#5 Why AI Won't Replace Freight Brokers (And What Actually Will)

[00:00]

Jesse Buckingham: I can't tell you how many times I talked to customers where they're like, hey, I just need to move the freight. Make sure you service it. Payment is not a big issue. Has completely flipped on its side here in the last three or four years. The rock star though is going be the rock star that's able to build relationship at the end of the day. I still believe you think about, you know, Fortune five hundred customer that you call, an AI agent is never going to be able to get 10 loads per day out of that customer. But at the end of the day, when you think about getting into procurement teams, the operations teams, how people feel, and understanding the different different facilities, and being on the ground and meeting these people face to face, those are some of the things I still think today that we really need to focus on at the end the day. Welcome to the Freight Show podcast.

Today, we're joined by Drew Herbeck, a freight industry veteran with nearly two decades of experience scaling brokerages and leading carrier sales teams. Drew shares his take on today's market, why twenty twenty four spot rates defied every forecast, and why the traditional freight cycles may be flattening as shippers use real time data and mini bids to stay nimble. He explains how procurement teams are reshaping negotiations, the rise of fraud concerns, and the financial discipline brokers need to scale from $50,000,000 to 1,000,000,000 in revenue. We also dive into Drew's leadership lessons what it really takes to hire and motivate top carrier sales talent, why relationships remain the brokers' real edge in an AI world, and how empathy for truck drivers builds trust that no technology can replace. Alright, let's dive in. This episode is brought to you by Voomah, the back office automation platform built for freight brokerages and 3PLs. From AI powered document handling to streamlined workflows, Voomah helps logistics teams scale smarter. Learn more at voomah.com.

Speaker 2: Welcome everyone to another episode of the Freight Show, Drew. It's great to have you on. How are you?

Drew Herpich: I'm great, man. I'm great. Great to see you.

[02:02]

Speaker 2: It's great to see you as well. I'm excited for this conversation. You've had a long and storied career in this industry and a lot of accumulated learnings and wisdom. But maybe you'll kick it off, Drew. I'm kinda curious to hear from your you know, like, in the trenches today, it is it's been a crazy few years. And I'm curious from your perspective what state of the market is right now and and what you're seeing out there.

Jesse Buckingham: Yeah. No. I was actually we just posted our our our quarterly outlook of how we're looking at the market going forward and and where it is today. It's interesting you bring this up, right? When we were looking at things of where we're sitting right now in Q3 here, you look at everybody's predictions from last year, everybody was somewhere between this, let's call it 13% to 30% year over year in the spot market, right? Or you look at where we are today, it's hovering right around 0%, right? So everybody's predictions were wrong to a certain degree. Fast forward and look next year, Robinson's already come out with theirs. I think they were posting around 3.5% year over year in spot. When you think about the peaks and valleys and what we've usually seen in supply and demand over these cycles, spot market is usually somewhere between that 1540% in those big years. And so to see them come out with three and a half percent, a lot of other people not feeling really bullish of what 26%

Speaker 2: rates or volume?

Jesse Buckingham: That that that's a year over year of what we're looking at from a spot percentage rate. Yep. Yep.

Speaker 2: Spot percentage rate growth or like percentage of of volume.

Jesse Buckingham: What are you saying there? Sorry.

Speaker 2: Just the the 330% just so I'm tracking what number is that.

Jesse Buckingham: Yeah. So what it is is it's a year over year rate, quarter over quarter of what we're looking at our spot rates.

Speaker 2: Spot rates. Yep. Cool. Yeah. So when

Jesse Buckingham: you look at it year over year from a quarter over quarter perspective. Most folks last year were, like, predicting sort of something in the 30%. We're kinda coming in at at pretty much, like, flat flat so far this year. Even we did. Right? We had a year over year projection up in Q4 to be 17% year over year. Right? Unless something crazily happens here in the next three to four months. We're probably wrong. Right? But I think there's been a lot of things thrown at the industry one way or the other, whether it be terrorists, you look at some of the things now with the English driving, you look at some of the things from immigration drivers. So there's been a lot of things thrown at the industry and nothing's really

[04:24]

broke through that much from the freight market perspective. Demand's still pretty soft. Consumers aren't as confident as they used to be. But as we go into 2026, I think a lot of people thought like, hey, three years of kind of a down industry, is this the year to finally take off? And so some of the things that we talk about and I was going back and forth with Eric Williams, who I've got a tremendous amount of respect for the other day is, are the cycles dead? And and we've kinda posed that question years ago.

Speaker 2: Yeah. That's interesting. Yeah. What what do you think is making it more challenging or challenging to forecast? Like where things are gonna be? I mean, it's always been a very like difficult difficult thing to do. But like what why is it such a challenging

Jesse Buckingham: thing to look out and understand where it's going to be? I think there's so many more factors today than there was before. I think when you think about, you know, the supply side of things that that's been pretty consistent, right? You know, supply comes into the market when rates are paying better. Obviously, drivers are more on board and when rates start to decline, they either get out of the market and go do other jobs, you know, or they jump on to some of the larger fleets one way or the other. So supply has been pretty consistent in that matter. Now from a demand standpoint, I just think customers are so much more nimble than they used to be. You know, I was talking to somebody the other day about this, but, you know, three years ago, even four years ago, running a bids for some of these large customers, the turnaround time was a month, two months, how they went through the procurement process, everything like that. Now in days, they're able to do that. You think about like API quoting, right? Customers at all times are understanding where the market is, where their lanes are, where they can have maybe favorable pricing. And I think we're seeing lot of that in real time. And so my thing going forward is, are these curves that we've seen, are they starting to flatten out a little bit more because of the data and technology that we're able to access and the nimbleness that customers can move in and out of their rates?

Speaker 2: Yeah. That's interesting. And so they're sort of able to kind of like smooth out their own cycles because there's so much more transparency in the market. I think the

[06:24]

Jesse Buckingham: I don't wanna say the idea of annual RFPs are dead by any means. I think you'll still see those procurement processes. I think we'll still go through them. I think the large idea of awarding freight at those cycles will be a lot less. I think a lot of it's being done through the year. I think a lot of mini bids, I think there's a lot of, you know, hey, how do we take the spot lane to contract lane? A lot more proactiveness. Like, customers just didn't have time back in the day to do. And now the data and technology is allowing them to do that so much faster today.

Speaker 2: Well, that's interesting. So you think it's actually driven by that, like, part of the reason why shippers were running these contractual RFP processes is because it just kind of simplified planning throughout the year. But when you move into a world where you can actually automate more of that and do more sort of, like, real time price discovery and shift networks with less work that you start to move into a world where shippers are, like, focused much more on the yeah. That's interesting. Drew, what are you sort of seeing change about, like, shippers' expectations over the last few years? Like, how are you sort of thinking about, like, their wants and needs changing? And how is that informing how how you're sort of thinking about, like, positioning the business?

Jesse Buckingham: Yeah. I think the two big things is, you know, fraud obviously is a big one right now today. Right? How they're looking at that in general. And so we've seen a lot of more of that in this industry. And I think customers are trying to get ahead of that as much as possible, especially the ones that have, you know, product that can be actually sold out there in the market as well too. I think the second thing is, you know, you think about tariffs, you think about these large companies and the projections and numbers that they have to hit. I think one area where I think they think they can get a little bit more creative and get a little bit more price conscious is in the transportation world. You know, when I first, my first five, six, seven years in the industry, I can't tell you how many times I talked to customers where they're like, Hey, I just need to move the freight. Make sure you service it. You know, payment is not a big issue. That has completely flipped on its side here in the last three or four years. And I think some of that is one, just how the operations look and two, the more and more procurement

[08:27]

gets part of those decision making processes, right? Operation wants the best carrier, best service, the drivers that they're used to, equipment that they've been used to and running their operation a very seamless way. Procurement obviously takes that into consideration and listens to the operation and facilities. Procurement's got a very much different idea of how they want to drive those rates down, how they're looking at the process, the way that they're going back to brokers and assets, and really negotiating those rates in real time.

Speaker 2: Interesting. So, like, five years ago, a lot of the, like, procurement decisions were actually sitting much more with the operating teams who just cared about kind of like service quality and execution and procurement teams are thinking about it at a different like, what are the diff like, what are the different dimensions that, like, procurement

Jesse Buckingham: cares about or is looking at that are like different from what that looked like on the operation side? Yeah. I mean, I think procurement's just very cost conscious, right? When it comes down to it, it's coming down to pennies and dollars at the of the day for them. How they're looking at the operation, how many turns is that, you know, able to do? I think from the operation standpoint, they're looking at more, like I said, service, how many vendors they have in there, which ones are bumping the docks at which facilities and things like that. And so in my career, I've been doing this now for eighteen years now. I've seen this happen twice, right? Obviously, right after COVID, we felt a lot of this and this came into that cycle a little bit more. And then obviously back in the 'eight, 'nine, the biggest difference though was 'eight, 'nine, the technology wasn't where it is today. And that's why I think we're seeing the biggest difference now in some of the cost consciousness of shippers overall.

Speaker 2: Yeah. That's interesting. Drew, I'm curious. You've spent a lot of your career, like, building and leading carrier sales orgs. And I'm curious to, like, what are the, like, lessons learned that you've you've taken from how to, like, identify and hire that talent? Because it require, like, a ton of people. Like, what have you learned about, like, what it takes to be successful? And then how have you gotten better at identifying

[10:31]

that talent on the front side?

Jesse Buckingham: Yeah. It is a great question. I think this is probably the the men are able to train it the right way for you to be able to scale your organization in the right way. And so for me, it's kind of ironic now as we go full circle into this because a lot of the times you wanted, you know, people that were able to use your technology be quicker, things like that. The AI and some of the things that we're seeing today, I I don't need that as much as I I used to. What I really need today, and this is what I tell, you know, our training classes and people that ask about AI coming in. I need the work ethic. Right? The work ethic is one thing that I think will never go away. I think to your point, Jeff, you've seen some of your posts. Right? The mundane tasks, those will go away. The rock star though is gonna be the rock star that's able to build relationship at the end of the day. I still believe you think about the Fortune five hundred customer that you call, an AI agent is never gonna be able to get 10 loads per day out of that customer. But a person, how they feel, how they build that relationship, how they go about the sales funnel, the sales cycle, how they're able to execute on those relationships at the end of the day, those are the things that stick out to me the most, right? And so when I think about, you know, hey, how do I get, you know, a successful rep in here either on the sales side or the carrier side, how they look in conversations, especially today with, know, some of the younger generation, you know, are they looking me in the eye, the way they shake my hand, their first thirty seconds of the elevator speech. These are some things that have been kind of a lost art. Obviously in the last year I turned 40 and I had this kind of halftime feeling a little bit, right, in life. But the one thing for me is now in that business world, I kind of sit at that halftime as well too, where I still understand how the 50 and 60 year olds are really looking at business. But now I'm trying to see this new generation of the younger 30 and 20 year olds come in. How do you motivate them? How do you know what's important to them? One thing I joked around the other day with somebody, you know, my first fifteen years in the industry, you know, maybe for yeah. Probably, yeah. First fifteen, sixteen years in the industry. Whenever we offered like some kind of, you know, package or like, hey, if you do this, you'll get time off or you get money, whatever it might be. If you're able to work a weekend, you know, stuff like that.

[12:33]

The rep always took the money. Always. Get the money. You're gonna spiff. Okay, cool. Last two years, the newer younger reps, they don't take the money. They take the time off. So how do you motivate them differently? How do you look at their careers differently and getting the most out of them on a day to day basis?

Speaker 2: Yeah. I mean, there's a lot to unpack there. Do you see the the role like, how do you see this sort of customer side and the carrier side evolving over the next few years? And what do you think are there differences there in, like, what you think that role is gonna evolve to become and what that means for the, like, types of skills that you're gonna want to select and recruit for.

Jesse Buckingham: Yeah. I I I think the big, you know, elephant in the room always in in this industry is how how do you scale to a billion? I can't tell you how many brokerages I always hear that, like, we need to get to a billion. It's like, well, get to fifty million first, 100,000,000, maybe five, you know, right? But everybody has that golden number of a billion. Right? And how do you get there? And so obviously from my perspective, I grew up in the buy sell method, right? You know, you have differently. One thing I've always been able to say over my time here is how does it look for your organization? Does it work the best way? I think what we're unpacking now with AI today is do you need both that buy sell method and could you go to more of that cradle to grave? And there's different opinions out there. Right? Now do I think there's still very important relationships on the carrier side that you have to build that possibly customer sales reps lose kind of that some of that? Absolutely. Mhmm. Now do I think with AI and some of the workflow and how we're looking at things, they can be done much more easy than it was, you know, five, ten years ago? Absolutely. And so I think you're gonna see a little bit of, you know, a hybrid method that you'll see a little bit more. What do specific individuals focus on while others can do all of the operations real quickly with some of the AI technology that's coming into place? But I think going forward, you might see a lot more companies not have to feel like they have to go to that buysell method to get to that billion dollars or to get to that scale. Because what usually happened in those companies that were $102,100, 300,000,000,

[14:35]

they eventually realized the scale was gonna be harder to get to unless you just started hiring and hiring and hiring. And so I think those are some of the things that we'll unpack in the next couple of years.

Speaker 2: Yeah. So why like, I'm curious. You've seen because, like, when you came into NTG as well, there was a bit of a transition moment as well. Like, some of the early days, it was sort of cradle to grave. And I know that you coming from Coyote, that was all kind of split model. What makes it easier to, like, scale to a billion at least under the sort of, like, you know, traditionally by having the split model? And what do you what are the things that you you give up by like moving towards that that model?

Jesse Buckingham: Yeah. I I I think when you think about like the the the split model works very well with large enterprise customers, consistent customers, right, where each side's kinda doing their their own thing. When you think about when you get into like different modes or different verticals, that makes it much more deep, right? The carrier side's got to learn several different modes, right? Instead of maybe just van or reefer, right? And so I think that's where you get a little bit more of the specific intelligence to it. Like, you know, for example, like a mode like flatbed. You know, flatbed or heavy haul and things like that to me, that really should be, you know, cradle to grave to some degree, right? When you think about a Fortune 500 customer giving you a 100 loads per day, that's where, know, the buy sell method can work a little bit better in my opinion. And so it really depends. I've always said this, you know, you can grow a brokerage a thousand different ways. That's how you look at it, being consistent to that strategy and not flip flopping on it at the end of the day. Now I think for us, to your point, you know, I came into NTG a little bit over five years ago. At that point, we were kind of on both sides. We were doing still a lot of cradle to grave, but we were starting to build this carrier thing. And obviously we accelerated to that and build out our carrier department of where it is today. But we still have some reps that that that have very specific type freight that we want them covering and it works better for it. And so for us, we are a little bit in that hybrid model today of how we look at it. For you, as you think about going forward,

Speaker 2: that a lot of what you're gonna be looking like, one is this kind of, like, raw work ethic, which it sounds like is maybe, like, harder and harder to to come by. Or or maybe people's attitudes about, like, what they want from their career and and life is, like, shifting perhaps. But then it sounds like a big piece of this is like presentability and and relationship. Like do you see there being is this is that like do you see the

[16:58]

the shipper side of things changing in terms of like what's gonna win there? Or do you think that relationships are gonna continue to be a really like important part of that equation? And how do you sort of what do you sort of think the like interface between

Jesse Buckingham: AI or software that helps to make those like interactions more efficient is gonna look like? Like, what what parts will, like, stay very human centric and relationship oriented? And what parts do you see there being opportunities where you might be able to, like, advance things through through software or AI? Yeah. I mean, like right away, I think about, you know, to a certain degree, right? Like carrier digital experiences. Right? I think, I think carriers are much more prone now to be able to go to either load boards or like, you know, our own platform beyond to, to book loads. I think about scheduling and appointments, right? But those things should be all automated here in our industry a year or two from now. Right? But at the end of the day, when you think about getting into like the procurement teams, the operations teams and how people feel, and understanding like the different facilities and being on the ground and, you know, meeting these people face to face, those are some of the things I still think today that we really need to focus on at the end of the day. What's quite interesting to me though too, is when you think about the young sales force that's coming into this industry in general, the last thing we wanna do at the end the day is sell. Right? And I think what they're gonna have to really understand is that's probably where a lot of their value is gonna come in and how they build relationships. Because I tell, you know, our team and our training class all the time, if you're doing the easy task or you're looking for the the easiest approach to it, those are things that I think AI will replace. Right? I do believe that the ones that it doesn't matter if it's NTG or any other large broker. Those ones that are, you know, working the tough hours, right? You know, the ones that pick up the customer call at six p. M. On a Friday, those are the ones that you're making somebody feel a certain way, and I don't think you'll ever be able to replicate that.

Speaker 2: So you think I mean, it sort of seems obvious in in some respect, but I am curious about, like,

[18:59]

why the relationship is so critical to being able to win more freight. I mean, you're sort of starting to, like, talk about some of these things. But, like, what why is that such, like, a critical piece of it? Because I do think in, like, some industries, like, that are not freight. Like, I don't think it will matter quite as much to, like, cultivate relationship. There's some types of buyers that actually don't want that sort of experience, but it seems like that is really important.

Jesse Buckingham: To the technology and the two or three screens that most people have and Mhmm. Work through all these different platforms. You know, at the end of the day, this is still a truck driver with a 53 or 48 behind them, hauling 45,000 pounds of of goods down the road. And, you know, for me, I always think about, you know, the worst case scenario in some of those contexts, right? We saw in our industry about a week ago. Those are things that from a shipper standpoint, that's the last thing you want to worry about, right? Your partners, understanding how that relationship's built, how they go about their processes, and what they do on a day to day basis. Those are things that you you you can't replicate with with technology. And so, you know, I think about one customer that, you know, is large in our network. You know, that was a five year relationship until we got to that point of where we were really scaling them. Right? We went through different, you know, objectives, different facilities, different silos in their network to be able to finally get to that top of that relationship. Those are that doesn't happen overnight. Right? Right. Me, that that that is a funnel, is a top down operation. You know, that's for me at the top, you know, making sure that I'm leading the right way, but then my VP of sales, making sure he's making the connections, the account managers, you know, working at facility levels, just things like that that will make everything a lot more deeper on a day to day basis.

Speaker 2: I've heard this. Yeah. It sort of reminds me of some other conversations I've had with brokerage leaders about how it does. It takes, like, many years to be able to develop the level of trust, credibility, and understanding of somebody's network to be able to really start moving big volumes, especially when you start to talk about some of the larger shippers. And that there's it therefore becomes really important that you're, like, retaining a lot of that, like, knowledge that you absorb over time. And that that means, like, needing sort of consistency

[21:08]

in the teams and that, you know, when you look at the, like, the highest performing individuals, they're often the ones that have

Jesse Buckingham: built up that experience over three, four, sort of five years. Is is that kind of like do you see that trend like playing out in in your business as well and sort of thinking about like retention as being a really important piece of this. Yeah. How I've always viewed retention, whether it be sales ops, anybody in the organization. I've I've always kinda done, the letter grade system. Just simple for me probably to remember. But you you you're you're a players, you're rock stars. They're gonna wake up in the morning. I don't have to tell them anything. They're gonna wanna make money. They're trying to prove themselves to their life, that they have certain things that they wanna be able to get after in life. Those are the people that I don't need to bother that much. That they're they're just gonna do it. That D player, there's not much I'm gonna say to them to get them motivated. They're probably not gonna change their ways. And to be honest with you, they can actually bring down your organization at the end of the day, right? You know, people don't wanna work around people like that always on a day to day basis. But you focus on those B and C players and try to get them to the A players, that's gonna change the organization in a different way in my opinion. So technology, data, AI, any of those things, obviously those will be the things that will help those being honestly having a familiar face is very important. You know, you're always cycling the same people out of accounts, can get very frustrating, right? You know, for example, now with my car insurance company, every other day I've got somebody new emailing me back about these quotes that I've been looking at. I don't feel like I'm getting anything more of an advantage from that company, but their whole pitch to me is you're able to build a relationship. You're able to call them at any time and get them on the phone. I don't feel any different than calling maybe like a twenty four seven, you know, insurance, you know, technology company, if that makes sense.

Speaker 2: Yeah. Because I mean, it gets pretty fatiguing, guess. Right? Like if you you go through that journey once of like bringing somebody up to speed expecting that you will have that sort of relationship and they'll learn but then they sub them out and that experience can be fatiguing. What have you learned about like how to like do you think a lot about retention and what are the like techniques that you guys have used that like work to kind of keep people in? And what are the things that like drive the lack of retention? Like what what's the sort of like framework for thinking about that? Or do you expect that there's just some natural amount of this that it's hard to like figure

[23:26]

out who's gonna be really successful at the beginning. And so you sort of like bake that into the the model as you scale.

Jesse Buckingham: Yeah. I mean, I I I've been a big believer in this. Right? You know, I came into this industry and and like most people that are on the EV freight brokerage side of things, I I I still am pretty undefeated on this conversation in my training classes that when they come in, you know, I always ask the question of how many of you guys dreamed about being a freight broker when you when you grew And nobody says yes to that, you know? And so, you know, for me, it's it's understanding you get the most out of these reps at the end of the day, how you keep them involved, you know. When you think about this industry, once you're in it, it can really suck you into it in a good way, right? You can feel a lot of momentum. You can feel like you're really doing something at the end of the day. You know, for me, my purpose in this industry that I always land on is we are really trying to help deliver goods to people on a day to day basis, whether that be food or your Christmas presents or whatever it might be. And so, you know, finding that purpose for those individuals, I think is so important. You know, when you get into those customers who are like, hey, you were able to deliver this load and this was, you know, went to this and you see the pictures and everything like that. Those are the impacts that really make you feel different at the day where it's not just one load or something that just came across your computer screen or a POD or a BOL. There's a lot more feeling behind it. The more that we can channel some of that through our reps, I think that helps retention, right? Because like I said, their dream growing up was probably to be an astronaut or a baseball player. And they probably ended up being like five, 10 like me and not wanting to go to space ever. Right? And so, you know, they had to change on how they were going to look at their outlook. Right? And so for us, how do we get them so involved in the freight? How do we get them to understand what they're doing? How do we get that tribal knowledge to them? For a lot of people, freight brokerage industry, they had never drove a truck. How do you understand the level of expertise that goes into driving a truck? How about that? Like, what were you sort of doing there? What did you learn from it? And are there, like, lessons that you think that folks coming up in the industry today could, like, take from some of the, you know, things that you thought about as you were learning the industry?

[25:29]

I mean, there there there's two type of people in life, I think. There's there's people that read about things and there's people that go and experience it. And Yeah. I I I'm not the the reader type. I'm the one that go experience it. Right? And so for me, I've gotta be able to understand what they're going through, put myself in those positions because I've never been there before. Right? And so when I think about those truck drivers in this industry, I was a 22, 23 year old coming in the industry. At that time, was from Detroit, Michigan. And I was living in Chicago. And so I was going back and forth to see friends and family. And I and I did two things on that those trips always. One, I brought a notebook with me and I was writing every MC number down on that drive home. Right? You know, on I 94 there. And then two, was dropping out the truck stops on the way and for the price of 30, you know, Drew Herpich business cards laying around somewhere on one of those still today because I was just handing them out. I put piles on the counters. I would go up to some of the drivers driving around. Early on my career, every year, I went out to, you know, Wilcott, Iowa where the I-eighty truck stop is out there, Right? And walked around, talked to people. You know, one time I got into a disco party into a trailer, you know. Just being part of of of what they're going through on a day to day basis will will help you understand so much. And because I went through it a little bit in my college career, I did floors for a company. And when we did those floors, we had actually a semi truck hooked up with all of our equipment, you know, four of us jump into the cab and we'd go to those places. And it's all along the way, you stopped at the truck stops, you got to meet individuals. And just the conversations, how they think about things, why they want to drive a truck, being able to see America. Those are things that I think a lot of freight brokers don't understand. And so for me, it really helped me build up my knowledge in that industry and have a tremendous respect what truck drivers do for us today.

Speaker 2: Yeah. In the early days of starting Vuma, Mike and I spent some time at the truck stops as well. And it was super eye opening. It also just gave me an appreciation for kinda how challenging the job is. You know? It's like super stressful. I mean, I think we were talking to right in the bottom of like rates as well. And so there were a lot of folks that were sort of like coming off making a ton of money and then things were starting to really like feel the squeeze and and it's a tough it's a really tough gig. There's a

[27:36]

yeah. And I think having that, like, empathy and understanding, I can imagine, like, does make you a lot better on the on the carrier side especially.

Jesse Buckingham: I mean, for me, right, I've got two kids and and my wife, and those are the most important people in my entire life. I can only imagine if four or five, six days of the week I I I was gone and I couldn't see them. Right? And, you know, a lot a lot of those truck drivers are are in that situation with not only their family or their friends. Right? And and so to have that empathy, to have that understanding, to understand what they go through on a day to day basis, I think that is a difference especially when you talk about carrier sales reps of how they're able more successful for their carriers at the fair value market in the industry today. Wow. There's things that, you know, obviously, you know, we get them, there's times that they get us, right? And so that's some of the relationship you build on that end. But those are some of the things that you foster through a relationship through years, right? The first time you book a load, you would never trust anybody to say, Hey, just send over that rate. You know, after three or four or five years going to family, you know, in events. I mean, I can't tell you many times I've I've heard carriers be like, hey, I'm going to to my carrier's wedding. Right? Wow. That happens through the relationship you've built and then the trust and value at the end of the day.

Speaker 2: Yeah. And so is this when you think about some of the carrier reps that are the most productive, what is it that they have done differently that allows them to is it and and what are the metric? Like, do you are you measuring is it, primarily, like, how many loads can that person cover at at sort of, like, at what margin? And, like, for the ones that really outperform, what are they doing differently relative to others?

Jesse Buckingham: Yeah. I I think we can talk about actual carrier sales reps at the end of the day. One that you you have to have, like, a a quick twitch. Right? Some people have probably heard the name Bill Billy Halloran, who who works for us over here. The way he goes about his day, how how many, you know, touch points he's making. Right? Because, you know, early in people in in freight brokerage was always phone calls, right? Now we're a different level now. It's touch points, right? Phone calls are important. WhatsApp is important. G chats important. Text message is important. How you're able to reach people is very important,

[29:41]

but the way that you're able to go through that and do everything. And I think the most important thing at the end of the day, Jesse, is not booking the load. Booking the load is the easiest part of our industry. Everybody always talks to me about that. Like booking the load, we gotta, digitally. Booking the load is so easy. Hard part is when you've got two extra pallets on the truck or the hard part is somebody has opened up the doors and the seal's broke. Or the hard part is when you show up to a facility and they don't have an appointment for four days. That's when truck is billed. That's when actually things happen in this industry. That is a lot of the things that people don't see, especially in my seat now today. Don't see that every day like I used to. And I think my understanding of the freight brokerage has always helped me. But that's something I'm always trying to pass on to our carrier sales reps. The booking of the load is the easiest process through that. Everything else is where you actually build the trust.

Speaker 2: So it's like when things break. Right? And like how do you handle that? I mean, and it's interesting. I mean, this is like a big piece of I think the value that like brokers are bringing to shippers. Right? It's like it's not like the easy stuff that goes well is not the challenging thing that they're sort of paying for. Right? It's like they're paying for somebody who's gonna go and, like, figure out Yeah. How how to solve a problem when something goes wrong. I'm sure they love the liability piece too. But no. I mean, all jokes aside. Right? Yeah.

Jesse Buckingham: Yeah. But but but, you know, at the end of the day, that's why you use a broker, right, to to a certain degree. Right? That they're able to handle those things in real time to be able to make sure that that your enterprise type customer. Those are things that at the end of the day, you don't have time to go back and do and you rely on your broker to be able to do. And so those are the things I think that, you know, really separate some of the good brokers and the ones you've seen from a carrier sales reps that have been able to do it. You know, you think about this too. Right? Friday afternoon, I I, you know, I can't get my appointment. Some brokers won't answer you back until Monday morning. Right? Who are the ones that are helping you get unloaded on Saturday? Because every day as a truck driver, it it is money. Right? And so those are the things that I'm always thinking about it on a day. I'm I'm hoping my team is always thinking about them as well too. Mhmm. But but really making sure that we're supporting them in a different effort.

[31:45]

Speaker 2: Drew, you've been a part of scaling some very successful businesses and there's a lot of brokers out there that have aspirations to become, you know, like several 100, know, millions of dollars, like billions of dollars of freight. And like for the ones that are able to like scale and get to that stage, what are the things that they they do really well that, like, maybe and maybe these are simple, but, like, what enables them to be successful?

Jesse Buckingham: I I I think there's a couple things. Right? Like like I said kinda early on, there's a thousand different ways you could grow a brokerage. Stay consistent. Understand what your plan is at the end of the day. Understand what you're trying to drive. Make sure you don't see shiny objects. Like our industry is such a shiny object industry. Right? There's so many new vendors always coming out. There's so many new products that come through. You hear things, you know, from from the deep different media outlets that that cover our industry in general and people get very fixated from it. I can't tell you every time I see a LinkedIn post go out that's kind of like a little bit of like, hey, this is gonna ruffle as much as boom. My phone starts lighting up with text. Hey, are you getting this product? Are you guys using this now? I I heard this can make your your sales reps 20% more efficient. Right? Things like that. And so it's a very copycat industry in general. And so what I would say to a lot of people starting off today is one, make sure you're on the floor, right? If you're just starting a brokerage, just if you think it's gonna make a lot of money, you better really understand the industry, how carriers get paid, how you get paid from customers, the financials that go into it, because you know, the hardest part for me in my career, and I tell this to people all the time, the key advantage for me is I came up in this industry, but as you come up in this industry, you know, sales, you know, loads, you know, margin, you know how the operation works, But the actual financial and business piece of this business is so important too. How cash flow, how many days to pay, how you're looking at your CapEx and OpEx. And those are the things that I think will separate really good brokerages want to scale to get that next end. You know, I don't want to say it's easy by any means. But a lot of people can get to 50,000,000 in revenue before you know it. If you've got that work ethic, you're building relationships, you're doing things the right way,

[33:52]

running a successful business for years to come and scaling by doing that, that takes a lot of understanding of this industry and the financial acumen piece of it too.

Speaker 2: This is a really interesting point, Drew, because somebody actually asked is not super well understood about what it takes to run a successful brokerage. For me as someone who has not actually like worked in a brokerage, I was thinking about this just this working capital. Like and actually running the maths on it. You know? And you sort of get to this point and you're like, wow. You can actually like make a lot of money like moving freight. But then when you actually understand working capital implications of, like, getting paid on 60 or 90 and having to pay on 30 or two and what that means from, like, a working capital perspective, if you're not really managing that super well, it's very easy, I think, to, like, blow through all of that.

Jesse Buckingham: That that's where I always get sensitive to us freight brokerages, you know, in general. Like, you know, everybody, you know, it's like, I can't believe these freight brokerages are making 10 to 15% margin. Yeah. You know, just talking about the cost and the the the technology and and the people and the facilities and things that go into it. Right? You know, what you're taking home at the end of the day is much more slim. You know, all jokes aside, you you think about the vendors in our industry, they're probably clearing 40%, 50%, 60% margins, right? You know, at the end of the day. And so for running a freight brokerage, you've got to really understand all that. Because if you're just looking at it saying, Hey, I'm making 15% margin. I've seen a ton of 15% margin freight brokerages fail over time, year after year after year. Right? And so understand what goes into that cost. How many people you're hiring into your training class? What you're getting out of technology and products, really making real ROIs, which is really tough in our industry. Right? You know, the one thing I've always joked about, you know, back and forth is how you really calculate some of these ROIs. And there's some runs that are very easy to be able to say, Hey, that's a slam dunk. There's a lot that is very hypothetical in our industry of what those will prove out and and making those right decisions can be so crucial.

Speaker 2: What are the the key metrics that you think a brokerage should be tracking and paying attention to that maybe are not, like, as obvious? Like, all the ones where you think, like, they're more important than people understand.

[36:03]

Jesse Buckingham: It's an interesting question. It's one that I talk about a lot, obviously. The easy ones are obviously your loads, your margin, Your touch points and things like that. How many loads per day a rep is moving, things like that. Then you get into some of the things like your cost per load and CPL, and then you're looking at your rate per mile to your cost per mile and things like that as well too. But I mean, like any P and L, you're looking at the revenue to the net revenue to what you're making at the EBITDA at the end of the day and what goes all into that. Now, think the, what do you want to do? And so that's one thing that I think you've got to be really consistent on. You're just looking to be the low cost brokerage, everything like that, well then maybe CPL is the biggest focus for you, right? If you're looking for growth and you're looking scale and things like that, CPL, if you're looking at that only could be actually the opposite of what you're trying to do, right? And I've never heard a company ever come out there and say like, hey, we're okay. We don't need to grow anymore. Everybody always is saying, we want to keep growing. They look at probably cost per load much more. Right? You know, I think it's funny when like, you know, new brokerages start up and people are like, Hey, what's your cost per load? It's like they've been in business for six months. They better be upside down on their cost per load. Then understanding what that journey is, how you want to bridge that gap. When you want to start turning that, you know, prop that business to profit. Those are things that I think are so important at the end of the day.

Speaker 2: Yeah. I mean, this it sound yeah. As as you scale, you I mean, you start to get a lot more data and you start to, like, be at scale on a lot of these things. I imagine, like, this sort of upstart investment on just kind of, like, standing up all of these functions and things is gonna look

Jesse Buckingham: look bad, but, like, you know, knowing that there's sort of a journey. And, like, it just depends what you do. Right? If you've got a cost per load, if I said to a lot of people in this industry, hey, is your cost per load 200? They'd be like, holy cow, that's so high. If you're making $300 margin per load, does it really matter what your cost per load is at the end of the day? Because if I had my cost per load at 140 and our margin was 150, rather take the brokerage with 200 cost per load and $300 margin. Right? And so those are the things that you've gotta just be able to understand what your freight mix is, things like that in just general. Well, yeah. I mean, this is maybe the point that you're making is that it kind of it depends on what lane. Like if you're moving like

[38:15]

drive down reefer, big lanes, you know, like and it's all very like similar. You probably that's like, to play that sport, you're probably gonna need to be like be pretty like razor sharp on on your operating cost. But for certain types of freight, I don't know, like maybe it's like temp controlled, like, refrigerated, like, difficult stuff. I mean, some of this stuff just, like, takes a lot more work to be able to to move it. So do you think that it's like then thinking about, like, cost per load matters, but you need to be thinking about it within the context of your strategy and the type of customer that you're serving and the type of freight that you're going after. Because it does seem to me that, like, if you for whatever, like, customer base that you're trying to serve, the better your cost profile,

Jesse Buckingham: the more aggressive you can actually be in winning that business and making the same sort of net profit dollars on that load. Yeah. And you can argue that's where the industry is kind of heading in general. Right? You know, like one one company obviously always, you know, following. I've got tremendous amount of respect for it is obviously CH Robinson. And right. And I think when they said on their, you know, automation journey three years ago, a lot of people are like, well, that's a lot of expense. And now where they are today, they're saying, hey, listen, we're gonna automate a lot of this, right? We're gonna drive our cost per load lower than anybody else. And then when we take lower margin than everybody else, hey, how are you gonna be able to do it? Right? And they're doing a really good job in that journey. Now at the same time, there's probably a brokerage out there today that to your point is doing heavy haul reefer or drop deck, step deck loads, where one, they're not even trying to compete with Robinson. And two, they could care less what their cost per load is at the end of the day. Right? And so for me, it's all metrics. I don't wanna say one is more important than the other. You've gotta have a balance here or the years to come.

Speaker 2: Drew, what do you you can put your crystal ball on like, I'm curious for you to reflect know, what did it what did it like, what has changed about the industry over the last, you know, ten, fifteen years? And to the bet, like, what do you think will not change over the next ten to fifteen years? And what do you think is likely to change most?

[40:21]

Jesse Buckingham: Wow. You know, I I I couple things. I mean, I think there's a lot of things that can go into our space and what you think about it. You think about autonomous trucks, you know, how does that change the landscape of things? You know, telling somebody the other day, you know, just thinking about my my son who four today. Right? When he's 18, he's not gonna need to know any answers. He's probably gonna be wearing glasses that have like the answer like right up there for us. So like being smarter, understanding books at all times, like maybe it's not the most important thing to him. Understanding how to do, you know, different things is gonna be very important. And I think that's going to be the key in our industry as we go forward as well too. I think there's lot of questions out there too, of what this industry looks like. Do we see more consolidation? How do we look at AI vendors in general? One day, do shippers go directly to carriers more in some of these platforms and things like that? You know, some of the things that keep me up at night. Those are some of the things that I think about, but I think at the end of the day, it really just depends on your brokerage, right? When I look in history and other industries, there's been a lot of things that have come in where they said, hey, x type of person in this industry won't be able to exist. And somehow they were the ones that made it through, right? Because they were able to, you know, flip their journey or whatever it might be. I, you know, I always think about an old model that that I've, you know, looked at before and I think it was really, really creative. But like how Ericsson went about, you know, the phone and everything like that. Right? You know, obviously, this is a a study they did back in the nineties and February. But, you know, obviously, they were the the old company that had some of the older phones and everything that they had was, you know, obviously from a standstill. And so obviously, they didn't want it to completely disrupt that company. But over on the other side, they were inventing the whole mobile phone over here. And when this started to die and we went all to mobile phones, they said, hey, don't worry. We're right here. I think a lot of brokerages are going through some of that today where if you're just still on pen and paper and Excel sheets or quoting everything manual, you're gonna have to up your game to be on those platforms. For me specifically, I know I've got an advantage with what I'm able to do from an API perspective. Right? So those are some of the things that will change in our industry over the next few years that I think people are gonna either be have to level up nor or they're gonna fall behind in some of the competition.

[42:32]

Speaker 2: Drew, thanks so much for this conversation. It's been a really great tour of your experience and history and how you're thinking about things. I really enjoyed it.

Jesse Buckingham: Yeah. No. Absolutely. Thanks for having me on and hope that continued success for you and the the Vooma team.

Speaker 2: Thanks, Joe. Appreciate it.