Ep. #29: Jason Provonsha + Steam Logistics' Journey

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We look forward to working with you To our listeners . That's it . Let's get the show on the road . Welcome back , freight Friends . We've got another episode of the Freight Pod . I'm your host , andrew Silver , and I'm joined today . We're going back to brokerage . We're going back to the best part of this industry freight brokerage .

So I've got a great guest today the CEO of what was recently named the 36th ranked brokerage in America via Transport Topics , mr Jason Provancha . How are you doing today , man ? Great , good to see you . I appreciate you having me on .

Yeah , you were on the panel that I led , or I moderated , a couple months ago for Reliance Partners , and that was the first time we'd spoken in maybe nearly a decade , half a decade .

So I was like the sixth hire in this company . We grew it over . I actually stayed there 12 years , typical Gen X fashion . You know , you just find a good job and you stick in it . And I stayed there 12 years . We grew it into , you know , about 150 employees . We had health care clients all over the US .

I traveled everywhere and really had responsibility ultimately for all the revenue side of the business , and so we went through a private equity buyout and learned a lot through that process and I stayed about four years . Post transaction Felt like I got a bit of a poor man's MBA in the process , which was a good experience .

But then it was kind of time to do something else and I started networking around and got introduced to Ted Alling and Chad Eichelberger at Access America Transport . Knew less than zero about transportation or logistics , but I was ready to do something else .

They were looking for some sales leadership and some sales talent , and you know , I basically just told I had , you know , some good skills around that , but I didn't understand the space , and so if they were open to letting me learn on the job that I felt like it could be a great fit for everybody , and they saw it the same way .

So that's how I got started in logistics , and that was in 2012 . Access was already sort of growing at a astronomic rate , and so it was a fun thing to jump into and quickly fell in love with the industry , which actually I didn't have high hopes that I would .

I was really joining the company for culture and I loved what I was seeing on the growth side and , and within six months , I really fell in love with the space , and so I really never looked back .

I stayed through the Coyote transition , when we sold Access America to Coyote , and I spent a year there and then ultimately left and the founders of Access had started a venture capital incubator and I left to join them for a period of time and we were doing some startup work and I spent a little less than a year doing that before then ultimately transitioning

to Steam , which was sort of born out of that same ecosystem of companies , and I've been at Steam since 2015 and still here .

And the sales that I was doing in college was like door to door selling print ads and like a free newspaper that you would get in bars , you know , you pick them up off the rack and I mean I was literally going door-to-door and the 90 degree heat and a full suit trying to sell $100 print ads .

You know , that was sort of my first foray into sales and I was okay at it , but I just I didn't . I didn't really understand what professional sales might look like long-term , and so I thought , well , I'm gonna do something else .

And so when I started at True North , it was client services , but within a year I started to see what true B2B sales looked like at a higher level , got really interested in it and then from there on out it was all sales .

I created a couple logos for a couple of clients for their ads , and so I did a little bit of like graphic design work and the publisher of that newspaper liked me and started taking me with him to go meet clients . And then that sort of spun out into hey , you can sell , you go sell and I'll be the publisher .

And so you know , these were cheap , hundred dollar little print ads . It wasn't going to be a tough negotiation . You either wanted it or you didn't . So I don't know that I was all that skillful in making it happen , but but it was a but . It was a good first step .

It was funny because I was finishing school and I only had like a couple of classes and one of them this is how unambitious I was in college .

I needed hours , so I went and took racquetball and so maybe on a Tuesday I would get up , I would go hit the pavement selling print ads all day in the heat and I would get up , I would go hit the pavement selling print ads all day in the heat and I would come back , change out of my suit , go play racquetball for like an hour , come back shower , change

back in my suit and go back out . So it was kind of a funny time in my life .

I mean , I spent my college focused on working and and not so much yeah the school stuff and I don't want to say I wrote it .

And so I just kind of I knew I needed that degree At least I thought I did , and I wanted to finish it . But but really I was always focused on , you know , having something to do . That was more of a profession .

He's still a good , good friend and has been a mentor , but he was just really great about giving a bunch of 20 something year olds a ton of responsibility and then expecting them to do something with it , and so we all kind of grew up in that business and so as the business grew , we all scaled with it , and I still have relationships with a bunch of those

people and they've gone on to do a lot of great things , and so it was a great place to really kind of learn how to be a good business person , learn how to be a good salesperson and really have more responsibility than you should have at a young age , and so it was a very valuable time .

That's kind of part of the recipe that a lot of us have deployed in some respect , wouldn't you say ?

bright-eyed , bushy-tailed , coming out of school and envisioning this huge future for yourself , and maybe even you're less . You're not yet weighed down by unmet expectations or bad experiences in the professional world . I don't know . It's just something interesting to me , as you said that .

Simply because he's a pretty exceptional guy , you know , talk about what kind of brought you into that business and meeting him and meeting , simply because he's a pretty exceptional guy . Talk about what kind of brought you into that business and meeting him and meeting that group . And you mentioned falling in love with the industry . Pretty quickly .

What was it about the industry ? What was it about that team that really kind of hooked you .

. I will say that when we went through our private equity buyout the years after that , it became a little experience there .

I will say that when we went through our private equity buyout the years after that it became a little bit different , and it wasn't so much that it was only because we went through a private equity buyout I mean , those things happen in a positive way all the time .

In this case , we had sold to this private equity firm who then merged us with another portfolio company .

And that other portfolio company we didn't know it at the time but they were struggling and I think the thesis of this was that our business was doing very well , we might serve as kind of a life preserver for this other business that was struggling so much , and instead really we all kind of drowned .

It's kind of the crudest way , the simplest way to put it . So it just became a very stressful period because obviously we were , you know , meant to grow and get , you know , produce a lot of EBITDA and all the things that you're supposed to do when you're , you know , working with a private equity company .

And so I watched in that period how , under the sort of stress of that time , our culture began to deteriorate . And so when I left it had deteriorated quite a bit , and I felt like in this next chapter I wanted to kind of recapture the best of those times , which most of them were good .

Probably eight out of the 12 years I was there was fantastic , maybe even longer than that . And so I , when I met the folks at Access America , I was talking with a mentor of mine , a different mentor that I mentioned before , and he sort of helped me clarify , you know , how to think about Access America . He said , well , what's more important to you ?

Is it the who or is it the what ? And I thought that was a really good clarifying question , because I felt like I just wasn't sure about the industry .

I just wasn't sure about the industry , I just didn't get it really yet , but I did get the fact that there was a bunch of people there that were excited to be there , who seemed to be very collaborative , who seemed to be friends , and so I thought , ok , let me just it .

There must be something to this If everybody looks like they're having such a good time . So let me focus on the who first , and then I'll back into the what and you know and what I've found . And I talk , I tell people this all the time , especially young people , you know . People say follow your passions . I don't know that that's the best advice .

I mean , I feel like you can be passionate about a lot of things . I tend to think go do a bunch of stuff and see if you're passionate about it . And so that's what happened with me in logistics .

I mean , I just got into it and it was just so much , there was so much more depth to it than I anticipated , and so it was just a great transition , and it was that time at Access was , I mean , super special . I still have a lot of friends that I've made , you know , during those years , and many of them work here now .

And I almost wonder most people were not passionate about freight when they started working for guys like you and I , or for guys like Ted Allen or guys like my father people who've led these very successful brokerages , but they develop a passion and your comment about the who versus the what and seeing these people having a great time and becoming good friends it's

almost like the people can create the passion for you and it's the people in the business that make it a passion for someone . I don't know , I'm just thinking about this out loud and the ability of a leader to motivate and inspire people and get them , you know , excited about the mission and whatnot . And I just I don't know .

I just I'm curious if you're connecting some dots here that I'm thinking about in terms of how like people can be the driver for a passion for individuals . Maybe it's especially true in our industry , but I've got to assume most of your employees at Steam . They weren't necessarily passionate about freight when they started , but today they are right .

The day I looked at it the first time I was like , okay , I sort of maybe understand this , but it's the industry , it's the people you're interacting with every day , it's the office environment , it is how you feel about going to work on Sunday night to get up and go Monday morning , how you feel about going to work on Sunday night to get up and go Monday

morning . So I think it's just so many of those things coming together that sort of you know , kind of create the way you feel about a particular career .

And look , there's people out there and I admire them that have grown up and they knew when they were five years old they wanted to be a brain surgeon and that's been their path and they never deviated and they became a great brain surgeon .

But that just was never me , and so I just it's hard for me to kind of connect with follow your passions , because I have a lot of interests and some of those have turned into passions and some of those have not . But I'm a big believer in that . Well , I guess .

I guess I believe there's a lot of people like that in the world , and when you tell them to follow their passions , that's going to confuse them , because they're not even really sure what those are yet .

And so I think sometimes we overthink things and I think , you know , maybe having a bias for action and then evaluation to determine whether or not your passion is another path you know Yep , a hundred percent .

And I'm curious , when you think about access , what are those things that that really stuck with you , that you wanted to implement in your own business , as you , you know , took over at Steam yeah , I think the first thing I recognized was that it was very organizationally flat and it was very low ego .

We had clients all over the place , but some in town I may have to run and see them , and hospitals are more formal environments and so you know , you walk into Access America and you know somebody's sitting there with a hat on backwards and t-shirt and the whole nine yards . It's a bit of a culture shock .

But I loved how it didn't feel like there was this overemphasis on totomic structure . It was very wide and the leadership team , which I ultimately became a part of , was very small . I mean , we really put most of the emphasis on these brokerage branches both in Chattanooga and around the United States , and so I loved that .

It just felt like we were all sort of on the same side of the rope pulling and nobody was necessarily given too much credence to who gets the credit for that .

It was just we were a team trying to climb this mountain and , uh , that that was just super rewarding and I feel like I've not I , but we as a , as a team , have , um , have really implemented that here . We , you know , we don't have a single office in this entire building . We all sit on the floor together .

Um , nobody is , you know , kind of tucked back away and unaccessible .

I mean , everybody knows that anybody can walk up to anybody in this business and get a response and have a conversation , and so , and that's , you know , that just makes for a much richer environment , you know , to come to every day knowing that everybody's here kind of working towards the same goals , and so I do think we've taken that from from access America

and , you know , as we've gotten older , I think there's been some subtle changes to , you know , how we do things and um , and , and , as it should be . I mean , when I left access in 2014 , that's , that's 10 years ago , right , and so we've modernized some things as well , but , um , it was , but it was an incredibly fulfilling time for sure .

So what would you say ? Was the the , in your mind , the greatest thing about having a super flat org and also maybe the biggest challenge that's created by that type of structure ?

It just seemed like organized chaos , but really in the best way , and going back to what we were talking about with , you know , putting putting a lot of responsibility on 20 something year olds , it was a good lesson and hey , if you expect the best out of people , they're usually going to rise to the occasion and prove you right . Um , which you know people .

They're usually going to rise to the occasion and prove you right . Um , which you know definitely was the case 90% of the time . Um and so , and then you know the thing I liked about it . So I came in as a essentially a corporate salesperson .

Uh , I had come from all this responsibility in my previous life , all these direct reports and all this stuff and , and it was kind of refreshing that I just came in as an individual producer , um , and especially learning a new industry . I feel like it took a little pressure off .

And so , um , I reported to Chad Eichelberger , who was the president and is now the president of Reliance Partners and good friend , he's awesome and uh , yeah , I know you know I got to say Ronald's awesome too .

I had been in sales a lot longer than most of them , and so while I was still learning the industry , I knew some things about how to engage customers and how to open up accounts , and it was just really fun that all I was doing was going out and doing work that directly had a positive impact on the brokers .

And so my early steps were how do I help these guys get some wins ? These guys and gals get some wins ? And there was just a lot of collaboration in that , and so I love the fact that I was out there trying to help other people build their book of business and by virtue of that it was growing the company , which was part of my mandate .

And so I'm really and we've implemented that here too we have kind of a similar structure here , in some ways a little different but similar .

re-quote it for two or three years sometimes , and so it was a very stressful and detail-oriented sales process that took a long period of time , and we would write these 30 , 40-page proposals for these things .

So it was just a very different world and so , immediately , what I loved about brokerage was that it wasn't necessarily a zero sum game and you weren't doing years of work for one opportunity .

You could pick up the phone and get an opportunity the first time you talk to somebody , and it might just be one load or one lane , but I love the fact that you could make quicker progress like that , prove yourself through merit and then grow the relationship based on the value you're producing . So I love that part of this business .

It's one of the reasons why I've stayed in it , because I love that kind of merit-based opportunity growing of a relationship . It just feels like a really natural way for both parties to you know succeed together , and so I love that part of it .

While you didn't spend a ton of time at Coyote , you spent enough to probably pick up a thing or two . So I'm curious from your experience within Coyote , what was something that you thought was unique or different or special that you wanted to carry with you into into steam ?

I had seen your dad sitting out there with everybody else and I reported to Chris Pickett and him being in and out . He had a little office but he wasn't always in there , and so that was kind of a quick . You know something that I took from that .

I think I learned a lot about the enterprise service model at Coyote , and you all had a very robust and smart group of people running a lot of enterprise freight . I've learned a lot about what that could look like .

I mean , we're a cradle to grave environment here and we've built some of those teams here at Steam as an augment to that strategy , because we think the cradle to grave is a great model in a lot of ways , and I know everybody has different opinions about that .

But when we started comparing notes on how many loads a day we were doing with certain shippers versus how many loads a day you were doing at Coyote with certain shippers , it was clear that we were there was going to be some limitations in volume production , strictly with the cradle to grade model , and so I learned a lot from that and being in how to be

flexible and try to capture the best of both worlds and actually I should also say I really enjoyed that time at Coyote . I did not leave Coyote because I was like having a bad time at Coyote . It was all about just sort of reconnecting with that group of people that I had such a great experience with at Access America .

I had an entrepreneurial itch that I wanted to scratch , and basically what we were doing there was this the venture capital incubator had a bunch of different startups in it and they had hired somebody to work for the incubator , who was a technologist who was spinning out all kinds of mobile apps and mobile technologies , and a lot of them showed some promise , and

so my um , my role was to come alongside of him and help try to commercialize some of these things , and so I would be sort of the business side of the house , as he was doing all the technical work , and we had some modest successes . I think you know where we struggled , he and I .

The chemistry between us never really materialized the way that I think both of us had hoped , and then I think we also made some basic mistakes around chasing shiny objects in the form of technology , and it was like sometimes we were a solution looking for a problem , and that's hard to .

You know , everybody in the world wanted to do free pilots with the various things that we were doing , but nobody wanted to pay for it , and I get it .

I mean , I just don't think we were driving enough value , and so when we kind of were seeing that this thing both on the kind of personal side and the side and the ability to commercialize these products was not going to work , we stepped back and said , ok , do we want to keep doing this ?

Is there a need within this portfolio of businesses that Ted and Barry and Alan , the founders of Access , had all started , and Steam was just sort of a logical place . But that was not the intent . I mean , I really thought we were going to be doing all kinds of startup work for a long time .

And , having said that , man , it was nice to get back into freight , to be honest , because I'm out here , you know , trying to take all these products that I barely understand to market .

And it was nice to slide back into something that felt a little familiar , even though I was going from domestic to international , which might as well be another industry uh , because it was such a massive difference from what I had , you know , become accustomed to in the domestic side .

Those guys are starting to get that business off the ground . I'm going to see if I can help them . And so that was so . He he never , you know , made the transition through the coyote and so when I came over , he had become the CEO of steam , because they needed a lot of help , um and and so when I came over , I was just going to focus on sales .

I was just going to go build a sales team and hit the road and try to help grow the business . And I don't know how long it was .

A few months in he was like look , I , you know , I need to focus on the inside of this place and I need , you know , and you should focus on the outside , meaning I'm gonna help drive the operation and the brokerage floor and figure out how we can go grow this business and you're better in front of customers and you're more of a public-facing , you know

figure than I am , so it was like it was more just like a division of labor . I mean , you know , we consider each other partners anyways along with a few other folks , including our CFO , adam and um so it . You know the title itself it was . It was just more like okay , where do we fit on the bus the best ?

And and so I kind of was surprised and said , ok , I'll do it . And back then we had 20 employees . So you know , it wasn't like we were , you know , this large enterprise .

And I think if we're going to look at Steve and any time a CEO is willing to say , I think you whoever is better suited to be the CEO of this business , I have a ton of respect for that because they clearly are seeing the bigger picture and putting the business before themselves .

And so maybe if I were to ask Steve that question , it was the lack of ego that he maybe witnessed at Exit America , that he carried with him , because that's it's obviously a big thing , I mean , even if it's just to move to the president role . I just think that says a lot about someone .

And you know , he's been a close friend for a long time and um , so I mean , but I , but I do think we were more naturally , you know , suited for the roles that we ended up landing in . But he could have done it too . He's an excellent , excellent professional and executive .

I'm curious for you what does the role look like and what does the partnership look like in terms of what you've got versus what he's got in terms of responsibility , focus , teams and such ?

But you know , as we've grown and added more people , I feel like a lot of ways I just keep giving pieces of my job away , which is a little . It's a little uncomfortable sometimes because you're trying to figure out okay , that piece of my job is gone , now , where do I , what do I fill it up with ?

Right , and you know , we have a , we have an eight person executive team and then we have a whole bunch of folks that are very good at what they do Maybe another layer below that , although we do try to kind of keep that flat organization the best we can .

And so you know , I really just spend a lot of time with that group of people , both collectively and individually . I , you know , am constantly collaborating across these different groups , trying to figure out who needs what and how do we get there together . I'm not at all a sort of top-down type personality walking around telling people what to do .

I'm definitely more of a collaborator by nature , and so I spend just a lot of time talking to those folks . I still do spend a lot of time with customers probably not as much as I should , and actually that's something that I'm hoping to do more of in the back half of this year .

We've had to be a little bit more internally focused over this pandemic period , so that's been , as you know , a challenging time , but we're starting to come out of that , which feels good . But , yeah , I mean , every day looks a little bit different .

It's a little bit hard to pinpoint how that role has evolved , but if I look at it today , versus where it was five years ago , it's it's not at all similar yeah , I mean , I think that's a good thing , though , and I think , as you , as you talk about giving away pieces of the job , it's , it's , that's .

At least , it's often a glorified salesperson . That's exactly what my job was for a long time . My job was for a long time and when I think about kind of my partnership with Matt , and you know , I think one of the things I appreciated most about him was how exceptionally was at picking up the pieces that I wasn't capable of handling myself .

And you know , managing a team with day to day responsibilities was not that wasn't something I was best suited at .

But being out in front of customers and in front of employees and staying in , attuned to the challenges , what was working , what was not , and then aligning our vision to those things and and whatnot , like that was where I was best suited , whereas Matt was exceptional at the day-to-day operational things and holding the team responsible and and and empowering the

people around him , um , to do their jobs . And I just think that you know as I think about things , for you know our listeners to think about within their business , um , as you said , the , the , the role , is always evolving as the business business grows , so do the needs , so do the challenges .

I don't think anybody in our space was thinking about fraud as much as they are now , and that's now something that you've probably got way more focus on , whether it's yourself or somebody on your team . For sure , it's just the way that the business evolves the way that the industry evolves the way that the industry evolves . So I appreciate you sharing that .

started as , how it's evolved . Walk us through that .

We'll refer business back and forth to each other and both businesses will grow .

None of us knew anything about what it took to put a company like that together , and so we all participated in doing various interviews with people that we were recruiting to come in , and we recruited a handful of people that had done this in other places to come over . And , and uh , and really that first year was a lot of setup .

We had to get through a lot of regulatory um requirements and , and really , the , the the business really wasn't ready for any kind of commercial work until probably like towards the end of 13 . Um , and at that point , we were already in the throes of , you know , the due diligence process with Coyote and going through that and so and that .

There's a number of reasons why I think we went down that path , but ultimately , ted Barry and I and the founders of Access were , I think , just ready for that step in the lifecycle cycle of that business and for themselves as well .

And so when all that happened , steam sort of just became , you know , it spun out on its own and just kind of became a little bit neglected because we were also busy with the merger . And so you know , fast forward to when I joined , steve had been kind of toiling away .

Steve , you know , at Access America ran our Minneapolis branch which was about half the business in terms of revenue .

Well , in the time that I went to Coyote , he moved down to Chattanooga because there was just a big need and he couldn't do it remotely . And so when I got there he was just in all manner of different , you know , projects trying to get this business to perform .

And again , we were having to learn this as we went , even though we did have a few people that could help us . But so when I got there , we just kind of put our heads together and and just , I'm sure we made every mistake in the book trying to grow that business and it was just a lot of trial and error and we were bootstrapped .

So we didn't have any outside funding that was going to , you know , carry us forward . We had to just kind of figure it out that was going to carry us forward . We had to just kind of figure it out and we did . It took us a long time .

Notably , we were not able to do any domestic freight because we had to non-compete with Coyote for that , which , for obvious reasons , when you sell a business , it's not uncommon to do that , and so that was kind of a blessing in a lot of ways , because it was like we had burned the ships , we had nothing to fall back on .

It was we're going to figure this out or die trying , and I'm sure we almost did a couple of times , but but that's how the business started . It was , you know , freight forwarding , air ocean customs , and we just we just kept at it until we figured it out and kind of found a strategy that worked .

Nvocc , like let's talk to me like I'm six and kind of explain to me how this is different than freight brokerage .

Okay , so brokering we don't own the vessels brokering the ocean uh vessels . Yes , okay , yes , um , freight forwarding is simply making the bookings , and so , um , they're used synonymously , and I think it's a fine thing to use those synonymously , because who wants to say NVOCC over and over again ?

So I think saying freight forwarding kind of encompasses all those things , and I'm sure there's going to be people that are going to want to slice and dice every nuance of that .

But for all intents and purposes , the business that we were doing and are doing is making arrangements to move ocean containers both as imports and exports , clearing customs on the import side , and so it's a freight forwarding operation

. So what's so different about international versus domestic , if you just kind of lump it in those categories is there's a lot more risk .

There's a lot of ways that you can lose money that , if you're not operationally sound and and and I mean lose money in much bigger chunks than you would , if you know , a truck falls off and you got to repower it for you know , an extra two grand or whatever .

This is like oh wow , we just left 10 containers in the port and they've been there a week , and now we have all this demurrage , and there's just a lot to it if you don't have good , sound procedures , and so I think some of the things that we really hung our hat on at Access that were so familiar to us , we uncovered the fact that in a lot of ways

those things that made us successful at Access hurt us on the international side . So , for example , at Access we just were always looking to just add new customers , add new customers . Any customer is a good customer . Just get them going because it's , you know , one pick , one drop from Chicago to Atlanta .

I mean , ok , if it didn't work out , great , you can move on . But like that's not , it's not a lot of commitment .

But as you , as you get into the international side and our CFO , adam Shearer he joined the company about a year after I did the first thing he did was analyze our customer base and goes , oh , this 20% , right here , we should not do business with them anymore .

Why move ocean container freight If you , if you go through all that work and they have five containers a year , it just doesn't make a lot of sense because it's the , the , the juice and the squeeze are kind of out of sync , right , and so , like in a in a domestic move , again , one pick , one drop .

It's not a huge investment of time or capital or anything .

And so you do all this work and you execute those things and you get five containers out of the relationship over the course of a year . And then you look at the numbers afterwards and you go , wow , we had X many people supporting that freight move .

Because you've got salespeople involved , you've got operations people involved , because this is not a traditional , you know , it's not cradle grave brokerage .

I mean you've got customs involved , so you have , like all these different groups of people committing time , energy and resources over you know a small amount of volume , and so that that that just sort of ran counter to us , which was always hey , every customer , you know we can support every customer at some level and be a great resource for them , and we had

to be a little bit more discerning about that on the international side .

Help me understand all the pieces or places you could make money throughout this .

And so we really pushed the fact that we were going to give them very high touch white glove service , and we didn't position ourselves as a boutique . It wasn't that niche , it was hey , we can move faster , be more reactive , more proactive than you know , all the big box freight forwarders that that everybody's so familiar with , that .

We're a hundred times larger than us , and so it was sort of just the . We're going to give you , you know , access to everybody in the business that you're going to need and we're going to carry this business and we're going to carry your freight through with a ton of care and attention .

What does the capacity network look like in this part of the business ?

. So you know , our approach , especially in the early days , was we would partner with other forwarders overseas who were larger than us , that had volume , and we would essentially piggyback on their contracts to secure attractive rates .

That's how we , you know , because it's always a chicken and egg dynamic when you're trying to build this up , it's like you can't get the rates without the volume , but you can't get the volume without the rates , and so you're kind of in this , you're stuck with that .

And so those early days we began building really strong relationships over , especially in Asia , because we were , especially in those days , heavy on the Trans-Pacific we still are but diversifying away . And so we had a couple of really good partners over there .

That and that was kind of an inflection point for us was actually getting on a plane and going to Hong Kong , going to Shanghai , going to Ho Chi Minh City , taipei , I mean , in getting in front of these partners and figuring out together how we could support each other and grow the business .

And that was one of the biggest sort of learning moments was just sitting over there and understanding from people that had been doing it for decades how we could be a better partner to them and then , ultimately , how we could leverage our relationships with them in a better way .

Um , it was a little bit more formal , I would say , and and I think the biggest thing is that they very much valued that we would get on a plane and come to them , Um , and we've kind of stuck with that . I mean we go back and forth , Um . In fact , I was just in Atlanta with one of our partners from China last week .

So that FaceTime is particularly important , I think , culturally across Asia , but particularly in China and in Vietnam , where we go the most .

That was a kind of a key to see how much different it was , because we would talk on the phone , we would have video calls or we would communicate via email , but the face-to-face piece is really where those relationships started to become , you know , mutually beneficial .

We have a very nice freight forwarding business that we built over the years . We have in the process of turning on our domestic product in April of 2021, . We also began thinking about drayage differently , and we've always done drayage as part of a pickup or delivery on an ocean container , which is just an extension of that ocean move .

But we began to offer that as a standalone service to especially larger BCOs that are sophisticated enough to break out drayage from their ocean spin they're usually going direct with ocean lines at that size and so we found there was a real appetite for that , particularly during the pandemic .

Many companies had never thought about a brokerage for dredge during the pandemic , because when things are going well , they have a couple of asset-based carriers that they can just lean on .

But they couldn't do that during the pandemic , and so we could aggregate a ton of capacity for them that they otherwise wouldn't have any awareness of , and so we became sort of this really great backup option for people . And so then you know , our dredge group grew very , very quickly . Domestic , we knew would and it did .

I mean we , 2022 was our full , first full calendar year for domestic and we did over 300 million that one year alone .

And so we had already recruited a bunch of our folks from Access America who had kind of scattered to different places over the years . We had a team in place of maybe 20 people . They were all very experienced , very excited about the opportunity .

We held a customer draft of all of our international customers that we knew had high volume domestic freight and we held a draft where everybody got to pick customers that we knew had high volume domestic freight and we held a draft where everybody got to pick customers that they would go after . So we made it really fun .

We started making calls at midnight on April 1st . Which was getting fired up . You might be putting an idea in my head right .

Yeah , it was , it was really fun , so we made a big deal out of it and but but because we had so many months to kind of think about how we were going , it was really fun , so we made a big deal out of it , but because we had so many months to kind of think about how we were going to approach it , I mean we really did hit the ground running , and

so that domestic and drayage group both those groups grew dramatically . I think we are now it's a little bit hard to know this for sure but just based on what I've seen , I think we're now the second largest drayage brokerage in the country , behind tql , really . So that thing just took off like wildfire .

And look , I'm not um , it's not lost on me that we started these groups . It probably the best time in the history of freight I mean , you know , 2021 , the the industry was absolutely going gangbusters , so we got some help . I'm not saying we did everything , just right , but those things took off .

And then last year we added Intermodal to the mix , and so that's sort of how we think about this . Business is domestic drayage , international , intermodal , with a few other little value add things that we also do . But those are kind of the four legs of the stool , even though Intermodal is only a year old . But we have high hopes for that long term too .

Um , relative to a split model , like you know , most of the companies I've had on the show were split model , yeah , but a couple are cradle to grave , and I just would love to hear your kind of thoughts on the strategy there and then the evolution of it , given the entrance to the enterprise business , and kind of how you've augmented things .

To be honest with you , we could have certainly gone out and recruited that , but I think the reason we didn't do that is what we like about Cradle to Grave . It is definitely a growth model because all the incentives align towards developing new business , bringing business on you know , the pod system and all the things that come with that .

We also like the built in accountability that comes with Cradle to Grave because , fundamentally , the person who makes the promise to the customer is the same person who has to keep it , and we like that .

It keeps us from having to sort of police accountability , so to speak , because it's ingrained in the model itself , and so we've always liked that aspect of it .

I think the biggest rub is that as you get up into a customer that wants to give you 500 loads a day , it doesn't necessarily hold up that well , and that's where you have to be able to build out separate teams . And so we've done that as a way to address high volume freight and we've actually done that on the drayage side initially .

But we know that long term side initially , but we know that long term that's got to be a huge part of the strategy where we pull large shippers out of that sort of traditional cradle to grave model and put more resources around them .

able to you know what a manager is at Steam . And then you get to hire somebody and the model is basically you give that person a little bit of your book to kind of get them started .

They're required to build their own book and then when both both of you have a certain level of GP , you hire another person and it goes on from there and a typical pod is four or five people and as that group expands out , you create a pod under that and it just sort of keeps expanding out from there , and so it's just .

We like it because it just really it drives entrepreneurial behavior . That's what we're really after . We want people to build a little business inside of our business that they create . We have uncapped commissions as they can continue to build that little small business , so to speak .

The other thing is the math makes sense a lot easier , um , and what I mean by that is you can create a structure where you just know that group what you're capable of paying them so that they're happy and making money and the business is happy and making money .

You don't have as many people who are necessarily non-revenue generating that you have to figure out , okay , how does their comp fit into the compensation of the rest of the business ? And you know , when I think about how we grew our business , that became a challenge .

We had a very big operations group and don't get me wrong , these people were exceptional and did a great job of helping us grow the business . But for a while they weren't quoting freight and they weren't pursuing new customers . They were tending to the existing customers , making sure those customers were happy .

But you couldn't necessarily attribute a dollar amount to what they were bringing into the table and what they were costing to the business with respect to that , and so it just gets a little bit more challenging to make all the dollars make sense and feel like you've got it spot on . It was hard to know how to commission them or compensate them and such um .

The other thing too is that , I think , is a big benefit to a creator . The grave model is you end up with a business full of hunters , right ? I mean everybody . Most people in that business know how to hunt , know how to go and get and land accounts .

That was not the case in our world and you could be in a place where only 5% , 10% of the people are capable not capable , but are doing the function of landing new accounts . And this isn't a heavy enterprise business , I should say for sure , but it's just a little riskier . You're putting a lot more eggs in a smaller basket .

I'm from , from my perspective , on the non cradle to grave model , so I just I like talking about these specifics Just because you know our listeners are thinking about this stuff . You've got young folks starting their businesses trying to think about should I do this or do that ?

I want to talk , though , about some of the challenges of it , and specifically one that I really wrestle with or struggle to understand how to navigate effectively is managing a carrier network . Building a carrier network , and one that's efficient . How do you think about that within the business ?

And I'm not saying we don't have that right now , but we are actively working to , you know , have a better solution for that . So it kind of goes back to the Access America days , and what do you keep from that and what do you adapt from it as a way to improve it ?

And the carrier side again , we're only three years in , a little over three years into our domestic business , a little over three years into our domestic business , and so , um , but we've already , you know , have somebody you know in our office now who is focused on carrier procurement and carrier relationships from a corporate perspective .

So , while we do have frontline people covering freight um with carriers all over the place , we have just recently put into place a kind of an executive role at the corporate level to start looking at this from a bird's eye view , to figure out how do we better align to this carrier network as opposed to just having sort of this kind of free for all mentality ,

and so we're kind of at the early stages of that again three years in . But we are , we recognize the limitations of the model relative to the carrier community and we're working through that right now .

It's a hard thing to answer because you do get there are so many benefits to the creator of the grave and this is just one of the challenges that you've got to figure out the right way to augment to and I think my perspective is just thinking about when you aggregate all the freight you have which it's not any individual's job to do within the cradle the

grave model .

You got to have someone from the corporate doing this and thinking about okay , we have 10 reps who have density on Chicago to Atlanta and someone corporate or someone outside of the cradle to grave model needs to look at that and then figure out what are all these lanes that we have , that density , when you aggregate the 400 or 500 customers we're hauling for

and then focus that kind of corporate carrier group on procuring capacity for those and you can kind of whittle away at the network to build the right carrier group to support that . It's kind of just my two cents thinking about this . You know , frankly , for the first time , but does that make sense ?

The way that we operate is we have inside sellers who are focused on their mode so domestic drainage , international , intermodal but we've also put some teams in at the corporate level , both in our client success team and our business development team , who are focused on all modes , because one of the things that we are concerned about is as a customer .

I mean , our goal is for a customer to use us for every mode that they , you know , know could potentially have a need for , and so what we don't want the customer to feel is silos in our business , so we don't want them to feel like , well , I'm doing domestic freight , I'm going to go over here and do some international , and it feels like they're doing

business with a wholly different company . What's the point , you know ?

So we've been putting these other kind of corporate level teams in place to help avoid that and to look at the business from the customer's point of view , so that the left and right hands are working in sync and there's graceful handoffs from mode to mode , and so this business is a lot more complex than what we were doing at Access America , which I loved

again , a lot more complex than what we were doing at Access America , which I loved again . But to your point it was all revenue-producing people on the floor largely doing a very similar role as the person sitting next to them .

But because of the path we've chosen , we've created a tremendous amount of complexity and there's just certain things we've had to kind of put into place to try to reduce the level of complexity , if you will .

These are the hard challenges that are really difficult to figure out and , as I think about it , it's like this is scaling really at this point is understanding how to go from one to 10 with the same level of customers , because you've been doing a great job for whoever it is domestically and you know they have that international business or vice versa .

And now it's like , okay , how do we make that work ? Because your domestic rep doesn't know the international stuff . Potentially , I mean , these are what I think would be the challenges that you run into .

But then this is actually where I think culture and trust and communication become really important , because if I know anything about businesses that support multiple modes and where different people are going to handle that , um , sales people are extremely protective and they're always worried about if I let someone else touch this . Is it gonna screw me ?

So if I'm the guy who's been doing a great job for you know , I just had cory written our on the show this last week . So let's say I'm doing a great job for cory and his team domestically on their limp business and now we're getting an opportunity in the international stuff . My biggest fear is when I pass it .

I'm Andrew and I pass it to , you know , jason , to handle the international stuff and he screws it up and he doesn't do a good job and then all of a sudden , like I'm , my business is at risk yeah . But again , I think this is as you scale it like .

This is where people have to develop trust and you have to have a culture that that allows for that to develop the right way . How do you think about that ?

And even communication , I think , in terms of , you know , helping people understand these are the changes we have to make to scale this business to create more opportunity for all of us , and when you can explain the why to people on the front end of those changes and you do it in an effective way , people buy into it and people are open to it .

So I'm just curious how are you thinking about all that stuff and how does that play ?

And what if somebody doesn't screw it up , which is more than likely going to be the case Not guaranteed , but more than likely they're going to do well and now you've got a customer who's doing two or three or even four modes with us . Do you think they're going to want to throw us out the door tomorrow ?

Or are they going to see us more as a strategic partner , not a tactical one , if we have that level of relationship ?

And so if they'll think about it from that perspective and we talk about that , that perspective and we talk about that , um , it's , you know , it's obviously there's , there's tremendous upside if , if we do our jobs right and trust each other and , and so we have to work with those guys on that and it's an ongoing conversation that probably will never end , but

that's how we handle it .

I mean , I think sometimes brokerages get these , you know , people will sometimes look at them and it's like freight bros or sort of you know a frat house environment . And I don't want to say we were in that environment , but it felt like we were tiptoeing towards it a little bit and it wasn't really what we wanted . It was just kind of happening .

And so we kind of stepped back as a leadership team and really just had some hard conversations around . Okay , we're starting to grow this business . What do we want it to look like ? And is this it or is it something else

? And at the same time , a couple of us had read this really great book called what you Do Is who you Are , which is a book by Ben Horowitz , from Andreessen Horowitz , the venture capital firm . It's an unbelievable book about culture and basically what he was saying is it's not what you paint on Andreessen Horowitz , the venture capital firm .

It's an unbelievable book about culture and basically what he was saying is you know , it's not what you paint on your walls or not what you put on your website , it's what you do . The norms of your business is your culture , are your culture .

So we and probably the biggest thing I got from that book was , he said , culture is either by default or by design . In other words , everybody has a culture . You either have one that you meant to have or you have one that just happened . And if it just happened it's probably not great .

And so we spent about six months actually , which seems like overkill , but we really wrestled with this and wanted to understand what were the cultural norms for our business , what do we expect from the people that join our business and what should they expect from us ?

And so it kind of culminated and we came up with six maxims that we , that we kind of live by , and it covers a whole host of different things , but those six maxims sort of act as sort of a filter of how we hire who comes to steam , what we expect them to do and why of how we hire , who comes to steam , what we expect them to do and why .

And then there's some kind of subsets of those that are just more kind of cultural norms , how we conduct ourselves around the office .

But having that has been kind of this North Star for us where we can always go back to something that we didn't just slap together but put real time and effort and thought into that has real meaning behind it , and if the business ever feels like it's getting off , course we kind of have this way to go back to the center , so to speak .

And so we do have them on the walls and we do have them on our website , but we did the work to define why and we talk about them all the time , and so it's just kind of an ongoing thing that we've put a lot of emphasis around and it really just makes coming to work every day .

I mean , part of what drove that was the sad fact that we're going to spend more time at work than we are with our families . It's just the reality . So why don't we create an environment that we really want to be in and that we get real benefit from ?

And so that was what really drove the entire thing , and thankfully we did it when we did , because that was right before we started to scale dramatically and it was before the downturn that you know was a huge challenge , but I felt like our culture held up very well in spite of and so you know we just kind of treat it as this ongoing living , breathing thing

that needs attention . I mean , I just love that , and so you know we just kind of treat it as this ongoing living , breathing thing that needs attention .

It's what you do , I just it makes me think about how I've always thought about culture , and the example I've always used for culture is when I take , you know , let's say I have 10 employees sitting in a row doing their jobs . Culture is when I put the 11th employee right in the middle of those 10 .

What are the habits that they pick up as a result of the people all around them ? Like who do they become as a result ?

Because whenever they come into the business with their intentions , they will either be ostracized for being very different if they're doing things completely wrong and against the quote , unquote culture that's been built , or they'll help develop it in a good way .

But it is what you do , it's what your team is doing on a day to day basis , and I think the intentionality piece is so important . Putting it on the walls is one thing , and everybody puts something on their walls , but those are either hollow words or they're words that really mean something to people .

And they mean something because they represent the actions that people take every day .

And if leadership is doing a good job , they are communicating it on a regular basis and even furthermore , they're tying the successes of the business to those actions and the stories they tell always come back to look at this win we had , look at this award we got from this customer whether it's a revenue award or a literal award for service and the reason we

got it . And you look at that wall and you look at those words and that culture , that that that you built , that's what drove it . Or , on the flip side , it's it's acknowledging the mistakes and the failures that we have , and everybody has them .

I mean , there are things , times , where we screw up , but it's easy to then attribute those mistakes and failures to a lack of follow through on the culture and a lack of follow through on the things that you committed to and said you were going to do .

But we , ultimately , we want you to assimilate into the culture that we designed , not whatever your ideas about it should be , and so it's a .

It's a give and take , and so , yes , you can be an individual here , but we need you to stay within these general guardrails that we believe in , and if you'll do that , then everybody's going to have a great , great experience .

was . It was the pandemic and created an unprecedented level of growth . But then the two years that followed have created immense challenges . There's not a company in the industry that hasn't endured some level of struggle , and it doesn't mean companies can't still be profitable or you know it's all about relative to where you came from .

But can you talk about what the COVID journey , the pandemic journey , has been like for your business ? And I definitely want you to hit on some of the ocean side , because the rate at which we saw ocean rates increase during the pandemic was like , if you know in the definition of the word , unprecedented . I think Sure .

So could you talk about that a little bit ?

But part of that was again we went from single mode to multimodal and all the things and the pandemic itself . But but to your point , on the international side , I mean , ocean rates got to $25,000 a can to go from Shanghai to LA . I mean , you know , in the months preceding that it was 1200 bucks .

We would go get the space and present it to the customer , got it to the customer and it was just that's the way it functioned , because you could get space and it would be gone like that and so . And all the customers ultimately came to realize that , and so it was just if you can get the space , you definitely have a buyer .

You just have to go get the space .

So you could do it pretty quick and you didn't always have to say it on the on the fly , like when they reached out . But you had to , you had to move fast , you had to move fast okay um , and so you know when that happened . Um , us again privately held bootstrap business , the the .

The way the ocean market just went supersonic , allowed us to use those dollars to fund our new domestic and drainage startups , and so it really afforded us the ability to get very aggressive in hiring and building those teams out .

And so it kind of came at a great time and it really , and even today , that multimodal strategy we love , because you know when , when one mode is going through a particular troubled time or downturn or maybe just bad week , the other modes can sometimes offset that , and so it's a little bit of a kind of almost like a revenue diversification strategy where you're

a little bit more protected from the major market swing . So , for example , right now we're kind of experiencing a mini little COVID right now on the ocean side for other reasons . But you know , this time last year , I think , ocean rates got down like a thousand dollars a container to the West Coast from China , and today they're about six thousand .

So not 24 , but certainly elevated compared to where they have been . And that's mostly driven by this Red Sea mess and the fact that the ocean carriers can't access the Suez Canal .

But and because demand is kind of still holding up and you know we're seeing a lot of increase in imports as a result of the perceived more tariffs that might be coming down the pike post election and also just the replenishment from , you know , basically not having to replenish inventory last year because everybody was holding so much .

It's often just kind of this optimistic it's going to turn soon , we hope . Yeah , it's been six months for like 18 months .

The six months , it's always six months , yeah , but you have an interesting situation , given that you have a lot of visibility into the inbound imports and containers , and I'm curious how you think about or what you've seen in your experience with respect to a correlation between the rise in rates or increase in volume coming inbound and how that is that a sign for

change coming ? How do you think about that ?

I think certainly they have to drive some , but I think there's a school of thought that you know , a lot of that gets moved over the rail and goes straight into a warehouse and that kind of thing . But I tend to be somewhere in between thinking it doesn't move the needle at all and thinking that it moves the needle quite a bit .

The bottom line is imports are up year over year . There is a pretty substantial capacity crunch in the market which drives rates . No one really knows when it will start to taper off . Many people I mean actually the rates have come down just in the past week , so it's starting to soften a little bit .

Usually golden week , which is a Chinese holiday around the beginning of October , is where things start to slow down . Then you might get a little bump leading into Chinese New Year and a lot of people think that that's what's going to happen this time around , because a lot of this volume is driven by a kind of pull forward inventory .

People are trying to get their inventory landed sooner . So peak season started much earlier this year for the ocean market . So most people expect around that October timeframe for things to start to calm down and get back to kind of a place of equilibrium .

If you will , the domestic market , you know , will , I think , receive some benefit over the next couple of months from all this landed freight coming overseas . But I think the bigger question is how do we get the capacity situation into a better place ?

It feels like it's pretty balanced all of a sudden , after being , you know , way too high on the capacity side for the past couple of years , it feels like it's coming back to balance , but certainly not ready to flip , I don't think . And so it's really just trying to figure out .

When does this thing start to , you know , kind of turn back the other way and it may need , I mean , maybe it's a hurricane . I mean , you know , there's always like some event .

It feels like that really drives everything into a state of disruption , and obviously I'm not wishing for hurricanes , but I've certainly read that they're expecting it to be a very active season . So that could very well be something that happens , who knows .

So I'm curious how are you guys thinking about kind of planning for your business ? You know we are in a it's been a two year now down part of the cycle . How are you thinking about long term growth and hiring and your strategy around that moving forward ?

And by the time we hired Aziz , our CTO , it felt both from a kind of standard IT infrastructure scenario where , you know , he looked around and saw a lot of areas where we needed to shore things up , so that was kind of step one .

And now we're building just a ton of custom IP that will augment everything else we already have . And so the way we're thinking about that is really on two fronts Can we drive internal efficiency ?

Can we do more or less through the way that we build this technology and I think about that in terms of like revenue per head , kind of a simple way to think about that and then , on the other side , can we deliver something of value to customers through technology ?

And so right now we are , and by the time we get to , let's say , q1 of next year , most of this will at least be done in its first iteration , and then you're never fully done with anything on the technology side , but it'll be operational .

And what that looks like is it's custom UIs that we're building so that all of our team can operate in the way that we really want to , instead of the way we've been sort of having to .

When you have all these different modes , how do we build those in ways where there's collaboration across these modes , building load boards that we can expose to the carrier community , which goes back to your carrier question earlier . That's another way we're gonna kind of streamline . Things is through technology , yep , so a ton of that kind of internal stuff .

And then we're rebuilding our customer portal , which really began as an international product , and that we're now expanding that across every mode so customers can log in and see everything that's happening with their freight across any mode that we're doing for them .

And then the other side of the coin of that is there's a bunch of bi tools in there where they can kind of see what's happening over time . So so it's sort of equal parts where's my stuff and what's been happening over time in my relationship with Steam and the various modes of transportation we're using ?

There are also , I think , a number of vendors out there that could get you a white-labeled load board that would be yours and you know especially I just feel like there's going to be almost , especially as AI comes into the fold and you know these bots that can answer the phone as carriers call in .

I'm just curious what your perspective is on the build versus buy notion and how you're thinking about that within the business .

I mean , would it be less expensive to onboard something that's close enough to what we want , or would it be better to build it ourselves and we just try to look at it on kind of an ROI basis from that standpoint , can this thing be implemented and up and running and delivering value in a month in a way that would benefit the business ?

Or if we waited three months , can we build it ourselves and maybe get a little bit better ROI out of it ? Because it's a little bit more to spec what we want , and so it just really comes down to those types of analyses about you know , and then there's other parts of it .

I would say sometimes it depends on how long the startup has been in place , right ? You know you don't always want to be the first customer if you're buying something off the shelf .

And there's so much activity , as you know , in our space over the past few years and it's actually been really fun to see some of the ones that three or four years ago were barely operational who have now become kind of industry standard , depending on what you're looking at .

So we do take that into account and our CTO is a total pro so he can look beyond the stuff that I might see . In fact , we had a meeting one time with a potential vendor who showed us all this really cool stuff . In my mind I was like this is amazing , why would we not do this ? He's like man , I can build that in a weekend .

I was like okay , all right , let me just stand back . Yep .

I'm still very competitive , uh , but I would say over the past five or six years I've taken a , made an effort to meet people across the industry and I've built some great relationships , even amongst what would be competitors .

But if you think about everybody's strategies being so divergent , um , your competitors in some ways but again , everybody's kind of got their own path and they can go make a super successful business , doing it very differently than somebody to the left or the right .

And anyways , I love these stories because you really get a good window into that when you get to hear from all these great leaders across the industry . So I'm really glad that you're doing it and I think most people are .

out my non-compete , but I'm just really appreciative of the relationships I've been able to develop with folks by having these conversations , whether it's someone who I knew a little bit 10 years ago and have spoken to once since , and now I've gotten your whole story and learned a lot about this business , a really interesting business that's just so different than

anything I've been a part of um , or people I never met and and I'm learning about their business for the first time , it's just been really fun , um , so I I'm I'm glad that this is what I've been doing and I'm appreciative of all the guests who've been willing to come on and share , and you specifically today .

Um , I thought about trying to shorten it up at one point because I was like I'm not getting as many listeners as I want and I'm like , but what do I really care about ? Like , do I ? doesn't matter if it's you know ten thousand or a hundred thousand like or does it matter that like , I'm getting meaningful value and relationships and and helping people .

I love the messages I get from people who I've never met , um , and maybe never will , but they're just like , hey , I listen to this and it completely changed how I think about this and that person is really awesome .

And then what I really love is the guests who , weeks later , will tell me how they met someone and they're like , this person , like , knew all about me from this episode and they were really appreciative and grateful and it helped me get this new customer or this new relationship , whatever it was . So it's been fun and I'm going to stick with it .