#28 Steve Wineriter (American Diamond) on Going From Stuck at $45M to a $100M Run Rate

Speaker labels are approximate; light cleanup applied.

[00:01] Jesse: Steve, very excited for this conversation. Thanks for coming on The Freight Show.

[00:05] Steve Wineriter: Absolutely. I'm excited as well. Appreciate you having me on today.

[00:10] Jesse: Yeah, it's awesome. Steve, one of the things that I've always enjoyed from our conversations is hearing you talk a little bit about your vision for brokerage, or maybe the type of brokerage that you all are building, especially as it relates to technology and automation. I think you guys have got an interesting outlook and an interesting approach that you're executing against. So maybe let's start there. What are you excited about? How do you think your business is going to change over the next couple of years, or maybe already is, with AI, and what do you think things look like that are maybe different from how they've been?

[00:50] Steve Wineriter: Yeah, absolutely. I think that the future is bright for ADL, and I think the future is bright for 3PLs in general that are technology centric and buying into these AI concepts. And obviously American Diamond has jumped headfirst into it. We're one of those 3PLs that has always placed a premium on technology. We went live with our TMS and GPS tracking system back in January of 2017. So we've always had that mindset that we didn't want to be held hostage to what other technology platforms did or didn't decide to do. And we really looked at technology as a path of least resistance from a scaling perspective, right? 3PLs in general, and really the logistics space in general, has always operated in a stagnant selling solicitation manner. It was always trying to find somebody, talk to somebody at the right time, have the DNA match, you try to get an opportunity from a client, and then it was prove yourself from there.

[02:19] Steve Wineriter: I kind of equate that to a salmon swimming upriver. It's got a lot of dangers involved, right? And everybody does that. You just had to rely on DNA matching with a client. And what we wanted to do is really put ourselves in a position from a technology standpoint that we could offer things that other 3PLs couldn't.

[02:48] Steve Wineriter: And we had no business creating a TMS in 2016 and 17 when we were a three and a half, five and a half million dollar company, but we overcame. And I really think that set the path for us from a business model perspective, because the TMS ended up being much more than just our TMS. It really ended up being our business model. And we've just expanded it from there.

[03:17] Jesse: Interesting. So I'm curious to understand. Your perspective is that by building your own TMS, it has enabled you to offer things that are differentiated in the market, and in some ways your operating model has flowed from that. Tell me more about that decision, because I think there's probably other folks out there that think about the cost up front but also ongoing, what that means, and how you have thought about the cost benefits. And I'd be curious to hear some of the specific examples of things that it has been able to unlock that might have been difficult if you were using an off-the-shelf platform.

[04:07] Steve Wineriter: Sure. So we looked at it, and it's not easy to do by any stretch.

[04:14] Jesse: Yeah. And did you hire all of your own developers, or did you contract it?

[04:19] Steve Wineriter: We did. Most of it was outsourced to contractors. That being said, we're probably still to this day ninety-five to ninety-eight percent of their revenue.

[04:36] Jesse: Okay, so it's a pretty integrated relationship.

[04:39] Steve Wineriter: It was. And it was funny how it all worked out, because we looked at a few different things relative to our model. Ultimately, obviously, landed on software. I've got a trampoline park that I own outside of Chicago. Long story short, I was headed to a franchise meeting in New Orleans and ended up on the shuttle bus over to these franchise meetings next to a guy and was like, hey, small talk, what are you doing here? What do you do? And he was there for the same conference on the IT side. Long story short, I was like, hey, we need to spend some time this weekend together because I need to develop something. And so another buddy of mine at the time was in corporate America on the IT side, real successful. So he and I had aligned, brought in this guy that I met on the shuttle bus, and he brought his developer with him.

[05:38] Steve Wineriter: And next thing you know, that weekend, I'm literally taking a napkin, the proverbial napkin. It really, in this case, it really was a napkin. And we're sitting at the bar having a few beers and I'm drawing out, from a high level, this is what I need to do.

[06:07] Steve Wineriter: And from there, we really took the concept of a GPS tracking platform. We actually did not know at the time that Macro Point even existed. So we thought we were going to be the first concept to market, only to find out towards the end that Macro Point had been in the game for a little while and was pretty well established. But we took that team, added some other developers for the GPS side, and I would just take all my spare time, draw it out literally on computer paper, and tell them, this is what I need these to look like. This is how I need it to interact. And it took the better part of 11 or 12 months. And when you see the finished product, it was amazing to see it all come together. And really we were pretty fortunate from a standpoint of I knew that if what we created was good for American Diamond, which we had a ton of confidence in, that it would be good for others. Technology at that time in the industry was just starting to really crank up.

[07:29] Steve Wineriter: And so we came up with the concept of separating out the technology as its own company. And I gave some equity in those companies to some of the developers. So we got into it a little bit from a cost perspective a little cheaper, and then have developed it from there.

[07:58] Steve Wineriter: What happens is, it's an interesting path, because in the beginning, you're absolutely paying more than what you would for an off-the-shelf TMS. The problem is, and there's some good ones, there's better ones out there now, but in the beginning, when we were looking at this, the TMS systems that were out there were really meant for back office data placeholders. They weren't designed to be what we wanted, which was a sales-centric TMS. I wanted to put technology in the tool belt of all of my reps so that I could help them be more successful, be more successful faster, and get ADL on the map.

[08:57] Steve Wineriter: And when we went live with Navigator and Freight Tracer January one of seventeen, we were about a six, six and a half million dollar company. And within four or five very short years, we had scaled over 50. First and foremost, it was because of our people, but secondarily the technology put us in a place where we could be more successful from a solicitation strategy than those we were competing with. People caught up, but it gave us a runway where competition was behind.

[09:23] Jesse: What were the types of things that helped that? What was the technology able to do back then that was allowing them to be more productive as sellers? And are you talking about customer sales or carrier sales, or both?

[09:37] Steve Wineriter: Ultimately both. But what I was most concerned about at first was outside customer sales, to where our reps didn't have to rely on DNA to match and find an opportunity at the right day at the right time. They went in, their solicitation message was much, much different from the word go, and in 30 or 60 seconds I put them in a position to be able to offer something that 95 to 98 percent of our competitors were not able to, the big ones included, right?

[10:34] Steve Wineriter: And without naming one of our competitors, that they're at or near the top of the list, we had a customer reach out to us and said, hey, I've got this company that needs some help on a project. I recommended you guys to them. And we had no idea who it was at the time. And so we got on a call, and about three to five minutes in, we realized that it's this large competitor. And I stopped them and said, hey, out of respect, we're a 3PL as well. We're much, much smaller. But I want to make sure you guys understand that, because if that's not something that you want to utilize, that type of relationship or partnership in this deal, we respect that and we'll wish each other well. And they said, no, no, no, no. We've heard good things about you guys. We want to continue the conversation. So we met at a Starbucks the following week over by DFW Airport and went through the intros. They told us about the project.

[11:26] Steve Wineriter: And at the end they said, okay, here's the deal. We want you guys to move forward with this project under one condition, and that is that you do not share with the client your technology capabilities because it's better than what we have. And it took everything that I had not to start jumping up and down, because I knew at that point what we felt, the advantage that we had, we were just being told by one of, if not the biggest, 3PL on the planet that we were situated better from a technology perspective. And at that time we were still six and a half, seven and a half million. We had no business having technology that was better, but it's a mindset that we've had. And that's more powerful than any financial capability anybody has in many cases, right?

[12:14] Jesse: Yeah. So the costs are there, but you think about it in terms of your ability to win business. And so concretely this is being able to sell the advantages of having that technology to your customers, maybe in terms of better visibility. The reason why I'm trying to tease this out is, did the systems that you've built allow your sellers to be more productive, focusing on the right opportunities, more sales enablement, or is it concretely that the technology is part of the value prop that benefits your customers?

[12:57] Steve Wineriter: Exactly. Yeah. Technology is definitely the value proposition, because rewind back to 2017, supply chain visibility was very, very limited. Smartphone, mobile phone applications were really becoming more mainstream, except for in our industry, right? And when I got into this in 2002, it blew me away that we'd put a couple hundred thousand dollars worth of product on a driver's trailer and when they got around the corner, you really had no idea where they were, where they were going, and when they were going to get there. They had Qualcomm and PeopleNet and some of those things back then, but they were designed differently, even when we went live in seventeen. And that was the difference. Those tools were really meant to give that visibility to the asset-based folks, right? They weren't designed to be distributed to the supply chain. And as a 3PL, we don't own the equipment. The driver's not an employee of ours. So we had to get creative.

[14:23] Steve Wineriter: It's impossible to produce thousands of devices to go in a truck and capture the GPS data, so we had to go through the driver's cell phone. Theoretically where the driver is, the freight is. And so that's what we did. So when we would go and solicit a client, the solicitation strategy was different. It was, hey, we can provide you and your clients real-time GPS data. We were pinging the drivers every five to ten minutes, and their clients were able to get access to that GPS data too. So that proverbial communication chain relative to shipments was eliminated, right? So it used to be a consignee would call the sales guy, the sales guy would call his logistics guy, logistics guy would call the 3PL, 3PL would call the dispatcher and or the driver, and then that route went backwards, right? And three hours later, maybe you got the same information, and most of the time you didn't. And we were relying on information that we were told, right? And so this went a long way to eliminating that.

[15:50] Steve Wineriter: And at the time, we were probably in that 30 to 40 percent acceptance rate. Drivers were pushing back. They didn't want the application to have access to their camera, because we would have them take a picture of the POD, upload it, and they could get paid much faster. And the clients could obviously invoice their clients faster. So it quickly scaled. And Macro Point did a great job of helping the industry overcome those challenges too. And now you look and ninety-five, ninety-eight percent of the loads are being tracked in some form or fashion.

[16:22] Jesse: And back in twenty seventeen, very innovative and quite unique. And then, as you described, there's solutions like Macro Point and others that have come in. So what does it look like now when you think about build versus buy? How do you continue to stay at the forefront and keep that advantage that you get from owning your own stack, and what does that look like now, given there has actually been a lot more stuff built for the industry?

[17:01] Steve Wineriter: The technology has come a long way in our space, thankfully. I think we found numerous opportunities to outperform others. So visibility and transparency, transparency in the form of we also built in performance analytics. We were telling the client at any given time they could also log into their mobile app and see data relative to how well we were performing for them. So at the outset, the technology was built around transparency, visibility, our operations team, our accounting team, management visibility, the ability to create a very well positioned agent department. Right? Because not all TMSs are designed for that. They don't really capture that relationship with the right visibility. And so what we found as time went on was that we were putting ourselves in a position to be successful outside of just the original visibility perspective, right? So it quickly morphed into, back then, communicating with carriers, and this is an interesting topic because we kind of come full circle now.

[18:53] Steve Wineriter: Communicating with carriers was a significant challenge back then. And one of the things that we did that was really beneficial at the time, I took our internal data and turned it into what I called an RFP. So if we had access to a carrier hauling a lane for us, when a similar lane came up, I was able to reach out to every carrier that had hauled that lane for us. And I remember the developer called me at like 5:15 one afternoon. He goes, hey, it's in production. It's live. Let's test it out. Nobody else was in the office. I had a random load that was on the board. I sent out the RFP to like 500 carriers and the load was covered at the rate we were projecting within three minutes. And I was like, that's phenomenal. But as you go on, you realize the gaps that still exist, where, fast forward to present day, we're really excited about what Vooma does for us in a similar fashion, much more efficient, in a much, much broader perspective.

[20:13] Jesse: Yeah, bringing agents to be able to manage a lot of the outbound. Tell me a little bit more about what you think the ideal technology stack looks like in a world of agents for outbound carrier procurement, or just generally carrier procurement.

[20:34] Steve Wineriter: So the agent model is really fascinating. You have a really wide range of folks that come from different experience.

[20:50] Jesse: Steve, I realize I was thinking about the sort of AI agents that are doing the outreach, which you were talking about with your carrier procurement automation. And I do want to come back to understanding the freight agent model for you guys and the role that plays in your growth strategy as well. I'm very interested there. So maybe let's actually start there and we can come back to the second. Why you guys decided to go down that path, what its role is in your growth strategy. Are you guys exclusive, or do you have a company managed side as well?

[21:32] Steve Wineriter: Corporate relationships, and then we've got an agent department. And that really started from a concept that I was not aware of for the first 10 or 12 years that I was in the space. When I got out of college, my dad had a 3PL. A successful 3PL for a while. I had really very limited concepts of what a 3PL was, how they operated. And I went to work with him and we really operated in a pretty narrow window, inbound, outbound Texas dry van type stuff. And then when I decided it was best for me to branch out and start American Diamond, I started to expand the types of business that we got involved with, and came across the agent concept. And it really resonated with me, because at that time I knew that we could create technology that would put them in a position to be successful just like it did with our sales reps, right? And so we really looked at it as an opportunity at a scale that could outpace what we would do just by hiring more salespeople.

[23:08] Jesse: Why do you think that it could grow faster or allow you to do that faster than what you could build yourself if you were hiring sellers?

[23:25] Steve Wineriter: Sure. So in this space, unfortunately, there's a lot of salespeople that come with a non-solicit, non-compete, and they're kind of handcuffed for twelve to twenty-four months when they come over. Whereas an agent that's either operating under a different provider or doesn't have those same restraints can come over and bring that revenue, bring that portfolio with him or her. And what we found was agents were really excited about a modern business model, right? And we've been very successful with it.

[24:22] Steve Wineriter: We were driving over 20 million in agent revenue by the third full year, which at the time when we started it, I wouldn't have guessed that it would scale that fast. But it did, and now we're on a pace that well outperforms that with our current model.

[24:42] Jesse: That's super interesting. And so for you, it was a lot about, you could hire sellers or you could hire agents. Many sellers are under non-solicit, so you'd have a year they need to wait, and it's just harder, or you're dealing with lawsuits and whatever else. And so with the agents, if you can attract them with a similar value prop, which is, hey, we're going to help you make more money because you're going to be operating on a technology stack that is more compelling to your customers, then you're able to bring them over and scale up at the pace that you can recruit into your network.

[25:14] Steve Wineriter: Absolutely. And they kind of look at it from a perspective of it can be difficult at times to migrate a portfolio of clients from one environment to another. So some are more apt to do it than others. But I think the mindset of these agents in today's world, they're really excited about two things. Obviously the low-hanging fruit is their split, right? There's a lot of standards in the industry. So nobody's too different than the next person. You see 3PLs out there that are offering eighty, ninety percent, and I just laugh because that's just not sustainable.

[26:11] Jesse: They're just buying people for a period of time?

[26:16] Steve Wineriter: But everybody else is within a pretty standard range.

[26:21] Jesse: And the standard range is somewhere more like seventy that they keep, roughly? Like fifty to seventy?

[26:27] Steve Wineriter: We've seen anywhere from fifty to seventy. So that's an area, if somebody is below our standards, then that's obviously a conversation that resonates. However, I really think that it's a pretty easy conversation with somebody that's got an ear for, hey, I've got a business model with all this AI that we've integrated to a TMS that we control, that puts you in a position to scale faster and much more efficiently. So obviously I think people have always concentrated on the top line in this space, but when you look at what AI does for us and for American Diamond, we're really fortunate to partner with you and the team at Vooma, and what that means for an agent as they're scaling, what that means for the bottom line, it's incredible, because your net is at an entirely different level than what it otherwise would be in a traditional sense, right? In a traditional environment. And so that conversation resonates with people. And when you have the level of support and when you have a commitment to them that, hey, there's going to be the next best thing that we have to implement. And the good news is we control the product roadmap, right? So we're not held hostage to what an outsourced TMS does or doesn't do.

[28:16] Jesse: That's interesting. I also hear the other side of this sometimes, which is that agents, some of them are very tech forward and very entrepreneurial, want to be adopting new technology. Others, not as much, right? They kind of don't want to be told what to do. They don't want to adopt, the change management is a lot harder. And so I imagine when you're recruiting folks, obviously if the value prop is compelling to them, they're leaning in. Do you ever find that you're in scenarios on the other side of that where it's harder to get agents to adopt technology that you think is ultimately beneficial, and is beneficial, but change management is hard, and you've got to adapt process, and it might mean role shifts?

[29:16] Steve Wineriter: That happens all the time. But it's really exciting when the conversation starts out like that and then we leverage our UI/UX in a relatable manner, because when you look at some of these other TMSs, even just to build a load sheet, you're having to go through multiple screens, and in a demo, you kind of lose interest. But when you look at Navigator and we're able to put it on a planner for them in a manner that resonates almost immediately, and you tell them, hey, we've got this great carrier lane tool that we're then going to send over to a group of agents, AI agents with Vooma, that are going to provide a very substantial amount of carrier sales horsepower, so that it's like you send it over there and get back to doing what you were doing, right? And then work the exceptions.

[30:43] Steve Wineriter: Right. You can't, it's not going to handle every little intricate load that you have, but the amount of bandwidth that it takes off of their plate, and then you go, hey, we're also automating load sheet building, we're automating appointment setting, we're automating track and trace, right, where you don't have to answer inbound calls anymore. You could go on my floor a year ago, and it sounded like the New York Stock Exchange. I've been on the bullpen several times today, and I don't think I've heard a single phone call. They're not answering a single email either relative to carrier negotiation. And there's no telling how many phone calls, emails, opportunities to procure a truck that we have missed in the almost 15 years that I've had American Diamond, that we're not missing anything now. Right? Everything is being taken care of. Everything is much more efficient. And when I explain that to an agent that is used to doing things a certain way for a very long time, when the UI and UX is so easy, it resonates. So even a lot of the guys that are stuck in kind of the more traditional business model, it's really fun, because I'll be sitting across the table from them and it's like the light bulb goes off immediately. And really the rewarding piece of this is not just having this business model for them, but the ability for them to change the outcome of their family potentially in multiple generations, right? That's not an exaggeration. I get a sense of satisfaction from helping those families too, right?

[32:56] Jesse: Yeah, you're empowering people to be entrepreneurs and change their own life outcomes. I'm curious about best practice. A lot of it is explaining the vision as well. I am curious on some of the nuances. When you offer technology, is it always bundled into the rate that you're taking from the net margin, or are there other instances where you have a menu and they can pick a la carte? Have you found one to be better than the other? Because it's something that comes up a lot where I get questions from folks about the best way to roll things out to agent networks.

[33:43] Steve Wineriter: It's a great question. And it's something that we literally talk about every week. So John Drager runs our agent department. He was one of the leading figures behind Landstar's success on the agent side for a long time. He was like a gift from God for us, because never did I imagine that the agent department would be in a trajectory that it's in now. One of the things he told me after being here for a very short amount of time was, hey, I hope you're ready for hundreds of millions of dollars, right? Which is great. And what he's doing is he's taking our existing agents and turning them into even more successful entrepreneurs. It's not about his network. It's about how he transforms support and getting them to understand the technology, what that means for their top line, their bottom line, et cetera. And our existing agents have scaled dramatically, almost overnight.

[35:36] Steve Wineriter: The concept of how those splits work is really fascinating, because for us we've looked at our agent department over the last several months, up to, we'll call it the last 12 months, and really looked at our existing group and some that we've been talking to even before John came over, and we're looking at them as almost like grandfathered in, right? But moving forward, technology, we're investing a ton of money on the technology side. And at some point the rubber meets the road where they have to contribute to it, but it's incredibly beneficial to them. But even more so, the pricing that they get from us is much, much more beneficial than what they would get direct. And so there's a benefit in that to them. But where we land, it's TBD. We're still trying to figure that out. But those that have already made it over, they're really benefiting from it because they're not paying for anything right now.

[36:29] Jesse: So it's bundled in essentially, but you may in the future have a line item where they actually do need to contribute to the technology costs. Because that sometimes can be some of the friction to adoption as well, where they're sort of like, well, I'll be good, I'm fine, but then everyone actually loses, because the business doesn't grow as quickly and they don't generate as much in the end.

[36:57] Steve Wineriter: Well I can tell you from our experience, the agents that we have signed contracts with over the last few months, I don't know that they make the same decision, and migrate over as fast as they're doing, without it. Because at that point we're still ahead of mainstream, but we're not as far ahead as where we are now.

[37:55] Steve Wineriter: And I think that capacity is doing a really good job of helping us sell our model, right? This is a very unique market right now, whereas COVID was more of a demand type of environment where it was just cover a truck and give us a price. Where now the customers, we're seeing good trends, but it's still not where it was in COVID, but it's more of a supply issue. Right? Supply is driving up costs. Customers are still trying to balance their budget and not bust it. And so there's this give and take with carriers right now. And I personally feel for the 3PLs that are continuing to look at this model in a traditional fashion. It is, in my mind, very, very difficult to be successful relying on making outbound calls, answering inbound calls, sending out emails, answering emails, with any kind of scale, with any kind of size. Because it takes a several times multiplier right now in the amount of effort and outbound and calls and answering inbound calls, just per touch point per load. You're not going to get the load covered on the first call or the first inbound call likely, right? It takes time.

[39:22] Steve Wineriter: And for us, we got to over 50 during COVID. Our volume has increased since then, but the average price of a truck obviously has dropped. So our revenue has been in that 44, 45 range for the last three years. And our trajectory in the last several months, we're now at a trajectory at dang near a hundred million. Now our run rate has jumped that high almost overnight.

[39:50] Jesse: What is enabling that? Tell me more about what's driven that growth, because that's huge.

[39:55] Steve Wineriter: Our scale is more of a "with" perspective. We've done really, really good over the last few years of maintaining our longstanding clients, and really establishing that relationship where we were helping on just about everything we could. And this scale over the last several months has really been from a "with" perspective. We have hired some really, really top-notch salespeople internally, brought on these agents, and then from an LTL perspective, we've got really, really interesting concepts going on over there. So it's all contributed to this new wave of clients that we're helping out. And from a volume perspective, we would burn a lot of this to the ground if we hadn't bought into this.

[41:03] Jesse: Tell me more about that. What would have broken? Why would you not have been able to handle the model if you tried to without having the technology and the systems in place? What would have happened?

[41:19] Steve Wineriter: 3PLs are really relegated to adding carrier sales and operations support, or coming up and implementing AI. And from a chicken or the egg perspective, right, 3PLs historically are waiting for this volume to come before they spend all this money on payroll. And then the volume comes, and if you hadn't onboarded, in our case, our revenue is literally doubling overnight, you can't really plan for that. That's not normal. Right? And so we've been really fortunate.

[42:12] Steve Wineriter: But other 3PLs have to make the calls, they have to answer the inbound calls, they have to have a staff that can handle that volume. We were getting upwards of 15 to 20,000 calls into our office every week for the last several years. And there's no telling how much of that we missed out on. And those 3PLs that don't buy into this, selfishly I'm glad, because we're going to be able to outpace them and outperform what their capabilities are. But in this market with supply doing what it's doing, it just makes things awfully hard.

[42:58] Jesse: It sounds like part of this is a mindset around putting the systems in place that can allow you to scale volume quickly without necessarily having to just add a ton of heads, because you just can't recruit and onboard and train people fast enough often. And so often you start to see service quality degrade and then it screws your growth trajectory, because the thing that got you there, you're not able to reproduce consistently over time. And that, I feel like, is the crux of the challenge of going from fifty to a hundred. You can maybe get from zero to thirty by building around a few people, but maybe duct taping it together. But if you want to start scaling beyond there, you really do need the machine, and to be able to turn it up and down more quickly.

[43:51] Steve Wineriter: Absolutely. And I used to always say that going from like twelve to fifty was a really difficult challenge. But really looking back on it, COVID and some of those other factors, from twenty to twenty two, I look back on it and go, man, I was not a very good operator back then. We were just printing money. So you didn't have to be.

[44:21] Steve Wineriter: We have learned over the last three years. It's been a crash course in learning how to operate a 3PL in an environment with headwinds that are coming at you nonstop. And we are much, much better for it. And we're much more prepared for that moving forward.

[45:18] Steve Wineriter: But AI, what Vooma does for us, is it allows us to scale in a much, much more efficient manner. And from a human perspective, I think a lot of 3PLs, or a lot of people that work at 3PLs, get nervous when they hear AI being introduced. But we've really tried to communicate to our staff that, hey, we are not looking for this to replace anybody. We're looking for this to be a complement to everything that you do. And one of our mottos, our slogans, is we let AI handle the transactions so that our staff can manage the relationships. And while their core competency, their core role, may look a little different, may feel a little bit different, we still need them. And relationships in this space are as important as anything, right? And so I think we're in a better position than our competitors in that manner, to where we let AI do its thing and be really successful at what it does, and we let our staff really manage those relationships and communicate what the AI does, communicate what our model does, and then let us scale appropriately from there.

[46:15] Jesse: When you talk to your customers now about your technology strategy, how much of your use of AI do you share as part of it? Is it part of the story at all? What have you found is compelling to them? What are they interested in? How do you frame your investments in AI to them?

[46:42] Steve Wineriter: So we look at it as an educational practice, right? Shippers today are much more aware, they're much more mature. They've matured in many cases faster than the providers have. Right, as some of those older shipping managers have exited the market and retired, and this younger generation is eager for, hey, I want visibility. I want to learn how you're doing these things. And our competitors just either aren't able to do it or don't know how to do it, even if they've got the tools. Where we're looking at this and we're an open book with our staff, with our clients, and it turns into even the marketing material that we give to clients is really technology themed. Our LinkedIn posts. Elise Delaney does a fantastic job with our LinkedIn presence, and she does a really good job of really presenting to our clients that AI technology themed business model.

[48:09] Steve Wineriter: And then when we get in front of them, it's, hey, when you send us a shipment that you're sending to somebody else, the first guy that finds a truck gets the load. It's an education to them that when they send it to us, we can get that out and get that covered much, much faster, because our touch points happen immediately, right? And our competitors that are stuck in 1985, 1995, 2005, et cetera, it takes them much longer. And so you educate the client in that manner too, and what they really demand of us and what they expect from us starts to expand as we educate them. And it happens every week now. Not that we're perfect, but our clients are really adapting to the model. Obviously, you can't go from fifty to one hundred if you're not presenting a model and then backing the model up, right? You've got to deliver on what you're presenting. And those clients are really buying into the model, and it's only going to get better from here. We're still on the ground floor for all intents and purposes. American Diamond is, right? With how we're putting everything together. And I think it's incredible where it's going to go.

[49:45] Jesse: So a lot of it is communicating the speed and therefore reliability that you're going to be able to find capacity, because of the engine that you built to be able to procure that others have not. And so you're a safer pair of hands to be able to get the freight moved. Tell me a bit more about what you're seeing in the freight markets right now, how things are shifting. Give us the rundown of the last three to four months, and then where do you feel it's at now, and where do you sense that it's going? And I'm always curious to hear to what extent you're making bets or just staying open minded and preparing for any scenario.

[50:37] Steve Wineriter: It's fascinating. I've been in this space almost twenty-five years and I don't think we've ever had a market like this. It's challenging, it can be rewarding at the same time. Capacity in different markets seems to have a really unusual ebb and flow. Even with the summer being produce season. I was catching up with some of the staff at lunch today, and they were talking about how some produce markets are a little light, and that's presenting some unique challenges that we don't typically see. So when you pair that with some of the supply issues that we're already facing, you get some markets that are operating much different than they normally do. And we're a 3PL that really prioritizes data along with the software, so we've got years of data, and we're looking at trends and we're looking at truck cost and lane cost, and it's really difficult to project.

[52:00] Steve Wineriter: And so I think that it presents an opportunity, because of our model, we're able to fill a gap for a client that may not have needed us right now, right? We're still making sure that we're taking care of our portfolio of clients that we've had for a long time. But these new opportunities that are coming in, in many respects, are opportunities that otherwise are not likely to have come to the table.

[52:58] Steve Wineriter: What I think is really interesting is projecting into the balance of 26 and into 27 when demand starts to increase. What's that going to look like? Right? And we are preparing ad nauseam for that, because carrier sourcing is a challenge right now. But if some of these geopolitical issues get figured out, and all this investment that's come into the US over the last several months is kicking in, and we're seeing some of that start to kick in, and demand kicks in, the market is going to be in a really interesting place. I think probably will outpace, easily outpace, what we saw with COVID. So it's a challenge.

[53:45] Jesse: Which is wild, right? Because we're already kind of, from a rate perspective, harder condition for a broker to operate in, but the rates are already sky high right now, right?

[53:57] Steve Wineriter: They are. And in many cases. Yeah, we still see some normalizing in some markets, but there's very little. The ebb and flow seems to be a little different. And the consistency is the challenge. There's not a whole lot of consistency to it. Even what we're hearing from the DAT folks and some of the other pricing tools that are out there is they're really having to look at their models and say, we've got to go back to the drawing board because our data has to keep up with the roller coaster. And as a 3PL, you have to be able to quote a client pretty quick, and that variance on what your cost ends up being has to be minimal, right, in order to be successful. And that presents a challenge on the transactional board.

[55:09] Jesse: So how do you navigate that challenge? Because it is a tricky one, especially when there's just so much variance. It's a hard thing to predict because there's no consistency. And I hear from folks that even within the span of hours, markets can move pretty dramatically. Does it change your strategy at all? Or do you try to just get sharper and sharper at having a pulse check on the market? Or do you think about it very differently, where you try to do more truck in hand? What are the levers that you have to try to make sure that you can still quote quickly and confidently?

[55:54] Steve Wineriter: It's a challenge. Naturally I think people gravitate to truck in hand. But there's a flip side of that coin where you get fatigue from those carriers if you don't ultimately secure that freight from the client, right? And so our mindset has always been on really maximizing the relationships with our carriers. So I think all of the roads lead to honesty. Honesty with carriers, honesty with clients, and that equity in those relationships allows us to be successful. Because coming up with a cost and a subsequent quote, obviously you're going to have some that you hit on and some that you miss on, but that communication with the client is really important.

[56:52] Steve Wineriter: But I think where American Diamond excels in that equation is really prioritizing data. Data that we may use today, we may use tomorrow, we may use next week. But we're capturing it, even to the point where every spot quote that comes in, it's either automated into our system or it's manually entered from our staff. We're keeping track of those spot quotes, of the quotes that we're providing to customers. And we can go back and look, whether it's to the same client or a different client on those lanes, and say, okay, this is where we were a week ago, three days ago, what does that look like today? And like you say, the market can change in hours. But it's still more data than what others have. So we're able to navigate it a little bit easier.

[57:54] Jesse: So really it's trying to get more information on understanding where the market is at so you can make better decisions, because of the fatigue of moving to truck in hand. It is interesting with AI now, you sort of imagine a world where carriers had technology and they would communicate what they would move freight for, that you could have this relationship where you might be able to pulse check faster without it being operationally burdensome on them. And so then you can more predictably quote, shippers presumably will on average get access to lower cost capacity, but you're not absorbing quite as much risk. It is interesting if there are different models for the different market, if we'll start to see those as everything becomes more connected.

[58:49] Steve Wineriter: Absolutely. Yeah, I tell our staff all the time that data is currency. It really is. And I think our industry is starting to buy into that more than what it has in the past. But I think it's really important. And I think, like you say, making things as easy as possible on the carriers, right?

[59:17] Steve Wineriter: I think it goes down to how the AI agents communicate to a dispatcher is really important too. Like getting them to put their guard down. If they're part of the group that understands and that picks up on the fact that they're talking to an agent, we want them to put their guard down and have confidence that having the conversation with that agent is going to lead to revenue, productive revenue, and in many cases repeatable revenue. And we don't want them to have to go, hey, just forward me to the ops team. We don't want that. And so I think that initial communication right out of the gate is important, because they're going to continue to get those calls. They're going to continue to get those opportunities.

[01:00:16] Steve Wineriter: And I think the other thing relative to this is being mindful of carrier fatigue, kind of like what I mentioned a few minutes ago. We don't throw everything in the kitchen sink at the agents. We're not giving them a list of a thousand carriers and go call all of these at the same time. That's not productive either. And so we're trying to find that balance. What's really important is the productivity of the list that is sent to the agents. If you're scatter shooting and we're sending them a shotgun approach, yes, they're going to be more successful than the carrier sales team, but you're going to create fatigue along the way. And so I think that's really, really important. And that's where we're really trying to work with those companies that have access to the ELDs and the lane data and current availability. I talk to them all the time and say, please consider this, please consider that. And if you trust me and you can implement some of this, financially you're going to be in a good spot. And we all are. Carriers are going to be happy, the 3PLs will be happy, and it makes for a much better system. And I think they're really buying into that, and it puts us in a position to put the agents in a position to be successful.

[01:01:51] Jesse: Steve, really enjoyed the conversation. We're coming up on time here. Final question. What are you most excited for for ADL over the next twelve months?

[01:02:03] Steve Wineriter: Our agent department is in a really, really good spot. We're seeing that department scale at an extraordinary pace. But I think the answer to that question really is it's our entire team. Our team at American Diamond has never been better than what it's ever been before. We've had some really, really good teams in the past. Where our team is now, and everybody rowing in the same direction, it's really fun to be a part of. They all believe in the AI, they believe in the model, they believe in the clients, and we're really trying to bottle that up. And I'm really excited, not just for ADL, but for 3PLs in general, where this market is headed. I think the last three years is about to be in the rear view mirror. So I'm excited about that.

[01:02:58] Jesse: I hope so. It feels like, I posted about this on LinkedIn, it kind of feels like there is this final storm moment where you can see the light at the end of the tunnel, but we're in the squeeze right now. And so it's hold the line and make sure you get through this period, because when everything, especially shipper expectations, kind of reset, and we realize that we're all operating in a new world, and capacity stabilizes a little bit, the market kind of understands what the new normal is. I think it's going to be a much, much healthier market actually overall for brokers, probably for carriers as well. We might end up paying a bit more for transportation, but that's not a bad thing either. Steve, great conversation. Really enjoyed it. Thanks so much for coming on the show.

[01:03:52] Steve Wineriter: You bet. Really, really appreciate it. I enjoyed it as well. Look forward to working with you and the team moving forward. Appreciate it.