State of the Industry
E12: State of the Industry Podcast, with John Elliott - One. Two. Three. Strike!
We are now eleven episodes deep into the “State of the Industry Podcast, with John Elliott” and the twelfth installment is coming your way, fresh off of our previous conversation from the Load 1 booth at the 2023 Expedite Expo, so set some time aside and dive into the next episode!
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Full Transcript:
Brandon Baxter: Welcome to the State of the Industry podcast with John Elliott. I'm your host, Brandon Baxter. This is a series dedicated to discussions pertaining to the trucking industry and featuring commentary by the CEO of Load one and immediate past chairman of TCA, John Elliott. John, welcome back. Thank you so much for joining me.
John Elliott: Thanks for having me as always, Brandon.
BB: Oh, my pleasure, as they say at Chick-fil-A. I don't know if that's a copyrighted or trademarked, but I guess we'll be careful with that one. So you-
JE: Just do it on Sundays. No one will notice.
BB: There you go. I can dig it. Right on. Well, John, when we last got together, we were at the expo right there in your Load One booth at the 2023 Expo, and it's now September and we're knocking on October's door. There's a lot of stuff going on to get to, a lot of stuff that we can talk about. First of all, let's talk about, and we'll get it right out of there, what's going on with you? What's new with you right now?
JE: I've been busy as always. I don't tend to sit still too much. This morning, I'm live from Nashville, Tennessee, and down here for a few days. We had board meetings and then I was at our Nashville operation center with our staff here for a few days, and then later tonight we will be here to kick off the Select This conference and that ... which I've been asked to speak at tomorrow.
BB: Okay. All right. Very good.
JE: Middle of Nashville, it's always a great town, great people.
BB: Oh, absolutely.
JE: A pretty decent spot for freight too.
BB: Yeah, not bad, not bad. Smack dab in the middle of everything, right?
JE: Yep.
BB: Right on. Right on. Well, speaking of freight, we'll segue into one of the biggest things making headlines right now in recent news, and that is the United Auto Workers Strike. They're hitting the big three automakers. I know, I know, but it's one of those things you got to rip the Band-Aid off and talk about. They're demanding higher pay, return to pensions, better benefits. John, what is your initial impression of the situation. At this point that we're recording, we're what, five days into it? How do you ultimately feel this could affect the expedite industry?
JE: This has really been pretty unprecedented. We went back and looked at the last UAW strike in 2019, which was a full stoppage at GM.
BB: Right.
JE: We actually found we stayed even or went up a little during that period, as odd as that is.
BB: Yeah.
JE: But I can't really compare that to today, even four or five years later, how much things have changed with plant realignment and union has some very aggressive, or I'll call them audacious goals here. Everything you just named plus 32 hours a week working, I mean, guaranteed jobs, return to the job bank program. I mean, honestly, they've asked for everything but uniforms and a pony.
BB: There's a lot on the table.
JE: Yeah, there's a lot. I'm hoping that it's posturing. I don't think the demands are realistic. I think the rank and file union members don't think all those demands are realistic, but we're going to see what happens. I mean, I think there's some good offers on the table right now, initial offers and that, so I think we're making progress. The Canadian Union settled with Ford last night, so I think that's a good sign.
BB: Good.
JE: I would have to believe that those two unions talked to each other and that one would not make a deal that was dramatically different than the other, obviously. So my hopes are that they've found some compromises. I haven't seen the terms of that settlement yet. I don't know if they've been released yet to the public, but I think that's a good sign. So far, I don't think it's had a big impact on the expedite industry yet. Right now it's one Ford plant, one GM plant, one Stellantis plant.
BB: Right.
JE: If they don't feel that they're making significant progress Friday afternoon, they will launch their second attack-
BB: The next wave of strike. Yeah.
JE: Yeah, strike of how they're going to do it. It may be additional plants. It maybe that they go for parts plants like engines and transmission plants to try to shut down other plants. They may let these three plants go back to work and they may attack three other ones causing a rolling chaos situation. I will say, I mean, he is playing his cards very tight to his chest in that and attacking this in a way that no one ever has. But again, it's a little bit of a cat and mouse game and a struggle because you have the strike fund over here. The longer they can preserve that strike fund, the more power they have, because when Ford and them layoff people from other plants that aren't on strike, well, then they don't have to pay, so then the strike fund has to pay in.
So it's a little bit of a financial battle, I guess, or tit-for-tat, yeah, trying to figure out who can leverage the best in this whole thing, but I'm pretty confident we're going to come to a settlement of some kind. I think if this goes on for another week, week and a half, I don't think it'll have a big adverse effect on the industry. Could even be a little pickup coming out of it.
BB: Sure.
JE: A long strike and a full strike against all three, that could be devastating, not just for our industry, but for the economy as a whole.
BB: Oh, of course.
JE: The president's in a very awkward position. He's claimed to be the most pro-union president in history. Yet, on the other hand, he's up for reelection and a full strike would cripple the economy and would make Bidenomics make even less sense than what I think they do already. So I think he's in a difficult position just due to timing and that, so it's definitely going to be interesting. I mean, there's a lot of different pieces in play here, moving parts.
BB: Sure. There's a lot riding on it and really from what you're saying, and one of the things I think I picked up the most is, is that the demands are what they are at this point. That doesn't mean that that's ultimately take it or leave it. Right? That's what they're going to settle on. That's why they negotiate. That's why they go to the bargaining table, because it's easier to ask up here and come down here than it is to start down here and work your way up.
JE: If you got a 40% wage increase and the 32 hours a week, I mean, I'm not a math major, but that probably equivalents to a 60, 70% labor cost increase, which would be staggering.
BB: Sure.
JE: I mean, for the big three to compete with Mercedes or Tesla or other non-union manufacturers, they're already at somewhat of a disadvantage. I think profit sharing is a more fair solution. They're very fixated on what the CEO makes. That's one person, often, and I'll agree, I don't always understand why a CEOO of those kinds of companies makes what they make, but I also don't understand why professional athletes get paid what they do or college football coaches make what they make.
BB: Right, right.
JE: But I also believe in a free market economy. You look at ... his name escapes me off the top of the head, the former CEO of Ford, who came from Boeing and turned Ford around.
BB: Yes.
JE: If Boeing is paying that guy 15 million a year, he's not going to leave and come to work for Ford for half of that. So sadly, people just have to understand it's a free market economy. If Taylor Swift makes whatever she makes, some astronomical number, does she deserve more than the person who's running General Motors? But again, these CEOs are the target, and again, but you could wipe their payout completely. It's not going to change the financial equation for these companies. So I think it's more of a talking point, and I understand the agitation, but ...
BB: Sure. I mean, there's viable reasons for concern on both ends, for both parties and really, I mean just from our perspective, individuals who from the outside looking in, you can see both sides and you really do hope that both sides can come together before it becomes a major economic issue. We've had enough of those lately.
JE: Yeah, I mean, I think everybody wants a fair deal. I mean, I think the workers deserve a fair contract, but it's also got to be something that keeps the company sustainable competitively. I mean, you can win a great victory today and then lose the war down the road with the YRC and some other examples of-
BB: Perfect example, and then you find yourself in a worse off situation.
JE: Yeah, and I don't think anybody wants that. Nobody wants to see GM or Stellantis back in bankruptcy in 10 years because of the deal that was cut today. So I think there's a healthy balance to be found there, and I'm hopeful that cooler heads will prevail and that both sides can try to work through that.
BB: I like that perspective. I like the way you talk about that, and hopefully that is the case coming out of it on the other end. Let's turn the dial a little bit and let's talk about just most recently ... again, we're recording this in September. Just recently, we celebrated Driver Appreciation Week, and it was topped off by an announcement that FMCSA is going to be awarding grant funding for truck parking safety and for CDL training. Now, first of all, John, I'm sure you echo this sentiment. Thank you to all the drivers out there who keep this country moving, right?
JE: Without a doubt. I mean, again, thank you. None of this is possible without you, and I wouldn't have my job, the staff. I mean the families that are provided for, both driver's families, the trucking industries, families, distribution centers, families, I mean it extrapolates to a huge number across our economy. It really keeps America rolling, and it's always great to celebrate and appreciate, especially because I think we did really great during the pandemic and people have short memories unfortunately, and things tend to slide back a little bit. So I think these things only help to reinforce the positives of the good image of our industry.
BB: Yep, couldn't agree more with you there. And John, to pick up from there, in talking about that investment from FMCSA, the grant and the funding, how huge is that investment for the nation's transportation industry? I mean, how much does that ... because obviously that is part of the infrastructure bill. Talk a little bit about just how huge that is.
JE: I've got to go through it in detail, but I mean, I know the requests and that I've read the final verbiage. Actually, I'll be in DC and meeting with the FMCSA on Monday and that, be flying in TCA. We have our call on Washington, so our executive leadership has meetings over the DOT and FMCSA, so able to talk to them firsthand about it even more. We've been pushing for it obviously for quite a while. That was a priority under my term as TCA chairman, and truck parking is just essential.
You look at driving a truck's a hard job, and when you add the stress of simply not knowing that you have secure parking every night, it's inefficient. Drivers have to stop prematurely, it affects their income. It adds a layer of stress to a job. Listen, I don't want to be stressed in my job, let alone do I want the guy piloting an 80,000 pound rig down the highway to have any extra level of stress upon them than what they need. There's enough natural stress out there. We, as a nation, do not need to add to that.
BB: No, I agree with that there. That makes a lot of sense to me. And I mean as far as, well, I mean, how many times we've talked about the parking situation, because again, I mean, as you just pointed out, that is something that you hold near and dear to your heart in an effort to try and help drivers out there. And it's not just about additional parking spaces, it's about safety. I mean, you've got a lot of people out there. You've got a lot of female drivers that they had designated spots or spots that were closer to a facility so they don't have to walk across a dangerous parking lot or across a highway just for sake of parking.
JE: Yeah, you look at the number of trucks. It makes my blood boil when I look at the number of trucks parked on exit ramps.
BB: Yes.
JE: They don't want to be there. They don't have anywhere to park. They don't know where to go. It's a last resort, and it's not safe. It's not safe for them. It's not safe for the motoring public.
BB: Right.
JE: Like I said, there are a lot of pieces to this thing, but I think these are really good first steps and I think we're moving forward. We need to continue to push on this with local municipalities and zoning. And, Hey, you want to build a million square foot warehouse? Gosh darn it, you better have onsite parking. Now these trucks should not have to be lined up and down the street for a mile on the berm waiting for that gate to open up in the morning, and cities need to think about that in their zoning and providing that. So you want to have the business, you should have the infrastructure to support the business that goes along with it.
BB: Absolutely.
JE: And that in this case, is truck parking and bathrooms.
BB: Yes. Yeah. That's the other part of that equation is the bathrooms. Again, safety for bathrooms, bathroom use and having them close to the parking areas. So that way, again, drivers don't have to ... I mean, a lot of times this is happening late at night. They're putting themselves at risk, getting out of their vehicles, getting out of their trucks, trying to get to ... Making it easier for the driver makes it easier for everybody.
JE: Agreed.
BB: John, let's talk a little bit about ... I know you mentioned, and for our viewers and listeners, there's a little bit of background noise there. John, you're in Nashville. We were talking about that here at the top of the show here. You mentioned the SYLECTUS meeting. You've got Full Circle coming up as well, and I almost blew it right there. What's going on at Load One with your TMS situation, right? I mean, that's what we're getting into. It's tech season, if you will.
JE: Yep. Yeah, we were a longtime user of Sylectus.
BB: I'm very familiar with it.
JE: Yep. After the last few years, we've been building our own system. Again, Sylectus is a great system, Full Circle is a great system. We'll integrate fully with both of them, but we needed to be on our own complete platform. At our size, we had simply outgrown it. We wanted to be better. We wanted to use better technology and continue to advance it faster. We wanted more offerings for our drivers, more technology for our drivers. We wanted more offerings for our customers and technology for them.
And at some point, we just came to the conclusion, if we were going to do this, we needed to do it ourselves. We couldn't rely on a third party because again, the third party's in business to quantify and make money and projects we wanted may be good for us, but they weren't essentially good for the industry or marketable for them to be profitable with them.
BB: Right.
JE: So I think we found a really good compromise. We're launching our own system, our Transcend One system, a very successful launch with that. A couple of little hiccups, but when you launch a multimillion dollar software platform, to be expected. And like I said, we're going to continue to lead the industry as we're going to continue to integrate with both of the other software systems, and I don't believe any expedite company has that capability at this point.
BB: Not that I'm aware of, and John, touch on that, you said it's called Transcend One? That's the system you're using?
JE: Yep, that’s the name of our system. Yep.
BB: Okay, excellent. Now with that, for a driver, what does that mean to them? I mean, because it may not on the surface seem like it makes a big difference to them, but it does, right? I mean, in terms of how they're-
JE: Yeah. It's more backend for them. The more efficient we're able to be in the office, the more we're able to automate in the office and increase speed, response time, information flow, and that, ultimately will end up benefiting the driver. And the nice part is now, like with our driver app, that was our own in-house, our own tech guys. So our guys are on our Facebook group like, can we do this? And literally sometimes 15 minutes later, our tech team will respond, yeah, okay, we just did it. Did we have a meeting about that?
We're able to be highly responsive. We're able to take our driver feedback and constructive ideas and criticisms and try to make these changes much more quickly. This will allow us to do it even more in-house with our systems, and that allows us to integrate every which way because I really believe it's all about automation, integration and optimization, and that's really where the future of the whole thing goes. I mean, we've already engaged AI into our systems.
BB: Yeah.
JE: Yeah, some of it's amazing, some of it scares me, but it's where it's going. So we can either choose to be on the leading edge or we can choose to be on the tail end of it all.
BB: Right, play from behind. I mean, you mentioned the AI. Obviously we talked about that in our last episode when we were at the expo. How much does the AI play into the TMS system that you've developed and that you've launched?
JE: I can't release too much of the secret sauce, but it's already a decent sized portion. The things it's doing are, again, pretty amazing, and I think it's only going to ... we just scratch the surface of it.
BB: Yeah.
JE: Well, I think we're past scratching the surface, but I think there's a long, long way to go that we're going to be building and doing. It's exciting. It's a very expensive investment, but I think it's one that really will pay off for our fleet, our customers, and our drivers.
BB: And I mean, what you were talking about before when we were discussing the UAW strike, I mean, you make the little moves now and hope that it pays off down the road as opposed to winning that battle now, or in this case, using that same example, just having the TMS. No, it's not just for now. That's something that's going to build and build and build and continue to help out Load One and your fleet.
JE: They're long-term investments, whether it be technology, whether it be people. Earlier this year, we opened up the facility here in Nashville, another operation center. Last month we opened up our Laredo facility down in Texas on the border-
BB: I was about to ask you about that one.
JE: Continue to see that business expand and grow, our Mexico presence continues to grow. We're one of the few that really handles ... we've got a facility at both Detroit and Laredo, brick and mortar, the two busiest crossing points in the US as near shoring and North American expedite market continues to increase. That'll position us very well. We're one of the few American carriers that have Canadian owner operators and Canadian trucks, and we don't have to cross dock all of our freight at the border like a lot of carriers do, and we'll see what happens with Mexico. That's going to continue to grow in a lot of ways for us.
BB: Excellent, excellent. So it sounds like a lot of exciting stuff going on at Load One right now. And again, this is shouting out to-
JE: It's never boring. It's never boring stuff.
BB: No, no. It doesn't sound like it's that boring behind you. I believe before we started this, you said you're sitting poolside right now. Is that right?
JE: You know what? Yeah. I'm at the hotel, set up on the rooftop. They were cleaning my room, so it's podcasts on the fly.
BB: Hey, somehow, that's-
JE: It's an indoor pool though, so it's not-
BB: Okay. There you go.
JE: It's 30 floors up, so it's a nice view of downtown Nashville-
BB: Yeah, not bad. Not bad. Good gig if you can get it, right?
JE: Yep.
BB: Nice.
JE: It's a great city and amazing the way it continues to develop and blow up-
BB: And like you said before, it's really a hotspot for expedite. You're in the middle of every ... not kind of, you're in the middle of everything.
JE: Yep, for sure. I mean, I see our office here for our facility here continuing to grow.
BB: That's awesome. Well, good deal. I'm glad to hear that things are going well, and again, this is picking up where we left off from the expos. So John, I know that probably the next time we get around to things, we're going to be wrapping up the end of the year, so we're going to see where we stand as we come to an end of 2023. And based on where we started, I'm sure we will get into those talking points the next time around.
JE: Sounds great.
BB: All right. Well, anything else you'd like to add? Anything else regarding Load One or something that you'd like to throw out to the drivers and our listeners out there?
JE: Again, we continue to grow. We recently hired some more salespeople. As far as dedicated expedite sales staff, I think we have the largest nation now for our sales team.
BB: Excellent.
JE: Again, I consider it an investment. We're going to continue to push investment and growth in this company and that. There's going to be some exciting things over the next year that are going to continue to boost the reach and size of this organization.
BB: Excellent.
JE: I invite owner operators who want to be part of it to give us a call or inquire.
BB: Yeah, now's the time to do it, because you get in while this stuff is happening now, you grow with the organization, you grow with the company. So drivers, owner ops out there, listen to what John has to say. He's got a lot to offer. Load One's got a lot going on for you right now. Well, that was an unsolicited-
JE: That was really nice.
BB: Thank you very much. Thank you very much, non-scripted.
JE: And thank you to the drivers again for all you do and truck driver appreciation week coming to an end, and most of all, stay safe out there. I know it's a challenge every day, having to be the professionals on the road. Sometimes you have to be the knights of the highway and forget about the stuff you see on around you and the unprofessionalism that goes on around our trucks every day. But it's all about getting your home to your family safe and sound, and the people around you get home to their family, safe and sound.
BB: Amen to that. Amen to that. Well, John, thank you again for joining me for the episode, and thank you so much for joining us for the State of the Industry podcast with John Elliott. I have been your host, Brandon Baxter. Join us again next time as John and I will continue the discussion, all topics transportation. Don't forget to check out expeditersonline.com and justcdljobs.com for additional access to over 150 carriers who are actively hiring, and of course, that includes Load One. Until next time.