November 25, 2025 • 42 mins
The North American freight market is soft, with excess capacity and uncertainty in manufacturing, retail and housing weighing on demand. In this episode of Talking Transports, ArcBest Chairman and CEO Judy McReynolds joins Bloomberg Intelligence’s senior transportation and logistics analyst, Lee Klaskow, to discuss how the company is navigating the prolonged freight recession. McReynolds shares how ArcBest is leveraging technology, AI and data to drive efficiency — from route optimization to dock automation — and how acquisitions like MoLo have strengthened its integrated logistics network. She also reflects on her career, the lessons she’s learned and offers advice to future executives, especially women entering transportation.
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Episode Transcript
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Speaker 1 (00:07):
Hi everyone, this is Lee Clascow and we're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Clascow, senior freight transportation logistics analysts at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the world. 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've got 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.
I'm very excited to have back on the podcast. Judy
(00:51):
McReynolds the Chairman and Chief executive Officer of ARC Best.
Judy has over thirty years of experience in the transportation
logistics industry, including twenty eight years said ARC Best. In
twenty ten, she was named ARC Best President and CEO,
and in twenty sixteen she was elected to Chairman of
the Board of ARC Best. Corporation. Most recently, in August
twenty twenty four, she transitioned to ARC Best Chairman and CEO,
(01:14):
overseeing the company's long term strategy, including a drive toward
innovative solutions. She sits on several boards outside of the company,
including OGE Energy, First Bank Corp. And First National Bank.
She's a member of Wall Street Journal CEO Council and
sits on American Trucking Association's Board and Executive Committee, after
serving as chair for eight years. She recently retired from
(01:37):
the American Transportation Research Institute. Welcome back to Talking Transports, Judy.
Speaker 2 (01:42):
Thank you. It's great to be back with you. I
was thinking, we've known each other a very long time.
I was trying to think about the number of years,
but it has to be somewhere in the twenty plus.
Speaker 1 (01:55):
I think it's around twenty one years. So yeah, it's
been a long time, and I've always treasured your insights
because you know, you work for a great company in
the LTL space. Can you tell a little about our
best for the folks listening to it.
Speaker 2 (02:10):
Yes, I love to our company our best. We are
a multi billion dollar integrated logistics company delivering smart scalable
solutions that are tailored to our customers supply chain needs.
Founded over one hundred years ago as a local freighthuler,
(02:30):
we've grown into a global logistics leader with fourteen thousand
employees and two hundred and fifty locations. Our technology expertise
and full suite of shipping and logistics services support businesses
of all sizes, from small operations to some of the
nation's largest enterprises. And we help our customers overcome logistics
(02:54):
challenges with solutions that we provide them that are flexible, reliable,
and built around their goals. And you know, we've been
in business, as we said, for over one hundred years.
We continue to offer ground, air, and ocean transportation through
a broad network of capacity providers, and that includes our
(03:17):
LTL carrier AVF, freight truckload service through MOLO, and an
expedite fleet with Panther Premium Logistics. And we collaborate with
our customers through our managed solutions that and in that
we develop strategies that enhance operational efficiency, reduce costs, and
deliver deeper insights into their supply chains. And supporting all
(03:41):
of this is very important. Our our Best Technologies team
are dedicated innovation group that delivers custom built solutions, advanced analytics,
and cutting edge technologies to optimize supply chains and empower
our customers. So we have really evolved into what I
(04:02):
consider to be a neat and appropriate company for the
marketplace that we live in today.
Speaker 1 (04:10):
Great, and also it's worth noting our best is a
publicly traded company. It's ticker arc B. It's got a
market cap around one point four billion billion dollars. So,
you know, one of the reasons why I wanted to
have you on a you know, you're you're not quite retiring,
but you're close to retiring, so I wanted to talk
to you before before you go. Uh and and the
(04:32):
reason is because you know, you've had such a long
career in the freight markets and you've seen a lot
of cycles.
Speaker 2 (04:38):
Can can you talk to us.
Speaker 1 (04:40):
About, you know, what is the state of the North
America freight market now from your perspective and kind of
where you think we're heading as we h heading into
twenty twenty six.
Speaker 2 (04:49):
Well, yes, well the freight market is still pretty soft.
We see that reflected in manufacturing, retail, and housing. There's
still excess capacity in our marketplace. I know there's been
a lot in the headlines about that, but the other
thing to keep in mind is just how much uncertainty
(05:12):
there's been this year for our customers. Comes from the
terror related activity, uncertainty about insurtrates, demand uncertainty for their
own business, and then even the recent challenges of the
government shut down. These are real challenges that take time
(05:33):
to solve and I think, you know, trying to make
decisions with all that and the backdrop is really difficult
for our customers. But I'm proud of how we come
to market and how we responded. We've actually grown our
customer base during this soft environment because of what we offer.
And it's really really important to be a strategic partner
(05:56):
for these accounts because you need to get into a
trusted relationship that enables you to see the issues with
them and and determine best what can better build a
supply chain for them. And you know, customers appreciate that
they look for who they trust and in an environment.
Speaker 1 (06:16):
Like this, and when you say you're increasing your customer base,
are you talking about you you're getting you're winning more
of your customer's wallets, or you're getting you're you're kind
of bringing on more customers on board.
Speaker 2 (06:28):
And okay, I'd say both, yeah, I mean, and both
are important, uh, and you know, and that at the
same time, I'll say, some of the challenges come from
you know, our customer base is high percentage of it
relates to manufacturing, and when you see weakness there, you
(06:49):
know that actually, uh pulls back on shipment levels for us.
And so you have that going on. At the same time,
you're trying to expand other relationship ships and grow new relationships,
and so it's it's navigating all of that is continuing
to be something that takes a lot of attention and visibility.
Speaker 1 (07:13):
You know, one of your one of your peers is
focused on like more local accounts, smaller to mid sized shippers.
Is that Are those the kind of shippers that you
that you guys are focusing on as well to bring
on board it on.
Speaker 2 (07:24):
Our best I would say yes, but that's always been
the case. You know, our customer base is made up
of you know, some of the smallest companies to some
of the largest, and I think the way we think
about it is we have sales and customer service efforts
focused on all of the above, but you do have
to on the small and uh mid market businesses. You
(07:48):
have to be in front of those customers. The face
to face relationships have been an emphasis for us, and
it's been interesting, you know, post pandemic. I think there
was a period of time where everyone really was much
more comfortable with virtual settings and meetings and that sort
of thing, and we've seen a renewed energy around getting
(08:11):
face to face with our customers. That's really paying off.
Speaker 1 (08:14):
Yeah, and you know you mentioned the soft soft freight
environment and slack capacity. Were you talking specifically to the
truckload market or the LTL market or both? What you
said that? What did you mean, by the.
Speaker 2 (08:27):
Way, Well, my comment really relates to the truckload market,
but you and I both know that ends up affecting
what goes on in the LTL market. Certainly does, and
so I think it's it's maybe second order in the
LTL market, but it is excess capacity, I think from
the truckload side, right.
Speaker 1 (08:46):
And do you I guess at our best, I guess
the one benefit would be you're going into the market
for line haul and the spat market. Do you guys
spend much time doing that or is most your line
hall your company drivers that you're leveraging.
Speaker 2 (08:58):
Oh, vast majorities company drivers. We do use, you know,
purchase transportation carriers, but it's only a small percentage, you know,
low single digit percentage, and it's just for balance, right
that we do that.
Speaker 1 (09:14):
That makes sense. So in addition to these, I guess
more local, smaller to mid sized customers. Where are you
seeing some opportunities in these challenging times? Are there different
different markets that you're going after outside your traditional asset
based companies.
Speaker 2 (09:30):
No, I wouldn't say that you know what we're seeing
as as opportunities that come from this, but you know,
the challenges are there kind of across the board, and
it relates to rising costs for the shipper and the
need to drive efficiencies across really every aspect of their
supply chains. And again just to comment, you know, the
(09:52):
flexibility is what's most important for them. Sometimes they don't
even know exactly what would be best and to you know,
you understand the issues and you're presenting the options. But
you know what's interesting is even though there are challenges customers,
freight still has to keep moving. And we've seen that
over our hundred years of experience. And again, these continual
(10:15):
disruptions are unusual, but it just makes the point even finer.
You know that you need to have the capability to
see what the options and opportunities are and bring that together.
So you know, what we're doing, uh, and we we
help our customers do is just focus on what we
(10:37):
can control. It is really really important in our business,
you know, to to manage costs, look for technology opportunities,
you know, to optimize your your own situation, and again
do that same thing for customers. We also find it
really valuable to lean on our history of the quality
(10:58):
process that we've had at the company for over forty years.
If you you know, it's the motto for that is
do it right the first time. But it has stood
the test of time. And so when you're facing a challenge,
whether it's in your business or the customer has one,
you know, getting the group together that's closest to the
problem and being able to solve that problem is a
(11:20):
real opportunity when things are are most challenged. And again,
you can't do some of these things without having entrusted
workforce and then relationships that you build. But you know,
it's pretty basic what we see as the opportunities whenever
you're facing some of these challenges that you know, cause
(11:41):
daily disruption for people.
Speaker 1 (11:43):
Right, and you know, you kind of touched upon like
how you guys are trying to grow organically? How are
do you guys approach mergers? Are there certain obviously you
know I can tell me who you're gonna buy, but like,
are there certain sub segments of the market that are
attracted to our best and obviously to get into those markets,
maybe an acquisition would make sense.
Speaker 2 (12:05):
Well, we always lookally at the solutions that customers need.
That's what we did all those years ago, and you
know we have a good cross section of that. Would
we like to have more scale in some of those yes,
And the reason why would be that just it would
enable us to better serve you know, our customers. But
(12:28):
we see our set of services as comprehensive. But we
keep our ear to the ground on what's coming to
market in terms of you know, acquisition targets. And we
do that because we might be able to achieve that
scale quicker if we were to make an acquisition. But
it is interesting how you know, we're we're not as
(12:51):
much acquiring unique businesses as we are acquiring businesses to
kind of plug them into what we're offering to customers.
I think think a great example of that is our
Molo acquisition back in November twenty twenty one. We saw
the need to have better, uh more responsive solutions on
the truckload side. Molo was a four year old company
(13:16):
when we bought them, and they had the same spirit
of service excellence that we do, which was really really
important and a great knowledgeable team. But what we what
we do, you know, with the truckload service that we
offer is as we want to make it available, you know,
to this customer base that oftentimes is using four solutions,
(13:42):
and so it's got to work in an integrated way
with the rest of what we do. So we do
have unique truckload customers, but oftentimes, you know, we're working
across the solutions that we have and we have to
be able to do that seamlessly to be effective.
Speaker 1 (13:58):
You mentioned technology a couple times. Can you talk about
our best technology strategies? Where are you investing what what
are you most excited about in terms of how it
can benefit your company or your customers.
Speaker 2 (14:11):
Well, you know, we've been doing a lot on the
technology front. You know, the the interesting thing is, you know,
just the opportunities for efficiency in this business that we've
been in for a very long time. And one of
the most exciting I think is city route optimization. You
know that we deployed you know UH a few years
(14:35):
ago but continues to pay off. And you know, we
used algorithmic AI combined with the knowledge that our people
on the ground have. You know, dispatchers are very knowledgeable
about customer tendencies and trends, and we combine that together
(14:55):
to put in place at kind of an automated approach
to route optimization, but it certainly is modified when it
needs to be, you know, by that local knowledge, and
it's paid off. I think that the current number there
is twelve to thirteen million dollars a year and growing
with new phases being added to that, and it's been
(15:18):
pretty exciting. But you know, I think that's one of
the things that's so good about what we do is
that we can bring together the technology side of things
with very knowledgeable people. By the way, we have about
four hundred people in our technology team that do a
combination of you know, development kind of in an organic way,
(15:43):
combined with great purchase solutions to really bring that to
bear on behalf of our customers. We're actually rolling out
a dock operation system across the ABF network that creates
visibility for the people that are managing that operation, whether
(16:03):
it's uh, you know, the the work that an individual
is doing in their job, or if it's how well
a trailer is loaded. You know, some of those things
again sound very basic, but if you can have visibility
and automate, you know, some of the things that are
needed to best understand whether you're doing your business with excellence,
(16:26):
you're going to be better off. One of the other
things that we've done recently is deploy a compliance UH
team and you know, we uh we really have some
knowledgeable people in our business that can go in and
look where, for instance, a new operating system has been
deployed or route optimization has been deployed and make sure
(16:50):
that that that that's being done well and that jobs
are being done safely. And we've seen this team this
year produce twenty million dollars in savings from existing operations
and they haven't been to all of our locations yet,
so you know, in addition to the bells and whistles
(17:13):
attached to some new technology, we understand that you need
to go in and make sure that that work that's
being done really adheres to the standards that you want
and the technology is being used to the best it can.
So I mean, I love all of that. And it's
you know again that the decades are even one hundred
years of being in business that help you do some
(17:34):
of those things.
Speaker 1 (17:35):
Right now, if we talk about AI a little longer,
you might get another turn on your multiple So let's
keep on talking.
Speaker 2 (17:41):
About Yeah, that's you're right. You're right.
Speaker 1 (17:45):
So are you using any internal or maybe even off
the shelf AI or machine learning programs to help you
with pricing?
Speaker 2 (17:55):
We do, you know, we do use that. You know.
A great example would be when we have customer calls.
You know, we have AI listening to the outcome of
those calls and helping inform us about things we needed
to know. We call it call audit to make sure
that our people are doing their jobs well and that
(18:16):
we're addressing customer concerns. That's an example, you know, we have,
you know, on the the truckload side, some you know,
technologies and AI deployed to help us make sure that
the calls that are coming in to take the loads
are qualified carriers and that makes sure that again our
(18:39):
people are working on the most important carriers and loads
that they can. So it's really in many different places.
Some areas are smaller than others, but some are very
impactful as as I mentioned earlier.
Speaker 1 (18:55):
And besides, you know the route optimization that you mentioned earlier.
Is there anything from a technology standpoint that's going into
the trucks that are helping your drivers be more efficient,
be safer. You know, if you could talk to any technologies,
it doesn't have to be a I just you know,
any technologies that you're using for trucks.
Speaker 2 (19:14):
Well, we use we work with Sam Sarah for the
the e l D units that are in our vehicles,
and we also have you know, other safety elements that
we've we've deployed that and some of those that we're
testing for you know, our drivers to make sure that
(19:36):
that you know, we manage and monitor speeding incidents and
things like that. But you know, we are very knowledgeable
about what's going on in the vehicle. You know, with
an LTL network, you need to be very much focused
on the timing of things and and that sort of thing,
and so you know what's great is we have America's
(19:59):
road Tea Captains, which I think you've probably met at
some point in time. You know, we've got numerous of
those folks that are just excellent road drivers that you know,
give us input on the technologies that we deploy. They
understand the importance of you know, being efficient and safe
and how that can save you know, fuel and miles
(20:23):
and so we you know, we do value that and
our drivers value it as well. So you know, there's
there's many many things that we have going on there
and and that's very important work because of the dollars
that it can save a lot.
Speaker 1 (20:40):
Of companies have been using technology to kind of fight fraud.
You know, fraud's a very huge problem in the trucking industry.
Is it is a bigger problem in LTL as is
in the truckload.
Speaker 2 (20:52):
Well it can be. It's not as big probably because
of you know, the knowledge that you have of the
customers and the routine mean that you have the customers.
But you know, we we do have instances where you know,
we uh might we need to verify that a customer
is a legitimate customer, you know, and if you were
(21:14):
delivering uh freight, you want to be sure that it's
going to a real customer. So there are efforts that
we have with our safety team and security team and
using technology to do that. But I think on the
vetting of the carrier side, you know what comes to
mind when you say that is on the truckload side.
So we use various uh uh, different services to make
(21:38):
sure that we're using carriers that are real, that are
not fraudulent, and they will serve our customers well.
Speaker 1 (21:46):
And just turning to demand right now, you know, we
were talking earlier about the freight demand and it's been soft.
Has this been the weakest that you've ever seen in
your career or or maybe maybe not the weakest, but
like certainly the duration of the weakness has been pretty long.
Could you just kind of benchmark it?
Speaker 2 (22:04):
Yeah, I believe it is. I think we're in the
fourth year of a freight recession, which is unmatched. Now
when you look at some of the measures you can
compare you know, the volume of shipments available and that
sort of thing to nine maybe the low point in
(22:24):
the pandemic, that's pretty significant. But you know, when I
look at our company and the approach that we're using,
I'm very pleased with how the company has transformed because,
you know, having the solutions, particularly our managed solution that
is in place, it really helps us serve our customers well.
(22:46):
And as I mentioned earlier, we're actually growing in this environment,
which is not the norm. And you know, all those
years ago in two thousand and nine when we were
most challenged. When I first took my role in January ten,
twenty ten, the the solutions we provided and the capabilities
that we had were not as robust as they are today.
(23:09):
And so I'm really proud of how, you know, we
used the work that we did with customers to transform ourselves,
you know, into to a company that is unique, yes,
but it's more relevant even in the face of these
kinds of challenges.
Speaker 1 (23:25):
Is there anything you and your team kind of look
for to try to find some green shoots and when
things will finally start to turn. Is there like an
index that you guys use or were indexes?
Speaker 2 (23:38):
Well, I think the best one that I can can
point to is the ISM Manufacturing PMI index, because if
you look at our customer base, manufacturing and wholesale makes
up you know, forty plus percent of our business. And
what we've seen is that when that turns positive. And
(24:01):
you know right now it's below fifty. You know, ideally
it would be in the fifty five range. But you know,
when it starts to turn positive in about four to
six months, we see the benefits of that. The other thing,
and you know, I mean in our latest AK filing,
you know we have this. We still haven't seen weight
(24:23):
per shipment turn and improve. When you start to see that,
that is a good sign too, but we still haven't
seen that happen yet.
Speaker 1 (24:33):
It's worth noting the ism. It's been a construction territory.
I believe thirty four of the last thirty six months,
so it's been we feel it. Yeah, you know, your
industry is consolidated over the years. Do you expect that
trend to continue? And I guess that's good for keeping
pricing rational. So do you expect the market to consider
(24:55):
it to continue to contolidate?
Speaker 2 (24:57):
Well, I don't know that that is my expectation. We
you know, with the Yellows bankruptcy, that was a major
company competitor that's gone. And yes, some of you know
those facilities. You know a large portion of those facilities
(25:18):
ended up and other competitors and even US I mean,
we helped our network by buying some of those remaining
facilities that they had, but it was you know, when
I think about the capacity that's left, that is significant.
And so you know, what's been interesting is how long
(25:39):
the recession has gone on after that, So I think
you're not really seeing the benefits of that. But it's
more about the unusual macro than it is about you know,
the appropriate capacity level, particularly on the LTL side, being there.
And so you know, I think once we get to
(25:59):
a more norm normalized macro, it's going to be obvious
that the remaining companies that are in the LTL marketplace
maybe from a capacity standpoint, it's pretty appropriate, but it's
just unusual what we're facing now. And we've always been
(26:19):
a company that's focused on price discipline. You know, we've
had a costing model that's been in place, you know,
more than forty years. We have a lot of intelligence
around business opportunities and what they do for us, and
that's going to continue to be a point of emphasis
and really, you know, a very important part of the
(26:41):
success that we have on the LTL side.
Speaker 1 (26:43):
Gotcha, So let's can we talk about you a little
bit if you don't mind. So can you tell folks
listening how you got into the transportation industry and what
was your career path to becoming a CEO of a
public company for a trucking company, which you know it
has historically been a male dominated industry. So you broke
(27:04):
you brooks, you broke some ceilings. So I want to
hear about that journey.
Speaker 2 (27:09):
Yeah, it's it's been a fun journey. But I was
first introduced to the transportation industry from the work that
I did in public accounting, and so I was in
Little Rock and our company was one of my clients,
and my client base also included a lot of others
(27:30):
that did or were in the industry, both at that
time and continue to be, many of the neat pioneers
and entrepreneurs in the industry, and I really enjoyed working
with them, getting to know them, seeing what approaches they
deployed and the successes that they had. But it also
allowed me to see the risks that some took, and
(27:53):
I can look back at that now and some of
those risk takers are no longer in business. But what
was attractive to me about our company me was the
professional nature of it. I remember you know, interfacing with
the people that are here, and honestly, many of them
are retired now when I think back about who that was,
(28:14):
but you know, there are people of great character and integrity,
and from where I sat, that meant a lot to me,
you know, in my family life and then also my
professional life. You know, I valued integrity and being able
to be honest and trusted in the business, and so
our company was really one that stood out to me.
(28:35):
But when I first was asked to join art Vest
later I was oftentimes I was the only woman leader
in the room. But from the experiences that I'd had
in public accounting, where I worked around some really effective women,
but most of the clients that I had were run
by men, you know, I had developed an understanding of
(28:58):
all of that, and I just focused on learning our
business and building relationships with people, and I just never
let that be an issue, and it really wasn't an issue.
You know, it's so neat to look back at all
of that. But one of the things that I did,
and it was very purposeful, is I knew I had
(29:19):
my role, which initially was the controller for the company.
I knew I had my role. I had my job
to do. What I tried really hard to do was
make sure that I was available for those meetings or
those discussions with other leaders where I can understand the
business and I learned to love it. And that resulted in,
(29:41):
you know, my promotion to CFO in two thousand and
six and then ultimately in two thousand and nine being
asked to be the CEO of our company. But you know,
I had the opportunity a lot of great experiences with
lots of neat people in our industry throughout all of that.
Speaker 1 (29:58):
Right, And can you share a few of the biggest
obstacles or challenges you've had to overcome while working in
industry and kind of what you learned from that.
Speaker 2 (30:06):
Well, it started whenever I was a CFO. But you know,
one of the things that I'm most proud of is
the transformation that we saw that needed to happen and
how that came about. But it all started in the
fourth quarter of two thousand and six, which I had
(30:26):
been a CFO for relatively short amount of time. And
Lee you probably remember this. The housing market just fell
off a cliff in the fourth quarter of six, Do
you remember that?
Speaker 1 (30:36):
Absolutely?
Speaker 2 (30:38):
Yeah? I mean, and so then that the next big
thing that happened was the financial crisis in two thousand
and eight, and then from all of that came the
Great Recession in two thousand and nine. So I'm again
I'm CFO during this time. But in October two thousand
(31:00):
and nine, the CEO of our company, then Bob Davidson,
who had he was the successor to Robert A. Young
the third, he announced that he was going to retire
and that he was going to be gone by the
end of the year. And so, you know, it was
a year where we had about a billion and a
half in revenue. We'd lost twenty five percent of our
(31:22):
revenue because of the Great Recession, and we lost one
hundred million dollars and so that was nine But at
the same time as all that was going on, I
was never so flattered when Robert Young walked in my
office and asked me to be the next CEO of
the company, to succeed Bob, and you know, so I
(31:45):
told him I would. It was a tough situation. The
good part of it was that I was already dealing
with that as CFO, so I kind of had my
hands on what we needed to do on the cost
side and I did that. We took those actions, but
from there it was so obvious to me that we
were going to have to do something very different. You
(32:07):
mentioned green shoots earlier, and I think about the green
shoots we looked for then. But the great thing for us,
as having been in business so long, we had many,
many trusted customer relationships, and we leaned on those. We
got together our team and we started working with customer data,
(32:28):
tracking trends, asking questions and getting honest feedback from many
of our customers. And again, you can't do that if
you don't have the trusted relationships. And what we uncovered
was that we were better as a full suite of
solutions for our customers than we were just serving only
(32:48):
the LTL part of our business. And the great thing
was we anticipated the complexity that our customers would be facing,
maybe not at the level that they're facing it, but
we anticipated that, and you know, we were able to
expand the markets that we were serving, which today the
(33:09):
figures are about fifty plus billion that's LTL. If we
instayed the course of that, that's the market we would
be serving. Instead, it's four hundred billion dollar marketplace that
we're serving. So we vastly increase the markets that we
serve and our ability to succeed. But we had to
(33:30):
educate our leaders and our employees about what we were
doing as we were going to market differently, and we
had to make some acquisitions and work through the integration
of those. It was really important to have a good
foundation of HR and talent development at the time. And
(33:51):
then I've already mentioned the importance of our technology team
being able to look at what we needed to do
and in some respects developed that our selves so that
we could evolve and change. And I'm very, very proud
of the fact that we go to market as an
integrated logistics company that serves our customers well and has
(34:14):
a lot more opportunity and sustainability, you know, than we
did back in those days.
Speaker 1 (34:20):
Great, and can you share any piece of advice you
might have given your successor, Seth Runtzer when he starts
his new role at the beginning of next year.
Speaker 2 (34:31):
Well, first of all, Seth is very, very capable, and
I'm really excited about him, and he and I've worked
together on this transition for multiple years, probably four or
so years, and he has a very different background than me.
But that is serving him well. We talked a lot
(34:51):
already about technology kind of in its intersection with operations.
He is very great at that, and it's so visible
and urgent for him to get some of those things done.
But you know, one of the things that I've shared
with him that has come up in my mind multiple times,
and that is that sometimes you have to make a
(35:14):
decision that you don't necessarily have all of the steps
or the facts or the path to how that's going
to unfold, but that you have to get as much
information as you can and evaluate it and then a
lot of times you just have to make your next
(35:34):
best move. And you know, because I think some people
strive for that understanding and that level of perfection in
every decision and in our business, and with how rapidly
things change, sometimes you can't wait to do that. And
so he and I've talked about that a lot. How
many different times that I've had to take that approach
(35:57):
and not know all the outcomes of that decision, but
do the very best that you can with what you know.
Speaker 1 (36:05):
Right, And what piece of advice would you give new graduates,
particularly women looking to enter and succeed in the logistics
and transportation field.
Speaker 2 (36:16):
Just never underestimate the impact that you can have as
an individual. And I give this advice often is just
don't worry about that next rung on the ladder or
like seeing yourself and then in that next role. Just
do a great job at the work that you're doing.
And I think when I as I was describing earlier,
(36:38):
for me, make sure that you do that so well
that you have time to learn the part of the
business or the business that you're in, and something else
I think that it's just super important is aligning your
values with the company that you work for. It's so
(37:00):
important to come to work every day knowing that you agree,
you know, with the values based approach that your company has.
That just makes things better and easier because I've found
if you can trust the people that you work around,
you're able to go faster. You're you're facing fewer obstacles.
(37:21):
Sometimes I think about, you know, the importance of not
creating obstacles inside the company, because you have so many
outside the company that you're trying to solve. But you know,
I think I think people underestimate their own ability to
grow and change, which is doing a great job at
the job that they have.
Speaker 1 (37:40):
That's that's actually very very good advice that that could
be applied to any profession, not just the transportation profession.
So what's going to be the biggest thing you're going
to miss after stepping away as the company's CEO.
Speaker 2 (37:53):
Well, I know what it is. And we've already had
one retirement event and it was really in front of me.
I was looking across the audience at that event and
just seeing the faces of people. Some of them I
see every day, but some of them were from out
of town that I don't And I am just really
going to miss the people in our business. We have
(38:15):
a We're blessed with people who are hard working and
care and want the best for both our people and
our customers. And you know, they're just great people. They're
people that you want to spend time with, They're people
you want to be friends with. And I'll miss that
(38:35):
the just the daily interaction there. I'm going to continuous
chairman of the board and so I'll have, you know,
some visibility into that. But you know, it's going to
be different for me after forty years of working really hard,
not having the day to day but I'm also looking
forward to spending more time with my husband Lance. He's
(38:56):
been such a supporter of me and an enabler of me,
and he loves his company like I do. And then
the other night we had some time with our grandchildren,
who won is twenty months old and one is fifteen
months old, a grandson and a granddaughter, and we're looking
forward to having some more flexibility and time to spend
with them. But I'm going to continue on Oge's board too,
(39:19):
and so I'll be I'll be busy, but it'll the
days will look different than they do today.
Speaker 1 (39:26):
And besides family time, is there anything else you're gonna
be exploring, whether maybe be involved in the industry other ways,
or I don't know, getting better at golf or picking
up golf. Is there anything?
Speaker 2 (39:38):
Well, you know, Lance and I've talked a lot about golf.
We both like to trap fish and fly fish, and
so we're going to do some of that. And he
and I used to play golf together in college, but
I declined many opportunities to play golf on occasion because
I'm not good enough at it. But we'll probably pick
that back up again. He's a great golfer and you
(40:00):
know his plate since he was a child. So anyway,
we're going to do some of that as well, but
we're kind of not really placing kind of restrictions on
what we might do. We're going to do a little
travel and and you know some of the things that
we already talked about. It's more having the flexibility to
do what you want to do. And you know, again,
(40:23):
I'm it would be hard, very difficult for me to
not be involved at all with our great company going
forward because we just have so much potential.
Speaker 1 (40:32):
Right And are you still going to be involved with
the ATA I?
Speaker 2 (40:36):
You know, I probably won't. I'll probably transition that to
Seth and Matt Godfrey that runs a BF and you know,
we've had people involved in safety committees, you know, and
cross border committees and all that. We're going to continue
at the level that we we do today, but I
won't be as as involved as I once was.
Speaker 1 (40:56):
So and just just to be clear, I've been playing
golf since I've been in high school and I'm still terrible,
So I don't.
Speaker 2 (41:04):
Yeah, it's so it doesn't. You just have to enjoy
being outside, don't you.
Speaker 1 (41:09):
I do, I do, and I and then during the
summer I try to play at least once a week,
but when my schedule permits. But I'm still absolutely terrible,
and my friends continue to make fun of me.
Speaker 2 (41:20):
It's oh they do, Okay, Well that'll probably happen to me.
You know. One of my strategies has been to whenever
I hit my ball, if it's a good shot, great,
If it's not, I pick my ball up and move
it where Lance is to hit it again, so I
don't slow him down.
Speaker 1 (41:33):
That's that's a good strategy. Well, I really want to
thank you for your time, Judy and your insights today.
I really appreciate it, and I also want to wish
you all the best in your the next chapter in
your career as it begins.
Speaker 2 (41:45):
Well, thank you so much. Lee. I valued your knowledge
and your role that you've had in our industry and
admired that. So I appreciate you reaching out and being
able to do that with you today.
Speaker 1 (41:58):
All Right, thanks those kind of words, and I also
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 hear conversations with C suite executives. Shippers, regulators,
and decision makers within the freight markets. Also, if you
want to learn more about the freight transportation markets, check
(42:19):
out our work on the Bloomberg Terminal at Bigo and
on social media. This is Lee Klasgaw signing off and
thanks for talking transports with me. Talk to you soon.
Hi everyone, this is Lee Clascow and we're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Clascow, senior freight transportation logistics analysts at Bloomberg Intelligence,
Bloomberg's in house research arm of almost five hundred analysts
and strategists around the world. 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've got 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.
I'm very excited to have back on the podcast. Judy
(00:51):
McReynolds the Chairman and Chief executive Officer of ARC Best.
Judy has over thirty years of experience in the transportation
logistics industry, including twenty eight years said ARC Best. In
twenty ten, she was named ARC Best President and CEO,
and in twenty sixteen she was elected to Chairman of
the Board of ARC Best. Corporation. Most recently, in August
twenty twenty four, she transitioned to ARC Best Chairman and CEO,
(01:14):
overseeing the company's long term strategy, including a drive toward
innovative solutions. She sits on several boards outside of the company,
including OGE Energy, First Bank Corp. And First National Bank.
She's a member of Wall Street Journal CEO Council and
sits on American Trucking Association's Board and Executive Committee, after
serving as chair for eight years. She recently retired from
(01:37):
the American Transportation Research Institute. Welcome back to Talking Transports, Judy.
Speaker 2 (01:42):
Thank you. It's great to be back with you. I
was thinking, we've known each other a very long time.
I was trying to think about the number of years,
but it has to be somewhere in the twenty plus.
Speaker 1 (01:55):
I think it's around twenty one years. So yeah, it's
been a long time, and I've always treasured your insights
because you know, you work for a great company in
the LTL space. Can you tell a little about our
best for the folks listening to it.
Speaker 2 (02:10):
Yes, I love to our company our best. We are
a multi billion dollar integrated logistics company delivering smart scalable
solutions that are tailored to our customers supply chain needs.
Founded over one hundred years ago as a local freighthuler,
(02:30):
we've grown into a global logistics leader with fourteen thousand
employees and two hundred and fifty locations. Our technology expertise
and full suite of shipping and logistics services support businesses
of all sizes, from small operations to some of the
nation's largest enterprises. And we help our customers overcome logistics
(02:54):
challenges with solutions that we provide them that are flexible, reliable,
and built around their goals. And you know, we've been
in business, as we said, for over one hundred years.
We continue to offer ground, air, and ocean transportation through
a broad network of capacity providers, and that includes our
(03:17):
LTL carrier AVF, freight truckload service through MOLO, and an
expedite fleet with Panther Premium Logistics. And we collaborate with
our customers through our managed solutions that and in that
we develop strategies that enhance operational efficiency, reduce costs, and
deliver deeper insights into their supply chains. And supporting all
(03:41):
of this is very important. Our our Best Technologies team
are dedicated innovation group that delivers custom built solutions, advanced analytics,
and cutting edge technologies to optimize supply chains and empower
our customers. So we have really evolved into what I
(04:02):
consider to be a neat and appropriate company for the
marketplace that we live in today.
Speaker 1 (04:10):
Great, and also it's worth noting our best is a
publicly traded company. It's ticker arc B. It's got a
market cap around one point four billion billion dollars. So,
you know, one of the reasons why I wanted to
have you on a you know, you're you're not quite retiring,
but you're close to retiring, so I wanted to talk
to you before before you go. Uh and and the
(04:32):
reason is because you know, you've had such a long
career in the freight markets and you've seen a lot
of cycles.
Speaker 2 (04:38):
Can can you talk to us.
Speaker 1 (04:40):
About, you know, what is the state of the North
America freight market now from your perspective and kind of
where you think we're heading as we h heading into
twenty twenty six.
Speaker 2 (04:49):
Well, yes, well the freight market is still pretty soft.
We see that reflected in manufacturing, retail, and housing. There's
still excess capacity in our marketplace. I know there's been
a lot in the headlines about that, but the other
thing to keep in mind is just how much uncertainty
(05:12):
there's been this year for our customers. Comes from the
terror related activity, uncertainty about insurtrates, demand uncertainty for their
own business, and then even the recent challenges of the
government shut down. These are real challenges that take time
(05:33):
to solve and I think, you know, trying to make
decisions with all that and the backdrop is really difficult
for our customers. But I'm proud of how we come
to market and how we responded. We've actually grown our
customer base during this soft environment because of what we offer.
And it's really really important to be a strategic partner
(05:56):
for these accounts because you need to get into a
trusted relationship that enables you to see the issues with
them and and determine best what can better build a
supply chain for them. And you know, customers appreciate that
they look for who they trust and in an environment.
Speaker 1 (06:16):
Like this, and when you say you're increasing your customer base,
are you talking about you you're getting you're winning more
of your customer's wallets, or you're getting you're you're kind
of bringing on more customers on board.
Speaker 2 (06:28):
And okay, I'd say both, yeah, I mean, and both
are important, uh, and you know, and that at the
same time, I'll say, some of the challenges come from
you know, our customer base is high percentage of it
relates to manufacturing, and when you see weakness there, you
(06:49):
know that actually, uh pulls back on shipment levels for us.
And so you have that going on. At the same time,
you're trying to expand other relationship ships and grow new relationships,
and so it's it's navigating all of that is continuing
to be something that takes a lot of attention and visibility.
Speaker 1 (07:13):
You know, one of your one of your peers is
focused on like more local accounts, smaller to mid sized shippers.
Is that Are those the kind of shippers that you
that you guys are focusing on as well to bring
on board it on.
Speaker 2 (07:24):
Our best I would say yes, but that's always been
the case. You know, our customer base is made up
of you know, some of the smallest companies to some
of the largest, and I think the way we think
about it is we have sales and customer service efforts
focused on all of the above, but you do have
to on the small and uh mid market businesses. You
(07:48):
have to be in front of those customers. The face
to face relationships have been an emphasis for us, and
it's been interesting, you know, post pandemic. I think there
was a period of time where everyone really was much
more comfortable with virtual settings and meetings and that sort
of thing, and we've seen a renewed energy around getting
(08:11):
face to face with our customers. That's really paying off.
Speaker 1 (08:14):
Yeah, and you know you mentioned the soft soft freight
environment and slack capacity. Were you talking specifically to the
truckload market or the LTL market or both? What you
said that? What did you mean, by the.
Speaker 2 (08:27):
Way, Well, my comment really relates to the truckload market,
but you and I both know that ends up affecting
what goes on in the LTL market. Certainly does, and
so I think it's it's maybe second order in the
LTL market, but it is excess capacity, I think from
the truckload side, right.
Speaker 1 (08:46):
And do you I guess at our best, I guess
the one benefit would be you're going into the market
for line haul and the spat market. Do you guys
spend much time doing that or is most your line
hall your company drivers that you're leveraging.
Speaker 2 (08:58):
Oh, vast majorities company drivers. We do use, you know,
purchase transportation carriers, but it's only a small percentage, you know,
low single digit percentage, and it's just for balance, right
that we do that.
Speaker 1 (09:14):
That makes sense. So in addition to these, I guess
more local, smaller to mid sized customers. Where are you
seeing some opportunities in these challenging times? Are there different
different markets that you're going after outside your traditional asset
based companies.
Speaker 2 (09:30):
No, I wouldn't say that you know what we're seeing
as as opportunities that come from this, but you know,
the challenges are there kind of across the board, and
it relates to rising costs for the shipper and the
need to drive efficiencies across really every aspect of their
supply chains. And again just to comment, you know, the
(09:52):
flexibility is what's most important for them. Sometimes they don't
even know exactly what would be best and to you know,
you understand the issues and you're presenting the options. But
you know what's interesting is even though there are challenges customers,
freight still has to keep moving. And we've seen that
over our hundred years of experience. And again, these continual
(10:15):
disruptions are unusual, but it just makes the point even finer.
You know that you need to have the capability to
see what the options and opportunities are and bring that together.
So you know, what we're doing, uh, and we we
help our customers do is just focus on what we
(10:37):
can control. It is really really important in our business,
you know, to to manage costs, look for technology opportunities,
you know, to optimize your your own situation, and again
do that same thing for customers. We also find it
really valuable to lean on our history of the quality
(10:58):
process that we've had at the company for over forty years.
If you you know, it's the motto for that is
do it right the first time. But it has stood
the test of time. And so when you're facing a challenge,
whether it's in your business or the customer has one,
you know, getting the group together that's closest to the
problem and being able to solve that problem is a
(11:20):
real opportunity when things are are most challenged. And again,
you can't do some of these things without having entrusted
workforce and then relationships that you build. But you know,
it's pretty basic what we see as the opportunities whenever
you're facing some of these challenges that you know, cause
(11:41):
daily disruption for people.
Speaker 1 (11:43):
Right, and you know, you kind of touched upon like
how you guys are trying to grow organically? How are
do you guys approach mergers? Are there certain obviously you
know I can tell me who you're gonna buy, but like,
are there certain sub segments of the market that are
attracted to our best and obviously to get into those markets,
maybe an acquisition would make sense.
Speaker 2 (12:05):
Well, we always lookally at the solutions that customers need.
That's what we did all those years ago, and you
know we have a good cross section of that. Would
we like to have more scale in some of those yes,
And the reason why would be that just it would
enable us to better serve you know, our customers. But
(12:28):
we see our set of services as comprehensive. But we
keep our ear to the ground on what's coming to
market in terms of you know, acquisition targets. And we
do that because we might be able to achieve that
scale quicker if we were to make an acquisition. But
it is interesting how you know, we're we're not as
(12:51):
much acquiring unique businesses as we are acquiring businesses to
kind of plug them into what we're offering to customers.
I think think a great example of that is our
Molo acquisition back in November twenty twenty one. We saw
the need to have better, uh more responsive solutions on
the truckload side. Molo was a four year old company
(13:16):
when we bought them, and they had the same spirit
of service excellence that we do, which was really really
important and a great knowledgeable team. But what we what
we do, you know, with the truckload service that we
offer is as we want to make it available, you know,
to this customer base that oftentimes is using four solutions,
(13:42):
and so it's got to work in an integrated way
with the rest of what we do. So we do
have unique truckload customers, but oftentimes, you know, we're working
across the solutions that we have and we have to
be able to do that seamlessly to be effective.
Speaker 1 (13:58):
You mentioned technology a couple times. Can you talk about
our best technology strategies? Where are you investing what what
are you most excited about in terms of how it
can benefit your company or your customers.
Speaker 2 (14:11):
Well, you know, we've been doing a lot on the
technology front. You know, the the interesting thing is, you know,
just the opportunities for efficiency in this business that we've
been in for a very long time. And one of
the most exciting I think is city route optimization. You
know that we deployed you know UH a few years
(14:35):
ago but continues to pay off. And you know, we
used algorithmic AI combined with the knowledge that our people
on the ground have. You know, dispatchers are very knowledgeable
about customer tendencies and trends, and we combine that together
(14:55):
to put in place at kind of an automated approach
to route optimization, but it certainly is modified when it
needs to be, you know, by that local knowledge, and
it's paid off. I think that the current number there
is twelve to thirteen million dollars a year and growing
with new phases being added to that, and it's been
(15:18):
pretty exciting. But you know, I think that's one of
the things that's so good about what we do is
that we can bring together the technology side of things
with very knowledgeable people. By the way, we have about
four hundred people in our technology team that do a
combination of you know, development kind of in an organic way,
(15:43):
combined with great purchase solutions to really bring that to
bear on behalf of our customers. We're actually rolling out
a dock operation system across the ABF network that creates
visibility for the people that are managing that operation, whether
(16:03):
it's uh, you know, the the work that an individual
is doing in their job, or if it's how well
a trailer is loaded. You know, some of those things
again sound very basic, but if you can have visibility
and automate, you know, some of the things that are
needed to best understand whether you're doing your business with excellence,
(16:26):
you're going to be better off. One of the other
things that we've done recently is deploy a compliance UH
team and you know, we uh we really have some
knowledgeable people in our business that can go in and
look where, for instance, a new operating system has been
deployed or route optimization has been deployed and make sure
(16:50):
that that that that's being done well and that jobs
are being done safely. And we've seen this team this
year produce twenty million dollars in savings from existing operations
and they haven't been to all of our locations yet,
so you know, in addition to the bells and whistles
(17:13):
attached to some new technology, we understand that you need
to go in and make sure that that work that's
being done really adheres to the standards that you want
and the technology is being used to the best it can.
So I mean, I love all of that. And it's
you know again that the decades are even one hundred
years of being in business that help you do some
(17:34):
of those things.
Speaker 1 (17:35):
Right now, if we talk about AI a little longer,
you might get another turn on your multiple So let's
keep on talking.
Speaker 2 (17:41):
About Yeah, that's you're right. You're right.
Speaker 1 (17:45):
So are you using any internal or maybe even off
the shelf AI or machine learning programs to help you
with pricing?
Speaker 2 (17:55):
We do, you know, we do use that. You know.
A great example would be when we have customer calls.
You know, we have AI listening to the outcome of
those calls and helping inform us about things we needed
to know. We call it call audit to make sure
that our people are doing their jobs well and that
(18:16):
we're addressing customer concerns. That's an example, you know, we have,
you know, on the the truckload side, some you know,
technologies and AI deployed to help us make sure that
the calls that are coming in to take the loads
are qualified carriers and that makes sure that again our
(18:39):
people are working on the most important carriers and loads
that they can. So it's really in many different places.
Some areas are smaller than others, but some are very
impactful as as I mentioned earlier.
Speaker 1 (18:55):
And besides, you know the route optimization that you mentioned earlier.
Is there anything from a technology standpoint that's going into
the trucks that are helping your drivers be more efficient,
be safer. You know, if you could talk to any technologies,
it doesn't have to be a I just you know,
any technologies that you're using for trucks.
Speaker 2 (19:14):
Well, we use we work with Sam Sarah for the
the e l D units that are in our vehicles,
and we also have you know, other safety elements that
we've we've deployed that and some of those that we're
testing for you know, our drivers to make sure that
(19:36):
that you know, we manage and monitor speeding incidents and
things like that. But you know, we are very knowledgeable
about what's going on in the vehicle. You know, with
an LTL network, you need to be very much focused
on the timing of things and and that sort of thing,
and so you know what's great is we have America's
(19:59):
road Tea Captains, which I think you've probably met at
some point in time. You know, we've got numerous of
those folks that are just excellent road drivers that you know,
give us input on the technologies that we deploy. They
understand the importance of you know, being efficient and safe
and how that can save you know, fuel and miles
(20:23):
and so we you know, we do value that and
our drivers value it as well. So you know, there's
there's many many things that we have going on there
and and that's very important work because of the dollars
that it can save a lot.
Speaker 1 (20:40):
Of companies have been using technology to kind of fight fraud.
You know, fraud's a very huge problem in the trucking industry.
Is it is a bigger problem in LTL as is
in the truckload.
Speaker 2 (20:52):
Well it can be. It's not as big probably because
of you know, the knowledge that you have of the
customers and the routine mean that you have the customers.
But you know, we we do have instances where you know,
we uh might we need to verify that a customer
is a legitimate customer, you know, and if you were
(21:14):
delivering uh freight, you want to be sure that it's
going to a real customer. So there are efforts that
we have with our safety team and security team and
using technology to do that. But I think on the
vetting of the carrier side, you know what comes to
mind when you say that is on the truckload side.
So we use various uh uh, different services to make
(21:38):
sure that we're using carriers that are real, that are
not fraudulent, and they will serve our customers well.
Speaker 1 (21:46):
And just turning to demand right now, you know, we
were talking earlier about the freight demand and it's been soft.
Has this been the weakest that you've ever seen in
your career or or maybe maybe not the weakest, but
like certainly the duration of the weakness has been pretty long.
Could you just kind of benchmark it?
Speaker 2 (22:04):
Yeah, I believe it is. I think we're in the
fourth year of a freight recession, which is unmatched. Now
when you look at some of the measures you can
compare you know, the volume of shipments available and that
sort of thing to nine maybe the low point in
(22:24):
the pandemic, that's pretty significant. But you know, when I
look at our company and the approach that we're using,
I'm very pleased with how the company has transformed because,
you know, having the solutions, particularly our managed solution that
is in place, it really helps us serve our customers well.
(22:46):
And as I mentioned earlier, we're actually growing in this environment,
which is not the norm. And you know, all those
years ago in two thousand and nine when we were
most challenged. When I first took my role in January ten,
twenty ten, the the solutions we provided and the capabilities
that we had were not as robust as they are today.
(23:09):
And so I'm really proud of how, you know, we
used the work that we did with customers to transform ourselves,
you know, into to a company that is unique, yes,
but it's more relevant even in the face of these
kinds of challenges.
Speaker 1 (23:25):
Is there anything you and your team kind of look
for to try to find some green shoots and when
things will finally start to turn. Is there like an
index that you guys use or were indexes?
Speaker 2 (23:38):
Well, I think the best one that I can can
point to is the ISM Manufacturing PMI index, because if
you look at our customer base, manufacturing and wholesale makes
up you know, forty plus percent of our business. And
what we've seen is that when that turns positive. And
(24:01):
you know right now it's below fifty. You know, ideally
it would be in the fifty five range. But you know,
when it starts to turn positive in about four to
six months, we see the benefits of that. The other thing,
and you know, I mean in our latest AK filing,
you know we have this. We still haven't seen weight
(24:23):
per shipment turn and improve. When you start to see that,
that is a good sign too, but we still haven't
seen that happen yet.
Speaker 1 (24:33):
It's worth noting the ism. It's been a construction territory.
I believe thirty four of the last thirty six months,
so it's been we feel it. Yeah, you know, your
industry is consolidated over the years. Do you expect that
trend to continue? And I guess that's good for keeping
pricing rational. So do you expect the market to consider
(24:55):
it to continue to contolidate?
Speaker 2 (24:57):
Well, I don't know that that is my expectation. We
you know, with the Yellows bankruptcy, that was a major
company competitor that's gone. And yes, some of you know
those facilities. You know a large portion of those facilities
(25:18):
ended up and other competitors and even US I mean,
we helped our network by buying some of those remaining
facilities that they had, but it was you know, when
I think about the capacity that's left, that is significant.
And so you know, what's been interesting is how long
(25:39):
the recession has gone on after that, So I think
you're not really seeing the benefits of that. But it's
more about the unusual macro than it is about you know,
the appropriate capacity level, particularly on the LTL side, being there.
And so you know, I think once we get to
(25:59):
a more norm normalized macro, it's going to be obvious
that the remaining companies that are in the LTL marketplace
maybe from a capacity standpoint, it's pretty appropriate, but it's
just unusual what we're facing now. And we've always been
(26:19):
a company that's focused on price discipline. You know, we've
had a costing model that's been in place, you know,
more than forty years. We have a lot of intelligence
around business opportunities and what they do for us, and
that's going to continue to be a point of emphasis
and really, you know, a very important part of the
(26:41):
success that we have on the LTL side.
Speaker 1 (26:43):
Gotcha, So let's can we talk about you a little
bit if you don't mind. So can you tell folks
listening how you got into the transportation industry and what
was your career path to becoming a CEO of a
public company for a trucking company, which you know it
has historically been a male dominated industry. So you broke
(27:04):
you brooks, you broke some ceilings. So I want to
hear about that journey.
Speaker 2 (27:09):
Yeah, it's it's been a fun journey. But I was
first introduced to the transportation industry from the work that
I did in public accounting, and so I was in
Little Rock and our company was one of my clients,
and my client base also included a lot of others
(27:30):
that did or were in the industry, both at that
time and continue to be, many of the neat pioneers
and entrepreneurs in the industry, and I really enjoyed working
with them, getting to know them, seeing what approaches they
deployed and the successes that they had. But it also
allowed me to see the risks that some took, and
(27:53):
I can look back at that now and some of
those risk takers are no longer in business. But what
was attractive to me about our company me was the
professional nature of it. I remember you know, interfacing with
the people that are here, and honestly, many of them
are retired now when I think back about who that was,
(28:14):
but you know, there are people of great character and integrity,
and from where I sat, that meant a lot to me,
you know, in my family life and then also my
professional life. You know, I valued integrity and being able
to be honest and trusted in the business, and so
our company was really one that stood out to me.
(28:35):
But when I first was asked to join art Vest
later I was oftentimes I was the only woman leader
in the room. But from the experiences that I'd had
in public accounting, where I worked around some really effective women,
but most of the clients that I had were run
by men, you know, I had developed an understanding of
(28:58):
all of that, and I just focused on learning our
business and building relationships with people, and I just never
let that be an issue, and it really wasn't an issue.
You know, it's so neat to look back at all
of that. But one of the things that I did,
and it was very purposeful, is I knew I had
(29:19):
my role, which initially was the controller for the company.
I knew I had my role. I had my job
to do. What I tried really hard to do was
make sure that I was available for those meetings or
those discussions with other leaders where I can understand the
business and I learned to love it. And that resulted in,
(29:41):
you know, my promotion to CFO in two thousand and
six and then ultimately in two thousand and nine being
asked to be the CEO of our company. But you know,
I had the opportunity a lot of great experiences with
lots of neat people in our industry throughout all of that.
Speaker 1 (29:58):
Right, And can you share a few of the biggest
obstacles or challenges you've had to overcome while working in
industry and kind of what you learned from that.
Speaker 2 (30:06):
Well, it started whenever I was a CFO. But you know,
one of the things that I'm most proud of is
the transformation that we saw that needed to happen and
how that came about. But it all started in the
fourth quarter of two thousand and six, which I had
(30:26):
been a CFO for relatively short amount of time. And
Lee you probably remember this. The housing market just fell
off a cliff in the fourth quarter of six, Do
you remember that?
Speaker 1 (30:36):
Absolutely?
Speaker 2 (30:38):
Yeah? I mean, and so then that the next big
thing that happened was the financial crisis in two thousand
and eight, and then from all of that came the
Great Recession in two thousand and nine. So I'm again
I'm CFO during this time. But in October two thousand
(31:00):
and nine, the CEO of our company, then Bob Davidson,
who had he was the successor to Robert A. Young
the third, he announced that he was going to retire
and that he was going to be gone by the
end of the year. And so, you know, it was
a year where we had about a billion and a
half in revenue. We'd lost twenty five percent of our
(31:22):
revenue because of the Great Recession, and we lost one
hundred million dollars and so that was nine But at
the same time as all that was going on, I
was never so flattered when Robert Young walked in my
office and asked me to be the next CEO of
the company, to succeed Bob, and you know, so I
(31:45):
told him I would. It was a tough situation. The
good part of it was that I was already dealing
with that as CFO, so I kind of had my
hands on what we needed to do on the cost
side and I did that. We took those actions, but
from there it was so obvious to me that we
were going to have to do something very different. You
(32:07):
mentioned green shoots earlier, and I think about the green
shoots we looked for then. But the great thing for us,
as having been in business so long, we had many,
many trusted customer relationships, and we leaned on those. We
got together our team and we started working with customer data,
(32:28):
tracking trends, asking questions and getting honest feedback from many
of our customers. And again, you can't do that if
you don't have the trusted relationships. And what we uncovered
was that we were better as a full suite of
solutions for our customers than we were just serving only
(32:48):
the LTL part of our business. And the great thing
was we anticipated the complexity that our customers would be facing,
maybe not at the level that they're facing it, but
we anticipated that, and you know, we were able to
expand the markets that we were serving, which today the
(33:09):
figures are about fifty plus billion that's LTL. If we
instayed the course of that, that's the market we would
be serving. Instead, it's four hundred billion dollar marketplace that
we're serving. So we vastly increase the markets that we
serve and our ability to succeed. But we had to
(33:30):
educate our leaders and our employees about what we were
doing as we were going to market differently, and we
had to make some acquisitions and work through the integration
of those. It was really important to have a good
foundation of HR and talent development at the time. And
(33:51):
then I've already mentioned the importance of our technology team
being able to look at what we needed to do
and in some respects developed that our selves so that
we could evolve and change. And I'm very, very proud
of the fact that we go to market as an
integrated logistics company that serves our customers well and has
(34:14):
a lot more opportunity and sustainability, you know, than we
did back in those days.
Speaker 1 (34:20):
Great, and can you share any piece of advice you
might have given your successor, Seth Runtzer when he starts
his new role at the beginning of next year.
Speaker 2 (34:31):
Well, first of all, Seth is very, very capable, and
I'm really excited about him, and he and I've worked
together on this transition for multiple years, probably four or
so years, and he has a very different background than me.
But that is serving him well. We talked a lot
(34:51):
already about technology kind of in its intersection with operations.
He is very great at that, and it's so visible
and urgent for him to get some of those things done.
But you know, one of the things that I've shared
with him that has come up in my mind multiple times,
and that is that sometimes you have to make a
(35:14):
decision that you don't necessarily have all of the steps
or the facts or the path to how that's going
to unfold, but that you have to get as much
information as you can and evaluate it and then a
lot of times you just have to make your next
(35:34):
best move. And you know, because I think some people
strive for that understanding and that level of perfection in
every decision and in our business, and with how rapidly
things change, sometimes you can't wait to do that. And
so he and I've talked about that a lot. How
many different times that I've had to take that approach
(35:57):
and not know all the outcomes of that decision, but
do the very best that you can with what you know.
Speaker 1 (36:05):
Right, And what piece of advice would you give new graduates,
particularly women looking to enter and succeed in the logistics
and transportation field.
Speaker 2 (36:16):
Just never underestimate the impact that you can have as
an individual. And I give this advice often is just
don't worry about that next rung on the ladder or
like seeing yourself and then in that next role. Just
do a great job at the work that you're doing.
And I think when I as I was describing earlier,
(36:38):
for me, make sure that you do that so well
that you have time to learn the part of the
business or the business that you're in, and something else
I think that it's just super important is aligning your
values with the company that you work for. It's so
(37:00):
important to come to work every day knowing that you agree,
you know, with the values based approach that your company has.
That just makes things better and easier because I've found
if you can trust the people that you work around,
you're able to go faster. You're you're facing fewer obstacles.
(37:21):
Sometimes I think about, you know, the importance of not
creating obstacles inside the company, because you have so many
outside the company that you're trying to solve. But you know,
I think I think people underestimate their own ability to
grow and change, which is doing a great job at
the job that they have.
Speaker 1 (37:40):
That's that's actually very very good advice that that could
be applied to any profession, not just the transportation profession.
So what's going to be the biggest thing you're going
to miss after stepping away as the company's CEO.
Speaker 2 (37:53):
Well, I know what it is. And we've already had
one retirement event and it was really in front of me.
I was looking across the audience at that event and
just seeing the faces of people. Some of them I
see every day, but some of them were from out
of town that I don't And I am just really
going to miss the people in our business. We have
(38:15):
a We're blessed with people who are hard working and
care and want the best for both our people and
our customers. And you know, they're just great people. They're
people that you want to spend time with, They're people
you want to be friends with. And I'll miss that
(38:35):
the just the daily interaction there. I'm going to continuous
chairman of the board and so I'll have, you know,
some visibility into that. But you know, it's going to
be different for me after forty years of working really hard,
not having the day to day but I'm also looking
forward to spending more time with my husband Lance. He's
(38:56):
been such a supporter of me and an enabler of me,
and he loves his company like I do. And then
the other night we had some time with our grandchildren,
who won is twenty months old and one is fifteen
months old, a grandson and a granddaughter, and we're looking
forward to having some more flexibility and time to spend
with them. But I'm going to continue on Oge's board too,
(39:19):
and so I'll be I'll be busy, but it'll the
days will look different than they do today.
Speaker 1 (39:26):
And besides family time, is there anything else you're gonna
be exploring, whether maybe be involved in the industry other ways,
or I don't know, getting better at golf or picking
up golf. Is there anything?
Speaker 2 (39:38):
Well, you know, Lance and I've talked a lot about golf.
We both like to trap fish and fly fish, and
so we're going to do some of that. And he
and I used to play golf together in college, but
I declined many opportunities to play golf on occasion because
I'm not good enough at it. But we'll probably pick
that back up again. He's a great golfer and you
(40:00):
know his plate since he was a child. So anyway,
we're going to do some of that as well, but
we're kind of not really placing kind of restrictions on
what we might do. We're going to do a little
travel and and you know some of the things that
we already talked about. It's more having the flexibility to
do what you want to do. And you know, again,
(40:23):
I'm it would be hard, very difficult for me to
not be involved at all with our great company going
forward because we just have so much potential.
Speaker 1 (40:32):
Right And are you still going to be involved with
the ATA I?
Speaker 2 (40:36):
You know, I probably won't. I'll probably transition that to
Seth and Matt Godfrey that runs a BF and you know,
we've had people involved in safety committees, you know, and
cross border committees and all that. We're going to continue
at the level that we we do today, but I
won't be as as involved as I once was.
Speaker 1 (40:56):
So and just just to be clear, I've been playing
golf since I've been in high school and I'm still terrible,
So I don't.
Speaker 2 (41:04):
Yeah, it's so it doesn't. You just have to enjoy
being outside, don't you.
Speaker 1 (41:09):
I do, I do, and I and then during the
summer I try to play at least once a week,
but when my schedule permits. But I'm still absolutely terrible,
and my friends continue to make fun of me.
Speaker 2 (41:20):
It's oh they do, Okay, Well that'll probably happen to me.
You know. One of my strategies has been to whenever
I hit my ball, if it's a good shot, great,
If it's not, I pick my ball up and move
it where Lance is to hit it again, so I
don't slow him down.
Speaker 1 (41:33):
That's that's a good strategy. Well, I really want to
thank you for your time, Judy and your insights today.
I really appreciate it, and I also want to wish
you all the best in your the next chapter in
your career as it begins.
Speaker 2 (41:45):
Well, thank you so much. Lee. I valued your knowledge
and your role that you've had in our industry and
admired that. So I appreciate you reaching out and being
able to do that with you today.
Speaker 1 (41:58):
All Right, thanks those kind of words, and I also
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 hear conversations with C suite executives. Shippers, regulators,
and decision makers within the freight markets. Also, if you
want to learn more about the freight transportation markets, check
(42:19):
out our work on the Bloomberg Terminal at Bigo and
on social media. This is Lee Klasgaw signing off and
thanks for talking transports with me. Talk to you soon.
Host
Lee Klaskow
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