Should We Be Fearful When Mega Carriers Enter the Bulk Space?

Jared Flinn: You're listening to the bulk loads podcast, your number one resource for everything bold freight trucking. Jared Flinn: Hey, guys. Jared Flynn with the Bulk Loads podcast. Got Tyler in here with me. Tyler Allison: What's going on? Jared Flinn: It's a different angle. Tyler Allison: Yeah, it is. Got a new setup going on. Jared Flinn: It feels a little awkward. Yeah. Tyler Allison: Dude, it's like the Joe we got the Joe Rogan setup going on. Jared Flinn: I feel like this is just personal space. We don't like don't play footsies with me. Tyler Allison: We're not in a podcast. We're just talking to your Jared Flinn: That's true. Yeah. So well, we, you know, we always like to change things up. So, yeah, this is a little bit different angle, hopefully, to, give the experience of our listener and viewer Jared Flinn: Yep. Jared Flinn: A little bit better of our podcast. But, yeah, welcome on to the Bulk Loads podcast. As always, when we get started, we wanna feature a truck, and, Tyler, I'll let you pick it up. Tyler Allison: Week will feature AHC Trucking Bulk Loads member since 2020, Stephanie Unruh out of Galva, Kansas. Man, they got some beautiful trucks. Pull pneumatics and hoppers. I really like this picture after I always like the pictures after they cleaned the trucks and, like, you can see the wash, in the background. But, yeah, that pneumatic is just super shiny, and they were actually at the conference. Jared Flinn: Yeah. Yeah. I'll speak a little bit on that. And, Joe, yeah, if you will also throw up the picture, Stephanie and her husband. But, got to sit with them and talk to them. Buddy Baumann on our side, one of our employees, he's been out there visiting him, and he told me a little bit about their backstory. And then she came to the conference and we talked for, like, a half hour or so, but she's got just an amazing story, grew up in trucking, then went out and started her own. Her and her husband also have a tow truck company, which, you know, we've had, Robert Brackett on talking about tow trucks, but, like, she gave us a different angle about mean, hopefully, maybe she'll be graciously to, come on the podcast, but that's a whole different arena when you get into tow truck operators and all that. Jared Flinn: And it's something it's a vital need for the industry, but, like, they're making it harder for tow truck companies to survive as well. Tyler Allison: Oh, wow. Jared Flinn: Yeah. You gotta have it. I mean, if there's an accident on the road or just you need a tow, it it's a crucial part. But, yeah, there's another side of that business that she was telling me about, and maybe we'll showcase that. Yeah. Tyler Allison: It's for that in the podcast. Speaking of the conference, we're actually going to upload, all the conference photos. We're gonna get them on the conference website. So if you were there at the conference and you wanna see some of those photos, download them, you know, post them on socials, we'd love to get those to you. I think the easiest way is just go to bulkfreightconference.com. We'll have a tab on there that says photos, and you can find the ones that you're in. We got a lot of good footage that Joe captured, and we'll have all those so you can download. Also, if you were not able to make the conference, but you got a little FOMO and you're like, what actually went on here? You can actually, go on the conference website, and we'll have photos and videos on there as well. Jared Flinn: Yeah. We're still, still talking about the highs of the conference and still getting emails and threads and postings from people. And, so, yeah, if you didn't make it this year, we will send out dates, probably soon with next year's dates, for you to plan accordingly. We know that it's probably gonna get bigger, and we'll probably have to cap tickets out. So we definitely want you there. Yep. So well, speaking of the conference, Jesse Runyon, spoke at the conference. He gave an industry report. Jared Flinn: Yep. We've had Jesse on a numerous times. We think his information or his information is super valuable. So wanted to bring him on on a little bit of a controversial subject, talking about mega carriers coming into the bulk space. And I think you all know the one that we're talking about here recently, but we know that in my career, I've witnessed probably a half a dozen or more, big mega carriers getting them bulk space. And we've seen just a lot of, I guess, just comments and content and thoughts of what people think about this and, you know, whether they should be fearful when you have a big mega carrier getting into the bulk space or is this a time does it present opportunities? Tyler Allison: Yeah. Yeah. That's what I'm excited about for this. This is a specific episode that Jesse talks about is, you know, we see him on our bulklets form, everybody talking about it. But, also, like, I'm part of all these Facebook groups, Jared. I know you are too, bowl callers and stuff, to where that's been a huge topic of conversation. So we wanted to cover and bring him on, but I'm excited to get into, like, Jesse talking about, like, why. Like, what prompted them to get into, the bulk industry, and, yeah, what does it mean for everybody else? Jared Flinn: I think more importantly, and you'll see this. We'll talk about this at the end. But, like, what can we learn about this? Everything we do, there's a learning opportunity about this, and Jesse's gonna point out some of those highlights. So with that said, here is my conversation with the freight wizard, Jesse Runyonce. Jesse, welcome back on the show. Jesse Runions: As always, good to be here. Yeah. I wore my jacket. Jared Flinn: Yeah. Well, first off, thank you for coming to the Bulk Freight Conference, but also all the time that you took into doing the research and really given us a good industry outlook. Jesse Runions: Well, it was a little bit of work, but, shoot, I'm gonna be before a a big crowd. I better have my homework done. Yeah. Jared Flinn: Well, for those that missed the Bull Freight Conference, talk about and we just talked about a little bit. Like, there's been I mean, it's a little bit old news now, but a lot of these earnings have came out from larger trucking companies. And I'm not saying it's doom and gloom, but it's it's pretty grim. Jesse Runions: Alright. Grim is is probably an overstatement, but it's what 2024 looks to be a continuation of 2023, at least until July. That's the the big issue right now. You're not gonna see a consumer demand upturn. 2021 to 2023 was a one off anomaly because, hey, the federal government dumped a total of $6,000,000,000,000 in the economy. It burned a hole in a lot of pockets. They spent a lot of money. Now that money is pulling back in to the, pulling out of the monetary supply, thanks to interest rate increases. Jesse Runions: And I guess in the fractional reserve banking, how they create money and, evaporate money, if you will. Jared Flinn: Yeah. Jesse Runions: So now we're back to a normal, albeit a new normal. And, they talked about the retailer's inventories. Well, households have inventories How many TV sets are you gonna have in your house at one time? How how long is it gonna be before those TV sets go out? Mhmm. So durable goods probably will take a hit for next 4 to 5 years. And, there's 2 drivers for trucking, and it it affects each niche differently, manufacturing and single households or single home sales, new homes being built by a single family. They're putting stuff in it. They're putting food in it. You know, eventually, they get a kid, a dog, pet food, or to live in the countryside, livestock, poultry. Jesse Runions: Yeah. So what we what everybody that pays attention to trucking right now, the 2 biggest things that they're looking out for future growth in terms of consumer demand are those 2 categories. The growth of single family homes and manufacturing. Manufacturing right now is flat or even declining domestically. Even though you have a record number of imports because China's subsidizing their manufacturers to make things cheaper Tyler Allison: Mhmm. Jesse Runions: To try to reclaim their market share they've lost in the last 4 years. Even though you have more imports, manufacturing is where it is domestically. So that's probably not gonna grow. Consumer demand is probably gonna stay about where it is right now. So the only thing that's gonna turn rates is carrier attrition. You know, trucking companies going out of business because there's still a record number of companies compared to what there were 4 to 5 years ago. Jared Flinn: Yeah. And my I didn't ask you about this prior. Do you know how many Jesse Runions: that is? I mean It's hard to quantify. Jared Flinn: But we're still, like, we're we're still more than pre COVID levels. Yes. We are. Jesse Runions: And that has not stabilized yet. And, as I you know, when you look at monetary supply between the beginning of the pandemic, 2020, February 2020 to roughly January 21 Mhmm. The federal government dumped 2 or 4 trillion in into the economy. Most of that, went direct or somewhat direct to the consumer, so that that kept our economy going. Then another 2 trillion between 2021 and the peak of 22. And of course, that's when the Fed Reserve started increasing interest rates. At that point, you can go look at trucking freight rates and you can see the same decline. So Yeah. Jesse Runions: Trucking in a lot of ways is directly tied to monetary supply. So if there's more money out there chasing more goods, then more goods have to move and there you go. Jared Flinn: And we look at some of these earnings that came out last month from JB Hunt, Warner, and these publicly traded companies that you can see the financials. I I mentioned, yeah, Swift Knight, but, I mean, they're all related to consumer Mhmm. You know, consumer purchasing. Yeah. Jesse Runions: And JB Hunt making noise is probably more significant than than others because their truckload segment is not their biggest segment of revenue, multimodal or intermodal. Yeah. And dedicated is their 2 biggest revenue segments, and they're still taking a hit in all three right now. So that tells you the consumer demand has not returned to the way we would like it to be. So I know Shelly Simpson, the CEO. She I know she'd come out and and mentioned some, but I don't know Jared Flinn: if you saw that article or whatever. When are they you know, these big companies that have 1,000,000,000 of dollars in assets and all this, like, are they are they seeing the same thing maybe July being Jesse Runions: That's what they're hoping. That's what we're all hoping. It could be longer if compare carrier capacity hangs on like it's been hanging on busy. Because I honestly expected to see it turn in that capacity where, you know, you a noticeable dip, by now. That's not really materialized. So a lot of companies, all that extra money they made, they put it back smartly. And in some ways, the the cost factors to a trucking company have not changed since the peak of the pandemic. So you got these lowering rates in your face, but you're still under the same cost pressures. Jesse Runions: In talking about the bigger carriers, even Knight slash Swift said that they have quit taking on loads that are unsustainable to maintain their operations, contract and spot. Wow. So when you got a mega carrier that can get away with the the headhaul and the backhaul as they call it, taking the really low ball backhaul rate that might pay the fuel, and they're saying we can't do it anymore. That that should turn some heads. Because eventually, whether it's big carriers or small carriers, eventually, there's gonna be a tipping point, and you're gonna see it. And now the danger is the longer it goes with an overcapacity issue, is a sudden drop in capacity. So then you have a lot less trucks on the road, and then you you have pandemic like conditions, except there's less trucks out there to service the shippers. That's the real danger for 2024 going into 25 is right now we're oversupplied in a rapid cliff and then radically undersupplied, which is great for the carriers though because they'll be able to it'll be, 22, 21 all over again. Jesse Runions: You can pick up the phone and ask to go anywhere for pretty much name your rate. Jared Flinn: Yeah. I can think about when my Bartlett days was 2,008, but that was happening, but, like, all these carriers were dropping off. Jesse Runions: Yes. Jared Flinn: And, like, this was my kind of first, you know, first chance in trucking, trying to understand what's going on. And I was frightened in in the fact that, like, are there gonna be any truckers left? I mean, that was in my mindset, like, who's gonna fill, or, like, next year when we have freight to move, who's gonna fill this? We know the the laws of supply and demand come back into it. But, yeah, you're it could be we could almost get too much of attrition or too many out, and then we'll be And for Jesse Runions: the bulk commodity segment, one trend I've noticed for about the past 6 to 8 months, Railroad's getting a bigger market share. These food producers don't have to produce on such a tight timeline like they did during the pandemic, So they can put that on rail. They're not in danger running out of corn or out of, soybean meal or any other ingredient. They can put it on the rail and deliver it, you know, at a much cheaper rate. Or, you know, a, pet food producer can get it via rail that delivers a less than 20 miles down the road, then they put it on a truck, and they're still coming out cheaper. So not only do you have the same cost pressures, a lowering rate structure, you're also facing increased competition from rail. That's the reason because even though we don't do spot, we pay attention to the boards. That's the reason you see a lot less available loads on the board is not because it's not being produced, but because it's being put on a railcar. Jesse Runions: Wow. Jared Flinn: Hey, guys. I hope you're enjoying this podcast with Jesse Runyon. Hey. Just wanted to let you know the economy is still struggling right now. I was talking with a trucking executive the other day, and they're saying that we are looking at a recession levels like back in 2,008. And if you were back in 2,008, you can remember there were over 4,000,000 Americans laid off. So we know that there's still gonna be a rocky road ahead of us in this trucking cycle. We hear from companies all the time that cash flow is getting tight, rates are low. Jared Flinn: We are here for you. Smartfreightfunding.com. Check us out. If you need help, or want to make sure that you're cash flow positive, reach out to us. Man, we wanna make sure that you are cash positive. We know as Jesse have said on previous podcasts, man, a lot of times business success relies on cash flow, not necessarily profitability, but cash flow. But if you need help, reach out to us smartfreightfunding.com. We will help you with your cash flow. Jared Flinn: God bless. Talk about the operating ratio. Have you seen where most of these companies are? Some of these mega ones, do you have they do they Jesse Runions: pull up? Most of the ones I've seen, they hope to be in the 90% range, which is where most companies are right now. Ideally favorable? 85. 80. And then your nontrucking ratio should be around 10% of whatever you're running. So if you're running 90, it should be over 9%. So, you know, that's your support staff, your dispatchers, your safety, etcetera, etcetera, or your boatload subs subscription. Jared Flinn: Yeah. For sure. Jesse Runions: But all of the non trucking revenue should never be more than 10%. Really, you wanna be in the 8% range. So if you're at 90%, which is not optimal, you you don't wanna be at, you know, you wanna be able to pull at least a 2% net. Jared Flinn: Yeah. Wow. Those are razor thin margins. Jesse Runions: Trucking has always been pennies on the dollar, you know, except in specific niches. Yeah. Yeah, absolutely. Jared Flinn: Well, let's move on. And we're I wanted you just to give us a little recap of the market. A lot of our listeners love hearing that. I hear that all the time. I wanna transition into the topic I'd kinda talk to you about previously and kinda why you're in here, and we'll kinda see where this navigates or where we move about this. There's been a lot of talk about a mega carrier here in this town, Springfield, jumping into hopper freight. And we see those that are on social media, a lot of social media posts about it. I've seen posts where people are taking pictures and they're seeing about this plant or this place and this place. Jared Flinn: And I'm gonna give you my thoughts. And, again, this is, you know, kind of our our thought process behind this, so take it kind of however you will. But I wanna kind of clear the air and just kind of give our take on this. And I know they'll pro this would be very opinionated, but let's start with that. I I guess I'll start the stage. I guess when when I heard news about this, did some research, and and actually, I think I read some of their posts, but the reason they really got into hopper freight prime we're talking about was they were already servicing some pet food manufacturers is from what I heard. And these pet food manufacturers said, Hey, can you service us on the dry bulk side or the hopper side? I think they were servicing them, I think on the liquid side. Jesse Runions: What we got on our end and, of course, you know, the trucking world, though, get your salt shaker. Jared Flinn: Yeah. This is speculative. Jesse Runions: They were also servicing Bunge with their tank division. I'm assuming with biofuel production. And, essentially, the same story. Because when it first came out, they were gonna get a 100 hoppers from Wilson, and then they were gonna get 50, and then they were then last thing it heard, they put 25 hoppers on that lane that they were specifically servicing. So it looks like they did some market research, and, hey, we probably won't don't wanna dump any more money in this. We have to because everybody else has been jumping into hopper just like, you know, people jumping from van into hopper, reefer into hopper, flatbed. It's actually becoming an reefer into hopper, flatbed. It's actually becoming an oversupply segment, so all we're doing is jumping into the frying pan into the fire. Jesse Runions: So they're in the ball game, but they are not making as big a splash as they initially were going to. Because when you commit to a 100 hoppers, you're committing to making at least, it's gotta gross at least 15 to 20,000,000 to break even depending on on how their cost outlays are. So they they scaled it back. You can you can kinda see how much money they were anticipating making in in entering this segment. So my opinion is, you know, okay. A big company's got in here, but it doesn't make a difference. And there's two reasons for that. Jared Flinn: Well, before you answer that, how is this and maybe this will be the answer to that. Like, in my career in bulk trucking, I've seen this happen with other companies. I've seen Warner, for example, jump into hopper freight. I think I've seen JB Hunt jump into it. There's another one I can't think of the name of, but, like, why has this one created a bigger splash than some of these other larger trucking companies, in Jesse Runions: your opinion? Prime has a controversial reputation. If you go look at their owner operator purchase program, where you go from company driver to owner operator, you know, I don't know. I don't see their financials, so I don't wanna speak to that. But there are many that think that they, they have predatory practices. I think probably a big portion of that, and I forget who it was that was discussing truck leases. A big portion of that is people not doing their homework before getting in the game. So they go in with unrealistic expectations of what it'd be in the owner operator is much less a lease operator under a carrier. And, you know, you're seeing these big paychecks, so you don't put anything back for maintenance. Jesse Runions: Any other cost outlay, your tires, even if they're paying your 22.90, your your tags and whatnot. You still got taxes, you know, come April 15th or October 15th, depending on how you file. So I think a lot of the problem from that reputation comes with people not anticipating the problems of trucking. So you have that, and then they are a big player. So when people, you know when I came into trucking, JB Hunt, Swift, and Snyder were the big villains in trucking. And the simple fact is even if you got shareholder cash coming in, a truck still costs a lot of money to move down the road. And if you're not making money, you're going out of business. So they've had to keep their rates somewhere to make that money, but perceptions, you know, how you perceive something is sometimes more important than the reality. Jared Flinn: Yeah. So back to and I interrupted you. What were the two reasons you think they really jumped into this? Jesse Runions: Well, 1 diversification of a revenue stream. Hopper is a different animal in trucking. It's not a date specific segment or a hour specific segment. You know, hey. We need this loan, the soybean meal, to deliver on 14th or, you know, 30th or before 30th or, hey. We're giving you 50 loads of, fertilizer. We need to have these delivered before May 1st. So you're not scheduling for a precise appointment on Saturday morning, April 20th at 5 AM. Jesse Runions: You have all this latitude. An another reason, I think they had an I think they might had unrealistic expectations of what this segment will make. Part of the, the biggest thing when you come from van or reefer getting into bulk commodity, especially hopper, by and large, it's a banker's hours segment. You're not gonna run teams in a hopper truck because the operating hours of the receivers and the shippers aren't there. Tyler Allison: Mhmm. Jesse Runions: So it's a Monday through Friday business hour operation by and large, you know, with, you know, a little bit exception on either end of the day. So they're gonna they're going to have some interesting adjustments learning how Hopper works. But and, again, you know, a new segment is a new revenue opportunity. So it comes down to money. They think they can make money doing this, and the customer asked them if they would. Jared Flinn: I've said this before, but it and, I'll ask you this question. I don't think, you don't see a lot of big hopper companies out there, Jesse Runions: And there's a reason for that. The main reason is you have roughly a we'll call it a 60 to 84 hour operating window during Monday through Friday. How many people receive on the weekends except for the big mega producers like Nestle or something? It it don't happen. Jared Flinn: This is speculative, but I almost wonder, and I'll let you comment on this, but, you know, this idea probably came from them. Maybe it was years before, but I would I would assume this was during the pandemic. We had a short supply chain. Everybody was running into issues getting product in. I imagine pet food manufacturer were the same with every everybody else. A lot of them that can actually be a little more time sensitive, versus, you know, a big grain terminal or fertilizer port or something like that. Do you think maybe that, like, these pet food manufacturers more reached out to them saying, hey, you know, you guys are serving us here. We need better help. Jesse Runions: Right now, you know, that's a possibility. They might be trying to lock up capacity before the next upturn. It's common. It may be further away than we want, but there'll be another consumer demand upturn. So they may be locking in capacity. They may be looking for a cheaper venue. And another trend that we're seeing from shippers is they want a carrier as more 3PL oriented. The pre or on the podcast, I heard about a a a a carrier or individual owner operator as a carrier saying he called somebody and they wanted 5 trucks or he couldn't haul a load. Jesse Runions: They're wanting a more 3PLs. So where they make one phone call versus 5 phone calls. Say, hey. I got 5 loads, you know, going to work. Can you handle this for you? They want a dedicated capacity. A lot of it comes from labor shortage. Just as everybody, you know, in trucking has a problem finding new people in the truck or in the office, so do the shippers. So they're trying to get done more for less or less effort. Jared Flinn: The other thing too, I always think about not wanting just beat this to a dead or beat dead horse on this, but the pet food industry continues to accelerate. A lot of people don't realize, and I can't remember that last stat. I mean, you know, it used to be an 80,000,000,000, now over a 120,000,000,000. I mean but, like, people are in or people are paying more and more for their pets. I mean, pet food and all that product. But, like, I wonder if that just that industry has just gotten so big. You know, think about COVID now, everybody, they went and bought all these pets because they were, isolated by themselves, but it just seems like and I always say I always raise our hand, like, we are one of those families, like, you know, we pay a $100 for a bag of dog food. I never in my life. Jared Flinn: You know, I grew up old dog food for $5, 50 pound bag at Walmart, but now we feed our 2 pets the screen feed. But it's like, could that be it? They just see that this there's a big demand that that's gonna continue to accelerate. Jesse Runions: Probably. I mean, I'm probably that demographic that helps this segment of the economy grow. When you become a cynical old man, you tend to spend more money on your little dog than other more amorous event adventures. So I can see this. But, yeah, pet food is gonna grow for a whole host of reasons. Part of it, it speaks to how strong our economy is. Even the most irresponsible person, when they get a pet, they're gonna wanna feed their dog. Yep. Jesse Runions: So so that kinda kinda is a good indicator to the affluence of our economy as a whole. You know, how long that lasts is a whole different, you know, ballgame, and you you can get one opinion on either end of the spectrum. But that is a good in economic indicator in the longer term. You know, people feel confident enough, to get a pet for whatever need reason, whether it's just to have a dog so I can post them on Instagram all the time or, you know, for a companion. Hey. Look look at it this way. Your dog's never gonna ask you for money. So who, who you gonna spend the most money on? Jared Flinn: Oh, that's so good. You said earlier that you shouldn't see this as a threat to your business. Jesse Runions: No. Talk about that. One, how many hopper loads are out there even at prom? You know, Rob Lowe said had an epiphany tomorrow morning and said, you know what? I'm converting my whole fleet to hoppers. How that's not even 1,000 or however Yes. That's not even it probably doesn't even bump 1% of the available the loads moving out there. So and 25, 50, 100, whatever it is, the hoppers, that's not gonna impact anybody's mainline revenue if they're providing solid service to their customers. Service is always gonna sell over price even if somebody snatches a load out from under you. As soon as that lowball carrier does one of 2 things, consistent service failures or they go out of business because they bid it too cheap, Whose phone is gonna ring? That carrier that service the customer to their fullest expectations. Jesse Runions: Service will always sell over price, But don't get me wrong. The underbid aspect or the threat of it, you know, hey. That is concerning. But, again, as a a small carrier, we run into we run into the underbidding thing long before prime has come around, and we will run into it again with or without prime. And as so long as we are blessed to keep on going, we're gonna outperform anybody that underbids us. And I'm pretty sure that's that's true of every carrier or independent contractor out there that has the same level of pride in the product they serve provide their customer. Yeah. Jared Flinn: Yeah. That's so good. You kinda answered this question. I'll just reframe it another way. I look at everything as a learning experience. Like, when you go through hardship or, you know, bad economy or something in life, like, what you know, you always look down the road what I learned from this. But, like, for owner operators out there listening to this, you know, maybe they've been very cynical about this or worried. Maybe there's a threat though. Jared Flinn: What can we learn about this experience to apply to our own operation? Jesse Runions: The biggest thing is consistency of service and I'll kinda jump to another trend that we've noticed probably 20% approaching of our customers are wanting more status updates on where their load is at. That's something that is carrying over from van and reefer. They're more time sensitive. So, you know, know where the load is. The the the shipper has realized that, hey. If I can track my pair of new socks and get a hourly update, I should be able to do it for that, you know, 10,000, $50,000 load. I should be able to get a status update on this. Yeah. Jesse Runions: So you're gonna see more of that come along. So, you know, just to make a little plug here, whether it's TMS Jared Flinn: I know. I was I was gonna plug it if you want. Jesse Runions: And or I'll even plug Sean McCarty or UScellars, My Fleet trackers. You might you know, it if you don't have them now and you don't plan on getting them in the near future, that is something every small company may want to explore, and it's cheap. Jared Flinn: Yeah. And be proactive. Don't wait for your shipper to ask for that. Let them know that, hey. This isn't, this is another service I provide by working with you as a customer. Jesse Runions: And be more more like a 3PL. And this is probably one of the reasons we have our highest customer retention. Look for problems before they happen. Yeah. Or, you know, when because you're gonna build a relationship with your shipper contacts. They have a problem trying to get a carrier for load even if it's not in your lane. If there's somebody in your in your in your call list that might service that lane for them, direct them to it. They're gonna remember that. Jesse Runions: You know? Do your best to service that customer in aspects beyond just picking a load up and delivering it whenever you get there. Try to make sure they they have a good a good feeling and knowledge about the product that they're putting on your truck. Jared Flinn: Yeah. Yeah. So so is good. This is gonna lead me into where we're gonna camp out next and probably end on this. But one thing that we get feedback from shipper I mean, we we listen to our to our members. And, like, a lot of times we're, you know, complaining about this person, that person, complaining about the shipper, the broker, the carrier, whatever. But one feedback that we actually got from one of our shippers and brokers was like better communication from carriers specifically on the load board when they said when, you know, we may pay post a load on there. We're advertising this load on your on bulk loads. Jared Flinn: And a lot of times, we'll get, like, a 3 word question on it inquiry. We'll get a carrier who we've never dealt with, never talked to, and it would be like, what's the rate? But they have no idea who this carrier is, where they're based out of, when they can take the load. I guess my point is, I wanna just bring this up because I wanna try to help carriers, and I think that we're all salesmen. We're all trying to sell our service. Both of us are I'm trying to sell our service here. When When you're interacting on there and you're working with a client, remember, you know, that per as a carrier, that shipper or broker, they are the customer. They're gonna be the they're paying you to to provide a service. Jesse Runions: Holy. Again, the best paying loads are not because you're got a a prettier truck or all these gee whiz gadgets. The best paying loads come as a result of good relationships. So if we see a load, and provide and there are some brokers that won't put a phone contact, they'll put an email. But if there's a phone number, that first contact to a broker should be a telephone call. Hey. And, you know, hi. I'm this guy in a lot of times, and this is something we're seeing from carrying over from the bigger industries. Jesse Runions: The the first thing they ask you is what's your MC number or your DOT number? Have it written right there on your dashboard. You know? Put that little sticky note with your MC and your US DOT so they can look you up. They can see your SAFER score. They can see how many accidents you've been in, what you're out of service rate. Shippers are starting to look at that. Even though there's been 2 decisions that have went either to the appeals and the Supreme Court has kinda taken brokers off the hook. We know the deal. Somebody gets hurt, they see a big signboard on the truck. Jesse Runions: It turns out that trucking company doesn't have enough insurance or they don't have enough money in the bank if they're going big. Who they're gonna go after next? The person whose product is on the wagon or the entity. Jared Flinn: Mhmm. Jesse Runions: So they wanna know who they're dealing with from a a regulatory standpoint. But when you call, have a spill ready. Hey. You know, I'm so and so. Whatever company. I actually service this lane regularly that, you know, this load is posted on. I'm curious. Can you tell me the rate? And just start a conversation. Jesse Runions: Will you get the the first time, you know, will you get the beginner's luck? Probably not. They're probably gonna be closer to 15 or 20% of the cut versus 8 or 10. But start that conversation, build that relationship. When you build this AI has not taken over either end of this industry. Relationships between people was what makes business. Build relationships. That that's the begin and end of higher rates, higher load offerings. If somebody knows you, you have a service reputation with them. Jesse Runions: You're going to get the business. Then you don't have to call. Then the loads are coming to you. Tyler Allison: Mhmm. Jared Flinn: That's good. I can remember back in my shipper days at Bartlett, you know, I would post a load out there, and I'm not exaggerating. Sometimes I get a call from a maybe even a trucker I kinda knew or whatever, but sometimes they would call me like, hey. What's what's the crappy rate on this? Jesse Runions: Well, that's a good way not to get a good rate. If it was me. Okay. You want a crappy rate? I'm gonna give you a crappy rate. Jared Flinn: But like the it was started off just like already. And again, not that like, but it was like, it was hard to be like, oh my god. Like, hey, how are you? You know? Jesse Runions: Respect. Talk to somebody, the old golden rule, treat, talk to somebody the same with the same level of respect that you expect to be treated. Because that's a two way street too. If a broker, which I don't get into that very much, but if a broker or a shipper gets kinda crappy with me, oh, you know what? We don't have any trucks available. No capacity. Yeah. I'm sorry, but give us a check with us some other time. That's a two way street. Jesse Runions: Yeah. So, you know you know, in trucking, there's gonna be crappy rates. You know, grain. As I I I oftentimes grumble about different, merchandisers in in the grain and fertilizer segments. They'll offer you, oh, this is $6 per loaded mile, but the average cost, bare bones, not factoring in the actual equipment cost to operate that truck, 1 hour is still a 120 or better an hour. And bare bones cost to run it 1 mile down the road So Jared Flinn: you're talking about, like, probably this is like a short load. Yeah. I mean, they're showing a 6 month file look like it's 10 of those. Jesse Runions: You got 5 hours in a load and they're paying you 2.50. It's a loss. It's a $250 loss. And we've had some pushback, but we're sorry. We got to decline that. We can't do it. You know? And then, you know, a mile down the road, 228 to 235 is the cost to roll that truck down the road, the operating cost. That does not include the extra do a little mental math here, extra 40 to 60¢ per mile to buy that truck and trailer. Jesse Runions: So you add that in there and you're pushing $3 a mile still. Mhmm. Cost. Jared Flinn: And you're basing that on a 500 mile day? Jesse Runions: I'm basing that on any mile day. Okay. But in terms of when you get into the extremely short hauls, you have to look at it by the hour, the time you're putting in that load. There's an hour 60 miles an hour is an hour of the truck, and the truck sitting somewhere is an hour on the truck. It may not be burning as much fuel, but $120 an hour, especially if you're paying somebody to get that truck. The average workers' comp rate is between 10 14%, sometimes higher if you got a couple of claims. So if I wanna pay you a $100 an hour or I wanna pay you a $100 Mhmm. I gotta pay 14¢ or $14, 10% of that to the workers' comp insurance company for every 100. Jesse Runions: Oh, wow. So and, you know, if you get lucky and you get a little lower rate, still $7 or $8. You know, on the other and that's for hopper. Yeah. Hopper is a labor intensive segment, so it has a higher workman's comp rate. If you were to do vans, it's dramatically less because most of that's no touch. It's 4 or 5%. So Hopper has a higher cost just to put a driver in that truck. Jared Flinn: Yeah. Super interesting. So going back and we'll kind of tail off and, in with this. So just talking about communication when you're when you're looking on the load board or when you're gonna make that step to reach out to a shipper or a or a freight broker on a load. The thing I wanna push and get across the fence here is be very, be very communicative. Let them know who you are. Let them know the service that you provide because, like, you wanna be able to stand out above and beyond. You wanna be positive and sincere about it. Jared Flinn: But again, you are selling your service to that company even if it's just an introduction. Jesse Runions: Well, BRB worked the last time. I've been in trucking directly since 97. We have the best dispatcher in the world as she builds a rapport. But before she makes that phone call, she does her homework to see how many miles it is to service that lane for that load and what's available at the other end to bring that truck back to home market. Oh, wow. We're a small company. We cannot afford to have trucks strung out all over the company for the whole week or a weekend. We have to so when we're sending a surging a truck out somewhere, we're having to plan on getting that truck back as fast as we can within legal limits. Jesse Runions: So do your homework. Know what it's gonna cost you for that entire turn so you can if you can't get your preferred rate, you can get a rate that you're you're not losing your rear end. And, like, we're we're a hybrid company. We have owner operators and company drivers. If we we try to give an owner operator rate, it's just a losing rate. They're going, no. I'm not gonna do that. But, so then you don't have the capacity. Jesse Runions: You committed to a load you can't or or a lane and a load you can't service because the rate's too low. So, 1, do your homework. Know what you have to have. If that broker will not come off that rate, then look for something else or, you know, look for a different lane because some lanes pay better than others. Texas is a hard market to get out of. We always kinda at BRB, we kinda say we do the thing other things that people can't or won't do. So, you know, when you spend a decade or 2 specializing at that, you build these relationships to get things that other carriers can't. Again, it comes down to relationships, respect, and communication. Jesse Runions: Love it. Love it. That's awesome. Jared Flinn: Jesse, before I let you go, man, you, like are studying the market all the time. We talked about this just on the very beginning, but what are you looking at or what should people be looking at you're really the next, you know, this next year in their operation? What would be your words of encouragement for them to kind of keep a pulse on and well, stay tuned with? Jesse Runions: This is not much different than when we talked in October. Cash, preserve your cash, cut your expenses. And when you're evaluating your financial picture, don't go by your instinct. Go by what your financial reports are doing. I think it was Martin Amiel. I never can't remember his name. The first thing any business owner or even owner operator or even a company drivers or on the company truck, look at your p and l or your checking your checkbook versus your bills. Know where you stand financially. Jesse Runions: Know what you can do, what know what you need to do, and know what you must do, and know what you can get away without. So for the remainder, and then we're we're we're just approaching the end of the Q2 or the midpoint, Just maintain your cash levels. Cash is everything. A lot of times, you know, hey, I'm a buy this. I got the money for it. If you can finance it, if the interest rate isn't too hard and heavy and if it's not overloading your your, income to, debt ratio, finance it. You can always pay it off in total next year. Jared Flinn: Yeah. Preserve your cash levels. Awesome. So good. Again, hey. Thank you for coming to the Bulk Freight Conference and speaking. I know that took a lot of your time and energy. Thanks for, again, making the hour plus drive up here to, to be in the bulk load studio. Jared Flinn: What do you think of our little backdrop here? That's pretty awesome. Yeah. Very awesome. Yeah. Awesome. Cool. Jesse, thanks for coming on. Appreciate you. Jared Flinn: Bye. Yep. Tyler, hopefully you kinda got the same, I guess, content or I guess thoughts that Jesse was portraying there about Prime specifically. But, it was interesting too when you really look at the volume they have, if you look at the bulk space as a whole, it's still just a small Yeah. Little dent. I mean, just a fraction of a percent of volume if we're looking at the bulk space. Tyler Allison: Yeah. And that's why I think a lot of a lot of our members and a lot of owner operators, you know, a lot of them are kind of nervous with them getting into, but a lot of them are like, dude, we've seen this before. Like, it's not gonna affect me or my company. So, yeah, it was good to hear Jesse lay that out, and he got, I mean, he got worked up. Like, he was he was on fire about it. Jared Flinn: Well, you've been here long enough. I mean, when it's no different for us when we see another competitor even on a load board perspective getting in or similar like products, factory Tyler Allison: Yep. You Jared Flinn: know, TMS, like, we get fearful as well. So it's the natural tendency to do that, and you can't be blindsided. But, man, look at that competition as a advantage, I guess I should say. So look at it. Hey. What can I learn from this? But how can I set myself apart? And that's where Jesse and I, I wanna just before we kinda end on that, this second part of that conversation was, hey. Well, how do you what do you learn from here? But how do you really set yourself apart? How do you when you're responding on load postings on the load board Yep. How do you look different than everybody else? How do you, instead of just saying, what's the rate? How do you say, hey, this is so and so I wanna earn your business. Jared Flinn: Yep. I wanna tell you a little bit more about me, but really, you know, selling yourself to shippers. Tyler Allison: Yep. Because at Jared Flinn: the end of the day, they're the customer, really. You're you know, they're paying you for the service. Yeah. So think about in that sense. So I think there's just I know it's easier said than done, but, man, when you interact with customers on the load board or potential new customers that you wanna do business with, how are you presenting yourself and how are you being professional, and how are you gonna stand apart? Tyler Allison: Yeah. Sometimes those small things are easy to forget. Like, you don't sometimes whenever you're in the moment, you know What's the rate? Yeah. What's the rate? Yeah. You don't even think about it. But, yeah, it's just the the small things that so important to these brokers and shippers, and it's what they actually look Jared Flinn: for. Yeah. And we said this at our conference. We all have to win if we're all gonna stay in business. It's not gotta eat. Yeah. It's not a zero sum. It's not one winner, one loser. Jared Flinn: We all have to work together. Rachel and I back in our Bartlett days, it's we always had that motto. Like, everybody's gotta win here. It's gotta be fair to all. Otherwise, we're not gonna we're not gonna survive. Tyler Allison: Yeah. Jared Flinn: So, what else before we head out of here? Jared, we got Tyler Allison: some new hats coming in next week. Jared Flinn: Oh, yeah. Yeah. You sent me the the schemes, and we actually have some cool different colors. Tyler Allison: Yeah. Yeah. We went with a couple different options this time, and there are a couple different colors. I'm excited for them. Joe actually kinda helped out and was like, dude, we need to do this. We need to, you know, go with the this color scheme. So I had they're gonna be in next week, and we wanna give some out. So if you're watching this podcast on YouTube, if you wanna have, just simply comment on this YouTube video, that you want a hat or just something you like about the episode. Tyler Allison: We will reach out to you and get you a hat. I actually had somebody message you on Facebook this morning. It was like, how do we buy some of your hats? We're not gonna charge you guys. We will send you one for free. You just gotta contact us. Jesse Runions: Yeah. What I love about Jared Flinn: these new hats, these are like the XL. Like, Like, they they fit my huge melon so much better. So you got a smaller head, but like these, man, these are the actual trucker hats. Tyler Allison: Yeah. Jared Flinn: And they're nice. So yeah. Awesome. Anything else? Tyler Allison: I don't think so. You know, I think we're always going to right now, we're just in a time where we're really trying to nail down our content. We had a great meeting yesterday with Joe. Jared Flinn: I was hoping you were gonna mention this. Tyler Allison: Yeah. One thing that, you know, we're really trying to focus on is getting quality content out there for you guys, to see. But the only way you guys can see is if you subscribe to our YouTube channel and you actually, follow us on Facebook and our social media. So it doesn't take a whole lot of time. We're not, you know, asking for anything special. We just want you to hit that subscribe button. That way, whenever we're getting ready to go into the season of really cool content, you guys are notified to get, to see it first. Jared Flinn: Yeah. And speaking of I think we said this last podcast. Joseph, actually, especially we've tasked him to be on the road really 50% of the time getting footage from companies and all that. So, man, if you would love I mean, if you would like, we would love to come out there and film you. I know people are just like, ah, that's not me or whatever. Like, trust me, this can be beneficial for your business. This is content that you can get out there. We'll market to our audience, show in your company. Jared Flinn: So shippers, brokers will see that information. And again, trust me, it will pay dividends on your end, and there's no cost other than your time. You can give us an hour or 2. But if you can, you can message us direct or comp or put, a note in the comments below here, and we'll reach out to you and we'll schedule that visit. So it's not a big lift at all, and we can meet you where you're at. If you're on the road going somewhere, man, we can meet you out there, do, probably an hour of filming and a couple interviews, and we'll push that content out. And then you can even use it for your own social media. Tyler Allison: Yep. Exactly. And if you're curious like, hey. What does this look like? Go on our YouTube channel right now. And I think the most recent one we do was the Tri State Commodities video. So look at their company video, and that's kind of what we're trying to do. We just wanna highlight your company and showcase, you guys and what you're doing in this industry. Jared Flinn: Yeah. And speaking of, we're gonna have them on the podcast coming up here in a couple Jesse Runions: of weeks. Jared Flinn: So, yeah, it was a really good one. I don't wanna talk too much about Jesse Runions: it, but, yeah, I Jared Flinn: got the grandpa, 97 year old Tyler Allison: The head honcho. Yeah, to Jared Flinn: come on. And, man, there's a lot of wisdom there. Tyler Allison: I bet. Jared Flinn: Cool. Well, as always, when we, before we head out of here, we want to, first off, if you have a prayer request, send it to me. I got one this past week. It was a company. They've been with us forever. They're out of, West Virginia. But, anyways, they're saying that, man, they're suffering. They can't make cash flow and, thinking about closing their business. Jared Flinn: So we are praying for you out there if you're listening here. But if you do have a prayer request, doesn't matter, small or big, send it to us. We will pray over that, and God does answer prayers. We affirm belief he's a good God. When we, petition our prayers to him, he will answer those prayers. Maybe not in the fashion we wanna receive him or like to, but God is in complete control. So I will, I'll close this out today. Yep. Jared Flinn: Heavenly father, we thank you for today. Lord, we thank you that you give us the opportunity that we get to serve this industry. That we're not required, but we have, that you've chosen us to serve farmers, agriculture, agribusinesses, any bulk industrial, Lord, that, we have the opportunity to interact with shipping companies, brokerages, carriers every day, and represent you more than anybody. But, lord, I just pray a blessing over our audience. The people listen to this podcast, lord, and the the greater audience of the, bulk and ag industry, Lord, that you'd be with them, Lord. Lord, that you show favor to them, and, Lord, that you bless them, Lord, that you show them the light, and the way, Lord, be with us in this time, be with our carriers as they're out on the road, traveling and giving them safety in your heavenly and precious name. Amen. Thank you as always for listening to the bulk loads podcast. Jared Flinn: Don't fit, forget to subscribe and as always, God bless.