Lightning like Steve McQueen? I'm in the fast lane when the light turns green? And I built tough? Find nothing but grit? Cause I made rugged blood sweat and spit? Yeah? Like a horse I fly? Better put yourself in 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 the Freight Coach podcast, the top podcast in transportation coming to you guys every single weekday, 8:30 in Pacific, 10:30 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. I'm just going to skip the rest of the intro because I got some very special guests who are on here to talk about something I'm very passionate about is, you know, that's. As a small business owner myself, how do I elevate my outreach to compete with some of the largest players out there? What can I do to really level that playing field? Because it did. It does only take one, right?
It takes one account to go out there, and that can literally change your life in your business. And my guests today have something really exciting to kind of announce and talk about and really put out there that I truly feel like is a game changer for the market. So I got my man, Dan Hellman and the honorable Jim Sanborn. I will call him, your honor for the rest of the show from now on. So, fellas, thank you so much for joining me.
Thanks for having us, man. It's always great.
No, it's, I mean, anytime Dan wants to jump on the show, I'm always happy to have him on. And then especially when he had mentioned what you guys are doing now with you guys at E2 open there, Jim, I'm just like, yeah, we got to talk about this because, you know, I, I'm like, you know, 95 of this industry is small business essentially, right? And it's. You get to the finish line. And I talk about this from a business development standpoint all the time is you got to go after the customers that you can actually service based on your current capabilities. And if you're bootstrapping your business, you know, you. And you might get to the finish line. And they're like, hey, yeah, we love you.
We want to set you up, but this is what it costs just to get set up, to move our freight because of tech and everything else. So I'm just going to kind of sit back and let Dan, if you want to kind of like run in with this here on what you guys are doing from this standpoint.
Yeah. So I'll first kind of set the stage of what is the technology, all that. So actually Jim, I'm gonna kick it to you if you want touch base, just kind of set the stage on what the API pricing is, E2, how your shippers are using it, the advantages and then I'll jump into the, basically what we're, what we worked on together to help those small mid sized brokers.
Yeah, I'll tell a little bit of a story. First of all, Chris, I agree with you. If Dan tells you to do something, it's a good batch business strategy to do that. Just do what Dan says. So about, I'm going to say four years ago, E2Open developed an API that allowed any carrier really to connect into our system and provide pricing to a shipper. Which is cool. We did that. The missing piece of that was how do you calculate that price? Right. And that's really where were able to partner with Dan over at Tabby and be able to, I like to say, democratize the freight.
Right.
You don't have to have a huge development department to build a giant pricing engine to be able to calculate a price on any lane at any time. They've figured that out for you. So it's been a really good partnership. I've got a TMS with shippers in it. I've got a connection to that tms. Dan's got a solution on his side that allows really a carrier of any size, an agent broker to be able to tap into that technology which gets back to where you started, which is you only need that one customer. Right. I might be a small business with a few trucks or a brokerage with a few customers. And if I can land one, I need to be able to service them. And that's really where they come in.
Yeah, and it's really knowing the intricacies of their operation as well. And I think like if you know a lot of individuals when you're going out there and you're building your book of business, they might have never heard of API pricing or EDI or anything because they're like, man, I'm just trying to find some freight to move and then you know, if you're pat, you know, you're good enough sales rep, which most people are. Right. You get on the phone, you talk to the right people. And then you get to that finish line and then you're looking at the price of some of these things and you're like, that's more like that might be more than what I actually pay myself in a salary, you know, so it's like the dollars and cents of things.
So Dan, when you guys are out there working on like with the like, how did you guys see that shift and really like want to bring this down on like the singular level like that?
Yeah, I mean so back when I was in the brokerage side of the business, we started in the apa, Price had a lot of success and we're starting to see the shift where some shippers are starting to require it. They don't even give you an option. There's one shipper particular, I'm not going to names. They don't get cold, called right and left by every person listening but they now essentially are requiring it. They're going to take the first five rates they get and it's closed. The bids, the spot loads, not going to stay open for hours on end. So you have to quote via API because it takes two seconds and a human just can't compete. If you're using a bot, it can't compete. You have to use API.
And then we're starting to see a lot more of that traction go on across the board. Whether it's on their spot board or it's that real time dynamic pricing where the shipper actually pulls rates out of your system. And so historically it's been kind of only allowed for the large brokers to access this because it's been expensive.
Yeah.
Working with Jim, we saw a gap in the industry or gap to. There's a missing piece of how do we enable agents? One man shows five man operations, how we enable those mid sized brokerages that maybe just have one shipwreck requiring it and they can't afford to buy the whole AP package but that shipper's about.
To kick them out.
And so our teams work together. How do we structure this, how do we structure it differently to bring more shippers to the. Oh, sorry, more brokers to those shippers there. And so that's what the program worked out, that's what we're really excited to announce and release. And essentially how it works is now Tabby Connect users can, instead of buying the entire API package through e2open can buy a single shipper connection. So it's affordable to an agent, it's affordable to a 10 million dollar brokerage, a 15 million dollar brokerage. Whatever size it is, or even really the. The really big boys that may just have to start with one. Just start with one to test it out and before, you know, growing from there. So it's much more affordable.
And the way we built Tabby is that we can roll it out to the individual operators. You don't need a tech team. You don't. You can do it yourself. And so we can go quickly with it.
So how do you roll that out to the individual operator, though? Like, how would that look? I'm a. Say I'm an agent, which I am. But, like, say I'm a. I'm a small broker. I got three or four people out there. I don't even know what API stands for, right. But I have this customer telling me, this is what this looks like. How does that start from? Like, what's step one?
Well, I think that's the cool part about Tabby is you don't have to. You don't have to know what API stands for. You don't have to be an IT person. You can be a salesperson, you can be a broke, because that's what you're good at. And you can use this technology. Pretty easy to use, pretty easy to get stood up in a hurry and then go to work, right? Go back to being a broker. Go back to prospecting those loads, maintaining that relationship with your customer, handling issues that come up. The work of an agent, the work of a broker that you're already good at, and let the technology do some of the other stuff for you and get it off your plate.
Yeah, go ahead, Dan.
Yeah, so, I mean, really, the setup's easy. You know, if someone. If someone out there has a shipwreck requiring it or they want to do it. Between our relationship with E2, we can have them live in a couple of days. Basically how we built our connection. We can bypass testing. It's more of a flip of the switch, and it's now extremely affordable. You know, in the past, rate automation has been historically just out of reach. It's just too expensive. A small company can't afford $30,000 a year for whatever it is based on how much things you're doing. But now with E2 and Tabby coming together, it's extremely affordable and they can roll it out.
So is this something that's connected into my TMS as a broker, or is it the shipper's tms? How does that integration work? Where does it from? Like a workflow perspective? Is this an added step in or is it like, hey, as soon as that hits your inbox, boom. It fires off the quote or anything like that. How does that look?
Yeah, so the general flows like let's say, all right, there's a shipper that wants a rate from you. They submit it into their TMS and to E2 open, they put the land and click the button. Whatever it is, it directly connects to tabby which will directly connect to your rate engines, pull back the rates, run it through that parameter set or logic tree and submit the rate straight back. So there's no human touch with that now you are putting your own logic in it. UI is very easy to use, so people with zero tech experience can use it right away, still support and all that. It's not eliminating the knowledge you have or that human touch. You're just putting your knowledge into a template format so you can quote a lot more.
One example we have that I absolutely love is like we have one particular customer. They're automating 130 shippers and they have one person that manages all the logic, all the data and it takes them 30 minutes a day. So they have one person going out 130 high volume shippers and one person's doing it in 30 minutes.
Walk me through that a little bit there. Because you know, like as that's something that I don't want to say, it's a struggle of ours, but getting back to shippers in a timely like we try and be fast, right? Like we think that we're fast out there, but like we're not 130 shippers fast like that, like you're describing right there is this like what does that look like? You know, is it you guys are integrating with multiple different shipper tmss platforms. It's just following your inbox, essentially scraping that and it's just firing off rates left and right that way.
Yeah. So it's not even touching really the inbox. So we're interacting with over 65 different shipper TMSS or platforms. So yeah, I think we're pulling for that particular customer. They have shippers on E2, they have shippers on Transplant, Super Freight, on Navistare, Manhattan, all of those. And so those requests come to Tabby follows the same process, rate, engine logic tree for every single shipper they have. So they're all quoting them out differently. So they're all taking their own knowledge. They have all that just from working with them and submitting the rates back.
Okay, and now so where. So then E2 open in this gym, this is coming in. As you know, you guys are the API connection that's running between, you know, Tabby and the shipper's TMS, right?
Correct. So E2 open is the shipper's TMS and you got 225ish shippers that are using that platform. So whichever of those that you're connected with through Tabby, it just works, right? They, they send a rate request or they post a load to the spot board. Tabby picks that up and it in it. Well, it does two things. It determines first of all, should you bid because like you mentioned, not every piece of freight that's out there is a good fit for what your business is.
Correct.
And then either places a bid or lets you know that it didn't bid. And here's why. And, and I love that for small business because you can have the confidence, right, that it did its job, something came in, it took a look at it either placed the bid automatically or it lets, you know, I didn't bid. You know, it might be some gnarly five stop, you know, nightmare of a shipment that you maybe don't want the technology to take care of. You want a person to look at that and say, okay, I'm going to use my tribal knowledge and I'm going to say, you know, I've got to calculate and stop charges and I've got to, you know, I've got to figure out the timing and the delays that I'm going to see on site and all of that.
You know, that makes you good at your job. Let Tabby do the easy ones. The easy one pick one drop. It's a lane you run all the time. You've got good pricing on it. Let it go ahead and do those kind of things and let a person take a look at those gnarly ones. Yeah.
Like there's stuff to hand on, there's messy stuff. Like you shouldn't automate everything.
Yeah. Because like, I mean, just here's a prime example for my book of business right now. Right. Like I have a customer who has. It's like a 50 split. It's either a 26 foot box truck or it's a one pick three drop, 53 foot drive in. Right. So it's like what you guys are describing here is this delineates the difference between the quote that's coming in where it's like, hey, boom, this is outside of your realm. Humans should go in and look at this one as opposed to, you know, the one pick, one drop, the, you know, like this, the setting. I, I don't ever want to call anything set it and forget it. But that's essentially what that is, right? The Atlanta to Chicago's that are always 20000 pounds, always one pick, one drop.
That is where the real bread and butter of this tool is going to come in. And then if it's like full truckload foot truckload, boom. This is an ltl boom. It'll flag the sales rep. Sales rep go in there and look at this, make sure the dimensions are legit before it goes and spits out a rate. Is that what I'm understanding?
Yes, there's that there's like two folds, like two levels. So one you're going to be able to quote a lot more essentially. So with our partnership we have access some data to where we can see. All right, you give us permission, we can go in and see how many spot quotes he's had available in the last 12 months. How many respond to when loss percentages. The shippers are all of that. And so across the entire board of the entire e2open network, which helped connect it. E2open used to be Blue Jay. A lot of people know it by Blue jay still. But YouTube bought Blue Jay across the entire network. If brokers are manually quoting, they only respond to 10 of spot quotes, probably less.
Whenever I say that, people get really angry and say it's not true, all that, but totally true the way it is. Our customers on average respond to 78% and so that missing 22% is not lost. It was. They put logic in place. It's freight they didn't want touch. They want to mainly do any of that. So quoting more. But then even more important is the data piece. So we have really extensive reporting dashboards. We have just released a GENBI reporting. We just ask Tabby a question. It'll auto generate reports for you. So it makes it really easy. And so we're capturing all these data points and so you'll know exactly how your team's quoting what they're responding to. How's the math? Mathing all of that fun stuff. And you have an exact. You'll know exactly what your customer shipper network is.
Yeah. And I like to advise, you know, brokers that we work with the loads that you don't win are probably more important from a data perspective than the ones you do. Obviously you need to win the loads and run your business. But in order to be more successful in the future, you need to see those trends. You know, I've bid on this lane 17 times and I never win. Maybe I need to make an adjustment to the pricing strategy or maybe I need to talk to my customer about, you know, why are you posting these loads and I'm, why am I not winning? Those kind of questions. And if you're not capturing that data on a daily basis, you're not going to see those trends, you're not going to get those insights to help you grow. And that's really where it helps.
Yeah, I mean from my perspective, I like that's something that we ask for all the time from a feedback loop. Right. Like I want to know like, how are my rates stacking up? Because like again, if this is Atlanta, Georgia to Minneapolis or Chicago and there's an asset player that's on that lane, my rates are going to be ridiculously high compared to that asset player that just needs, you know, they're repositioning their fleet back to wherever it is. Right. And I always look at it as how am I allocating my time as a small business? How am I allocating my time? What I want to bid on the right freight. And you know these people who are sitting here saying like, oh, all freight's good for it. You're lying to yourself.
I want to bid on the freight that I know that we're going to be competitive on that we can really fit in. Because some of these larger shippers or even mid sized shippers that are out there, they want you one to two lanes because they have their established network that is out there. And then from a workflow perspective, I don't want to get caught up in bidding and bidding, which is great if we're not winning anything. Because the more time that I spend on bidding on freight that I'm not going to win for everything that we just described, that's costing me time from developing new business. This is the realities of a startup, you guys. Unlike what you see on social media, I actually bid on freight. I prospect freight. I do this every single day.
That is a major, I don't even know if gum up's the right word to use. But like in our day to day is, it's like, it's great when we're bidding on freight, but if we're not competitive on the prices, taking time away from us developing new business.
Yeah. And I think some of the insights you get from that data can help you with that. Right. First of all, you can let it do let the Tabby do some of that work. So it's not eating your time bidding on freight that you may or may not win. It's always, it's always a gamble. But you want to go after the freight that you're good at, the freight that you have a good chance to win. The other thing it can point out is maybe I'm not competitive on that lane. Maybe I needed to find some new carriers on that lane so that I can be more competitive. Right. And it can help you with those kind of insights as well. Or the flip side of that, I'm winning this lane all the time.
How am I going to be able to service this unless I go out and find some more capacity?
Yeah, 100 and it's, and you're spot on, Chris. Like there's places for it, there's certain customers you should, there's certain customers you shouldn't. And so it's finding the right ones. We help guide that. Earlier this week, our CEO just recorded a podcast with one of our customers going to get released here in a week or two. They're a large enterprise account. They're doing about 4 billion in revenue a year. And in 2024, Tabby won them $100 million in freight without a single person touching the quoting.
Oh, wow, that's it.
You gotta love freight. That just happens while you're asleep or while you're at lunch or whatever you come back from lunch and oh, I won three loads.
Yeah.
In their case, probably 50 more loads at that volume. But yeah, you gotta love that.
That's the beauty with, it's like, all right, they're a four billion dollar company, they're big, they have lots of people, they have, you know, great analysts, all those fun stuff. But now with what E2 and Tabby worked out together, a one man show can now have access to that. Yes, well, one man show win $100 million of rate. No, it's not gonna happen. Just because you don't have the customer base. Just because it's not there. But there's probably one or two shippers that would work really well.
Yeah, no, and that's exactly it. Right? Is, you know, because we're always looking at, you know, the next 24 months. Right. Like I don't sit here and think in today's terms, I operate in today, but I'm always planning of all right, what if or when we onboard that enterprise level shipper. How do I build up my team around it, what is going on. But then again, how do we capture all of those opportunities that are coming in? And you know, it's as you're building something up and you know you're getting through the workflow aspect of things because everybody gets bogged down in their busy work, right. I have a laundry list of stuff that I could be doing besides developing new business, but I need to be developing new business like 90% of my time, right.
And, and I need something working for me in the background. And like I just literally put a post out about this yesterday. I, I am going to heavily invest in automation as I grow and scale my company up because I don't know of any other, because I'm looking for that 15x return on my time, right. Like I need to turn 120 hours of possible work into like a 40, 50 hour standard work week when you can actually get people on the phone. Ladies and gentlemen, I know some of you like to work 24 7, 365 but the reality is your prospects aren't. So how do I keep my time focused on those roles? And I like this is what I love about this stuff though is it's like this works behind the scenes, this keeps you bidding on stuff.
You know, when you're dealing with one of your customers right now and three more quotes come in from another customer, this spits out those prices so you're not half assing each of your tasks.
Right on. And it also makes the ROI calculation pretty easy, right? You know the fixed cost that you're going to get from Tabby and you can calculate with your margins how many loads do I need to win in order to pay for itself and how many loads do I need to win to 5x what I'm paying for it. And I hope that we've worked together to get you a price point where that's a pretty low number, where it's a few loads a week over the course of a year and it pays for itself and then you get to take those gains in productivity like you said, focus on those customer issues instead.
So is this one of those things that it depends on the volume of loads you're bidding on in a month from a fee perspective? I mean obviously you don't have to come out here and say it's only going to cost you X. But I think like that's one thing that some people get surprised in is they're like, oh hey, the more freight I win and bid Via this. It actually cost me exponentially more money. So why would I go after that business?
Yeah. What we, that's exactly the thing that we've tried to address. In this new pricing model where you're working with one shipper, you can quote as much as you want. Right. If you're working with one shipper, you can win as much as you want. And I think that's going to open the door for a lot of these small and medium sized businesses to take advantage of the thing. Now at the enterprise level. Absolutely. E2 Open has a pricing scale based on your load volume. But we wanted to lower that barrier of entry and hopefully what happens over time is you're successful with that one customer that you're working with and you're able to grow that business into 2, 3, 4, get into that enterprise level.
But you know, being partnered with Dan and Tabby over the last couple of years, we've really recognized the fact that we kind of had a high bar for some companies that were interested, could probably have made use of the technology but the cost to get in was just too high. So you know, hopefully we've lowered that bar and I think it opens the door for agents. And I got to tell you, one of the funniest things, working with Dan over the years, I didn't realize that freight agents were still a thing. Chris. Oh, really had gone away and Dan was like, absolutely not. They're out there all over the place. Yeah. Because from where we sit as a tms, a carrier is a carrier. We don't know if they have an agency model or if they're a brokerage or asset based. We really just.
It's a SCAT code to us. Right? Yeah. But opening the door to those agents I think is going to be huge.
Yeah. And, and you know, again. Oh, sorry Dan, did you have something.
Oh yeah. Not to say echoing a Jim is so at least on the tabby side it's a flat, flat monthly cost. So it doesn't matter if you're doing one quote or a hundred thousand quotes, it's a flat monthly cost. We used to do transactional a few years back.
Yeah.
And it confused people. You didn't know what your bill was going to be. And honestly you don't really have control. Totally. Like if a shipper's pulling right on our system, like it's hitting you, but maybe you don't want to quote it, which we have stops that you don't respond to those. But that's still a transaction, so we just eliminate it and just a flat monthly cost. So you know exactly what the bill is going to be every single month. And it's easier to do the roi, like, all right, will I win an extra two loads this month then? It more than pays for itself.
Yeah, I feel like, because this is a very real conversation in every single business. Is. Is do we invest in people or technology at that point? Right. And if you're looking at it, and I mean, because that is like, I. I've been brokering for, you know, going on 15 years essentially, at this point, and I'm like, I'm better than that. I have all this tribal knowledge in my head. Why would I invest in more technology where I'm losing money as a business at this point? Right. So it is really balancing that out as you grow and scale. And I mean, I talk about this often. I want to invest in all the right technology because again, this is number 88 that I've said this. Chris Jolly will never have cap commissions for his sales reps inside of his freight brokerage.
Just throwing that out there. But I want to pair my people with the tech to where it can increase their outputs. But I also need to allocate the right amount of money inside of my P and L every single month to where it's worth it. And it's like it is that. Is it. Is it better to invest in more people or is it better to invest in more technology and have more tech and less people to run? Lean inside of your organization.
It's. It's an investment and you know it will over time reduce your transaction costs, increases load volume, and not add headcounts. But it's an investment. So you have to find the right spot and when's the right time to do it?
Yeah, yeah.
The other thing that drives that, Chris, is like Dan mentioned earlier, we have shippers now that are sort of requiring this as almost table stakes to be able to be in their network at all. And, you know, if you want to start in their spot market and hope to grow that into contract freight, you're going to have it automated in order to play in the spot market and be successful. And it doesn't do you any good to bid on 6% of what they put out there, because eventually they're going to see that and they're just going to drop you because of your response rate, especially compared to other brokerages that are using the technology and bidding on 70 plus percent of what's out there. They're going to want to keep those in there.
Yeah, there's, you know, I think there's a desire for a lot of individuals to get that enterprise level customer and they're great, don't get me wrong. But it's not the same. Like not every single customer is the exact same out there. And you, what you realize is the larger the volume, the more and more requirements that there are.
Right.
Like there's people like you gotta have a 98 acceptance rate on some of these, you know, on the RFQs, you gotta be bidding on 80 to 85% of all of their spot market freight. Or like Jim said, they will just kick you out because if you don't, there's literally a thousand other brokers who are calling these guys at any given time who have the capital to give them all the credit they need to operate their freight and all of this stuff. These are very real parameters out there.
And again, Jim, I'm glad you brought that up because that's another point that I talk about as you're building and scaling your operation about prospecting the right customers and if you don't have the capital to invest in that, I'm not saying don't go after people, but know what you're getting yourself into if you cross the finish line or sit down at that table with that prospect and you can't have sticker shock if somebody comes to you and they're like, hey, this is a complete hypothetical example. Yeah, it's great, Chris, that you want to move our freight, but it costs at least $10,000 a month just in technology just to bid on our stuff. Essentially. Right, hypothetical example, but like the larger the shipper, the more of a reality that there is a cost associated with that before you even move one shipment.
And with the indications that we may be coming out of this freight recession, the time to get that technology is now. So that you're prepared for those conversations because you know, shippers are going to be looking for new providers. There are going to be able to take a look at rates and say, oh, they're on the rise. Maybe I need to expand my network and diversify because capacity is going to get tighter. The smart ones are going to be doing that soon and you want to be prepared.
Yeah, like I say all the time, you guys do not pay attention to what's going on out there. Pay attention to your business, your outputs. Because you know, like I just saw somebody post about this morning that she just grossed her first million dollars in new business over a down freight market. We've grown too, in that time frame as well. So people are onboarding providers all the time. Where are you going to be, though? Like, and I think this is perfect time of year to say this because, you know, everybody's got the new year, new me stuff coming out. Well, I tell you what, you guys, I'm making sales calls literally every single day right now, as I have for the last six months.
If you haven't sold or picked up the phone in the last six months, where are you going to become January 6th? Because let's be honest, nobody's working the second or the third that Thursday or Friday. I'll just call it what it is because again, I live in reality. You're not just going to miraculously pick up the phone January 6th and get all of this business right away. You need to start looking into this today. You need to prepare for this stuff as we're going in because this is a very real thing. What if it does flip overnight? Seemingly, where are you going to be? Because then the train's already gone. The train's already left the station and you're going to be sitting there, what, another three years? That's what you're gonna wait. Are you gonna survive another three years? I love it.
I appreciate you guys. I'm, I'm amped up. I'm ready to, I was cold calling before we did the show today and I'm gonna, I'm ready to go pick up the phone and start hammering it out again because I need customers after this. How does anybody, Jim, how does anybody reach out to you guys to find out more about what you guys going out at e2open?
Yeah. So you can hit your, our website, e2open.com number two. Not don't spell it out or you can email me directly. Jim.sanborn2open.com Happy to talk to anybody and answer questions even if they're not interested in being a customer.
I appreciate it. And Dan was just on the show a couple about a month ago now at this point. But again, I love having Dan come on because I love what him and his team are doing over there at Tabby. And really I'm always telling Dan, before went live today, you guys, I was even when my company's doing 100 plus million dollars a year, I am always going to talk about the tactics to get you to that point because it's easy to sit back and envision what you'll do at that level. But if you're not doing the daily tasks today to get to that level, it's just going to pass you by. I mean, I spent a lot of my time out there.
So that's why we're always going to continue to bring this out there and talk about the small to mid sized company, because I'm a bootstrap founder, ladies and gentlemen. But that will be it for today. We will be back tomorrow. We got more guests coming on this week because we do not slow down on the Freight Coach podcast. But as always, you guys, I appreciate you guys. I love you guys and we'll be talking to you soon.
Thanks, Chris.
Yeah, we're.