Ep. #30: Omar Singh - The Rise and Fall of Surge Transportation- And From Bankruptcy to (Re)Surgence

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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 to another episode of the Freight Pod . I'm your host , andrew Silver . We've got a very interesting and unique story today that we are going to be walking through .

You know , let me put it this way we're not in the breaking news element of this business , but I feel like we're kind of in the breaking down news in that , you know , we're getting to a place where , when there are big events happening , we've been able to get some of the key players within those events on the show to really talk about what's going on with

their business or their situation . And I'm really fortunate to be able to do that today , as I welcome Omar Singh to the show . We're going to talk about surge transportation , their journey up and then down and hopefully back up for them . So welcome to the show , omar . How are you doing ?

I've gone to a couple of events uh food shippers , a couple of e2 open events , uh , but I've sort of been just focusing on the restructure and staying home um , uh , much less travel , much less dressing up , but um it didn't feel right to just kind of have gym clothes on in this conversation yeah , I mean , I will say for me as I was , you know , I sat

out this non-compete for a year it's been a year and a half now , I guess and uh , I didn't . I didn't wear much other than sweatpants and gym shorts for that time and as I started getting back into more professional settings , it was a little uncomfortable at first putting on a nice shirt and whatnot .

But I think even supply chain degree programs were very few and far between . Supply chain degree programs were very few and far between . So I think even in the 90s , you know , entrance to the industry weren't doing it necessarily by career design but sort of just kind of found themselves one way or another .

And you know , I think back then it was called inventory management or you know whatever . You know getting in kind of without a career path like there is now , but I'm an English teacher by training . You know I have kind of without a career path like there is now , but I'm an English teacher by training .

You know I have two degrees in English and I started driving trucks in 94 .

To pay for college I went to a state school in Virginia for undergrad and at the time , you know , it was kind of possible to work all of the hours moving furniture and driving , you know , straight trucks my first year to pay in-state tuition , after just you know kind of three , four months of work . So I got into that very quickly .

My boss took me under his wing . You know , within a couple of months I was driving class B trucks and then within a year I was driving class A and then it just kind of stuck with me . I did it throughout all of college and it worked out . To pay and kind of have side money , we would do office moves at night in Washington DC .

After all the offices would close . We'd have 6 pm to 6 am to do these kind of massive moves and that was , I don't know , it was just fun at that age . And then I moved out to California to teach for Teach for America after I got out of undergrad , taught there for a while but I was moving up and down kind of San Jose down to LA area .

On the weekends I was driving trailers down , dropping them off , swapping , coming back for an Atlas agent and then kind of stayed really like in love with trucking and driving . And then when I was doing that I was driving sleepers for the first time and you can imagine just driving the West Coast after growing up on the East Coast was .

It was just an adventure really and really enjoyed it . And then so I moved back to DC and went to Georgetown for graduate school after teaching and thought I was going to get into teaching as my career and anticipated , like so many teachers , not making money , you know , for the first few years .

So I thought I'd lay the groundwork by driving over the road , you know , for a few years before getting into my career . So I bought a truck as an owner operator and I drove over the road for three years and then my plan was going well as an owner operator .

I was saving money and I bought my second home at that point and then kind of mistimed the hiring season for teaching one year I thought I was going to come off the road , put my truck up for sale and anyway I mistimed it . The teachers got hired way before the next school year and then I started a trucking company .

I thought I would do it on the side until the following kind of teaching hiring season started . And then , you know , anybody who's owned trucks knows that's just not something you know you can hop , hop in and out . Of .

You know , in a in a nine month period and so also all of my friends were drivers at the time and I still had my over the road truck and so I started a company called Jando Trucking in 2003 and kind of built that up on sort of a lease operator owner , operator and then we went to employee model , but I ran that until 2010 and kind of bled out in the

recession . So this industry as cyclical and hard as it can be on people , I went through it in 2008 , 9 , and 10 .

But in that period like really the kind of the hardest years , which were 8 , 9 , and 10 , I developed some legacy , what I call legacy customer relationships that allowed me to pivot into brokerage in early 2011 , because I had sort of those relationships established and in many ways , you know , kind of those legacy customers from that period 8 , 9 , and 10 are the

ones that helped me get into brokerage successfully . I started out at Landstar as an agent and then moved to a couple of other agent-based companies and those same legacy customers helped me start , surge and to be honest with you . Those same legacy customers are the ones that have helped me restore .

Just talk to me a little bit about what kind of lessons you have from being in the in the truck and that kind of mindset you had over those years , mindset you had over those years .

So you have to have also a real service mentality , in addition to , of course , the work , because summertime I mean I've said a couple of times it's not every week , but I mean there are weeks every summer where we would clock , you know , a hundred hours on on the clock and it was , it was brutal , you know , and hard

work . And then kind of every day you're getting back to the yard at 7 PM thinking , oh , I only had a 12 hour day . And then the dispatcher goes . You know , I got two crews out there . They're going to be out till 2am . Could you give them some relief ? And they're like your friends , you know .

So you can't , you kind of can't say no , and then you come back and you end up sometimes sleeping in the trailer because it's just not worth going home for , you know , for three hours so , and then you just start work again .

They give you uniforms , but I was determined to save as much as I could , you know , to pay for college , like I said back then you know , in-state tuition was about $4,000 a year and I could make about $12,000 a summer , so it was sort of an easy no-brainer and then have a little bit of you know money for during the school year in addition to night moves

or weekend moves . And then it was the same way as I mean an owner-operator . It was just a different era of kind of moving and tariffs and the money was pretty good . I guess it always is if you work that many hours .

But I was able to from all of the money that I saved doing that , of course , and then when I was teaching on the West Coast and making extra money then and their hourly wages on the West Coast are pretty good , like double time on Sundays all day in California , which was helpful as a teacher to have extra money , of course .

But I bought my first condo when I got into graduate school , before I enrolled , and then I sold that condo for a huge profit when I graduated and then I took all of that profit and I put it on a down payment on my first truck , which is actually right there .

It was a custom sleeper with a shower and kitchenette and you know my son , omar , was already born . So we bought a car seat , bolted into the floor and just and left you know . So like it was always an adventure to me .

And so there was a little while where we were running slot machines for casinos , like it was all blanket wrapped and kind of white glove , you know , in and out of Vegas round trip , and I just it never really took off . But so then it was brokers for a couple of years and then I would say , probably after year two it was all customer direct .

You know we had built up to 30 trucks , which is it's enough for somebody to you know kind of sit down and have a conversation with you about some annual freight , you know , rather than it's just so hard when you have call it , five trucks to go to a large shipper and get , you know , a contract , um , but yeah , it was just classic door knocking going to

warehouses in the area . It was sort of terrifying . You know they all have these . Do not solicit , trespassers will be violated or whatever . Uh , violators will be prosecuted . Yep , you know they all have these .

Do not solicit , trespassers will be violated or whatever uh violators will be prosecuted yep , you know um , and then you kind of knock on the door and waiting for them to call the police . I have trucks .

But when I joined Landstar , you know , kind of in 2010 , early 10 , you know we closed end of October of 10 . So kind of the end of 10 .

I'd spent about a year kind of vetting where what I thought I was going to do was place my fleet of trucks Right , and so I attempted to move as a what they call kind of an asset agent rather than a broker agent , and I joined thinking that that's was going to be the move that I'd be able to keep the customers that I was working with , I would stay

under asset contracts and I would bring my drivers over and my trailers over , and you know you get all of these kind of efficiencies and economies of scale when you join a large fleet rather than when you're a small company . Um , and then , with all of the savings that we got from economies of scale , we would be able to continue being a trucking company .

Um , and it that didn't turn out to be what happened um , for whatever reason , whether it was by design or by mistake , couldn't get the drivers qualified . Uh , so went out and tried to hire 150 new drivers and they couldn't get qualified and , and you know , um , it didn't work .

So I lost all the trucks and lost all the trailers , and then kind of had this brokerage contract , which I thought was very just secondary to everything I tried to do . You know , and there's a , there's a thing there . I mean , I still have a good relationship with them and the people I was working with back in 2010, . 11 , aren't there anyway .

But there's a thing where they say that their agents aren't successful , anyway , but there's a thing where they say that their agents aren't successful until they get rid of their trucks because the trucks are so just time consuming and just a resource drain , and managing drivers is harder than managing customers and whatever it is .

So I don't know if it was by design , but I didn't get my trucks or my drivers qualified , and then I had to learn to sell differently , but the idea was always to stay an asset provider and stay a trucker and stay , you know , in what I was doing and to keep my team together .

And then that didn't happen , you know , kind of partially , and then I just had to learn how to sell differently and I think it's a transition a lot of people really have a hard time doing and to this day , you know , there's asset based brokerages that have a few trucks to try to go in on an asset contract because it's just a different sell and then kind

of develop the business model that we have to this day , which is trying to sell on not being the primary and , you know , bringing value to to times when primaries are unavailable , um , and that is just . It was a really hard sell to learn , um , but I think you know for the most part we got there .

But the idea of kind of what we do and I'd understood our business model kind of I don't know if I wanna say perfected it but got it to a point where I had a narrative , I had a strategy which was , you know , to be there when primaries are unavailable for one reason or another . You know there are plenty of reasons .

You know , just if nothing else , you know forecast is linear , demand's not linear . You know that's that's one of my things . I started doing business as Surge in 2013 or 14 , but then officially incorporated the company in 16 .

I did a quick bounce from Landstar to another large national firm really quick length of stay there into another large national firm quick length of stay there and then took Surge Independent in 16 . And those bounces were sort of like testing if I would be able to bring customers over , if they could sign new contracts , if there would be any non-compete issues .

I had a Schedule A when I joined , which was the my legacy customers that were portable .

But you never know , you know how things are going to go so , um , so I did a couple of bounces to tap and test the market to see if I'd be able to kind of pull off becoming an independent company again yeah , so were those other agent-based businesses that you were bouncing between .

You know you're working on commission only , so there's no base salary whatsoever . You know my kind of hours of work were similar to moving furniture . You know , say , cover a hundred loads a week .

You know I build my loads from 4 am to 7 am , cover the loads from 7 am to 11 am , then bid on loads from you know , 11 am until 6 , 7 pm , manage the expedites at night , then start all over .

You know , at 4 am and , and maybe I was doing the work of four or five people , but if you're not paying anybody and you're getting that commission , then you know you can get it all . Yeah , yeah , you can , you can , you can do a lot more than with a W-2 if you're willing to put in the work and you have , you know , some relationships .

And then you know when they take care of back office it's also , you know , kind of don't have that . You know carrier onboarding compliance AR AP . You know , you just kind of have a little bit of payroll and you're an independent company .

Technically , all of the agents have to have some tax ID , whether they trade as a real company name , like Search Transportation , or they just trade as you know . Call it Omar Singh Inc . You know and you don't ever use your name , you just use the parent company's name .

So some people brand themselves separately but they're still running all of the receivables and payables through the parent company . And some people brand themselves with the parent company . And then it's just very challenging in the national firms which was also part of my desire to switch .

Switch because they're all very established and all of the kind of accounts that everybody wants to go after are assigned to an office already . So kind of getting your foot in the door and picking up kind of the crumbs of any shipper who's not assigned to an office is challenging . And then you know when you you it's .

So it's very difficult to diversify your customer base .

And then you have customers who go through acquisitions or um , transportation managers change , especially with a business model like mine , which was to be like reasonably priced but a little bit higher than primaries in order to do you know the difficult work , kind of new managers come in and go , boom , you're out right , and so we're gonna cut costs here and I'm

gonna kind of make my mark , and then it's six to nine months before they bring you back in . So so every time that happens it's like , okay , I just lost six months of revenue , or I just lost nine months of revenue . I need to get more customers and then all the customers are assigned to another office .

So that was one of the challenges and one of the reasons I mean , kind of , for going independent . I need to be able to try to sell to everybody , rather than just kind of the leftovers of who's not assigned .

And all of a sudden I get to Molo and I just remember sitting and looking and being like holy crap , it's all mine .

I was there a lot doing agent development workshops and training and IT committees . I was very involved with corporate and even corporate sales as an agent , maybe more so than a lot of other ones are . I was down there a lot and anytime I had kind of surges uh , you know I would try to hire people .

Where I live in virginia and you know they're washington dc metro . It's a transient area . It's hard to , you know , kind of keep people . It's also very , um , high cost of living , transient labor pool cost of labor is high and so it was challenging for me to kind of build a team here .

And port cities not to mention a land star city or there's lots of brokerages there . They're good supply chain cities because they're always supply chain programs . There's ports which bring railroad , which brings trucking , you know which is , you know ocean shipping and you know everything's around these port cities .

So I have found them to be good kind of labor pool cities for hiring people who want to work in logistics rather than like people , you have to force them to give it a shot , you know . So I hired some people in Jacksonville and so I had a few people , always like two or three .

So when we started surge in 2016 , it was , you know , two or three of us just kind of grinding out , building loads and then , but then you know we have responsibility for pnl and that all changed .

But it was like very much an unknown , you know , know , I mean , so I would always , like it was one thing for kind of my large legacy customers to say , okay , I'll follow you to , you know , brokerage B , or follow you to brokerage C , because they're large , national , multimillion dollar , a hundred million dollar , a billion dollar firms , you know , with this

great kind of financial stability that we require in our partners . And then they all , like would say , if you go independent , all by yourself , you know , then I'll also support you , but you don't know that they can actually make that happen . You know they want to , they just can't . So it was , I would say , 16 , 17 and we're like proof-of-concept years .

You know , like , will I be able to get an office lease ? Will I be able to get customers to actually onboard me ? I know they want to . They might not be allowed to . Well , I've been to get insurance . Will be able to get motor carriers to haul the freight ? Will we be able to get insurance ? Will I be able to get motor carriers to haul the freight ?

Will we be able to get factors to give us credit ? You know , so we can cover loads like there's all these like what , if so , it's kind of a big chance . Um , and then by the end of 17 , so we're still way out in front of covid right by the end of 17 , it was like , okay , so proof of concept , works . We got it .

Now we don't have the monthly , monthly subscription TMS , but kind of a much more robust TMS . We got nice office space , nice I mean just we're not working out of my basement or someone else's basement and then we've got credit with the factors , we've got good payment history , we've got everything . So now we have something that works .

But it was still very much like these four legacy customers , right , that um stuck with me through everything . And then um , and then before you go on .

You know , our business model has been 30 day rates , 60 day rates , 90 day rates , you know , or just backup overflow 12 months , but they're going to be high anyway .

So we hit like a 60 day rate , which January of 17 started to stay busy and so I had a good like 90 day push of we just were all working day and night , three or four of us , and I was able to , you know , generate some cash . And then we went six months without a load . And yeah , and so not literally without , I mean well , like a couple .

And then , and then you know stuff just started coming in , and that's what a lot of people say it takes six months to get started , whether it's RFP cycles or just kind of summer season started kicking in . You know , things just kind of started happening .

You get a book , you get a load booked and you start building that and I was really accustomed to that . And then I moved into customer sales . I'd just gotten home from Michigan and called Brian and he was like great , you're coming to customer sales . But , andrew , I know you pretty well . Let me tell you something . You're going to get told no a lot .

It's going to take six months before you get your first . Yes , yeah , and I was like no chance , man , I'm not , I'm not no chance . And he's like I'm telling you , just be patient , it will take six months . And I I did work around that because I went and got some grimy freight .

I was going after this ugly produce like I don't care how ugly it is , I need loads on the board . I'm not sitting here with nothing to do yeah , but but that is as you said . That's kind of the way it is in this business .

The most at least good shippers aren't going to give you an opportunity the first time you email or call them and probably the first 10 times you email or call them . I think a lot of them want to see you're even willing to have the persistence to follow up and stay with them for a long enough time to show it's worth it to them .

And to get them to just to say , yeah , I'll just activate you and and good luck on the weeklies . I mean it takes like a really large , complex supply chain for people to have weeklies every week , right , and then to say , okay , we have this huge auction opportunity , you can do that , and then you know we'll start you on weeklies .

You don't have to wait for an annual RFP .

Most companies at some point during their year have some level of emergency where they get let down and that's that one chance you might get to forego the nine to 12 month wait for the rfp results or whatever it may be yeah , yeah , it's always that right , I mean , and it's , I can tell you .

But you go , you know we're going out to a nice dinner or we're doing something , and then the call drops and you go well , we're going back home and you know they want to say I thought we were going out to dinner and you go well , we're not . You know we're not anymore .

And I was like , all right , well , you guys have fun at the park and I'll be in the hotel room for the rest of the weekend um and that's just how you got to do , though , yeah , all right .

How many people would you say ? It's still four or five people Okay . Yeah , yeah , maybe 10 . I don't know , but it's .

It's this whole dilemma of you know , I know people say this and there's probably a term , you know , do I , do I hire somebody to go out and do the sales because I'm I'm so invested in the operation , service and execution that if they can bring in customers I'll make sure everything goes well ?

Or do I try to do sales because I kind of know people and now have some familiarity in the industry and then hire people on the execution ? And then , of course , the pros and cons are , if I do sales and they can't execute , are you know , if I do sales and they can't execute , then there's no point in doing the sale .

But if I hire them to sell and really you know it's hard it's hard to bring on organic , new outside business development , which it's not the same as reactivating existing accounts , it's not the same as finding new revenue streams and active accounts .

Like just going out and creating something out of nothing was very challenging , you know , um , but so so I decided to try to just start with some outside sales people , um , and then what I thought would be , I guess you know the operation , but really I mean a lot of credit , you know , to dina .

Well , you wife , I mean , she really pushed me to sort of get out in front of the industry , get out on stage , do a lot of writing , do a lot of public speaking and while that's like kind of marketing , it's not sales , you know , it ended up being really team selling . So , you know , I had my first guy

. That started in 2018 . It took us about six months to kind of find somebody and then we would do the scripted way to build your brokerage , which is to go to the conferences , get the attendee list , meet the people , follow up on the attendee list , ask for meetings and then get the meetings . And that's what it was .

So , 2018 to 2019 , he and I did 250 in-person customer visits . So we were just flying all over the map and then trying to do operations from the hotel room early in the morning , set the day up for success , and then we were just meeting . Anywhere we could get a meeting , we were doing it . You know we were crisscrossing past .

We weren't clustering , you know . So we'd go seattle one day and then chicago the next day , and then portland the next day , and then massachusetts the next day and then california the next is like nuts just anywhere . We could get a meeting when someone said they would do it , you know , yep , um .

And then that was really like the foundation in many ways for when covid hit , because , like we were just saying a minute ago , people would responded well , right to to the story and to the business model and they'd say , and this is now 2019 , by the time you get in the meetings , it's okay , I'll invite you to my , to my next RFP , or I'll call you when

there's a pandemic , right , I'll call you when I need you . I like you , but right now it's 2019 , freight market's soft . You guys seem like you're , you know okay , but there's just no opportunity . So but little by little those would turn into you know something . We'd get into an RFP and win a couple of lanes and have some opportunities and spot .

And then I got hit with the kind of double whammy of I know you guys were Anheuser-Busch carrier of the year one year right 2020 ?

And so their transportation manager saw me spoke on a panel at CSCMP , um , and just appreciated at that time I was talking about routing guide strategies . I was .

I didn't even know what an API was , but just kind of the strategy of , you know , being lower on the routing guide , second or third , and being reasonably priced to cover a freight that primaries can't . You know , that was just the strategy and forecast is linear and demand is , and then transportation managers go yeah , that makes sense .

Why doesn't anybody sell on that , right ? But anyway , so . So he invited me to be part of their dynamic rate tree know what you're probably familiar with . And then so gave me their specs and said right into our api system , like , do you have the capability of doing this ?

And um , I mean , I certainly , like at the time didn't , but I try to take calls , like on linkedin people , you know , solicit you for stuff , and software companies would hit me up all the time and say we can build anything you want built . Well , I don't need anything built .

You know , I solicit you for stuff and software companies would hit me up all the time and say we can build anything you want built . Well , I don't need anything built . You know , I have a TMS , like we can build a load board . It's like no , I just use other load boards , we can build a TMS and I have a TMS .

And then so he offered me this opportunity to build kind of a dynamic pricing model and we already had this like algorithmic pricing . That we did in excel . So we already had like inbound , outbound states , length of haul , uh , minimum rate per mile , minimum flash . We already had that in in excel .

So it was kind of a little bit fast to deploy that logic , um . But I called that software company and said I have this opportunity . Can you , you know , can you do this ? Um ? And they just said , yeah , I have this opportunity . Can you , you know , can you do this ? And they just said , yeah , you know , this is you know .

And then you start learning about Jason . You know language , communications and APIs and XML , like all this stuff , and they're like , yeah , yeah , yeah , we can do that , we can do that , we can do that , we can do that . And then so we went live with AB March of 2020 , when the whole world , you know , went nuts .

You know , I never , I never really thought I was excited about the idea of getting out and changing the way people view brokers , roles in the industry and and writing about different strategies and speaking , but I really honestly thought at most I would have maybe a little bit of a larger lifestyle business 20 people , you know , 30 , I don't know that .

I always thought in my mind from my trucking company days , I had 75 drivers on 30 trucks and we were slip seating and running two shifts and like in my mind I had this like 50 people's the most . I think I'm I'm really like good at managing kind of all aspects of of the organization .

So I never never thought I would get like in this position to go from probably where we were March of 2020 , 20 people in the entire company to you know , almost 300 , like very quickly and then trying to manage that and it led to obviously you know kind of where I landed , but in part , but so anyway . So I don't know if I even answered your question .

You did .

And you made a comment that was I don't know if that's marketing more so than sales . I don't think it matters what someone calls it .

I think the smartest thing that a growing business , brokerage especially I guess I shouldn't speak about anything other than brokerage because that's what I know but the smartest thing an owner , a CEO , a president of a brokerage can do is show the world who they really are and get out there and be your authentic self and preach who you are and what you stand

for and what the business stands for . And if you do it authentically and with some passion , I think it's an easy way not easy , but it's a way to get natural buy-in and it is sales . It is marketing , but it's . It's a way to get natural buy-in and it is sales . It is marketing , but it it , it's .

It's not sales in like a hey , I'm coming to solicit your business , it's more . I just want to show you who we are and then you can decide if you want to be a part of our journey . And that works , um , I I .

You know you guys did have a very big present . I mean , the only way you and I know each other is through this conference circuit and you know the way you guys present yourselves at conferences . It was very out there with the magician and everything . That was something that kind of drew me to you .

And then next thing , you know , you know we decide let's grab dinner one day and I realize you're a great guy and that's , I think , part of truly why we're sitting here today . So I just wanted to speak to that for a second Thank you . Second , to that comment I want to talk about . I just think it's an interesting strategy .

You talk about not trying to go and be the primary on the bid and it just it's very different than kind of our approach at Molo and what I was trying to do and our team was trying to do .

Where we wanted to go , win that contractual business , we wanted to have guaranteed revenue in the door that we knew we would be able to manage and it made it easier for us to forecast and grow and bear in mind we had some investment behind us , and so these are kind of things that people need to think about as they develop the strategy for their business .

We thought that , yeah , we knew we were taking some risk in going and getting this a lot of contract freight but and that risk is , you know , the market goes up in rates and you're stuck with these long-term prices that you've committed to . But it also serves as insurance .

It's a way to know that you're going to have business in the door day in and day out for your team to manage and allows you to go higher to make sure that you can keep people busy .

And it's a little bit of betting on yourself that , hey , you can service this business so well that the customer is going to find ways to give you more business in the event that things go sour , and that you know you get to a place where you're losing money on your primary or whatever .

The counter to that is your approach , which is I don't need to be primary , I'm going to put rates on file that I know I can make money at , and the only thing that's not guaranteed is how much business is going to come in the door through that . And the only thing I can think to add there is it's really important that you're 10xing the opportunities .

You know I might be able to get away with 10 opportunities . This is an arbitrary number , but 10 opportunities because I know all 10 are . I'm getting primary guaranteed business on .

You're going to need 50 opportunities again arbitrary , but just a bigger number to ensure that business is fun , business funnels through , because we don't know if the primer is going to take it or reject it . Does that make sense ? Yeah , yeah , so I don't know .

I just wanted to kind of throw some thoughts in there on top of your commentary , because I thought it was all really good and both of us have that kind of common relationship to Anheuser-Busch .

I will always be grateful to Anheuser-zer bush because they were the first enterprise shipper to give molo a chance , and I said it from day one whoever the first one is , we will be going to the ends of the earth to make sure they're taken care of , and I think that's that's partially why we we got carrier of the year for them one year , right , um , because

it's just . It's an appreciation for someone taking a chance on you when you're an upstart company that nobody knows .

It's in many ways it's hard because , uh , I mean I don't know uh , to how the right way to articulate it but yeah , you're like deeply moved by these things that people do and you kind of feel that they're your friends , right , if , if not your , if not your friends , your , your colleagues or I don't know more than just business , right .

And then when you have these businesses and things go bad in many ways , like so this year , I mean , I've certainly held my family closer and my wife closer and you know and and and everybody .

But like , in many ways , like I feel like I lost a lot of friends , you know , because like they , like they're , they're my people and the people who you work with are there's like relationships , they're real relationships , you know , that mean something and yeah , yeah , and we appreciate it deeply .

And then it's also hard when , well , for me , things went south for you . You're just being told you're not allowed to talk to them for a while , right , yeah but I mean , maybe you can as a friend anyway , but not you know , of course . Yeah .

. Surge was called by freight waves a digital broker . Yeah , I , I never knew you as a digital broker and I'm curious would you have classified yourself as a digital broker ?

I would think that if someone's trying to capture the essence of what a digital broker is when they say it , I'm thinking like investment backed , maybe Silicon Valley backed , or you know some form of you know startup with technology that's supposed to take over the industry , consolidate this fragmented market into you know kind of just a few big players , is the idea

. So so I don't know that there are any digital brokers , but certainly I'm not . I wasn't one of them and I never represented our company as that . I did have a period where part of our marketing was to call ourselves hybrid , like traditional and digital .

So we would say , you know we would use some you know tech capability to price loads and sometimes even source carriers , but then we would move freight the traditional way by you know relationships with motor carriers , talking to every driver .

You know just cell phone tracking , whatever it is motor carriers talking to every driver , or you know just cell phone tracking , whatever it is . So maybe the word digital hit like a slide .

I happened to just read it because I was doing some research on you before this call but it was kind of about the demystifying digital broker concept and spoke to how the digital concept maybe works a lot better in a B2C environment than it does in a B2B environment .

But it does sound like , based on our conversation today , you had a very bootstrapped business and had technology support through your TMS and whatnot , and then it was , as a result of a customer opportunity , making your own investment into the kind of API pricing model which is one kind of facet of .

If you were going to go , if you were going to say digital brokerage is 95 plus percent automated movement A to Z of freight pricing would be one part of that . But it sounds like you never let go of the human element of having people involved in dealing with the drivers on a day-to-day basis .

Having people involved in dealing with the drivers on a day-to-day basis and you know , it's kind of that transactional versus relational business approach and I think especially on the carrier side is where that becomes important . So does that kind of did I ?

But then , yeah , it was just a automated way of pricing um , with the kind of human follow-through and traditional way of doing things after that . So I mean , you could even compare it to RFP pricing . It was just faster and at the level of the load rather than at the level of the lane .

But but , yeah , other than that , that was that was the only digital element was fast pricing .

So legacy offices were Jacksonville , which is still standing , and then , of course , we moved into Chicago in 2020 , february of 2020 .

And then we had some , you know , uh , philippines , which largely was second shift , weekends , third shift , a lot easier to hire there because the time difference .

And then you know , we had some um down in in south america and in many , in many ways , you know , like tadina and I went , we lived down in medellin for a few months and my IT guy was down there and so we were kind of very hands-on .

It was more of like a surge office then , you know , then just completely remote , and then the guys and people would come down from Chicago and stay there for weeks at a time and so , but yeah , so 280 people , 2,000 loads a week and four offices , a scattering of work from home , three outside sales reps I mean really that was it , wow , and a lot of TMS

integrations . So not direct answer to your question , but so we did the Anheuser-Busch API dynamic retree and then we had another large legacy customer that started APIs and then right after those two I was like , okay , it's a lot of work , it's a lot of time to build these integrations .

So now let me see if I can just go sell directly to TMSs rather than to individual shippers , and see if that builds a pipeline . That's smart , yeah , and then become alliance partners with them . So then , even though it's still 90 days for an integration , like , okay , boom , now you have access to all 300 of our customers . So you know we start .

So it was very small sales team but just the opportunities that were created through the TMSs , in addition to having you know the track record at that time and then good references , you know being able to kind of go to the user conferences and say we're also vetted alliance partners with the TMS . It's just kind of you know things started happening pretty fast .

Yeah , yeah , yeah , I mean we never were hitting , like you know , it's kind of what brokers are expected to make 10 and being market-based pricing , api you can't really get above market . You know too much um but so . But ten percent on three thousand dollar , you know kind of line haul , is way different than what happened .

Literally april of 2022 went from three thousand dollars in line haul to fifteen hundred dollars line haul , and then you go from ten percent to you know kind of seven and you so the math sort of didn't add up to the overhead , you know anymore at that point .

The demand wasn't short-term because of COVID , it was because of people's buying behavior and this great API technology that we have and all these TMS integrations , and so we need to plan for things to stay expensive .

And so , true to my legacy business model wasn't competitive on rfps , um , but they kind of like uh , went against each other that model because with , with apis , then we couldn't load backup , um , we couldn't load published backup rates either , because they would conflict with APIs when there's a published rate on the lane , and so it kind of lost the published

backup rate model , which wouldn't have mattered in what happened to the market anyway . And then , yeah , we didn't have an anchor . So it was just like , as fast as the market was tanking and everybody sees all the charts and the rates and we were just on that wave when did you first realize you were in trouble ?

you know , um , probably , uh , early q3 , uh , maybe mid q3 . We realized it was like everything every month , month over , month , right , going into when things change , we're accumulating more cash on hand and accounts receivable were growing and everything was good from financial reporting .

And then we hit this , you know , everything turned for us April of 2022 , but really we were also always behind . I was trying to build an executive team and a finance team and we were kind of always behind on reporting and always behind on , you know , just trying to keep up .

But it was like , well , but there's more cash , there's more cash , more cash , and so kind of you allow it to happen Like , are you done closing the month ? No , I'm three months behind . Well , that's okay , because we have more , you know , cash on hand .

And then the cash on hand starts like dwindling and dwindling and then everyone goes no , it's not that we're losing money , it's we have this , you know , invoice compliance issue , because we're so big and we can't get these payments approved . And so you're trying to figure out this .

And then it's well , this customer , they want all in rates on spot and they want line hall only on real time rates , and so we've got invoice compliance , invoice compliance , invoice compliance , and so we just aren't losing money , we're just losing cash , and and so you kind of get into this like so your accounts receivable was .

And then we kind of said , after a few months of that , okay , no , now like we're losing , but we still have this cash on hand and we think , like so many people I'm sure you remember , this is going to be short lived . Right , these down cycles are short lived . This is just a short term market correction from COVID , sort of quote-unquote ending .

This is a short-term market correction because of the Ukraine war and fuel prices going through the roof . Do we want to downsize ? Do we want to , you know , give back all of this freight that you know doesn't work ?

Do we want to change margin strategy , all these things , or do we just want to ride it out Because we've built this , you know , kind of organization , all these customer relationships and kind of don't to be the case , you know . But so , probably October , we started saying , okay , it looks like we're in trouble , but I think we can still ride it out .

So that's to answer your question . When did I realize it took a while ?

. You know , the easiest hindsight 2020 hindsight is 2020 . And sometimes the easiest answers are the hardest ones to see . I mean we should have done in hindsight is to change our margin strategy and any contracted freight that we had , either renegotiated it or give it back and lose the customers rather than lose the company .

But you know , I , when COVID hit in March of 2020 , I mean I had contracted freight at the time . It was just I was a baby on APIs , right . So I mean I renegotiated all of that . There was a period in which we gave it back because , you know , and I told customers I'm not going to be here if I keep bleeding .

So , and then you know , 90 days later , they said , ok , come back and just what's ? What's the new price ? Right , so it's kind of a long term renegotiation . But I would say the experience of that time period , 2020 to 2022 , a lot of customers and you know this Right , you kind of start out losing money on the account until you figure it out .

You figure out where the opportunities are . You figure out where the opportunities are maybe to offset your loss leaders , rather than renegotiating your loss leaders , or you just find , you know , kind of new things . Rather than ending the relationship , you kind of see it through and figure out how to make it work . And we've done that dozens of times .

So then , kind of we're at October 2022 , said , well , do we want to end these relationships or do we want to try to see it through until we can figure out how to make it work , or , you know , until there's a cause to renegotiate .

You know this justifiable , and so that was the decision that we made as a company to say let's try to see it through until , on each account , we can learn how to make it work better , you know , and turn it profitable . And then that kind of didn't work . You know , october , november , december . So in December I started kind of entertaining .

There was always someone around wanting to make an offer or buy or do a deep dive , which was also hard . I mean . We entertained it a couple of times we were behind on financial reporting .

their reimbursement to the driver , so it's not taxable to an employee driver or a it's not taxable income , um , it's a reimbursement , so it's not an earning , it's a reimbursement , so that's their default mode , because their default motor carrier based software .

Um , and so we had , even when we were behind , we had a conflict in our reporting because , even though on P&L it was there , on all of our operational reporting , we had lumpers designated as I'm probably getting too technical but there was inconsistencies , you know , in the P&L on the operational reports versus the financial reports , and anyway , that didn't help

either . But so in December of 2022 , we said , okay , I think we have to probably partner up with somebody which is sell , get a partner , you know , and Get some financial backing , someone to help yeah . Help us weather the storm . You know , and , and , and .

So we went down that path and you know , at the time we still had really great branding , really great volume , really great kind of technology .

Um , and so like , very quickly , we found a large company over a billion dollars in revenue that was also family owned , single owner and got under an exclusive LOI in January of 23 . So it's like OK boom , we're going to be OK , right , we're going to weather the storm , we're bleeding out .

And then , and the LOI was , it was substantial money , it was more than we were bleeding out for right . And then so I would say there's two terms I learned in January of 2023 . One was material misrepresentation and then another is networking capital , which they sound like probably easy terms to you , right ?

Yeah , yeah , so material misrepresentation is we have this letter of intent and we're going to acquire you for 40 million dollars and then you earn out , you get all this other stuff right , and it's going to be 20 , 20 million in year one , ten year two , ten year three , and then I'll earn out , you know , into the future three , and then I'll earn out , you

know , into the future . And so and the letter says , so long as you're not falsifying anything , you know we're going to pay this , but we're going to pay this plus or minus networking capital , plus minus networking capital yeah so . So , number one I said , okay , we're losing money .

I've known we've been losing money for a while now and I'm scared about not being able to make the change fast enough . So I went straight to them and said , look , I need to tell you something , because I think that it's a material misrepresentation if I don't , since we're behind on our finances a little bit .

You don't know maybe that we're losing money , but we are losing money . Money , but we are losing money . And this is well , how much are you losing ? I'm probably underwater like a couple million , right ? So well , don't worry about it , we're just going to take it out of networking capital .

So , rather than giving you , you know , $20 , we're going to give you $18 . And that's not a big deal to us , because we can turn this company around with you . You just stay , you keep your team , you keep your strategy .

Don't lose your sales reps , don't lose your customer , don't lose anything , don't upset the apple cart , don't do anything to change what we're buying , okay , so then we kind of keep going through the process and all these interviews and meetings and diligence , and then you get to March of 2023 and you go okay , we've continued to lose money , you know .

And now we're like 6 million in networking capital underwater . So , that's okay , don't worry about it , we'll just take it out of cash at close . And so , instead of getting 20 in year one , you'll just get 14 . Like , is that good enough for you ? One , you'll just get 14 . Like , is that good enough for you ? Like , okay , don't worry about it .

And then so may comes and it's like , oh , we're like really having a problem here , you know , and uh , what are you like ? Networking capital minus now it's like 10 . So , yeah , we don't want to buy you anymore .

Um , so we're out , right , and that's how deals were going in 2023 , because everyone kept underperforming and underperforming was getting worse and worse and deals weren't closing and so so that's kind of what got us to may of 2023 .

And then it's well , this is a hole I can't get out of , you know anymore , and this exclusive buyer and I couldn't shop it around , and you know , it's just like it didn't work . Um . And then so I went to Logison and , um , we tried to do a distress sale .

Um , and we thought that the distress sale would be just the networking capital maybe a little bit extra for me or or whatever you know it was but also the financials still weren't current and you know , and my director of finance and accounting had had quit because it was like all this pressure , you know , he quit in January , like we're not keeping up to date

with books and the pressure , pressure , pressure , pressure , pressure . And you know , that's something I've learned 't that uncommon people stay until they just give up . I'm gonna stay as long as you know you'll have me until you hold me accountable and you're gonna find out .

I kind of haven't been doing a lot of stuff for six months and I'm not gonna stick around to fix it . You know this out of here .

So then , anyway , it didn't help in the distress sale to also have lost , like finance and accounting team , and then be behind and then trying to estimate your you think you're , you know , $10 million under and so anyway , so it didn't work .

I should pause , because then the decisions that you know happened the weekend of sort of July 1st to July 3rd 2023 is just just pause there . So we had about eight interested buyers May and June of 2023 . And I will tell you today till I'm blue in the face I was just completely astonished that nothing happened . I mean , we had LOIs , we had diligence .

We had in-person meetings and it was distressed and it was maybe a good deal and I would have never thought that everybody would walk away . And so in many ways , I didn't say anything to customers . I didn't say anything to the industry . I didn't say anything to customers . I didn't say anything to the industry .

I didn't say anything to anybody because I thought the news would drop that XYZ company acquired us and everything was okay and they would stroke a check . Networking capital's gone and we have a finance team to back us and nobody's the the wiser . Not that we're deceiving anybody , but I just thought it would be repaired .

It would be a fixed situation , you know , and and nobody would get hurt . It would just be okay , you know . And june 30th , 5 pm , last buyer left the table and I yeah , you know yeah .

I mean , do you feel like that was a big failure on your part not to like really focus your efforts on that during any of those , you know , january through may , to try to get that thing fixed , cause I feel like that's a big miss that caused some of these challenges .

. I think the most reasonable excuse I don't know excuse reason you know that I can give is that I really did subscribe to the idea that we would turn it around and figure out a way to Make these losing accounts profitable , right . To make these losing accounts profitable , right .

I really thought , if we stuck it out , we would figure it out and we had built up such a large customer base that we didn't want to just go back to a four-person company , a four-customer company , which is ultimately what happened . But so I subscribed to that , thinking let's try .

And also , I would say , in 2020 , when I renegotiated rates with the COVID spike and it was my legacy customers that I had had contracted awards with at that time . It's a hurtful process , it sucks , right , but we did it and the company survived .

And it was a little bit easier because my sales team was relatively new and they didn't they weren't the ones who set the rates and they weren't the ones who kind of had the relationships and then sort of found myself in this atmosphere where I had like so much pressure from what sort of turns out to be true with salespeople .

They're saying don't upset them , we're going to lose the customer , don't upset them , we're going to lose the customer , don't upset them . And then I got so busy , too right , we're going from 20 employees to 280 , and then you go to one office to four offices and you go from 100 loads a week to 2,000 loads a week .

And so I was trying to kind of divide responsibilities and everything and honestly Divide responsibilities and and everything . And honestly , I like overpricing , I like overpricing and other lesson learned which is common business knowledge apparently never let sales take over pricing . But I , I did , yeah , I did .

And then so there's like this tremendous pressure from the sales team to say don don't make these changes , I'm going to lose the customer , don't make these changes , I'm going to lose the customers . Well , we're going to lose the company .

And then everyone kind of always had this you're never going to lose the company , someone's going to bail you out , someone's going to buy you , someone's going to save you , don't lose all of these customers . And then you know so . The irony , of course , is company sort of doesn't make it . And then the salespeople were right , they didn't lose their customers .

They went somewhere else and they said remember what a good job I did for you at that place , why don't you just come on over here ? So to that extent they were right , they didn't lose their customers . But you know we lost a lot more at least I did , and motor carriers did , you know . But so that was the single biggest miss .

I mean absolutely nail on the head and simple margin management adjustment that we did in early July of 2023, . You know , three weeks before we filed Chapter 11 , which was kind of a pilot test to say the bank said you know , we'll support you if you show us that you're willing to make the changes to become profitable . Can you do it Right ?

And so you know what , july 5th 2023 , jacked up our customer rates , try to find a new normal . You know , when I say jacked them up , I mean sustainable rates , I don't mean like gouging .

Went from 2000 loads a week to 400 loads a week , laid off 200 people and then said , yeah , we don't have enough money to get out of water , but I think we can turn this around . And had I done that in January or February or March or April or May , you know , things probably would have been different and it was .

Honestly , it was that easy to say we're going to change the margin strategy , we're going to we're going to lose our bottom hundred customers , you know . And we're going to change the margin strategy , we're going to lose our bottom 100 customers , you know . And we're going to close these offices and you know , we're going to make it .

And literally , it took three weeks to turn it around and yeah , I could have done it at any time .

But it can also stab you in the back If , if , if we're not willing to pivot fast enough to save a business or or to to remedy a situation , whether it's , you know , thinking hey , we've still got the customers and the volume to keep these people and we can turn it around , we can turn it around , we can turn it around .

Or it's one of these guys will buy us , somebody will buy us , somebody will buy us , because I've seen both happen . Someone I'm close to who kind of had to sell their business in a fire sale and I remember along the way they kept telling me like I'm about to close with these guys , are about to close with these guys , and it never happened .

And , um , it's just challenging because you , you want delusional optimism to a point , but it's it's when . Do you know when that delusional optimism is , is is going to put you under , because there's always a time , like the smartest business people , I think , are the ones that can quickly pivot to keep their business on pace or afloat .

And it's when we don't quickly pivot that's the failure and that's where things get to a place where they got to and I don't know , I just it's . It's tough because it's hard to know when , when , when that inflection points hit , hits , and then it's too late .

But I thought , well , let me just have this exit which , you know , uh , it just kept looking like it was going to happen . You know , yeah , um , I mean , we had the documents to commit to it . Yeah , yeah , but so ?

You mean the just like getting to file on July 24th this past year filing and what happened with all the creditors and and and and employees and carriers and you know , did everybody get paid ? I know I saw aight Caviar posted something about like 150 grand owed to employees or something and wages Like . Help me understand , did anybody get left behind here ?

But to speak to that one claim , no employees were owed anything . I replied on that on their post . No employees have ever been shorted and in bankruptcy they're always the first people to get paid .

So they're called priority claims is employees need to get their wages Right , and so one of one of the things that anybody who files a claim against you , your temptation is to say I'm a priority , right , Like I really want my money , whether it's a motor carrier or a furniture vendor or whatever you want to say I'm a priority .

Well , the bank's legal , the court's legal definition of that is a w2 wage employee . That's , that's what it means , right . So you might go in and fill out a form that says I'm a priority because I want my money . You know well , that's not legally true . And then so it gets recorded in public documents as as wages because someone filled it out that way .

I'm a a priority Right . So anyway , it was an offshore vendor and it was about notice of termination , because you're supposed to give 30 days notice . But then when we we announced bankruptcy , they pulled their people and then they said you're supposed to give us 30 days notice . I'm like , well , that's dumb .

Like you didn't work , you know you pulled your people , I didn't . I didn't tell your people to pull . We're still trying to restructure , but anyway , and so we settled and it went away . Um got it , and so that number that they quoted was also from an article that was written in july of 2023 , or maybe it was early august 2023 .

So it's kind of nuts , you know .

Like who was left , if anyone behind , like carriers ?

It's just called suspended until you can one prove that you're able to reorganize and start making money again .

And then , based on your capacity to reorganize and your capacity to pay , then the court or the creditors committee , who decides what they're willing to settle for , determines if your capacity is high enough for them to accept it , whatever the payment number is , whatever the payment plan is , or if they're better off liquidating you for your assets .

So in a brokerage you know it's furniture , hardware , computers , it's a very relationship-based business it's hard to say your contracts are worth anything , right , yeah , and so you got your , your physical assets , and you have your accounts receivable , which the accounts receivable are pledged , and so that wasn't an asset and and so so , at a high level , everyone

didn't get paid whatever was owed on january 24th 2023 . July 24th July , sorry , yeah , okay , it got what's called suspended until a determination can be made about our capacity , and that can take 60 days , 90 days .

You know it led to also a slow wind down of whoever we had left in the company , because the other thing they say is you have to look like or demonstrate that you're actually trying to reorganize . So if you have , you know some cash left right , because we had some cash left in the bank like so when I called it , you know , you see the headlines right .

Most trucking companies or brokerages that close , it's one day to the next . They don't necessarily forecast I'm not going to be able to dig myself out of this hole . They get to where it's lights out and they're just done . I did have some runway Now that the last buyer has left the table .

I know I can't dig myself out of this hole , but it wasn't that it was lights out that day , it was just like I can't dig myself out of this hole . So we had some runway , you know , to be able to try to reorganize and so in that sort of capacity to reorganize , it becomes you . You know this .

There's creditors committee because there's a large enough number of motor carriers that we owed money to , so they hire an attorney how much ?

Whether it's backup overflow , published rates before api or api , it's still very transactional in terms of the volume and the concentration in any kind of area . So what that also means is our , our motor carriers were also very transactional in the sense that no high-volume lanes , right , I didn't have 150 loads a year from Jacksonville to Chicago .

I just had 150 loads a year out of Jacksonville going to 150 different cities . So you use 150 different trucks , kind of right . Well , there's no good part of this , okay , but if there's any silver lining , so the average motor carrier was owed thirteen hundred dollars , you know when , when we closed .

So it wasn't like we had these family businesses that were putting all their eggs in the basket of the relationship with us and 90 of their receivables , you know most carriers most carriers were owed one load , and I'm not saying that's okay , I'm not saying that it's good , you know . But it's just a point worth making .

You know , in terms of what we've been able to do to recover , and a lot of carriers are over it . They're over it .

So yeah , I can appreciate that point , but I understand why we're not saying that's good , it's just it's relatively better than 10 carriers each owed a ton of money .

And they end up paying 80% of the total debt that's owed because they're able to just cut where they need to cut and then kind of keep on moving . And then you get companies like , essentially , well , what my experience was was that immediately all of the factors cut us off and so immediately we're just dead in the water .

You know , no loads , no ability to cover loads , maybe a couple of customers that were willing to trickle some loads to us to see you know what would happen , but for the most part it was just a hard stop . No one would give us a load , Nobody would .

So how are you able to demonstrate an ability to operate in a profitable manner given those two massive constraints ?

Three-day payment terms , knowing that factors wouldn't approve of us but that maybe we could get carriers to get a release or carriers who weren't factoring loads to work with us . So we're three-day payment terms since January 24th 2023 , and we're going to be July 24th July .

I don't know why I keep saying that You're good , I got you One more year of three-day payment terms for everyone's our standard pay . So that's been one of the things that we've done to try to attract carriers to want to work with us . And then another thing is when we started factoring with Triumph , we only factored some of our customers .

So there was always this just kind of weird commingling of money and how much is going where and who's paying who . And we also then said , okay , let's factor 100% of our customers . And now they take all of the carrier's margin and advance it to them and then they advance us our profit .

So it's no longer possible , it's not possible for any commingling of funds and it's not possible for the carriers not to have their money and they're getting it in three days . So that was something that we thought would be helpful and like really popular and it's helpful and popular kind of now we're a year into thousands of payments , you know , in three days .

But it wasn't like an immediate hit right and customers didn't immediately feel good about working with us right away in July of 2023 .

So the capacity became really just my two homes . I bought a home for my mother . You know , when we were making money , I paid down the home that I live in here .

You know quite a bit extra payments every month and I never really was like I would say , irresponsible with the money in terms of , like , buying yachts or buying anything , you know , watches or anything like that .

And I mean , if anything , I took all of our profits and I invested it , you know , in marketing budget and growing the company and everything but um . But I did buy a house from my mom and paid mine down substantially and so really , triumph Pay said we'll give you a loan based on your net worth . And is that going to be enough for the creditors committee ?

So I still had no capacity to pay in terms of demonstrating performance as an organization , demonstrating performance as an organization , but they were willing to sign up $2 million loan for 10 years to me to see if that would satisfy the creditors committee , to allow us to stay in business .

So pay the creditors 2 million bucks and then essentially get out , which is ultimately what happened there . I mean , there are a lot more details there and over the 10 years it'll cost me 3 million . You know , with interest , but sort of getting to like , yes , we'll take that , which it still took another nine months to get out and settle altogether .

But that's what led to everyone saying yes , we'll , we'll take a couple million . And so long as your neck is on the line and so long as you can't leave Omar , then we'll start settling up with the factoring companies and we'll start trying to repair credit and we'll give you ammunition to go out to your customers .

And you know we'll extend the three to go out to your customers . And you know we'll extend the three-day payments from one year to two years .

And you know we'll kind of do all these things one factor at a time , one meeting at a time , and and so you know , kind of over the course of these 12 months , when we got to a number that was just purely based on come and get everything that I'm worth and that Tadena's worth , then you know like let's go Right and it certainly wasn't fast , you know it's

been . It took exactly 365 days and that's not there's no like correlation to just that . Those were the days . But so that was the capacity . And now we sort of have to , you know we have to hit it . But I mean I will say , you know , after four or five months , six months , customers started coming back . They're saying they're taking a break .

We had to , of course , protect them from collections from motor carriers , from factors I mean there's just so many things that had to happen to get them feeling good . And I think hopefully there are a lot of customers who start to feel good again now that the news is out . We're able to provide more sort of security for them .

And there are a lot of carriers who are affected . There are a lot of carriers we work with who weren't affected . You know that kind of don't have a problem at all . A lot of the carriers who were affected , like you know they're , they're working with us .

You know we tell them look , if it was thirteen hundred bucks I owed you , can I give you an extra 50 bucks on the next 26 loads ? Like I know , the settlement amount's not enough to make you whole and I know paying out on the bond isn't enough to make you whole .

But you know , if I pay you in three days with no fee , you know maybe you save a percentage point on , you know , a $3,000 line haul . And let's literally record we created an accessorial code called pre-petition debt so I gave you 25 or 50 bucks on every load until I've made you whole and like and , and that's what we're trying to do .

And then at the end of the year , you know , hopefully we're profitable and then share a portion of the profits with the carriers who we owed money to , who have decided to give us a chance . But we are , you know . I mean we're moving anywhere between 250 , 300 loads a week right now , straight out .

And you know we have been for a few months and it's still not the easiest to cover because all of these settlements are becoming final with the biggest factors and credit credit worthiness .

But we're getting it done and to be honest with you , outside of anything that's in the media , like the conversations I'm personally having with carriers and my team is having when we tell them about everything we're doing to try our best and so like , think of the $2 million as a down payment on what our intention is to do , moving forward .

You know , but but no , I can't pay it all at once .

But if you work with me , I think that it's better in the long run to stick around and try to do the best that I can by everybody affected , you know , to my maximum capacity , rather than to like , shut the doors with cash on hand and then just do something with it you know that's dishonest or or just liquidate and make and nobody gets anything in the

liquidation , or you know , and still be available for comments and be available for questions . And you know I got people writing to me on LinkedIn and I call them and explain the process to them and what we're trying to do . You know , I've been at food shippers this year .

I've been at E2 open and carriers come up to me a lot of the times and say like , literally , I lost money working with you , what are you going to do about it ? And we sit down and I face them .

I said this is what happens , how we got here and this is what I'm doing to make it right , and they just go thank you so much for explaining that to me Like , yes , here's my card , let's get after it , let's go .

Am I understanding this correctly that if the second time around , if the business fails , what happens ? Do you lose your houses ? I mean , is that where things go ?

And it could be two years , three years , five years . There's all kinds of ways to structure it . You know , you could do a payment deposit , like we did now , and then a percentage of future earnings .

All of this , Whatever we ended up doing was saying you know , kind of 2.15 million now and we're out , and so the carriers are going to get paid that amount and minus professional fees and court fees and postage fees and all of that stuff . But yes , and then , so that number is not going to change .

And if I can't pay it , monthly service , the debt , as they say yeah then I lose my homes and my 401k and college savings and I lose everything and so I I hear the plan to support the carriers .

Um , I mean it's , it's not easy . Uh , a couple of the biggest ones I had to put up , you know , personal , um , letters of credit you know , which hopefully , on three day payment terms don't get exhausted . Other ones , you know we hopefully on three-day payment terms don't get exhausted . Other ones , you know we were just able to .

I mean in like just substantial letters of credit , and then other ones we were able to do without letters of credit , but just kind of the agreement , court order that the funds have to be segregated so the carriers can never get short paid or not paid . Court ordered three day payment terms .

Right , Court ordered that I don't surge , doesn't control the money and we're just operating on profits , like all of these sort of guarantees that are put in place to then be able to make them say , okay , like if this is court order , not only can we come after you , Serge Omar , we can go after you know , the bank that's financing you , you know , and then

there can be punitive damages . So there's like everything has to work and we were able to just work it out . I mean , it took a year . It's not easy , you know .

And so we had , like the early ones that re-established their relationship with us based on the letter of credit , and then so you get like Triumph Pay was paying and getting paid , and then the largest factoring company in the market started getting paid and reporting that they're getting paid on time , and then the second largest started reporting that they're getting

paid on time . And then so you get like the next seven go okay , like it looks like there's something happening here that we can get on board with , you know , but very slow process with you know , but very slow

process , I guess .

What will be different this time to ensure that it doesn't fail ?

Um , I have a guy who's going to be joining me in a couple of weeks as cfo um , who was one of the advisors who kind of helped me just do our even July 2023 three week quick restructuring , margin management , cost cutting , like can this work ? Right . And then he's sort of stayed as an advisor to me and interested in our restructuring for the last year .

So he's going to join as CFO in a couple of weeks and that'll be . And he's got 20 years of CFOs with large brokerages and so I think you know he's also willing to be gritty and do the work until you know we can hire a team .

So one is like financial controls , margin management , you know , not going after volume , but like I mean traditionally I did , I did well with the company and my business model from , call it , beginning of 2011 up until , you know , april of 2022 , um , by just trying to sell on value .

Um , don't need volume , don't need you know kind of top line , just need to have a sustainable business with , you know , sustainable margins where it's low enough that the customers are happy .

Maybe they don't ever feel taken advantage of , but they know , maybe it's a little bit more than a primary where we're able to pay motor carriers a good amount of money so they feel good .

Um , and then you know those two things , the financial kind of controls , the , the strategy of just having a sustainable company and not getting caught up with with volume and top line and size and all the headlines , along with the fact that through bankruptcy I've been able to control or right size the overhead , you know , and I I think that's what happened to

a lot of companies that grew quickly during covet and even now , as I continue to talk to people in the industry and hear , uh , what other companies are going through , their over head is just outsized , you know , and and their volume's not what they thought it was going to be , their top line's not what they thought it was going to be , their margin's not what

they thought it was going to be , and they can maybe sort of work with that a little bit , but they're really having trouble bringing their overhead down to sustainable levels for them .

For them , so , four or five times the office space that they need , maybe tech vendors and partners who they're paying on long-term contracts , but they're not actually utilizing any of that stuff , and so one of the things that bankruptcy allows you to do is just end any contract with anybody at any time , and so we've been able to really shrink the footprint down

of what our operating costs are to where the financial management combined with the sustainable business model , combined with manageable overhead . You know , I think we can make it , and it's not going to be easy . You know it's got a lot of hard work ahead of me . I'm happy to do it , but I think that those three things will allow us to get it done .

I do think that was one of the biggest mistakes we made at Molo early on was not focusing our attention enough there , and it's clear that that was a big issue for you as well , and I think that's an important lesson that clearly you've learned . I appreciate the strategy , I appreciate the approach and I'm cheering for you .

To be honest , I uh , just cause I I've known you for a little while and I know you're a good guy and I can appreciate , I'm hopeful that you're able to take care of all the carriers that were kind of left behind in in the interim and that you kind of do the right thing with all of those folks , and it sounds like you've got a plan in place to do

that . Um'll ask you kind of any kind of final thoughts here . We've run on for an hour and 45 minutes . I think it's been great . I appreciate how transparent you've been about the entire process and your story , any kind of parting thoughts you'd give to the audience , any potential you know , potential carriers , future employees or shippers listening .

But I would say that kind of Bible verse Philippians 4.8 it's like meditate on the good . I will stand firm behind my belief that it's better and it's more commendable to stick it out and to try to do what's right by everybody .

That you can do as much as possible , as much as what my capacity is , and to face the news and to meet carriers at conferences and to talk to them and to respond to LinkedIn messages and cell phone calls to drivers who are curious about what's happening , than it is to cut and run .

Whether you're broke , or you cut and run and you steal money , or you're just not available to support people and guide them through the process , or there are people going to jail doing dishonest things as companies close , I mean .

So I've tried my best to be honest and in front of it and to commit to sticking around for as long as it takes to make everybody as whole as as whole as possible , and you know , when I lay my head down I I think that's the right thing to do and I hope other people agree with me and kind of help us restructure .

And I guess my last question would be have you considered changing the name from surge transportation to research transportation ?