To protect the anonymity of our sources we have removed the names and identifying facts about their companies, but we believe investors will still find great value in what these industry influencers had to say about current industry conditions, how they are responding, what they are worried about, and what they see developing.  Some very consistent themes emerged as we took copious notes throughout our many conversations, but we’ve decided to just republish a raw version of those notes. We think readers will be able to quickly enough see the patterns for themselves.

Here’s what they had to say, quoted as verbatim as our note taking skills allowed:

  • The rate at which technology is changing is both a challenge and an opportunity.  It is harder than ever to keep up with all the changes, but if you can, there is an opportunity to grow market share by outpacing the competition.
  • Litigation is increasing.  Both from a frequency perspective and from a breath perspective.  Attorneys seem to be very hungry, very anxious to pursue anything that they think might generate a payday, and the things you can get sued for is also increasing.
  • Insurance costs are going up and many small truckers are struggling to find coverage at any price. Could eventually lead to a shake out in the industry, or attract new underwriters.
  • We are focused on investing in our people (especially drivers) and technology.  Those continue to be our greatest impediments to growth.
  • ·2018 is exceeding all expectations, on number of transactions, on revenue, on margin per transaction. Can’t stay this good forever, but don’t see anything to create downturn, at least not yet.
  • Drivers are experiencing technology overload.  What they are expected to do continues to grow, and the technology that is available for them to do their job continues to explode.  Many of them are struggling just to keep up with all of it.  Don’t see this easing / getting better anytime soon, if ever.
  • Was active in the acquisition market but margins are high and valuation expectations on those margins are high as well.  Makes it harder to do deals right now.
  • Biggest challenge has always been drivers but can’t remember a time when it was this bad.  Despite raising pay by 15 to 25%, still struggling to find drivers who are qualified and insurable.
  • Using the way shippers and receivers treat drivers to determine who we are going to do business with.  Both from an objective point of view (i.e., how long does it take to get loaded and unloaded) and from a subjective point of view (driver and dispatcher feedback on how easy or difficult it is to do business with each consignor and consignee.  Technology has allowed us to be very specific on origin and destination points even within a specific customer’s profile.
  • Huge increases in driver compensation and improvements in quality of life have already been made and more are coming.
  • Our primary focus is driving internal productivity because it maximizes current margin and gives us more options to protect ongoing margin.
  • Finding carriers with available trucks is hard.  Finding carriers with adequate insurance is even harder.
  • Hard part right now is figuring out what the right rate is at the right time on the right day.  The volatility in demand, truck availability, and rates has never been this high.
  • Focusing on reducing transaction cost right now more than growth.  Growth is coming easily and it is easy to lose sight of making the business more strategically competitive for the long-term.
  • By focusing on technology and reducing transaction cost, we have increased load count by 30% on a Y-O-Y basis and have one less accounting person.
  • It is essential to use the ELD mandate to get small carriers to share location data.  That is the only way we can help them manage their schedule for coming hours and coming days.
  • So far, it has been a very strong 2018.  We continue to focus on technology and automating process.  The right thing to do at this part of the economic cycle.  Everyone is obsessed with figuring out when the cycle ends but none of the traditional red light warning signs, not even yellow warning signs, are out there.
  • 2018 is extremely strong, but the later half of 2017 was as well, so the comps get a lot tougher in the back half of 2018.
  • Our biggest challenge has always been finding talent.  Continues to be.  Don’t know if that will ever change.
  • We are currently involved in two wage hour lawsuits.  Plaintiffs bar has become increasingly creative in finding reasons to sue you.
  • Having a strong 2018.  It’s possible to hire plenty of kids out of college and develop them into good brokers. The hard part is finding leadership, people who are middle managers, people who can manage, train, and inspire all those kids.
  • Plenty of bid packages from customers out there, but more and more of them have rates that don’t go into effect until 6 months from now.
  • Last year margin was the challenge, and so we invested in anything that helped us expand or defend margin.  With the changes in the marketplace we are now investing in growth.
  • Not only can we use technology to make ourselves easier to do business with, but we can use technology to make it easier for us to do business with our carriers and small truckers.
  • Everyone just wants to hit the easy button and use technology to automate, but you have to build relationships with people and you can’t let technology get in the way of that, which it can.
  • Bought 7 companies in the last couple of years, but now multiples (valuations) are making accretive deals hard to find.
  • Entry level talent is relatively easy to find.  Mid-level management talent is very challenging to find.
  • Trying to connect O-O’s with larger fleets who can help them learn how to use ELDs and get their utilization back up where it needs to be.
  • Business is up 50% so far this year.  Biggest challenge is saying no to customers.
  • Hiring mid-level is tough.  Having success hiring entry level, but developing them is harder.
  • Relationships are paramount.  The best technology in the world can’t save you if you don’t have a relationship with your customers and your employees.  Can technology help you build those relationships and solidify them because of what it allows you to do for people?  Sure, but it can also get in the way.  You can’t automate showing people how much you really care or that your concern for them is sincere.
  • Need a national hiring standard to thwart the plaintiff’s bar.  They are getting better and better at finding cases to develop.
  • If we are all focused on technology and using the same or similar vendors, then how differentiated can we be?  Are we fooling ourselves?
  • 2017 was our best year ever and 2018 is 45% even better, so far.
  • Firing customers is one of the best things that you can be doing right now.  Too low of rates?  Fire them.  Too much trouble to deal with?  Fire them.
  • Very dynamic marketplace.  Very strong right now.  Enjoy it while it lasts.  Things are never this good forever.
  • Sourcing flatbed capacity is the single hardest thing, largest challenge in the marketplace.  Flatbed capacity is harder to find than good drivers or good mid-level management.
  • Independents have become unreasonable in their rate expectations, going up almost daily.  Increased visibility in the marketplace is showing independents what they are really worth.  Problem is that they might have received an outrageous rate last week in a certain lane and now they think that they can get that rate or better in any lane.
  • Detention tracking and getting paid for detention or stop pay has improved markedly with ELDs.  It really had to.
  • Dry van is figuring out how to use ELDs.  So is reefer.  I don’t know if flatbed will ever figure it out.
  • ELDs are hurting flatbed more than anyone because the driver has to be involved in the loading and securing of each and every load.  There isn’t any drop and hook in flatbed.
  • SaferSys score needs a “what is and isn’t acceptable threshold score.”  We need a standard.  Above X is good and below X is a ‘no go.’
  • Production per employee has continued to go up after investing in proprietary software.  There is an advantage to developing technology in house to meet your own needs.
  • We are acquisition oriented.  Continue to be even with the current valuations.  Just have to be better and faster at the integration process to make the current valuations work.
  • Changed IT development focus to offshore a couple of years ago.  Paying big dividends.  Can afford to develop proprietary functions that make us more efficient and make customers more sticky.  Once they get accustomed to the information feeds that you developed to meet exactly their needs, it is harder to lose them as a customer.  Currently have 85 offshore IT developers.
  • More and more of the small independent truckers seem to figuring out how to use the ELDs, especially in the dry-van segment.  Visibility of equipment and visibility of bad consignor or consignee behavior is at least partially offsetting the loss of productivity.