Lightning like Steve McQueen I'm in the fast lane when the light turns green and I built tough I ain't nothing.
But grit cause I made rugged blood.
Sweat and spit yeah, like a horse I fly for a bumpy ride I.
Like to play hard but I work.
Harder and I weather the storm cause.
I'm built stronger what is up, ladies and gentlemen, we are back. We are live. It is a freight coach podcast, the top podcast in transportation coming to you guys every single weekday, 830 in Pacific, 1030 Central, to break down some industry headlines, but most importantly, provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real sada freight, ladies and gentlemen. And I say that before every single show. And what I mean by that is we only speak with transportation professionals because at the end of the day, I want to talk to the right individuals who have done what you're looking to do or who are currently doing what you're trying to achieve.
So you can take that information, apply it, utilize it and see a meaningful difference in your business and your life. Happy Thursday, everybody. We are going to jump right in. I got a very special guest for you guys to come on. And, you know, it's funny is we ironically, indirectly work together about like eight years ago back in the day, and that's just how small of an industry freight is sometimes. So we're going to talk about trailer leasing, rentals, short term, long term, all that stuff. And kind of like, how are they able to predict where things are heading on their side of the industry? So I got Mister Paul Goudreau of McKinney trailers here on the show today. So, Paul, thank you so much for joining me.
Thank you, Chris. Appreciate it.
No, man, I'm really looking forward to it. It is pretty funny that, you know, back eight years ago or whatever, you know, back in my XPO days up in Reno and we happened to be in contact and then our mutual friend Harmon Chima puts us in contact here recently. So, yeah, man, it is a small industry overall. Yeah, dude, how did you, like, how'd you get your start in the industry?
Well, actually started. Oh, gosh. Going back to year 2000 in Las Vegas, I started with Rollins truck leasing and I was with Rollins for about eight, nine months until the Penske merger. And so when Penske bought out Rollins, I was promoted up to Salt Lake City and worked there for probably six, eight months. And then it just, they weren't sure what they were going to do with the Rollins people at that point. And. And I wasn't really comfortable about, you know, living in Salt Lake City at that point, having a new baby at home. I was commuting back and forth to Las Vegas every weekend, and so I called my boss back in Vegas and said, hey, is there anything you can create for me back there? And sure enough, they created a position for me there.
Spent five or six years, I think, with Penske, and then decided to kind of leave the power side and get over to the trailer side. So started my trailer career with extra leafs for six years, and then was recruited by McKinney to come up to Northern California and run the stopping facility. And 14 years later, you know, 14 years later, here I am today. So it's been quite a ride.
I like that, man. I think, you know, it is. There's so many different facets to the transportation industry, right? That not a lot. I mean. Cause everybody, you know, obviously think about truck drivers first, and I think warehouse workers, you know, second, and then, you know, brokers or, you know, something like that third. And there are so many different angles that you can take if you want to work in this industry. And then especially on the leasing side of things, whether it's trucks or trailers, you know, there's a massive market that. That comes along with it, and, you know, so, like, from. From the trailer leasing side, man. Like, what are your options? Right?
Because I look at it as so many people get in, they start their business, they might just buy a truck right away, or maybe they're leasing a truck, and then they're going to lease a trailer right away until they can get money to buy. You've probably seen all walks of circumstances that have came across your desk there. So, like, what does that look like, man? Am I able to come in? Like, if I started a trucking company? What do you need for me to show, like, hey, I want to lease a 53 foot drive in from you. But, like, for like a year, right?
That's the one thing nice about McKinney, is we do work with owner operators. A lot of the other guys won't do that, so we will give anybody a chance. But we do have some requirements. We'd like you to be in business for at least two years. Sometimes we can be a little lenient with that, depending on maybe how your financials look, personal guarantees. We try to find a way to make it work for you. So we do go that extra step to get the owner, operators and a piece of equipment doesn't always work out, but we'll try to do whatever we can. Maybe we'll require a deposit, whatnot, because we want to see you succeed, right?
So we try to do our best to help you out, but then, you know, we have our owner operators and then we go and do our corporations, you know, Amazons and Teslas of the world and stuff like that. So it's basically just filling out a credit app. We take a look, we talk, we get to learn about your business, who you're going to be hauling for how many miles you're going to be putting on per month. Do you have a shop? You know, stuff like that. And then we can kind of determine what we can do for you and.
The best Fitzhen speaking of having a shop, like, is this something where you guys are like, I guess I kind of want to bring some more light to, like, the leasing side of things here before we kind of talk about anything else. So, like, what does that maintenance look like? Am I as the lessor, I guess, required to maintain it? Is it a McKinney approved facility that it has to be brought to? Like, what does that look like?
That's a great question, Chris. Yeah, I mean, all of our locations, we have full service shops. And that's what kind of puts us aside from the others is, you know, we're very especially in California here, we're very, you know, every 90 days you have to bring a trailer for a bit. Yearly feds are required. We have, like here in Stockton, I have six mechanics from level one to level three. Technicians, actually. Excuse me for same mechanics, but no, my technicians. Everyone's certified in everything. We work on components of the trailers, brake systems, you name it. These guys are certified. But we also offer a mobile service so we can come to you and perform those 90 day bits on site. Because the last thing we want is for you guys to get, you know, stuck in the scales and it's because of a bit.
Not only is that going to affect your CSA score, but it's going to affect McKinney's CSA score as well. So we're very adamant about keeping our trailers maintained. Not all states require the bits, unfortunately, California does. So we're definitely on top of that here. And we do have leases or rentals. I guess you could say that our net terms where the customer is responsible for all the maintenance. But are they really doing it? We're supposed to see proof of it. They're supposed to send us copies of the bits. We don't always get that. So with paying the mileage fee, on a rental, we do take care of all that maintenance for you.
Okay, so is that, I mean, yeah, if you guys take care of all the maintenance, I don't know why you wouldn't schedule all of that stuff out and get it done right away, but I could only imagine not everybody is as organized, and it's, a lot of it is. They don't think about it until it happens. Right. I mean.
Right.
Most business owners main concern is to continue to generate revenue, to be able to pay for everything. And some of that other stuff, you know, I don't want to say intentionally falls to the wayside, but I don't think that's probably, probably top of mind for most people and, you know, because it's like, I've had plenty of guys come on here and, you know, and talk about, yeah, you know, preventative maintenance schedules and everything else. Because, like, ultimately, because my old man drove, you know, he was an owner op for 40 years, right. And he always had a saying where it's like, hey, if my wheels ain't turning, I ain't earning. So it's like that to me, should be like, one of the top priorities out there.
Right?
Like keeping your equipment maintained so it is running. Yes, things happen. But, like, controlling your controllables. Right. I think ultimately, at the end of the day, is something that you would, you know, want to provide, especially if you're going in there and leasing somebody else's equipment to run your business still.
Right? Yeah. Why would you want the burden of the maintenance on yourself? That's, you know, that's where we come to play. And that's why the short term rentals or long term leasing is a benefit. You know, that's just one thing you have. You know, you can concentrate on making your money, like you said, keeping the wheels turning. Let us handle the maintenance for you.
Are you seeing fleets, you know, to kind of shift into a little bit more of like a, like where the market's heading from. Like, how are you guys perceived receiving things? Do you see, like a shift? Right. Like, if the freight market's up, most people shift to a, you know, long term lease, or if the freight market's down, they shift. Like, how does that look?
Yeah, it's been a crazy year, actually, the last two years. You know, I hate to say so, like, the COVID years were the best years we've ever had as a company. I mean, and right now I'm speaking just from my branch myself. You know, I take two steps forward and five steps back, week after week, it seems like people just aren't holding onto the equipment long enough. They're kind of scared and hesitant of what's coming with the election year. And as a company, we're averaging 88% utilization for 38,000 trailers. So we're doing good as a company, not as good as were doing in the last couple of years. But me personally, I don't think that this market's going to really turn maybe second quarter of next year. It's, you know, I just want this year to get over. So, yeah, I'm not.
I'm not looking at anything, you know, great. Right, this. Right this moment, usually this time of year, our branches are empty. You know, we can't have enough equipment for people for the holidays. But a lot of these companies aren't gearing up and getting as much product in. And the need for storage is very limited so far. So I just, like said, I'm just hoping that there's a turn, you know, come 2025 here.
Yeah, it. You know, because I was going to ask about that in, you know, in the sense of, you know, peak season leases would, you know, especially just for, like, storage. Right. And especially in California, you know, the. The amount of inland freight that comes, I mean, just. Just up the street from you guys in Oakland alone. Right. The amount of people who truck it in, warehouse it in Oakland, get short term leasing or something like that to store that product. I mean, shoot, I got one. You know, a couple of my customers are storing freight right now, you know, as they're building out new facilities and everything. And, you know, I think that from a market perspective, like, I don't see anything changing anytime soon, right? Not. Not as fast as some people want it to.
But I also look at it, you know, like, I guess, like, from my perspective, Paul, like, I don't really. Yes, I care about, like, what is happening out there, but I'm also, like, what can I do in my business, right. Like, nothing that, like, my opinion on where things are going is irrelevant, right, to the overall economy. Like, I can't control that, but I can control what I'm doing inside of my business. And I just think that there's so much natural hesitancy out there when you see that. Right? Because, I mean, I think, you know, who knows, though? Maybe yesterday with the feds dropping interest rates out there, maybe people might get a little bit of a boost of confidence to start spending more money at the business level.
I don't know about the personal finance side of things, but like the overall business level, maybe they will take a bigger risk out there with it. But I think that there are a lot of greater economic factors that are going on that are creating that natural hesitancy, right?
No, and that's the beauty of where we come in for both leases and rentals. With this economy right now, a lot of people are kind of hesitant on signing a long term lease because they don't know what the future holds. But with the month to month rentals, we'll rent a trailer for a day if you want one. It's just a lot of people want to test out this market, so they don't want to make a long term commitment on the trailer, say, hey, I just need one for a week. I got to run some freight from Sacramento to LA, and if it goes well, then we'll talk about keeping it for a year. It's an open ended contract so they can return a trailer anytime they want on a rental. So that's kind of the nice thing about it.
But then again, you can't really control your costs either because you say you have for a week, but then you've only budgeted, then you end up keeping for a month, and then here you are, we're chasing you for money. So we had a lot of that. I mean, we've had some pretty big guys watching back. The tendency right now is the money is slowing up. People are paying us a little slower than we're used to. So that's all effects of this market as well. And everybody, I talk to you on a daily basis. You got to stay in front of your people. Nobody's just, you know, giving a thumbs up and happy about what's going on right now. It's just everyone's just kind of like, well, we're just going to get by and see how the market goes.
And, you know, I've had a couple good customers close their doors after 50, 60 years because everyone's getting undercut right now. So it's just, it's been tough. It's been tough on a lot of the carriers and I feel for these guys, man, you know, but we gotta do what we got to do.
So how does a company like yours compete out there in the market? Right? Because obviously there's other leasing companies, there's other trailer companies and stuff out there. So, like, how do you guys position yourself in the market to, like, get people to want to come in and work with you guys direct? I mean, you talk about receivables you know, starting to age and everything out there, and that's across the board, I think, in every aspect of the industry. So, like, how do you, like, what does that look like from a competitive advantage? Why, why isn't you guys over anybody else right now?
You know, it just comes down to customer service. Who's going to be there for you when a customer is struggling, right? I mean, I, like I said, giving everybody a chance. If you're, hey, Paul, I can't pay my bill this month. Can I break it up into three payments? We'll work with you on that. And a lot of the guys won't do that. It's, hey, here's the money, or we're going to repo the trailer. So it's just about kind of just selling what you can do for your customer. I mean, we're going to work with you. We understand the marketplace, you know, and that's one thing that I think it sets us apart from everybody else is we want to see you succeed and we're going to help you get there any way possible.
So if you need to break off your payment into two, three payments, we're going to work with you on that and let you keep the trailer at the same time in most cases. So it's just really about providing that extra level of service and that added value that we offer.
So do you guys compete on, like, lease terms? Right? Like, is it something out there where it's like, hey, we only do monthly rentals, where you guys do, like you said, daily, weekly biannual, stuff like that? Is that like a kind of a competition standpoint in the trailer leasing game?
Oh, definitely, yeah. I mean, I have three or four competitors just here in the Stockton market, and we're all going after the same business. Right. And we offer the same thing. It's just, you know, you can do the day rentals, the month to month, up to seven, eight years. We'll build a trailer for you. So we'll sit down with you and design the trailer for you. Hey, you need this certain spec. We'll go ahead and go to the manufacturer and we'll build that trailer for you. And then you have, but you're going to sign a six, seven, eight year lease for that trailer. Other guys will do the same thing, but we will customize, I think, a little more than some of the others, a trailer for you to fit your exact spec, what you need. So.
But, yeah, we all kind of do the same thing, but it's just, who's going to provide the level of customer service that's expected in this industry. And coming from the other guys, I can tell you that this company has definitely been the most customer focused company I've ever worked for. It's really good.
I think that's. I mean, ultimately, when it boils down to it, I think from a competitive communication and everything else out there, because on the freight side, ultimately, we're all offering the same stuff as I'm sure it isn't on your side of the industry as well. You guys are all offering the same kind of core product, ultimately leasing of trailers, just like me as a freight broker. Access to capacity transportation management. You can throw any buzzword out there, but ultimately what it boils down to is your ability to service your customers, your ability to communicate with them and to make sure that they're taken care of right. And you really got to push that from a business development standpoint to get in front of people because otherwise, like maybe it might be different. You guys probably get inbound opportunities, I would say. Right?
Or are you guys out there cold calling trucking companies and warehouses in the area and stuff like that?
Oh, yeah, that's a big part of our business. We're out there on the streets. We're pounding the pavement every day. You know, I have one account manager here and then myself and yeah, we're out in the street every day covering between north of Sacramento all the way down to Visalia. So we have a large territory and Reno, so we have a large territory to cover. And that's the number one focus for McKinney is we're very sales oriented. Get out there and get in front of the customer. Pound the pavement. Old school ground root sales, right? I mean, it's just, it's something we've all been doing for many years and we'll continue to do so. And that's just the most important thing. You got to stay in front of your customers, especially in these times. Right now, there's too much competition right now.
We're all sitting on trailers. So, you know, there's some guys out there that are just, quote, in ridiculous rates as they are in the freight market. And, you know, a lot of people now, it's kind of what we're seeing is people are very rate conscious, which is understandable. But I, it's the customer service thing people are forgetting about. And, you know, they might be able to get a cheaper rate somewhere else, but, boy, when there's going to be a problem somewhere on that trailer that other companies not going to be there for them. So is it worth paying, you know, a little bit less and not have that customer service? I don't know. That's something for, you know, people to think about.
But, no, I'm right there with you, Paul. And I think a lot of it for me is, you know, because I truly feel this way. Like, I don't want anything to go wrong. But I also understand that's where my value really comes out. That's where my experience really comes to light, is it's just like, hey, I've been there before. I maybe haven't dealt with that exact situation before, but I've been through challenging situations, and we figured it out, right. The only way that it doesn't work out is if we stop communicating with each other. That's the only way problems don't ever get resolved. But I think, you know, from back down to it, man, I think, like, as we become more and more tech focused, right?
Like, I'm sure there's marketplaces that are out there in the leasing space that you guys are competing with where it's, like, digital only, and that happens in here. But I also. I'm one of those guys where I'm just like, man, if everybody's going in one direction, like, yes, we're all going to have a tech component to our business in today's day and age, but, like, I'm going to bring back that old school customer service that most people are trying to get away from, the in person stuff, handwritten notes, stuff like that, to really separate yourself out there, because I think it's transactions and business, to me, it shouldn't be automated, you know, because, and maybe this is because I've kind of forged my own path for the last four years, and I've had to.
Every dollar that I've made has been earned through my ability to, you know, create value to, whether it's the audience or my customers on the brokerage side, whatever that looks like that. I know how valuable somebody's business is. I don't take anything for granted. Like, all of my advertisers on this show, I don't take any of this for granted, man. I'm not entitled to any of this, right? Like, I got to show up, provide a quality product every single time. And it's ridiculous to me to sit here and say that I get paid to talk about trucking, you know? So it's like, I don't take that for granted, but I want everybody to receive value when they're working with me, and I don't want anybody to ever think, like, I take that stuff for granted.
Exactly. Yeah, no, you hit the nail on the head on that one for sure.
So what are you guys doing right now for, like, are you guys shifting through? Like, like, do you guys keep new inventory coming in? Like, are you guys going out there? Like, I see the great Dane, logo on your wall back there. Are you guys going to them? And as a company as a whole? And are you guys buying new inventory from them every couple of years, or do you guys sit on trailers for five to seven years? What does the life cycle of some of your guys units look like?
Yeah, so we've kind of have revamped our whole, that whole deal in the last year or two where we've actually started a resale division down in Fontana. And so as we bring in the new iron, we're selling off the old, and we're very successful with that. Not everybody needs new iron, right. They like to have it, obviously. And each one of our branches is different in this market. Here in central California, I probably have a handful of customers that require brand new trailers, but most people are comfortable using 2010 to 2018, something like that. A lot of local used trailers, but as a company, we didn't build any new trailers last year, and I believe we're doing 350 this year with Hyundai. And we work directly with Hyundai, so we don't have to go through anybody, any broker, so to speak.
But we go directly with Hyundai. We put in our spec. We will see those sometime in the, you know, 1st, second quarter, probably second quarter of next year, typically how McKinney runs. They want to send the new, the trailers to, you know, the brand new stuff out for long term lease, but we also have to have the new iron sitting on the fences as well. So we're trying to, you know, get rid of some of those. Like, I'm trying here aggressively getting rid of the older stuff. We're scrapping them, but we're a big storage market here, too, and we're one of the only ones in the city that have storage trailers available. And that's a big revenue line for us. But I'm also getting those calls now where my customers are saying, hey, I can't load a trailer that's older than seven years old.
And so we're starting to see that in different markets as well. So is that changing with shippers? Some places, yes, some no. So we're trying to adapt to the changing market as well, but when you have 19 branches to focus on and everybody's a little bit different, it's kind of hard to get that right. Fleet mix, but, yeah, but I have, like, here right now, I have a handful of new stuff and then a lot of, you know, older stuff as well. But it's just what this market, you know, calls for, so.
Yeah. And then are you guys just working with, you know, drive ins or do you guys have food grade trailers, reefers, tankers, flat beds? Like, what is that? What does your guys inventory look like?
I guess, absolutely. I have a fleet of over 88 reefers here. Constantly changing those out because of the carb laws. I have flatbeds, drop decks, lift gates, you name it. Only thing I don't have here in Stockton or chassis. But a lot of our branches do have those. But, yeah, we do. We do everything. I mean, we'll go out and buy trailers, too, for people. I mean, we'll do whatever the customer wants if it makes sense. So that's what's kind of nice about us, that we can, we have the ability to do that. Our owners aren't afraid to write a check. If there's something that makes sense, they're going to go out and spend the money and get that trailer.
So that's what's kind of nice about being a family owned company is, you know, I have the ability where I could call the president today and talk to him and, you know, and work stuff out. So it's just, it's, there's not. We don't have a lot of levels of upper management, which is kind of nice. And we all work together and we have great support from above and makes the job a lot easier and stuff like that.
No, I like that. Right, because I think, like, there's so much that's. I think that. Sorry. Corey Buchan says, I live in Billings, Montana, and we have a lot of available space up here. If you guys are looking for a.
New spot, I like to be there.
Yeah, right. But no, I think that having that flexibility again back down to your guys's customer service ability to come in there and kind of custom made. Right. Because I think, like, there's a lot of opportunities that come about, you know, like, I believe in, like, selling on our core competencies.
Right.
Our core competency is full truckload. Ultimately, at the end of the day, we like to stay in open deck, but, like, also if they need drive ends, reefers, whatever that is, like, we'll work with them from that regard, but it's also those odd requests that come up, you know, because I think when you're developing out a book of business in freight or developing out your, you know, your trucking business as a whole, you might be just moving reefers, for example, and then you're going to have a customer who's going to come to you and says, hey, we're struggling with hoppers, you know, like we're struggling with bulk. How can you help us out with that?
You guys are doing this and then you make that decision at that time and kind of again, having that avenue where it's like, hey, I might be a long term lease with you guys right now doing this, you know, but like I want to start moving, you know, tank or liquid, whatever that looks like. And that knowing that they can come to you as a resource and really spec that out and see like what's the feasibility of this? How does that look? What does this opportunity looks like? And it sounds like you guys were looking into locking with some of these guys to help them essentially build out their fleet.
Yeah, we'll try to do that. Now that's kind of a little bit out of our wheelhouse though, with the hoppers and stuff like that. Yeah, but I know people that do that stuff. So you know, I like to have. That's why we attend these CTA meetings and these other functions because there's people from all walks of life there, right. So we can meet the guy that has the hoppers or the fuel tankers and stuff like that and we can put people in direct contact with the right folks so that, you know, that's one thing we want to stay on top of as well. And it's funny mentioning the Billings, you know, with the yard space is that's been a huge problem for us company wide, just finding available and I've never had to.
Right now I'm currently working out of three yards and you know, Harmon, speaking of Harmon, he was helping me out a great deal for the last several months. Parking, gosh, 80 trailers over there. But you know, I'm, you know, I have yards up to 2 hours away right now. It's just not, doesn't make things very easily manageable. It's very tough logistically to manage these three yards. But hey, I mean it's just the times we're in right now and. But hey, I have available equipment so you know, anybody needs a trailer, give me a call.
My guy Cody said he's going to reach out to you. He always needs drop trailers in the Stockton area. Cody, I'll connect to you guys here after the show. But yeah, man, because Cody and they do a bunch of produce freight out of the, you know, obviously the Central Valley and everything. But no, I mean, I think that, you know, that's something, you know, you're talking about yard space and, you know, because like truck parking, for example, right now and finding those vacant lots, like that's almost like a whole other business that has kind of spawned here recently with it all right. And the ability safe and secure truck parking and then having commercial space to store trailers and everything like that.
Absolutely. And then, you know, during we actually a couple years ago started, well, we've always stored trailers here, but we really kind of started putting it out there and marketing that all of our yards are now we can accept people to store their equipment here. Problem is, a lot of people need 24/7 access. We tend, we like to kind of deal with people that need, you know, seven to five access Monday through Friday. But now that we have so much inventory back, I can't even take in people's trailers right now to storm. I have probably 80 of them in my yard right now. One of my large accounts, they've been here for a few years now, but I had to tell them last week, I can't take in any more trailers. I just don't have the room.
So I'm forced now to go out and find other parking. And people are catching on quickly. That's a huge commodity out here. And the rates have just skyrocketed for parking, so. And, you know, now. And with that, the counties and the cities have now caught on. So now they're making all these yards that might have been, you know, fenced with some dirt, you know, fence thrown around it now they're like, oh, well, you guys gotta pave it now. You gotta do dust mitigation and security. So now everybody wants a piece of the pie because it's needed here, especially in this valley. So it's tough. It's been very tough with all these yards. I feel sorry for my guy that's got to go out there every week and do inventory. But that's just part of the game right now, unfortunately.
But yeah, that's a big problem in this area. I think nationwide it's a big problem. Just truck parking, period, you know? Yeah.
So safe and secure parking, man. But hey, Paul, we're at time here, man. We're at that 30 minutes mark. And I'd like to keep these shows concise and to the point and you know, because everybody who watches my show has a job, you know, they get packaged, start doing some work. But man, how does anybody reach out to you to find out more?
Reach by my cell phone or Mckinney trailers.com and you can go to open an account on our website up on the top right corner and just fill out a basic interest need or credit application and you know what city you want it and it'll come to me and we can go from there.
Perfect. Paul, I appreciate it. And that's going to be it for today, ladies and gentlemen. As always, if you guys got value in what you heard, subscribe to the show. You guys share it out there. Dear network, because if you see value, your network's going to see value as well. I appreciate you guys. I love you guys and we'll be talking to you soon.
Thank you. Chris.