บทถอดความฉบับเต็มของ Tighter Capacity Could Extend Rate Cycle

So from each of your vantage points, what is hitting transportation organizations the hardest right now? And what are leaders most at risk of underestimating? Craig, let's start with you. 00:03:09 Speaker 5: Yeah, I mean, this is the most interesting time in trucking. I've been around it, was born in it, been around it my whole life. And I think it's the most interesting time since deregulation. Frankly, because the regulators are taking an enormous amount of look at all of the problems. For the last five years, we've suffered, the industry's suffered from a safety, security, and economic crisis that has created the Great Freight Recession. We're now coming out of it, largely thanks to regulatory pressure and oversight. And that's creating a whole new playbook on how to respond to those events. Technology and AI are part of that story, but I think what's more interesting is how the government is actually interfering in some ways or impacting the freight market in ways that they haven't done in, frankly, years. 00:04:00 Speaker 1: Lee, do you have anything to add to that? 00:04:01 Speaker 3: Yeah, I think Greg really nailed it on the head. In addition to that, there's obviously the macro backdrop, which is extremely uncertain and inflationary, and I think that is having a really big impact on carriers' ability to remain profitable in this current environment. But with rates going up as they have, obviously that has been a great tailwind for them to mitigate those sort of risks and costs. Excellent. 00:04:31 Speaker 1: And Alex, from your perspective? So from a shipper perspective, we've been struggling a lot with availability of loads. Some in some certain areas of the market and some others, lack of abundancy there to be able to find it. Then also the cost. The cost really has skyrocketed for us and it's very difficult to pass the cost down to our customer. They are willing to accept some of it, but it's been a real struggle to pass it down on the shipper side. 00:04:59 Speaker 4: So is this a. 00:05:00 Speaker 3: Temporary pressure or structural change. 00:05:02 Speaker 1: Leaders need to plan around? 00:05:04 Speaker 4: Structural. 00:05:06 Speaker 5: We're pretty close with the FMCSA and DOT. I've had a number of conversations with Secretary Barr's who's in charge of the Federal Motor Carrier Safety Administration. And the way that they're leaning into regulatory oversight are ways that we haven't seen. If you think about, I bet many in this room couldn't even name an FMCSA director that wasn't named bars prior. It's had an enormous amount of turnover in that job. But I think this administration is taking that job very serious. It's really starting all the way from the top at the White House and down. And it fits their overall mission well. Whether you like the policy or hate the policies, DOT is executing Trump's policies, but they're trying to put rules in place that codify these so that regardless of administration, that we will have a tighter, more secure, and more regulated market than we had before. 00:05:59 Speaker 4: And I think what's. 00:05:59 Speaker 5: Interesting about it is it used to be or had been over the last decade is a lot of the very powerful lobbying groups and very powerful operators like the ATA are were pushing for deregulation and lowering the barriers to entry. And I think what they've learned is that by lowering the barriers to entry, making it easier to get into the market, particularly for truck drivers, that it was actually hurting their business. And I think if you follow the money, the largest participants in the market, the largest motor carriers and the associations have sort of woken up to this safety, security, and more importantly, economic crisis. And so I think we're going to have persistent regulatory oversight and change. And that is going to change the entire trajectory of this market. So I would say, based on what I understand, is we're just getting started. And it's not just the federal, the feds that are doing this, but it's also extending to the states. And now, post-Montgomery, you have the Supreme Court and the court system that is actually regulating brokers, which have not... The FNCSA would tell you they don't regulate shippers, they don't regulate brokers. Now the court systems are taking the responsibility of regulating freight brokers, which is also going to change the trajectory of this market in ways that I think are going to be pretty profound. 00:07:20 Speaker 4: That's excellent. 00:07:21 Speaker 1: We'll get into some of the Montgomery discussions maybe a little bit later here. Lee, what do you think has changed most over the past, I was going to say year, but things change like every week it seems like right now. What do you think has changed the most this year? 00:07:35 Speaker 3: Well, I think it's really the supply side that Craig was talking about. You know, we view what's going on there as really creating a different rate cycle than what we've seen in the past. Really, it's going to be an elongated rate cycle. So higher rates probably for longer. And, you know, at the end of the day, no matter who's in the White House, you know, no matter what party's in the White House, we think that what the federal government is doing today has been a net positive for road safety. And so I don't see, you know, a lot of the things that the Trump administration is doing to get necessarily rolled back. You know, I think it's road safety is something I think we all can agree on. It's a good thing. And what they've been doing is helping to improve the overall safety of the rules to take roads, taking people that shouldn't be behind a truck off the road. So I think that's that positive. 00:08:26 Speaker 4: And then, you know, what's changed? 00:08:29 Speaker 3: You know, it's whatever's going on in the Middle East, whether it's the Strait of Hormuz, you know, it's like game on, game off. And that's obviously having a huge impact on

diesel pricing. And that's a huge input for the trucking industry. So, you know, geopolitical trends, I think, is a big thing that's been changing. And then, you know, what Craig was talking about on the supply side. That's a great transition into the next topic. So several of these pressures come back to the health of the freight market. Are we entering a real and sustainable freight market recovery, or are the current improvements mainly being driven by higher operating costs and capacity leaving the market? 00:09:09 Speaker 4: Craig? Well, I mean, the answer is yes. 00:09:11 Speaker 5: A lot of the improvements are because we are seeing structural changes in capacity created by regulatory changes. You're seeing less entrants come into market. The driver hiring situation is as tight. I'm sure folks in this room would attest to how hard it is to find truck drivers. And ultimately, truck drivers is the capacity constraint. The manufacturers can produce more trucks. It is really about whether we can find the truck drivers. And immigration over the last two decades has been the primary source of new truck drivers. The BLS data says as much as 23% of truck drivers are first generation immigrants. That was in 2019, that number by insurance estimates has probably doubled to about 40%. And so as we take immigrants out of the market, for regulatory change, change of immigration policy, and put more restrictions in place, that's going to reduce the available capacity. 00:10:06 Speaker 4: So that means that. 00:10:08 Speaker 5: We have this environment where it's going to be harder to add truck drivers to into the industry and because of the harder structural changes, that means this cycle. I mean, trucking has been historically, I'm sure the owners in this room can appreciate how low the return on capital and return on investment is for truckload particularly. This is giving, the structural change is gonna make it an environment where you do get a proper return for your capital because the winners are gonna be those that can recruit drivers and keep them running. And I think that's, back up what Lee said, I wrote an article, an opinion piece in the New York Times, which is not a place that you typically see pro-administration. 00:10:56 Speaker 4: And it had some very favorable things about DOT. They published it. 00:11:00 Speaker 5: And what was amazing is they actually shut down the comments after we got to 1,200 comments. And you would expect if it was a pro-administration article, that the comments would have been far more negative. And I thought it was interesting that the majority, probably 95% of those comments were very positive because it was in the mind of safety. There are 5,000 people a year that die from heavy duty accidents. The trucking on a per mile basis, the fatality rate has actually increased over the last decade, not decreased. And yet larger motor carriers have invested substantial amount of money in technology, safety, and training,

and they are getting safer. 00:11:40 Speaker 4: But something else is amiss. 00:11:41 Speaker 5: And so I think any administration in the future, to talk sort of back to what Lee said, is going to have a problem going to the public and talking about lowering safety standards to allow more people to be in our industry. We have crossed that chasm, and I think it's a permanent shift. 00:11:57 Speaker 1: Alex, from your perspective, are you seeing any of this coming through and translating into actual bids, rates, or carrier negotiations? So for us, a couple of things that I'm going to be addressing some of what you said. as we're doing more understanding of what's happening in the market, we've seen that over 110 schools of driving, teaching drivers have closed in the last couple of years. And then we also see the aging, the average age of the driver continue to elevate, and we're not seeing. 00:12:25 Speaker 4: The new introduction into the market. 00:12:28 Speaker 1: Then when we sit back and realize what's going to be that within three to five years from now, well, we need to see more development on the self-driving vehicles. where it's going to need to have from point to point, and then be able to allow us to have a better position on the availability of those long hauls, those hauls that do require a manpower to manage those. So from us, to your question, the increase rates, we are seeing them, the lack of availability of the lanes that we need, long haul especially, short hauls have been easier, but the long hauls we've been stressing substantially. It's maybe one of the, we were talking about this backstage, maybe one of the first conferences I haven't heard about autonomous trucks. And you were talking to Craig a little bit about that. Craig, what was your response to that? 00:13:14 Speaker 4: I mean, it's coming. I think it's not a matter of if, but when. 00:13:17 Speaker 5: And I think we're going to see the capacity shortage, because I don't like the term driver shortage, because I think fundamentally the market corrects. But this capacity tightness and safety awareness is going to increase the investment and adoption of autonomous technology. question is i think we can argue about the timeline for that it's probably more ubiquitous in a decade i think we'll be sitting here but i think we'll start saying um we will start going beyond pilots within the next couple of years i think 2032 to 2035 um within the next six to eight years is when you're going to start you guys are likely tendering to some form of autonomous um and this i think if we sort of think about politics because the regulatory environment is a political situation, I think it's likely that the next administration, that autonomous and AI become the topic of importance because of the overall social and labor questions that are out there. And so I think this is what my assessment of that is that the technology will be ready before the public necessarily is. Excellent. 00:14:28

Speaker 1: We've been quiet in this question period here for this one. Do you have anything to add or to support? I'm probably a little. 00:14:36 Speaker 3: Bearish on autonomous being widespread. I think it's more like 20 years out than 10 years out. I think it's going to work in certain applications, but it's not going to be widespread across the country. I think certain applications, it's absolutely a good and interesting technology. To Craig's point, I think it's the, it needs, we all need to be comfortable with it. And I think that's going to take time because the perception of, you know, trucks are, they're unsafe to begin with by the, you know, the driving public. And I don't, I don't subscribe to that. But so, and if you don't even have somebody behind the wheel, I think people are a little skittish about that. And there's a whole lot of regulatory issues that have to be ironed out as well. 00:15:19 Speaker 4: You know, it is here. 00:15:20 Speaker 3: I think it is viable, but I think the application has to warrant it. 00:15:27 Speaker 1: We were talking a little bit in the question here about the recovering freight market. Lee, what do you think could cause the recovery to stall here? 00:15:37 Speaker 3: Well, I mean, from an economic standpoint, we're seeing mortgage rates at 7%, making housing less affordable for people. And people aren't refinancing their mortgages usually when they either buy a new home or refinance their mortgage. You know, they might spend some money to, you know, buy a couch, buy a refrigerator. And that all goes in a truck. So, you know, a bad housing market is not necessarily good for trucking. And then also, you know, you're probably going to have another the Fed, the Federal Reserve will probably increase interest rates again. The market is forecasting about a 25 basis increase, one more increase this year. Some expectations are for maybe even two times, which is a pretty incredible comment because 12 to 14 months ago, we were all talking about rate cuts. So the interest rates were definitely going in the wrong direction. And that just makes everything expensive from homes to credit cards to autos. And those are things that are good for freight demand. And then you also have the K-shaped recovery rate. meaning that, you know, people at the high end of the income ladder are doing pretty well and, you know, higher gas prices really aren't going to change their purchasing behavior. But it's eating into, you know, the lower rungs of income households. And that's moving up and up into the middle income households. So, you know, as as as fuel remains higher for longer, as interest as I'm sorry, as inflation remains persistent, that's really going to weigh on the consumer. And, you know, we did see recently the Michigan sentiment index for consumers came out and it was at a very low level that we haven't seen in quite some time. 00:17:24 Speaker 4: Nimbism. 00:17:25 Speaker 5: That's what's going to kill the freight

market. And it's the thing that's holding up the economy right now are all the CapEx and AI data center build out. And if you were to get, and maybe during the next election cycle, They would put a moratorium on data centers or, heaven forbid, power plant production. Something crazy that happens in Washington that stalls out the CapEx build-out, that would absolutely crater the freight economy. Because to Lee's point, we track the data. Consumer freight has slowed down. I wouldn't say sharply, but much greater. That's what kept the freight market going for the last couple of years. It's the industrial side of the economy that's doing well. If you put a moratorium on data centers, that's going to crater the industrial sector. Data centers, whether you like them or not, or want them in your back, not or not, are a gift to the freight market and to our economy. It's the largest CapEx build out in history. And if you didn't have that, we would be talking about. 00:18:25 Speaker 4: A very different market. 00:18:27 Speaker 3: And that industrial economy and the strength you're seeing in the ISM index, which has been in expansion territory every month this year through September. Prior to that, it was in contraction territory. I believe it was like 36 out of the last 39 months prior to 2026. So the AI spend, the data center spend has really been a boon. And it'll be interesting to see if that has legs and can continue. 00:18:54 Speaker 1: So we talked a little bit about the fuel prices, the economic cycle. Organizations can't really control that, but they can control how efficiently they operate. That brings us back to technology. So where is AI-driven automation producing measurable operational value today, and where are we still confusing experimentation with real transformation? Alex, do you have any operational or procurement examples that you can share utilizing AI? Yeah, we do have. Currently, we're using the TMS system. We use the Trimble's products here in our organization. It's allowing us to make decisions a lot quicker, We were able to do procurement on real time and have multiple carriers bid at the same time for our loads. We also were able to put prices out there for where we're willing to pay for those lanes. And then the system is learning what our patterns are, and then it's putting it out by itself. so it's allowing us to be more efficient tremendously from the ai side in what we have coming forward on on our ability to the back office be more efficient and be able to carry more lanes without having to increase the labor force craig what do you think um this has kind of on the market or the brokerage impact with the AI being introduced to help speed things up here for selections? 00:20:15 Speaker 5: Yeah, I mean, I think AI is a continuation of a process. I mean, brokers, and I tell this to every founder, are always the easiest customers to sell into. If there's any founders in the room thinking about technology, sell it into the brokerage industry because effectively these guys are your day traders of the industry. They're the ones that are most willing to adapt and add use. far more than the asset carriers. Selling into asset-based carriers is a very long sales cycle. They tend to be much more cynical about improvements, but that's a penny's business where they have to be. That's how you survive running an asset carrier is you have to pay attention to every penny. 00:20:51 Speaker 4: Brokers don't have that problem and they're willing to adapt technology. 00:20:55 Speaker 5: AI is a manifestation of a trend that's been going on since the beginning of brokerage, which is anything that can give them the edge to either buy more efficiently or I mean, there's only two ways to make money in brokerage. Either your margin expands on a per transaction basis, or you do more loads. Margins are going to compress and are continuing to compress, particularly around this regulatory environment, because shippers are now going to, they're flexing and saying, I need to know, I don't know if you guys have done this, but they're now screening who their brokers are buying capacity from. which means the price, the clearing price for brokerage. 00:21:34 Speaker 4: Is going up. They're having to pay higher rates. 00:21:37 Speaker 5: And yet shippers aren't necessarily accepting the kind of contract rate increases that allow brokers to make the kind of money. So the only way brokers are going to increase their profits is to do more volume. And AI is a way to help them optimize that solution. So the more technology, the more loads that they can push through the system, they'll be able to grow. And those that don't, aren't able to do that, are going to continue to find it's a more and more difficult environment. 00:22:04 Speaker 1: Alex, do you agree with what Craig was just mentioning there? Yes, I do. And I also think the customer loyalty and the customer intimacy with those customers that you have today that are giving you those routes that are working for you, take care of them closely. Know their business better than you know your own business. Know when their next lane is going to be. Know when they should be shipping something and they're not. Because, I mean, they're going somewhere else. It's giving them a lower number. For me as shippers, not always the cheapest lane. It's that making sure that I have no risk and that's being delivered at the time that my customer is requesting. We do a lot of job site deliveries. That's extremely important because a crane is waiting, a crew is waiting. And for us, it's that delivery. It's what makes the success of that product. Passing down the cost. In the industry, everyone sees oil prices. Everyone sees what's happening with immigration, right? So sometimes it's a little easy for us to pass down an incremental cost to our customer as long as the data is visible to everyone. So we've been able to do some increases on freight to our customers. And

they've been, the whole industry and the construction, they've been agreeable to it. But they also want to see the decrease. When they see the fuel going down, they want you to react quickly. So we need our shippers to react quickly when it comes to the surcharges and the fuel surcharges, when we see the reduction, the same thing that is happening when we see the increases. 00:23:27 Speaker 5: I think one thing on that point, I think Montgomery is a massive gift to the asset carriers. Because now there's going to be, we talked about this backstage, is that shippers are also, I mean, there are four lawsuits right now where shippers are being brought into lawsuits. And Montgomery is encouraging plaintiff's attorneys to go after every party that had anything to do with those loads. Now, whether or not these stand up in court or not is to be questioned. But plaintiff's attorneys are looking for every party that they can find fault with. And so if I owned assets, I would be leaning into that story as I pitch. Like going after the cheapest price, you're exposing yourself to a massive amount of potential liabilities as a shipper. So owning assets and being able to determine that I control the custody of that load the entire process is a massive gift for an asset carrier. And we've seen lawsuits where Penske and J.B. Hunt were involved in them where they brokered a load. Those loads got doubled or triple brokered. And now the court system is allowing all parties, including parties that had no idea that the loads were being double brokered, to be called into the courts. And so this is liabilities increasing. Shippers are not exempt from that. And if I'm a shipper, I'm spending a lot of time to understand who my providers are. And do I trust that they're hiring the drivers that are going to be safe? 00:24:58 Speaker 1: Our few legal situations that we've had in the organization when it comes to transportation has been exactly that, double brokers. And at the end, we have to solve the problem. We end up double paying for the freight. So before getting all the attorneys and everyone involved. So it is a problem for us that we're dealing with. Lee, do you have anything to add from your perspective? I feel like I keep coming back. You're like in the middle of these. I do feel a little neglected, I'll be honest. 00:25:22 Speaker 3: On the AI front, I would say that, you know, I think AI is one of the few. I've been covering the space for 20 some odd years. And it's the first technology hype that's actually worth the hype. You know, we talked about autonomous. We've been talking about autonomous this year for 25 years. Maybe not 25 years. We've talked about blockchain. There's all these other things that, you know, came and went. We're just taking a lot much longer to progress. But AI, we're definitely seeing, you know, the benefits, whether that's, you know, a broker using it to, you know, when there's a missed pickup to figure out, you know, when the next pickup should be or customer service rate pricing. route optimization. There's a lot of tools that AI can be used and they can be as sophisticated as building stuff that maybe C.H. Robinson's doing or some off-the-shelf things as well. So there's a lot of things that can be done there. And then on the Montgomery thing, we're definitely seeing that in higher insurance premiums. 00:26:26 Speaker 4: J.B. 00:26:26 Speaker 3: Hunt called that out. Their stock went down, I think it was like 12% a couple of weeks ago. because they guided down their third quarter expectations and a lot of that had to do with higher insurance premiums, among other things. So that's definitely a headwind that the carriers are going to have to figure out. And it's good that they have the tailwind of a better rate environment behind them to try to mitigate those additional costs, the cost to retain and attract drivers. and obviously, you know, equipment's going up, too, with the new EPA-compliant laws. You know, they're going to be a lot more expensive as well. So, you know, if truckers are expected to, you know, generate a decent ROI, rates have to keep on going up from where they were because at the end of the day, during the freight recession, it just wasn't a viable environment for companies to operate in. I mean, they were not operating. They weren't making money. They were just, you know, if they were lucky, they were able to pay their debts. 00:27:27 Speaker 1: So you're mentioning some of the bigger carriers. Where should a smaller carrier without a large technology team start today? 00:27:34 Speaker 3: I think there's also an appetite within certain industry organizations, whether it's the truckload group or the ATA, to kind of share best practices. And I think that's a place where a lot of the smaller carriers can go. And to be frank, it is going to be harder for them to compete against the larger carriers. You know, Craig mentioned the larger carriers, some of their core competencies. is attracting and retaining drivers. They have the budgets to spend the money, the capex, on developing either AI stuff internally or buying it off the shelf. So it will be very interesting to see what happens to these smaller carriers. But the good news for the smaller carriers is that if they run safe trucks and they have safe drivers in their networks, they will be okay because safety will be coming at a premium because of things like the Montgomery case. 00:28:32 Speaker 1: So this might be my favorite question here. What decision should not yet be handed over to AI? Alex? 00:28:39 Speaker 4: Which decision should not get behind? 00:28:41 Speaker 1: It should not be handed over to AI. 00:28:44 Speaker 3: Well, and I think I said it earlier, the customer intimacy. 00:28:47 Speaker 1: AI would be great for the efficiency and everything you want to build, but that touch still needs to be there. Still need to call whatever that contact person is. You still need to call that customer

service. Make sure that you know you have their back. You're there for them. Do you know their business extremely well? AI is going to be, you know, efficiency for the system itself, but do not lose the touch. 00:29:09 Speaker 4: I had to echo that. 00:29:10 Speaker 5: I think if you're a broker, your most important discussion is either your customers, your shippers, or the carriers. So a lot of brokers have implemented AI solutions that sort of talk to the drivers. I think that's a massive mistake because drivers... And I've said on a board of a company, when they first implemented AI, they were very excited about the results. Next board meeting, they came back and said, our results have gone, we've gotten no more productivity in fact, we've upset our drivers. Um, and I think as a, and then everybody implementing AI around shipper engagement, we all, we all can read the content. I run a media business. I know what AI content looks like. We all can tell when it's written by AI and there's nothing more annoying than getting customized emails that look like they're specific to you and knowing that AI wrote it. And so, um, I think I would de-emphasize AI in anything where I have a value-added proposition, either to my shipper relationships. So many places you can use AI in your business that you don't actually put it in between you and your most important resources. 00:30:14 Speaker 1: Yeah, Alex, you mentioned backstage, you were talking about just getting hammered with all these generic emails, right? They're probably coming from some sort of AI system. What are your thoughts about that? So, you know, as on the shipper side, It's on a daily basis. We get phone calls or be more like we get emails. All the emails are very script. You know, we could do everything for you. 00:30:34 Speaker 4: We're a broker. 00:30:34 Speaker 1: We could do everything for you. 00:30:36 Speaker 4: Those are delete, delete, delete. 00:30:38 Speaker 1: But when I get one that tells me, I know you moved product from Texas to Florida and I see that you do eight or nine, you know, per week, 10 or 12. 00:30:48 Speaker 4: They know that. And they say, well, you know what? 00:30:50 Speaker 1: I have a back call that is in Orlando and I could take it back to Texas for you when you have the vice versa. To me, I have to forward that next to someone in my team to make sure we start a conversation. So now you did a little bit of homework. Now I'm not just an email. Now you have a vested interest in me and the fact that you did homework and you're telling me, now there's an opportunity for us to. 00:31:11 Speaker 4: Have more conversation. 00:31:12 Speaker 5: Especially if it has a grammatical error in it that you can tell is not written by AI. I talk to a lot of influencers that are, it used to be all of our stuff would sort of go through a copy editing process. Now, if you see someone that tweets, I tweet, Roth, and you know it's not AI, you kind of know there's a human behind it.

And a lot of the problems is you can get specific. Someone's going to, I'm getting an email today saying, I saw you at the Trimble event. Somebody who's never been there, was not here. And they'll talk about what we talked about because the stuff is all available. 00:31:44 Speaker 4: AI will find it. 00:31:46 Speaker 5: You want to look authentic as possible. 00:31:49 Speaker 3: Sure. 00:31:49 Speaker 4: Grammatical errors do a really good job of that. 00:31:51 Speaker 3: Okay. 00:31:52 Speaker 4: Got to go back. Don't copy edit your email. 00:31:54 Speaker 1: Take the spell checker out, right? All right. So moving into maybe our final question here. If you were advising a transportation executive planning for 2027, what is one decision you would urge them to make? So we'll go Alex, Lee, and then Craig. For 2027, I think you need to understand the ability that's going to be for your lanes. What is really going to be restricting traffic? The ability for me to move product from point A to point B. Some of the stuff that we're doing, because of the freight cost today, we're investing and we're moving manufacturing from a certain part of the country right next to where the customer is. Even if it costs us whatever amount it is to do it, because we have no control what. 00:32:38 Speaker 3: The freight cost is. 00:32:39 Speaker 1: So understanding that portion from the freight cost, what is going to be going forward, for us, it's extremely important from our side. From the shipper standpoint, your costs are going up next year. Figure out a way to deal with it. On the trucker carrier side, I'd say invest in your drivers because they've always been your most important asset, but they're becoming more and more important to run a successful fleet. I want to add a little bit on the driver side. From what I see in the transition, in the business we're in, we do a lot of schooling and training. We teach our installers how to install our product and we certify them ourselves. I don't know if that's a move that it could be happening into the industry. As we see, you know, driver school closing, kind of large carriers or the carriers start their own school system and they train their own carriers certified to become the drivers. 00:33:33 Speaker 3: Maybe it's out there already, but I'm not familiar with. 00:33:36 Speaker 4: Some of the large. 00:33:36 Speaker 3: Carriers like XPO have their own driving schools that people that did cross-doc work can go in and learn to be a driver and get their CDL. 00:33:45 Speaker 5: Yeah, I just think this is an interesting time to own trucks, brokers as well, if you can lean into compliance. If I were running a fleet and I was talking to my sales team, I would be leading with compliance. I would tell the story to shippers that this is how we ensure that we've hired drivers that are safe. We're not brokering your freight out or double brokering your freight out. And I would make that my lead of my pitch because if shippers aren't thinking about these issues, they're going to in the near future once compliance sort of takes over and legal takes over. And I think I would lead with that because that's not a pitch you normally hear. Everybody chases price. But if I owned assets, I would be emphasizing why am I safe to do business with? Why is your freight secure? Why is the government not going to shut me down? Why do I have the financial wherewithal to deal with this, I would lead with compliance. It's a boring topic, but that's why there's opportunity. And I would use Claude to write, it's an area where you could use Claude to write a pitch deck, but I would really emphasize the areas that I'd made the investments to ensure that the freight is safe, secure, and is not going to end up being disrupted. And I think that's how you win a market share in this round. 00:35:09 Speaker 1: One comment on, One of the most successful carriers that we have, they have a mix. They have their asset owned and then they have a brokerage owned, which then is allowing them for us to guarantee us a certain amount of strict lanes that are happening on a daily basis. And then wherever that extra is, the new orders that come into the system, then they go broker those out. But it's really giving us a safety elimination of risk because they have the asset always available to us. So that's a recommendation. If you guys have then do some investment. I think that's definitely investing in the asset is something from the shipper side that we would appreciate tremendously. 00:35:44 Speaker 5: And someone that's cutting your rates, that's giving freight that's far below your operating costs, there's probably something questionable about the providers that are offering that service. 00:35:56 Speaker 4: And I would definitely lean into that. 00:35:57 Speaker 5: And if you lead with compliance and you point that out to your shipper, they have to think about whom they're doing business with. 00:36:03 Speaker 1: Excellent. Well, the message I'm hearing from this panel is that readers cannot wait for perfect clarity. They need to understand what is structural, be disciplined about where technology creates value and makes decisions that build resilience now. That's going to do it for all of us here on the main stage. Craig, Lee, Alex, thank you. Thank you, everyone. 00:36:23 Speaker 2: And that's a wrap from Trimble Insight 2026 in San Diego. A big thank you to Craig Fuller of Freightwaves and Alex Formoso of Polyglass for joining me on the panel. and Martin Schmidt and the entire Trimble team for bringing us together for a great conversation. My biggest takeaway is that the freight market may be entering a very different cycle. Capacity is tightening, regulatory and liability risks are changing, the economics of trucking and higher costs could keep pressure on rates. At the same time, AI is moving quickly from hype to practical applications that can improve productivity, pricing, procurement, and customer service. But technology doesn't replace everything. Drivers, customer relationships, safety, and execution remains critical competitive advantages in transportation. If you enjoyed today's episode, please follow Talking Transports and take a moment to rate, review, and share the podcast. You can find us on Apple Podcasts, Spotify, and wherever you get your podcasts. Also, you can reach out to me on the Bloomberg Terminal, LinkedIn, or on X, where I'm at, Logistics Lee. I'm Lee Glasgow at Bloomberg Intelligence, and this has been Talking Transports. Until next time, keep it moving.