What is an asset?

“An asset is something that has monetary value and can be owned by an individual or business. Assets can be tangible or intangible.”

It’s a term we hear a lot in the trucking industry.

Make no mistake - LTL carriers are my religion.  They are who I identify with, will eternally support, and who I believe are the roots of the trucking market.

Assets, though.

To me - at the most basic level - it’s control over a process.  It’s a resource that can be plugged into any applicable situation to solve a problem.

It brings with it - power and trust. Physical-ablity and tangibility.

It’s long been a simple equation that carriers have assets and brokers/shippers don’t.

I think we’re at an interesting time however where that is quickly changing.

Information or intellectual property is an asset.

Sentiment is an asset.

Energy is an asset.

Capital is an asset.

Code and media are assets.

Times are changing - and they aren’t going back.

What does this mean?

It means that an asset based carrier with trailers, tractors, and drivers in the seat can absolutely still control their own destiny and make decisions that impact their own bottom line. 

As they aways could.

It also means that they don’t control the market and market cycles like they have in the past.

Government deregulation is long past.

Trade assocation influence is going to be the next to fall.

Technology, IP and collaboration are what decentralizes the power in any market - and those who leverage it will do well - those who fight it will die.

Take the shippers out of this equation - they will always be there and have a need.

The real equation involves on-the-ground capacity providers, LSP’s and technology providers.

I believe that a capacity provider can build a flywheel that taps into all of the other afore-mentioned parties above…with the singular goal of having:

Available, high quality capacity for shippers that need to move physical goods - run those goods through their networks - and spit them out the other side on time and intact.

We’ll dig into what this could look like in a future article.

As always - thanks for reading!

LTL is NOT moving to density based pricing in 2025.

These are my thoughts & opinions only. Feel free to leave yours in the comments.

I think what is happening, practically, with the current NMFC class change campaign is a great thing - and a bigger step towards change than what we've seen in recent years.

It'll take a long time to shift the trajectory of what is this very large ship. Shippers wouldn't be ready for this overnight.


BUT. Fam. Lets call it what it is. A slightly bigger step than those previously taken - however not in a new direction.

Like most things centrally managed - the concept might be golden - however the execution and lack of awareness for downstream impact usually falls short.

I also want to dispel the notion I am continually hearing buzz and fly around the industry, which is that this is THE change. The big one. The move to density based.

"Oh - that thing I've heard about for 15 years? Yeah, this must be it."
"Oh, they must have finally done it - good for them."

Nope. Sure isn't.

Please remember this:

As long as there is a direct correlation between an LTL bill of lading and the specific classification code for that product (or it's family) - there is no true innovation here.

Is it change? Absolutely. There's going to be all kinds of pricing chaos
TONS of busy work. Got to re-align all of those juicy little FAK's with the new actual class breakdown. It's going to kick up a cloud of admin work, billing discrepancies and activity for really a whole lot of nothing.

Let's recap though: FAK's will still exist. Classification codes and commodities will still exist. And carrier pricing teams will be overrun with work. Sounds like nothing much changed.

This is a desperate grab for relevancy in a quickly changing industry.

As long as there is a single specific commodity code for a product shipped, or group of products shipped - we have not simplified anything. We are all overselling this as the path to simplification. It's not at all. Yes - after the dust settles it'll be a little less noisy and the standardized density scale for those commodities where it applies will be great.

It's extremely difficult for any organization to innovate out of who they are at their core.

I think it's time for the NMFTA to stop being the parents of the LTL industry and either lead or get out of the way with TRUE innovative solutions.

We need characteristics classification - not commodity. Way too granular for the pace of our evolving world.

Jameson Goforth, VP at ITS Logistics and former GLS executive says: 

“It’s a fun time to be in West Coast LTL. With so much recent change, there’s a vacuum that in time will absolutely be filled by the fittest Regional out West. The GLS acquisition should be immediately accretive to DC’s quest to win that race. Be it in density, people, or reach, DC added a valuable piece of the puzzle today.”

Scooter Sayers, of Sayers Logistics, LLC and Cubiscan shares:

MVL was a very good carrier but I think lost a step or two after GLS bought them. MVL was #6 on the Mastio list as recently as 2018 and had a very good reputation.

If this brand can be brought back, both in name and service, it has the makings of a formidable and emerging player when you add in their Mexico cross border capabilities.

This is just another very compelling story taking place in LTL. Never boring.

Doug Russ, CEO of Premier Logistics Partners says:

"The Western US has needed a boost in LTL service capacity and coverage. DC Logistics’ acquisition of Mountain Valley Express will bring a strong solution to these needs. At Premier Logistics Partners, we look forward to working with this new group to help service our LTL customer base in the West!"

Todd Fain, President of Reconex mentioned:

"The next big hurdle here is the integration of the business and culture of these two carriers - but if they succeed - this will be exactly what the doctor ordered for this region - and particularly to balance out LTL market share in the West where it might be a little national carrier heavy currently."

Hey everyone.

Announcing the next ULTL Playbook Live event!
November 11-12th 2024 in beautiful Asheville, NC. It'll be peak leaf viewing season and peak LTL season (it always is :)

Running a couple promotions on this:
- coupon code "EARLY" gets you $1,000 off!! But only 3 of these exist - so GRAB one today.

- for returning attendees - if you've been to one of the first 2 events - use code "RETURN" for $500 off. No limit here, but you have to be a return guest.

One other major update - we are going to allow tech demos - starting with 3 companies this time. HAS to be tech that's very relevant to the LTL market. If you're in this category and want to participate, please shoot me a message directly.

Sign up link.

Don't wait - I expect these to move quickly.

What a great few days, spent immersed in LTL, surrounded by passionate and thoughtful people.

Huge thanks to our 4 partner sponsors for making this thing happen.

To call each one of them out, please see below for a quick ‘blurb’ about each:

NAVIX

Navix automates freight audit & invoicing for freight brokers and 3PLs easily and delivers results immediately. Navix reduces DSO by a minimum of 3 days, which improves cash flow that can be re-invested in your organization. Navix uses machine learning and AI to flag errors instantly and enable auto resolutions, and easy disputes without having to search for a single PDF, invoice, or document. This enables workers to perform more efficiently and effectively and allows them to focus on the growth of their business. 

For more information, visit https://www.navix.io

DDC FPO Solutions

DDC FPO is a strategic business process outsourcing (BPO) partner that enables clients to focus on core competencies and achieve their goals.

As a strategic business process outsourcing partner, it is our mission to arm today’s business leaders with custom-built solutions that protect their operations, strengthen their performance and support long-term, sustainable revenue growth.

Our vision is to drive the advancement of the industries we serve and facilitate a ripple effect of empowerment for each of their respective communities by way of innovative people, processes and technologies.

For more information, visit https://www.ddcfpo.com

Benesch Law

Big thanks to Benesch Law Partner Laura Kogan for coming out to represent the firm.

Laura Kogan is a Partner at Benesch Friedlander Coplan & Aronoff and has a broad range of experience defending public and private companies in commercial litigation. She has defended corporations in paramount legal matters, including multimillion-dollar class actions, significant business disputes, consumer claims, arbitrations, statutory issues, and litigation threatening company operations. Laura has secured notable wins and brokered favorable settlements for public and private companies. She regularly briefs and argues motions in both state and federal court, and the outcomes of her matters have had industry-shaping implications.

Laura served as a Federal Judicial Law Clerk to the Honorable Benita Y. Pearson in the Northern District of Ohio. Since her federal clerkship, she has garnered considerable recognition by the nation’s foremost legal publishers. She is a four-year recipient of both the Ohio Super Lawyer Rising Star Award and Best Lawyers in America Ones to Watch for Commercial Litigation Award.

For more information, visit https://www.beneschlaw.com/

Please see this link for registration and information.

Only 30 spots available. Don’t dither!

- Curtis Garrett

These are my thoughts….

The US Less than Truckload (LTL) freight industry is very quickly expanding as we find ourselves just past the halfway point of 2020. I’ve thought a bit about what makes some national account reps stand out from their peers - and decided it might be time to share.

Below is a brief overview of how the industry is broken up currently, and 2 reasons why certain NAE’s just are much more effective than others.

First, here is a custom (and accurate) drawing of the current LTL Carrier-Scape using colorful circles:

Pretty impressive, right?

The first 3 circles represent 40% or so of the entire LTL market from an asset based carrier perspective. That’s a lot!

Now, within each of these circles in the approximate $50 billion of LTL freight annually - there is a group at each carrier commonly known as the “National Account Executives” or “VP of Strategic Accounts” or some other fancy name. They are a group of folks that handle larger accounts (usually $1mm/annually), as well as the mid-sized to large 3PL accounts.

Basically, a ton of freight flows through these people - and they (normally) travel a million miles a year, while also receiving millions of emails, jumping on calls, joining meetings, and getting to know their clients on a personal level. Sounds exhausting doesn’t it? It is, and only a special few are cut out for this.

I would safely estimate that 62% (or roughly $32B) of all LTL freight is managed by a national account rep somewhere, somehow. And not all of them do it with the same pizazz that sets the top 20% apart from the pack.

This truly is an 80/20 scenario within a greater 80/20 scenario! The national account reps are the 20% that handle 80% of the LTL business within their companies - and then the top 20% of that 20% are much higher quality than the remaining 80% of national account reps.

One you get your brain untwisted - I’ll tell you the biggest reason why the top 20% are so good.

They see the forest for the trees.

That’s really it...the biggest reason for success. They understand that while they will have to get into the details and reverse-engineer some problems that come their way - they aren’t drawn into the trap of living within policy-land. They see the macro and understand the big picture. They’ll take a short term “loss” if they need to, in order to win in the long game. 

This doesn’t mean they always cave to the customer and agree to all requests - but it does mean they look at each situation fairly, and balance the details of that with the larger, overall strategy. Not everyone can do that, and those that can probably take it for granted that it's even a skill they possess.

Secondly -- good national account exec’s are vortex’s. They pull opportunities, people, business, and ideas right into them with an energy that’s hard to miss.

They won’t sit back and wait for the RFP’s to roll in. They won’t react after the billing or operational issue has already happened. They deeply understand the full beginning to end of their customer’s business and will advocate internally when needed, as well as push back externally when required also.

They are folks that are hives of ideas and innovations. Always have a solution to a problem, and isn’t OK replying with a “no, we can’t do that.”

By definition these human vortex’s reside outside of the proverbial box.

Just some thoughts! There is so much more I could have covered here, and may at a later date - but wanted to get this out into the industry in order to crystalize and refine my thinking on this.  

PLEASE - comment and let me know your thoughts. Agree, disagree, add, whatever!

-- Curtis Garrett

The elephant should be the official animal of the LTL industry.

Which family of elephants specifically?  I have no idea.  I’m not an elephant expert.  

Stay with me…

There is one primary trait that prompts me to make this statement, and that trait happens to be the elephant’s memory.

Just like the friendly elephant, folks in LTL have bizarrely long memories when it comes to what they perceive as partner inflicted pain. Shippers especially.  

It’s really not that uncommon when involved in a casual conversation with a shipping or warehouse manager, to hear them bring up a specific carrier, either at your prompting or as a reflex connected to some deep down, way back trauma.  

Something may have happened years ago, either to them, to their predecessor, or their superior.  Either way - it HURT.  They want you to know that it hurt.  The past scars then led to a decision made at some point to cease doing business with that company.  And that decision has been passed down as tribal knowledge for all to obey and nobody to question.

The interesting solution here is that all shippers - especially those with unremitting pain and anger from years past - should aim to spend a whole lot more of their time, energy, and attention on themselves rather than their mean old partner.  Become a very self-aware shipper. 

If this seems counterintuitive, then I will explain. 

Over and over we have seen in the LTL market where an unruly shipper, broker, or carrier turn out to be the common denominator in every equation.  

Let’s think through this.

It really isn’t feasible to accept that in a system as complex as the freight industry with all of the various attributes and moving parts that are both central to the market - in addition to others being native to certain situations - that the sum of all those parts can result in the same party can running into trouble on multiple fronts, with multiple partners.  They need to look down and within.  To give their LTL shipping program a good, hard look in the mirror.  

Then…overhaul everything that is tripping them up.  Even more so, overhaul everything tripping their partners up.

Let’s recap:

1. Look in the mirror.

2. Become self aware.

3. Decide what needs to be fixed.

4. Fix it.

If this post is focused on the art of building the right LTL program - however - then we must address ‘the Resistance’.  

Having recently reread Steven Pressfield’s amazing, timeless book, The War of Art, I am reminded that whenever an endeavor of higher calling is in front of us - the Resistance likes to rear its ugly head, dig in its heels, and prevent us from achieving what needs to be done.

This includes becoming an enlightened LTL shipper.  Everything that you will need to take on and improve will be the equivalent of pushing a boulder uphill.  Even though you get to a point where you can envision the reward and articulate the payoff - setting out to take it all on will take all of your strength and stamina.

Why?  Because it’s much easier to blame the other party. Becoming an enlightened LTL shipper takes planning, consistency, and most of all, it takes an investment of your time, energy, and resources.

Key word here being ‘investment.’

Investing in the stock market and investing in your less-than-truckload (LTL) carrier partnerships may seem like two completely unrelated concepts, but upon closer inspection, they share some similarities. In fact, many of the same principles that apply to investing in the stock market also apply to building successful carrier partnerships in the transportation industry.

I’m sure you’ve heard of dollar cost averaging in the stock market world?  Very applicable in the world of LTL shipping as well - where continual and consistent “buying” by way of pouring into and improving your LTL program - is absolutely key to long term partnerships.  Folks that try to time the market the way our colleagues in the full truckload world end up chasing white rabbits all over, while arguably not really adding much value to their LTL scenario.  At worst, they never get established as a legitimate LTL shipper.  At best, they are seen as a rate shopper and price chaser.

Remember these key words: 

During any time of chaos in LTL, the carriers control the narrative.

With the lack of standardization, centralization, and market transparency in LTL - the market really does run on who can tell the best story about their network, business, and perspective.  Not to imply things are being made up.  Just reiterating that it’s often a combination of many different factors and whoever combines them together to construct a balanced narrative will do well.

At the end of the day, the LTL market doesn’t “happen to us.”  

We can control a lot of it based on the foundation we put in place inwardly.

And remember - it’s all Space, Time, and Risk.

This is a manifesto written directly to the 30 people that I’ll be in the room with on November 9th and 10th.

Today’s date is November 4th, 2023.

Since the event is approaching quickly and we have folks coming in from all parts of North America, I wanted to get a piece of writing out to everyone to help guide you towards the best possible experience possible during the one and a half days we are all together.

I am posting this publicly as well because I feel everyone should know the depth of how our time together will be spent. There has been zero paid marketing or posting about this mastermind; rather completely grassroots and everything stemming from me, A Team members, Speakers, Attendees, Sponsors, and partners like Manifest, FreightCaviar, etc.

Further - the content, discussions and list of people attending will all be kept private and will not be streamed, shared, or recorded in any way.  We want to ensure that without fail, this gathering sets itself apart from every other conference, trade show, and industry meeting out there.  You need to be here to get anything out of it. This mastermind will foster networking and build trust within the participants to a level we don’t normally see.  It’s about adding arrows into your LTL sheath.  Actually - several arrows.  An arrow for knowledge, one for strategy, one for new and stronger relationships, and several more, based on your own reception and interpretation of things.

I am very happy with the group size and makeup of the gathering.  The goal was twenty-five attendees, the minimum was ten, but I estimated it would land around twelve to fifteen.  We ended up with twenty people attending and eleven speakers including myself. Thirty-one in total!  That’s pretty cool!  A positive signal for the future of this event.  The background and experience level of these thirty-one individuals is broad AND deep.  We have folks in their early to mid-twenties all the way to a retired LTL carrier executive and everything in between.  We have people from three of the largest five LTL carriers, and executives from seven active LTL carriers.  We also have two folks who recently worked in key roles at Yellow Freight.  We have business owners, someone from Wall Street, one person from small parcel, and another from the forwarding world. Truckload-ers – where you at?!  We also have a gentleman from a technology company, a TMS builder, that will join us.  Lastly - we have several 3PL folks, including one from a top five brokerage, and three from top twenty-five, by revenue.

I want to thank Adam Robison from The Robinson Agency, Madison Conway from DDC FPO, and Eric Krueger from Navix for their amazing contributions of time, money, and creative bandwidth in helping build this event in a rather short period of time.  You 3 are special people - and I’ve enjoyed working with you!

Ok, now to the experience itself.

PLEASE come with your game face on :) I’d like to see questions that stump the experts.  I’d like to see minds changed and opened.  I’d like someone young and fresh in the industry to enlighten some of the seasoned veterans. You can always tell when community respect grows, and lightbulbs come on in people’s heads.

The format will be as follows. Nine topics will be presented and discussed.  Each speaker is going to have fifteen to twenty minutes of material prepared, and then we will have at least thirty mins of discussion and Q&A before moving on to the next topic.  I’ve been at so many conferences in the past where I am desperate to ask a question or get three minutes with the speaker afterwards, but that usually isn’t an option.  It will very much be here!  It’s the core of how this event was built.

The dinner on Thursday is to get everyone acquainted and comfortable with each other before we dive in all day Friday.  We have the entire upstairs, bar, and outside balcony of a tasty Southern cooking restaurant in High Point.

Breakfast, all day coffee and beverages, and lunch will be provided and be less than 5 steps out the door of the boardroom.

Sitting here now and think, everything is done, and all loose ends are tied - with the one exception of the task of awarding the scholarship winner with their free attendance, flight, and hotel.  I’ll be announcing this on Monday.

I am so very excited to see everyone next week - and words cannot express how truly grateful I am to have the LTL community endeavoring on this experiment with me…both in person and in spirit.

Thanks - and remember - everything needs to be wrapped, but it all can’t be double stacked.

In Space, Time, Risk, and Health…

Curtis Garrett

Curtis:

Is Less than Truckload Freight primarily a network business model?

ChatGPT:

Yes, Less than Truckload (LTL) freight can be considered a network business model. Let's unpack this:

1. Definition of a Network Business Model: A network business model gains value as more participants (either users or producers) join the network. The classic example is the telephone network: the more people who have phones, the more valuable the network becomes to each user. This is often referred to as network effects.

2. LTL's Network Characteristics:

   • Terminal Network: LTL carriers operate a network of local terminals. Freight from various shippers is consolidated at these terminals, and then it's loaded onto trucks for regional or long-haul transportation. The more extensive and efficient this network of terminals, the better the service can be for customers in terms of reach, frequency, and cost.

   • Economies of Scale: As more shippers use an LTL service, the company can more efficiently use its truck space, reducing wasted capacity. This efficient use can lead to better pricing for customers and better profits for the LTL company.

   • Increasing Value with More Users: As more shippers and receivers become part of the LTL network, the value of the network to each participant increases. A shipper can reach a wider range of destinations, and receivers can get shipments from a broader range of sources.

   • Information Network: Modern LTL operations rely heavily on information networks for tracking shipments, optimizing routes, and coordinating between terminals. As this informational aspect of the network grows and becomes more sophisticated, the service becomes more valuable to users.

3. Challenges: Like other network businesses, LTL carriers face challenges. They need to maintain service quality as they scale, balance demand and capacity, and invest in infrastructure (both physical and digital) to support the growing network.

In conclusion, while LTL freight is fundamentally a logistics and transportation service, it exhibits characteristics of a network business model, especially as it scales and seeks to optimize its operations

Curtis:

At what point does new business drive the growth and direction of the network - or does the network dictate where new business needs to be landed in order to improve lane density and keep the assets, labor, and equipment moving.

ChatGPT

In the context of Less than Truckload (LTL) freight and other logistics industries, there's a symbiotic relationship between the growth of the network and the acquisition of new business. The interaction between these two can be complex and iterative. Here's how they influence each other:

1. Network Dictating New Business:

   • Lane Density Optimization: One of the key operational efficiencies in LTL is lane density. When an LTL carrier has more shipments on a particular lane (a route between two points), it can operate more efficiently. So, carriers often seek to acquire new business in lanes where they already have some presence, as it helps fill trucks and reduces costs.

   • Asset Utilization: LTL carriers have significant investments in terminals, trucks, and equipment. If a terminal or a lane is underutilized, the carrier might prioritize gaining new business in that area to better utilize its assets.

   • Existing Infrastructure: The presence of terminals, hubs, and trained personnel in certain areas can dictate where a carrier might focus its business development efforts. It's often easier to expand where infrastructure already exists.

2. New Business Driving the Growth and Direction of the Network:

   • High Demand Areas: If there's a surge in demand in a particular region (maybe due to the rise of a new industry or a major customer), LTL carriers might prioritize expanding their network to service that demand.

   • Strategic Customers: Landing a large or strategic customer might necessitate network adjustments. For instance, if a major e-commerce company requires LTL services in a new region, a carrier might decide to expand or reallocate resources to service that customer.

   • Competitive Landscape: If a carrier identifies regions or lanes where competitors are weak or absent, they might target new business there, even if it means expanding the network in a direction that wasn't previously prioritized.

3. Feedback Loop:

   • The relationship between the network and new business isn't linear. It's more of a feedback loop. As the network expands and evolves, it creates new opportunities for business. Conversely, as new business is acquired, it necessitates changes and growth in the network. This loop continues as the market, demand, and competitive landscape evolve.

In practice, LTL carriers and other logistics companies often strike a balance between these influences. Strategic planning, market research, and operational analysis all play roles in determining whether the network guides business decisions or vice versa

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Curtis:

That makes sense. Throw in market cycles and various macro-economic impacts, and it's a wonder that LTL carriers can consistently expand their reach and capacity while also staying profitable.

ChatGPT:

Absolutely! The LTL freight industry operates within a complex web of variables that can significantly impact its operations, profitability, and growth trajectory. A few of these variables include:

1. Market Cycles: Like many industries, LTL carriers experience boom and bust cycles. For instance, economic upturns generally increase shipment volumes as businesses grow, while downturns might reduce shipping needs.

2. Macroeconomic Factors: Global and national economic conditions can have profound effects on freight demand. For example:

   • Trade policies can impact international shipping volumes.

   • Currency fluctuations might make imports and exports more or less attractive, affecting shipment volumes.

   • Recessions or economic downturns can decrease consumer demand, leading to reduced shipping needs.

3. Fuel Prices: LTL operations are significantly influenced by fuel prices. Rising fuel costs can erode margins unless carriers can adjust rates or implement fuel surcharges quickly.

4. Labor and Regulatory Issues: Labor costs, union activities, and regulatory changes (e.g., hours-of-service rules for drivers) can all impact operations and profitability.

5. Technological Changes: The rise of e-commerce, real-time tracking technologies, and advanced analytics can shift where and how LTL services are needed.

6. Competition: The LTL space is competitive. Carriers not only compete on rates but also on service levels, technological capabilities, geographic coverage, and other differentiators.

7. External Events: Unforeseen events like the COVID-19 pandemic, natural disasters, or geopolitical events can suddenly and dramatically impact demand, operations, and profitability.

Given this intricate landscape, the success of LTL carriers hinges on several factors:

• Agility: The ability to quickly adapt to changing conditions.

• Strategic Planning: Forward-looking strategies that consider potential future scenarios.

• Operational Efficiency: Streamlined operations to maximize asset utilization and minimize costs.

• Customer Relationships: Building strong ties with customers to ensure consistent business and understand evolving needs.

• Technology Adoption: Leveraging technology to improve service, reduce costs, and gain competitive advantages.

It's indeed a testament to the management and operational prowess of successful LTL carriers that they navigate this maze of challenges and still manage to expand and stay profitable

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Curtis:

What about the oligopoly nature of the LTL carrier market is a positive, and what might be considered a negative result?

ChatGPT:

The LTL carrier market, particularly in certain regions like the U.S., exhibits oligopolistic characteristics, where a small number of large carriers control a significant portion of the market. This oligopoly structure can have both positive and negative implications:

Positive Aspects of an Oligopoly in the LTL Carrier Market:

1. Economies of Scale: Larger carriers can achieve economies of scale, leading to operational efficiencies. This can result in lower prices for customers as carriers can spread fixed costs over a larger number of shipments.

2. Service Consistency: Big carriers with extensive networks can offer more consistent service across wider geographical areas. This can be especially valuable for businesses that require uniform service levels across different regions.

3. Investment in Technology and Infrastructure: Larger carriers often have the capital to invest in advanced technologies, such as real-time tracking systems, advanced logistics software, and modernized fleets. This can lead to improved service quality and efficiency.

4. Stability: The oligopolistic nature means the market is less susceptible to the volatility that might be seen in a highly fragmented market. This stability can be reassuring for customers and investors.

5. Innovation: The competition among a few significant players can sometimes drive innovation as each company seeks to differentiate itself and gain an edge over its competitors.

Negative Aspects of an Oligopoly in the LTL Carrier Market:

1. Higher Prices: With reduced competition, there's the potential for carriers to collude (either explicitly or implicitly) to maintain higher prices. This could lead to customers paying more than they would in a more competitive market.

2. Reduced Choice: Fewer significant players can mean reduced choices for customers in terms of service options, pricing models, and other differentiating factors.

3. Barriers to Entry: The dominance of a few big players can make it challenging for new entrants to break into the market. This can stifle innovation and prevent fresh competition.

4. Potential for Complacency: In the absence of robust competition, there's a risk that carriers might become complacent, leading to reduced service quality or slower adoption of new technologies.

5. Reduced Negotiation Power for Customers: With fewer carriers dominating the market, large shippers or customers might find themselves with less negotiation power, especially if one or two carriers especially dominate a specific region or service niche.

In conclusion, while there are both advantages and disadvantages to the oligopolistic nature of the LTL carrier market, the actual impact on customers, carriers, and the broader economy will depend on various factors, including regulatory oversight, the specific competitive dynamics of the market, and the strategies adopted by the dominant carriers

Curtis:

Knowing a bit about the US LTL market - what do you think is the single most largest challenge for each party: LTL carriers and LTL shippers?

ChatGPT:

The U.S. LTL market is intricate and influenced by various factors, both external and internal. For LTL carriers and shippers, the challenges can differ significantly:

For LTL Carriers:

1. Capacity and Asset Utilization:

• Efficiently managing capacity is one of the biggest challenges for LTL carriers. Carriers have significant investments in trucks, terminals, and equipment. Ensuring that these assets are utilized optimally, without leaving too much idle capacity or, conversely, over-extending and being unable to meet demand, is crucial for profitability.

• Related to this is the challenge of lane density. Achieving sufficient volume in specific lanes (routes) is essential for maintaining efficiency and profitability. Balancing demand across various lanes and ensuring trucks aren't traveling half-empty is a constant challenge.

For LTL Shippers:

1. Cost and Rate Volatility:

• Shippers often grapple with the unpredictability of LTL rates. Unlike the truckload (TL) market, where rates might be more straightforward, LTL rates can vary based on a multitude of factors, including freight classification, distance, weight, and density. Rate changes and fuel surcharges, which can be influenced by broader economic trends, can also significantly impact shipping costs.

• Moreover, the trend toward "dimensional pricing" (where pricing is based not just on weight but also on the space a shipment occupies) by some carriers has added another layer of complexity for shippers, necessitating better management and understanding of their shipments' profiles.

While the challenges highlighted above are prominent, it's essential to note that both carriers and shippers face a myriad of other issues in the LTL market, such as regulatory changes, labor concerns, technological shifts, and market demand fluctuations. Effective collaboration, transparency, and leveraging technology can help both parties navigate these challenges more effectively

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Curtis:

Do most LTL carrier costs roll up to either "space," "time," or "risk?"

ChatGPT:

Yes, most LTL carrier costs can be categorized into these three broad categories: space, time, and risk. Here's a breakdown:

1. Space:

   • Asset Procurement and Maintenance: The acquisition of trucks, trailers, and terminal spaces requires substantial capital. Additionally, there's the cost associated with maintaining these assets, including routine repairs, replacements, and upgrades.

   • Freight Density and Utilization: LTL carriers are especially concerned about optimizing the space within their trailers. Mismanaged space (e.g., trailers that aren't full) represents missed revenue opportunities. Conversely, overloading can result in regulatory fines and increased wear-and-tear on equipment.

   • Terminal Operations: The operations within terminals, including cross-docking, sorting, and freight handling, all have costs associated with space utilization.

2. Time:

   • Labor Costs: A significant portion of an LTL carrier's costs pertains to labor, including drivers' wages, terminal workers, administrative staff, and more. Time inefficiencies (like long loading and unloading times or drivers waiting at docks) increase labor costs.

   • Transit Times: Longer transit times not only impact customer satisfaction but also increase costs in terms of fuel, potential overtime for drivers, and asset (truck) utilization.

   • Operational Delays: Delays due to congestion, inefficient route planning, or other operational hiccups directly translate into increased time-related costs.

3. Risk:

   • Insurance: Carriers need various types of insurance, including cargo insurance, liability insurance, and more. The cost of insurance can vary based on the carrier's safety record, the value of the goods they typically transport, and other factors.

   • Safety and Compliance: Regulatory non-compliance can result in substantial fines. There are also costs associated with safety equipment, training, and programs to minimize accidents and ensure compliance with transport regulations.

   • Bad Debt: There's a risk of customers not paying for services rendered, which can result in bad debt expenses for carriers.

   • Market Fluctuations: Economic downturns, changes in trade policies, or other market uncertainties can impact the volume of freight available, presenting financial risks for carriers.

   • Operational Risks: This includes risks like cargo theft, damage to goods, or misrouting. Addressing and rectifying these issues can impose additional costs.

While the above offers a generalized framework for categorizing LTL carrier costs, the nuances and specifics can vary based on the particular carrier, the regions they operate in, and their specific business models and operational practices

Curtis:

Agreed, thanks. Where should most LTL carriers look to make improvements in their operations that will move the need most? Line-haul routing? Cross docking? Pick-up and Delivery Operations? General technology?

ChatGPT:

For LTL carriers, improving operational efficiency can lead to significant cost savings and service enhancements. The areas where improvements can move the needle the most vary depending on the individual carrier's current operational state, strategic goals, and market dynamics. However, here are some general insights into the areas you mentioned:

1. Line-Haul Routing:

   • Significance: The line-haul phase, where freight moves between terminals over long distances, is a major cost center. Efficiently routing these movements can lead to substantial fuel, labor, and asset utilization savings.

   • Improvement Opportunities: Leveraging advanced route optimization software, predictive analytics for demand forecasting, and dynamic rerouting based on real-time conditions can offer significant enhancements.

2. Cross-Docking:

   • Significance: Cross-docking, the process of unloading freight from inbound trucks and immediately loading it onto outbound trucks, is central to LTL operations. Speed and accuracy here directly impact transit times and customer satisfaction.

   • Improvement Opportunities: Improvements can come from layout optimizations of terminals, better training for dock workers, real-time freight tracking, and system integrations that allow for seamless movement of freight.

3. Pick-Up and Delivery Operations:

   • Significance: P&D operations represent the "last mile" in LTL, directly interfacing with customers. It's crucial for customer satisfaction and heavily influences the perception of the carrier's service quality.

   • Improvement Opportunities: Route optimization for P&D, real-time tracking and communication tools for customers, efficient scheduling systems, and training drivers in customer service can make this phase more efficient and customer-friendly.

4. General Technology:

   • Significance: Across all areas of LTL operations, technology plays an increasingly pivotal role. Whether it's in tracking shipments, optimizing routes, automating administrative tasks, or interfacing with customers, technology can be a game-changer.

   • Improvement Opportunities: Implementing a modern Transportation Management System (TMS), integrating AI and machine learning for demand forecasting and route optimization, adopting IoT devices for real-time tracking, and leveraging cloud technologies for scalability and resilience can drive transformative improvements.

Final Thoughts: While all the areas mentioned can offer substantial improvement opportunities, the priorities for each LTL carrier might differ:

• For a newer LTL carrier with limited infrastructure, investing in general technology might provide the most immediate returns, allowing them to compete effectively with established players.

• For a large, established carrier with legacy systems, modernizing technology and improving line-haul routing might be the most impactful due to the scale of their operations.

• For carriers with a strong focus on customer service, enhancing P&D operations and ensuring timely, accurate deliveries might be the top priority.

Ultimately, a holistic approach, combining improvements across all areas while prioritizing based on strategic goals and current operational bottlenecks, will yield the best results for LTL carriers

Curtis:

Knowing how LTL pricing works today - do you think the 10 year future of the market will still include freight class? If not - and it's dimension driven - how quickly will that change and will shippers and brokers get up to speed? Will it contribute to LTL having a more simplified UX?

ChatGPT:

The classification system, particularly the National Motor Freight Classification (NMFC) freight class system in the U.S., has been a cornerstone of LTL pricing for many years. However, there's a growing sentiment in the industry that the traditional freight class system might be overly complex and not fully reflective of modern shipping needs. Here's a perspective on the potential evolution of LTL pricing:

Shift Toward Dimensional Pricing:

• Over recent years, there has been an increasing shift toward dimensional (dim) pricing in both the parcel and LTL sectors. This move is driven by the need for more accurate pricing based on the space a shipment occupies, especially as e-commerce continues to reshape shipping patterns.

• Dimensional pricing tools, often aided by automated dimensioning equipment, offer more transparent and straightforward pricing for shippers. They can more accurately reflect the carrier's costs associated with the space occupied by a shipment.

Predictions for the Next 10 Years:

1. Dim Pricing Dominance: It's quite possible that in the next decade, dimensional pricing will become the dominant or even standard pricing model for LTL. The proliferation of affordable and accurate dimensioning technology, combined with the need for more efficient and transparent pricing, will drive this trend.

2. Freight Class Phasing Out: While dimensional pricing might grow in popularity, freight class won't disappear overnight. Transitioning away from such an entrenched system will take time. However, its significance might diminish, with more carriers offering dimensional pricing options or hybrid models that use both dimensions and freight class.

3. Simplified User Experience: A shift toward dimensional pricing can indeed lead to a more simplified user experience. With transparent pricing based on easily measurable dimensions, shippers and brokers can more readily understand and predict shipping costs without navigating the complexities of the freight class system.

Challenges & Adoption:

1. Educating the Market: One of the primary challenges will be educating shippers, brokers, and even internal carrier teams about the new pricing paradigm. This education will be crucial to ensure smooth transitions and reduce disputes.

2. Infrastructure Investments: Carriers will need to invest in dimensioning equipment and integrate this technology into their operations. This might be a significant hurdle for smaller carriers.

3. Integration with Existing Systems: Transitioning to a new pricing model will require changes to existing IT systems, including billing, tracking, and online quote systems. This integration could be time-consuming and complex.

4. Market Dynamics: How quickly the shift occurs will depend on market dynamics. If major LTL players aggressively push dimensional pricing and gain a competitive advantage, others might follow suit more quickly.

In conclusion, while predicting the exact timeline and trajectory of such a change is challenging, the LTL industry's momentum seems to be leaning toward dimensional pricing. As with many industry shifts, early adopters who navigate the change efficiently might enjoy competitive advantages, while those resistant to change could face challenges

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Curtis:

Thanks!

ChatGPT:

You're welcome! If you have any more questions or need further information in the future, don't hesitate to reach out. Happy shipping!

Ok.

I’m going to keep this short.

The way we get to the right side of the above visual is through community, trust, networking, and mental models.

Humans remember feelings and emotions more than they remember facts on a paper or screen. How something made you feel is going to trigger future brain activity related to a given topic WAY better than recalling a piece of data.

How do we achieve the tribal effects in our industry?

Through community!

So let’s get out of the textbooks and into the intuitive environments that will drag us into success through mentors and relationships.

Time is ticking - so don’t dither!

Event Info & Sign-up: HERE

Best,

Curtis Garrett

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