Ep. #22: Scott Pruneau

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We look forward to working with you To our listeners . That's it . We look forward to working with you To our listeners . That's it .

He and I played some scheduling tag for a while , but happy to finally be here , joined by Mr Scott Pruneau . Welcome Scott .

And while we are going to jump into everything that is ITS , we're going to take it back first . We're going to start back at the beginning of your journey , scott . So tell us , when did you first join the industry ?

My bachelor party was scheduled for that Saturday and I went to it and we worked Sundays then and I ended up coming to work the next day in not too great a shape and my boss told me to do the paces pretty hard on that Sunday . So I remember that week and weekend like it was yesterday . But 94 started .

I was on the produce side of the business , coming straight out of college . I had no plan for my career . I thought I was going to be an athlete and when that didn't happen I got a random recruiting call from Robinson . And I mean 30 years later , here we are .

If all the product wasn't sold , I collected my own money , I marketed my own services and so , really without realizing it , those days at Robinson were a great training around to kind of see a business holistically instead of just one component of the supply chain .

And if you go back to Robinson's original history , it started running potatoes as a potato business and you know Robinson has .

You know , if you go back to Robinson's original history , it started , you know , running potatoes , you know , as a potato business and so produce had always been part of Robinson's background and it had a bit more moving parts and more you know ways to either make or lose money , I guess is the way to say it and kind of a harder business in that wholesale

produce world . And I think it was a great training ground for folks to realize that there was a component of that transaction it was just the transportation piece of it that could be really impactful for customers and value add .

And if you spent the same amount of time focusing on making that and professionalizing that , it could be just as valuable , if not more valuable , than the produce business . And obviously it's turned out to be that way .

At that same time , companies were starting to pop up around the industry that were doing just freight and been building and building great businesses and kind of that golden era of starting free brokerages .

I think it was probably from mid 90s through maybe the early 2000s when that was really kind of launched the mentality that that could be a real viable standalone business .

Cause . I think that's very different than what we've looked at here before .

You may have 40 to 60 growers , shippers that you deal with to get pricing , understand inventories , and we were predominantly selling into wholesalers . At the time the business branch ended up more retail focused and more account management focused , but we were probably selling into wholesalers .

At the time , the business branch ended up more retail focused and more account management focused , but we were probably selling to wholesalers . So if I were selling six or seven commodities , I'd probably have 500 to 700 different suppliers that I needed to manage pricing from and we would sell .

We would buy a box of apples , say , for $7 or $12 or $20 , depending on the market . We would mark that up , take title to it and sell it to a buyer for , hopefully , a margin , a quarter , a dollar a case , whatever you could do . And then the transportation became part of it .

So sometimes you sold it as $21.50 delivered , so that had your cost of the box of apples plus your margin , plus the cost of the freight , or you would sell it , fob Washington , where you just sold the apples and the customer got their own transportation . But for our business , we , we , we procured the freight and it was you know .

So so we had to , we had to keep a . This is I'm going to sound really old here . We kept a notebook on the top of our pod , literally a notebook , and we would talk to carriers and the guy the guy would say , hey , I have a truck available in Yakima , Washington , on Thursday .

So we would flip forward to the Thursday page and write down the truck's name and the phone number . And the guy that he had a truck in Yakima on Thursday , and that was our load book , our load board was this notebook . And so the harder thing for us was keeping track of all the commodity prices .

You get rain , you get a freeze , you get a couple of large retailers go on ad and take away the volume in the marketplace . It was a very volatile market , just as volatile as transportation , if not more sometimes . And then you had regions would change . So if you're doing apples , you have apples in Washington and then Michigan or New York .

We had pagers .

It just blows me away the things we were doing then , like you'd be on the way home from work and you get a page , pull over , go to a pay phone , call another pay phone or call a shop where a truck is or a place where a truck's trying to get loaded .

I had an 800 number at my house so that from the ship , from the shipper's facility , they could call my house to dispatch a truck at night like it was .

It was crazy and the amount of information you could train somebody on or get someone up to speed in those days we didn't think you were experienced until you were two and a half or three years into the industry . Now with technology and training and programs and processes and systems you can get somebody up to speed in six months is so much faster now .

But going through all the trials and tribulations that we did back in those days I think helped a lot of people learn how to run a business . That kind of branched off from that and did some great things .

If you look at people's desks then they had those manila folders that were stacked up this high . Everyone was a load . You had paperwork in there . But to your point , where the business has gone to today from then , I think is a is the party than other people might be able to bring .

I just don't believe the supply chain , you know , is set up to act as a , you know , just like a travel agency . It's just not that way Too complicated .

So if a supplier had low volumes available whether it was maybe the end of the melons or , you know , end of the apple season in washington or something and they only had a couple of loads left , why would they pick you and your office for Robinson versus a different produce broker ? What were the differentiating selling points in produce brokerage ?

If I I mean , we literally had two phones on our desks and I probably made three or 400 phone calls a day to find , to make sure I knew the prices of apples . I you know not being cocky , but I guarantee you no one knew the prices of apples in 1996 more than I did .

So I talked to everybody , I knew what their inventories were , I knew what they would sell them for , all the different grades , and so if someone we used to have a phrase , it was the deals and the buy . If I knew the pricing well enough , then I could tell I could sell a customer and be able to buy myself into a margin .

I think way back in the freight days it was the same thing . If you knew more about capacity in a certain market or a certain type , then you have a chance to sell at a fair market price and still make money . And so I think both those industries are the same in that regard .

You know , this was before freight waves , this was before sonar , before , like , there was , you know , the green screens of the world , all all these , both media platforms and these vendors that would aggregate data and allow you know it . Just , this was a time when tribal knowledge could be really beneficial to being ahead of the market .

So you go back to our little notebook on top of the desk . If I knew that I could sell a load of apples and I knew the trucks were tight in Washington , but I had a guy in Washington on Thursday , it gave me confidence to sell in advance and that might get me the load because I had a truck .

So I mean , I think being posted on capacity used to be the way that brokerages made money for sure .

So I got exposed to that business in a very small way . We were doing freight specific business and not even selling produce to some of our customers .

So that was kind of the transition point for me to be able to get a wider view of the real opportunities out there that I said that wrong , the other opportunities that were there in broader supply chains not that produce isn't a real opportunity I still have great friends in that business that have gone on to do great things , and some even at Robinson .

A lot of them are retiring now but they were there to this day . I was lucky to be part of an organization that touched a large part of the supply chain when I went to Chicago when we moved the regions together . We were buying product , we were packing product , we had inventory to manage , we had local transportation to deliver .

We were doing all this whole piece came up and you could see a supply chain from start to finish . Now I don't think I even really respected that for a while because I went from there to Knight and we kind of started the brokerage business at Knight . Transportation and the warehousing piece went away . But that would come back around .

I always wanted to be in a business that had all of those services the carrier piece , the warehousing piece , the logistics piece to bring more of a holistic solution to a customer . That was more asset light versus asset heavy and I love that model .

But it was getting into the warehousing business and having transportation specific customers that gave me the chance to really look at it in a more broad scale .

I think when you talk about the rise of kind of freight brokers in the early 2000s I think a lot of that kind of you could argue stemmed from the success that Backhaulers had and then that Robinson had with Backhaulers support there . So I'm curious what do you remember , if anything at all , about how the business changed with bringing Backhaulers into it ?

That is the only way to do it , and I think that was an eye-opening thing for both factions of people that came together in that timeframe .

But to me the biggest thing that sticks out is that was the moment in history , in my opinion , that opened up broad visibility . So at Robinson , when I started at Robinson , if you were in a branch in a certain city , your market was basically protected . Other offices wouldn't sell into your marketplace and vice versa .

And I think that even while there was some pain to go through for that the move of opening it up to say , hey , listen , if you can't get into this particular customer , you can't provide enough value to open a door with this customer why shouldn't the company have a chance to do that with somebody else , to take a chance to make that happen there was a lot

of heartburn then . But what a great move by the organization to open that up , because I think that was really the moment in time where you thought well , I can live in Chicago and sell somebody in Florida . I can live in Florida and sell somebody in California , and vice versa .

What matters is , can I bring something different to the relationship to open that up and provide continuous value ? It doesn't matter where I live or where I work .

If I've got the most experience in the business with apples and I know the price of apples better than anybody else it doesn't matter if I live in St Louis and the farm is in Yakima . I should be talking to them . Just because you live 100 miles down the road doesn't mean you're the right person to sell their business .

You earn margins based on your capabilities now , but I think that moment in time was what opened the doors up for that to all really happen .

And so we hooked up and I did a lot of the design of how the compensation plans would work , how the procurement would be , what the structure of our teams would look like . Would we be mode specific or team specific or customer specific ?

And so I really had a chance to test some theories in that regard and it was a good run and I think it was really appreciate the Knights for giving me an opportunity and to be part of starting that up .

But I also learned in that timeframe , you know kind of the difference and that kind of takes you through the CRST years too the difference between a culture that is asset light in nature versus asset heavy in nature . You know , and not everyone thinks of the business the same way .

So , if I'm an asset heavy provider , I think the asset guys from the brokerage people get a bad rap on not being customer centric and not utilizing the asset .

And if the customer's business changes on a regular basis , I think you have to make decisions that are sometimes adversarial because your true north is utilization of that piece of equipment , whether it's a building or a truck or a trailer or whatever . So I think being asset heavy puts you in that situation and it creates friction a little bit internally .

And for me , being new to that business , I learned so much from Kevin Knight and from Joe helped me as I kind of crafted my career going forward that I wanted to be more asset light than asset heavy because I'm naturally built that way from the years I had growing up at Robinson .

And they don't give enough thought to the legal ramifications , the technology needed at this point to get access to capacity , the customer service requirements of being able to answer the phone in five minutes or 10 minutes or immediately and respond to emails and communication

. I think the reason that third parties exist is to provide that layer of I mean handholding is the only way I can think of , but it's a poor choice of words .

It's a level of service that is difficult because when you're running an asset , you've got so much baked into the capital it requires to run the assets and the driver relationships and the warehousing relationships and the people . All of your fixed costs are so much higher you don't get a chance to invest in some of the things .

The more the creativity side of it and I think people underestimate the value that that side of it brings and they make it feel like it's easier than it actually is to accomplish .

They're just two very different things .

You can't just rubber stamp all of that and feel good about what you're doing with your customer because your customer is going to expect if you're a carrier and you're outsourcing , they're going to expect you to have like coverage .

Now I think about the year and a half or so I spent on the TIA board versus now Today those contracts are pretty boilerplate and you can be an asset business and you can get great contracts that have already been pre-established and vetted and utilize them to set up a brokerage .

But if you're not making sure you're vetting , you know you're close to the insurance part of that conversation . You're close to what the carrier's insurance is versus your own insurance and your customer's contract .

And I think you know from the mid to small size asset-based players I think some of them you know just feel like I've got a customer , I'm contracted with them . If they'll let me broker then I just got to have a quick piece of paper and go do it and I think that there's potential risk in that .

I think shippers now see that risk and they're trying to hold providers a little more accountable , to be more intentional about the way you're papering your relationships with your different business partners .

and there are still of pure play brokers who all they do is broker loads and there are still some pure play assets who all they do is haul loads on their own trucks . We're probably north of 50 where there's a blended mix .

Where it's , it's maybe an asset-based company that has just set up a brokerage on the side , or a brokerage heavy business that bought a couple assets and is using it for marketing tools or whatever . But the contracts aren't as clean in that sense .

I mean , it's really hard to get a contract generally just signed between a broker and shipper , or even an asset and shipper . It can take months , it can take a lot of time and energy and red lines back and forth to then go and ask a shipper if I can set up a second contract because I'm opening my brokerage or I just bought some trucks .

It's opening a can of worms . I think many people don't want to , but is necessary for all parties to be covered in the right ways . I'm curious , if you've noticed . I mean because your business is now ITS is diversified offers , as far as I know , eight to 10 different services that all may require different contracts .

How do you think about that stuff , as you're relating to your customers ?

We obviously have some trucks , we have a couple thousand trailers , we've got four million square feet of warehouse space , we've got multiple legal entities and when we do a contract with a customer we literally have the conversation around . If I'm spotting trailers , sometimes that might mean that it'll be a power only move .

It could be an ITS truck , it could be if we could go live , live and having a contract that encompasses all of those things together to make sure that the shipper's protected , that we're protected , that the indemnities are right .

It's a process , but unless you create a great relationship with your customer , especially now , it's hard now to do anything because you can pick the color of truck you want to load a truck . Today the market's really- .

All that to say , if we do a poor job of creating a relationship that establishes the value prop that we think that we bring , we won't get to the end of that contracting process . And so there've been a lot of contracts that we just didn't get done or couldn't get done because we couldn't get it papered the right way .

And the reason I said it was a little sad or I'm disappointing is I think there are people who will take that risk or take certain risks at a level that I'm not sure they understand , the level of risk they're taking in rubber stamping some of those agreements .

And on the shipper side , I think when markets get hard , unfortunately I think some shippers will throw as many wrinkles into those contracts as they possibly can to make them so one-sided they're not really fair . Can to make them so one-sided they're not really fair . And I think that's a hard thing to negotiate .

So I see why some folks will rubber stamp a contract to say what's the chances of that really happening ? And I wish we could live in a world here where always the contract process could be hey , here's exactly how I do business , here's how you do business . Let's put a rational piece of paper together that protects us from an identity perspective .

You cover your own negligence , I'll cover my own negligence , and we'll be good to go , Because I think everybody wants that , but it's hard to get there .

Maybe that's , maybe that's a possibility .

The question is , though , when you get that language , it's the challenge for everybody who's on our end of the sale trying to sell a service , especially an asset light service , to a shipper going to be any releasing of any control , or ? I've got these mechanisms in place to protect me and I'm the customer , so I'm going to have all those .

Now , I don't want to paint a picture that all customers are bad , even customers . Your job in a negotiation is to get the best terms you can , and if you're in a world where more people will just sign those terms than not , why wouldn't you go after more of them ?

But I think , as capacity ebbs and flows in our marketplace and you want to do business with reputable companies , I think you want to have a reputable contract . To me , it's just part of the game .

Power changes hands often in our industry and you know we've had a two-year run here where the shippers got all the power back and granted , they had two years where they were getting their butts kicked , um , but there are certain actions that are um trend during certain times , during certain market cycles , and one of the actions when the shippers have all the

power aside from and again , this is not every shipper and it's not even most shippers , it's just , you know , some subset of them that make the kind of short-sighted or uh , short-sighted is a good word decision to adjust aspects of their business .

And you know , one of those aspects , as you mentioned , is the contract , and there are ways to make a contract way more favorable for the shipper and there are times that they can get away with it , and things like pay terms and moving your days to pay from 30 to 60 to 90 or even 120 . You know , you get to some crazy numbers and it's all market driven .

What do you think about , like ? How do you think about that in terms of your business ? And you know you , when you've got a sales guy who thinks he just landed this great account and he comes to you with these challenging terms and conditions or , um , negligence coverage , uh , indemnification , whatever it is how do you navigate that ?

You don't get the benefit of the doubt until you get a chance to actually have the conversation . But we try as hard as we can actually have the conversation .

But we try as hard as we can and for that person who brings that opportunity in , we have the hard conversation and we say listen , if this is going to actually be a business relationship built on a solid foundation , we have to be able to have this conversation . And if we can't have this conversation , then maybe it's not the right relationship for us .

And we've walked away from a few that you know would probably surprise some people in the process , because we did make those decisions .

But at the end of the day , I feel very confident that the majority of customers that we're contracted with not all of them , you know we have an agreement in place that push come to shove , if it ever had to get called into question , we have a foundation to stand on that we went in eyes wide open on all sides and would be able to have a tough

conversation about . So it's hard , especially in a market like now and to the point you made a minute ago . We used to always say who's got the hand in the relationship ? Like you have the hand or they have the hand as a supplier . You know we never . You know congestion is terrible and you know demerge or premium costs are going crazy .

You know you think about the kind of supplier you were then and the kind of supplier you are now , when things are pretty level and that's not there . And the way you keep business is to be the same people then as you are now , and it doesn't mean that sometimes you make more money than others . We're not a flat margin business .

We're here to make money , just like anybody else is . But we try to be as transparent as possible . We try to be as fair as possible .

If we feel like there's something that's not fair in the relationship , we will say that , and if we want our business partners to say if we're not being fair , please say it in return , because at the end of the day unlike 25 or 30 years ago .

If you want to continue to have a customer long-term , you've got to provide mutual value to each other , and that's hard to do when price really isn't the issue . Everyone sees the same pricing , everyone sees the same rates .

The issue is is a shipper going to trust you to make some margin on the business because they believe in what you're doing and believe in the value you're providing ? That's entirely what we try to accomplish in those conversations and get to from a rate perspective .

But culture is the kind of the way a group of people engages one another and operates , and so it's interesting I think it speaks volumes again that like when , when asking about contracts , your first response is to go to culture , and it does speak to that kind of higher level , because there is so much of the short sidedness in our industry and it comes from

every angle and I get it . It's like action , reaction , and then you know people , people have a hard time being the one who trusts first . It's like I've been burned so many times that I'm going to do whatever I need to cover my ass .

You know I'll sign this contract and just hope the worst doesn't happen or hope I can figure it out later or , you know , raise my rates later , whatever may be .

People are just kind of taking the easy win now and I think it speaks volumes that that you know you're thinking about it more from what am I instilling in these people from day one , and how are we thinking about this from a long-term perspective ? And the relationship what kind of relationship do we want ?

Because what it's realizing is you're just saving yourself more pain later . And it leads to my next question for you is what do you think the risks are to those companies that are rubber stamping contracts ? So the small brokers who they were just desperate to get a customer . The customer said yes , so they said screw it .

They didn't even read the contract because they don't have a general counsel that would know what to do with it , so they just signed the

thing . What are the big risks that both brokers and shippers are dealing with when they sign contracts that are overly one-sided ?

Right , so I shouldn't indemnify you for your own behavior , but your employee causes a problem . The classic example is forklift driver hits someone on a dock and then what happens downstream ? I mean , it's so rare that happens . I can see why some folks just kind of sign that through .

But the more that carriers double broker today , because , especially in a market like now , now when people are a little desperate to drive whatever revenue they can or they're putting other freight on the truck maybe you only got up for on behalf of your business partners if you didn't get a chance to read through that and when fraud is more prevalent and when

risk is more prevalent because there is more double brokering in the marketplace , and then one of those folks has an accident and you're brought in because you're on the paper . And then one of those folks has an accident and you're brought in because you're on the paper .

And then everyone upstream is brought in because everyone realizes that I can keep going up the food chain . If I have to , more so than it used to be , then it's just a risk , that's there . Your insurance could maybe cancel you because you took some of these risks and you don't want that to be the case .

And I don't want to sit here and paint a scary picture that this stuff happens on a regular basis , but it happens . And if you're the one in a hundred that it happens , to what are you risking to get to that place and is the risk worth the reward ?

And I realized , saying that , coming from a position of the size of business that we are in , I've never done what some of you guys have done and started a business from scratch and had to have my first customer , my first five customers and the pressure to go build at those times .

I'm pretty hypocritical saying the things that I am by not having lived through that , but I think if you establish that the foundation early on that we're going to adhere to a certain set of standards and values , I think there's enough customers out there and it's a fragmented marketplace that you'll be able to build a business that's based on a little stronger

foundation .

Those points are very valid and my approach I always wanted us to be aggressive and grow as quickly as possible , but one of the things that we did very intentionally was one develop a very strong relationship with our insurance partners . So we understood , better understood what are the risks we're taking , and also we said get us the best possible coverage .

I want the most expensive coverage . I want to make sure that we can be able to offer as broad of a service offering as possible so that we can meet our customers where they are and if they want our support on this , we want to be able to do it . And then you know , using them as a resource .

I think a mistake that a lot of people make is like being afraid to pick up the phone and it's okay , we've got an interesting opportunity here .

I don't know if it's the right , I don't know if the risk is worth the reward , but when you get on the phone with people who that's their business , insurance is their business and say , hey , this is the contract , what do you think about this , should I sign this ?

and you know , getting that feedback , having the right mentors in place as you're going down that journey from zero to and chat gpt , just toss yeah , just end it like that , just toss it into chat btt and then you're good . No , I'm kidding um but I do want to actually I think I think people .

Going into a business , those things are important and they become important for customers . They want to do business with companies that have financial viability and they'll be there through a transition and all of a sudden , I'm not going to call your company one day and you've fired two-thirds of your staff because you hired in advance .

Some of that knowledge of the way you operate your business and tapping into people who've done it before has got to be so valuable .

From there you went to Knight where you were the VP of brokerage , vp national accounts and kind of helped led the brokerage there . But Knight was obviously a very established business CRST logistics . From there you were the president and then eventually you were at Redwood for three and a half years as chief business development officer .

So these are all very successful companies in our industry , all who have longstanding histories . You come into all of those at the executive level .

So this is kind of a leadership question how do you think about coming into a business like that that has established culture , that has legacy , and then how do you digest what's going on and make an impact ? That's something that I'm curious about is because this is the opposite . I didn't do that when I started my own business .

So it's very I like the idea of crafting your culture and building it as you go , but this is the opposite , what you've done in all of your roles and now , as the CEO at ITS , same thing . So how do you think about that ?

You've got to take the things that you've learned and the cultures you've been close to or learned I can think about . Great cultures to your point aren't just ping pong tables and parties . Do you stand for something ?

And sometimes you can stand for things that are hard and those things , but if they're consistent and everyone who's there buys into them , it's a great culture . If people aren't , then they're consistent and everyone who's there buys into them , it's the right culture . If people aren't , then they're not .

So when you started a new organization , what I always try to do is learn , ask questions . You know , learn as if I'd never been in the business before and ask as many dumb questions as you possibly can , and then you can lean on experiences that you have to maybe provide some value into the conversation that maybe somebody hadn't thought of before .

And I find that by doing that , I personally learn it . I learn way more than I impart because I get a chance . I've been so lucky in my career to have had a chance and listen , I've not always been the best leader . I mean , I've failed at leadership more than probably anybody to get to a chance to get to where I am today .

But I think all that time down the road , if you ever get to a place where you feel it is about you and it's about your name on the plaque and your name on the top of the organization , when it's that point I think you miss such a great opportunity to learn things from people you may not have ever thought you'd learned from before , such a great opportunity

to learn things from people you may not have ever thought you'd learned from before .

I can look at every company I worked for and I can think about things I've learned from them , whether it's the first years of Robinson and how cool it was to work around people who were so vested in the brand that they would for lack of a better word get in a fight at a bar if someone bad-mouthed the company .

Then in night transportation you talk about the and CRSC . I think falls in the same bucket the level of discipline to run a business of pennies at that level of profitability and what it takes to be so close to your business that you know all the details is insane , how good those guys are at running those businesses .

And then you go to a Redwood and you think about okay , what does commitment look like at a culture level for not a Robinson that's a billion five but a company that's $200 million ?

And are people going to really fight for a brand at that level and are they going to try new things and new services and start new technology and invest in those kinds of things and invest in a belief that people are along , they're on your team long enough . They're going to go make that happen ? And then I came to ITS and I learned so much about .

You know what it means to be a teammate and what it means like from some of the culture that our COO , mike Crawford , started you know 12 years ago on .

You know honest and direct whenever you're talking to somebody and not having not over meeting , your meeting , your your world and not having all these one-off conversations and what true transparency actually means and what true commitment to a longer-term goal means .

I think those are things that I picked up everywhere I've been and I just try to adopt all the new things you get when you get someplace , but you don't get that if you walk into the door and it's my way , or the highway , I'm the one that's experienced . I'm going to tell you guys how all this works . We tell people all the time .

Whether you're here two months or 20 years , if you have an idea , you've got to share it , because none of us have all the perspectives and I hope , as a leader , I never get to a place that I'm not willing to listen before .

I'm wanting to just spout off my opinion , because I used to be a leader who wanted to give you my opinion more than listen , and I think that's been a big maturity thing for me over 30 years , or 20 years at least .

What I was terrible at , you know , and still challenge with today , is effectively trusting and being able to I hate the word delegate because it sounds it's terrible but trusting someone to do a job and then , more so than that , being able to hold accountability to that job . So you know there's a you can . You can take a mentality that I'm hiring somebody .

They have a set of skills I'm hiring for , I'm going to put them in this job and I'm going to let them go , be successful or fail on their own merit can be close enough to them that you onboard them correctly , that you get the right feedback loops and know whether they're a good fit or they're not a good fit , and then you can actually help them progress

in their career or you can go so far into that you do the job for them . I was always somebody who would do the job for people and I think if you polled people who've worked for me in the maybe 25 , 20 years ago versus now .

I think the folks 25 , 20 years ago would probably tell you that was pretty , pretty hard on them in terms of constant like in your business , not trusting enough and and when that would happen and if things were going the wrong way , I would get more and more and more .

I would sm Like I don't know if you've ever read the book of mice and men , but there's a character in there that you know

. I can't believe I'm saying this on a podcast . The character is Lenny .

But you can't back off too much because you can't let your team sink or swim . I don't care whether they're a C-level executive or a first-time manager . You've got to have the right feedback loops to make sure that you know what's going on as the leader and you can help them be in position to succeed .

So long-winded way of saying you can micromanage at a level that's healthy or you can micromanage at a level that's unhealthy , and I think I've been an unhealthy micromanager for a lot of my career and it's been difficult to get out of that because you just want to win so bad and you just smother it .

that you and it takes a long time to change . I mean , it's something I sit and deal with all the time myself and get frustrated with myself where I don't see myself changing in ways I want to .

And whatever leadership skill you're trying to learn , you know how do you measure quickly and make sure you're measuring the right things . I'm also somebody who I will overanalyze things to death . I'll do the biggest spreadsheets you've ever seen , you know . But I think a lot of that work is sometimes pointless .

Like what are the two or three things that really move the needle and focus on those instead of the whole picture ? So so , moving up and down in that is is really nuanced and I , you know , I don't think I don't think again .

Like I said earlier , if I ever felt like I was , like had perfected it or it was really great at it , I think it would be a negative thing for me , because you've got to continue to get better and I know I can get better at it .

Listen , you talk to anybody who I work with on a regular basis and they'll tell you the same thing my opportunity to get better as a leader is to not micromanage as much , and I think people now versus 10 , 15 , 20 years ago , it's a different sport altogether , but it's constantly something you have to be able to worry about .

And I think the other thing is , if you're someone like me who micromanages a lot and you can get into a lot of data and spreadsheets , I think being decisive is another thing . It's hard to do . I'm a collaborator by nature . I like to have a culture of inclusion and transparency and people getting a chance to weigh in .

But at some point people have to call the ball and move forward , and I think my style can sometimes lead to a little uncertainty and confusion if it's not as direct from a leadership perspective . So the nuts and bolts to all that is when you get into a leadership role and however long you're in one .

People who want to continually get better and learn and will accept feedback and coaching and can be humble enough to hear that from anyone at any time , I think have a chance to succeed in their leadership roles .

I think the easiest way if you're in a leadership role , is to have lines of communication directly with your team where there's I don't like the term safe space , but where there is a safe space or a place where both you and your direct reports can feel comfortable being very honest with one another about ways you're helping each other , ways you're hurting each

other certainly not intentionally , but ways you're potentially hurting the business by not being on the same page enough or being too micromanaging , or or whatever it may be .

I think the faster you can get that feedback , the faster you can accept that feedback , be comfortable beating it up with each other , making sure it's okay to have constructive conflict and be able to say that , scott , your idea is terrible , and that be okay . So let's talk about why . What are we going to do that's better than that ?

That , I think , is really the secret to unlocking a fast-paced culture . That that is decisive , moves quickly , that doesn't just die on the sword of an idea from a year ago . It hasn't panned out yet and you can pivot and change . Without that level of transparency , I don't know how you create something great yeah , I mean it's .

You know , it's not that they're , they're not necessarily front of mind , but like , at the end of the day , like you and I might be on the same team trying to solve the same problem and we both want the same thing , but we're incapable of getting to that point because one of our egos or one of our emotions gets in the way of that .

Like I , like , how you said , the you mentioned even keeled , because like it's whether it's good or bad , like the even keeled pieces is what's important . That's something that I struggled with a lot in my career .

I you know , there to this day I still think about things from my Molo days that I feel shame about and guilt about and , frankly , they were often all tied to my ego or my , my emotion getting in the way of what we were trying to do . You know , I'll never forget specifically this one example of one of the , the , the most challenging customers .

I don't know if I've talked about this on the podcast before . That's the challenge of having a podcast that you don't realize if you're telling the story you've already told .

Um , not to get off subject , but uh , this example was a customer , a very challenging customer for us that had like 5 am pickups and if you were five minutes late you didn't get loaded and it was like 80 miles outside of a major metro city .

So it wasn't easy to , you know , just deadhead a truck over there at a moment's notice if you were running late and we were the only broker that the shipper trusted at this point they had fired everybody else and we had largely been doing a very good job .

Our team was working very hard to execute but we were having some issues and here and there we were having trouble with loads . And I remember it was a Friday night it was maybe 10 o'clock at night when we had maybe had two issues in the last three or four days and we had every extra eye on this we could . It was , you know , otherwise a normal load .

The customer didn't think it was any more important than any other loads . Because of the challenges with this , this specific customer , there was a lot of internal attention on it , to the point where , like every single one of our loads , our entire executive team was getting tracking updates on it .

The entire carrier management team was on it operations folks and this load we failed on a friday evening and my reaction to . It was so unacceptable . I I mean it just was so unacceptable . I emailed everybody on this email chain .

I was motherfucking , I was M M Fing people and I remember saying my reputation and I was , you know , I had the direct relationship with the shipper and here I was , you know we had the same goal Everybody was working their butt off yeah , largely not largely , but like at my direction .

Like you know , I had communicated this vision of who we were and the people were very bought into the vision I crafted and and and was was communicating to them . And here I was just lambasting in and just just going off on these folks who were just trying their best and I was making it about me .

It was my fricking ego and like , I still , to this day , think about that .

Like I'll wake up in the middle of the night and be there and just like how , this , that's who you were , and you know I'm not proud of it and you know I bring it up only because it's only because it's you mentioned your growth and that , like , we have to be committed to the idea that , like , we can always be getting better and that , like this stuff

isn't easy either . Like it's way easier , in my opinion , to grow a business than it is to grow yourself as a leader .

This is a passionate industry and emotions run high and if you really care about something , you're emotional about it and I think that's something that we try to promote and I've always been a I'm kind of an emotions on my sleeve kind of guy .

I'm a terrible poker player for that reason , because I kind of know if I'm having a shitty day or a good day almost immediately or a good day almost immediately .

But I think unlocking that in a way that , yes , you're passionate , yes , you get it , you're passionate for the right reasons and you're hard on people for the right reasons and they know you're coming from a place of love .

That , yeah , maybe you could have said some of those things differently , but the fact that you care enough about it , that it's that important and you demonstrate that as a leader , I don't think it's bad at all .

I think what's important is is that the people around you have to know you well enough to know that when you do add those moments , they're coming from a place of care for them , for the , for the organization you're building , for your business partners . And when they know you care that much about it , that can be infectious .

I think the art of great leadership is because I'm the same way and I wore my emotions on my sleeve and that passion I think you know there's a I could almost argue that's part of my you know , quote unquote superpower is my ability to leverage my passion and articulate it in a way that got my team very excited about what we're doing .

It's important for developing buy-in with your people .

But it's like when you're on that edge of emotion and and you're communicating and you're frustrated and it's like , yes , you are coming from a good place , but when you pivot from making it about the issue to making it about I don't know yourself , your ego or them , and you're just , you're just that , letting out that frustration in a way that becomes derogatory

or negative . It's like that's when it's a negative and the thing is like everybody understands that we're all human and so you get grace , like you know , when you are coming from a good place and you have done a lot of good things for people and you've worked hard for people to help build a business .

People let you off the hook here and there , when you go over the top one time and you don't communicate it the right way . But it just can't be a common thing or it can actually get in the way of your leadership and it can lose you people over time .

That is , I think , where you want , as leaders , progress . You've got to be able to manage that .

Or is your ego just sitting there with both hands on the wheel saying we're going and there's nothing you can do about this ? I'm about to go off .

. So you came into ITS in 2018 ? Yes , initially as the chief commercial officer , right ? Yes , was the plan from day one to come in and become the CEO , or did you just quickly earn ? Like , walk me through how that all came to be .

You know , whenever I the reason I came on board to ITS was , you know , and I had a chance to be basically a free agent for six months at the beginning of 2018 , I really made a conscious decision of the kind of business and the kind of culture and the kind of location that I wanted to take the next step .

I had worked for the better part of 24 years and never really thought about things at that level of choice . I'm not just reacting to my career and just doing the best I can . I have a chance to actually make a conscious decision about it .

So when I was looking in the marketplace , I wanted a business that was predominantly freight brokerage related or asset light , because that's really more where my culture is at and my upbringing has been . I did want trucks and I wanted trailers , because I've always believed that all of the models of scale I think are going to become hybrid in nature .

These are going to be asset heavy or asset light . There's going to be a place for spot market , pure brokerage players . I don't think that space ultimately is the largest players in the space . There might be a few , one or two or three .

But I think if you want to deliver real solutions that are tangible and that can ride through markets , I think you're going to have to have some kind of hybrid . And I wanted a business out of warehousing business because I didn't know back then that e-com was going to be .

I wasn't smart enough to know what the trajectory would be in that business , but I just kind of felt like fulfillment was getting more popular . Shipments in general are getting smaller . Supply chains are getting more complicated . Being in that space ought to be a value add to a shipper at some point and I would have liked a business that had that in it .

Culturally , I wanted a business that was more of a team-based culture . I didn't . I wasn't as aligned with you know , the customer , sales , carrier sales model . I wanted something that was more team-oriented in nature . Just because my upbringing from Robinson was pre pre-backhaulers and pre that , pre that environment . I wanted a .

I wanted a city that my wife and I could see ourselves retiring in staying in for a long time . I had lived in Chicago , I lived in Phoenix . I didn't want to live in a Metro of 10 million people again because I like to get wherever I want to go in 15 minutes from my office to home and that's great . So quality of life is awesome .

I wanted a lot of sunshine , I like to hike , and so when I was putting all this together and then I got to know ITS , it really the boxes just started getting checked Like this works , this works , this works .

And then the thing that really sold me when I got here was it felt of everywhere I've been and I've been in places where people really cared about their brand and their business , but it hadn't felt to me like Robinson felt to me like the snowflake felt to me , until I came to ITS and I interviewed at the time with a gentleman who founded the business , the

original private equity firm that had the business , then the gosh 10 , 12 people in the business that I met and every one of them spoke about ITS in a way that felt like people spoke about Robinson when I walked in the Robinson office 25 years ahead of that and to me that was kind of the kicker right .

So I didn't intend to become CEO of this business when the opportunity presented itself . I wanted the opportunity . I felt like it was the right time in my life . I felt like I had learned enough to be able to be effective at it at it .

We were in the middle of bringing all of our business units together under one umbrella and I felt like that was something that I could accomplish . I could build a good strategic plan around that . But at the end of the day , those things aren't easy to do and you do have .

We had a carrier P&L , a warehousing P&L and a brokerage P&L and , thankfully , through a team getting aligned around wanting the same things , and we've been able , over the course of six years , to work together and put a unified business in place . That that is it's . It's growing in , in , in really all in all facets .

You know , and I think , I think the the story that we have I say story the business that we have , the business model that we have , does unlock value and it is fairly unique and it's enabled us the ability to build interesting technology and to put things in place that I think some companies aren't able to from an asset inclusion perspective and that was always

the vision from the beginning is to be able to take all these services and put them together to run solutions for customers and we're doing business for some customers today that I think four or five years ago would have been hard to conceive .

The level of which we're doing it and it's really awesome to see it happen and to be part of it is you know , I consider myself lucky every day .

And I'm curious , just for the audience to get better context can you kind of walk through as much as you're willing to share from just a general and you can be generic , but just like a general numbers perspective of what the service offerings are , how big this is versus that and what it is that ITS has to offer ?

We moved that fleet down in number there was more when I started but the idea around that is we want the trucks to do very specific and kind of value add deals around some of our geographic footprint of our campuses . So that business today is about 50 trucks and has a chance to grow as we kind of reset the model

. We've got a little over 4 million square feet of warehouse space between Reno , indianapolis and Dallas . That business is predominantly omni-channel distribution , so all the businesses are multi-client . We do a lot of high-turn business . We do a lot of e-com connected business .

We are a great kind of not overflow is the wrong word but a great new location option for a shipper who may need a closer touch point . We can touch 95% of the United States population in two days . We do about a quarter million , quarter billion dollars a year in container management . So the port drayage .

We've built some technology that manages containers called Container AI . That is more of a visibility tool for our customers in that space .

We just rolled out our own TMS product in the drayage world a year and a half ago , product in the in the drayage world a year and a half ago and two months from now that product will roll across our overall asset light trucking organization which we can integrate , you know , trailers and chassis and in networks and common visibility from port to door and as it

comes through our warehouse . We're putting in a new where our new WMS system in place this year . We've got a really nice , healthy spin on technology to both develop and to buy and integrate . We have very , very little technical debt . Almost all of our business is in the cloud today . We're not on a bunch of multiple platforms .

So we're setting the business up in a way that , whether your solution is drop trailer point A to point B , whether it's goods coming into the country through a facility , out and back , we've got a small parcel business that we just built . We've got a managed solutions business that's just now launching to kind of encompass all those services .

As you would know , it's the next evolution in the service mix that we have is to really kind of own the soup to nuts supply chain .

So it's a business that continues to evolve on a regular basis and fortunately our load counts have been very strong through the last several years and we've maintained our profitability and cashflow percentages so that we can continue to invest in the business and be prepared for really any market that we see .

But I think for a business of our size and the amount of assets that we have , we have as many services as I think anyone I can think of actually .

We've also we've got some locations that we're doing kind of that dedicated piece with a power only solution where we've got ITS trailers and we're and we've got outside capacity who are executing on our behalf , which gives us a little more flexibility . You know , somebody has a call off .

It's easier to cover , you know , than if you've got a solid , a consolidated list of employees there . And I think over time you'll see that kind of spread out and be a little more of an integrated solution where some of it's asset , some of it's non-asset . But we've been able to do some pretty healthy asset light stuff in that space .

So I'm curious you're doing a lot in brokerage with the trailers , correct ? Can you talk about that a little bit ? Because I think that's pretty different than traditional brokerage and I'm curious why is that the strategy ?

If you're only using me , you know once every month and a half or so when you've got an extra ad hoc load . You know we'll do that business if that helps us earn an opportunity to do more . But our real MO is to pool volume , aggregate capacity .

We talk about aggregating ours in our business partners capacity , whereas we'll be able to actually be treated from an execution perspective like a carrier or like a distribution organization . But we can bring the stickiness of having that piece of equipment there but the flexibility to be able to kind of ebb and flow with some volumes .

Now we've been learning every day since we opened up the whole trailer pool thing to the power only model and there's the things we're learning about network utilization and trailer optimization and all that stuff .

But I think we growing up as an asset based business to begin with and knowing what it takes to actually make those assets profitable , building that into a customer centric mindset , has given us a chance to really do it at a reasonable scale . I mean we've got nice , some of the businesses closed loop , some of it's one way and then we contract freight back .

But we've been . What we didn't do with it was say we're willing to go out and lose a bunch of money just to build the network , because I don't think you can do that and ever get yourself to profitability . It has to start and kind of grow in a meaningful way . And we've been doing power-only business for gosh probably 10 years in some way shape or form .

So we've had a lot of practice to get it to where we are today . A lot of work to get done , a lot of technology to build to connect to that space or acquire to make sure that it's connected very healthy into our TMS ecosystem , it very healthy into our TMS ecosystem .

But I think from a culture and management perspective we've been doing it long enough that scaling it has been a little more successful for us .

So I just remember and we played heavy in the Fortune 500 , especially food and beverage retail , grocery stuff like that and as great of a pure play broker as we were , on execution it didn't matter , because we still only got to see 10 , 20 , 30% of shippers bid because they needed assets , and by assets it's not trucks .

Well , I mean , they need trucks to pick up the trailers , but the trailers are what they need on site at their facilities so they can load more efficiently and and not be paying exorbitant attention amounts , um and I just felt like I was always missing out to your point .

And there are people who probably listen to this podcast that think that these solutions aren't unique anymore , and I'm telling you a lot of them are . I listen to this podcast . I think that these solutions aren't unique anymore and I'm telling a lot of them are .

You know , you might , you might have a five to one trailer to truck ratio or trailer to load ratio for this particular business . Or you might need I might need it for three months of the year have a , have a storage facility that I can . I can , I can get it out of easy to overflow my own building , along with the transportation component of it .

You know . So it's , I think , to .

I think what you said is exactly right If you want access to play in 100% of the freight opportunity , then having just live , live options at your disposal aren't going to get you there , and I think shippers are realizing over the last two or three years , that the hybrid model for people that are investing in the space and investing in the space and investing

in some levels of owned capacity is okay as long as they deliver the service , they have the right culture , they communicate effectively .

Marrying those things up feels like I'm doing business with a high level carrier that does a great job in the stuff they own , but they can flex and grow with me faster than they can if the whole business is asset related , and so the asset folks are seeing that and they're introducing better asset light models and the asset light folks are seeing it and they're

introducing asset models . So I think at the end of the day you're going to have , if you want to play in the whole space , you're going to have to be able to do all of it , because it's got to be fast , highly communicative , it has to scale , but it has to be sticky enough that you've got some investment in that game . That's all I'm thinking .

But when I think about the way , you know , I was just in my head I was imagining creating an integrated business like yours , where you've got brokerage experience from the people who have done brokerage , you've got asset experience and asset services , you've got warehousing , the port dredge stuff , you've got them all and they're kind of separate , but you you want

to marry them up and and have them all kind of act in this integrated , you know , unified fashion . What I'm thinking about is the brokerage way of life or brokerage way of execution , the solution mindedness , the communication levels . Is it true that that's kind of elevated relative to what the others historically have been ?

My job for you as a customer is to ensure that the business you entrust with me goes without a hitch , it's priced effectively and it works . And I think that the schtick of the broker mentality does that better , because as a broker you only live and die by your reputation as a pure play broker .

Then it matters to you that I do answer the phone on one ring and I don't have my voicemail on at night . And it's a hard lifestyle to really be that connected to where you can build that . I think organizationally , any culture whether it's asset heavy or asset light could build that .

But I think if you're asset light , you are more driven by the customer's outcome than the asset utilization . Not that it isn't important , but it's customer success trumps asset utilization . If you're asset heavy , asset utilization trumps customer success . Everything Realization trumps customer success .

So I really tried to kind of separate myself from broker and non-broker , because at the end of the day , it's about running your business model the best way you can and being a trusted source for your customers to give you information and knowledge and help them be effective , and I think that's kind of a big thing too .

10 years ago it was either one or the other I'm an asset or I'm a broker . 10 years ago , it was either one or the other I'm an asset or I'm a broker .

Well , today I am just a solution provider , and that solution happens to include some assets that we own or lease and some that we don't , but it's all one solution , and that was always like you were describing . I'd love to be able to do all these things .

I think we're , uh , we're on the precipice of being able to have a modern 3pl model that actually can do that um and do it , you know , at scale , which is , uh , which is something that we , you know , knock on wood , we can continue to do over time , because I think it's the ratio there I think works .

I know it's a way . It probably didn't answer your question , but I don't , I don't know that , it's just broker or non-broker .

And what I mean by that is when you take people who are their history and experience is selling brokerage , and then you take people whose history and experience is selling I don't know , warehousing or asset . It's just very different .

And when you bring them all together and say , hey , you know what , everyone's on the same sales team and you just sell all of it . I've seen historically that can be really challenging for people to figure out how to do another offer , the other service .

It's not just as simple as saying , oh , we can do it , it's just the way you approach it , the way you sell . It is different . So I'm curious was that a challenge for you as you guys were undergoing this process , and how did you kind of navigate it ? If so , Still is .

You know , you still have to be in sin to run a great warehousing business and to run a great trucking business and to run a great asset light logistics business , those things have to continue to exist . I think it goes back to culture again . When everybody you know philosophically is aligned on , here's how you incentivize based on this type of success .

You train leadership behavior based on these principles , you train , you do business with customers based on these values . As long as those things are aligned across the organization , then I think you can have nuanced different compensation plans , you can have different leadership structures , because all the rules aren't the same .

But as long as the foundation comes from the same mentality and that's been the biggest kind of challenge that we've had is getting that mentality baseline to be the same across the organization . And we probably have a ways to go yet to really get there . But I think we're getting .

We're certainly closer today than we were two years or three years ago , but that's always going to be a journey because you can't . The mentality of a great freight broker is not the same as the mentality of a truck driver or a picker or an IT person . But the foundational culture pieces you know . Are you competitive ? You know , are you about team ?

You know those types of things you can actually run through all of your human systems . I think that's attainable . I'm not going to say we're great at it , we're trying to get better at it . It's something we work on all the time . Almost everything we do comes back to culture in some way .

Both best lesson you've learned in the business and about leading a business like the one you're at , and also kind of the thing you're most proud of what you and the team have been able to accomplish in that time .

I'm the most proud of the fact that all the effort that the team has put towards making this business what it is today , all the lives that we've impacted , the people who have started here I think we've averaged over 100 promotions a year for the last two or three years and the ability for people to take a step up in their life to impact others , to impact

our customers , our community . When you think of the number of lives impacted by a business like ours , the size that we are , the number of people who work here and that they interact with our customers and our carriers , that entire ecosystem , I feel so much pride in knowing that I was part of the last six years of that evolution and has been really impactful

.

The number one lesson I think I've learned if you want to build a great business , you got to have a group of light-minded people who not only have the skill to do things that are special , but you got to have a group of light-minded people who not only have the skill to do things that are special , but you gotta , you gotta break down the friction to get it

done . You can't have , you know , sacred cows or you can't have the norms that you know well , we just always have done it this way , so this is the way we're going to continue to do it .

You've got to be able to to really challenge the status quo and you gotta let , got to give people the ability to step out of their comfort zone and own things that maybe they aren't prepared to own , and you got to challenge them . And you got to be able to have enough love in your culture that you can be direct and not waste time on a bunch of crap .

And I fully believe in the statement that execution beats strategy all day long . I think if you evolve fast enough , anybody who's been in this industry long enough can draw a great strategy . Anybody can build the services that ITS has .

What's hard is building the culture to make that into a great business , and I've always believed that you could take and I'm sorry to be , this sounds boastful , but I think you could take the team that's here , the culture that we have , and you could pick it up and put it in a different industry and they would succeed , because what people believe in here is

bigger than the business model and it's about the special that they bring to the relationships that they're building every day , and that , I think , is what earns us the right to keep investing and building a better model , if that makes sense .

I think we got a lot of great lessons here , from the history of produce brokerage at Robinson and your role in that , to quite a bit on leadership and the challenges in leadership , and then you know , I think , really culture and an in-depth look at ITS logistics a fascinating billion dollar , fast growing player in our space , and I'm just appreciative .

So thank you so much for joining us .

So with that , thank you , scott , and have a good one , folks . Thank you .