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 under the storm cuz.
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, 08:30 a.m. Pacific 1030 Central to break down some industry headlines. But most importantly, you guys 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 side of freight, ladies and gentlemen. And I say that before every single show. And what I mean by that is I only speak with transportation professionals because at the end of the day, you guys, 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 Tuesday, everybody. The freight coach roadshow is back in full force this week. I will be flying out to Kansas City here in a couple hours. So if you see me walking around at Dapcon, the signature orange will be there Wednesday and Thursday. I'll be speaking on Thursday about building a sales team and everything. And you know, ultimately I'm out there talking about what I do literally every single day inside of my business. And frankly, that's why you guys tune into the show. Because I actually work in the industry. I'm actually building a real company inside of the industry. And although I am a pretty face, I'm not just a pretty face out there.
I've got everything on the line just like each and every one of you who are out there making things happen. But also, just a little quick reminder, I'm also going to be in Cleveland next week at the NMFTA cybersecurity conference. So if you're going to be in Cleveland Monday and Tuesday for that, you will see me there. I'll be doing my show from there as well. And yeah, guys, we're just going to be out there making that happen. But I got a very special guest for you guys here today. We're going to talk about the freight market. But most importantly, what is a freight market? How like, what does any of this stuff even mean, right? Because ultimately we see a ton of information out there, you know, conflicting views, opinions, everything else.
And we're just going to kind of break all of this down. So I have my good friend Mister Kyle Lintner back on the show. Kyle, thank you so much for joining me here.
Hey, Chris, thanks for having me. Good to see you, buddy.
Yeah, good to see you too, man. And it's, you know, I was thinking about this the other day. I think I read my 18th post about what's going to possibly happen in the freight market coming up. And I'm like, man, you know what, I haven't a, I haven't had Kyle on in a while, but I'm like, Kyle always loves to just keep it real about all of this stuff, man. So, dude, what's been good? What's new? What's been going on in your world? It's been a minute.
It has been a minute. I would say if you had 18 articles that you read, it must have been just one day only. Cause there's about 5000 that come out a week, dude. Yeah, it's nuts. Same old, same old. I'm just trying to help people get more organized and efficient inside of the space, whether they're a carrier shipper, three Pl, or a vendor.
Yeah, no, absolutely. And dude, that's one. You know what's funny is I saw a video this morning, Tyler Robertson, he's the CEO of Diesel laptops. He posted it of a podcast interview that he was on and he was talking about how, you know, he, you know, it was like making money and then losing more money than you made and everything else. And I'm just like, man, I'm like, isn't that the stage of everything? Especially in business? You're going to go from, I will do anything to make money to making a little bit of money to then you have a situation where you make the wrong decision. Then you lose more money in a month than you did in previous years based on those decisions. And you got to wake up and attack the day, the next day like nothing happened.
And that's what I think is, you know, to kind of tie in what you're doing right now. And our topic today is frankly, there's so much noise that's out there that is completely irrelevant. Right? Like, yeah. Is the market tough? Yeah, it's going to be tough. It's going to be good sometimes. But I got a business to build and run. I can't pay attention to anything that could possibly lead me down wrong path and avoid the work that I know is required to build my company. Up?
Yeah, I didn't see the exact post that you're talking about. I've seen some of his others. I know the general theme, and that's, I think, extremely relevant for what you're talking about. The idea of making money consistently. We can't view things in the very short term or through a narrow focus. If you zoom out, you know, did the business make money over the course of the entire year? Over two years, over three years. Everybody wants to talk about how terrible things are now, but they're very quick to forget how wonderful things were for the previous two or three years before that. If your business does not make money in a calendar year, but made significantly more than it lost or broke even in that calendar year over the previous two or three years, overall, you're doing pretty well.
And that's a business that is successful over the long run, Clay.
No, and that's exactly it, because we just finished up our second technical fiscal year in business, in the brokerage. And, you know, I'm the type of individual where I think my house is on fire literally every fucking day. Like, it's never enough. It's never growing fast enough. And then I look at the year over year comparisons, and I'm like, holy shit, we grew 90% year over year, right? And I'm like, all right. So then I have that 24 hours of like, hey, you know, it. Shit's not that bad. Then the next day after that comes in, I'm like, fuck, we're done. Like, nothing's happening. We got to add more customers. And that's just business in a nutshell, right?
And I think that what's going on out there right now is I feel like you see a lot of dissenting voices trying to prove each other wrong, or more importantly, prove themselves right on why their opinion is accurate about their out there on the market. And I want everybody to think about this. What if it doesn't change? Like, what if what we're experiencing today is what 2025 looks like? Like, what if it doesn't change? What are you going to do? Are you going to sit there and post every other week about, oh, three more months? Three more months? Who fucking cares? What, like, you got to perform today.
I don't want to necessarily give a spoiler alert, but my general opinion on how freight looks moving forward is get used to the way you feel right now, because this is it. And the reason I say that is anytime any industry or any market goes through a monumental change, like we did during COVID and then post Covid things don't necessarily go back to the way they are in particular areas. And one of them by far is the level of service. Think about what everybody's willing to do now to get the business. Shippers have become very accustomed to that. It isn't going to go back or swing or sway or any of these other things.
Everybody wants to say when they talk about cyclical nature of free rate and how shippers are going to claw back or carriers are going to claw back and then brokers are going to get involved. It's not like that. So much of what we talk about now from a service level is table stakes. Tracking is the number one thing. I can't believe that there are still people who actually do check calls, because if you don't have a carrier that is automated in your system with tracking, you shouldn't use that carrier. A lot of businesses are going that way. So simple things like that, as far as this level of service are going to become the norm as well as the prices.
And the reason why the prices can stay low and this can become the norm is everyone is forced right now to cut costs and to become more efficient. Some businesses are obviously better than others at doing that. The ones that aren't good at doing it will be eliminated from this industry. The herd gets cold a little bit, and the companies that remain are the ones that can run at lower cost with better service.
So what is a freight market, Kyle?
What?
Like this? Besides this mythical being that I believe Shakespeare wrote about back in the 14 or whenever the hell he was alive. I went to public school, so forgive me on that, but it's this great philosophized time and I just made that word up on what actually goes on out there.
So what.
What is a freight market?
Philosophy is a word, but I think in Shakespeare's time it was barge traffic that people were brokering. Now we have over the road transportation freight market. If we want to think about it in terms of a market, and it is one, anytime there are buyers and sellers in one place, that is a market. I know it's fragmented. We don't have one central place to conduct business. We kind of do. They don't want to admit it, but they are. We have an overall marketplace with supply and demand being how many people want to purchase transportation and supply being how many people are supplying transportation. Within that overall market, there are individual markets that have their own supply and demand conditions.
Those individual markets can affect the price of transportation somewhat, but for the most part, where we sit nationwide with how many trucks there are and how many loads. And the type of loads there are is what dictates the price of a truck from a to b. And then that price gets moved up or down depending on the individual characteristics of both the origin and that destination, and then to some extent, the equipment and the time. But where we have buyers and where we have sellers, we have a market, and freight is no different.
Yeah. Here's a little spoiler alert for a lot of people. The Pacific Northwest has officially flipped based on the freight that I just picked up there yesterday. The produce season has kicked off out there and rates are increasing. So just a heads up on that. So when you guys see headlines next week about tender rejections or rates raising in the Pacific Northwest, let's also talk about the seasonality of said freight that kind of goes on out there. So I just wanted to throw that little caveat in example, because if you.
Think about it, an individual area or market can have their own conditions and then their own price. So Pacific Northwest price will escalate and be higher than it is in other areas, but because they are connected and it's a submarket, that's not going to last forever. And even if it weren't because of time, how long before trucks begin to migrate to that area to take advantage of those higher prices?
Yeah.
So nothing is fixed and everything can change.
Yeah. And that's within a certain amount of time. Right. And that's also why I wanted to talk about, like, what signals do you look for that would say this is an overall market shift as opposed to a seasonal market shift or like a short term kind of blip out there.
It's a great question and one with many answers, and there's variants and wrinkles within those answers. But the way I view it is this. The easiest way to gauge a trend in market is by price. Right. Price is an advertising mechanism. It tells you when there's too little or too much of a certain thing with respect to where we are today on price, and that being spot rates and contract rates. Because they are two submarkets within the greater market, relative to the past history on this, price is pretty low. But I can say that looking at that price and seeing that it is somewhat constant, you know, if you look at a graph or chart of rates, they are flat. It has been aligned straight across. That's not a market that's primed to change.
It means that we are in balance and we are very comfortable with the rates that we have. If we look at it one step further or maybe we break it down a little more between spot and contract. And I'm one of those people that is of the opinion that contract rates should always be above spot rates. Spot rates should not be above contract. I know some think you need to dissuade people from using a spot market and that rate should be higher than a contract rate. That simply isn't the way this market works. The reason why I can say that with certainty is if spot rates were always higher than contract rates, freight brokerages would have no dedicated contractual business. How on earth could you have a contracted rate if every time you go to source it, you're paying higher than what you're receiving?
And for the most part, when you're buying a truck, even if you have that guy set up dedicated, he's not going to be too far from the spot. Market rate contracts got to be higher than spot. It is right now. It has been for a very long time. That is a healthy, balanced market. The spread between those two is very literally the margin for a freight brokerage. If you want to think about bear versus bull or when rates are going to move higher, all you have to do is look at price and we will not see an increase, a sustained increase in freight rates until spot rates at least come close to what they are in contract. They don't necessarily need to cross over because there's variability. And you know, each market has a different rate.
And we look at the overall market average for the nation. If spot is nowhere near contract, we're not going to see any jump in rates. It's not going to stick around. We might have the pockets, we might have the little blip because of a hurricane or a produce season, whatever it is, nothing that's going to change the meter. So number one, the very long answer to your simple question, I look at price and then obviously everybody wants to know, where are we going to go next? Or you can't just look at price because that's the output, that's the byproduct. The factors that go into price are always supply and demand for any market. We don't have a very good way to look at demand. There isn't anywhere that we can go and see specific demand.
Even within that, there's, everybody has their own opinion, right? There's tonnage, there's ton miles. People look at the dollar figure, I believe it's load. Unfortunately, we don't have anywhere we can go and see how many loads were booked. Because if we're thinking about demand for transportation. I am purchasing a class eight truck and if I want to get very literal and specific, I'm actually buying the time, weight or cubic dimensions of that truck. I have 11 hours of 53ft times whatever the height is, you know, and I get my cubic volume. So cube hours is what I'm really buying of a truck and what I choose to do with that is up to me.
But without us having a total line of sight, a complete line of sight into the demand portion of it, I look at the supply of trucks and thankfully the FMCSA does give us truck registrations. It's not in real time. It is somewhat lagging. But for the purpose of this today I did take a look at where we sit and as of three weeks ago we have the latest refresh as far as those numbers are concerned. And this is the first time in a while that we actually have a decrease in the amount of carriers and trucks.
Okay?
So as it's been going on over time and as much as everybody wants to complain about rates and rates, we have new companies coming on board and we have new trucks that are hitting the market. Finally, in the last couple of months we've seen a retraction from that. There are now 1200 less carriers than there were in July and there are 119,000 less trucks than there were in July. So if we want to talk about market changing or rates moving, this is the way it's going to happen. We're going to have to better match the supply with that demand. And this is what I was actually hinting at earlier when I talked about culling the herd. We are losing the carriers that don't know how to run profitably in today's market. That's net positive for everybody.
It obviously stanks for the people who are on their way out. But if we are going to see a decrease in the amount of trucks out there, that's obviously less trucks that can take loads, which means we don't have too many trucks around. We can start to prime the pump or have the conditions ready for any movement higher in rates. We can't have rates higher if there's too many trucks because we simply just don't start demanding more freight. People only eat so much food, people only buy so much stuff or build so many houses or whatever else you want to think about. We don't have to go too far down the rabbit hole of the little small things that actually increase the amount of demand.
You know, if you have transcon loads or if you have a partial load, you know, you're not using the full trailer, you're not really utilizing exactly what you're paying for, but that doesn't have the same effect as just a complete change in demand or complete shift in the products that we ship.
You know, I think there's a lot to unpack on what you said there, but I also don't want to unpack any of it because I can't add anything to that. Right. Everything that you're just describing right now is just another reason why you have to look at your operation and see, are you actually built? Is your business, because, again, your personal feelings are irrelevant. Is your business built to sustain or improve during these times?
Right.
Because it's like, how many people have looked over these last twelve or 24 months and said, what we're doing isn't working and not blamed the big bad boogeyman market that's out there and, you know, and then all of these, you know, leaders and sales reps going to their bosses saying, like, oh, the market, you know, we can't sell and this and that. And, you know, again, and I'm not trying to sit here and discredit anybody's feelings because they're very real. Right? Like, I get that way at times too, where I'm like, man, what the fuck? Like, what are we gonna do? But I also don't let that stop me from doing my daily tasks and looking at my operations and saying, like, all right, how can we get just a little bit better?
You know, like, if people aren't onboarding new suppliers at a high rate, how do we improve our operation? How do we grow with our current customers to become their number one provider, regardless of volume of freight that they have? How do we become their number one provider? How do we get better? How do we grow from that angle? Because, yeah, new business development is tough. I'm not going to sit up here and say that it's not because a lot of people are not taking your phone call, but they are at the exact same time. And you have to continuously reach out to that. And you have, I think a lot of it is you. There's a lot of information out there that causes paralysis. Analysis. I really feel that way, Kyle. I think there's the tech bug that's out there with everybody.
There's the rates, there's data, there's all of this stuff that's going on out there. But frankly, it's all irrelevant. It's all irrelevant because I prospect every single day, I talk to shippers every single day, my own, my prospects, everything else. And 99%. And I'm not just exaggerating that 99% of the conversations that I have with decision makers who are actually moving freight are the exact opposite of what everybody's posting out about there about what you actually need, all right? Because frankly, the people that require that, the companies that require that are not onboarding new providers, all right, I am not associated with any of these companies that I'm about to list off. But the Kraft Heinz is the Anheuser bushes of the world.
All of those large ones that require a tech stack a mile long are not taking your phone call right now, okay? Because they have like a twelve to probably 36 month sales cycle to kind of get in the door with a lot of them. So if you're out there thinking you need this stuff to move freight, you don't. All right, you don't need any of that stuff. I have a customer of ours that we're probably going to start averaging 100 loads a month with here starting next month. They have not once asked about our tech stack, okay? So I'm not saying that there aren't people out there that require that, because there are, but there are also ones that don't. Okay. And that are more concerned with. Do you actually fucking know what you're talking about? Okay.
When they come to you with freight, do you actually know how to execute that? I would err on the side of. There's probably 90% of the decision makers out there who are in that camp, right? That are like, dude, we just wanted to make sure that you fucking know what you're talking about.
I completely agree with all of that. And there's also a lot to unpack in there. I think a lot of the stuff you said people should be doing now, immediately, if they're not already. You know the easiest way to think about all of that, if we boil down a lot of what you said, you're not the provider for everyone. And in the same token, not every shipper out there is for you.
Correct.
And everybody gets so obsessed with the big names and what is there? 50 on the Fortune 5100 on the Fortune 100? You know, a lot of those companies are enormous. They don't have the type of freight that you necessarily want. But with everybody overlooks there are so many mid sized shippers out there that are dying for service because they don't have their phone ring and their options are one mega broker over the other. They don't get the level of service that they want. They don't require the tech stack that the companies that you're talking about mention, and you don't necessarily need them. If you think about your role as a broker, if we're going to stay in this vein, your job is to act as an outsourced wing of that company's transportation department. If they didn't need you, they would handle it all themselves.
They require you to connect them to the carriers that can't fit with the rest of the stuff. If we think about it in the traditional sense, you know, those guys ran out their RFP. They had so many asset guys come back and take whatever lanes, whatever's left over is what they need to get to the carriers that they don't know about. Your job as that broker is to find the carriers that fit with that specific type of freight. And that's exactly what you're talking about. Do your job. You know, if you're any good at your job, you'll be able to find the carriers that fit with the demands of what that shipper is asking for from equipment, from time, from whatever the components are, is what's going inside of it, what's being loaded and unloaded.
It's not one size fits all as much as you know. And I'm the biggest person that says that freight is becoming standardized and commoditized and it is in the biggest and broadest sense. But when we talk about the actual time spent on the docks loading and unloading, the job of the broker is to know the customer on both sides, both carrier and shipper, and connect the two of them together and then be there to facilitate that business. Carrier needs you because they don't have the people in house to do that. The shipper needs you because they don't have the people in house to do that. That doesn't mean you need to go knock on Anheuser Busch's door and demand their freight. That to be honest, you probably can't run profitably anyway.
So let's concentrate in the areas that you do succeed in and that you can run profitably in and find carriers that are looking for the same thing. And the last thing I'll say is it everybody does want to say, I just need more freight or different freight or new customers. It's always about revenue, revenue. You can't change the price of the market. The market tells you what the rate is for something. Your job is to decide if that rate fits within your business and if it does, to take the most out of that rate for your business and the way to do that is to control your costs. The way to control your costs is to have an organized business that is efficient and optimal with no excess slack around there and with improved workflows.
And if you can't sit down and take the time to do that, you shouldn't be in this industry.
Yeah, I think you just brought up the most over celebrated and misunderstood term there. And that is the word revenue. Revenue, although it's flashy, doesn't keep you in business. And I think these last couple of years will show that money raised in revenue do not mean profitability. Right. And you need to look at that. You need to treat your business as open heart surgery on a life saving procedure at all times. You know, I was just talking with, I was at technovations last week, and James Lemon, he's with SPI logistics, and, you know, he's the CFO of everything.
And, you know, and I was telling him, because, you know, obviously I have this media business that's separate from the brokerage, but I was telling them, I'm like, listen, man, like, I have all of my expenses listed out on a spreadsheet that from the most my top fixed cost down to my lowest one. And I constantly look at that. I look at that as what? Why do I have this? And then I look at that as. Do we. Did we use this in the last 30 or 60 days? Right? Like, I have, you know, a team now, right? I got my guy Christian, who handles, who's, who just does everything for me. He's a fucking gangster. But I go to him and I'm like, because, you know, like, I invest in that. Like, we have a bunch of technology and all of that stuff.
And I'm like, hey, are we using this? Do you use this on a daily basis? Monthly basis? What does this look like? Because I can have a lot of revenue, but if I don't turn a profit, I'm going to be bankrupt, right? So I think, like, going out there and then looking at what is the most profitable freight for your organization? How are you going out there and really dissecting a lot of this stuff? Because, you know, you're right, man. There are a lot of customers out there that the Fortune fifties, Fortune 100s that they need you. You need to have a lot of capital to work with them, right? Like, you need millions and millions of dollars in credit on a monthly basis to extend to them. And then their payment terms are 60, 90, maybe 120 days.
I don't specifically know what they all are, but they're not net ten or anything like that. Right. So it's like you need to be able to sustain a, a lot of that stuff. So do you even know who you're going after? Are you chasing a logo or are you chasing the best freight for your business? Right. Because, you know, again, we're a smaller operation. It's just me and my business partner and the brokerage. Right. If a customer or a prospect came to us and said the only way you're getting set up with us is if you can move a thousand shipments tomorrow, I'm going to have to turn that business away because we don't have the infrastructure in the team. Now if you give me 60 days, I'll invest in it and we'll do that. But you know, ultimately that's what you're up against.
When you're out there and prospecting in any freight market, you need to make sure you're going after the right customer that fits your business. And I'm not going to sit here and say, don't take risks, ladies and gentlemen, take all the fucking risks. But ultimately, is your risk going to pay off in the long term or is it going to bankrupt your business because you went after the wrong people, you overextended yourself, credit and, you know, infrastructure operationally and then you're out of business because of that.
Yeah. Cash flow is usually the issue. Why people have problems inside of this industry. Nobody wants to talk about it. I think the biggest issue we have though is you need to know how to run a business. Everybody wants to focus on I know freight or you know, these people don't know freight usually. Now people like to complain about outsiders that are coming into this industry and how they don't know freight. They don't need to know freight. They know how to run a business.
Read. I don't mean to cut you off, but read Brad Jacobs book, how to make a few billion dollars. All right. That guy is the epitome of what you're about to describe. I want to say that.
Exactly. That's the kind of stuff that I was going to say. Is it? If you're given two things, you need to know. You need to know how to run a business and how the business world works. Or you need to know freight. You know, I think you'd probably take the first one because you can learn freight faster than you can learn business.
Correct.
Brad Jacobs is a great example. I guess I can take that long to understand how to move something from a to b or be the broker that finds the person to move from a to b. But, you know, I say that because if you don't know how to run your business and cash flow is one of them, cash is king in this. If you don't know how to run your business, you're not going to succeed in this industry. I don't care how much you know about freight. And those are the small things that people don't want to number one, admit, and then two, they don't want to work on that. But from all aspects of your business down every single department, you need to know how to run a business.
The example that I always like to throw out to people so they get a sense of this is restaurants. Restaurants that have great food go out of business every day. Yeah, restaurants that have terrible food stay in business for 30 years. You know why? Because they understand how to control their costs. And this is why you have a chef and this is why you have a restaurant owner. The owner takes care of the business side of things. The chef puts the food on the table. Same thing goes in freight. You have to understand the business. But number one, you have to understand how to run a business.
Yes, I wholeheartedly agree with that, man. And I'm getting a crash course on all of that. Like I, you know, I always try and tell my un, my truth, my unfiltered truth about what I go through out there. And, you know, again, I think everybody goes through these phases where you come in, you think that you're just going to be fucking instantly successful. And then back to what I was saying earlier about Tyler Robertson's video, right? Like, you're going to come in and you're going to, you know, from my perspective, this is how I went. I didn't make any money for 16 months, man. Like, I broke even after 16 months for the first time in 2021. Then I made like six figures in my business and I thought it was fucking on at that point, right?
And then I made a little bit more and then the market shifted and things happened. And then I lost money. And then I was like, holy shit, I lost more money in one month than I made in my first year in business and stuff like that. So it's like you have to learn how to run an actual company, okay? Like this is, and you have to have checks and balances that are inside of that business. You cannot, and I know we're almost out of time here, but, like, you cannot have somebody who's emotionally connected to a lot of these transactions, make financial decisions about those transactions, you got to remove somebody from it. You have to have a degree of separation out there, because otherwise your emotions will fucking lead you into the ground. Okay? Ultimately, you're wrong. All right?
Like, I see this stuff all the time. I think I'm fucking better than sliced bread in a lot of instances as well, but I'm not. All right? And I need somebody to have that checks and balance that comes in there to make sure that this business sustains and grows in any freight market out there. But Kyle, as always, man, we could go for fucking hours every single time you're on this show. But how does anybody reach out to you to find out more about what you got going on? Or they just want to connect about, you know, your insights on the industry?
Just ways probably find me on LinkedIn. I'm around.
Better is coming, you guys, as all the time. But that's going to be it for today, you guys. Tomorrow, tomorrow's show, I'm going to get very granular on sales, freight sales, how I personally go through prospect shippers, what I look for in somebody, and then what are some key identifiers in the prospecting phase that make me actually want to double down on a prospect? Or if I want to kind of take a step back and some of the lessons that I've learned out here recently, because trust me when I say this, you guys, selling in this market is vastly different than my previous 15 years of selling in this industry. I'm just going to talk about that and tell you what's working for me and everything out there. Because again, you guys, nothing. That what we're doing is proprietary.
And if what I'm going through can help you guys succeed in your business, that's what it's all about to me. But at the end of the day, you guys, if you guys got value in what you heard, subscribe to the show, you guys share it out there, your 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. I like that.