This Is What It Takes to Win in the World of Freight Brokerage

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:16)

So Tracy, this is a special episode of the podcast that we actually recorded at a recent conference.

Tracy Alloway (0:23)

That's right, we recorded it live at the Freight Waves Future of Supply Chain Conference in Northwest Arkansas. We got to meet a bunch of people in the logistics and transport industry and really dive into some of the topics that we've been covering for the past year or two.

Joe Weisenthal (0:39)

Exactly right, and so at the conference, we recorded this episode live on stage with the CEO of one of the fastest growing truck or freight brokerages in America, Arrive Logistics.

Tracy Alloway (0:50)

Yep, here is our interview with Matt Pyatt. He's the CEO of Arrive. We hope you enjoy it.

Joe Weisenthal (0:58)

Hello, I'm Joe Weisenthal.

Tracy Alloway (1:01)

And I'm Tracy Alloway.

Joe Weisenthal (1:02)

Yeah, so we are the co-host of the Bloomberg Odd Lots podcast. We've been doing it for a while.

We cover all kinds of things, markets, finance, and economics, and we're gonna record a live episode today.

Tracy Alloway (1:14)

Yeah, now normally we do cover finance and markets and economics, but over the past couple years, we've slowly transformed into supply chain correspondence because everything that's going on with logistics and transport at the moment has ended up having a really big impact on the economy as well as markets.

And so the further we go into the supply chain, the more we discover that we don't actually know. And we just go deeper and deeper until we finally end up at conferences like this.

Joe Weisenthal (1:43)

Exactly. So I'm really excited. We're going to be speaking to the CEO of one of the fastest growing freight brokerages in America founded in 2014, 1900 employees, raised 100 million, 2.4 billion in revenue. Matt Pyatt, the CEO of Arrive Logistics in Austin, Texas. So Matt, thrilled to be here with you.

Matt Pyatt (2:01)

Thanks a lot for having me. Thanks Freightways. And thanks to you guys. I'm excited for the conversation. Can you give me no heads up on how this is going to go? So we'll see.

Joe Weisenthal (2:09)

We'll figure it out. We're just talking. We're just chatting here.

But I want to get into how the business works and what it takes to be one of the fastest growing freight brokers. But before you in that, obviously lots of concerns about a freight slowdown, a freight recession. We've read all the stories, many on freight waves.

What's your sort of perch into the industry right now? And what's your view on what's happening right now?

Matt Pyatt (2:31)

Yeah, I mean, I'm sure this whole conference, the last couple of days has been around what's going on in the market.

There's been a lot of attention in the media, people making predictions, especially freight waves, where the market's heading. What we're seeing is absolutely what you're seeing in the data.

Those companies that have a high exposure to contractual freight, they're continuing to take all that demand. The freight's not coming to the spot market, so the spot market's getting more competitive. You saw that really accelerate when the fuel prices kind of jumped up to north of $5 a gallon.

So when that happened, not only were their contracts elevated, but then you got the elevated fuel surcharge, which made the contractual freight even more advantageous for the asset-based carriers and the brokers.

And then you had a lot of supply that entered the market over the last 18 months. You heard about a lot of the new entrants, a lot of owner-operators. Obviously, you use equipment going super expensive these days. Insurance is high, fuel is high. So you have the owner-operators that are subjected to kind of a higher fixed or variable cost per mile. And that's really driving a lot of competition in the spot market. And ultimately, it will be a really challenging market for any company, whether it's a broker or an asset that is thriving in the spot environment. So really what we're looking at is how do we balance our portfolio? How do we diversify modes of transportation? But really right now, contract is where you want to be. And those that are in the contract market are thriving.

Tracy Alloway (3:54)

Just on the rates question, I mean, the debate seems to be, is this a capacity issue?

Lots of new entrants into the market when spot rates were really high, or does this reflect some sort of genuine slowdown in consumer demand? Can you give us your gut take on that issue?