Business Dynamics with Brian Riker

We do our best each week to bring you episodes that will help you improve the way you work your business and things that will help you improve your bodybuilding , and this will be one today that you'll totally enjoy , because our guest has been a speaker at URG many , many times and you know him well . We also have in-house Chuck Camp , the producer .

I'm DJ Harrington and most of you know me as the cardiologist , the doctor , and we give you a check up in the neck up each and every week . So , without further ado , let me do my best to introduce my friend , the DOT guy himself , brian Ryker . Brian , how are you this morning ?

You spoke about the use of drugs in our industry and he sat captivated by you and watched you take questions from the audience and you knew each state rule and regulations for DOT . He was amazed and he came over and said hey , dj , your friend there , brian Wright , he's like the right man .

He's a very knowledgeable , gifted guy and it doesn't go to his head , he's very humble and he's just a good guy . So I want our listeners tell our listeners a little bit more about you and how you got into this .

I got out of the towing industry a couple of years ago , but I also worked in the auto salvage industry , on the auction and the transport side of it . We never owned a recycling facility ourselves , although I served hundreds of them throughout my career and I still hold a Class A commercial driver's license .

I like to play with trucks when I get a chance to keep my skills current , but my real passion is advocacy and education , and I learned that from my mom and dad when we were growing the family business and through all of the work I do with various trade associations in a couple of different industries , I learned just how important it is to make sure that

everybody has a voice and everybody has some honest coaching and a place they can go to get the straight answer , even when they don't like the answer . And that's the same way that I work with . My current position is supporting our leadership , giving them the answers , whether it's the answer they want to hear or not .

I give them the straight answer on what the rules say or what best practices are , and it all comes from more than three decades of trial and error , from running my own companies and being on the road as a driver and an operator .

The weekend of September I think it's the 21st through the 23rd you're split your weekend up , so you're going to be with the towers up in Ohio and then you're going to proceed on . So would you tell our listeners a little bit about your weekend ?

In other words , don't do what I did when you were raising a young family . I'm presenting that with a very close friend of mine , michelle Succo . We'll also be speaking on marijuana and how it's impacting the transportation industry and , I believe , distracted driving .

And then I fly up to Albany , new York , for Saturday , the 23rd , where at 2.40 in the afternoon , I will be presenting a seminar called Risky Business , and the Risky Business seminar is on driving behaviors that affect more than just your fleet , so it's going to have a focus .

This is for managers and leaders , and this will have a focus on coaching your drivers and making sure they're actually qualified to be a driver . Not just they hold the credentials , but they have the right mindset , the right skill set .

We probably will touch a little bit on the effects of legalization of marijuana and marijuana derivative products , because New York has legalized a lot of them and it's creating burdens on our labor pool and anything else that affects your fleet . I also like to have question and answer sessions , so I will be there Saturday to mingle and answer your questions .

and Saturday . We have our director of training , beth Gustafson , speaking on teaching them right the first time , and our marketing VP , megan Quinn , speaking on marketing and social media , so it's going to be a pretty good event on Friday and Saturday in Albany .

So hang tight and learn along the way . On the URG . See you in a minute .

The smartest investment you will make for your business this year Go to U-R-Gcom and click on become a member . Your path to a profitable future is just a click away . That's U-R-Gcom .

We are available on Spotify , itunes , pandora , google Play , stitcher , iheart Media , Amazon or wherever you get your podcast . Now , before the break , I asked our guest , brian Reinker , your DOC guy , if he would be kind enough .

Really , when I called him in because he's on the road working all the time , I said do you think you could spare a couple of minutes on a Tuesday or a Thursday ? We have listeners that want to know about the Yellow Corporation . Brian knows the background . Brian , would you share a little bit about all we know is ?

On the way to the podcast center last week I had told Chuck Kemp . I said can you believe they laid off 30,000 workers . All of them took that shot in New York . So tell us a little bit about your view .

Yellow has struggled for more than a decade to maintain profitability through some questionable management decisions , some questionable mergers and acquisitions . Think of what happened with Sears and Kmart when the Kmart Corporation bought Sears , which was a very well run , long standing retailer , but kept the management from Kmart in place and ran it into the ground .

Very similar happened here . What we know today is Yellow Corporation is a 99 year old almost made their 100 year anniversary 99 year old trucking company that had become a major player in the regional less than truck load segment . So how this affects us as recyclers .

A lot of us shit with these LTL companies when we have parts that are too big for trucks like UPS and FedEx or going too far to be delivered on our own truck , so we use these LTL carriers .

So I'm hoping that none of our listeners have any freight tracked in their system , although I will say Yellow did a pretty reasonable job winding down operations to make sure freight did not get stranded on their dock .

If it did and you need some ideas on how to get it off , then reach out to the podcast center and I might be able to give you a little bit of guidance on how to get your stranded freight out of the Yellow system . But , that said , there are a lot of lessons here that we , as recyclers , can learn from the failure of Yellow freight .

So many folks are quick to blast the Teamsters Union and their labor demands as to reason that Yellow failed and , honestly , the Teamsters had made a lot of concessions over the last 10 or 15 years to keep Yellow afloat and this probably should have happened 10 years ago and should have wound down operations and sold off when they still were viable and the

transportation market was healthy . But the timing is just terrible right now . Freight rates are falling , there's excess capacity , other LTLs were laying workers off , so this freight will be absorbed quickly , but it really didn't leave Yellow any breathing learns yeah , breathing room .

I apologize , but we learned from this is understand your market and follow the trends so you're not caught by surprise when things pivot rapidly . Often we get stuck in the mindset of this is how we've always operated and hasn't failed us yet , which can be very dangerous in an evolving marketplace .

I say this is a caution to you , dear listener , as well as myself , because I too am very resistant to change . That said , I am data driven , and when the data shows a market shift , I want to be ahead of the wave and not caught in the undercurrent where I could drown my business .

So , all that to say , we can't always just go forward the same exact way . We need to innovate , we need to keep up with the times , we need to adjust so that we are lean and ready to react , and that is something that the behemoth corporations have a very hard time doing .

And it gets even more complicated when you have labor agreements in place with labor unions , because they're often not flexible . Where there's a lot of work , rules that triangle management practices .

The teamsters are blaming mismanagement of the corporation and the yellow corporation , of course , is blaming the teamsters , 22,000 of them of the 34 teamsters .

When Yellow Freight , who was based in Overland Park , kansas , purchased Roadway Corporation , based in Akron , ohio , roadway was the much healthier of the two companies , again very parallel to Sears and Kmart , but Yellow kept their management control because they were the company purchasing Roadway and they tried to integrate and were not very successful in integrating the

Roadway into the Yellow Freight system Combined this with purchasing a couple of other regional carriers that had been USF companies when TNT and USF went and left the United States markets . Tnt is an Australian based less-than-truckload carrier that had a worldwide presence .

The combined conglomerate was always operated in silos and they had a couple of smaller regional carriers , like NewPen , which was based very close to my home down in Lebanon , pennsylvania , for decades , and trying to operate all of these separate companies where they were competing against themselves left them in a very dangerous position , and so their goal was to become

one Yellow and merge all of their operating companies into one , which would also require intermingling the union contracts , the seniority of their labor force and such in a method that the teamsters approved for the West Coast , but we're fighting them here on the East Coast , where they are most strongest , and that led to the company not being able to get the cost

synergies from purchasing these competitors that they had planned , which then Help lead to their demise . So this is a lesson for consolidators that when you are consolidating your companies , you need to make sure that the proposed synergies can actually be realized and you are going to be able to merge the operation seamlessly .

Otherwise , you're just increasing your expense and exposure and ultimately competing against yourself in the marketplace , instead of removing competition from the marketplace , which is the goal Of consolidation .

Now with , with your background when there's a bankruptcy of a big corporation , because this was was this like the third or fourth largest trucking company .

So , yes , this was one of the largest trucking companies in the United States and throughout North America .

They were right up to the July 31st deadline deciding on whether they were going to go on strike or not , and so this is why you always need to have alternate contractors . You cannot have as comfortable as it is to deal with only one or two people . You cannot have a single source for mission critical services .

So if you don't have multiple less than truckload transportation companies that you have contracts with and you share business with , you are at the bottom of the priority list .

When you need to now jump over to ADF or old Dominion or R&L or whoever your regional carrier is , to get your freight hauled , you're going to pay a premium because you hung out with the other company till the end . Now there's something to be said for loyalty .

Please don't misunderstand me there , but it is irresponsible business when you only have a single source supplier for anything , and so the companies that relied heavily on yellow as their exclusive transportation provider are now feeling that , and again .

Some of them even still have freight stranded on the docks where they can't get to it at the moment , which really hurts , because now you have to recreate those orders and ship them with somebody else , and it is a complete loss if you even get your freight back at the end of the bankruptcy . Well , yes , the lesson to be learned in this is twofold .

Whether you're sourcing a supplier or you're having a customer , you get a few people that are always asking for more and more and they give you great volume at your rates . Or you give them great volume and get a great rate , and so you're comfortable extending credit terms or extending business on a handshake , which I'm all for .

But if you have too much of your work dependent upon one provider or one customer and something happens and they fail , they have a change in management and they don't want your line of business anymore you're in a boatload of trouble . And that's exactly what happened here . The warning signs were there and really that's ultimately what led to Yellow's rapid demise .

When the teamsters threatened a strike because they did not want to allow this one Yellow plan to go through , a lot of Yellow's customers got nervous , pulled most , if not all , of their freight out of the Yellow network and gave it to other carriers .

And now Yellow freight was left with almost no incoming revenue and they just burned through the hundred million dollars of cash they had on hand as a reserve in a matter of a couple of days , just to keep the lights on .

And that's also where managing your affairs effectively and not letting it get to the point where you could have a labor action come against you will help you maintain your clients . Because when we see this happening rightfully so we have to protect the continuity of our own business . So we have to make contingency plans and put them into action .

So I understand why the customers did what they did and how it hurt yellow . It just left yellow now where they're not a viable entity to sell as an operating company . So now it's going to be a chapter 11 , asset only sale .

Record your D O T guy , remember to like , review and share everywhere . And if you would like you know people like a Brian right now , or a Nandy Latham or a Paul Dio D'Armo or you know whoever you ask for , just call the hotline 706-409-5603 and Chuck camp and I will do our best to get them .

And if you have any questions , by all means I will ask Brian . Right to give out his number , but I want to ask Brian . I want to tell all of us . I've been doing recycling almost now 30 some plus years and I've been writing for 40 years in the industry and speaking .

And about 11 years ago I was telling my dear friend Shannon Nordstrom up there at Nordstroms in South Dakota . I said I'm here at a location and I'm just going to tell you what's your credit limit on these people . He said they have a $20,000 credit limit . I said Shannon , don't give him a nickel more . I'm here and if they last another two months .

But I want to tell all our listeners they lasted 11 months . Shannon Nordstrom called me and told me he took a hit for $64,000 . So we have a guest today , brian Riker , your DOT guy , and he's a very gifted guy . So , brian , what I want to just ask you is are there any tips you could give to the URG listeners on this podcast With today's economy ?

You know , my wife and I bought a car last weekend and we worried about shortage of vehicles .

And then the man who owns the dealership comes over and says DJ , we don't have a problem on shortage of vehicles , we have a problem of fraud , identity fraud and you know the country wants people to think we have other problems , but there's a lot of fraud out there . So how does the recycler prevent taking a hit from somebody who's not credit worthy ?

When you are purchasing transportation A , you have to make sure that the company that you are tendering the load to is actually the company that's delivering it and it's not somebody that posted it on a load board and then a less than honest company will pick that load up , pretending to be another motor carrier , and disappear with your trailer full of valuable

scrap metal or valuable parts or whatever it is you're shipping .

So if you're shipping stuff and you're just shopping for customers on load boards or you're using a lot of brokers and you end up with brokers that you don't regularly deal with , you have to check their credit , you have to check their industry references carefully , but also make sure that the truck that comes to your yard to pick a load up is who you're

expecting to come pick it up .

This is a huge problem called double brokering in the transportation industry , where I can go on and I can look up any trucking company that I want the information to matter a public record and I can pretend to be that company when I take a load from a broker and freight's being stolen without anybody even realizing it till days or weeks later .

So the problem with when you hire a less than reputable broker you as the shipper are ultimately responsible for paying the carrier to actually haul that load . So you think you hire trucking company a , but they illegally give it to trucking trucking company and then they don't pay that company . Well , that company C has every legal right to come back after you .

So the old , reputable companies watch the market trends to know when they're struggling and don't place all your eggs in one basket . When you're extending credit terms to your commercial customers which includes extending freight out to carriers are going to haul it for you , always be prepared for them to not pay , file bankruptcy or just disappear .

Have a contingency plan in place and especially when you're hiring out services that you're responsible for , you may not be able to just stop serving that customer because they filed bankruptcy if you have a long term contract with them . So be very wary of who you extend generous credit terms to and , again , be very wary of having one source for everything .

We're speaking about yellow freight , but they're not the first large trucking company to fail , nor will they be the last . And it wasn't even a surprise with yellow , yet so many of their customers got caught off guard .

I will give you both email addresses . You can send me an email to my Phoenix email address . I may or may not be able to respond to you . We do have certain restrictions , but we try to help . We , as a company , want to give back to this industry and help everybody be professional . It helps all of us when we support the industry . I can be reached .

It's all one word . Brian Riker , b-r-i-a-n-r-i-k-e-r at Phoenixparts . That's F-E-N-I-X-P-A-R-T-Scom . If you can't remember that , you can always reach out to me on air at your D-O-T guycom . That's all one word . O-n-a-i-r at Y-O-U-R-D-O-T-G-U-Ycom . I'm happy to help if I can .

The person says , well , can you give me an extension ? I'll catch up next month or I'll catch up in two months . All of a sudden they find themselves behind the eight ball . Oh , yeah , do you have any tips on people ? I ?

I'm on the hook for almost $8,000 in consulting fees because I had decided after several years of working with them that they no longer had to pay monthly . They could pay me quarterly . I'm a small business when it comes to the consulting side that I do for Towing and the trucking industry .

That hurts to lose several thousand dollars that you weren't expecting when you thought your client was healthy . My biggest tip for this is stay current on the trends in your industry and in your client's world . Not only what's happening with your competition we all worry about our competition but what's happening in the auto body industry ?

What's happening in the auto repair industry ? What's happening with the shade tree mechanics ? What's happening with our suppliers ? One of the major auto auctions was just purchased by a Canadian company . Is that going to affect the way they do business here in the United States

? It's too soon to say , but we need to stay abreast of everything that is going on in our entire ecosystem . We need to understand all the players and where we fit into that puzzle for the best chance of long-term success and our best chance of keeping our head above water as the economy constricts a little bit more around our neck .

Go by and talk to him and tell him you heard him on the URG , on the Go podcast . We'll see you next time .