Brent – 00:00:01:
Welcome to Freight Nation, a trucking podcast where we explore the fascinating world of trucking and freight management. We dive deep into the freight industry and uncover why the trucking industry is more crucial to our country now than ever before. Stay tuned to uncover the driving forces behind successful trucking businesses and hear from the hardworking truckers and leaders who keep the world moving. Let’s hit the road. All right, Freight Nation, I hope wherever you are in this great United States that we all live in, it’s been a great freight day for you. This is my first time to ever use that line, a great freight day. Beau, you can laugh at that. That’s fine. We got a great guest today, but Freight Nation, thank you so much for joining us for another episode of Freight Nation, a podcast by Truckstop. And we’re glad that you give us your time. We’re honored that you give us your time. We always want to bring value. That’s the most important thing because your operations and the success of your operation, whether you’re a trucker, whether you’re a broker, whether you’re a shipper in this marketplace, is what’s important to us. We want to make sure that you’re successful because if you’re successful, then we get to keep doing what we love to do, which is to serve you. So this is why we do these podcasts. And I’ve done over 40 of them now, so it’s been so fun. And I got another great guest today. I always do a little pre-interview. Freight Nation, if you don’t know that, I always do a little pre-interview with each one of them just to kind of get to know them. And I didn’t know our guest today before I got to do this. I didn’t know I was going to do the interview with him, but he’s a likable person because of just the way in which he’s grown in his over 15 years in the market. Joining us today on the podcast is Beau King, the author and presenter of Running Signals, a great data piece in the marketplace. You’re going to hear that he’s got great experience in the market all the way from being some leaders in the market like C.H. Robinson and RxO and FreightWaves, and then developing things like technological solutions and data solutions for the marketplace. Beau, thank you so much for joining us on Freight Nation today.
Beau – 00:01:49:
Thanks for having me. I’m damn excited to be here, man. Thank you.
Brent – 00:01:53:
Damn excited. I like that. That’s cute. That’s cool, man. I like it. Mr. Beau King. Sorry, Beau. So one of the cool things that we always like to start with on Freight Nation is everybody has a pathway to this marketplace. The reason that I always like for someone to tell their story is because I want you to hear the legitimacy of them. I want you to say, okay, well, this is a person that knows what they’re talking about because we’re not into wasting your time. We want it to be like we set a value to you. So, Beau, you started out in this industry 15 years ago, which is a pretty good amount of time. And that’s enough time to become an expert at several things. And so tell us, you know, what was your desire to get into the freight marketplace?
Beau – 00:02:28:
Okay. Well, let’s start with maybe there wasn’t an initial desire. It was 2008. So 15, 16 years ago.
Brent – 00:02:34:
Let’s see. Something interesting happened in 2008 to all of us. I’m 57. I was right in the middle of my career maturing. So, whoa, 2008, that was a big year, Beau.
Beau – 00:02:44:
Yeah. I actually dodged the bullet on a mortgage roll. Wow. I had a bank job and last minute said no. And then I had somebody that I knew was an intern at C.H. Robinson at one of the other offices and I found an opening in Richmond and decided to meet them. I drove up and kind of started from there. I was giving myself 18 months when I first started and it certainly grew on me. And I think everybody will tell you. And eventually, like once you get that bite in this industry, you’re kind of stuck. I just started asking more questions, really just started to really try to understand the market, try to understand the job or the role and kind of put your nose to the grindstone. That’s what you really got to learn early on. And I try to take that advice from others and really try to do that.
Brent – 00:03:27:
Yeah. So you entered into the marketplace with the largest player in the world at moving freight. So you didn’t jump into a shallow pool. You jumped into a deep pool. You had several positions at C.H. Robinson, a great company in the marketplace. And so tell me about like, what was your progression in that? And sort of where did your curiosity or your love for asking questions? Let me tell you, Freight Nation, he likes to ask a lot of questions. So where was your love for that? Where’d that take you in your career there?
Beau – 00:03:57:
So C.H. was a lot different back then. And you know, 2008, you wouldn’t think it’s so far ago, but we’re still using the fax machines and things like that. Right.
Brent – 00:04:06:
We know about those at Truckstop.
Beau – 00:04:08:
It was cradle to grave too. So at least right when I started, it was you get the business, you get the carriers, you handle paperwork. So I think that appreciation of that whole line from procurement all the way really helped me along. It was very competitive, right? It’s 2008. You’re making money off of peanut loads and paper loads and things like that. We all know that that’s kind of tough to live by, especially as you’re starting out or you get a new company, you kind of have to grow in these commodity level freight. So that kind of cut my teeth there and had my first opportunity to really price with a mold project. And boss, he told me, just take the email list every day and send them back rates. And after about the third or fourth day of doing that, I got bored of doing it. So I made an Excel matrix. I realized that they were going to like 40 different places in the northeast and I said, all right, if it’s within 50 miles of these different cities, then it’s going to be these prices and just send me tenders instead. So he told me not to do that. Ended up doing that. And that kind of got me my first taste because I started winning business off of that. I doubled revenue that year in a tougher market and kind of got my first taste of pricing and went from there. I was a nerd at first though and I got picked on early. I said, what are the miles every time somebody would want a spot quote? I just leave it alone. But I really wanted to get an understanding of rate differences across the country. And I was in the Northeast division to start. That’s what we were part of. We were in the top 15 branches out of almost 200 at CH Robinson. So they had about 180. It’s crazy for me to hear that and I don’t know the truth to it, but they have 70 sales reps now. Right. I think there was an article about that.
Brent – 00:05:41:
Yeah, sure was. A lot of cuts in the industry right now across the board. You can look at every major place. They’re cost cutting right now. So that’s not uncommon. But you just said something really unique. You saw an opportunity where there was an inefficiency. You were doing something kind of manually and you created your own sort of custom way of automating a process and getting it out there. And you had somebody who was a leader of you say, Hey, that’s not the way to do it. And you were like, yeah, I think this is the way to do it. And your fruit from doing it proved it out. So tell me once that started happening when that leader, did that leader come back to you and talk to you at all about, Hey, maybe I was wrong and this is a great thing you’re doing, Beau. How can you help hold the vision to do that?
Beau – 00:06:23:
Yeah. So he was a great boss and I’ll tell you, it was highly competitive. They’re quick to kind of tell you, slap your hand, what the hell are you doing? Kind of thing. Right. But eventually he came back and said, Hey man, this worked out. And I ended up using it the next year and ended up building a lot of capacity for the Northeast, specifically the Island. Everybody hates getting Island carriers and we had great relationships.
Brent – 00:06:43:
So that was the Island. The Island, what you’re saying, what do you mean the New York Island?
Beau – 00:06:47:
So we’re talking about the Bronx. We’re talking about Long Island, right? The one right up there.
Brent – 00:06:52:
The trucker’s favorite place. Oh yeah.
Beau – 00:06:55:
You want to talk about surge pricing? That’s surge pricing.
Brent – 00:06:57:
That’s right.
Beau – 00:06:59:
Yeah, my boss is great, though. He came back. And after that, he kind of just let me start doing some of my own things. I think what I like to teach people is there’s enough low hanging fruit. When you’re looking at spot freight, when you’re looking at opportunities in the marketplace, there’s always enough opportunity to follow the same track, to go after the same types of freight. But when you branch out and you find something that you can jump on and create efficiency, like you said, or make a process a little bit better, it gets noticed. And you have to take those leaps. And sometimes it may not look like it’s going to turn out in your favor. And sometimes it doesn’t. But you have to take those opportunities. You have to take those risks for yourself and for your business. And I was able to do that. And I was able to build into a pricing or into a carrier supervisor role while I was there. Because of that, I started really working on the process, too, and creating relationships. One of the things that I absolutely dislike is just this idea of treating carriers like commodities. You see that in cases. And I wouldn’t say it was prolific. I thought. C. H. Robinson did a lot of good with creating relationships. But that’s really what I started to pound home was how we created relationships and how we built them and the types of freight we did and the questions that we would ask folks to understand their business. And I think that’ll be the big thing that you’re going to take away from me.
Brent – 00:08:10:
So you were working at a brokerage office and you were focused on relationships. And let me ask you a few questions. This is a good one because I deal with this all the time, listening to carriers saying you can’t trust brokers. And you hear brokers saying, ah, the carrier is so simple, blah, blah, blah. We don’t always give them. All the information or they don’t need all the information. It sounds like you took a little different angle on that. Tell me about some of these questions that you would do to help create a better relationship.
Beau – 00:08:34:
The easiest questions to ask are where are they comfortable, right? Especially when you’re doing like owner up types. That was my bread and butter. The relationships. I think when we started, we were talking about having somebody strong in a relationship. Mary Terry transportation was my first couple that I dealt with. Mary Terry’s transport. He was right outside of Edenton, North Carolina, and he’s hauled peanuts at the Springfield mass for me and I’d take him. He’d have the deadhead from New Jersey down just to get backhauled. But if you understand their limitations, their likes, their dislikes, right? Which kind of receiver do you like to go to? What kind of freight do you like to haul? What if understand some of their performance, right? You’re going to get that over time. Then you understand what kind of shipments to put on the ones to offer. And that’s the big deal is understanding what kind of business they like to operate, how they operate, where they like to go and what kind of thresholds on pricing they really want.
Brent – 00:09:24:
Oh, okay. Thresholds. Thresholds on pricing. Wow. Okay. All right. Freight nation. Beau just gave you a really good pro tip here. All right. Now, so whether you’re listening to this or watching this and whether you’re a broker or whether you’re a carrier, this applies to both of you. So when you communicate specifically about what your needs are, both parties benefit. All right. That’s interesting, Beau, because you’re like, we were the broker and I was interested in that because not just because it made success for them, but because it made success for you. Yep.
Beau – 00:09:53:
I looked at their W2s in some cases and I’m like, some of my guys are making much more money than I was, right? Like here I was in 2008, like we say, and you’re not coming by profits much in those years. And 2012, right? And I thought some of these guys would work hard, but we’d find it would feel really cool for me to string like three loads together. You consistently do that in certain regions and create relationships. So one guy that I had, he loved to go to Florida. Damn, do I hate bringing the guy to Florida, you know, during the outside of produce season right afterwards. But then I’d create long-term relationships with other reps so that he would get the benefit of that freight. And it got me to understand how mechanics of pricing worked in different regions too, by moving people around. So there was a lot to learn from that.
Brent – 00:10:36:
Yeah, no doubt. So you developed some methodology at C.H. and then that took you to another company after that. Talk a little bit about your transition to another company and why you chose to leave and where did you find success there?
Beau – 00:10:49:
So 2015 is when I left C.H. They were starting to go towards, I think, a little bit of separate models on sales and procurement. It was kind of getting more towards a regionalization approach. And then I had an opportunity to follow a previous boss of mine. He was at XBO in a cold start. So in the brokerage office there, and he said, Hey, look, they just acquired Conway. And I have all these guys begging me for quotes left and right. I need to help kind of manage some of this. So I took that opportunity and I got to go on the sales side. I was in procurement for the first seven and a half years.
Brent – 00:11:22:
Okay. Swap to the sales side.
Beau – 00:11:24:
Yeah. And I took that to task. I wanted to become like the top sales rep in that office to kind of show I knew what I was doing and I took every opportunity I could. So I had 60 Conway reps in the Northeast and in the mid Atlantic. And I started with Conway, right? They were XBO now. I created relationships with them. I said, you stay where you are. You want LTL all day long. I’m not selling LTL, especially transactionally. Heck no. No, I’m not doing that on a small basis. But give me everything else. So I became the everything else for some of these and then got some good inroads and built a customer base to that and then started helping with the bigger accounts from there and kind of building myself out. But I wanted to prove that I could do that. I’d love being able to price different things too. So I mean, when I was at CH, I moved maybe two hazmat loads that whole time, right? We were focused on the customers and the commodity, but XBO gave me that first chance of kind of taking that entrepreneurial spirit. I did a 16 foot by 14 foot wide piece of machinery within the first six months that I quoted and I made money on it and I got it sourced because I’m taking a bet. I used to tell the LTL guys, I’ll quote a helicopter load of dog turds. Just tell me what you got and we’ll figure it away.
Brent – 00:12:32:
Wait a minute. Are there lots of helicopters that have dog turds? No. Is that a set of comics?
Beau – 00:12:38:
No, but it got their attention and they say, “hey, this is my friend.”
Brent – 00:12:42:
Right. You were making a point. Yeah. That’s great. So at RXO, you ended up being on the sales side for a while, but you said something common there that was common with your time at CH, pricing. So how did you weave pricing into your time there?
Beau – 00:12:57:
Got more involved in any of the bids that were coming in. When I left CH, I was really well ingrained with the bids. So I know that I was on the carrier side, but I helped with many of the contracts. So we helped build out customers like Anheuser-Busch, National Fruit, many of the paper large players out there. Kind of took that information, took that ability to kind of chop bids up, learn the process of that, and then teach the sales reps really how to start thinking about their freight differently. And I think this is probably going to be the bigger takeaway. Like you would with a carrier. How do you understand the customer? How do you understand their freight? And then how do you create a process that allows you to price and teach them to be more confident in their pricing and how they delivered it to their customers and built from there. And then I inevitably got my first opportunity to kind of look at how automation would start feeding into pricing more intimately. And that’s when I kind of moved into it. Right when the pandemic hit was when I got into that kind of more technology-based role. We did two things. We were able to grow our cold star consistently over the years. We also had the lowest cost of transportation.
Brent – 00:14:01:
Do me a favor. Define a cold star for the watchers and listeners that may not know what you just said.
Beau – 00:14:07:
Okay. I don’t know if that’s true of all brokerages, but this is what we called it. It’s basically a formation of a P&L in a location that wasn’t previously there.
Brent – 00:14:16:
A brand new company. Okay. Yeah, I didn’t think you were talking about Cold Star and your old Chevy in the driveway. No. All right. Cold star means you’re starting with nothing. All right. You’re building something from scratch, as they say. Well, that’s super cool. So did you just discover this need for accurate pricing or understanding the models of pricing or understanding the market dynamics and the pricing outputs on that? Because it seems like this is something that when I say pricing, sometimes I see your eyes getting a little wider like, oh, yes, that’s the fun part, right? Yeah. So tell me why pricing is. It is so important to push into the business.
Beau – 00:14:58:
So much is predicated on it. And I think so little is actually understood.
Brent – 00:15:04:
Okay.
Beau – 00:15:04:
Well, I believe his name is Andrew Leto. I believe he’s the CEO.
Brent – 00:15:08:
I know him well.
Beau – 00:15:09:
He mentioned at the FreightWaves Conference that reps spent 70% of their time in price discovery. And you would see that consistently. And you’d see people consistently trying to teach price. And as we know in a lot of these organizations, too, it’s a tougher job. So you get high attrition. You have to be able to train newer reps all the time. So that’s a consistent thing that you have to deal with. And you have to deal with the inflow of information, these new tools that are coming along. And I really wanted to kind of wrap my head around these things and understand how pricing was derived with these tools that we’re using. That’s how I kind of got a better understanding of how they kind of work behind the scenes and what actually went into the price, right? A lot of people think that they’re going to get this golden rate prepackaged for them in any provider that they have. And that’s just not the case. So if you understand the validity of this rate, what goes into it, and then what do I know externally about the market and things like that, then I can get a lot better at it. I thought I was damn good at pricing, and I wanted to be able to replicate that. And how did I do it in the office? And then how could I replicate that at an enterprise, the full level of the organization?
Brent – 00:16:13:
Right. Took me a while, though, to really understand. Of pricing in the market and how that relates to capacity. And I was explained to by a broker in about 2015 that rates and capacity were synonymous words. So would you mind talking to the Freight Nation watchers and listeners? What does that statement mean?
Beau – 00:16:38:
If you think of a pair of scissors, you’ve got supply and demand.
Brent – 00:16:41:
And that’s a great example.
Beau – 00:16:45:
They’re both cutting at the same time. I mean, you can never really exactly say which is which, but we do get a good sense of how much capacity is able to cover the demand that we have out in the market with the price, right? And I think what a lot of people get confused with is they think capacity is just total numbers of trucks and drivers exactly instead of where these things are located. But it tells you how much capacity you have in certain areas or how much capacity you have or not have in certain areas. And price is a great indicator of that. And if you’re just looking at an average across the nation, right? The ones that are higher, you can see the difference of capacity in different regions of the country versus others by just monitoring the price differentials there. The capacity equation fully dictates the price. And when there’s no capacity, the price goes up, right? There was an analyst, I forget his name, but he basically said spot solves shortages and contract solves surplus, right?
Brent – 00:17:44:
Say that again. That’s a nice statement.
Beau – 00:17:46:
So spot solves shortages and contract solves surplus, right? So if you think about it from the demand environment, when there’s a shortage of demand, everybody wants a contract, right? Because they want consistency. They want to make sure that, and that’s why we get into this cycle like we’re in right now, where the contract rates get a lot more competitive because there’s less spot freight too. And then when there’s a shortage, the spot gets the truck, right? Because the best price gets that truck and gets that availability. So that’s a good thing. So the shortage is solved by spot prices. And that’s how you kind of understand the difference between the cycles is when you’re going into that shortage territory of capacity, prices are going up. When you’re going into that surplus, then everybody’s going after the contract and you see that contract adherence gets a lot better.
Brent – 00:18:31:
Wow. All right, Freight Nation, please pay attention to what Beau was just talking about. I loved your example of scissors, right? Scissors don’t work if they’re not joined together by cutting at the same time. They’re just a knife, right?
Beau – 00:18:46:
Yeah.
Brent – 00:18:46:
And not a very good one. But they work when they’re working together. But you also talked about what spot and contract, what problem are they predominantly solving when the marketplace moves because it always moves. So yeah, that’s fantastic. So Freight Nation, please pay attention to what Beau was just talking about because that’s worth your 45 minutes for this one right now. Just that part right there about pricing because pricing determines everything. Think about it during the pandemic. If you weren’t going to pay whatever that truck was demanding, you weren’t going to get it. Pricing was pretty important. And now, pricing is still important. Right now, we’re at the bottom part of the economic curve, which we’ll talk about in a little minute with your running signal report that you put out. But right now we’re at the bottom of that curve. So pricing’s hard for the carriers. Some carriers just won’t take a piece of rate because they’re going to lose profitability on it or they won’t make any profitability on it. So you’ve chased this pricing curve from C.H., then automation and using some technology to XPO, RXO, and then you’re going to be able to do that. So if you transition into working for a really big player in the marketplace from a standpoint of communication, you worked with FreightWaves for a while. So talk about why you transitioned from RXO to FreightWaves. And Freight Nation, the reason I’m asking Beau to do this is that when you think about your career in this marketplace, there’s always transition points. You may stay your whole life at one company and that happens because this is trucking. But there’s been so much opportunity in the last decade alone. You could be improving your bottom line, which is what’s most important to each individual, by transitioning to another company. So talk a little bit about leaving that part of your career and what was your decision to go to FreightWaves?
Beau – 00:20:21:
So 15 years in a brokerage environment in two different hats. I loved what I helped build at RXO. I started building an opportunity for myself to maybe branch out in more of the technology world, a little bit more of the consulting side. I really started getting more into creating these Intel decks. I wanted to be able to build again just more on the technology end. And I think that would be the takeaway that I would have is get interested in the technology and don’t feel like it’s so far away from you and that you have to be able to code. I wasn’t coding. At any part of these roles, I wasn’t coding, but I was managing an API before I left, right? I was understanding the inner workings of it and putting business logic in so that we wouldn’t have issues with quoting, right? I’d have to understand if we do this and we quote this way, well, then what happens? And that’s really what it comes down to. It’s a big if, then, but statement. If you can do that, you can direct.
Brent – 00:21:12:
If, then, but okay.
Beau – 00:21:14:
If this, then that, right? Like that’s how a lot of this stuff works. And if you can kind of get down to that level, then you can guide some technology and then you can start to build your interest in that stuff. And as you do, you can get those opportunities. And like I said, it’s a little hanging fruit. It’s usually the ugliest stuff that nobody wants to touch. Well, you can fix that but you get your name out there, you get to actually fix something for your business, and that always goes a long way.
Brent – 00:21:36:
Right. Fantastic. So talk about your experience in working for what is now known as, in my opinion, I was in media for 15 years, the best communicator about freight and the freight marketplace globally that I’ve ever seen, which is FreightWaves. And they need to be commended for their take on really, truly reporting this freight marketplace. Not segments, not the manufacturers of the marketplace, not the unique demographics or the players in the marketplace, but the actual marketplace itself. So talk a little bit about what was your experience there and what were some of the things you learned?
Beau – 00:22:07:
They’re a great company. They have a lot of smart folks there. I was able to work closely between the product teams, work with Zach. He taught me one of the ways to be able to talk about it is how it progresses non-linearly, right? So I got to learn from him. It was an overall great time with those folks. We got to work on big problems. I think they’re consistently trying to think of what their shipper communities need, what do their broker communities need? I’ll tell you, I’ve loved them for a long time. When I was in those older roles, like you would get a periodical or you would get a saw update here or there, or somebody would pass you some bank information or a sell side report from an analyst. But then 2018, I see for the first time, I’m seeing some of these tender rejection charts. I used it to help price. I knew the market was going down in the back half of 2018, I think, because I was watching a couple of those. And XPO is one of the first companies to work with those guys to bring them on. And we really utilize that information. And that really helped me. So seeing that visibility, that real-time information, it’s so powerful. And to be able to incorporate that from a strategic level to actually integrating the data. And if it’s not just them, but just integrating data in general, I think it’s a fantastic opportunity and they’re some of the best at it. And they really care about their customers. They care about their vendors and their relationships with their vendors. And I learned a lot that time working with those folks. I do really have a high respect for them.
Brent – 00:23:28:
Yeah. So you mentioned something here. You said get interested in technology. All right. So where has that been a benefit in your career where you’ve been able to advance faster or better or larger than not taking a look at it?
Beau – 00:23:44:
So one thing that I’ve tried to build a philosophy for myself on Manage is know your intersection. And by that, I mean know the roles and know some of the responsibilities and the language people use around you. So when you’re a carrier rep, right, it’s FABP. It’s your sales reps. It’s other folks. When you’re in a variety of roles, you’re going to see where do you end and begin with these others? Because you’re not able to do any of these roles ever completely by yourself. And there’s so much siloization in the world. So you only go ahead when you’re able to kind of put these things together. And that’s what I was able to do. I was able to ask questions and start learning this world a little bit more. We had some of the first robotics processes. And I signed up to kind of understand how it worked. And from there, that’s where I got my opportunity to take over that arm of automated bidding at RxO by getting incorporated with those. And then, like I said, it’s if, then, but.
Brent – 00:24:40:
He worked on the automated platform on the RxO side. So that’s fascinating because you were interested in that part of the technology.
Beau – 00:24:49:
Yeah. So they had a program that they had already started and I took it over. And the biggest thing that I started to do was say, let’s add rules to this stuff. Let’s add some governance to it. And AI today, everybody wants the exact answer, but they forget that governance is a big piece of it. What do I do when I don’t want it to have that answer or when I want that answer to be different? And if I want to talk about pricing real quick in the automated world, there’s accuracy, there’s precision and there’s reliability. Everybody’s focused on accuracy. They think that they can get a hundred percent hit rate, but you need all three of them. And accuracy is how close you get to actuality. And I’m sorry, you’re just not going to get there because we’re all pricing freight for the future, whether it’s tomorrow, three days from now, and then stuff happens in between. Right. Somebody can’t make the pickup. So whatever you guess the price would be, maybe you were right. Well, now it’s wrong. Or maybe there’s a price out there that, you know, you could take, but you don’t want it like you mentioned before. So you kind of have to sit out. Right. So being able to understand how you put guardrails and things like that, and your pricing is really what I kind of took to task with that team. and I had to understand those systems and I had to ask questions and I, there were grueling parts of my process where I was updating spreadsheets like at the end of the evening to get things uploaded into our systems. Right. But I learned that over time and you also got to take time. You’re not going to learn this stuff after one course. You’re not going to take a small course in something, get your badge and say, this is great. You’re going to have to beat your head against the wall a little bit for a little bit of time, but then you get it and then you can really start maneuvering things. And I was able to do that. I take a realistic approach to building automation because again, know your intersection and know how it fits. Pricing is a function of billing, right? In terms and parameters and all those other things too. And people just forget that they think what’s the price from Missoula to Sarasota tomorrow. Well is it at 40,000 pounds or is it 10,000 pounds? Is it picking up next week? All those things dictate a different price.
Brent – 00:26:47:
So you said it’s three things, accuracy, precision and Reliability. Okay. And I love what you just said. You said pricing is a function of billing because pricing is not holistic. You’re so right because one load may have X amount of cost in it and another load may have another X amount of cost in it and those are different. So pricing is not holistically all the same and then different operations have different cost bases to operate within and so there’s all kinds of different integers that go into this. This is why people, I get frustrated sometimes when people go, isn’t it just $220 in that lane right now? Well, it depends. It depends on your operation. One operation, it can be $220. Some operations might be able to offer $215. Some of them may not be able to do it for less than $235. So it just depends and so this is why there’s no holistic approach. It’s good to have generalities but I loved your accuracy, precision, and reliability and pricing is a function of billing. That’s just the salient thing to say because most people are never going to hear that. Unwind the billing part. Pricing is a function of billing. Talk about that then I want to shift into your latest endeavor of running signals. So I want to talk about that because this is where all these years of Beau’s experience and this is where he is now with figuring out what he’s going to bring to the market right now and then what’s next for Beau. So talk about pricing is a function of billing.
Beau – 00:28:11:
Yeah. So two ways, right? First is the price that you kind of mentioned whether it’s contract or spot and then just the terms too, right? Another takeaway that I had from the conference was that Chris Voss, right?
Brent – 00:28:24:
Oh yeah. He’s an FBI negotiator.
Beau – 00:28:26:
Yeah. Right. And he had a really cool story where he said, I tried to buy one of the kids’ ID cards. He knows it’s a pain to replace. So he said, I’ll give you like a thousand bucks. So he had all these takers and they finally said, okay, I’ll do it, but I’ll give you a dollar a year for the next thousand years. And I’m like, everybody groaned, right? Well, that’s what you get with some freight sometimes, right? What are you signing yourself up to when the payment terms are 90 days? And then also when you get into these situations too, you see on the same lane, right? Like you mentioned, somebody has this rate, $1,700. And then you see $2,300 and you’re like, how the heck did that happen? Well, one load had $1,700, the other load had $3,000 in it. And they’re both rates for those loads. So it’s a function of what you see, what’s billed and what people are going to fight against too. If they have enough money to run, they’re going to run. If they don’t, they’re going to fight tooth and nail. And sometimes you gotta know when to hold them and know when to fold them too, in that regard.
Brent – 00:29:19:
Did you just use Katie Rogers on me?
Beau – 00:29:21:
Yes, I did.
Brent – 00:29:24:
Yep. I always think of Kenny Rogers, I do think of the songs, but I also think of Kenny Rogers roasters. So I don’t know why I think about that. It’s always because I lived behind the Kenny Rogers roasters when I first got married, believe it or not, in Mobile, Alabama. All right, let’s keep moving. So this is great. So I don’t want to devolve into eating chicken. So really great advice. And thank you so much for being willing to talk about this because pricing is where everything begins and ends in this marketplace. It’s all around pricing around the marketplace. So you’ve learned a lot. You’ve worked in technology. You’ve taken on some things and you’ve always kind of taken that and added it to your experience level and begun another part of your career right now, which is you’ve transitioned out of FreightWaves into running your own sort of a data consultancy or advice consultancy in the marketplace, using your experience with the leaders in the marketplace you work with. But you’ve produced a really nice data piece. And honestly, until I got to know you, I didn’t know that Running Signal was out there. Some of it’s a mashup of some other people’s data. Some of it’s a conclusion. That you’re giving in the marketplace. So let’s talk a little bit about Running Signal. And you can find it. Go to Beau’s LinkedIn page. It’s right there on his LinkedIn page. It’s got good graphics on it. It’s put together. It’s not overly complicated, which is great for everybody, right? Because a lot of people like to talk like scientists and then only a scientist understands you. You got to talk plain so people can understand it. So let’s talk about running signals. Why you put it together, how you put it together, what are some of the outputs of it and where do people get value from it?
Beau – 00:30:50:
I think a lot of people like to be told what’s going on, like you said, about really having to dig in or really having to listen for 30 minutes or what it may be. And that’s part of where I compile some of these things I do take from you guys, FreightWaves, DATs of the world. And a lot of it allows me to give a corroboration of what’s actually going on in the market. Because if you see three of these players all kind of saying similar things, you can do that. And I know a little bit of regurgitation in ways, but I feel like I’m able to expand upon what I do each week is I try to focus on different aspects. So a couple of weeks ago, I was more so on the flatbed. I saw that we’ve been going sideways on housing sales for a while. So that momentum has dropped. I know housing starts to drop, multi-families are starting to pick up. So I started seeing trouble there. I knew that oil and gas was going down. So flatbeds are highly connected to these things. If housing demand stinks and the fed is not going to cut, we’re going to have issues in housing and that’s going to be detrimental to flatbeds. So, and then when I go towards the Red Sea situation, I’ll pick up more information from there. And I really tried to pick out things that I watch throughout the week because I’m constantly monitoring the flow of information. And I kind of want them to give that piece to the data. Everybody wants data. Everybody doesn’t know what to do with data, but data is not just like the ones and zeros. Data is a chart. Data is an anecdote. Data is conversations that you’re having with other people and you have to consume data in a lot of different ways. So of course I’m on social media, but that’s where I get these charts because I’ll save them on my phone or I’ll get them so I can reference them later and bring them up and kind of really expand on these points. One of the bigger things I like to do is talk about the economy, talk about trucking and how they are interlinked, but not in lockstep. I think we’ve had that conversation, right? That what’s going on in the economy is not always what’s going to happen right away in trucking. There’s an obvious relationship, but if I can kind of talk about what’s going on in the economy, you’re going to get an insight into what’s going to happen in trucking in the next three to six months. So I think doing that is where you’re going to get the real benefit of listening to what I have to put out there. I spend a lot of time trying to get into a horizon that’s 3, 6, 12 months out and constantly kind of change it as things unfold, but that’s what we have to do. Nobody has a three-month, six-month view in the future that’s always right all the time, right?
Brent – 00:33:00:
Our economist likes to say, if I could predict the future in freight, you all would be worshiping me right now.
Beau – 00:33:06:
Yeah,
Brent – 00:33:07:
Because people go look at the macro and micro economy metrics and that sort of thing. And I go, it all comes down to human behavior. It’s a human behavior thing that the consumer is 70% of the overall marketplace in the United States. And so as the consumer goes, the economy goes. And so, so super important. And we make a lot of crazy decisions, we consumers. So tell me a little bit about how you’re, because yours is not just the U.S. Freight market. You were pulling in some other, because you said you looked at the Red Sea, you looked at some things, because with the internet now and with a lot of these players working offshore and in other countries, you’ve got a little bit of a global effort. When you say freight, it’s a little bit more globally than it used to be.
Beau – 00:33:46:
Yep. That’s really kind of where my understanding really started to bloom and where the interest keeps picking up over time is I got the domestic side. I started seeing seasonal trends. I can tell you at this point, I could probably redraw some of the OTRIs over the last five years because I lived them and I watched them every week. So I kind of got an understanding of what would happen around the holidays. I got some understanding of the 100 days of summer or different mechanics from different verticals, but then I really wanted to get like what happens before then. And I really started kind of building that out and seeing the connection between the global side, the global trade and how that affects here in the United States. And I think my time at FreightWaves has really helped kind of connect some of those together. A lot of those ideas that I already had, they really kind of came to bear when I was with them and I kind of learned some of those things and just to be able to connect, all right, when you’re getting an influx of containers, where are they going? Where are the top works that they’re going to? Where are the fulfillment centers that are against them? Because people don’t think about freight, freight is like a continuation of decisions that happened three to six months ago. Right. So if it’s an order that you got from overseas, it came from China. Right. Especially a lot of our manufacturing and a lot of retail comes from there. A lot of the decisions and like November, that’s for stuff. That’s for your bikini that you’re going to wear in June. Right.
Brent – 00:35:01:
Well, I stopped wearing bikinis for a long time.
Beau – 00:35:05:
Whatever you’re wearing these days, pal, you’re making those decisions then. And then right now we’re getting all the stuff for Q4 and it’s on hold, right? And then you get the end of month mechanics that push certain types of profiles of freight. So understanding that, got a good understanding there, but then how do you link it with the global influx? What does that do to pricing? 2021 should have shot, everybody got interested in 2021, 2022, all ships, right? So I think that really helped. And then just kind of expanding on the macro economy, the global economy and how these things are going, how it influences trade deficits, how it’s looking where we have China’s exporting like crazy right now, that’s contributing to some of the flows that we’re seeing. Southeast Asian trade to the United States is up to, I think, four or five years high. We’re seeing TEUs, which is going to influence Southern California, which has had its own issues. And that’s probably one of the areas that’s had more capacity taken out, right and it’s not just capacity overall over the country, it’s capacity in areas. And with the regulations, like you’ve mentioned, we’ve had a lot more people move to California as well. So if you get a lot more freight at a five-year high, you should expect, you should have a little bit more freight. Then I think February, it’s going to be wild out of California and Texas this summer because I saw that freight come in. So you have to kind of connect these dots and the more that you can connect them better, you can advise on strategy and building around these things.
Brent – 00:36:24:
Right. Yeah, that’s a great way to put that. So one of the things that we used to say at Truckstop all the time is that the spot market was a precursor to what was happening in the macro economy. And that’s true, but it’s not true from the standpoint that it doesn’t dictate what’s going to happen. It shows you what’s going to happen. But the only reason it can show you what’s going to happen is because we see the data faster. We see the data every seven days. We see it every day, but we see the conclusions of it every seven days. So I can tell you way ahead of time what’s going to happen because the government data and the overall macroeconomic data doesn’t come out for 90 days or 120 days. And that’s understandable because it’s such a large piece of data. But the point is you can look at these trends on, okay, this is what’s happening in the market. So it’s a lag indicator, but it just comes out so much quicker. It looks like a leading indicator. So Freight Nation, let’s take a little peek inside some of the stuff we’ve been looking at at Truckstop. And I know Beau knows the same thing. It’s just, it just looks that way. All right. So Beau, this has been fantastic. All right. You’ve had a great career. Once you get past like 40 in the market, you start to become like the real experience part of it. So you’re developing these data sets. You get deeply seated into something that takes a decade to become an expert at anything. If you do that thing for 10 years, you can look at the book Outliers by Malcolm Gladwell. He talks about if you do 10,000 hours, it takes about 10 years to get there. Where is your expertise, other than running Signal, which is a great piece, what do you think could this come from some of the areas of the market you’d like to get into next?
Beau – 00:37:54:
I’ve been very interested in micro mobility.
Brent – 00:37:58:
Micro mobility.
Beau – 00:37:59:
Yeah. So like I think inevitably things are going to be solved in different types of vehicles versus just your traditional truck and car, right? I think more people are wanting these small type vehicles. I live here in the Southeast. And if you live in any planned community, you’re going to see golf carts everywhere, right? Those are people’s third vehicle. I think the cities, if you go anywhere in Southeast Asia, you’re going to see mopeds or smaller vehicles there. I think that you’re getting into the RV kind of stuff. So there’s just a lot of different opportunities ahead with the EV space. And I’ve been interested in how that’s going to develop, especially with what you can kind of do with these things too. So that’s been one interest that I’ve had for a while is how do you kind of get into some of these like small trucks? I think the United States has an opportunity to kind of reinvent itself a little bit with the auto industry versus just kind of chasing some of the legacy brands or just transferring them into EV. I’m still. I’m interested, vastly interested in pricing, vastly interested in building technology. I want to be known for doing something great in this industry.
Brent – 00:39:00:
Yeah, man, what a great aspiration.
Beau – 00:39:01:
I do. And I know I may not be creating the next brokerage or something, but I want to be known for the process or technology contribution that I can give. When I was at one of the proudest things that I had from a technology perspective, and this kind of speaks to just knowing the business helps you with technology is, you know, we’re creating these APIs and what people don’t realize. It’s really hard to connect when you quote something. Was that the price you’ve quoted? And is this the tender related to that? Right? If they’re quoting you five different times on the same lane, which one of those prices? So we instituted something where we had, you’re given a unique code back and that sounds simple as heck, right? But once they do that on the EDI, now we’re getting electronic agreement up front and it clears through better on the backend. And just something simple like that. Hey, why can’t we just have a unique number that flows through? Right? That’s not a crazy idea. That’s not something that you need to be a master coder to understand. It’s, “Hey, how does this help flow through to the business better?” And those are the kinds of things that I like to think about. So if I’m going to leave anybody, just please, if we can do anything in this damn industry, shippers, TMS, put lane IDs on your contract freight. You will not have to worry so much about all the details. Just say it’s LN111. And that means this right. And all your carriers aligned to that start using. You need codes for contracts.
Brent – 00:40:23:
Man. That’s very interesting. I look before you go, I want to bring up one thing. Cause I think this was cool. I read your LinkedIn page and you’ve got some nice things you say about things that you aspirationally want to do in the market, but you close with this. You say none of these achievements. Would have been attainable for yourself. Without the wisdom of countless mentors, the camaraderie of peers, and the commitment of talented individuals I’ve worked alongside. Talk about the power of that, then we’ll close this episode of Freight Nation.
Beau – 00:40:53:
Probably too many people to name here, but I guess the gist is you need powerful people. You need people on your corner. You’re not going to get far without looking up to people to kind of emulate or ask questions to. And people like to help. I know it can be scary sometimes, but I like to sit next to the veteran rep. His name is Earl Burr, if you come across him. Yeah, I think he’s still in the Richmond office. I mean, that man, he could book freight with one computer screen and one phone and he had the biggest contingent of island carriers that I’ve ever seen. Todd Bradley, he was a great manager. Taught me how to think about freight differently, how to approach customers. One of the best unnoticed people, I think, in this industry is a guy named Tudor Bodea.
Brent – 00:41:33:
What a name.
Beau – 00:41:34:
He’s at RXO. He’s the real reason behind a lot of things over there too. Tudor Bodea, you need to look him up. He’s a great guy. But learning from these super smart people, being able to work with people and have them believe in something with you, there’s nothing better. And you need to find that. And you don’t need to be changed in the world, but can you be the best group? Can you be the best trucking operation? If you have people that are rallying around you and they’re smart, they’re dedicated, you’re going to go a long way. And I truly believe that.
Brent – 00:41:59:
Well, you just said something that is really a great piece of wisdom. If you want to find success, work with people that believe in the same thing you do. It’s hard to beat a team like that. Man, Beau, thank you so much for being on Freight Nation today. You’ve been a wealth of knowledge to the Freight Nation watchers and listeners. Freight Nation, please listen to this episode. I mean, pricing is so important in this marketplace. Having aspiration is so important for your career and being able to be an expert at something, you can leverage that into any part of success in your life that you want. So, Beau, thank you again for being a part of this. I really appreciate you giving your time and your expertise to the Freight Nation listeners.
Beau – 00:42:36:
Thanks for having me.
Brent – 00:42:37:
Yo, man, fantastic. All right, Freight Nation, that’s another wrap for another excellent episode. Beau knocked it out of the park, but I hope we can keep it up. So, man, as we like to say at Freight Nation, don’t forget, work hard, be kind, and stay humble. All right, Freight Nation, we’ll catch you the next time. On behalf of the Truck Stop team, thanks for listening to this episode of Freight Nation. To find out more about the show, head to truckstop.com forward slash podcast. If you enjoyed this episode, make sure you hit subscribe so you don’t miss any future episodes. Until then, keep on trucking and exploring the open roads with Freight Nation, a trucking podcast.
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