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 then it push yourself in for a bumpy ride. I like to play hard but I work harder and I under the storm cause I'm built stronger.
What is up, ladies and gentlemen, we are back. We are live. It is a break. Coach morning show. The top morning show in transportation coming to you guys every single weekday 08:30 a.m. Pacific, 1030 Central to break down some industry headlines and most importantly, provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real 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 on this show because at the end of the day, you guys, I want to talk to the right individuals who have done 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. We got a guest that we are going to bring on here shortly, you guys. But just a couple of quick announcements. We got that weekly newsletter that we drop every single Wednesday drop yesterday where we just feature. Obviously, you guys, it's all industry insight in there because I'm a freight junkie at heart, but I'm not going to auto sign people up for it. So if you guys want to get in on this weekly newsletter, go to the freight coach.com dot. It will auto prompt you to law to register for that weekly newsletter. It drops every single Wednesday on there. And then yeah, you guys, we're going to bring our guests. Let's see. Carla is dead. Good morning. April Maroney. Good morning. Let's go.
Good to see you too. Steve Seca over on YouTube. Good to see you. Sonny Sharma. Happy Thursday. Orange shirt gang. Let's go. We go live on YouTube, you guys. I'm trying to get everybody to slowly migrate over to YouTube and watch it over there. But with that being said, you guys, I got a very special guest for you guys here today. We're going to pull up and talk about building a niche based business out there inside of the transportation industry. So I got Mister Colby Varley on the show. Colby, thank you so much for joining me.
Hey, Chris, good morning. Thanks for having me.
Now good. Hey, your favorite person, Ingrid's here. As well. Already. Good morning to you.
What.
What's been going on, man? Who, like, we, for starters, you guys. If you guys just want to come on my show, you just got to reach out and ask.
It's.
It's. It's a pretty simple process because Colby and I just got introduced here, like, literally last week, but, yeah, man. So for those people out there who don't know, you just do. Like, how'd you get your starting freight, man? What brought you in?
I got started right out of high school in 2010. I was a local driver and went from the driver's seat to the C suite. Now owner and managing partner here at advanced transportation, and we specialize in highly perishable food and produce. I mean, that's our niche.
And so what brought you. And Ingrid says good morning to you, by the way. What? So why produce? Like, what was it about that made you want to go out there and be like, all right, this is where I'm going to stick in and stay inside of here to build up my business?
Well, I'm born here in Salinas, California, so that's the salad bowl of the world. You know, you pick up any packaged salad or any leafy green, there's probably a 95% chance it came from Salinas. So it's literally the community that we live in. You know, you drive into work every day, and on both sides of you, both sides of the freeway are, you know, some sort of agricultural product being grown. So, you know, you see it from a dirt field to 05:00 a.m. When the harvest crews are out there getting ready to get started. So that's kind of, you know, obviously, I grew up in it. My dad still, to this day, is a produce broker.
Oh, wow.
But he specializes in just melons. All he does, cantaloupes, honeydews, and watermelons. But, you know, grew up kind of in a produce brokerage office. You know, everybody in this area is, you know, somehow probably connected to produce. Obviously, there's, you know, other industries and whatnot, but. And then got connected to a small LtL trucking company that serviced inner California. And I think that was really the fast track. I mean, if you've ever done Ltl freight, you know how difficult it is and how complex it is. And then got hooked up with Marshall Kipp. He was our CEO. He's now our Coo. But he and my dad drove truck together for the Tom Lang company back in the 1970s.
Oh, wow.
Kind of small world, you know, coming back around and Marshall just had a niche in the produce. You know, that's what he did. You know, we're going to be 40 years old in October and, you know, just tried to be the best at it, you know, not chase. You know, there's nothing wrong with flatbed or dry van or heavy haul or anything like that. But, you know, we took his business model and it's done really well.
I think that there's a lot of people who truly try and overcomplicate what they try and do, especially in freight brokerage. Right. Because there is a ton of opportunities that are out there. There really is, you know, full truckload ltl. Like, we just had Robert Calton on yesterday and, you know, we did a deep dive into the Ltl sector and everything. And, you know, I think that when people are kind of getting out and starting out, like, I talk about choosing a niche and just really getting to know something before you want to just branch out. Right. Because to me it doesn't make sense to. All right, I'm going to go do produce and then, oh, I'm going to go call this flatbed shipper and then, oh, this drive in guy. Nope, no.
I'm going to go do this ltl and I just don't think it is necessary. And then, especially if you want to get, everybody needs reps, right when they're first starting, you need reps. You need to say the same thing. You need to get comfortable in your pitch before you go outside of it. But I think what a lot of people realize, and, you know, today's freight market isn't like a normal freight market, right? Because there isn't a lot of opportunity like there has been in years past. So you really do need to niche down. You really do need to focus on a couple of core things because how else are you going to get noticed? But then you don't want to have your first shot called and then you're like, shit, how do I actually operate this load? What do I actually do here?
Yeah, absolutely. I mean, there's generalists and there's specialists and, you know, I think being a specialist is, you know, a much better option. Like you said, you know, you're going to get called for that shot and being able to take it confidently, know what you're doing. Unfortunately, in our business, I mean, things are going to go sideways. It's just part of the business. And knowing how to navigate that and, you know, mitigate that risk is just, it's huge. I mean, that's how you're gonna be successful.
Yeah, no, I agree with that, man. I think that really going in there and being able to properly identify what customers actually need because like, the fact that so many people just rely on, hey, let me quote your lanes is I think it's like, you know, it. I understand why people do it. Like, don't get me wrong, because there are customers out there who are price driven that, you know what? Yeah, they, yeah, let's see where your prices are at. I get the whole cut to the chase mentality, but like I want to develop partnerships, right? Like, I don't just want to move one of your truckloads one time, right? Like I want to build sustainable revenue that kind of goes up and down, you know, like goes with the market where my volume stays the same, my opportunities stay the same throughout there.
And I'm not constantly being assessed by who's cheaper, you know, who comes in less than that. I don't want that for my business long term. And I, I think that, you know, to initially cut through a lot of those beginning phases of your business, I think, you know, the specialty will help you get noticed a lot faster because very rarely, I mean, I would love to hear, man, when you're out there prospecting, your not like you being from there, you probably know everybody and especially your old man being in the industry as long as he has, you know, you have a lot better idea on how things go compared to most people who just pick up the phone and you're like, oh, hey, I want to call this shipper. They might have something.
Yeah, I mean, obviously we're here, right? So we're surrounded by a lot of these shippers, but we also service a lot of shippers, you know, in other areas that aren't in Salinas. But I think to your point, you know, no business is better than bad business. And, you know, the sustainability is key. And, you know, it's okay to, you know, tell somebody, hey, that's not going to work for me. You know, revenue is not driving the company. It's profits that are driving the company. And I do agree somewhat to your point of, you know, you do need to have those customers that you're quoting because those are reps, right? You're going to get reps by being able to quote people and that is part of it. But I totally agree with you.
You know, you're looking for a customer, you're not looking for an order and differentiating that and, you know, being transparent with that is a huge thing. I mean, I had a open conversation with a customer. They're not our biggest customer. And, you know, they just, they love to hammer me on the price, you know, and that's okay. That's their business model. And I went to them and said, hey, here's your profit percentage with us right now. Like, I'm sending you out of my system. You know, you are below what we need to turn a profit. And having that conversation, and it really kind of changed the attitude of how they, you know, they were really trying to beat me up to, okay, like, I understand, you know, you're quoting the same as everyone else. And it's like, yeah, because that's where the market is.
Like, yeah, you know, I can't do it cheaper than everyone else and, you know, run out of five or 3% profit margin. Like, it just doesn't work.
Yeah, no, I mean, you literally are going to have a very hard time staying in business if you try and operate at 5%. I mean, because some of those larger companies out there that can do it. I mean, I think that, you know, not enough, and this is my opinion, not enough emphasis is put on out there about some of the larger organizations that are out there because if you pay attention to any earnings calls, they're all down. They're all off. Right? Why? Why is that? You know, like, there might be a little podcast host with an orange shirt who talks that a lot of these large companies can go in and bare bones basic, like, bare bottom prices on stuff because they're preserving revenue over profit in these markets. Right? Like, this is just what has happened, at least in my experience.
This is what has happened out there. A lot of these large companies can go in and they can survive on 3% or 2% because they have the capital that's coming in. Like, they have. They will survive. They have the war chest. And I'm not knocking anybody's strategy on how they do this, but this is how it's done. This is how large companies survive during this time when. Because how else, because it's like, if it is that everybody's got to lower their price, they're going to be like, well, hell, I'm not going to sit at 7% if everybody else wants to fight at that. I'm just going to come in at 3%.
Yeah, it's going to suck for us in the intern, but we're going to have all the freight that we need to keep all of our trucks running and keep all of that stuff going. I just like. It's a very common thing. If you pay attention and again, pay attention to their earnings calls. You guys, this isn't speculation. Pay attention to their earnings calls. Read the articles on that. You will see. Pay attention to their financials. They're all losing money right now. You got to ask yourself, why? Why are they doing that?
Yeah, they're trying to keep it alive.
Yeah. They're keeping the revenue coming through. They're keeping their trucks moving. They're doing what they need to do to make sure other people can't go in there and underbid them and possibly take their volume away from them. It's. It's just common. It's just common practice here in the industry. And, you know, so how about this, man? One thing that's not talked a lot about, well, at least I don't see if anybody else talking about this is I want to become a broker choice for carriers. And when you're in a niche like this, man, you really have to have the carrier's best interest in mind as well in these situations, because there isn't a laundry list of carriers out there who will do produce where. You know what? Let's. Let's be honest, man. Sometimes you do have to wait.
You do have to wait some time. There. There's not a lot of people out there. So how do you manage that? Because, again, I hope you're paying Ingrid here because she is. She is all about you, man. And I, and I love seeing this, and I love Ingrid. And her saying Colby is literally hands on. And it makes a huge difference of his knowledge that he is a teacher as well. So how are you balancing that to become a broker or choice to trucking companies?
Yeah. So a lot of it's just referral based and just doing, you know, do what you're going to say you're going to do. Right. So it's like, if I got a carrier that's stuck at a shipper, I'll, we'll call, find out, hey, what's missing.
Right.
And it's not, oh, you're waiting on product. Okay, great. What am I waiting on? You know, do you have an ETA then going back, you know, getting with your sales person, getting with your customer? Hey, you're short on this. Can you sub it? Can you know, go without it? Can we get it tomorrow on the next truck, you know, doing everything you can in your power to make it as easy and streamlined as possible. I mean, I have a great team behind me. It's not just me yeah. You know, with the amount of volume that we do, I can't. I, you know, go over every single detail. I have a phenomenal team, you know, and we really emphasize the details. Right. You know, what's the appointment time? What are the hours? Is the pickup number good? Is the case count good?
What temperature on the, you know, reefer, all those details, verifying it up front to when the driver checks in. You know, it's not a. The pickup number is not good, right. Or it's loading at a different place. Like, all those little things add up and just really being on top of it. I mean, I'm. I'm freight, right? So it's like I wake up, you know, before 05:00 a.m. I'm already on it, you know, hey, what trucks do I know that are in the hot seat? Right? You're on it. What's going on? Where are they to, you know, leaving my guys at night notes, like, hey, I'm going to bed, but make sure xxx gets done.
Yeah.
You know, if it doesn't, call me, right? Like, I'll field the call at 02:00 a.m. Like, yeah, I might be grumpy, but I'm gonna field it and take care of it. And, you know, you. You might as well deal with it now, because if you don't, it's gonna fester, and then it's gonna be a big problem later. So I think that's a lot of it, just, you know, handling your business.
So why. Why is there longer wait times with produce shipments? And I'm not asking this question to, like, deter anybody from it, but, again, Mandy and everything that I do from a content perspective is education based, and I want people who are out there trying to develop a book of business to know what they're getting themselves into prior to getting their first load. And then you're like, you just earn the entire opportunity down right away.
So there's obviously a few factors, but, I mean, we'll just keep it simple. If it's just raw commodity type produce, right? Like heads of lettuce, we'll say. Or cauliflower. Nothing processed, just straight pick from the field. So that stuff is literally picked, packed, cooled, and shipped all in the same day. So if you're gonna show up at the cooler at 07:00 a.m. And think that your cauliflower is gonna be ready to go, it's not. I mean, if the order was in the day before and they have it on. On the floor, ready to go. Yeah, sure. But you know, if your customer saying, hey, I want fresh cut day of loaded on this truck, it's probably going to be an eight or 09:00 p.m. Load. And the reason for that is it's got to get picked. They pack it in the field.
It's boxed in the field. You know, sometimes these fields are not 2030 minutes away from the cooler. I mean, yeah, they could be 3 hours away. You know, they're down in south county or something like that. It's brought in, it's received, it's unloaded, then it's got a cool, they got a, you know, and I, there's all the commodities coming in at the same time, right? So it's not like it just gets offloaded off the field truck straight onto the hydro cooler, the pre cooler, and then there, and then, you know, something like cauliflower, you're looking at a four hour cool time just because it's so dense, okay. To get that heat out of it.
So then after it's cooled, it's got to get put into the cooler, it's got to be received, then, you know, okay, we have the product available and then, you know, depending if your appointment time or first come, first serve, all that stuff kind of plays into it. So that's just kind of the quick nitty gritty. But, you know, I always try and give the perspective of, you know, it's pick pack cooled and shipped all in the same day. Like, just thinking about that sometimes is mind boggling. Like, yeah, you know, I mean, even on a load of strawberries, you know, there's like 3300 cases a truck. Like all 3300 of those were picked, packed, cooled and shipped all in one day. And that's just one truckload. And there's hundreds that get sent out a day.
No. So, like, how do they decide what. And if you don't know this, man, that's completely fine. But I was just thinking, like, how do they decide the difference between what product is fresh product and then what is frozen? Because if it's all picked in the same day, is it like a quality thing? Possibly because, you know, like what, how do they decide what is frozen, what's fresh?
So I think not so much on, you know, the frozen, but I. A lot of it has to do on like the price, right? Like the berry guys, depending on where the price is in the fresh market will determine if they're going to go to freezer.
Okay.
Right. So, but then there's obviously farmers that grow specifically for freezer. Right. That's their contract. Like, hey, we're going for, you know, individual quick frozen, you know, berries or whatnot. So, but a lot of it, you know, you'll hear, like, if the strawberry market's not doing that great, they'll switch to juice berries or they'll send them to freezer because it just makes more economical sense to put in a plastic tote to send it to the cannery or send it to the freezer than waste the money on the clamshell and the cardboard box.
Yeah. Because I think, like, there's a misconception out there in just, like, normal consumers that, like, hey, if it's frozen fruit or frozen vegetables, there was something wrong with it. But I've actually heard the opposite. I've actually heard that from a nutrition standpoint, they're actually better than fresh at times because they're like, they're literally picked and then instantly cleaned and frozen right away. And it almost, like, makes it more. I don't know if it, like, just preserves the nutrition aspect of it, but what, like, what is that? Is there any accuracy to that?
That I don't know, but I I've never really heard of, like, oh, it's fresh and we can't sell it or it's going bad. So now we're going to freeze it. I mean, it's usually when it's harvested, they know it's going to go for the freezer or the canary. You know, I don't think it's not sitting in a cold room for a week. And then they decide, okay, like, let's go to the freezer.
Yeah. So there is actual product out there. And like, this is, I don't haul produce, so I would. There's actual product that is grown strictly for cannery, strictly for frozen. Strictly for fresh.
Absolutely.
Dude. I learn something new every day, ladies and gentlemen. I honestly had no idea that's what it was. I thought that it was all coming from the exact same field, and they're like, all right, we got to do. This portion of it has to be frozen. This portion of the order has to be fresh and everything.
Yeah. So, I mean, it can be like that, right? Let's say you're farming 40 acres of strawberries, and you say, hey, we're going to allot 20 acres to go to the cannery, and the other 20 will keep fresh. You know, I mean, it can be like that, but, it's the same stuff.
And to me, you guys, right now, this is why you, if you're going to move? Because I think, like, having like, a lot of the brokers out there that I know that just do produce, like, they are all consumed in produce. And the more and more people that I talk to because, like, I've had, like, even here because I live in, I live down in Phoenix, right? So there's a big produce provider push out of Arizona, obviously, Nogales, Yuma, and, you know, even Western Arizona with onions and stuff like that come out. But like, the more and more I meet people that are in that do food and especially fresh food like that's literally all that they do. It's, they're like, that's all they want touch. That's all. That's the only area that they want to get it.
And I get it right because this is like, this is pretty complex stuff at the end of the day on knowing what product is going to be out there, the seasonality of it, and just kind of talking about like, the infrastructure of it and training your entire staff up on that, like, you need to be right. And it's the same thing, like, when I tell people all the time, because we do a lot of over dimensional and specialized freight, I tell people all the time, like, you can't just play in this field. Like, because if you do, it's not your standard 26 pallet drive and load that's out there or your standard flatbed load with tarps. Like, when you go into the specialized aspect of some of this stuff, man, like, you will legitimately bankrupt your company if you quote something the wrong way.
Because, you know, if try quoting an over dimensional load and then not knowing that it goes into the super max category and see what that does. See what that does for your customer relationship.
Yeah, see, I mean, you're already talking french super Max, you know, I mean, I don't even know what you're talking. You know what I mean? So it's like, that's the perfect example.
So how are you? I know we're already, you know, we only got like five, six minutes left here, man. But like, how are you planning for the rest of this year? What is the crops look like? Is it, is it, like, was it a good growing season or what? Like, what are you hearing out there, man?
So this year, there was actually quite a bit of ground that did not get leased. So people that own the ground, that people are going to farm it did not get leased. And the reason for that was, is it's just the cost. You know, these guys did not. They. They did not have a great season last year on the open market. So unless you were, you know, guaranteed a contract at a certain price, like, it just didn't make dollars and cents. So what that did is, you know, this season, it seems like the. The prices have been, you know, a little bit better, longer. You know, all the items, you know, everyone that I've talked to, you know, they've had a good run at certain times of the year. Whether that's, you know, items are tight, supply is tight. You know, there's gapping.
We had some weather issues. It's been a little bit warmer than normal here. You know, the only ones that I've heard that haven't done too well is the strawberry guys. Strawberry guys seem to haven't done so well this season. But on the wet veg, I think everyone did good. But that goes back to, man, simple economics, supply and demand. There was less supply in the market. People just grew less, and the market reacted due to that.
Preston, are a lot of these contracts, are these sold on the futures market where it's just like, hey, a hypothetical example, we're going to plant August 1 here. We need to sell all of our product at, you know, a dollar a bushel, for example. Again, hypothetically speaking, is that how it's done pre plant, or is it after the product comes out, they're like, hey, I'll pay this based on the quality.
No. So you look at, like, the big processors that are going to, like, the food service guys, right? Yeah. They go set a contract and say a cisco, hey, us foods, like, your box price is going to be XYZ. And obviously there's triggers and factors and escalation clauses and all the mumbo jumbo that goes into it. So then it's like, okay, you know, shipper a knows that they're going to have to provide 600,000 boxes from this date to this date. And then, you know, so they have to plan for that. And obviously, they all don't grow their own stuff. They use outside, smaller family farmers. So say they'll go to, you know, ten different farmers and say, hey, we need 60,000 boxes from you from this time period to this time period, and we're going to be able to pay you this amount.
Yeah.
Per box. And then, you know, if they grow more than that, you know, they can sell it on the open. But the open might be worse than, you know, what the contract price is. Or on the contrary, it could better. But, you know, that's a risk, right. You're betting on the market, and, you know, it's hard to gauge that far out. Right.
I was gonna say, is there a lot of contracted rates for produce, like, or is it heavy? Primarily spot market? Like, hey, this is what it's paying today.
It just depends on the shipper or the consignee, the customer. Right. But, I mean, yeah, we're pretty, we have a mixed bag. Right. I mean, I don't know about your business, but it feels like in our business, like, you have to have both.
Yeah.
I don't think there's answer one way or the other that, you know, one is better than the other, but it kind of goes back to, are you gonna take something that's keeping your trucks rolling day in, day out, or are you going to risk it and, you know, play the spot market?
Yeah, I think that it's, I think this year is, and this isn't everybody, right? Like, I really think it's very shipper dependent based on the volume that they move out there. But I think, like, a lot of them in this small to mid sized market, if they were an RFP style shipper, they've, and if they can get away with not doing it and they can play the spot market, I think that they're naturally going to do that because, like, you know, again, back to simple economics. Hey, we got to let's roll the dice on this. We can always go back to contract, and now this isn't, like, everywhere, but I think because you definitely see where, you know, maybe it's a new customer that they get that could technically be on the same lane as a contracted RFP other customer of theirs.
But now they're just like, let's throw this one out, let's keep this one in the spot market, or let's pull this one out of contract and let's put it out there on the spot market and let's see how these performs. I have not been a shipper, but I would assume those are conversations that happen behind closed doors. Like, hey, let's pull this one off contract and throw that one out in spot, because, like, I've been on the other end of it. Right? Like, as a broker where, hey, this is all, we're going to go do a bid or we're going to do a mini bid. Now we're going to put these out on the spot market and see how the things perform. So I know it happens.
I just wondered if it was like, if it was kind of like niche specific on that or if they just did it, like, based on what the prices were trading at in the produce market that day.
Yeah, I mean, I don't think it's niche specific. I think it really comes down to customer specific.
Right.
I mean, there's customers that they're buying on a weekly basis based on the market. Right. They're not in on a contracted price. Yeah, but then you have other customers that are 100% contract, right. They want to know what their per box price is from the shipper. They want to know what their per box price is from us. And that's how they navigate their business. So I think the bottom line is it comes down to who's paying the bill and what their customer preference is.
Yeah, I got you, man. And so that right there, ladies and gentlemen, is why if you're going to be in produce, you need to really spend your time and listen to what Colby's talking about here, because it's, to me, it's seemingly not as simple as the warehouse to warehouse transfers that a lot of people are accustomed to out there. Like, there are longer wait times. There are a lot of different factors that kind of come in and talk about this. And this is why I have people come in from different niches, you guys, to talk about their specialties before you go out and start prospecting some of these customers and then think you're just going to figure it out as you go. It's to kind of, you know, keep you more well informed out there, man.
But Colby, how does anybody reach out to you to find out more about what you guys got going on?
Sure, you can go to our website, advanced transportation.com. You can find me on Instagram, Facebook, any of the social media profiles. LinkedIn. Yeah, I mean, give me a call, email, love to help, you know, throw ideas around.
Perfect, man. That sounds great. Colby, thank you so much for joining tomorrow, you guys. It's Friday tomorrow, so we're going to be doing Q and a day tomorrow. All right. I don't have any guests coming on, but we're going to be doing Q and a. So if you have any sales or operations related questions for the transportation industry, dm me or drop them in the chat live on the show and I will answer them. As always, you guys. If you guys got value in what you heard, subscribe. You guys, come on, share it out there to your network. Mauricio says it's good info. So, Mauricio, I hope you're going over there and subscribing to this show, man. I appreciate you guys. I love you guys, and we'll be talking to you soon.
Hey, Chris. Thank you.
Yeah. Mandy.