1537. #TFCP - Building Resilient Freight Networks In Any Market!

0:00Hey guys, before we jump into the episode, I wanted to let you know it is brought to you by Revanova, the official TMS provider for the Frick Coach. You guys have been a broker for a long time, and the tools that are at your disposal with Revanova help you eliminate bouncing between systems, which improves your accuracy when you are managing multiple tasks throughout your workday. Plus, it's built into the Salesforce Cloud. So your CRM is fully integrated with your TMS eliminating yet another silo. In today's day and age, you are definitely concerned about the safety of your data. With Revanova, it's fully protected. They have cutting edge security that keeps your information safe so you can focus on what matters most, and that's growing your business. Speaking of growing your business, with right and lane IQ, you get real time pricing and route recommendations, helping you optimize costs and improve operational efficiencies, which ultimately helps you make smarter decisions.

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2:28If you are looking to take control of your financial future and build your business with a backing of one of the most successful logistics firms in North America, visit www.spi3pl.com to learn more. Do me a favor and let them know that the Frick Coach sent you. What is up ladies and gentlemen, we are back. We are live. It is the Frick Coach podcast, the top podcast in transportation coming to you guys every single weekday, 8.30 a.m. Pacific, 10.30 Central to break down some industry headlines. The most importantly you guys provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real side of freight ladies and gentlemen. And I do say that before every single show and what I mean by that is I only speak with transportation professionals because at the end of the day, I want to talk to the right individuals who have done what you're looking to do. Or who are currently doing what you're trying to achieve. So you can take that information, apply it, utilize it and see a meaningful difference in your business and your life. Happy Tuesday, everybody. I got a very special guest for you guys here today. I always love talking to anybody who's got extensive experience and transportation, but especially in times like right now when information seems like everything we're going through isn't anomaly like this is the first time anything has ever happened like this and freight before and you know, I love bringing individuals on the

3:41people who have walked the walk talk to talk. They've seen a lot of this stuff and we can provide like I say in the intro actionable insights that you can apply to your day to day business. So I want to welcome Mr. Andrew Peschong on the show today. So Andrew, thank you so much for taking the time to join me this morning. I'm glad you're on my pleasure. Thanks so much for having me. Appreciate it. No, you know, it's I'm glad our friends over at Revan Ova connected us about this and you know, it's like I think people sleep on Minneapolis has like a freight hub for some reason. It doesn't get you know with Chicago being so close by, but it's like me growing up just outside of the Twin Cities like that's where I'm from and it's like I'm meeting so many more people that are from that area and but like before we get any any of that stuff and I was like to ask especially if there's just a lot of people who are in the area that I'm going to talk to. I want to ask especially this is your first time on the show, how did you get your start and freight like what brought you into the industry. I think my story is like a lot of others where you're watching college in the Minneapolis area, say Paul and get into the industry right after 9-11 basically and wasn't really sure what I wanted to do and stumbled into it.

4:51You know, I think that's a very common case, you know, that the longer I've been here, the more I talk to people in our industry, it's one of those things where you know, I didn't have some guidance counselor or something like that, pushing me towards it. I didn't go to school, you know, specifically for supply chain management and turn anything like that just happened to know someone that was an extra Robinson guy that started the brokerage here in the Twin Cities and you had done to school his wife and he was hiring and you know, the next thing I know, I've got a lot of things going on here, I think that's a very common thread in the industry, people stumble into it and it's very interesting. No, it is right and I, you know, your story is it's a tale of two sides, right? It's either that where they stumbled into it or it's like individuals like me where their dad was a truck driver or grandpa and they got into it that way. And you know, it's like I love it.

5:51Like for me personally, what I love the most about Freight is is there is no two days that are the same and like I, you know, my wife would probably tell you this, but I have ADD and I have a hard time paying attention to one thing time again, but like that's what I love about Freight though is is like there's no two circumstances that are ever going to really be the same out there. And I like I also love it because it's like there's days where you come in it's like oh it's going to be a slow day today we only got a couple of shipments on the board and then an hour later you got 27 loads moving that day because so many opportunities can kind of fall into your lap like that and you know, I look at it though where you know it to me right now Andrew it seems like a lot of people are either a this is the first time they've ever experienced a market like this or be they think that. What we're going through right now has never happened in the history of transportation and and i'm like i'm looking at a lot of the circumstances right now where the only thing to me that's like really new is is the absolute enforcement from the FM CSA to remove a specific CDL holder from the market but like everything else whether it's tight capacity high fuel.

7:04Like that's just been kind of like the norm for me for the majority of my career. Yeah I think you're exactly right in that that's something you know we see and you know anyone that's been in the industry you know post pandemic hasn't hasn't really seen that but our industry like many others out there is very cyclical you know we've seen these these ebbs and flows and you know these cycles in in the transportation industry and the supply chain industry. So you're exactly right I think really the only differentiating factor is CDL enforcement but we've been through you know high fuel costs high insurance costs you know driver shortages capacity crunches these are all very common cyclical things and yeah you know everyone that thinks the sky is falling that's not the case I mean this is one more cycle this is one more thing that we have to adjust to as an industry. Especially on our side on the brokerage side but that's what we do you day in day out we have to find a way forward we have to offer those solutions to our customers and figure out a way to keep the freight moving.

8:16How do you build you know it's kind of the title of the the episode is building building resilient freight networks in any market you know like I look at it for me as a broker it's my job to insulate my customers from the ebbs and the flows up. Right and same thing with my carriers I want to I want to insulate them from seasonal slowdowns by having other shippers that move inside of a specific network that they like to run so it's like from your seat Andrew how do you do that right like how do you start that. Sure I think a lot of that goes into you know a great question and you know the way we approach is kind of twofold you know if we start on the carrier side we have to make sure we have that able you know bench of our go to carriers that we're consistently feeding freight to you know urine and you're out a lot of people that I think stumble another company stumble with this part is where there's a lot of people that are going to get a lot of money. The part is where they're really chasing you know seasonal freight you know chasing those high buck loads and you know that that's great that some people's business model that's not something we do and haven't done for the nearly 30 years we've been around you know we be strategically look for very stable clients very stable industries that offer you are carrier partners you're on freight so they have that security.

9:42We're not constantly having to rebuild our carrier base you know every quarter or you know every half year or a year. You know there are carrier partners that we've had since the 90s that were still utilizing you on a daily basis weekly basis year in year out. And I think you have to build that network network density you know with your carriers make sure you have you know your trusted group of carriers you know for those markets that you're servicing for your customer and you know you're creating that partnership you know we for years you we treated our carriers I think in a lot of cases you know as well or better than our customers because you know they are the face of KPI when they're picking up from our client and. You know you you have to create those relationships and have a true partnership you know fuel going to go up fuel going to go down you know there will be market tightness in some market but it's a matter of if you have those relationships if you fostered and maintain those relationships you over time you know you're not going to have the seasonal effects as you know someone that's just hunting the load boards 24 seven when you have that real stable.

10:56They will group and it's the same thing with with our clients you know we have an insane customer attention rate I think it's like 97.2% or something like that and you know a lot of that is you know these these are customers we've had for decades plus because we have spent the time to become you know subject matter experts on the type of phrase that they're hauling and you know we've made it a point to form those true partnerships it's not just a transactional you know spot market relationships. We're not going to have a partnership with our customer whether or not their contract customers are not you know we treat every customer like that and I think that's one of the big keys where you have to have you know that knowledge of your customers for you you have to have something more than just you know what have you done for me lately like if you're just a you know a cheap rate or another truck to them you're never going to establish that relationship and you know you're going to get your RFP quarterly annually or whatever and you're not going to have a solid book of business. What I got a lot to unpack with what you said but I guess you know the the top question that comes to my mind is is why do you think people want to reset their carrier network and their customer base seemingly every market shift because like my approach is like very very similar to your guys is right like I am of the mindset and this is just backed up with proof of concept over my 15 plus years as a broker.

12:25There is literally a carrier for every lane in America you can think of the most obscure lane that is out there there's a few carriers who just run that right or very very similar to that and I look at it where it's like again I like my gut says most people do it just do to compensation structures right like they're compensated to continue to push down rates and so that if that's your prerogative cool go for it I don't want to play that game I want because I know what a good carrier can do to my gut. I'm going to play my relationship with my customers and what that can lead to and then vice versa and so it's like I like to play that very strategic approach when building a book of business and you know for us like we're West Coast flatbed brokers and you know drive and stuff like that we do a lot of building materials a lot of stuff like that and I've just identified where it was like early on in my career I was working against myself more than not and it's like I want to minimize you know again I want to insulate and I'm going to do that.

13:25I want to minimize my customers to the exposures of a market and you can do that by working with the same carriers and now yes that could you could view that as an expect like an added expense or lost profits to your company I don't it all man I look at that as that's the greatest investment to my book of business that I can make. Yeah hands down and I couldn't agree with that more and I think you're part of that is. You know people try to yeah there's some brokers some you know tripping companies too that they're trying to get rich on every load and you know to be successful and to you're really really marketing this industry you have to play the long game you know there are going to be lanes for your customers that you may run out of loss because the rest of the book that you're moving with them is. So you know what I think is profitable and you know I think if you're just hunting and you have that mindset where you know you have to make a high rip on every load you know you're going to end up without a question from point so yeah to your point where you said you may be you know playing against yourself and not expanding outside of one market I don't see that I mean it is a slow growth you know everyone's looking for that hockey stick growth pattern but you look at what happened to a lot of those companies.

14:45That were really chasing that model yeah some of them just killed it coming out of the pandemic and you look at those companies now and how are they performing over the last three to four years when the market you started the pendulum swung the other way. So you know I think it's key you know I think we should have a very similar you have concepts of that of you know really you're over performing for the customer you know trying to influence them from that market volatility. You bought up an interesting question or point about you know why is that on you know the customer side to and I think on the client side you know I would love it if we had the same traffic managers day and day over year over year but you know with any industry there's a lot of turnover on that side too and that's one thing you have to prepare yourself for where you know you may have a new traffic manager come in and you you know sourcing man. Or something like that and their whole goal maybe to drive right down to you know RFP all the lane and that's a real real concerns for most people out there because that's unexpected you could have a 10 plus year relationship with someone and with a customer and with their staff and then all the things when new comes in and you have to rebuild that relationship from from scratch.

16:06Yeah you know I've gone through that a few times in my career and you know I've gone through that a few times here recently with one of our customers where there's been a new transportation manager that has came in and stuff like that but you know I look at it where how deep are you selling inside of an organization is your relationship just with the transportation manager or you know how deep does it go right to they have load planners that they have account like who is all involved in that transaction. And I think that you know again most people just look at it as that one transaction they don't look at the opportunities of like really solidifying yourself as a true partner to that organization out there and I think like that's one thing that as a business owner. I definitely approach that a lot differently than what I did as an employee and I'm not saying that every employee out there does the same thing it's just me personally where it's like now I'm like man I know that people change jobs all the time I also look at that as an opportunity where it's like if I perform well enough for that transportation manager chances are if they do leave there going to be a transportation manager or you know an executive of supply chain at a different company.

17:23So hopefully they're going to bring that along with me and then I keep that relationship with that original logo and I want to be that that's like kind of our strategy overall is as we really deep sell a lot of that stuff where everybody in there has a relationship with us or is aware of us so when there is a change of guard if you will add a company they're like hey these are the guys that we use. Yeah I couldn't agree more and that's one of the things we always preach to our team members is getting sticky with your customer you know getting that relationship beyond you know that get keeper that your transportation manager getting to those desk level folks that are the ones that tendering you know that freight game day out to you and you know you're exactly right like I can't count on 20 hands you know how many times we've seen that where someone leave the company. Goes elsewhere and then you know six months later we have an opportunity with a new client because of that so that's a great call out.

18:27How is technology improved a lot of what we're talking about right there because you know like not trying to age either one of us Andrew but we both probably started vaccine stuff. Exactly and I remember several offices ago just puddling around that facts machine waiting for that tender to come over so yeah we're definitely using ourselves talking about a fast machine and I remember not too long ago talking about that on the floor on our operations floor and I had an employee ask you what was a facts machine I'm like you just need to leave now. I never felt told my life. But yeah I mean technology you know that's a such a loaded question especially in this day and age where you know both of us have been in this industry long enough where we've seen so many steps and so many enhancements.

19:28In in tech in in the freight space but at the end of the day you're still a very high contact very relationship driven. You know environment and you know I don't think you know if you look back you know eight 10 12 years ago there are a lot of freight companies that you wanted to be this big disruptor in our industry and. You know whether that happened or not you know I think up for debate I think what I've seen more are those small enhancements you surrounding tracking surrounding you docks scheduling you know things about nature or like that the ELB stuff nowadays where you just being able to hook into an ELB logging device to be able to track versus you're hiring someone just to make check calls all day has been a game changer. Same thing with you're just something as simple as you docks scheduling tools nowadays rather than having to sit on online or on hold for an hour trying to schedule at a food warehouse okay just you're too clicks and you have an appointment scheduled.

20:34You know I am so fearful that you know with every you know and again I'm showing my age here you know with with all these advancements that you know I think we have lost some of that personal touch so you know and some of that's a generational thing too where you know so much stuff is done by tech nowadays or by you know email versus you know picking up the phone. And you do you know lose some of that you know personal connection you know the further you distance yourself from an actual human. I couldn't agree more I know that a lot of the success we've had over the last six months has come from the fact that we know how to operate offline and it is it's like you know technology is phenomenal right like I I look at it now where it's like as a sales rep I'm like dude I could do like a hundred loads a day is with one person you know like I don't know what I'm doing. I don't need a bunch you know but it's like I also look at it and I think that this is going to be the great equalizer out there is is I I think that there's going to be three companies three schools of thought with the current environment and freight it's going to be automation at all costs remove as many humans as possible.

21:46Then there's going to be no automation at all a eyes of you know fallacy it's going to be just like the dot com bubble blah blah blah there's going to be that mindset and then there's going to be the individuals in the middle that learn how to balance both learn how to how do we automate as much as we can but how do we keep the human involved as much as possible so like because I look at it where. You know me personally man I craved that human interaction now right like I yes I will text with people email stuff just just as much as the next one but like I still like going to the same grocery store you know like I like going into the bank to deposit you don't get cash and stuff like that and I still think that i'm like okay if i'm craving that other people are and I also look at it is like that's probably the opportunity out there that most people are trying to avoid. Where they're like I don't want to go out there and meet people and and stuff like that it's like all cool go do you but like I look at it now where it's like man with the right tech stack behind you as a broker I think there's going to be a cataclysmic rise of the mid level broker out there that doesn't need to go any larger than they are.

22:59Because they're like dude I got everything I need we dominate this market and we found that you know we can get out there and visit our customers visit our prospects meet with our carriers I truly think that that's going to be the way here moving forward I could be wrong right but like I don't know my guts usually right on these things. Yeah I know and I think you're spot on with that you know kind of those three different schools and we're already seeing that today and you know that's only going to. Grow and I think those three kind of models will continue to divide you know there's been such a big AI push you know in the last couple of years I remember going to you know freight waves and manifest you know even like three years ago when that stuff was still really in its intensity in our state. And then to go to some of those shows now I mean it's not any different and a lot of those companies out there are currently are at you know price points where those mid to your brokers can implement some of those to enhance their current offering.

24:05And I think our industry is so. You're divided and you know there's so many different niches in it that you will full deployable tech stack doesn't work for some non-posh shipper like you have to meet the client where they are to. You know you're not going to have success trying to you know push a bunch of technology on a customer that either a doesn't need it be doesn't understand it see doesn't want it. So you have to know you know what your client needs what they're looking for and you know again there's you know hundreds of thousands of the shippers out there and it's all about you know finding what fits best for them. And how you can enhance their experience and on the back end of it obviously to is okay you if you have a whole track and trace team you know how can that be enhanced with you know AI with some some new technology. So some of those roles you will allow those mid size your brokerages you to scale without having to add additional headcount and without having to ultimately really change you know their core competencies and the core service offering.

25:21Yeah what you said there about like with what your shippers are requiring from a tech stack perspective did it's such an overlooked concept out there. You know we we work with some shippers that you would think would require certain things but like you just wild because we're like I don't care about any of that step in is my truck and a show up on time and deliver on time you know and and I think like that's why it's like as as a broker it's so important. To choose tech vendors that are like adaptable to the fact that not every shipper out there is EDI not every shipper out there I mean dude I think most people would be shocked at the amount of shippers that still operate off of Excel spreadsheets that are like enterprise level. Right and then it's like yeah they might have EDI or you know API connectivity from the tender in aspect of things but I think it's meeting your shipper with what they have and you know again I like I mentioned. You know friends at Revan over connected us on this that's what because like we personally utilize them and that's one of my favorite features about it is it's like we have some shippers where there's no technology at all on there and it's like my my TMS isn't just fit for one level of shipper so adaptable and it's like I think that is such a miss though by so many freight tech vendors out there is is they have a one size fits all mentality to their product and they're like.

26:47That actually eliminates like 98% of their target market because only a small segment of brokers out there might need that for because that's what the shippers are requesting. Correct yeah and I think that's you know we're going a little off you know maybe I'll talk to you but I think that's been an issue with our industry. For two plus decade you know you look at it from 15 20 years ago you know there was this great you know rate for all these different TMS systems and a lot of them at that time were led by freight people. And then you fast forward a couple years from there and all the new entrance into that space were then led by tech people and there was that huge disconnect because those tech people were trying to sell you know an enhanced platform to freight people but they didn't have the background they didn't have the foundational understanding or knowledge of what their clients were actually looking for.

27:52And I I fear that's you know kind of the the territory we're in today with a lot of these you know AI products and offerings a lot of the freight sector now is that I think we've again they've gotten away from. Through their clients are in what the actual use cases are they can build these really pretty cool shiny thing but not at a scale that's really applicable to a lot of their target customer base. So you know to your point they they may not or they're trying to do one size fits all when really you are our industry of so diverse in the size of the users the size of brokerages the size of the logistics companies app and as carriers shippers receivers. That yeah I think they do get themselves into trouble by you know building this massive tech stack this great platform but again it's only going to be targeted to the top 2% in the industry. So I think there's a lot of room and a lot of maybe missed opportunity because they're focusing on just a very very specific or very finite number of users.

29:05Yeah we will see if you're open to coming back on the show we will save that topic for an entire other episode. I do have a lot to talk about that because I look at it though but like this is where to me AI is going to be the greatest equalizer because a lot of these freight tech companies only cater to the top 5% of the industry and I get it right statistically 90 some percent of businesses fail out there like I completely understand that. But what they're missing is how and especially in freight and this is why I think freight is unique in the sense of like there are so many regional mid size players out there that have a stronghold on certain markets where it's like but there is no technology for those individuals out there but this is where AI if somebody has an itch to go out there and develop their own products whether it's with clawed or Gemini can teach you to code. And before you know it you have proprietary technology that's running through your system that knows the market better than maybe your reps know the market and now you're able to amplify your outreach out there and your efforts and then you know and it grow your business by keeping your head count where it is.

30:22Yeah, I think that's a great thought you know that spot on I think that you know give me the time for a different episode but just to that point where you know today so much of that is just tribal knowledge you know with your existing rep and you know if they leave that knowledge with them. And you know to your point you know if you can train an AI agent that information then that's not lost and it can be shared in this first with you know your entire team versus with just that one rep that may may hold that knowledge. It's a great point. No man I so as we're kind of wrapping up this flew by I knew it was going to man and I feel like we're not we haven't even like got into it yet if that even makes any sense I feel like we could go for so much more because like I truly think that the most successful system out there is is adaptable and multiple to any market and I just look at it like as a broker it is my soul job to insulate my customers and my carrier.

31:28So I think that is an important thing that is about the market and the transformation of customers and my carriers from a lot of these things by utilizing you know doing a lot of what we were trained to do right like in network capacity I think like everybody likes to hound on fraud identity theft, you know freight theft all of that stuff right now and I get it. It's a very hot button issue and it's a very real problem but like it's also solvable it's not sexy but it's solvable when you are working with that trusted network of carriers out there it's the only thing I know Andrew with all of the experience that I've got. experience that I've got. That is the only thing that really truly insulates your customers from a lot of that exposure is by working with the same trucks time and time again. It is that you know I couldn't agree more with that and that's you if I look back you know 2025 years ago you know everyone wanted to tell it like oh I have this network of 15,000 you know carriers that in our network or whatever. If someone were to tell me that now in our traffic manager, hey I would you know call bullshit and be that would scare me.

32:33So like okay cool out of those 15,000 you have you know 14,000 one and done carriers and maybe you know a handful that you are working with on a regular basis. But you know again it goes it goes back to that safety of you know having a true relationship with those carrier partners you know treating them as an extension of your business. Again like I said in the very beginning you know we align with carriers that are a representative to us. You know they're the face of your brokerage anytime they're picking up or delivering. So that carrier selection is key and if you're just churning through carriers you on the spot market a super dangerous nowadays you know we know what freight stuff looks like these days and then all these liability issues that continue to crop up and continue to evolve in our space that yeah the really only way you can insulate your business and your customers' business is with that trusted network of your core carriers and really you know making sure they're

33:38fully vetted making sure you have some type of monitoring system obviously in place that you know keeping up to date on all of their you have the ATU information but yeah if you don't have that that tight network you know you're not protecting your customer you're not protecting your own business for that value. Now 100% Andrew thank you so much for your time today. How does anybody to reach out to you to find out more about what you guys got going on over at KTI? Sure yeah and welcome you to visit like you're on LinkedIn we're KTI LLT or website www.kti-trans.com or feel free to reach out directly to me at Andrew at KTI-trans.com. Perfect Andrew thank you so much that's going to be it for today that is in gentleman. You guys can't find Andrew or KTI out there. Hit me up I will gladly put you guys in direct contact with them as always if you guys got value in what you heard and you're not subscribed

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