State of the Industry
E9: State of the Industry Podcast with John Elliott - Remembering Our Fallen Heroes
We’re now eight episodes deep into the “State of the Industry Podcast, with John Elliott” and the ninth installment has already been set and prepared to launch as the summer months are underway. So, set some time aside and prepare for the next episode!
Hopefully, there are many of you who have already been tuning in and making this podcast part of your regular listening, or viewing, routine. If not, why?! Obviously, John and I want you to listen to or watch this monthly podcast, which you can quickly get your fix by clicking below:
Brandon Baxter: Welcome to the State of the Industry podcast with John Elliott. I'm your host, Brandon Baxter. This is a monthly series dedicated to discussions pertaining to the trucking industry and featuring commentary by the CEO of Load One and immediate past chairman of TCA, John Elliott. John, thanks again for joining me.
John Elliott: Good morning, Brandon. Good to be here as always.
BB: Yes it is. It's better to be here than there, I think some people say, and I still haven't figured out what exactly that means, but it's good to be here. We had a little pre-discussion as we were getting ready to record today, and John, before we get started, we were talking about the past Memorial Day holiday. For those who were just watching or listening, we just recently recognized Memorial Day and in which we remember and pay respects to the men and women who've the ultimate sacrifice in defending our country. So John, without getting too deep in the weeds, I'm just curious, what does Memorial Day signify to you personally?
JE: I had the great privilege to serve in the US Armed forces. I was in the Army and I think those holidays, like Memorial Day especially, hit harder and that, God bless, I was never shot at, I never fired in combat. So, you consider yourself lucky. You train for the things and the situations you hope you never need to go through or experience. And when you look at literally some gave all, it means a lot. I know as a company, one of the charities we support quite heavily is Wreaths Across America. And I've been in Arlington for many years watching the wreaths be placed and helping to place wreaths on graves of the fallen. And it really hits home when you see a grave of one of the newly fallen and to see a wife there laying on the ground after placing the wreath with children, crying and hugging the headstone.
And you realize that so many of us, and I'm as guilty and as 99% of our population, that we don't really appreciate the sacrifice that the few have given for everything that we all have. So it really gets lost in barbecues and cookouts and beach time, the real meaning of the holiday for sure. So it does hit home and I hope it continues to hit home and hope in a way it hits home harder for more people over time, that they just take that extra second to realize, as a country, we owe them a debt of thanks that we can never repay.
BB: You make a great point. Echoing what you said, I'm just as guilty as anybody else. Now, I've said it in this way before that I know myself personally, I'm not the type of person that... I'm not built to be that type of individual to, whether it's armed forces or protective services, EMS, police, fire, whatever it might be. I'm not built that way to handle those types of situations. And I know that about myself, but I'm very, very grateful for those who do because they're stepping in areas where I know personally I'm not built for. So I'm thankful. And like you said, a lot of times we take it for granted and sometimes forget those things. And so Memorial Day is a great opportunity and I shouldn't say great in the sense that it's phenomenal, but it's a way for us to, in most cases, solemnly remember the freedoms that we're allotted in this country because of those people who have made those sacrifices.
JE: For sure. I'm lucky, I was built for that, and I was able to take 11, 12 years of US Army infantry and, honestly, I was an infantry drill sergeant, believe or not, of all things. I was able to take that job skill and parlay that into a career in expedited trucking. One of the few places that you can feel like it's a battle every day.
BB: That is true. That's a great point. You make another excellent point. And John, I did not realize that about you. So thank you for your service. It's appreciated what you've done.
JE: I correct a lot of people, that's Veterans Day 'cause a lot of people thank you for your service on Memorial Day and it's not about being a veteran on that day. That is very an elite special group of individuals who, like you said, went above and beyond and really gave everything.
BB: That's a great way to put it. That's a great way to put it. Thank you. Thank you for that. It gives us all a moment to pause. We may have listeners or someone viewing that isn't taking in this episode until sometime in next December, but the fact remains that being appreciative and remembering those who are no longer with us because of the sacrifices they made.
JE: Even if they're watching this in December, then hopefully they think about wreath laying day and look up across America and what that charity does and the huge, huge role that the trucking industry plays with that charity hand in hand to help make that possible. So again, it's just one of those many, many things, so many things, that the trucking industry does that's not often recognized by the general public and sometimes even by our own industry. We don't do enough as an industry to promote the good that we do, even internally sometimes. So we're all guilty of that in this industry and we do great things and sometimes we need to sound our own horn or trumpet our own story.
BB: Sure, absolutely. I couldn't agree more. I think that more of that would help the industry, help its image altogether. And we've talked about it before on this podcast, talked about better marketing towards the type of drivers that we want to enter into the industry at this point. So I agree. I think that goes a long way. And it's also great to remember where we came from in terms of our background, whether it's in trucking or military or whatever it might be, to have that memorialized in a way, whether it's on a personal level or a professional level as well.
JE: Yeah, I will segue a little bit when you talked about where we came from, that I did get the sad news just yesterday. Many in the industry will remember PTL or Premium Transportation out of Toledo. One of the founders was Dave Schwartz, who I considered a good friend over the years and I don't have details, we got the sad news that Dave passed away yesterday, unexpectedly. Leaves behind family and children and things like that. So it's sad and you realize how short life is or how short life can be and you got to make the most of every day. And Dave was really, I won't say a pioneer, but he was definitely an earlier on guy.
BB: Integral part of Expedite.
JE: Yeah, definitely part of it. Him and John Mueller and Chris, they were regular attendees at the Expo. Chris unfortunately passed away years ago to cancer, so again, far too young, but again, they played a role in helping to shape this industry and what it is today. That company was later acquired by Magnet Worldwide and became part of Bolt later.
BB: Well our sympathies go out to the family and friends. And John, my sympathies to you as well, losing a friend like that.
JE: No one ever wants to get those texts or calls.
BB: No, no, you're absolutely right. Sticking with, and I know it's not always an easy segue to make-
JE: Let's talk about the positivity now.
BB: Sure, it's a segue. Segue on the left.
JE: Let's talk about the economy.
BB: The what? So speaking of the economy, John, obviously the name of our podcast here is the State of the Industry. And it lately doesn't seem like there's a whole lot going on in the trucking world, but is there anything that we can talk about that that might be pertinent to anyone who's watching or listening, something of importance?
JE: Economically, I think we all know that we're in a freight recession or normalization for sure. Optimistically, I think we found the bottom in that. I feel like it's not the numbers we want it to be, but I feel like we've stabilized. I feel like we're starting to inch forward and I'll say inch and I think it's going to be a slow crawl out of this. Hopefully it looks like we have a deal to get the debt ceiling raised. I think that could have made a very big effect on the economy and freight. Again, this week, that's getting voted on by Congress.
BB: Stay tuned.
JE: Stay tuned. Hopefully that happens the way we think it will. And I think at the end of the day, nobody wants to hold the economy hostage. Everybody wants to make the best deal they can make and what they feel is best for the country. I think that'll give some more stability, that'll give some stability to the stock market and to the banks. And then in turn businesses and hopefully then those things stabilize up. We can see a little bit of interest rate reduction later this year and I think that would help to stimulate the economy back. So I'm still relatively optimistic that the third quarter's going to be better and the fourth quarter will be better yet, it's not going to be like 2022 robust, but I think it's going to be good or decent again.
Used truck prices have taken dramatic falls. I just read an article this morning on that. Again, it's supply and demand. I think you have a lot of small carriers or fleets that have exited the market. Unfortunately, you have to find balance between supply and demand and that that's going to happen. And sometimes it's people choose to retire a little earlier or choose to sell and some just don't have a choice and are forced to exit. But again, Darwinism, the strong survive, and ideally those that are left will do better in the long run. And it's like I tell our fleet all the time, you have to play the long game. And it's a good example of it. Another example of the long game is really legislation. There are some good bills advancing slowly through.
BB: I noticed the truck parking bill is advancing now.
BB: I just noticed that as well.
JE: Yes, we fought very hard, TCA, for that I would've loved to have got that done under my term last year. But man, you realize those things tend to take years.
BB: You were one of the ones that really got that ball rolling though. I know you've always been a big component for that.
JE: I was part of a great team that really recognized how critical parking was to our industry in so many ways. You look at trying to get young drivers. Well, we got to retain drivers and what's one of the biggest factors for retaining drivers? It's parking and job satisfaction. And for female drivers, the safety aspect. So again, I think there are good things happening. Unfortunately we tend to over-focus on the bigger negative ones, but when they're economic, that affects everybody's pocket. So they tend to bubble to the top for sure. And rightfully so.
BB: Absolutely. And going back to something that you mentioned a moment ago with the used truck rates going down, do you feel like that might help stimulate the opportunity to get more trucks back into the market? I know that for a while, and granted that was more along the lines of the new trucks with the computer chips and everything that was on hold. Does that play at all or are those two separate issues?
JE: Yeah, I think they're separate issues. The used truck market coming down obviously makes it more attractive for someone to go out and buy a truck. But you also have conflicting factors. You have much higher interest rates. So even though the price came down, you're going to pay a lot more in interest. Rates and revenue are down, so even if somebody gives you a truck for free or very cheap, is it the right time to jump in? I also think it might be the opportunity for some owners and fleet owners who their trucks got aged out a little bit. They couldn't get new ones. People were not giving up the used ones they had. They ran them longer because they couldn't replace them. So I think everyone held their equipment longer than they anticipated. So the new market's going to stay pretty strong, demand there just to replace equipment.
It's not expansion, it's just replacement. And I think you might start to see a little bit of a surge or wave in used replacement, that people are buying newer used equipment. A lot of individuals, especially if you're a single owner operator, it's very hard to justify the expense of a brand new sleeper or straight truck and the economics of it. Generally, you're buying a new used truck that came off of a fleet owner running teams and things like that. So as they're able to better replace equipment again, that that'll move some more of that equipment into the market. But it's tough. The new stuff is still very, very expensive. And if the used trucks are down dramatically on value, well it makes it a lot harder to trade your used truck to help offset the price of the new one. So there's a lot of dynamics that go into the whole equipment trade cycle and market.
So we'll see how it plays out. I don't think it's so much on the expedite side as much as it's the tractors, the standard tractor world. Now, sleeper and straight trucks, that's just a very unique market. A lot of that equipment that got held onto a lot longer than expected, it's got a lot more miles on it, it's aged more, so sometimes, these guys are keeping older truckers. Good or bad, maybe older, but they know it, they know the reliability of it, they know what they've done to it versus getting a three or four year newer used truck that you don't know what you're getting a lot of times. So we'll see it. Like everything it makes for interesting times
BB: Makes for interesting discussion points as well. And in my experience over the years in recruiting and working with companies like Load One, every carrier seems to have a different, what's the word I'm looking for? Not ramification necessarily, but qualification, I think. It's a different -ation that I'm looking for there. But in terms of truck age, has Load One budged at all? Because typically most of them are looking for something that's 10 years or newer, unless it's in some sort of prime.
JE: I think we've all had to budge some, when you couldn't get new ones for two or three years, it forced that. We've always had an age requirement like that, but we have our own maintenance shops and everything. So we'll do a pretty high level inspection on the truck 'cause honestly, I've seen four or five year old trucks that are garbage. I've seen 10 year old trucks that are meticulously kept and maintained, so age is...
BB: It's the individual.
JE: Age is just a number.
BB: But I tell myself that every morning.
JE: The thing you have to run into is you do have some customers that have age requirements. That rule was designed for the trailers. They will apply that to a straight truck at times, the customers. That was really designed back in the day, and I can remember earlier in my career, trailers were not built very well and forklifts were much heavier. And you saw a floor separated from the side,. You saw trailers buckle in the middle and collapse. And the idea was the unions, it was a safety issue that forklifts falling through and forklift drivers getting hurt, they basically generically applied that rule over to straight trucks at some companies.
BB: So just an all-encompassing rule?
JE: Yeah. But a box on a straight truck is sitting top of two frame rails. It's not under the same stress, it's not the same issue. So that was a misapplied rule, I think. I see it applied occasionally at an individual plant here, there, but in general, Expedite that doesn't tend to be as big a situation.
BB: It's one of those things that I think in most cases over the years when I've talked with different carriers and different companies, there's always a little bit of a fluctuation, but not much. It's typically that 10 year rule. But as you just pointed out, some consolation have had to be made over the last several years.
JE: Yeah, I think we've all had to adapt in that. And ideally you want newer equipment. Image is very important, especially when you're doing expedited or premium product. And a lot of the newer equipment tends to have more safety systems, more safety technology in it. And that's always a good thing. And unfortunately that that's been slower to come to the expedite industry than the truckload world side because a lot of the big safety systems, we run them on our company tractors, then when we move those into lease purchase or they get sold and bought by operators, that moves that advanced technology down to the next level much faster. You don't see giant fleets of company-owned equipment on straight trucks. So individual owner operators, a lot of times, will not make that choice to buy those systems because they're expensive, one.
Two, some of the technology was not available. The M2 platform with Freightliner, which was the most predominant platform really for the straight truck industry, was not equipped to handle the Detroit diesel assurance safety system. There were some other systems you could get, but you could not get the all in one manufactured system. But some of the other systems had limited abilities there because of the way the wiring was set up on those trucks. So they've rolled out the new version of that truck, a remodel of the M2 and the new one has all that available. But that's just coming now where I've had tractors that are in version three or four of that safety system and we've had 10 plus. And again, safety is really paramount. No matter how critical the freight is, if it's on the side of the road turned over or someone's hurt, and suddenly that freight becomes very irrelevant. So it's all about keeping our drivers safe and the motoring public around them as safe as we can.
BB: Absolutely. Well, sticking with Expedite, since we're in that space at the moment here and as summer is really just beginning, it's a warm one here in Cleveland today, let's jump ahead a bit. Let's talk about the midway point of the season. For us here in the expedite industry, and that's the 2023 Expedite Expo, of course being held in Fort Wayne, Indiana this year on July 21st and 22nd. And John, you are often one of the headlining speakers for the Saturday session. This year it's on the future of trucking. Talk a little bit for a moment about your years of addressing the industry on these types of panels.
JE: I've got a face for radio, but somehow I get drawn into a lot of these over the years. I enjoy it. I like being able to help spread the message and talk about our industry. And sometimes there's a lot of things that are misnomers or people misunderstand about the dynamics of how it works, especially on the other side. We have that struggle with drivers, they're sitting in a cab, they have limited exposure. A lot of times it's easy for them to derive what they think is how things work. So it's nice to be able to share, "Hey, the pullback, the covers," or, "The hood," and say, "Hey, here's how it works on the other side, underneath. And here's the dynamics of how those things interplay."
And as much as I'm able to help teach, you learn a lot too with those things. And you get to meet a lot of different people, you meet a lot of new people every year at those things. It's always nice to see familiar faces in the audience, the people that you know have sat there and you said, "Man, you've come back and listened to me for eight years in a row. I'm not sure if I should be flattered or you couldn't find anything better to do."
BB: Everyone's looking for that new wrinkle to see what you bring to the party next time.
JE: What's he going to drop this time. It's not going to be a rap album. But the Expo is a great part of our industry, in that it's a very special niche. A lot of memories for myself and a lot of us over the years going, the ups and downs of it, going through, this, that. The relationships you made along the way, the history, the moving around. Like I said, my first one was in the truck stop in the Detroiter and Woodhaven Michigan, and to watch how that evolved and moved around and how we outgrew places and got bigger, it got smaller, then, this, that. So it's definitely interesting. I know the drivers that attend it, enjoy it.
BB: They do.
JE: The dynamics have changed. I can remember once upon a time, he parking lot used to be the world's biggest camp out. All the big carriers had their, I'll call them encampments or something. It looked like a medieval battle was going to happen.
BB: Everyone stayed to their own little area.
JE: But a lot of good times. It really, really is a fun event. It's a great event to network, to learn, to look at different carriers, products, the panels. The panels came later, those were new. Those things that were added over time and the educational aspects and education tracks were added. So I think it continues to evolve. And then a lot of shows have died off and gone. The Great American Truck Show, the Las Vegas Truck Show has gone, but the expo has really been a niche show that's really focused much more on our industry and everything.
BB: It's very unique in that aspect.
JE: Myself and three or four of the other larger expedite carriers exhibit, let's say at Louisville, Mid-America Truck Show, but we're a 1% fraction in that. So we get lost there. Or expedite as an industry gets washed out or lost there, understandably. Look at us, the expedite industry compared to the size of the industry as a whole. So that's what's really nice about the expo, is it is a niche thing for a specific core and that really ups the value, let's say the networking and the information sharing and when you're looking at products, you're looking at products that are applicable to the industry. You're not over there and say, "Well that booth looks really cool." "Oh yeah, that guy makes the parts for the back of a dump truck." You know what I mean? Things like that, that you don't get that at the expo, where they're much more specific to our industry, where if you're going to spend a day or two, that's what you want is to get the most value out of it.
BB: Well and something that you, you've pointed out a couple of times just there, John, is the importance of taking advantage of the workshops, like you mentioned, and the networking. It's a two-day event. So for drivers, maybe they're able to come off the road and spend a day or two after they've delivered their load, hopefully. They're not sitting on a load while they're there. At least in a perfect scenario.
JE: If they are, I hope that's my competition, not my guy.
BB: Exactly. And speaking of having a leg up on that competition, Load One is hosting the welcome barbecue. You're doing it first night there at the show, you're going to be hosting.
JE: Well, as we evolved, the barbecue moved from the end of the show to the beginning of the show. So we have the privilege or honor this year of sponsoring that as the kickoff event, moving that to the first night before. Hopefully that repositioning is a good thing and increases attendance and participation at it, because I think sometimes when it was at the end of the show, a lot of people, if you had places to go or had to get home or had get a load delivered or things like that, a lot of people had to go. So I think doing it the night before, a lot of people arrive, it's a nice way to unwind a little bit and get in the mood or in the mindset for the show, good food, good networking, little corn hole, little this, that. It should be a good time. I think hopefully.
BB: We all work better on full bellies.
JE: I've been told that.
BB: Speaking of Load One, John, obviously part of our monthly conversation is going to be talking about anything new that's going on with you and with Load One. Anything that we can share with those out there on what you're looking for, what you're looking to do?
JE: I can't say anything dramatic is new since the last podcast. We continue to push technology. We got some new things we've rolled out with our customers to help enhance the customer experience. And that may not seem relevant to a lot of people watching this podcast. But keeping our customers, being able to connect and automate them more and more is good for the fleet. And again, we've been able to do that with a lot of large direct shippers that have technology platforms that we can automate with them and work hand in hand with their people on. And again, we think that's a competitive advantage. We think direct shippers are the way to go. That's the long game for it. It's helped to keep us much more stable during this time. Knocking on wood, our recruiting phones are still ringing pretty solid. Actually even more right now 'cause I think there are a lot of guys or ladies out there, who, their carrier kept them busy when things were pretty steady out there.
Rates were high brokers and 3PL people had to pay whatever they had to pay to get a truck. It was great. But then those customers are often the ones that go the other way that are all now the lowest paying customers 'cause the tide has turned. They don't have to. The direct shippers sit in the middle. They paid more, but not as much. But they also don't go down as much. So when you look at the long game, direct shippers are really... Load One, that's our primary. Things like brokers or bid boards and that, not that we don't do business with them, no we don't. Well actually there's a lot we don't. A lot of the bid boards and that we walked away from over the years. We have a securement rate of 5% or something. We're not going to bid 30 loads to do one. It doesn't make sense.
BB: Well, that hurts you in the long run and in essence, it hurts the drivers.
JE: Yeah, well that's fine 'cause that's a race to the bottom on rate. And we choose not to participate and we choose to invest in sales and sales team. We have probably, I will say conservatively, the one of the top three largest sales teams in the expedited industry, possibly second largest, maybe the first, I'm not sure. A lot of our competition who's out there has been cutting and laying off. It's a hard time. They've been laying people off. We have not. So far we've been able to avoid that. I look at it when things are tough, that's when you need sales, that's when you need your operations. People bang the phones harder.
BB: That's the time to really buckle down, absolutely.
JE: Yeah. And it's easier said than done to sit here and say, "Hey, let's go spend the same or more," when revenue's dropping. But it's easy to cut and helps you as a carrier to get through the short term. But that doesn't protect your fleet the same way. So just by the fact of how our phones and recruiting are ringing, sometimes our fleets, they're softer than they were too. But you got to remind them, "Hey, you think this, you should talk to recruiting. Let me tell you what they're hearing from guys wanting to come over from other carriers." And again, I think this is still a short term problem and I think within three, four months, I think it's going to look a lot different. So again, we're excited about the future at Load One.
BB: Good. And then of course, as an industry, as a whole, that's something we're looking for is that evening out period. And I'm with you, John. I think that we're going to get to that point hopefully sooner, rather than later.
JE: I would agree.
BB: Excellent. Anything else before we wrap things up today? John, anything else you want to touch on? Maybe anything that you're keeping in your back pocket?
JE: No, just my wallet.
BB: I was just going to say leave the wallet.
JE: No, really that's about it. Like I said, obviously we're looking for individual owner operators primarily and sprinters, straight trucks and tractors. We're looking for owner operators or fleet owners, OTR or expedite. Again, we're running coast to coast. We have salespeople from the West Coast, the East Coast. So we're one of the few expedite carriers that actually has salespeople on the ground in Mexico. So again, we're looking to continue to grow that. I think we're going to continue to expand. I think with nearshoring we're going to continue to expand our Mexico and Laredo operations, and that'll hopefully have some good things to talk about in the next podcast there.
BB: Well, there you have it folks. You're going to have to tune into the next one to see where we go from here. All right. Well John, thank you very much once again for an excellent episode. And thank you very much for joining us for the State of the Industry podcast with John Elliott. I've been your host, Brandon Baxter. Join us again next time as John and I will continue our discussions, all topics transportation, and don't forget to check out expeditersonline.com and justcdljobs.com for access to over 150 carriers who are actively hiring, and that includes Load One. Until next time. All right.