Came back with a bank window down yelling now money anything hey oh Got the foot on the gas pedal to the metal when I'm get to the bag hey Got the foot on the gas pedal to the metal when the lane moving fast hey Let them all cross if they hate then let them make a bigger balls hey.
What is up ladies and gentlemen? We are back. We are live. It is a free coach podcast, the top podcast in transportation coming to you guys every single weekday, 8:30am 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. 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 Friday, everybody. We got a very special show for you guys here today. Intermodal Drage. All of that stuff, it's a whole other side of the industry, you guys. There's a lot of stuff going on in that side of the industry with, you know, in regards to tariffs and everything else, market shifts. And I figure who better to bring on this show than Mr. Jason Hilson back today to talk about all of this.
So, Jason, thank you so much for joining me.
Pleasure to be here.
No, man, I, Dude, I think we've met for the first time. What was it 2021 at, in Austin?
It might be, yeah. Tia. Long time ago.
Yeah, yeah.
Huh.
Dude, it has been a long time. And you've been at it now for a while. I mean, before we get into any of that stuff, man, how'd you get your start in freight? Like, what brought you into the transportation industry, Jason?
Crazy enough. I got a degree in this from Western Illinois University, so I, I, I wanted to be in it.
Oh, that's fun. So you went to college to, for supply chain?
Yeah, yeah, I got a degree in it and I've been, I enjoyed it all the time. I just love it.
So did you start off working at like on the drage and intermodal side of things or, and have you always worked on that?
Yeah, that's been my thing since college. I out of college got hired at a company that had an intermodal contract and it was a company called Gen X here in Chicago and I was hired to do dispatch. So I started out trying to find drage truckers to move containers and back then it was rail trailers. It wasn't really even containers at that time.
That's okay, dude. So what's been the evil, what's been the biggest evolution that you've seen, do you think on, you know, from your side of the industry there over your career, what's been the biggest change that has happened?
I would say just back then it was 45 and 48 foot rail trailers and then it went to 48 foot size containers and that the Evolution went to 53 foot size containers for domestic intermodal. And when I started my company like my job out of college, it was really before the Internet. And in 1999 I was like this Internet thing might stick around and my short story is I wished I had. There was a website that listed the container truckers, you know, not just any trucker, but the ones that specialized in pulling containers. That's what my job was. And decided to make a website, two websites out of it.
And so with having all of that. So like let's talk about what you're doing now with your company. Right, so it's like you have two different. Does it list off all of the specific carriers and it's based on what they're actually doing, like what equipment they're pulling, what they run and all of that.
Yeah, for the drayage side. Yeah, yeah. Drayish.com is that phone book directory. Because the thing with containers is you've got lead time. Like when I, we did some broke over the road, you know, drive and flatbed brokerage at this company too back in the 90s. So you know, that was more spot market stuff, you know, hey, can you find a truck? You go on DAT truck stop, you find a truck. Whereas containers, you've got more lead time and containers are more specialized. So like you know, when a container, an international container leaves China, you've got weeks ahead of time to plan the drayage. So you got much more lead time for domestic intermodal, you know, the 53 foot size, you've got lead time too. Not, you know, usually, hopefully you have some lead time.
But traditionally with intermodal longer transit time, you got longer time to plan the pickup and you got longer time to plan the delivery of the container.
Mm.
So the load match sides the posting board. You know, for that spot market dray stuff. Drays.com is the directory. So if you got time you go to the Dray's directory, find the trucks, trucking companies, you know, which terminals they serve, what size containers they pull. And so that's why there's two different websites.
So you're so andrews.com it lists off what ports they're out of, what equipments they'll pull. So if they're, if they do refrigerated or not or bulk or anything like that, it lists all of their services out there.
Yeah, that's the Dray's directory side, you know because if you're a trucking company, you want to specialize in a particular container type. You know, sometimes you're a trucking, a drayage company and you'll, you want to dry only the railroad side, the 53 foot size containers. And then some trucking companies like to do, you know, ocean port stuff and they want to only do refrigerated or the flat racks or open tops or ISO tanks.
How important is it do you think for you know, maybe from the brokerage side of it to really kind of. I, I look at it like I'm all about the niche, right? Like we do open deck heavy haul. That that's primarily all I do inside of my brokerage and you know, and I do that because like there is so much opportunity that's out there. I truly believe in a singular sales focus from a business development perspective. And then once you're in the door with somebody that's when you can go in and kind of plant your roots in there and you know, possibly work other modes and everything else that come along with it. But if you're going to go out there and I look at it like this.
The problem I feel like a lot of individuals come up against is they're like oh this drage opportunities about I'm going to go out there and I'm going to work and I'm going to quote all this work out to my customer. And then you start calling these carriers who are, you know, the ones actually doing the work and they're like dude, you're full of. And then they just hang up on you because you're calling these guys and you're trying to like do something that they're like those guys are the subject matter experts. So it's like how much do you like when you're out there talking to, you know, other people on that side of it where it's just like they just wish individuals actually understood what they were getting themselves into.
If you're going to go out there and bid any type at all, whether It's a standard 53 foot drive in or a, you know, a refrigerated container, for example, how much is it in the details that a lot of these individuals, they just do not know what they're getting themselves into?
Yeah. Oh, you're spot on, Chris. I mean that's why as a broker, you know, we're paid to be experts in moving something, you know, so if you're, if you better under, if you understand, you know, the flatbed refrigerated ltl air cargo bulk stuff containers, like if you're, if you specialize, that's how you make money and if you're better aware or knowledgeable on moving containers, you can make some good money being a drayage broker because you know, companies, shippers, don't have time to specialize in all those segments. You know, they're hiring us or you as a broker because you know, the industry, you know the specialties of moving something and you can, you know, help them get it moved at a reasonable price and take care of problems.
Yeah, I, I kind of look at it as, you know, I, I think it paralysis analysis is a major obstacle for a lot of individuals to kind of get over. Right. Because it's like you look at some of the largest providers in the industry on any side of the fence and you know, people are like, oh well if they're doing it, we have to do it as well. And, and I just couldn't see, I, to me that you couldn't be further from the truth out there. If you're, if you're going out there to try and develop a book of business to become a subject matter expert. I don't know why you're trying to compete with some of the largest providers in the industry because you can't.
They could beat you on price, they can beat you on tech, they can beat you on a lot of find out where they can't beat you though. You know, because it's like just because they offer everything doesn't mean they're good at everything. And I feel like that's why. It's like because you're going out there and building a business, you know, sticking inside of that niche. I mean, is that kind of why you stay in the drage and intermodal side of things, Jason, as opposed to like going out and doing that for literally every single trailer type in the United States.
Yeah, spot on. Like I, I want our websites, our team's small. There's only four of us. There's only 480. There's 490, 000 drivers that do drage in the United States. There's about 12,900 companies. So it is a very niche Marketplace. But those 12, you know, those 13,000 Drayage trucking companies move millions of containers a year. So it's really cool to be a subject matter expert in your line of business. You know, whatever segment of cargo that you're moving, you know, that's how we make money. Because we're specialists, we're experts and we get it done. Get it done. Right. And I like to be that place where people can find those carriers.
Yeah, no, I'm really right there with you, Jason. I look at it as, you know, the more niche down you can get inside of this industry, you know, is the better off that you're going to because I mean I could so like you have your. Is it like your kind of state of the industry coming up next week?
Yeah, next weekend here in Chicago on Wednesday. We, we're sold out at 300 people so far. So yeah, I do an industry update. I go on. There's a lot of stuff going on like to get in the niche of how specialized Drayage is. You know there's domestic 53 foot drayage, there's international ocean box drage. Amongst those two segments there's contract drayage and spot market Drayage. And I go over like the mergers, acquisitions who went in and out of business for Drayage Trucking. And I talk about business opportunities around Chicago and talk about the changes in the 53 foot container fleets. That's what I do. And it's pretty fun because you know, it's a really neat marketplace.
Yeah.
In my opinion.
Yeah, no, absolutely. And then so like with Chicago kind of being the hub, I mean correct me if I'm wrong again, I don't do a lot of intermodal stuff. But isn't Chicago like the main intermodal hub in the United States of America?
Yeah, for domestic and international boxes, for ocean boxes, you know, you've got such a huge segment in la Long beach for port Drayage, there's a big segment for rail drayage in la Long beach and Then New York, New Jersey, same thing. But Chicago's neat because it's, you know, it's all railroad stuff but it's really segmented into the containers, ocean containers that arrive on the railroad and the domestic containers, 53 book containers. So yeah, it's a, that was huge for intermodal.
So are you seeing more and if any of this is at your talk and you don't want to, you know, talk about any of this stuff early, are you seeing more of a trend towards spot freight inside of drage this year? Are people trying to see, you know, how can we, you know, maybe save on some of that transportation costs or is the intermodal and drage side primarily contract and that's where people kind of like to stay and then are they, you know, multi year contracts at.
That point on the domestic 53 foot intermodal for sure, most of its contract intermodal, you know, intermodal is really good. Domestic 53 foot intermodal is really good at high volume lanes, long distance, you know, the JB Hunts Hub Group, SCG Logistics, Schneider Swift, you know, those are all big companies. You know, there's about 380,053 foot containers in the marketplace. And so a lot of those, that, 380,053 foot containers, you know, it's a contractual high volume lanes that they're moving intermodal, they're spot market 53 foot intermodal. But for the broker, where you make money is brokering that import ocean container, Drage, you know, that's where somebody's importing something from China or Europe.
You know, they don't want to mess around with all the complexities of the chassis and notifications and clearance and they hire a drayage broker to find that drayage trucker to pull the container out of the port, the ocean container. So that's how you make money on the spot market. You know, one or two containers and you know, you make a couple hundred bucks depending on how far it gets drayed. The further the dray, it's round trip. So that's round trip money. So. So every little bit you go further out on an import dray, it's more and more money because of the round trip.
Yeah, we, you know, we did a pretty sizable amount of drayage work last fall for an existing customers of ours. And I, I would say that was, it's, I think it's the most cut and dry mode that's out there because they're like with all the accessorial schedules and everything else. Like when it comes down to, you know, pre poll detention, any of that stuff, drop trailer storage, any of that stuff, I liked it because it was very cut and dry. Right. Like there is no variable that comes with it. You have, you literally have four days to pull it from the port. You got four days to get it back to the port. Otherwise you're going to get absolutely hit with fees. And there is unapologetic. Here you go, here's your bill. And it's. It's kind of wild to me. Right.
And that's one of those modes that I would highly recommend you do not get into unless you are very well versed in how those things go. Because I feel like a lot of people, you're going to get yourself in trouble when you go in cheap no matter what. But I feel like Drage is one of those things because people are going to look at it as, you know. And I'm just taking this, Jason, from the standpoint of like, you've only moved like local drive and work and you're like, oh, it's 100 miles. We normally pay, you know, 300 bucks or something like that, for example. Then you go in there and you think Drage is going to be the exact same thing. And then you go in and you bid this stuff.
And you know, sometimes customers are like, oh, that sounds like a really great rate. If you think you can do it, go pick all that stuff up. And then it's like you might break even on the line haul, for example. But then there's chassis fees, there's storage fees, there's pre polls, there's all of that stuff that comes along with it. And then all of a sudden you're looking, you're like, I'm going to lose $700 on this one container. Because I thought everything was going to be like a drive in load.
Yeah, you're spot on. You know the terms.
Yeah, I'm not just looks here, Jason. I actually work.
That's awesome. You know, enough to what you're getting into. But you know, I wouldn't, I would say to some, like when I see you at tia, you know, I tell the, the traditional dry van brokers out there that, you know, if you have enough time and patience, I mean, you can learn another segment to broker, you know, so I mean, if you, if there's somebody. I always like to tell when I train younger folks getting in the business, it's like you just got to picture yourself like what the truck Drivers actually got to do. When you're talking on the phone or emailing, you know, when you're talking to a shipper, you got to envision like what is. I had a, I had a complaint in Minneapolis. This cup.
This broker got hired to find drayage trucks to load 40 foot containers export of automobile parts. Turns out, you know, it was a scrap yard in Wisconsin in the wintertime and the truck had, the driver had to bring containers to get loaded for export. And it was scrap motors going to China for scrap. And it's wintertime and it thawed, driver got stuck. So it's like. So they quoted this business and all these other things happened. And my word of advice is like, whatever your broker, you got a picture in your head, do the Google Earth search, you know, see what you're actually getting involved with before you get taken to the cleaners on quoting something low. And then you get involved with it. You're like, wait a second, this is what I had not envisioned.
Yeah, I look at it like this too, Jason. Like regardless of the mode. And I'm right there with you, right? Like, I think I get misinterpreted when I say only sell one thing. You know, like I am more of like when you're out there trying to develop a book of business, it's easier to sell one mode than say you can do everything. I feel like you can have a more in depth conversation. And then after the fact, after you get comfortable with somebody, if they come to you with additional opportunities, of course, don't turn them away if you think if you know you can do it right. But here's where like you brought up there, Jason, where people get themselves in trouble is they say yes way too fast. They do not actually and ask questions, you know, like when I'm.
When I'm speaking to a prospect of mine, I want to ask as much as I possibly can with them on the phone while we're talking to get all of this information out. Because I hate surprises. I don't know about you, some people enjoy them. I hate surprise parties. I hate all that stuff, man. I like having all the facts in front of me before we go in and do a lot of that. And I think like that's just where people will always find themselves in trouble is like. And I get it right? I cold call shippers every single day. I've already cold called 35 of them today. I know how lonely it is out there, how much the rejection stings. I get all of that.
But I feel like you cannot let desperation creep in when somebody wants to get you over the goal line to. You can just throw a rate out there. And then you don't ask any qualifying questions about how the operation actually is supposed to look. Because money and revenue seem great in Siri when you don't have any. But then I think after a while you come to realize like not all revenue is good revenue and you need to kind of prepare yourself for the future by just taking a couple of seconds and I. And it does break down to a couple of seconds to ask some qualifying questions about how the operation actually looks.
Yeah. Yeah. Well, good advice. That really is.
So obviously Jason, tariffs are all over the news right now. Are you hearing anything where you know, people are looking to actively ship? I mean and I think like there's a lot to kind of come about here, right? Like there's a lot. Like I just said this on the show the other day. One of my biggest complaints about the current administration is like I feel like enough with the flip flopping already. Right. If we're going to do something, commit to it. Because there's a lot of small businesses that are hanging on the fringe of making a purchasing decision about where they're going to get their raw materials from. And it' is. It could potentially be catastrophic for some of these individuals out there. Right. I think like it's a very.
And if you haven't ever researched, you know, cash flow in small businesses, that's like 90% of the reason why small businesses fail is because of cash flow problems and everything else. And when you're out there manufacturing goods in purchasing inventory is a very big thing out there. So are you seeing or you know, in your experience, Jason, how much of the intermodal and drage market is going to be on the. On on the cusp of potentially exploding in volume? Because I just think, you know, Canada for example, how many people are now going to be like no, let's just put that on the rail and rail that material down to the states as opposed to just sending out multiple 53 foot dry vans because we got to get more bang for our buck.
And if we're going to pay a 50% tariff on something, I'd rather do it and load the rail car as much as we physically possibly can with.
It'S possible it with domestic intermodal it's so subjective to the. The price of over the road. And this is the, this is what drives like our intermodal world crazy is that dry van rates, if there's less Stuff moving dry van rates come down and that's more, that's approaching the cost of 53 foot intermodal. So it's. So if the total volumes decline then intermodal pricing has to come down too. And it's not as you know sensitive to shocks in the system. I mean intermodal pricing is pretty I would say for the most part steady compared to drive and spot market. So if the dry van rates come down I don't see a lot of shift going back to intermodal drive and rates stay up cross border intra United States, you know then intermodal is going to stay about the same.
If fuel goes up, that increases drive and more than it does intermodal. So the most sensitive thing for intermodal domestic pricing is the fuel. If the price of fuel goes up, intermodal becomes way more attractive for longer haul.
Well I think you know it is good to note that diesel is Its like four year low right now out there. 358 a gallon nationwide. If you guys want I do a weekly fuel report on my newsletter which drops on every Wednesday you guys. But you can also just go to the EIA dot. That's where we pull all the data from. All of that stuff is publicly listed out there. And again like these are very good talking points for a lot of your customers and prospects as you're going out there. I mean Robert Calton said here he's just like do you believe brokers are booking more freight from international load boards and network carriers only posting on public load boards last minute if they cannot get the load covered?
And then he's saying that this means carriers on spot markets are seeing less freight than is actually available. And it says future show how can spot market carriers find freight on load boards and what special guest could we bring on? But no, it's a very real thing. Right? What is that going to do? You know like when you're talking intermodal is like does intermodal really have a spot market at all or is it more long term contract where you know like you were saying like hey that like fuel isn't that obviously a factor in that? So do you see more long term pricing from the intermodal standpoint than any like real last minute spot mark? Because I like I've moved intermodal freight before. I don't know if there's ever been a last minute get me a rail car in the next 30 minutes.
Well there is definitely spot market 53 foot intermodal stuff I see it every day on the load match board. You know, they're trying to find the empty containers in some locations. You know, Intermodal gets out of balance. There'll be, you know, peak season LA, Long Beach, California. You can't find a 53 foot container. It's a premium. And so that's a big spot market surcharge in the peak season, you know, 100, 200, sometimes $300 on top of the contract rate, you know, and then now when things slow down then you know, then you get deficits in, you know, places like Chicago or Dallas and you can't find 53 foot containers and you're not willing to pay a premium because the dry van rates, you know, in line with Intermodal. So there's the vast majority. 53 foot intermodal does move contract with those big fleet owners.
But on the brokerage side, the Intermodal Marketing company or IMC is what it's called. You know, there's, there is spot market opportunity for sure and sometimes you get a killer deal like if there's surplus 53 foot containers in a certain area of the country like the east coast. I mean you can get a killer rate going west on a 53 foot intermodal and make several hundred dollars more going that way versus van. So if you're aware of the spot marketplace pricing and your shipper is open to a few extra days transit to save, you know, three, four hundred bucks, you can make some good money knowing that pricing in the spot market for Intermodal.
And I mean I think that's key right there, right. And I feel like, you know, if you're looking out, you know, projecting, you know, another mode, I feel like, you know, if you' or you're moving dry van cross country or you know, anything over a thousand miles or something like that, be looking into the intermodal side of things as well. Because like if your customer's fine with it, right? Like if there is a first come, first serve shipper and receiver that's out there, they don't necessarily, there is no real must arrive by date from it. You will never beat an intermodal rate out there. Like that will always for the most part, right? Like I think if we're looking at it from a price per pound or a rate per mile basis, that's out there. If it's very tough to compete with that.
And, but that's also why you know, you all like I also look at it like Some people will load up a 53 foot van and then they'll throw it on a rail car.
Oh yeah, they don't tell a shipper and then they're like wait, why'd it take seven days to get to cross country? Eight days.
That's just one of those things. If you've been brokering long enough, it's only a matter of time, especially if you're in the drive in world. Jason, so what's, what should people be expecting this year from the market? What, what are you kind of anticipating on how things are going to progress? And you know, you can either say drage or intermodal here or.
Well, my specialty is that the intermodal domestic 53 foot intermodal space is really subjective to the dry van marketplace. So when drive in pricing goes up and there's more demand for dry van loads to be moved, intermodal follows along. So that part I think whatever the dry van rate marketplace does, intermodal follows. But for the drayage trucking, the import, export, drayage trucking side off the ports for ocean boxes, man, it's going to be I, it's so I've been doing this, you know, since 1995 and it's so unpredictable because for example, like I've got customers that export and the logs got like the logs for going to China have been like stopped. So if you're doing drage trucking and you're brokering logs going to China like your business has stopped, you got a reroute to the east coast or somewhere else, sell them elsewhere.
Grain, same thing import side, you know, if there's a particular segment, a commodity like the alcohol from Europe and there's going to be a tariff, they're going to shove as much in here as you can, you know, in the United States to beat a tariff. And so my point is that if you follow what's going to be tariff, they're going to try to pull in as much ahead of time as possible to avoid extra cost. And but if there's a solid tariff that takes effect, then that import segment is going to hold off as long as possible and the volumes will go down because if they think the tariffs going to be lifted, you're not going to ship from overseas. If you can avoid a tariff six months from now, you're going to hold off as long as you can.
So it's going to be crazy for the drage truckers, depending on what cargo or customers They're. That they handle.
Yeah. I think there's a lot kind of waiting in the whim this year, Jason, on it, I was alluding to earlier and what I was saying on my show earlier this week, you know, like, I'm not going to argue who's right and who's wrong with it with a tariff, you know, thing. But, like, at the end of the day, I just want that consistent. Like, if we're going to do something, like, let's commit to it so people can actually start planning out their year. Because you're right, you know, when we're talking a 25% increase, you know, again, I went to high. I went to public school, so a lot of my math is, you know, it's very subjective on it, but, like, that's a lot of money we're talking about there. Right? Like, that's a lot. That's a massive increase.
If you're going to go out there and if you're sourcing any of those goods that are potentially going to be affected by tariffs, and it could. There's a lot of negative that could come from it, you know, at the end of the day. And for me, it's just like, if we're going to do anything, like, let's just plant our flag, like, legitimately and just stay there for a bit instead of. I hate the flip flop. And I'm not going to sit here and say that it's a. I think the flip flop is very detrimental to the smaller businesses. Yes. Some of the larger companies can absorb that. They're not necessarily fretting anything.
But if you're looking at the small to the midsize operations that are out there, which is like 90% of the US economy is small business, it could be detrimental to a lot of them, and that's what I don't want to see happen.
Yeah, we're in a very unique environment right now, aren't we?
Oh, 100, Jason. But, well, hey, man, that. That's. That's gonna be it for the show, dude. It flew by. I appreciate you jumping on, and I know you said you're already sold out for your event, but is there any waiting list that people could possibly sign up for if they want to get into it?
Yeah, we've got people that'll back out Monday, Tuesday, next week. So if there's anybody, we'll try to fit in as much as we can. If people want to make the effort to learn about Intermodal and Dre is trucking, we'll try to fit them in.
Perfect. Jason, thank you so much for jumping on today, man. I really appreciate it. That is going to be it, ladies and gentlemen. If you guys want hit up Jason on social media. If you guys can't find him for whatever reason, DM me, I will gladly put you guys in contact with Jason but we're gonna have show people on next week as well. You guys, as always, but most importantly, if you got value, subscribe to the show. You guys, if you're feeling really ambitious after this one, which you should be, rank the show on itunes and Spotify because that's how your network's going to see value. Because if you saw value, chances are 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.
We don't, we don't have any cool outro Jason. Then we just.