our success that arrived.
But at the end of the day, it's a people business.
Technology is a huge part of our success as well,
but it's really just hiring good people, training people well,
and servicing your customers. And there's a lot of opportunity
(08:29):
to grow. And so that's kind of the way we
look at the market. It's so big, it's so fragmented.
Speaker 1 (08:34):
Yes, it's two follow ups on that, you know, you mentioned,
you know, when you hire somebody and you kind of
know their productivity, if they're going to they're gonna last,
you know, after the first twelve months. Because obviously there's
a lot of chre in this because it's a you know,
it's a challenging business. It's it's it's uh, it's it's
it's calling people and and and and asking for their business,
which obviously isn't easy. So are you are you hiring
(08:56):
people with limited brokerage experience beforehand or are you hiring
people with experience? So kind of what is your target
new employee? Uh, that's on the broker side.
Speaker 2 (09:07):
So I would say when you look historically over the
first eleven years, ninety seven percent of our hires have
no experience whatsoever. And so, you know, when we were
growing quickly, we definitely went and hired some experienced people
to help us, you know, scale our business, to help
us you know, have more mid level management. But at
this point, you know, if you look today, I bet
(09:29):
if we hire seven hundred and fifty people, maybe ten
of them have experience, and so that that's going to
continue to trend in that direction. You know, we're very
confident in our ability to hire people that have no
sales experience, people coming out of college that want to
get a career in sales. You know, it's really easy
and like I'm not you know, throwing shade at other
people's business model, but going in overpaying someone that's got
(09:51):
five years of experience to move their book of business
over it's really easy. I mean, we could go do
that to all of our competitors, but that's not our strategy.
Our strategy is, you know, go hire your people, bring
them out of college, put them through the best in
class sales training, have them to think about the job
the way we wanted to think about it, and it's
very scalable and repeatable. The way that we do are hiring,
(10:11):
our training, and so you know, that is our strategy.
It's going to continue to be our strategy. You know
a lot of people are like, oh, you're gonna go
buy a bunch of companies. You know, obviously there's a
lot of companies looking to sell right now with how
challenging the market is, but you just pick up bad
habits and so we prefer to you know, hire people
and go to ourselves.
Speaker 1 (10:26):
Yeah, and you know, you did mention that the market
is extremely fragmented, which which it is, but there are
some people talking about it becoming a little more or
less so because consolidating that market is obviously going to
be very, very very difficult to do. Do you see
more consolidation, whether that's through M and A activity or
just people being pushed out of the market because they
(10:48):
just can't compete because they don't have the capital to
invest in the technology that you probably really need to
be successful in this business today and tomorrow versus you know,
ten years ago.
Speaker 2 (10:59):
So I'm I'm always a believer that consolidation is a
very logical outcome for our industry. With that said, there's
a large tale of shippers the SMB market. There's hundreds
and hundreds of thousands of shippers that small brokers can
continue to survive on for a very long time. And
so I think what you're going to see is consolidation
within the enterprise market, right the companies that are very
(11:20):
educated in buying transportation, that have high requirements for service,
have high requirements for integrations and capabilities.
Speaker 3 (11:27):
I believe that the.
Speaker 2 (11:28):
Top five or ten brokers are going to take the
vast majority of that market share over the coming five
to ten years. And so I do believe the big
will get bigger. You know, I kind of look at
European transportation companies as these huge conglomerates that are massive,
and in North America you don't have that many of them.
Speaker 3 (11:44):
You've got JB. Hunt, You've got H.
Speaker 2 (11:46):
Robinson, You've got a few others, But you don't have
those twenty billion dollar companies in North America. But I
do believe that the big will continue to get bigger.
I think at the end of the day, technology is
a deflationary product, and it's going to cause rate deflation
or time. We're not great inflation, but margin compression. But ultimately,
as long as you can get more efficient internally and
you can take cost out of your cost structure, it's
(12:08):
okay that margin compression happens, right, because you can still
put the same amount of profit to the bottom line
even if margins get compressed, if you get more and
more efficient from a technology perspective and from a rep
perspective as well. And so you know, I'm a big
believer that you know, the investments that we make in technology,
we're taking cost out of our business. We're going to
pass those back onto shippers over time, right, And so
(12:28):
I do believe that that in among itself, will cause
consolidation providers because the people that aren't investing in technology,
that don't have the efficiency that we're having, and we're
seeing they're not going to be able to compete on
a rate perspective, because what they need to charge to
make their margin is going to be significantly more than
what I need to charge to make the same margin
to the bottom line.
Speaker 1 (12:48):
So would you be surprised or not surprised if you
sew more deals like the RXO Coyote transaction. I guess
that's a year ago that when that happened. Were you
expecting the big getting bigger just by taking share?
Speaker 2 (13:02):
I think it's a combination of both, right. I think
there is only a few companies in the industry that
has proven to be able to grow organically. You know,
TQL is the top of that list. They've been around
for thirty years. Ken and Carey have done a really
good job over there of building like an unbelievable business organically.
And then I think there's a lot of companies in
the top ten that haven't proven to be able to
(13:23):
grow organically. And even with these industry trends, you know,
organic growth is tough, especially private equity owned or publicly traded,
because it requires investments, right, and so our investments aren't
in CAPEX. Our investments are into people, and those people
have a drain on your P and L, right, and
so it's really hard for the public companies to grow
organically because you've got to be able to invest through
(13:44):
the entirety of a cycle. And as you know, this
cycle is very volatile, right, and so a lot of
people like to make investments when the cycle is good
and they stop making investments when it's bad. Well, you
can't grow like that, and so I think that the
companies that have to hit those earnings or they have
to hit certain covenments because they're probably equity owned with
you know, a lot of leverage, it's really hard to
do that organically. And so they're going to grow inorganically.
(14:05):
And there's a lot of good platforms out there that
we see popping up that are fifty million, two hundred
and fifty million of revenue that they're seeing their writing
on the walls and they're looking to get out. And
I think you're going to see a lot of that
consolidation happening over the next five years, and that's going
to be in the form of M and A for
the bigger people.
Speaker 1 (14:21):
And so, you know, you mentioned, you know, the difficulty
of private equity and publicly traded companies might have versus
somebody that doesn't have those sort of constraints. Can you
talk about you know, arrives ownership. Who owns a arrive
So it's a conglomerate. There's a bunch of investors we've got.
We've got a private equity group called ATL Partners. They're
(14:43):
a minority owner in the company, which we've we've said
that publicly before. They're co investors are BCI which is
a Canadian pension fund, Bawl Post which is a hedge fund,
and TAMASK which is a Singapore sovereign wealth fund. And
so that aggregate of investors as a minority holder. We've
got to great growth equity firm that we brought on
back in twenty seventeen that's been with us for a
(15:03):
long time called lead Edge Capital.
Speaker 3 (15:05):
They're spectacular.
Speaker 2 (15:06):
And then we've got two seed investors that are the
founders and still the CEO of Nutrable, which is see.
Speaker 3 (15:13):
For the energy dree company.
Speaker 2 (15:15):
And so we've got a lot of you know, we're
it's like a democracy on our board, which is a
good thing, right and you know there's not one person
that controls, you know, all the decision making, which has
allowed us to really have good, healthy debates at the
board level. It allows us to kind of hear everyone's
side of the argument and give a lot of different perspectives.
And so, you know, we feel really good about where
our ownership is today. You know, doesn't mean things change
(15:37):
every you know, as you know with investors and with
private equity and growth equity and everyone else, they have
different you know, timing dynamics with their funds, and so
inevitably there will have to be something that gets done
to you know, align the timelines going forward.
Speaker 3 (15:50):
But we feel really confident where we are today.
Speaker 1 (15:53):
All right, great, you know we were talking a little
bit about technology. Uh so it arrived? Is your technology
proprietary kind.
Speaker 3 (16:01):
Of what is it?
Speaker 1 (16:02):
What does it allow you to do that you know
is helping you win so much share?
Speaker 2 (16:08):
Yeah, I mean at the end of the day, when
we look at technology, yes, arrives, technology is proprietary. We
always look at the buy versus built. There's definitely things
that we buy slash partner with people that are building
something they specialize in. Right when you look at you know,
the AI trends and you look at voice AI and
you look at all the different things that are coming out.
You know, we definitely partner on some of it and
(16:28):
then we build some of it right, But historically, you know,
there's three main verticals that we invest in. Number one
is connectivity to our customer. Too is connectivity to our carrier,
and three is just internal rep efficiency. And so I
would say eighty to ninety percent of our technology is
actually focusing on internal efficiency and automation and decision support
because the connectivity to the customers and the carrier is
(16:50):
actually pretty quite easy. A lot of apisz dis you know,
customers want you to put the information in their systems.
They don't want to go to your system, especially within
the enterprise market. You know, we build unbelievable carrier facing
technology that we feel is best in class, but there's
only so much technology we need to build to you know,
integrate with our carriers. And so really now it's all
about like, how do we build a better system internally
(17:12):
to to where we can ramp up our employees faster.
We can prevent them from making bad decisions, we can
help them make better decisions. We can automate the manual
tasks that no one wants to do anymore, whether it's
tracking and whether it's load building, whether it's getting invoices,
settling invoices, answering questions, whether it's you know, scheduling all
sorts of different parts of the life cycle that are
(17:33):
very menial. And so really that's kind of the way
we focus our technology. And so, like, look everyone in
the top three or four or five truckload brokers, and
you made a comment earlier where you said, we're like
the eleventh biggest according to Transport Topics, and you know,
transport topics when they look at brokers, they look at
all brokerage. I kind of compare myself to like the
truckload market, and so because that's all we do. And
so we think we're the fourth or fifth largest truckload
(17:56):
broker in North America, and that's just truckload going in
terms of how much truckload wyting we move every single day.
And so when I look at the people we're competing
with in that market, you know, I think we all
have great technology.
Speaker 3 (18:08):
I think we all have different.
Speaker 2 (18:09):
Flavors of how we've built out what the user experience
looks like. But the end of the day, we're matching
loads and trucks, right, so we've got great algorithms that
have pricing science behind it, so we know what our
costs are going to be on carriers based on lead time,
based on how much volume. Because what's crazy people don't
even think about it. But if we have like seventeen
loads on Chicago going to the northeast on a day,
we're quoting all those loads very differently. We're quoting that
(18:31):
incremental eighteenth load differently than we quoted the first load.
If fifteen of the seventeen are already covered, we're going
to quote the eighteenth different then at thirteen of the
seventeen are covered. And so there's just so much that
goes into the algorithms that really look at the internal
dynamics of our marketplace. Our marketplace being the loads that
we already own, and so a lot of stuff we're
building errors around data, around pricing, around what is our
carrier costs going to be? When should we take an offer,
(18:53):
When should we not take an offer? How should we
you know, we negotiate on an offer. If we get
a carrier offer that comes in that's a thousand bucks,
we try to push the nine hundreds. We take nine
to seventy five, And so that's really the technology that
we're building is how do we become more efficient and
make smarter, faster decisions so that our employees are more productive.
Because at the end of the day, the easiest way
to look at productivity is the number of loads per
(19:13):
day per head, right And so at the end of
the day, if you're able to get more out of
your people, and you can get loads per day per
head as a function of because of your average rep
ten years higher, but you can also get loads per
day per head because your technology is better. And so
really that's the way we look at technology investments. You know,
it's a never ending roadmap. There's so much opportunity for
us to do more and build better technology. But we
(19:33):
feel very confident. I mean, we've taken our cost per load,
like our cost to serve down significantly in the last
thirty six months. I'd say we've probably lowered our cost
per load by over forty percent in the last thirty
six months right now, and so we're going to continue
to hammer on that every single day. And so we
think that's the only way you're going to survive over
the next five to ten years is building technology that
(19:55):
hammers down your cost per loads, that you can serve
your customers better and so that's interesting.
Speaker 1 (20:00):
So you're taking out the cost of load considerably. You know,
have a couple questions related to that. A how like
what are the what have been the biggest wins in that?
And then also are you like, you know, taking that
savings and passing it along to your customers And that's
kind of how you're winning the share, you know, because
(20:22):
maybe you're you're able to offer something at a less
price but still make the same amount of money because
you know, your cost structure is different.
Speaker 2 (20:28):
Yeah, I mean, it's it's a delicate balance, right, Like
you know, if we take hypothetically five dollars out our constructure,
are we passing that back on to the customers immediately?
Speaker 3 (20:35):
Probably not.
Speaker 2 (20:35):
Right at the end of the day, arrive as a
fast growing company that is at around industry average margins,
but we have to continue to expand our earnings. Right,
We're very fortunate that we're profitable. We're never not going
to be profitable going forward, but you know, we want
we want to get to where C. H. Robinson is,
where you know, at the bottom of the cycle there's
still you know, four percent evada.
Speaker 3 (20:57):
You know, we're not quite there yet. Now.
Speaker 2 (20:59):
Function of that is, you know, we're reinvesting a lot
back into the growth of the company, but obviously we
just have to continue to improve and so you know,
we're not turning around and you know, all of a
sudden lowering all of our rates overnight to our customers.
But I do believe that over the next five to
ten years that as you you know, for every ten
dollars you cut out of your cost structure, you're probably
giving the vast majority of that back to the customers
(21:20):
over time. It's it's not that fluid of a market
where it happens instantaneously. But yeah, I do believe, Like
let's just make up an example and use hundred percent.
Let's just say the industry average cost forload is one
hundred percent today. If that one hundred percent becomes seventy percent,
I do believe a lot of that savings goes back
to the shippers over time. And so, you know, is
it happening overnight. No, But you know that's why we
(21:42):
continue to get more and more profitable. We're getting better
operating leverage as a company, and that's part of maturing
as an organization, right, Like you know, you can look
at Uber freights, you know, public earnings, and you can
see that they haven't really cracked the code of profitability.
You know, they obviously have to work on their cost structure,
they have to work on their margins, and like the
common of those two things are the only way you
can survive long term.
Speaker 3 (22:02):
And we're doing the exact same thing.
Speaker 1 (22:04):
So what was the biggest I guess things that you've
taken out of on the cost side through technology.
Speaker 2 (22:13):
So when you think about taking out, I don't look
at as taking out I look at as getting more productivity, right,
And so let's just make up a number.
Speaker 3 (22:19):
Right.
Speaker 2 (22:20):
Let's say when you're doing a million loads, you're investing
I'm just making this up hypothetically, fifty million dollars in technology.
So you're spending fifty dollars per load on technology. But
if you're doing three million loads and you're still investing,
you know, sixty million, now you're only spending twenty dollars
per load, right, and so you just picked up thirty
dollars of operating leverage over time because you're doing more
(22:41):
as an organization. And so a big part of cost
structure improvements is really around like load growth, right, if
you're able to grow your loads and you're not, you know,
increasing your operating costs at the same rate, you're picking
up a lot of operating leverage at the same time.
It's rep productivity, right. So when we look at how
many loads per day is the average rep doing that
is a big driver cost per load coming down. So
(23:02):
you're not like firing people to take cost out, You're
just getting more productivity out of them. And so you
have more loads and less cost because the cost of
the offex isn't going up at the same rate. And
so when you think of technology where it's really driving
cost per load down, it's increasing productivity of the people
we have. And so we're continuing to add bodies constantly,
but we're adding bodies at a significantly slower rate than
(23:24):
we are adding volume. And so that is what technology
is helping us do.
Speaker 1 (23:28):
And you know you did mention the number of loads
per day per head. Do you have any stats on
there or where you are and kind of where you
hope to be?
Speaker 2 (23:36):
Yeah, So I will answer the question in ten different
ways because it's just impossible not to. You know, we
kind of look at that in a lot of different ways.
Do we look at loads per day per rev Gen employee.
Do we look at loads per day per total employee.
Do we look at loads per day per total employee
excluding everyone that's in training, because if we hire six
hundred people in the summer, it's going to move that
number down, right, And so it's a very volatile stat
(23:58):
depending on how you look at it.
Speaker 3 (24:00):
So if you look historically, I would say the truckload.
Speaker 2 (24:03):
Now this is the problem is I'm in truckload, so
I speak truckload lingo. Historically you would say three loads
per day per head is kind of like where you
needed to be, right, So if we have two thousand people,
you better be at six thousand loads a day. Well,
we're north of that, and so you know we are.
We believe that in that stat that stat we'll get
to five loads per day per head, it will go
to six loads per day per head. And now once
(24:24):
again that's including all employees. That's talking track and trace employees,
technology employees, that's every single person in the organization. But
if you look at just Rebgen, you know our Rebgen
productivity is going to be way north of ten loads
per day per head because you have all the support
staff that goes in behind that, and so you know,
that's kind of the way. It's a really tricky question.
And when we look at our annual operating plan, we
(24:44):
literally have those ratios literally fifteen to twenty different ways
and making sure that we're getting operating leverage on every
single department within the company. Right, Are we getting operating
leverage on technology, are getting operating leverage on ARP? Are
we getting on legal and compliance? And so everything we're
doing is trying to get operating leverage on all of
our different departments.
Speaker 1 (25:02):
So you mentioned three loads per day, maybe getting to
six loads, that was industry average storage. That's industry average,
got you? So, I guess more specifically unarrived, do you
guys have any any goals that you want to share
in terms of, you know, how much you want to improve?
You don't have to give specific numbers per head, but like,
(25:23):
you know, do you want to should that number? Should
should that stat for you guys double in the next
ten years, next five years, next three years, tomorrow north.
Speaker 2 (25:32):
Of three and a little bit under four today, I
would say in the next like three to four years,
you want to be north of five to the mid fives.
You know, kind of the way we look at is
by twenty thirty twenty thirty one, we're very confident we
could be moving north north of fifteen thousand loads a day,
and so we want to continue to make sure we're
making the right investments. And you know, there's obviously a
(25:53):
difference between optimizing productivity and optimizing growth and profitability. Right,
they're kind of like at an intersection of each other.
If you want to optimize productivity metrics and you want
to optimize profitability, then you're going to minimize long term growth, right,
And so there's always a delicate balance of when we're
looking to optimize these these different metrics and what the
right timing of that is is So if we want
(26:14):
to continue to grow at fifteen or twenty percent of them,
you know every single year when we think the market's
growing three or four percent, we're never going to really
optimize that ratio until we're willing to pull back on
our growth investments. And so that's kind of the balance
that we look at between you know, maximizing profitability and
maximizing productivity.
Speaker 1 (26:33):
So we can't talk about the brokerge industry, or trucking
or or technology without adjussing fraud kind of what are
you doing with that aspects? How are you combating fraud
which has become an increasing problem for the freight markets.
Speaker 2 (26:48):
Yeah, fraud is a massive issue, and you know, it's
a lot of the articles that you're reading online. You know,
there's a lot of you know, different perspectives of what
we can do to improve as an industry, and so
Arrive has spent a lot of time and energy investing
in different you know, integrations, whether it's using highway, whether
it's really tightening up our own internal SOPs. We have
(27:08):
an entire fraud detection team of former detective that literally
you know, tracks downloads and works with local law enforcement
to recover stone loads. That typically was something we used
to outsource. But it really just comes down to like
really good internal control right at the end of the day.
Are you doing your diligence. Are you making sure that
you're loading a carre that you know and you trust.
(27:29):
Are you making sure that the dispatcher is who they
say they are, Are you working with cares that are reputable.
There's just so many different things that we can do
as an industry to really crack down on it. Yes,
there's the technology and there's the people that are coming
from all over the world that are you know, trying
to hack into people's emails and get into the care reportals.
There's things we're going to prevent that. But at an
aggregate level, I mean, we definitely were a victim of
(27:51):
fraudulent thefts over the course of the last couple of years,
But the last six hundred thousand loads that Arrive we've
had zero fraudulent thefts, and so we feel really confident
that we're getting ahead of it, that we're investing in
the right tools, the right resources, building the right teams.
But I don't see this trend going anywhere anytime soon,
especially where rates are in the industry. And so I
think we as an industry, you know, whether it's DAT,
(28:14):
whether it's you know, truck truckers, truck stop, whether it's highway,
they all need to you know, pitch in and make
sure they're working on different compliance tools that allow us
to be more successful as an industry as well.
Speaker 3 (28:24):
And so it's a team sport.
Speaker 2 (28:25):
And so we do feel that Arrive has got a
good handle on it, but for us to do it,
it's taking out a lot of capacity.
Speaker 3 (28:31):
We're having to be extremely strict on.
Speaker 2 (28:33):
What we're doing day to data and make sure that
our customers aren't at risk.
Speaker 1 (28:37):
Gotcha, and let's let's, I guess talk about the truckload market.
Since you know, as you mentioned, most of your businesses
in the full truckloak market. What what are you guys
seeing from your vantage point? You know, the recovery and
rates have been extremely slow, probably a lot slower than
most of us thought it would be twelve months ago.
(28:58):
If you can just give us a little update on
you know, what you're seeing in the truckload market.
Speaker 2 (29:02):
Now, Look, I think I've always been very hesitant to
call a market turn. You know, over the last two
or three years, I've been very vocal and a lot
of you know, closed sessions and open sessions, whether it's panels,
et cetera. That the most important indicator is, you know,
what is the delta between spotting contract rates? And the
delta between spotting contract is still significant and so you know,
(29:24):
the tenor rejections are low, the delta between spotting contract
is is high. You know, the market, in my opinion,
is not in a position to be disrupted. Yet we
need to see more capacity exit and we need to
see more demand return to the market. You know, obviously freight, freight,
waves and DAT and there's so many different great data
providers out there that all have a different spin on it,
(29:45):
but they're all pretty much in agreement that you know,
capacity is pretty much consistent, it's not exiting at the
rate that we thought it would be, and demand is
being destructed. And so the combination of those things you
are going to lead to continuing challenging environment. And so
for us, you know, we love when the market's in
our favor. We obviously grow more, we can take more
(30:05):
market share, we can get in with more customers. But
the end of the day, like we we're accepting the
reality that we're in and we just have to improve
as an organization. Right the only things that we can
control is we can get better as a company. We
can hire better, train better, have better relationships with our customers,
have better relationships with our careers, build better technology, take
costs out of our cost structure, and just get better.
(30:27):
Because sitting around hoping for the market to change is
a fool's game. And so you know, we're very we're
very comfortable in the market that we're in. We're getting
better every year. And so, look, I'm not going to
sit here and say that twenty six is the year
for the industry to change. I think there's a lot
of unknowns. I think federal regulation is the only thing
that could change it on a dime, and that will
(30:48):
be that will be really interesting what the administration does
with you know, the English English proficiency, you know, the
non documented drivers, and there's a lot of stuff going
around with you know, and world right now. I think
that would be catastrophic to rates for the shippers, and
so I don't know if they're going to make a
hard stance on that and cause rates to double overnight.
(31:11):
And so it's going to be an interesting next six
months twelve months in the industry. But without any like
crazy federal regulation, I don't see demand returning fast enough.
I don't see drivers exiting fast enough to create any
type of real volatility without some help.
Speaker 1 (31:26):
Yeah, we recently had Derek Leathers from Warner Enterprises on
the podcast and he noted that, you know, he thought
that if you know, true enforcement, it could take five
to fifteen percent of the capacity out of the market,
which would obviously bode well for rates. You mentioned the
spread between spot and contractual is there is there a
(31:46):
spread where like when you see that spread, you're like, oh,
the market's tightening or this the spread needs to narrow.
Speaker 2 (31:53):
It needs to narrow, and so look it. If you
look back historically, it's always within us a much closer range.
I think, I don't have the most recent data, but
you know DAT puts this out consistently. I haven't looked
at in the last couple of weeks, but it's been
in the thirty thirty set range.
Speaker 3 (32:09):
Right.
Speaker 2 (32:10):
Typically, what you see that as in the teams when
the market is more prime for a disruption, Because what
has to happen for a freight market disruption is that
the market in the spot market has to have better
rates for a long enough period of time that asset
based carriers are willing to give back contractual freight and
force shippers to rebent.
Speaker 3 (32:29):
Right.
Speaker 2 (32:29):
And so a one week blip or a two week
blip of tightness where the contracts in the spot they
get close, but they never actually cross. Carriers aren't going
to go give back that contract for a one or
two week blip. It needs to be a sustained disruption
where the carriers actually believe they can go back to
the shippers and get more money, right, and so we
just haven't seen any period of sustained disruption, whether it's
(32:51):
demand driven or capacity driven. And so really what we're
seeing is kind of like a flat market. I mean,
it's been almost dead flat the last twelve to eighteen months.
Speaker 3 (33:00):
Kind of continuing.
Speaker 1 (33:02):
Yeah, you know, you mentioned some of the stuff that's
going on with regulations and the Trump administration. Obviously they've
been a lot more protectionists in nature than past administrations.
And in the beginning you also mentioned the fact that
you guys are you know, growing your your Mexico Canadian
(33:22):
cross border business, has the tariffs and that more pro
protectionist stances impacted those businesses.
Speaker 2 (33:30):
You know, we've seen periods of volatility around like leading
up to when they're going to go into effect, but honestly,
from our our scale, you know, we're moving hundreds of
truckloads per day in Canada and Mexico, not thousands. You know,
we're not seeing any crazy, you know, volatility in those markets. Also,
I think that shippers are just you know, they're kind
(33:51):
of waiting and seeing, right. I think that's kind of
the nerave that we're hearing from everyone is you know,
no one knows what the next you know step looks like.
I think everyone it's hard to pivot your supply chain overnight,
and so, you know, do I believe that long term,
you know, Mexico and Canada should be a winner and
there should be more freight opportunities in those markets if
the tariffs continue to hold. Yes, But I don't think
(34:11):
anyone's confident that there's any kind of sustainability or consistency
to what we're seeing from the administration. So I think
it's just a lot of weight in seeing We're not
seeing any crazy volatility in either of those markets.
Speaker 3 (34:23):
It's kind of business as usual.
Speaker 1 (34:24):
And you know, you mentioned on the beginning of the
conversation how you know arrive was really more focus on
the transactional market, and you've moved more and more into
contractual markets. Could you talk about, you know, what the
shippers are telling you guys on the contractual business about
(34:45):
peak or you don't really have that kind of visibility
from shippers. They'll just come to you when they need you.
Speaker 2 (34:54):
Yeah, I mean it depends, Like Broadbrush, we have a team.
I mean, we see hundreds and hundreds of shippers every
single month. We have a team of what we call
executive sponsors, and they're all former directors or vps at
Fortune five hundred companies that have come over to the
broke side and they basically travel and see customers for
a living. And so we do get a lot of
different feedback. And I would tell you not any customer
(35:15):
tells you the same. I think, you know, when you
work with thousands and thousands of customers, you see a
little bit of trends, but it really is dependent, Like
even within the retail you're getting different feedback, right, And
so I think it's kind of all over the board.
Speaker 3 (35:30):
I think if you look at the data, though, if
you look.
Speaker 2 (35:32):
At like the freight freight waves data around and bound containers,
it would probably tell you that there's not going to
be much of a peak season this year. But look
at the end of the day, you know, things can
change in a hurry. But you know, I think the
data would suggest less of a peak this year. But look,
we saw some serious rate volatility around Labor Day, right,
(35:53):
and so the market is potentially in a position that
you could see some volatility with any kind of hiccup,
And so we're kind of waiting in seeing but you know,
if you're a pure data and looking at it from
that lens, I think you would probably air on the
side of a very small peak season.
Speaker 1 (36:07):
And are you guys seeing anything different when you guys
are looking to hire new folks? Just given this seems
like the job market is deteriorate a little bit over
the last couple of months. Is it easier for you
guys to bring people in or do you do you
get more applicants?
Speaker 2 (36:23):
Yeah, so it's a great question. And so you know,
we hire, like I said, almost entirely out of college.
And so we're onboarding the vast majority of our employees
in January, February, a little bit of March, and then
almost the rest May, June, July, August, September. And so
if we're not, if our offers aren't out in Q
four Q one, those summer roles are hard to hire
(36:44):
because we have to go outside of our profile and
we typically don't like to do that. And so it
will be a really good indicator I think in Q
three and Q four of this year how the acceptance
rate is for next summer, right, because I think that's
when you know it will be our people on college
campus this quarter. Are they actually at the career fairs?
Are they extending offers on the entry level? So I
think it's too early for us to tell. We're just
(37:06):
I think last week we just started ramping up our
college presence for this semester, and I think we'll be
able to tell very quickly on how quickly people are,
you know, applying, how quickly they're accepting their their their offers,
and then you know how much volume we're getting that
in that perspective, So I probably be able to answer
that better in a month.
Speaker 3 (37:23):
Or's right?
Speaker 1 (37:24):
And are there are there certain universities or colleges that
you guys focus on that if you've had like success,
like like these are the folks that are the most
prepared for a job at Arrive.
Speaker 3 (37:36):
Yeah.
Speaker 2 (37:36):
We we are very data focused and so we have
a profile by roll, so customer sales, carrier, sales operations.
They're all very different personalities, different you know, backgrounds, different universities,
and so we we have a very strict you know
program that we've put in place.
Speaker 3 (37:54):
Now, what's crazy is like sometimes.
Speaker 2 (37:55):
Schools do really really well and then all of a
sudden we start to see them fall off. And so
we'll rotate them out and bring in a new school
that's like in like an incubation period. And so you know,
we've got a lot of core schools. I mean what
I would tell you generally speaking there, we do a
lot in the Midwest. A lot of our hiring comes
out of the Midwest, and we relocate those people to Austin,
to Phoenix, to Tampa. We obviously have two offices already
(38:17):
in the Midwest and Columbus in Chicago, and so you know,
I would say the vast majority of our campuses are
in that part of the world. We are, you know,
pretty big in the Texas market. You know, we have
a few schools that we really like in Texas. We
like some schools in Louisiana. But outside of that, it's
it's heavy Midwest.
Speaker 1 (38:35):
Right, And just one more on this system, Just curious,
do you look at people with like logistics majors or
miners or you're interested more it's more about that personality.
Speaker 2 (38:45):
Yeah, honestly, majors. There's not a lot of people that
have logistics majors. So for like customer and care sales,
we're seeing more like sales focused, you know, sales major
sales miners operations. We definitely take people that have more
of a background apply chain, people that want to you know,
do more problem solving for a living, and so those
are going to be the roles that we would probably
see those majors. But our salespeople, you know, there, they're salespeople, right.
(39:10):
They don't care if they're selling logistics or insurance or
wealth management.
Speaker 3 (39:13):
They just want to do.
Speaker 1 (39:14):
Sales right, right. And so let's talk about the future
because you know, I know you said you don't like to,
you know, to tell the future, but or predict the future.
But you know, you mentioned the fact that you're the
fourth or fifth largest truckload broker in North America. Where
do you think a Arrive's going to be in three
years from now as an organization.
Speaker 2 (39:36):
Well, look, the people ahead of us are big, right,
You've got h Robinson, You've got TQL, and now you.
Speaker 3 (39:43):
Have RXO Coyote. Yeah.
Speaker 2 (39:45):
RXO Coyote integration definitely punted our ability to take what
we would consider the third spot for a period of time.
That was a pretty big merger of two really well
run companies. And so look for us, we're not paying
attention to that. We are very focused on playing our
own game. I'm very confident, like I said earlier, by
twenty thirty, twenty thirty one will be north of fifteen
(40:05):
thousand truckloads per day. You know, we're going to continue
to build great technology, hire great people, and we're going
to continue to service our customers. I mean, I think
if you look at the last three years, we're at
thirty eight here of the Year awards for Fortune five
hundred shippers, and I think that's more than those three
companies combined. I'm not sure, but I think it is.
And so we're going to continue to focus on offering
(40:27):
the best service that we can. And we think we're
going to be very very successful from now and into
the future if we do, if we focus on what matters,
which is delivering great service and great products to our customers.
And so, look, we obviously want to continue to climb
that leaderboard. We want to have, you know, optionality, whether
we want to go public in twenty thirty or twenty
thirty one, or we want to stay private. We want
(40:47):
to just keep our options open. And the only way
we can do that is by performing every single year.
And so that's what we'll do.
Speaker 1 (40:52):
Gotcha And I'm sorry if I missed this. You know,
you said fifteen thousand loads per day by twenty thirty,
twenty thirty one, So what what would that imply the
growth at.
Speaker 2 (41:04):
When we look at our growth over the next five years,
we're looking in like the high teens. You know, it's
it's a lot easier to grow when you're moving you know,
one hundred thousand loads a year. But now that we're
you know, almost you know, almost two million loads, it's
still a lot of growth when you're growing at that rate.
And so you know, that's kind of like when we
(41:24):
look at our five year perspective, we're mid teens growth
rate every single year.
Speaker 3 (41:29):
Right.
Speaker 1 (41:29):
So, besides coming on the Talking Transports podcast, what is
your favorite thing to that you know about your current role?
Speaker 2 (41:37):
So I think it's a combination and I love By
the way, if you look at me, I hardly do
any podcasts, so I guess that's a testament to your podcast.
But no, I usually like to keep a super low profile.
I really get energized by operating every single day. I'm
not one of those founders that likes to be out
of the business. I like to be extremely in the business.
So what drives me and keeps me excited every day.
(42:00):
Like it's just there's hundreds of things that arrive can
do better. And so we have such a great team.
My leadership team is all bought in. We're not a
team that's you know, taking days.
Speaker 3 (42:08):
Off to go golf. We're all in it every single day.
Speaker 2 (42:11):
We have a lot of fun together and there's just
so much opportunity to improve his organization that that's what
keeps me going. And you just have to be relentless,
right like, and I think that's our personality.
Speaker 3 (42:20):
We show that.
Speaker 2 (42:21):
You know, yeah, we're up thirty five percent year over year,
but we should be up forty We should be up
forty five. We should hire better, we should train better,
we should have better retention, we should have better growth
in our modes. And so for me, I just like
you know, building and finding the problems and you know,
identify them and solving them. And so you know, that's
what we do and I think we do it better
than almost anyone in the business. And we're not scared
to make changes like a lot of people, Oh, we
(42:42):
can't change that, it's going to create disruption. It's like
once you figure something's not working, you just you change it,
you make it, you make it better, and you move on.
Speaker 3 (42:49):
And so you know, that's what keeps me going every day.
Speaker 1 (42:51):
All right, great, well, I wish you luck on your
growth story and also I look forward to checking in
with you down the road to see, you know, if
you get to those levels that you've you've carved out
for yourself or the targets you've carved out for yourself
in twenty thirty twenty thirty one. So and again, Matt
so much. I really want to thank you so much
for your time and your insights today. I really appreciate it.
Speaker 2 (43:12):
Appreciate you giving me the opportunity be on here and
it's not if okay, we're very confident what we're doing.
It's a win, so okay, and all sincerity. I really
appreciate the opportunity. And you know, reach out to me
if you ever have any other questions. But thanks a
lot for the time.
Speaker 1 (43:26):
All right, Thanks so much, Matt, and I want to
thank you for tuning in. If you liked the episode,
please subscribe and leave a review. We've lined up a
number of great guests for the podcast, so please check
back to your conversations with c suite executives, shippers, regulators
and decision makers within the freight markets. Also, if you
want to learn more about freight transportation markets, check out
our work on the Bloomberg Terminal, at big and on
(43:48):
social media. This is Lee Glasgow signing off and thanks
for talking transports with me. Talk to you next week. Bye,
Host
Lee Klaskow
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.