Ep. #72: Andrew Leto, Founder & CEO, Emerge

Episode Transcript
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Speaker 1 (00:00):
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(01:28):
Welcome back to another episodeof the Freight Pod.
I'm your host, peter Silver.
I'm joined today by a specialguest, mr Andrew Leto.
Mr Leto, how are we doing?
Great thanks.
Thanks for having me.
It's a pleasure to have you.
You have one of the moreillustrious freight careers of
any of my guests thus far, soI'm excited to kind of dive into

(01:49):
your journey, and I think itmakes sense to start.
Just take us back to what evenbrought you to freight to begin
with.
How did you find this funindustry?

Speaker 2 (02:00):
Yeah, so when I was younger my dad was a franchise
owner of a company called PilotAir Freight which is still
around.
He was a Phoenix office and Iremember going to his office and
I always told everybody mydad's in the freight business.
Kind of like you were broughtup but my dad didn't own any
trucks or any planes.
So I was like, how does thiswork?
How are you in the freightbusiness if you don't own

(02:20):
anything?
I was like, how does this work?
How are you in the freightbusiness if you don't own
anything?
And I went to his office oneday and he showed me.
He just showed me how shipperscall him up and he goes through
a bunch of books, aci guides,but they're calling it air
freight business and Ford Air iswhat they put most of their
freight on.
Actually it's kind of funny.
They sell expedited servicesbut it's mainly on trucks,

(02:42):
mostly air freights.
On trucks it's just fastertrucks, team drivers.
But he showed me how you couldjust connect shippers.
He picked up the phone one day.
He's like, hey, watch this,I'll make $100, $200.
And he just was giving quotesout, looking at books and then
adding a margin to it.
And so at a young age I figuredout wow, this is how you make.
You can make money in freightwithout owning anything, just by

(03:05):
being the middleman,essentially.
So that's where I got my firstexposure to that.

Speaker 1 (03:11):
So did you work for him, or what was your first
actual job in freight?

Speaker 2 (03:14):
Yeah, so as a teenager I worked in his office.
I worked in the warehousemainland and didn't do anything
anything great and he was mostlyusing typewriters and stuff.
So I went to after after.
I was not an academic, I was, Ihad add and I didn't realize it
at the time, but I do, um and Icouldn't pay attention to
school.
So I didn't have the grades togo to college.
So I went to the navy fiveyears from 2000, from 96 to 2001

(03:40):
did five years navy, um, andwhen I got out again I started
working for my dad again afterthat.
But my last year in the Navy Iwas like, okay, I'm going to be
so far behind all my friends whowent to college and I was
actually going to the Navy toget a college degree, the GI
Bill, to have something to gopay for college.
And when I got out I worked formy dad for about three months.

(04:02):
But that year before I left theNavy I just studied every
business book I could get myhands on.
I went to Barnes and Noble atthe time and went to the
business section and read everygreat book on business or every
bit.
I was like I got to at leastfigure out how to be an
entrepreneur, make money.
So I read, like you know, richDad, poor Dad, to Think and Grow

(04:22):
Rich, which was my favoritebook of all time, and it really
just.
I didn't realize this, but mylast year, when I was doing all
this, I didn't do anything butread for like last year of the
Navy just constantly.
But when I went and worked formy dad after I got out because I
worked for him when I wasyounger I saw, like you know,
we're still, it's 2001 and we'restill using typewriters and you

(04:42):
know companies would call himup and say, hey, give me a quote
on this.
And he would go through a bunchof books and you know, add 35,
it was a 35% margin business,the air freight business back
then.

Speaker 1 (04:50):
But there was not a lot of shippers for it.

Speaker 2 (04:52):
And also it was after September 11th, so you really
couldn't get new shippersbecause there was this thing
called known shipper where you'dhave to go out and, uh, to get
a new shipper was really hard.
So I was, I remember, and thenone day, I remember someone
called our office and wasselling stuff on eBay and they
they.
I told them I said, listen,bring it to a terminal, don't

(05:15):
have a lift gate, residential,come up, that's going to cost
you a fortune.
He was selling an ATV and hesays okay, I just sold it to a
guy.
How do I get it to him?
And I told him like, bring thisto what a Ford Air terminal.
I told him how to package itand have your customer pick it
up there.
And he called me back an hourlater.
He's like wow, you're thecheapest quote I got.
And I knew I was because youknow, everybody else was giving
them residential lift gates bothways.

(05:37):
So that guy and he also prepaidus on.
PayPal, which is awesome.
I was like wow, this guy isactually prepaying us.
So I said I told my dad I waslike dad, we should advertise
online and see if we get peoplefrom eBay to use us.
And we did that for a littlebit.
And I remember someone calledme up one day and he said hey,
listen, I got a quote fromsomeone just as good as you, or

(05:59):
actually it's better, it's mucheasier to use them.
And I said what's that?
And he goes freightboatcom.
If you remember freightboatcom,it's now RCH Robinson.
Freightboatcom was one of thefirst travel orbits or price
lines for what essentially isLTO Not really for truckload but
for LTO and I said I saw thesystem, I saw freightboatcom and

(06:22):
I saw all the carriers lined uplike you would on travel
lawsuit orbits or Priceline,just like you would book a hotel
or book a plane.
And I was like I told my dad.

Speaker 1 (06:30):
I said this is the future.

Speaker 2 (06:32):
I said we got to do this and he wanted nothing to do
with that.
He could care less.
He was like go out, put a suitand tie on and go go out and
sell shippers to call this upand do it the old fashioned way.
That's all he knew.
And I said we got to invest inthis and he wouldn't.
He didn't do it.
So it was literally three monthsafter I started working for my
dad and I, really, after readingall these business books, it

(06:54):
was like kind of like the matrix.
When I worked for him I waslike before I read all this
stuff I didn't see it.
But when I started working forhim, I this is crazy, how he's
doing and how this wholeindustry works.
It's you know where people haveto call you up and get a quote.
Why don't they just go onlineand get a quote?
So I left my dad after threemonths of working with him and
he he didn't really talk to mefor only my.
The only person in my familythat talked to me at the time

(07:15):
was my mom for about a year, andmy dad thought I was going to
compete with him.
He's like what are you doing?
But anyways, that's how Istarted Global Trends.
I left my dad's office one day Isaid, okay, I'm just going to
start a company.
I had zero dollars to my name,zero.
I had unemployment checks fromthe Navy that was it to live off

(07:37):
of and that was only for sixmonths that I would get that.
So after about three months ofworking for him, I said I'm
going to do this and I justremember the guy on eBay calling
me up and saying, hey, wouldyou ship this for me?
But I remember mostly is heprepaid me.
So I was like, wow, if I canget prepaid from people, I don't
really have to have money tostart a business.

(07:57):
So I went out, started GlobalTrans.
What I did was I just went oneBay for about a month and just
emailed everybody that lookedlike they're selling something
that wouldn't fill UPS or FedExor parcel.
It was bigger than 150 pounds.
I would say, hey, give me acall when you want to ship this.
I went out and got one carrierrelationship and I knew the

(08:18):
cheapest at the time was acompany called Central Transport
.
They probably still are and Iremember because I remember when
I seen that, because when Iwent to freepocom they were the
cheapest carrier every lane um,worse service.
I don't know if they've gottenbetter, but back then it was
really bad, but it was half theprice of anyone else.
But also, I was also thinkingif I just could tell all these

(08:39):
people go to the terminal andhave to deal with liftgate
residential, it doesn't't reallymatter.
I mean, you're not going tohave as much problems with the
shipment if you're just using aterminal.

Speaker 1 (08:48):
Well, they'll save so much.
And for this kind of thing it'snot like most of the like.
Someone's buying an ATV, dothey care if they get it in
three days or if it's two weeks?
I feel like back then, ifyou're shipping something on
eBay, you didn't need it to bethere by a certain time, so you
could probably get away with theworst, worst service as long as
it, as long as the price was,was right.

Speaker 2 (09:09):
Right and it was.
That's what it was.
I mean, they still mess up alot of shipments, but it was
still worth it in the end.
And then.
So what I did was I went andmet the guy for lunch, the guy
here.
He said I'd have to prepayevery shipment, so for about.
So after a month of emailingeverybody on even I probably
sent out like 10,000 emails topeople I was starting to get

(09:31):
calls every day.
Hey, I'm ready to sell this.
You said you're going to giveme the best freight rate.
What do you got?
And I would just go on.
I got the same tariff asFreightboat at the time
Freightboat at the time Becausethey just got to Phoenix and
they wanted my business and theygave me the same pricing, which
was amazing.
And they didn't give me creditright away.
But after a week of having tocall them every time I had a

(09:57):
shipment, they gave me credit.
But anyways, what was niceabout that?
After a month everybody calledme.
I was the cheapest becauseeverybody else would try to go
on, call FedEx or UPS and oreven go to FreightWalkcom, I did
not know like the whole.
Just bring it to the terminalthing.
They would just put the people'saddresses in there, so I knew
that if I could get everybody tobring their freight to a
terminal I would be the cheapest, especially using just center

(10:19):
transport.
So after about a month of doingthis I had $0 in my name.
So after about a month of doingthis I had zero dollars my name
.
I.
After about a month and a halfI had about two hundred thousand
dollars in my bank accountbecause, remember, I was getting
prepaid for everything and youknow, I was making 30 margin on
it, 40 up, something like thattime.
Um, and so I owed centertransport 120 grand of it.

(10:41):
Um, luckily they didn't wanttheir their, so back they didn't
really they would back.
They would call me after 60days for the writing.
So I actually had two months ofcredit for them.
And at that point I just hired abunch of my friends.
I said one of my best friendswho was my co-founder of Lutrens
, I was living at his house, hewould email all the people on

(11:02):
eBay and then I had anotherperson that would do the
bookings and then that personexplained to the shippers do the
quoting and another person dothe billing.
So I had like four or fivefriends working for me after
about a month.
So I really like.
I only had to do really onemonth of work, Like, and then I
was became a master, masterdelegator after that.
But after about a month I saidto myself I need to build what
Freightboat has.

(11:23):
I mean, I always knew that Iwas like I got to build what
they have.
So I went to online and Ibidded out with a bunch of
companies.
Actually, Joe was talking aboutthe guy last week on your
podcast.
His name is Abhishek.
He reached out.
I went on this company calledElancecom, I put it out there
and he was the lowest price forit.

(11:44):
You're saying to build theactual website Freightboatcom, I
was like, hey, build me this.
And it was funny, at the time Ididn't even know SMC3.
So for about three months I wastrying to figure out how to do
it.
I would literally mail to Indiabecause that's where I was
building it out of all the ratedisks from all the carriers.
So back then it was likeWatkins and Central Transport

(12:05):
and all the companies I wouldtry to get rates with LTL
carriers and I'd email themdisks and they were like we
don't know what to do with this.
They were trying to piece ittogether through the disks.
And then I finally called SMC3up to buy more disks and the
guy's like what are you doing?
Why do you keep buying allthese disks from us?
I'm like I'm trying to buildwhat FreightPoD has.
He's like, oh, you just need aRateView product.
There was a product out therethat they were using.

(12:27):
So I was like, oh, tell meabout this.
So after I figured out RateViewand all this, I bought that
product.
It was either Carrier Connector RateView, one of those two.
And we built my first,carrierratecom, which was what
we use at Bulbatrans, which waslike pretty much the second it
was us and Freightboat and thenUnishippers were the only
companies that had you know aplace where you could go online

(12:49):
and do and kind of like traveloff your orbits for truck, for
LTL, and after about two yearsof doing it it took about two
years of doing what I was doingon eBay to get the system ready.
And then, once I had the systemready, I was like, ooh, I can
go get actual shippers now thatI have this.
But I didn't.
I was like I have no capitaland there was no capital at the
time Like only Freightboat gotinvested in until probably about

(13:11):
2010 in our industry.
There's no other biginvestments in our industry from
from anyone.
And so I was like there's gottabe a way.
How do I sell this to shipperswithout having to hire a massive
sales force?
And that's where I came up withthe idea.
I was like, wait a minute.
I said dad, how did it workwith Pilot Air Freight?
And he told me he's like PilotAir Freight would do the billing

(13:33):
, they would do all the backoffice stuff and we would just
go sell it.
Pretty much that's howfranchise models work for Air
Freight.
And I said, ooh, I wonder if Icould do that for LTL.
I remember meeting a couple ofmy reps here in Phoenix.
Two of my best reps JetMcCandless, who you talked to

(13:54):
last week he was my YRC rep herein Phoenix Then Mike Bookout,
who runs a company that's calledMyCarrier.
They're actually in a legaldispute right now between the
two of them.
Those were my two best reps inPhoenix for LTL and I literally
asked them.
I said, hey guys, if you hadthis, and I showed them.
I said here's carrierratecom.
It looks just like freight food.
We had about six or sevencarriers and then we had Central
Transport, old Dominion, acouple other ones, a couple of

(14:19):
regionals in there that weregiving us some rates and at the
time, honestly I had to say Iwas a shipper to get rates.
Ltl carriers hated brokers backthen.
They still don't like them butthey at least deal with them now
.
But back then it was very hardto get rates for LTL.
We managed it.
It just took time to keep it.
Obviously we were doing so muchbusiness that we kept them.

(14:42):
I asked Jet and I asked MikeBooker.
I said if you had this and youbrought this to your shippers
and I think both of them hadlike five to $10 million books
of business here in Phoenix.
They were local reps.
I said how many of yourcustomers would use this?
And they said this probablyhalf of them.
Half of them would use this,they would love to have
something like this.
Because it was 2002, three,when that was like a new thing.

(15:09):
And uh, I said um, so I hiredboth of them and they both
brought in millions of dollarsof business, like in the first
year, of ltl shippers and we'dmake 20.
It was a 20 margin business.
So if, if someone had a 10million dollar book of business
and they brought one, onemillion of it over, that was 200
grand a year we're making andyou know he can make up we would
give half to the rep and halfof the company.
So I was after that point.
I was like, wait a minute, thismakes total sense.
Why not have an agent mod?

(15:31):
I know at the time I was tryingto do a franchise model, but
agents much easier to puttogether.
We did an agent.
We're the first ones to do anagent model for ltl and what we
did is we picked our carriers,we picked the ones that we want
to do business and then we wentafter the reps.
For the rest of them it's likeYRC, we didn't do business with
them.
So we went after YRC reps andthe and the, the agent.
The call would be hey, how muchdo you manage for YRC?

(15:57):
And they'll be.
They'll be like oh, we have a$10 million book of business
here in.

Speaker 1 (16:00):
You'd make a hundred grand a year, and that's what
they're making typically so, andafter that you make 50%.

Speaker 2 (16:05):
You know, let's say, you brought $2 million and now
you're making an extra hundredthousand dollars.
So really so I used my two reps, who were actually two of the
best recruiters in the industrynow are.
Kj McMasters and Brent Orsugawere my two guys that did that.
And yeah, they would justrecruit agents all day for um,
um, global trends and um afterabout.

(16:27):
So that's how I, that's how,without any capital, I read $0.
People say you need money tomake money.
I had $0 in my name and Istarted global trends with zero,
but also it was able to, youknow, build it to what it was.
When I left it was half abillion dollars, but just using,
you know, I had to figure Icouldn't hire a bunch.
If I could have hired a bigsales force, I wouldn't have

(16:49):
done the agent model.
But the agent model just workedout great for LTL because it
was a new thing back then.
And so that was the first fiveyears of Globetrans.
And then about 2010 is when wedecided to get into truckload,
and then about 2010 is when wedecided to get into truckload.
That's when everything changedfor me personally, because I was
like, wow, this is way cooler,way harder to do.

(17:11):
But I thought way better thanLTL, it's a way bigger industry.
And actually meeting your dadwas really what showed me how
the industry works.
And I was like blown away whenI first met him in 2009.
And I met him in Chicago withJet.

Speaker 1 (17:29):
Yeah, coyote was three or four years old at that
point.

Speaker 2 (17:32):
Yep, and I don't know if you were there.
I remember him showing mepictures of you like you were
playing hockey or something atthe time.
I remember.
I still remember it was hockeyYou're playing.
No.

Speaker 1 (17:40):
I would have been.
I was playing football backthen.
My second youngest plays hockey.
There's only one of us in thehockey.
Oh yeah, he was showing mepictures of you guys.

Speaker 2 (17:50):
But I remember that's when I first heard of you.
But I remember going out to theChicago office and at the time
we were the best, we were thefastest growing LTL brokers in
the country and your dad was thebiggest, fastest growing
truckload.
And I told your dad.
I said, hey, wouldn't it becool if we could work together?
Somehow we're doing this?
And he said, yeah, come out andmeet us.
And so Chet and myself went outthere and we saw what he had

(18:12):
going on.
It was right before he moved tohis new offices.
It was the older offices, itwas a big campus, yeah, Of
course.
And I said what are all these?
This is what blew me away.
I said what are all thesepeople doing?
I said, are they sellingshippers?
Cause, remember, I'm from theLTL world where we have the
carriers.
Once you, you don't need thecarriers Like you have the.
You've one guy that hascarriers, Cause you have all the

(18:32):
carriers.

Speaker 1 (18:33):
You just need to procure the load and then you
put it in the system and thesystem does the rest and the
carriers selected and then theydo what they need need to do.
Right, and that's what I askedhim.

Speaker 2 (18:41):
I said I saw hundreds of people.
I'm like jeff, what are thesepeople doing?
And I started calling shippers.
He goes no, and he pointed tolike a little room with like 10
people in there.
Five people, those are myshipper guys and he said I said,
what are all these otherhundreds of people doing?
He's like they're callingcharacters and that's where it's
like oh my god, this is.
This is the craziest.
How this industry works is, um,you know, that's the model.

(19:03):
I mean, even today, it still isthe model where you know the,
the idea of of.
You know what makes ch,robinson and coyote great is we
could talk to every.
We have a huge care sales forcethat knows where the market is.
Um, I wouldn't even say it'sstill happening right now, maybe
not as bad as it was back then,but um, it's still like that.

(19:23):
You know, coyote and and ch andthe big guys overall can buy
better than any other brokeragebecause they could call every
carrier first and book thatfreight.
And that's what blew my mindand that's when I said to myself
man, I'm going to really investmyself and time into figuring
out truckload.
And that's where my nextcampaign came in to play.

Speaker 1 (19:44):
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(20:06):
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(20:27):
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Yeah, no-transcript.

Speaker 2 (21:08):
Yeah, so I was thinking Grow Rich.
Honestly, the only reason I'mtalking right now is because of
this book and I remember I wason the ship.
I was my last year in the Navy.
I was in my trying to readeverything I could get and I
remember this one guy came tothe ship and he was kind of
known as the kind of the ship.
Uh, he was always in trouble andhe was just a bad like, not a.
He didn't have a good, positiveattitude at all.
He was always getting beat uplike not beat up physically,

(21:29):
just beat up on like mentally byeveryone.
And uh, I felt bad for him andand I.
But then one day he came in andhe was uh, acting all very like
totally different and he's likeI'm gonna be a billionaire, I'm
gonna change the world, and I'mlike how everybody's asking
like're not, how are you goingto do this?
And then we finally got it out.
He read this book, think we'reRich, and I was like, okay,

(21:49):
whatever, and I just brushedthat aside.
You know I didn't think aboutit.
But then I was doing all thesewhen I was going through reading
I was like man, I remember howchanged that a millionaire, I'm
going to do whatever I want.
I can make anything I wanthappen.
I realized how to do it and thetitle of the book is so stupid.

(22:13):
It's like the worst title everThinking You're Rich, but
actually that's what it is.
But it was written 100 yearsago, by it's timeless and it was
actually rehashed as the Secret.
You heard of the Secret, thebook, the Secret.

Speaker 1 (22:25):
Yeah, I didn't know those were.
I have it sitting within 10feet of me, I just don't know
where it is.

Speaker 2 (22:29):
Yeah, the Secret is really just an updated version
because this was written back inthe 1920s.
It was obviously.
It was definitely written for aman to read.
There's a whole chapter on howto use your sexual self for your
self-improvement instead ofusing it.
You know redirecting that andit was so.
There's an updated versioncalled the Secret, but it's

(22:52):
really a manifestation Like youcould think.
You know, think your richeswhatever the mind you know.
His best quote from NapoleonHill is the author is whatever
the mind can conceive andwhatever, he believes he can
achieve, and whatever you canconceive and believe you can
achieve, um, and that book waswritten, was was sanctioned by
uh, andrew carnegie a hundredyears ago.

(23:13):
He hired this guy, napoleon hill, to write down why him and all
his friends, jp, morgan and um,all his buddies at the time
rockefeller he was number two,rockefeller's number one how
they're so successful.
And he didn't say I don't wantyou to say how we did it.
I want you to write down theblueprint of how we think and
what makes us, what made us,what got us everyone here to

(23:34):
where they're at.
And he did this for like 15, 20years, wrote this book, and
it's the time like, honestly,it's the number one self.
I think it's the best self-helpbook of all time.
I think if you read this, it'sall you need, but you have to
take it to heart.
And I took it to heart.
I really did, um, I also madeeveryone that worked for me and
you.
If everybody asks like, why isso many people from successful
from global trends?
Ask them all.
I made them read this book.

(23:55):
Um, I think that has a lot todo with it.
You know, also, if I have tothink, I think a lot, of, a lot
of white people are successfulin global trends.
They saw me do it and they'relike well, andrew's not any
smarter than me, so I could dothis, which has a lot to do with
it too.
But Think You're Rich is like Isaid, it's time.
I cannot wait to share thatwith my children one day and say

(24:16):
hey, listen, this is just asgood as if you could just build
your blueprint of how you think,like, just make this the mind
frame, the framework, this will.
You can't go wrong with this.
I mean, this is to seeeverybody that's successful use
this and it's very simple stufflike if you read it, but it's uh
, very powerful.

Speaker 1 (24:36):
I will.
Peter Renshler of Metaphoractually gave me this book like
three weeks ago.
I just don't know where it is.
It's somewhere in the general,general vicinity but now I'm
taking it as a challenge for youto read it so metaphor came
from jet, who I may read thebook so I thought the power of
the book is very.

Speaker 2 (24:53):
A lot of people buy it.
They won't tell you like it'sbecause it's book, but I think a
lot of it has to do.
I wouldn't be sitting heretalking because that's what
changed me the paradigm, how Ithink, like I always thought you
have to have money to makemoney, or you have to come from
money, or you have to be givensomething or get lucky, or work
your ass off at a job and thenwork your way up, which
everybody's taught as a kid, butthat's not how it's done.

Speaker 1 (25:16):
Yeah, I mean I do think it's fascinating how you
kind of maneuvered I don't knowif maneuver is the right word,
or things just kind of fell intoplace where you realize, like
wait a second, I don't reallyneed cash.
Like these eBay guys are goingto prepay me.
Central Transport is theirbilling department doesn't know
its head from its butt.
Therefore they won't eveninvoice me for two months.

(25:37):
That's two months of revenue.
That's just going to be sittingin a bank account.
How do I use it and grow it?
I think that's reallyinteresting.

Speaker 2 (25:46):
I urge everybody that I know to.
If you want to be anentrepreneur or anything, just
be successful in life, I'd makeall everybody works for me read
this book.
Uh, because that's how powerfulit is.
I think it's.
If you have, I think it's justas good as a college degree and
honestly I mean I'm puttingthose down, but I think it's
just that amazing.
It's changed my life andchanged so many people I've seen
in their lives.

Speaker 1 (26:05):
Did you ever get a college degree?
Or you did Navy and then, nextthing you know, you were founder
of Global Trans.
Global Trans takes off and herewe are, no.

Speaker 2 (26:12):
I didn't, but I truly believe you have to be educated
.
I self-educated I readeverything I could possibly get
my hands on.
Every big, great business bookI read, I just find myself as an
ADD.
I can't pay attention to class,but I can do it by myself.
I can pay attention by myselfand listen to things in my own
time.

Speaker 1 (26:28):
Well, I think if your ADD brain works at all like
mine, it's if you find interestin what you're reading.
You can read it all day.

Speaker 2 (26:36):
Yes.

Speaker 1 (26:38):
If not, you could read it and four seconds later
have no idea what you just readand have to go back three more
times trying to retain it.
I'm the same way.

Speaker 2 (26:47):
And if someone's teaching me something, it's much
better.
I sometimes have to for somethings to sink in.
It takes me a little longer.
It feels like.
So I just that works way betterfor me than learning from
somebody Like I've never had amentor or anybody in my life.
Just because that's who I am,I'm much better.
I'm an introvert and I dothings better on myself.

Speaker 1 (27:12):
But reading is key to that.
So back to global trends.
You know one of the things.
You kind of alluded to it interms of choosing the agent
model, because that was kind ofwhat was available.
But I am curious definitivelyif you could do it again, would
you still do the agent model?
And I'm also curious if youcould talk a little bit about

(27:34):
the nuance, like what does ittake to build a really strong
agent model from your side of itin terms of like being the
infrastructure, because thereare a lot of companies trying to
do that today and it's just not.
I don't know, not all are assuccessful as global trans was
yeah, I think the agent model isgreat.

Speaker 2 (27:54):
Obviously you have to treat the agents as your
customer, the shippers not yourcustomer.
Um, that's what we did.
Well at global trans.
We, we were we didn't reallycare like if the shippers came
in we'd obviously be nice tothem, but they weren't our
customer.
The customer was the agent.
The benefits of agent models isagents will fight for business
more than anyone.
They're usually better friendswith the customers than any

(28:16):
other model Because obviouslytheir livelihood depends on it.
They're not going to lose thatcustomer if they switch jobs.
In a sense they get to keep thecustomer Because the customer
is typically not using the agentcompany, they're using the
agent.
So the agent switches.
You usually agent can take thebusiness and then so we treated
the agents like customers.

(28:37):
And the only drawbacks the agentmodels you're not going to get
massive customers.
It doesn't work well forfortune 500s maybe pieces of the
business, but nothing more thanthat.
And then obviously they theybrings a lot of headache with it
too, like a lot of cause.
Everybody does businessdifferently and, um, you know,
so you have to have a lot ofhuge team managing that.

(28:57):
And the biggest problem withwith LTL agents is is in.
The biggest problem is in.
The biggest problem in theindustry for LTL is for being a
broker is, yeah, you don't havea huge carrier sales team, but
you have this massive team thatdoes rebuilds.
You know everything.
Every half the shipments arereclassified, reweighed and
every shipper wants to, you know, complain about it and not pay
on that.
And then the carriers and it'slike you have so much you know,

(29:20):
probably 20% of any kind ofcrazy, but 10% of your revenue
is sitting in 90 days, plus thatyou owe the carriers in that
model because there's just thatmuch disputes and it's like you
just I always looked at it I waslike, oh man, is that what's
going to?
And sometimes it goes away andyou're like, whoa, it's my way,
how'd that go away?
And sometimes it's like no, yougot to pay or we're shutting
you off.
But it's just a it.
That's why I was happy to getin the truckload after Obatrans,

(29:43):
because that's the worst partabout it.
And the opposite flip side oftruckload it's the other side.
You have to have stuff carried.
A hundred people find sourcingit's all sourcing.
Not very little happens afterthe fact.
You know, like an.

Speaker 1 (29:54):
LPL.
Why don't the fortune 500s endup using agents?
Much Cause this is it'sinteresting cause.
I lived primarily in thetruckload Fortune 500 world, so
agents are about as far fromfamiliar to me as they can be,
which is why I'm just curiousabout this.

Speaker 2 (30:11):
Yeah.
So agents, remember, when youuse a CH or Coyote for a big
Fortune 500, you're going tohave this farm of teams.
You know you win a lane and youhave all these carrier sales
reps going to work for you.
The agent model usually is thecarrier sales rep or they have
one or two people working forthem.
So they're great for, like youknow, if a shipper's given one

(30:32):
load a day and they have to finda truck, but if it's like 10
loads a day and they have tosource trucks, that's hard for
them to do that.
But some of the agent models,like Global transit, we had a
system where you could feed itto the brokerage there and they
could manage it for you.
And but then the agents, youknow they don't want to share
the split.
It's just it's, it's, it'salmost like it just never comes
because of that.
There's just too much.
It does.

(30:53):
They do get them, but it's notas good, as big as the coyotes
and why would any shippernecessarily pick an agent over?

Speaker 1 (31:02):
Like, if I'm looking at adding one provider to my
network and I've got these fourbrokers soliciting me and then
I've got four agents, like whywould I end up picking even as a
smaller, non-Forge 500, why amI picking the agent over a
broker if it kind of feels likeI'm then almost double brokering
it because they might give itto a broker.
No?

Speaker 2 (31:22):
Well, typically they give it to their broker.
So if it's like an Armstrongagent or a Global Trans agent,
they have this internal carriersales team.
So it's still internal.
It's just not the, but typicallythe agent models.
They are brokering loads.
You know their team.
They might have two people intheir office that are doing that
, but if they get a big account,they have to send it over to
the corporate to do and that'swhere.

(31:44):
But they don't have controlover it either, like you know,
like, and then it's just you'remiss, it's just you have to
manage it, while some do, butthat's why it's not prevalent as
big as.
And then also agents really relyon the wine and dine.
They're the best at it.
They're best at, you know,creating best for you know, I

(32:07):
would say, buying the business.
I wouldn't say they do itillegally, but they are the best
at winning, dining and takingout people.
And also, if it's a good agent,they're going to be picking up
the phone on the weekends.
And that's where I think TQLhas done so good is because
their, they, their model reallyis a bunch of agents sitting on
phones because they get paidpretty much like an agent, their

(32:27):
commission.
So they're very.
If you ask any shipper, you knowwho's your most responsive
brokers Typically.
You know the ones that have alot of skin in the game with the
commission, which are.
You know TQL reps are great atthat.
And also you know the agentmodel.
You know they'll end up on thephone, they'll handle things.
Maybe if it's a good agent now,you might get a bad agent.

(32:48):
You're not, you know.
Half of them are good, half ofthem are bad, but um, most of
them, if you get a good agent,could be better than going
through a ch yeah, I get it.

Speaker 1 (32:59):
I mean, you still have commission in the split
model, like coyote, molo, ch,arc, so all those folks have
commission.
It's just as the selling rep,the customer selling rep, you're
getting probably half of whatyou could get as the agent, but
then again you're also doinghalf the work.
Uh, the agent's having to coverthe load sometimes, whereas as
the sales rep you're notnecessarily doing that in a

(33:19):
split model business.
But I I get what you're saying,so I do miss having the agent
sales force.

Speaker 2 (33:25):
It's the greatest way you know this business model
you need to.
Distribution is key in thisindustry.
Like you have to have adistribution, whether it's lots
of people on the phone or agentmodel, and I do miss having that
.
It was just because it justalways, if you get a good agent,
you just know they're going togrow every year and they just do
what they're saying.
They very rarely lose businessbecause it's like they're lively

(33:47):
.
They'll fight tooth and nailfor that business.

Speaker 1 (33:51):
It feels like it's a lot cleaner of a business to
manage financially.
In terms of just attributingcost, we struggled with that, I
think, in the more traditionalsplit model brokerage where it's
like what's the cost of thisoperator, right, that's doing
like three tasks on a load, likehow much should they be

(34:12):
attributed to the total cost tomove the load?
Like it just was?
There was a little more nuanceto a split model where you're
splitting up by task versus, Ithink if you just have an agent
whose job it is to procure thefreight and you you handle the
billing and some of the otherinfrastructure, yeah, the agents
they, since they do everythingit's it's it's cradle to grave

(34:37):
and they, they, like I said,they have them do good, have
them do bad For a company.

Speaker 2 (34:41):
the worst part is like agent models aren't really
the most profitable business.
If you're actually going tostart agent model Cause remember
you're the goal and raise like30% to the agent or to the
company.

Speaker 1 (34:50):
But think about this.

Speaker 2 (34:52):
If the agent, if that and this happens all the time
they'll move a $5,000 load andmake 200 bucks on it because
they don't care right.
And then, but is the companyreally making money?
If you're putting $5,000,getting paid 45, 50 days maybe,
and then making 40 bucks on it,50 bucks, you're probably just
breaking even.
So you have a lot of that.

(35:14):
There's a lot of nuances thatyou have to fight all the time
as an agent model.
Then the agents were like, well, I'll just go somewhere else
and they go somewhere else andthey switch all the time.
If you think about it, whatwould you say?
I would say 23% of the businessis agent model of the truckload
brokers, maybe 25%, I don, ofthe truckload brokers maybe 25.

Speaker 1 (35:31):
I don't know if I could even put a number.
I would guess less because I Ijust don't know of many
companies that are sizable onthe agent side.
There's a couple, but like ifyou look at the top 50
brokerages in transport topics,I would guess 45 are not agent.

Speaker 2 (35:51):
Yeah, yeah, it's just it's hard to scale in that
model as a, as a broker, as intruckload.
It was great for LTL, but fortruckload it's just harder to
you.
Very rare Do you have an agentthat you know you met could lay,
manage a massive account.
It does happen, but it's it'sway that way.
That goes way more to thecarrier sales models with a

(36:15):
massive force of people.

Speaker 1 (36:17):
Yeah.
So let's back back to kind ofjust the general global trend
story what, how long were youinvolved in the business and
when you did finally decide tosell?
Um?
Take me through that processand kind of why you did when you
did.

Speaker 2 (36:33):
Yeah.
So about 2014 comes around.
We've been in business for 10years.
We're about half a milliondollars, but that's obviously
actually the last three years ofthat.
Ever since I met your dad, Iwas really interested in how do
you?
You know doing truckload, buthow do like, how do you?
What's the next in 20 years?
What does truckload look likefrom the shipper standpoint?
And that's where I realized,when I was at Global Trans, I

(36:56):
was like, okay, how do we askthe guys and say, okay, we're
getting ABM Bev truckload.
How do we get this?
Because we started a brokerageinternally carrier sales model,
coyote model, just like what youguys built there.
But I remember how do we getthe freight?
And they showed me thespreadsheet the shipper sent to
us.
It was a, it was an RFP, it wasa Excel spreadsheet for ABM.

(37:16):
They sent us a.
They said I put our rates hereand I email it back to them.
And that's where, honestly,that's where the idea for 10,
four came.
So my first company was 10,four.
After the little trans, 10,four was supposed to be.
What has emerged right now is10.4.
But then, so in 2014, I started10.4.com and then, quickly, we

(37:39):
started showing the shipperswhat we built at 10.4, which is
essentially a marketplace.
It didn't have an RFP platformin it yet, but it was a
marketplace and it would showyou where all your trucks are at
and then you know you couldbring all your brokers and
carriers in and they could trade.
It was I was trying toessentially create a load board
for the shipper, like here's aload board that does your

(37:59):
procurement.
You could bring all yourbrokers and carriers Instead of
saying this email spreadsheetyou know, I want to have that
digitized especially and yourspot but we always had was a
spot at the time we We'd havethe contract side.
And then when I showed it to ABMBev, they literally said could
we?
Just?
We want to, we don't care aboutthe market, we don't care about
the marketplace.
You go, we like the.
They saw the trucks in the mapand they're like Ooh, that's

(38:21):
cool, we want that.
So all of a sudden I like Ithought a tooth and nail, but I
should have actually went thisway.
I was actually wrong.
Travisyan was running at thetime 10-4 um, and he he was my
cto at global trans and hestarted, so he was running 10-4
we did out of boulder, colorado,and obviously every ship we
went to wanted the map of seeingtheir trucks on, because there

(38:43):
wasn't four kites or p44 yet.
Um it was just you know youwouldn't see your trucks and it
was, you know we had it.
Where you like just uber, youcould see all your trucks moving
around and we tie into the ELDsand all that.
So we had like more like forABM, but we had like we tied up
Warner for them.
But the idea was to create amarket, create an RFP

(39:06):
marketplace.

Speaker 1 (39:10):
And we pivoted right then to a visibility provider.
I was going to say I never knew10-4 as as a Marketplace
organization.

Speaker 2 (39:16):
So it was.
I'm surprised hearing this.
I thought it was visibility.
It was 100.
We had to switch because that'sall the shippers wanted.
So we got ABM, but we got aboutfive major shippers and it was
just an us and four kites goingat it.
And then I, my heart was neverin.
I always wanted to help, be apart of the solution of what I
saw at Coyote, which is you needhundreds of sales reps to call
carriers every day to find outwhere they're at.

(39:37):
I was like there's got to be abetter way to bring the carriers
and to make this visibility.
I was always interested in thematching, not the tracking, and
if I could go back to that time,I should have been more
interested in the trackingbecause I see, when the
valuations at P44 and all theseother guys got Because we were
really the first it was us andForkites at the same time going
at it and I thought we had abetter product, they had a

(40:01):
better connect, they were betterat connecting with the EDIs and
all that and APIs.
We weren't that great at that,which we should have been great.
That was the key is you have to.
The key, the whole idea behindp44 and four guides is let's tie
everybody in with apis or ediand then you only have to tie
into us, to tie into all thesecarriers, and everybody brings
their carriers on.
It will just, it's easy, it'snetwork effect.

(40:23):
So I left.
So at that time I was not reallyinto the tracking of it, and
that's where we got an offerfrom trimble to buy it.
That was like too hard torefuse.
It was like so we got that, Itook the money and then, uh, we
split it was.
I took that and started toemerge.
That's really what.
I took all the money from that,which wasn't that much.

(40:45):
It was really enough to justpay what we put into it and a
little little, and I took thatmoney and it was 2017 when they
bought Trimble bought 10-4.
And unfortunately it didn't goanywhere.
Because If you go to ABM, I wassurprised when I went there.
It's like they still have 10-4on the wall like their trucks

(41:06):
moving around, because we gaveaway for free for the first six
months and then they never endedup charging for it.
But a big company should neverbuy.
You never should buy a startupright.
Interesting Because right whenthey bought it, the first thing
they did was bring their HR teaminto it, and that just screwed
up everything.
You bring their HR in it's likeyou're a startup.

(41:30):
You can't act like a big companyand so they bought it and it
just went nowhere.
It was actually a big failureand it's unfortunate.
I hate to see that.
But you know, back then Ididn't really realize that
either.
I didn't realize like theywould.
They would just treat it notlike a startup.
They tried.
They treated it like when theybought.
So tremble bought like acompany.
Uh, what was the company theybought?
Where it shows the miles, pcMile I didn't know, trimble

(41:54):
owned PC, miler, yeah, okay.
I think they still do.
I might be wrong on that.
They bought something.
It was either that one orsomething else, but it worked
out because it was already anestablished product.
It had customers, it hadrevenue.
You could bring in a for-hireguy, you could bring in a good

(42:16):
CEO to run it.
Startups you can't do that.
You can't just bring in anybody.
The founder has to be there andyou can't have a big company
overseeing it with HR, that'sfor sure.
So that really went nowhere.
And I remember when P44 that'swhen P44 said you know, let's
get in the truck with right thenbecause they saw we were doing
it and you know, I wouldn't saythey took the idea of, but

(42:40):
they're the ones that reallytook the bull by the horns and
ran with it.
And you know, in hindsight weshould have stuck with the, but
again, I was just.
I came from this whole match.
I'm a third-party guy.
I've always been that.
My whole career is matching.
How do you match trucks andshippers?
So that's why I left andstarted Emerge right.

(43:04):
Then I took all the technologywe built at 10.4, that
marketplace stuff, ripped it out, gave them visibility to
tremble, and then started Emeremerge in 2017.

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Okay, and so?
What was the original idea forwhat emerge was going to be?

Speaker 2 (44:21):
um, I just I said to myself this is all I said.
I said every ship in the unitedstates, 90 of the freight is
contract and all that is run ona bit, like most of it's run on
a bit, and it's either a three,six or 12 month bid cycle.
And here's the idea.
It just came from this.
It was like if everybody wasusing the same bidding platform,

(44:43):
it would make it so much betterfor the carriers that were
within it, because the thecarriers then like, let's say, a
billion dollar shipper pushes atruck 10 times a day here and
this you know.
Vice versa, they're pushing allthis capacity out, awarding to
these carriers.
So the system then gets smarterand then the next shipper comes

(45:04):
in, runs a bid and now we knowhow, which carriers to bring
into those lanes.
Now this, it's kind of funny.
Our business model during COVIDwas amazing for shippers.
They would love it.
They'd be like, oh, we needmore capacity.
Right now, our business modelis really, we're not a
SaaS-based product.
We do have SaaS you could payus a SaaS, but it's really.

(45:26):
We make money on the matching.
We make money on matching newcapacity to shippers by using
data.
So the idea behind Emerge islike if you can just get enough
shippers using this platform,you can open up a door.
Because if you had a carrierwith, like, say, 50 trucks and I
said here's a shipper, anyshipper in the United States,
and I said what's the chancesthat you are part of their bid,

(45:48):
it's like maybe 2% that you'reinvited that bit, like even with
50 trucks, and maybe one ofthose trucks maybe one of your
trucks be perfect for one oftheir lanes so that was the
whole idea behind emerge is likeif you could get all the
shippers on a platform that'swhat you gave away for free and
then open a door for carriers ofsize, you know, 20 trucks or

(46:08):
more that could buy a contract.
It would be the first contractmarketplace that carriers would
have, because they really don'thave a place right now.
They could go and say they haveto be a part of the shippers
network, obviously, to get thator buy from a brokerage.
So the idea behind Emerge hasalways been give the shippers a

(46:28):
free platform for their threesix-month, 12, 12 month bids.
Make it simple, super simple,because that was a big problem
during COVID is using ourcompetitors, which are Coupa and
Jagger, were very hard to do.
You would run those on anannual bid that's what most
shippers do, but for many bidsand try if your rings break down
, it's terrible you have to doeverything by email.
We made that simple.
Unfortunately, it hasn't been aproblem since covid.

(46:55):
You know, uh, that you know we.
If I told a shipper, why areyou better than I say we're
faster and easier, they wouldn'treally care because they only
do once a bit.
They don't use that softwarethat much right now, um, but
it's always, as we know, likeeverything cycles, like it's
going to be a bad, it's going tobe a tight market again, um, so
hopefully shippers would wantto get ahead of it.
But we give away a free platformto the shipper.
Carriers and brokers areinvited, or and their brokers.

(47:18):
We also give them a spot marketand that's one of our best
systems.
And we also tell shippers whenthey shouldn't go to spot,
because most shippers I wouldsay 30% of shippers freight
shouldn't be in the spot marketanyway, at all times, most of
the time, let's say 90% of thetime, should be in the spot
market anyway at all times.
Most of the time, let's say 90of the time, should be in the
spot market, not as a contract.
And these are the ones that,because I find you go ahead.

(47:39):
I'm just gonna ask why okay, lowvolume contract lanes, so like
we call them uh, low volume.
So let's say you have a bid andyou're looking for three trucks
uh for truck a week in one lane.
You have that in your contract.
You're doing an annual contracton one truck at this one

(47:59):
location per week.
Right now, actually, the smallmarket is way cheaper.
It's, first of all, cheaperthan contract.
Second, usually it's a brokerwho buys it.
It's not a carrier that buysthat, it's usually a broker that
does buy that.
So with Emerge, it's like whynot allow not just that one
broker to have access to it, butall your brokers to have access

(48:19):
to it, and then you'll get atrue market price.
Because, remember, if you do ayear contract with anyone,
they're going to have to putsome fluff in it to make sure
that they can service this for awhole year at this price.
So you have that and then youhave so if and if it's a live
live, it has to be obviously notdrop trailer or something like
that Live.
If it's a live live, you shouldallow all your brokers and all

(48:41):
your capacity providers, allyour carriers, all your brokers,
access to that load when itcomes to bill.
So that's what we try to pushshippers in, 30% of that.
So if, if, if that was the case,it wouldn't be 90, 10, 90%,
contract 10% spot in ourindustry.

(49:02):
It'd be more like 60, 40 rightnow.
But that 40%, 30, 40% would beso much better being in the spot
market as far as far as acosting standpoint.
Now, obviously you want to be.
You're only going to let thecarriers and brokers you want to
work with anyway do it.
So our system allows you to say, hey, allow TQL Arrive and
so-and-so, and these carriers tobook it.
But then it goes into ourmarketplace.

(49:23):
It starts low, so it starts.
You said it's, let's say, 10%below DAT 15% and moves up over
time and that's one good thing,that.
Convoy brought.
I got that idea from Convoyactually.

Speaker 1 (49:34):
And people can buy it then.
So like, if I start the laneChicago to Dallas at 10% under
DAT and it's at $1.90, let'scall it.
It shows up, so it's a spotload.
I'm Anheuser-Busch, that's myspot load and it's coming out of
the emerged platform and myapproved brokers and carriers

(49:54):
can then essentially buy it now.

Speaker 2 (49:56):
Yes, yeah, so you would let any.
So instead of saying what we'retrying to tell shippers,
instead of awarding this to onebroker at a fixed price
throughout the whole year, pushthis in the spot market and
watch what happens.
First of all, you're going toget better price.
You're going to save 10, fiveto 10% of that and then allow
the carriers that you want tobook it, allow access to it, and

(50:16):
so that's so you would allow.
Yeah, like you said you wouldallow, you could pick which
carriers are allowed to buy it.

Speaker 1 (50:25):
And theoretically that's best in this market.
Right, a down market wherepeople keep bidding lower and
lower and the rates just keepdropping, and so you know a spot
is well below where thecontracts are.
But if it's 2021 again or weget another, you know it doesn't
have to be another COVID, butthe next up market, I imagine it

(50:48):
won't be the same, like that60-40,.
You'll want it to lean a littleheavier 80-90% contract with
lower spot, because the spot'sgoing to way outweigh the
contract rates.
Right, it's just the other sideof the market.

Speaker 2 (51:02):
Yeah, I would say that a lot of carriers did hold
their rates for the shippers,but usually it was asset-based
carriers, not the brokers.
The brokers obviously can'thold a rate like a carrier could
and it's typically not on theselanes.
These lanes are like, like Isaid, these are mainly one from
the brokers.
Like the brokers, just winthese one and it makes your big
weight, your annual bid, waybigger.
Right, if you have all theselines that you should be in the

(51:23):
spot market anyway.
But yeah, it could go up.
But let's say rates do go upand you're seeing a spot market
crazy.

Speaker 1 (51:29):
Why not just run a contract that you know you?

Speaker 2 (51:31):
could run a contract at that point and then right now
you're going to save 10, 10 to15 percent.
Uh, by doing that and I'm justtypically I mean that's uh, on
the low, like usually, it couldbe even better because, remember
, you're allowing every one ofyour carriers and brokers access
to this freight now at thatcurrent day's price, which is
typically, I mean, as you know,for the last three years has

(51:52):
been bad or been on the shipperside, it's been really low rates
.
But, like I said, if things dochange, those lanes would have
broken anyway.
Those brokers would not havecommitted to it if it's one load
a week at that price.

Speaker 1 (52:06):
So it makes no sense to think, oh, I'm going to save
myself.

Speaker 2 (52:11):
Some brokers.
Yeah, no one's going to lose.
Let's say, rates go up 30%Brokers are not going to be able
to hold the rates.
Anyway, I think it makes senseto do that, but also be nimble.
You have to say to yourself Iwill be willing to run a bid if
I do start seeing rates gohigher.
That's not been the case forthree years.

Speaker 1 (52:29):
Yeah, how does it work then in terms of driving
revenue, if the tool is free forthe shipper?
When do they start?
Or who's paying?
Who pays the bills?
Like are carriers and brokerspaying to be on the platform, or
the shipper pays when a loadtransacts.
How does that work?

Speaker 2 (52:49):
Yeah, so how it works with the merge is, let's say, a
carrier.
We open a door for carriers Oursystem's free for the shipper
and then we open door forcarriers not brokers, but
carriers to come in and buy thelane from the platform.
And then they were transparentwith the carrier.

(53:09):
So you see the carrier name,it's like ABC Trucking here's
how many trucks they have andthen obviously we're just doing
the billing at that point.
So we didn't have to source.
We're not sourcing the carrier.
We do have a sourcing team.
If that carrier does fall offand buys a contract, we have to
find a new truck.
So we have to act like abrokerage in that aspect.
But we'll never win all theshippers for eight, I think you
know, five to ten percent.

(53:30):
But that will help pay forthat's how we're supplementing
this.
You know, giving you a freeplatform and yes, it has hurt us
with some shippers becausethey're like, well, I can't give
you.
But remember it's not a mergepricing, it's the carriers
coming in buying it's actualperson at the carrier buying it
but that.

Speaker 1 (53:46):
And then you have like a transaction fee, like a
brokerage, but on top ofwhatever they're paying.

Speaker 2 (53:51):
Yeah, a transparent fee.
That's like $7.9.
That's so interesting and thenwe make.
That's how we make, that's howwe pay for the platform.
So the idea of AdWords is likehey, you get a free platform and
we only make money as if wesave you money, because usually
you're not going to give it to anew carrier unless you're
getting some kind of savingsomewhere.
But also it creates a greatbidding environment.

(54:14):
I think shippers that don't usea platform, that don't do bids
a lot, that don't run athree-month I think it's way
better to do a three-month bidthan a 12-month bid.
You're going to get way betterrates from your carriers.
You have to be quicker, though.
You have to be able to do that.
A lot of shippers don't like todo that.
They like to want you know theworst.
Thing is shipper, and you'veheard this before.
Shippers always say I want towhittle down my carrier base, I

(54:37):
want to work with as leastamount of carriers as I possibly
can, and I think that's youknow.
The best buyer of freight isnot the one that does that.
The best buyer of freight by10% over everybody else just
allows everybody in.
It doesn't matter who you are.
So they and they play the broker, you know they they do a great
job of, like you know, everythere's always a broker.

(54:59):
There's always someone willingto buy into a lane.
So I think it's, if you'relooking to cut your
transportation costs by five to10%, be open to more carriers
and brokers.
You know, think about this,especially a spot market.
Let's say there's you, you knowthis.
Let's say the biggest brokerageis at two thousand dollars.
In this lane there could be someguy like an agent model that's

(55:20):
at fifteen hundred, twelvehundred, like a four or five
hundred dollar savings on oneload, just because they know
that truck is deliveringtomorrow there and he wants to
go back here and the big guydidn't know about it.
So you want to play, you wantto have enough.
You don't need.
So you want to play, you wantto have enough.
You don't need to have everybroker in there, but you want to
have enough to where it's notoverwhelming, like it's not.
You know there's a right mix.

Speaker 1 (55:42):
Oh, this is go ahead how do you feel about this?
Well, I just this is such a funthing to think about because
there's a rebuttal to all thisright.
So, like your, your example'sright that on a given lane that
that ch buys at 2000, there issomeone out there who knows
about a truck that can do it for1400.

(56:03):
Right.
But by and large, if youcompare, ch is buying power to
the market.
Ch is beating any individualacross the board, right, whether
it's a person or anothercompany.

Speaker 2 (56:19):
So I'm not saying you should let them in.
Let them in, you still let themin and they're still going to
win their percentage of business.
But I'm saying just be open toworking with more.
I'm not saying work witheverybody, but work with the
right ones.

Speaker 1 (56:45):
Yeah, I'm not saying work with everybody, but work
with the right ones had to havefelt like their only path to
eventually having a profitablerelationship with a shipper is
to buy freight from the jump.
Because they realize, hey, thisshipper is letting me in but

(57:06):
only if my rates are good enoughto beat the incumbents, which
on average a broker on a biddoes not.
Any random broker doesn't havebetter buying power than the
incumbents.
They're just committing totaking the freight at lower
rates than the incumbentsbecause it's the only way they
can get the loads and their hope, or their bet, is that over

(57:28):
time they will quote unquoteprove themselves and that means
servicing the committed volumethey have really well and that
hoping that that then leads togetting more business.
And once you're an incumbent youfeel like I don't have to price
as aggressively.
But if you look at any givenbid at any given time, it's very

(57:50):
likely a shipper has let in abroker who is thinking about how
they have to buy business.
So it could be a strategy for ashipper every year to let five
or 10 new brokers into their bidwho they know will buy 3% to 5%
of the bid each if allowed to,and then you've got 10 brokers
buying 50% of your bid at thelowest rates, all planning for

(58:14):
the future and then the nextyear you could theoretically
just do the same thing and getrid of get rid of the 10 who
supported you last year.

Speaker 2 (58:21):
You're always paid 10%.
It only works for products thatthat you know.
Like it doesn't matter, youdon't have to worry about this,
or you have to worry about likeit works for like commodities,
big commodities, like, and yeah,but they typically pay.
I mean we see we have 12billion dollars running through
our platform.
Now there we see they are thebest guys who do that, who let
that in and have that model, andthere's a few of them.

(58:43):
They pay 10.
Take their whole.
I mean it's a huge.
Say anything about if you're abillion dollar.

Speaker 1 (58:48):
Sure, it's 100 million a year unfortunately,
most shippers don't even thinkthat way, like if I said like
let's do this, they're okay,like we're happy with our
service.
I don't think it's a.
If you want to save money youshould.
Yeah, if you want to save moneytoday, but I don't think it's a
good strategy.
Good is not a fair term.

(59:09):
If your goal is purely to savemoney and you don't care long
term about the relationships youhave with the brokers, then,
yes, every year you can burnthrough a batch of brokers and
in this highly competitive,oversaturated industry there
will always be a fresh crop ofbrokers for you to burn, maybe

(59:32):
till the end of time.
But it's not a good strategy ifyou're trying to develop
long-term partnerships, becauseeventually these brokers will
expect to get good business fromyou at rates they can make
money on.
They won't just eat crow yearafter year.

(59:52):
In fact, there's also theargument to be made that a lot
of these brokers on they won'tjust eat crow year after year.
In fact, there's also theargument to be made that a lot
of these brokers, if they don'tfeel like they're getting their
money's worth within months,will stop supporting the freight
.
I mean we always used to try tobe very, very strategic about
freight that we bought, and whatI mean by that is like I was

(01:00:14):
looking for the low volume lanes.
I wanted to be the lowest rateon the random lane from Manitoba
to Phoenix that shipped 18times a year, one and a half
times a month.
I was happy to be a dollar amile less than the next guy
because I could do the math andover the course of a year it's
18 loads.

(01:00:34):
I'm gonna lose 500 bucks each.
That's nine thousand dollars.
If I, if I, if I can't find away to make nine grand back on
this good opportunity, then I'mjust not a good broker.

Speaker 2 (01:00:45):
um, so like there's such nuance to navigating that
strategy effectively, but it's,I believe, also niches, like
think about this, every brokercan say we're the best in this
one market.
A lot of them because I meanover any, you know pick 20
brokers, every one of them, oneof them will have like their way

(01:01:06):
, their the way, they're good,it's just the way the work, it's
just.
It's crazy how it works likethat, but that's the way the
industry is still.
It's big.
Like I said, the biggest guycould be at 2,000.
The next guy could be at 1,400.
It looks like that.
I'm talking about five trucks aday difference.
You're like, how does thebiggest guy not know with these

(01:01:27):
carrier base?
It's still like that.
Now, I'm not saying let everybroker in, but you should have a
fair mix because of that andthere's always someone if you,
if you do care about cutting,cutting costs, I mean it does
make sense to have a bigger, butyou're right, it doesn't for
long-term strategy.
I would, I would have my theright mix.
I think the right way is to dokind of a little hybrid of that,

(01:01:49):
not to have not the extreme ofletting anyone in.
But yeah, the best shippers, theones that pay the least by 10%
over the next guy, is those guys.
The ones that do that.
They're just very open tocarriers.
They're not trying to whittledown their carriers.
The highest paying ones are theones always saying we want less
carriers to work with.
There's a huge cost with that.

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I think they're generallyaccepting that reality that
they're getting.
They're getting their money'sworth, or they feel like they're

(01:03:16):
getting their money's worth insupport, in commitment to the
business, because it's.
It's a lot harder to expectsomeone who was awarded 10 loads
a year to be committed to those10 loads than it is to expect
someone who was awarded 10 loadsa year to be committed to those
10 loads, than it is to expectsomeone who was awarded 20,000
loads a year to actually executethe 20,000.

Speaker 2 (01:03:35):
But at the end of the day think about this the CFO
and the CEO of most companies,big guys.
They're going to listen totheir head of transportation.
He's going to say we have abillion dollar need for trucking
this year and they're going tosay, okay, yeah, is there any
way we could save money on that?
No, we've done everything wecould, but I mean, if they knew
like this guy's, this person'sonly working with 10 carriers.

(01:03:56):
You know, like you and I knowthat there's probably a 15 to
20% savings if they were justopen, more open.
But that guy doesn't have theincentive to do that because
he's already been okay, I got mybillion and, uh, they're happy
with it.
By the way, I'm showing we'repaying average to d18 on
freightways.
We're showing that we're payingpretty good.
Um, so why do we have to messwith anything, anything up and

(01:04:17):
add more people on my team and Ihave to.
Then I have to actually justifylike, why do I need double the
team?
You know like or triple theteam.
You know it's a fight that a lotof guys just don't want to.
A lot of men and women don'ttransportation people don't want
to do.
But there's a huge cost savingsin freight that most big guys,

(01:04:37):
most of the CFOs and CEOs, don'teven know about and it's
significant.
I mean you're talking about 10%or 20% on billion dollar
freight spend.
You know, and it's there.
But most shippers do it good,most shippers are, are good, and
they don't just run aspreadsheet, just excel
spreadsheet.

Speaker 1 (01:04:54):
You know, at least they're using kubajagger I'm
curious what the reception fromshippers was like as you got
this business up and running,because it's different than I
don't know of any directcompetitors.
You have that offer all of theservices you provide is the

(01:05:15):
right way to put it.
I think you have directcompetitors in facets of your
business, like in.
There are, as you said, coupaand Jagger are two direct
competitors on the RFP side, butthey don't offer.
They don't offer the kind ofexecution platform that you're
talking about.
Similarly, name a broker MoloCH Arrive.

(01:05:38):
They're competitors with you onthe execution market.
What was the shipper receptionlike?
Because I feel like oftentimesshippers are hesitant of anyone.
If it kind of looks like abroker, smells like a broker,
it's probably a broker, and ifthey feel like they're being

(01:05:59):
deceived, then they don't wantto deal with it.
In this case, it seems likeyou're open about it.
But I'm just curious what thatreception was like and if you've
had to do a lot of kind ofeducating to get people on board
with what you're doing.

Speaker 2 (01:06:11):
Yeah, so good question, because I think that
it's always been hard because,like, where you're there,
they're very confusing when wesay it's not a SaaS product.
And I'm glad we didn't go SaaSactually at this point because
SaaS is very hard to get peopleto pay right now because
everybody's like you know, do wereally should we have they're?
They're sassed out in a sense.
I think we actually see itbecause we actually have a SaaS

(01:06:32):
model.
We we do give the option hey,you don't need to use our market
if you just pay us a SaaS.
And most people choose themarket because it's like that's
the way to go.
But I think the closestcompetitor we have obviously
Coupa and Jagger's couponjaggers, who we go against for
the rfp platform, you know, um,but the biggest, I would say the
closest one we have is whattransplace was like the

(01:06:53):
transplace without the managedtrans aspect.
So transplace, we're prettymuch what they were without the
managed trans.
Like you wrote, we run your bid, all the.
That's what they do attransplace.
They obviously they run theexecution layer they have, like
you know, they charge a 1520managed 3PL prices for managing
the freight and doing thetendering and all that.
But they also manage the RFPand they also have brokers that

(01:07:15):
come and buy from that RFP.
So you think about it.
That's really what we do.
We just automated.
We don't have.
If you use what is Uber nowTransplace?
If you use them, you're goingto see Uber coming as a broker
versus in us it's going to saythe carrier name versus, but
it's just a change of term.
I mean, in a sense we're thesame company without.

(01:07:35):
I would say that's the closestcompetitor we would have.
Like who are they like?
Oh, they're like Transplace,but without the managed trans
aspect and you can switch at anytime.
Like you're not like beholdento it.
Like when you and you canswitch at any time, you're not
beholden to it.
When you use TransPlace, it'svery hard to switch.
You're pretty much riding yourwhole transportation department
over them.
Thus you get to keep yourtransportation department but
have all the benefits of that,of having the procurement and

(01:07:58):
all that done, because that'swhat TransPlace does they do
procurement and the execution.

Speaker 1 (01:08:07):
We just don't do the execution.
Yes, it's interesting See thosebusinesses can be messy,
because I feel like sometimesshippers don't want or they want
like the kind of wall betweenthe technology organization
supporting them and the brokersexecuting for them technology

(01:08:30):
organization supporting them andthe brokers executing for them
right and so like.
I actually remember a verydistinct issue where transplace
was being incredibly shady.
This was well after sandersonwas gone, so this wasn't on him,
but it was before uber boughtthem, so I can't blame them.
But we had an instance where wehad a new shipper wanting a new
transplace shipper, wanting toadd us as a broker, and when

(01:08:51):
they reached out to theirtransplace team and said, hey,
you should add Molo as a brokerfor us.
We want him on our next bid,transplace said no, you
shouldn't use them.
Look at their on-timeacceptance percentage.
For one of our other shippers,they're at 40%.
They're terrible.
And what they had done was thiswas for I think it was Nestle
Waters, one of the watercompanies.

(01:09:12):
It wasn't Niagara, but it was acompany who had primary
acceptance and backup acceptanceas two completely separate
metrics and you could havewhatever rates you wanted on
file for backup and there wereno acceptance parameters.
You just take what loads madesense for you.
On your primary you had toaccept 95% or whatever percent
backup and there were noacceptance parameters.
You just take what loads madesense for you.
On your primary you had toaccept 95 or whatever percent.
So we accepted 95% on primaryand on backup we were like 40

(01:09:36):
something percent and they onlytook the piece of information
about backup and said this istheir acceptance percentage for
our other customer.
You shouldn't work with them.
So they essentially manipulateddata to make us look worse,
which is a big like.
It's just an example, but it'srepresentative of kind of the
mistrust that can exist when youhave these companies that are

(01:09:56):
doing multiple things andthere's a conflict.
They are incentivized to keepany broker off of that bid
because it's more of the piethat they get to keep.
So I'm curious, as you hear astory like that, like how do you
think about that?
Have you had shippers like haveconcerns about conflict there?
Most?

Speaker 2 (01:10:16):
shippers don't have a problem with them.
I would say that.
And then I would say that thedifference between us and
TransPlace is we don't have thatcontrol.
We don't tell the ship we can't, we don't have that right we
place is we don't have thatcontrol.
We don't tell the ship we don't, we can't give, we don't have
that rate.
We give them a platform.
We hear we say here's theplatform you manage it, here's
your usernames.
They let everyone, they, they.
Uh, the only caveat is unlessyou want to pay a sash, you have

(01:10:37):
to let our carriers.
And that's what we'retransparent.
It's not like we use a three,three PL.
They always had a problem atTrent like these companies,
because they can only.
They always say like we canonly carve off so much for our
brokerage, and then the shipperswill get pissed.
This is a conflict.
But when you're transparent,like our system, you'll see the
carrier name, you'll see theprice.
We don't force you to use themin it, but if you give them

(01:10:59):
freight, then we get paid andthat's.
But it's your decision, we'renot so decision, we're not so.
That's how we keep the conflictout of it.
Yeah, but it's been tough.
I would say it's been hard forus Like a lot of a lot of
investors like wait, why would abrokers want to use you guys?
If you're doing this, I'm likewell, first, of all they do it
all day long with 3PLs.
So every 3PL is a big brokerageand they go into those and they

(01:11:20):
get their freight.
Actually, 99% of the freightand emerge goes to brokers.
I mean 90 to 8%.
We went like 2%.
So it's like and I don't eversee it getting past.
Maybe 10% is like maybe our max, with a shiver, because you
know they have these rulesanyways that they don't want to
give all their eggs in onebroker.
So I've always have and weallow brokers to come in our
system, tie in the rates, so alltheir spot rates are pushed in

(01:11:42):
our system.
So if you have CH Robinson, yousee your CH Robinson rates and
all that.
So we work with, we have to, wehave to walk the trend line,
but we don't use, we don'tcompete in the same way that
they do.
We don't buy the lane and thensource it with carrier sales
reps.
We're just transparent.
We show the carriers that arebacking it up, which is not

(01:12:02):
honestly.
It's like that's why we're notgrowing.
We would be way bigger if weactually did it the other way
spot free.

Speaker 1 (01:12:08):
But I think that's where you get.

Speaker 2 (01:12:10):
it's kind of you get in a conflict at that point,
like the transparency is wherewe get away with it.
We're like, yeah, we are broke.
We see your data, but here's acare name.
You could use them or not.
And it's actually helping youget better rates and find more
capacity.

Speaker 1 (01:12:24):
They don't care about capacity right now, but they
will, for you know, in a laterday, hopefully sooner than later
, yeah, has has this kind ofscratched the itch you had?
I mean, because you've you'vesold two businesses now.
At least one I know was waswildly successful.
It's not like you needed tostart a merge, you know, but

(01:12:44):
like, but like you, you kind ofmentioned, like feeling this.
You always wanted this kind ofmentioned, like feeling this.
You always wanted this kind ofmarketplace.
You wanted this kind of carriersourcing stuff that you saw
places like coyote.
So I'm just curious do you, doyou feel like this itch has been
scratched and and where are youtaking this from here?

Speaker 2 (01:13:02):
oh for sure I uh.
So I told my wife and familyI'm not doing any more business.
I don't want to do any morestartups.
I think three, this is goodenough and it's just gone a lot
longer than I wanted.
I was hoping to be out of it bynow, but obviously the three
years of these last four yearsreally just don't count in a
sense, because it's justeverything's on pause I look

(01:13:25):
like everything's.
So I think that you know it'sgoing to take probably 10 to 15
years to sell this, maybe 10.
We'll be at 10 years and 27.
My goal is to get the breakeven, but I will be there about
12 months to 18 months and thenlook for an option to get out of

(01:13:47):
it, because I do love this.
But I found out when I wasalmost 47, like I definitely
don't have the drive that I didwhen I was 37 when I started.
So I'll be much better as aninvestor and being on boards and
stuff like that which I'm doingnow.
I like that much more thanbeing a founder of a startup and
having to make the founder.
You know it's enough.
Like you know, as you know, asa founder, like there's a lot of

(01:14:08):
hard decisions and having tomake the founder.
You know it's, it's, it'senough.
Like you know, as you know, as afounder, like there's a lot of
hard decisions I have to make,it's a lot of, it's a lot of
pain and a lot of most in very,very rarely you have like the
days where you're like, oh myGod, this is great.
You know, like my whole careerhas always been like the steady
rise up.
It's never been like boom andwith Emerge it's always it's
been like this.
You know it's still going likethis.

(01:14:28):
And then it's like paused forus for years because
everything's like no one caresabout capacity and no one's
running that many bids likeright now?
why would you run a bid likeit's?
It's very hard to get shippersto run bids like when rates are
bottomed out, but at least they.
If it gets any worse.
We all know that.
But I think the last four yearshave changed.

(01:14:49):
If you asked me four or fiveyears ago I'd be like oh, I've
been working for 60, 70.
But now the last four years, Idon't know.
It's been a tough time for anyentrepreneur.
Maybe there's a few companiesin the news that could say
otherwise, but mostentrepreneurs it's not been fun
the last four years.

Speaker 1 (01:15:08):
What kind of advice would you give to people
enduring tough times like this,where it feels like the cards
are stacked against you?
Like, as someone who's beenthrough it now with multiple
businesses and are currentlygoing through it, I'm just
curious what advice would yougive to fellow entrepreneurs
navigating these kind of reallyunfun times?

Speaker 2 (01:15:30):
well, I think the best times, like, for instance,
when 2007 date happened, I waslike global trends and I didn't
even realize at the time,because I didn't have any money,
but that there was a crisisgoing on because we're growing
if you're growing in a crisis itdoesn't matter.
You know, um, you could have,it's amazing and and uh, the
best times ever to start abusiness are now.
I mean, it's the easiest.
What you need is 10 people tobuild a.

(01:15:52):
Let's say you want to build aproduct.
You need one person two peoplenow, not 10, just to get your
MVP out.
And there's always ideas.
There's a million ideas, likethere's always, and you could
see them in your job, you know,like anybody could see, like I
wish there was something thatdid this, I wish there was
something that did that.
And then just look at the townand what's great about our

(01:16:12):
industry, especially freightlogistics, is, I would say, in
most industries I wouldn't beable to do what I did.
It's just because there's alevel of competition in most
industries.
Freight is not much competitionLike anyone can build a great
company, as you know, you know.
Great is not much competitionLike anyone can build a great
company.
As you know, you know a lot ofgreat CEOs and most of them we
can only do.
Freight Like this is a goodthing.

(01:16:33):
They're freight businessesbecause most of us we couldn't
build a tech company we couldn'tbuild.
So I think anyone in thisindustry has capability of being
an entrepreneur and I've seenit.
I mean, I've seen some of myguys where I'm like how did?
this guy do it, and we had twoguys that sold the company for
$200 million.
If you would ask, I was like,oh my God, these guys were not

(01:16:54):
the like.
How did they do this?
But it's freight, it's.
We're in an industry where Ithink anyone can be successful.
And you know what's evencrazier is if you ask any CEO or
anybody that's an entrepreneur,let's say you want to hire
someone to come run your company.
There's such a lack of talentfor that, like there's just very

(01:17:19):
no one.
I think in this industry thisis the best industry where you
could work on yourself, work onyour skills and move up and be
the CEO of any company, becauseit's very hard to hire.
High executive talent is sohard.
Like if you had a portfolio, ifyou had a company right now and
you're going to hire a head ofsales, you might have two names
you know everybody too Maybe oneor two names and they're going
to be hard to get to, but it'snot like there's hundreds of

(01:17:39):
people.
There's not a huge amount oftalent in our industry.
I don't know why that is.

Speaker 1 (01:17:47):
There's got to be something wrong with us that we
think that way, because I agreewith you, but I I like the these
two things juxtaposed don'tmake sense, right?
I thought that on one hand,anyone could be successful,
anyone can be a successful CEOin our space, like they can
build a business and make moneyand make it happen, but on the
other hand, if you were to lookfor a replacement, you wouldn't

(01:18:08):
feel like you could find a goodperson anywhere Like.

Speaker 2 (01:18:10):
Those two things don't go well next to each other
, because I think a lot ofpeople don't work on it Like I
wish they would.
Just like most people need tolike what makes the greatest
leaders, sales leaders.
Like I studied I wanted to bean entrepreneur.
I didn't know how to be anentrepreneur.
I just said, okay, I'm going tojust read every book.
I just got to think like theydo.
You know, I wouldn't say I'm, Iwas a D student in school.

(01:18:32):
I'm not, I'm not, I'm not likea high IQ person, I'll admit it,
but I just.
But I get like I just.
I think I studied enough andread enough about the subjects
that I wanted to be good at thatI became good at it.
Enough about the subject that Iwanted to be good at, that I
became good at it.
And, like I said earlier, Isaid that's why most of my

(01:18:54):
people are successful.
Maybe it has nothing to do withthe book.
I think it's because they sawme do it.
They're like wait, this guy cando it, I can do it.
But yeah, there is a lack ofmassive like there's.
Just I don't know what it is,but I hope people take this as a
call to action.
Like anyone can, you can haveany job If you're not an
entrepreneur already, if youdon't want to be an entrepreneur
and you have your sights in thecompany, you can take over that

(01:19:15):
company.
It's just very few people stepup to the plate to do that too.
But I think that this in thefirst chapter of my favorite
book, thinking You're Rich,talks about that.
The guy goes works for Edisonand he's like I'm going to work.
He didn't know anything about,he just wanted to work for
Edison.
So he went in there and didn'tknow anything but just said I'm

(01:19:37):
going to work next year, I'mgoing to work for free.
And eventually he becameEdison's CEO and runs the
company.
That whole story is in there.
That kind of stuff neverhappens, but I think that this
is the greatest industry for itto be an entrepreneur.
There's so many things thatneed to be automated, and a lot
of them are companies.

(01:19:58):
That's why most founders inthis industry always start
something new.
That's why I asked you and Isaw you last time I said what's
your next thing?
Because I know it's going to besomething.
You're probably just waitingfor the right thing, but you're
going to, you know.

Speaker 1 (01:20:11):
Yeah, it's interesting.
You talk about the Thomas Edisonstory and it feels like what
I'm taking away from that is theidea of instant versus
long-term gratification.
And you're saying no one everdoes that anymore.
And so I think it's because our,our, our ADD brains and just
our dopamine addicted brains areso used to being able to get

(01:20:32):
the next hit and get the nextinstant gratification whether
it's the next scroll on TikTokor whatever that the idea of
putting in long-term work,sacrificing short-term gain,
saying hey, I'll work for youfor free, just so I can learn
from you someone like ThomasEdison or any type of visionary
and putting in all that time andenergy it doesn't satisfy any

(01:20:53):
of our short-term gratificationdopamine-addicted brain.
But in the long term it teachesus the skills to be the kind of
next-level entrepreneur or CEOthat you want to be.
So I'm wondering if there's aconnection there, and that's
maybe why you don't see peopledoing that.
I'm not saying people should gowork for free, but invest,

(01:21:14):
investing yourself in learningabout something, even if it
takes hundreds of hours to learnit, and you're not going to see
a dollar until you've reallymastered it and then applied it
and worked hard at it, like thatthat I get.

Speaker 2 (01:21:30):
In the Navy my last year.
I year I just said I want toread everybody and I did it for
like four or five years.
I started my first company foreverything I could.
I was so curious and that'sonce first said to me I
understand why you're successful.
And they said because you askso many questions, I'm just very
curious about how things work.

Speaker 1 (01:21:43):
And then, um, but I think that, yeah, you, if if, if
I like my mom used to yell atme, she'd be like cause my mom
was an extrovert.

Speaker 2 (01:21:50):
She'd be like New York and she, I'd be on the
couch.
She's like what are you doing?
And I'd be sitting on the couch.
I'm like I'm thinking and she'slike, what are you thinking
about?
I'm like don't worry about it,here's what he's doing wrong.
And I was just really going deepin everything and I was so
committed to figuring it out.
I think that's commitment, likejust commit yourself.

(01:22:12):
This is the best industry forit to work your way up and be
the CEO of any company.
You know we are all at the top,we see the guys at the top and
we know, like this is one ofthose few industries that anyone
could be and there's so manycompanies too.
But I think anyone could be,and there's so many companies
too.
Um, but I think, yeah, justplanning and then getting better
and then learning the skill.
If I was going to be the best,if I wanted to be the best uh,

(01:22:35):
ceo or best leader of a companyI just follow, I wouldn't read
on crowd, just be, read aboutall the great managers in the
country and just get good at itand then just making your goal
every day when you wake up.
And that's actually there's inthe in the book Finger Rich.
There's, like he says, in everyhe goes in every page of this
book there's a secret of how youbecome wealthy, and he won't
tell you what the secret is.

(01:22:55):
He says you have to explain itto yourself, but I'll tell you.
I'll let everyone know rightnow what it is.
It's very simple.
That's why he wouldn't tell you.
Envisioning yourself you justhave to picture yourself as
there already and live your lifelike that.
So if you want to be abillionaire, you picture
yourself as a millionaire.
If you want to run a companyone day, that's who you are
every day.
You wake up and then everything.

(01:23:17):
The idea is that everythingwill come into place to make
that happen, as long as youbelieve in that and make your
mission follow that.
And if everyone knew that.
I think it's such a detrimentif you don't understand the laws
of attraction, like how thatall works, because I think it
truly works.
I couldn't believe when Istarted seeing it all happen.

(01:23:37):
You could envision your life,and I did.
I envisioned my wife.
She was a brunette.
I got a brunette.
Like it was.
Like I pictured everything.
It happened, um, and then uh,yeah.
But you know one thing aboutthese books is they don't teach
you spiritual stuff.
So I remember I got there.
I was like what the fuck?
This is all there is.
So then I read a bunch ofbuddha stuff to help that, but
that's a whole different story.
But, um, yeah, start with that.

(01:24:01):
If anyone wants to read that,read it.
Um, but I think it's changed mylife.

Speaker 1 (01:24:09):
Well, I can say I will be reading it.
Whenever I find it in this room, I will pick it up and start
reading it, and I will.
I will let our audience know mythoughts.
You'll start a company in oneweek after you read it.

Speaker 2 (01:24:21):
I know you're going to do it, but it's kicking in
here.

Speaker 1 (01:24:25):
So last topic I want to talk about is just kind of
investing, because you aresomeone who has now, with
multiple successful startups,you've started to take some of
the money you've earned andinvest it across our industry
and I'm curious how do you thinkabout investing?
What are you looking for whenan opportunity presents itself

(01:24:46):
to you?
How do you feel like you'repicking a winner?

Speaker 2 (01:24:49):
Yeah, most of my investments have mostly worked
in this industry.
I've noticed that you invest inwhat you know and I invested.
So I own a big portion ofRoadrunner, the LTL carrier, and
I remember I got a call fromthat five years ago and if
you're in the LTL business youknow Roadrunner has somewhat of
a monopoly on what they do,which is long haul not that many

(01:25:12):
cross-stocks LTL trucking.
They mainly run team driversWest Coast, east Coast and it
was a very low valuation.
It was like an $80 millionvaluation.
I'm like this is crazy.
Those kind of things that youcan cite once you know this
industry.
I'm like obviously I had majorproblems and bad former CEO that

(01:25:33):
got convicted for fraud and CFO, but that was all in the past
when I invested.
And then we brought a new CEOin King Pris.
He's amazing.
And now that company I investedat five years four years ago
and now that company I investedin five years four years ago
it's doing great and it's stillthere.
They're public, they're private, so I can't really talk about

(01:25:56):
the numbers, but they are doinggreat.

Speaker 1 (01:26:01):
And I think that Maybe I'll get Chris on the show
sometime.
You think Chris Jamers yeahhe'd love it.

Speaker 2 (01:26:07):
The guy loves.
He's always posting videoshimself traveling sitting in the
middle seat.
Yeah, he loves to show that offhe's like I forgot, he's got
seven turnaround lenders built,so it's pretty, pretty awesome.
And what's?
He's got a really awesome storybecause he actually is the
biggest owner of you can tellyou the story, but he's, uh, one
of the biggest owners of it now, not, he wasn't the biggest
owner last year, so good for him.

Speaker 1 (01:26:29):
Yeah, if you, if you'll have to connect me when,
when you get off.

Speaker 2 (01:26:33):
And then I have a company called my carrier which
is, uh, doing an lto plot.
So the guys mike book on my Itold you jet mccannis and mike
book on my top two guys atbowletrans and I remember jet
called me like right, when heleft bowletrans or and started
p44 and he said, uh, hey, wouldyou invest in this?
And I said no, I didn't havethem first, I didn't have that
much money then, but I shouldn'thave said no because you know

(01:26:54):
people, it was like an awesomevaluation.
I could have got huge win there, um, but he was just starting
and he wanted to create backthen.
It was a crazy valuation.
I thought so I passed on it.
And then when mike called me up,he left global trends.
After I left he was one of mytop guys there.
He did all my LTL carriermanagement there.
So I managed all the LTLcarriers and he started
something.
I was like let me in and I wentall in with him.

(01:27:15):
So I'm a big shareholder therenow and I'm on the board.
What they do is they're thewhite label.
So Old Dominion SIA say SIA, itmight say Averitt, it's all the
LTL carriers.
With the accession, maybe FedExis the only one that doesn't

(01:27:36):
use it, but all the LTL carriersuse them and white label their
system.
So now that shipper can bringin not just SIA, let's say they
could bring in.
Let's say they have arelationship with a little bit.
So they're really essentiallycreating, like what Freightboat
has and what Volatrans has, butfor that shipper direct to the
carrier.
That's a SaaS based model thatcarriers pay, that it's in my

(01:27:57):
book outs running, that it'sdoing really well.
And then I have a companycalled E-Dray.
So I pick one each model.
I have an LTL carrier, I have aLTL software and then I have a
Drayage and they're like.
E-dray is like the firstcompany I've ever seen.
I invested five years ago whenthey first started.
It's over a $10 million company.
It's breaking even, which isawesome, Very unheard of in this

(01:28:18):
industry to get break even.
And literally they're just liketransplace for trucking or
transplace.
They're a managed transportDrayage and they manage 5% to
10% of the containers.
And then Emerge obviously is mymain day-to-day Because I put a
lot of my wealth into Emerge.
I pretty much put all my globaltrends into that.

Speaker 1 (01:28:41):
So I appreciate you explaining the ones you're in,
but I'm curious more on thethought process as you look at
as future opportunities get putin front of you.
How are you thinking aboutwhether or not you should invest
?
What are you looking for intoday's industry?
Where do you think there areareas that still need better
technology or better companies?

(01:29:01):
Where does our industry need?

Speaker 2 (01:29:04):
AI is a big thing.
I think me and you are in thesame investment there.
The clone ops are doing great,but AI is like we all know AI it
big thing.
I think me and you are in thesame investment there.
The clone ops are doing great,but AI is like we all know AI.
It's unbelievable.
I think AI, even with itscurrent technology, could do 70%
of the jobs in the industry,which is scary in itself.
It's a whole differentdiscussion.
It's going to take years forthat to implement a company.
Now it's much easier to startand then build ai into it, but I

(01:29:28):
think any company, if it wasfully using ai, would probably
need 70 less people, especiallyin logistics, which is crazy, um
.
So I think ai is just thefuture and I think there's going
to be multiple winners, notgoing to be one or two um, and
there could be specific likelike, for instance, guys invest
prasad, who did a.
I'm not invested in it, but hedoes.
He he's doing like Q, which isa.

(01:29:49):
You know, it's just a one, justa appointment scheduling for
using AI.

Speaker 1 (01:29:54):
So it's like there's so many little things, but I
think AI is just going to doeverything eventually.

Speaker 2 (01:30:00):
I hate to say, even say it.
But carrier sales, I think, isgoing to be tough.
I think there'll always becarrier sales reps, but I think
the carousels are up 10 yearsfrom now.
We imagine 50 to 100 loads aday.
You know where the ai is doingmost of the work and they've
he's managing the exceptions.

(01:30:20):
But, uh, there always becarrier sales reps, but I think
there'll be a lot less of them,unfortunately.

Speaker 1 (01:30:23):
I think that's going to be a tough transition for
industry um, I'm so curious I'mso curious how companies are
going to do it.

Speaker 2 (01:30:32):
A lot of people are against using outbound AI, but
I've seen it in action.
It's pretty crazy what it doesand I think the biggest thing
that's going to happen in a yearis that imagine when the guy
with five that Al Jack's brokerhas five people working for him
can now call all 30,000 or20,000 of his set of carriers
every day.
Imagine the amount of phonecalls that are going to happen.

(01:30:56):
The carriers are literally notgoing to be able to put up a
phone in I would say a yearbecause there will be so many AI
calls going to them.

Speaker 1 (01:31:02):
Well, they'll have their own AI answering calls,
right.
They're also.
You know, I saw Apple's gotthis thing now where it tells
you in advance.
You don't even have to answerthe phone to get the information
from someone.
It tells you on your screen.
It's an AI call asking if youhave a truck available today.
Do you want to answer or do youwant me to?

(01:31:23):
I think we're going to get to aplace where the calls aren't
even going to be happening.
The data will be exchangedsomehow through an app or
whatever.
I think it's going to be AItalking to AI.

Speaker 2 (01:31:34):
eventually it's going to be their AI.
Your AI is going to call thecarrier's AI.
Your AI is going to know here'show much we have in the load,
just like your carrier salesreport, and the AI from the
carrier is going to do the same.
I think it's a huge opportunityfor a land grab of who gets the
carriers and for the AI models.
That's a big thing.

Speaker 1 (01:31:52):
But also, it's like you know, a year from now.

Speaker 2 (01:31:55):
I think, is that going to hurt the biggest
brokers like TQ1CH, becausethat's what they rely on.
Their biggest advantage hasalways been we have thousands of
carrier sales.
We know where every truck isevery day, just because we have
enough people to call.
But once that's taken away,that's going to be a struggle
for a lot of the bigger guys.
Maybe not so from I don't knowif he feels, but I think TQL

(01:32:18):
will be a company like.
Tql is more cradle grade andmore customer service and
smaller shippers might do betterat it.
But CH Robinson, everybody'salways thought that they're
going to.
They've still the leader.
So maybe they'll figure thisout.
But it's going to be hard forthe carrier sales model of the
past where you know becausethink about this the one thing
that's never talked about inthis industry is how much

(01:32:38):
capacity is eaten up before iteven gets to.
If I let's say, even at yoursize at Molo, you guys were
maybe big enough to call four orfive, maybe 20 carriers in the
morning.
You know maybe hundreds ofcarriers in the morning, but you
weren't able to call all thecarriers and find out.
But but imagine when that youcould have that same.
You know capability of calling.

(01:33:02):
You know you're not going toneed worry about CH Robinson
having all these carrier salesreps calling and then eating up
that capacity.
I think I wish the cares justwants to move it at $3, $2 a
mile.
He gets CH the first call, ch,no TQL, all right, send it over.
Boom Gone, that capacity isgone.
I would say I don't know howmuch capacity gets eaten like
that, but a lot does that theyhave advantage on.

(01:33:25):
But I think that's going to bespread out.
That advantage is going to goaway, which is great for
everyone else, right?
Because now that once thatcarrier could say, you know, I
don't need to take this firstload given to me from the first
carrier sales rep that calls me,I could wait a little longer
and maybe get five to 10 centsmore, 20 cents more if I just
wait another hour, two hours,and once that digitalizes, I

(01:33:51):
think it's going to be so muchbetter for carriers and for the
industry.
Maybe not so much for thebiggest guys though, which rely
on that advantage.

Speaker 1 (01:33:58):
Yeah, I'm so curious if we get to a place where
there's kind of this aggregateddata pool, that's a that's
transparently available to themarket, that shows us where the
trucks are and what the trucksare looking for on a price on a
given lane, I don't know.
I mean, it feels like we couldget there If enough of the Happy

(01:34:19):
Robot or Fleetworks whoeverthey are, if they're talking
every day to all these carriersand then they just start to sell
that on the open market ofthese, this is who's available
today and this is the pricethey're looking for on a given
lane it's going to be a verydifferent ball game.

Speaker 2 (01:34:36):
I don't know what that means.
I think it'd be so much betterfor the industry.
What's going to hurt, though,is imagine the RFPs right now.
On the RFPs, you'll see a lanewhere maybe CX, robinson, rfps.
You'll see a lane where maybech's romans and she was, but the
next lane tkl is cheapest, thenthe next lane armstrong is
cheapest, and so on, so on andum, and then they'll war teach
one.
But once that level that's alevel playing field everybody's

(01:34:57):
gonna have to work on, andthat's gonna be like okay, we
work on whoever could work thecheapest right.
If I could do it on a sixpercent, seven percent margin,
right and I don't think we'refar away from that, I think
maybe five.
But I think it's going to begood overall for the industry,
because I've always, ever sinceeven though your dad mastered it
the calling of carriers andmanaging carriers, the carrier

(01:35:20):
sales rep idea I just alwaysfelt like that's not going to be
.
I thought it'd be gone by now,but it's still there where you
need massive carrier sales reps.
But I think that could be.
I not going to be in the.
I thought it'd be gone by now,but it's still there where you
need massive care of sales reps,but I think that could be.
I think that goes away in thenext five years finally.
And then that carries alldigitalized.
You can put your freight outthere and there'll be clicking
by.
You don't have to negotiate.
Negotiation will happen withthe AI at first and eventually

(01:35:41):
it'll just be just happen.
And then it's going to be whocould service this for the
cheapest?
And I hate to say this, it'sgoing to go.
Broker rates are going to godown to, I think, five years, to
be 10% on average.
I think it's 14% average rightnow.
I think it's going to be onlike 11, 12, the next five years
.
But eventually it's going to belike, if you want this lane,
you're going to have to be at 5%margin or 6% margin, cause the

(01:36:10):
rates are all.

Speaker 1 (01:36:10):
Everybody knows, like you put your load out, there
it's the same period.

Speaker 2 (01:36:12):
If they buy it from cx, you're gonna buy it from tpo
.

Speaker 1 (01:36:13):
They're gonna buy it from.
It's like what happens at thatpoint, you know, like, yeah, the
only challenge is going to beit.
I my guess is that the averagebroker that has a buy it now
button or or a load board for acarrier to buy freight from
without having to talk to acarrier or rep, I would say with
confidence that any companythat has that has more fraud

(01:36:37):
happening on the loads that aredigitally bought versus the
loads that a carrier rep isinvolved, and I've heard that
from a couple of brokers thatvalidated that and I can't speak
.
Well, I'll just leave it atthat, because there's less
barriers or fewer barriers.
You know, if the hacker orfraudster can get your DAT login

(01:37:02):
credentials, they can get yourcredentials to whatever other
tool is being used.
They buy the freight withouthaving to talk to someone and
then they're stealing it.
So I am curious if that becomesa headwind for this kind of
efficiency train that we'removing down and if it's enough
for companies like Highway tojust kind of offset that, or if

(01:37:23):
there's going to be an avenuefor a newer or additional fraud
prevention technology to show up.
Pretty rampant right now it'sreally bad, and then but.

Speaker 2 (01:37:34):
I think obviously it could be settled.
I mean, if, whatever you're,whatever a person could ask the
care you could have, the AI dofor sure.
But I think that's where youhave people.
I mean there's, like I said,there's always going to be
carrier sales reps.
Maybe the carrier sales rep hisjob is to make sure that
there's a little.
You know, yeah, I have 50 loadsgoing down.

(01:37:54):
I need to make sure all thesecarriers are up to par and maybe
20 of them are new or 10 ofthem are new or something like
that.
Um, but I don't think it's goingto be that.
That's not going to be thebiggest headwind of this.
I think the biggest headwind islike one of the carriers gonna.
I actually can't wait until thecarriers are bogged down with
the AI calls so they actually doget digitized Versus.
You know, like I said, I think50 to 60% of the capacity is
gone before the average truckbroker calls that carrier.

(01:38:18):
It's all gone Like it's allbeen moved by the carrier.
But in Chicago, call them atfive in the morning and got that
load booked or secured for TQL,secured for CH or whatever it
was, I think that's a big.
I think that's so.
I think it's, I think that it'sgoing to be over.
But also I worry about alsolittle brokers.
How little brokers you knowcompete 10 years from now when

(01:38:38):
you know they have to come.
You know the margins are allthe same, like right now.
They're relying on the factthat they know this market
better than your CHR also repdoes.
But when that levels out,that's going to be interesting
too.

Speaker 1 (01:38:52):
Yeah, I don't have a ton of confidence in the future
of the small broker.
Yeah, it's going to be tough.

Speaker 2 (01:38:58):
We'll see, though.
Yeah, I heard that you someonetold you he was talking to you.
Why don't you start anotherbrokerage?
It would be tougher now, right,but I mean you could.
It might not be a bad ideabecause, like, think about it,
if you started a brokerage rightnow, like you, fully AI, like
boom, I'm going to start an AIbrokerage from start.
You don't need hundreds ofpeople, you need, you just need

(01:39:21):
a few.
But is where's the industrygoing?
And you know how do youdifferentiate yourself?
That's another key.
Like no shipper wants to let abroker in right now because it's
very hard to get in anybody.
It must be like what makes youdifferent, you know.
So that's you have to run intothat.

Speaker 1 (01:39:37):
Yeah, if I was going to start another broker, I would
want to be able to be differentsomehow.
I'd want to be connected, I'dwant to be tied into a shipper
or tied into assets in the rightway, or LTI like something.
But just starting a traditionalfreight broker on its own with
no special effects, essentiallythat would be a lot harder than

(01:39:59):
I want it to be.

Speaker 2 (01:40:01):
Yeah, but we've always said it's going to happen
, it's a bad time to start.
Even five years ago, I alwayssaid no, it's probably going to
be a bad time, but it would havebeen the right time then too.
Yep.

Speaker 1 (01:40:11):
Go ahead.
Well, listen, this has beengreat.
I appreciate all your insights,hearing your story, learning
about how you built Global Trans10.4 and now emerging to the
companies they are, and I thinkmy audience will really
appreciate all the insightsyou've provided and certainly
the book that we'll all now bereading in the near term.
People can send you theirpersonal feedback and what they

(01:40:34):
learned from it.

Speaker 2 (01:40:34):
Yeah, please do.
Please send me feedback.
Linkedin you can reach me at,and I'd love to hear anybody
that has any reaction to it.
Love to hear about that.
But yeah, thank you, andrew.
I think I'm glad that you and Ihave become friends over time
and at least I think we got offon the wrong foot.
But I think that you'reactually the first person I ever

(01:40:56):
said I think I got on the wrongfoot with this guy.
I usually don't, but then inthis industry I've learned that
sometimes my way I talk doesn'tmake friends at first, but
that's always been the case forme.
But I'm glad that you and I havegot to that point where we can
be friends.

Speaker 1 (01:41:11):
You and me both, yeah , you too, man.
All right, Well with that.
We will see you next week.
Peace out, Thank you.

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