Supply Chain Now Episode 496
In this episode of the Supply Chain Buzz on Supply Chain Now, Scott and Greg welcome Bobby Holland and Eric Olson to the podcast to discuss the U.S. Bank Q3 Freight Payment Index.
It’s time for supply chain. Now broadcasting live from the supply chain capital of the country. Atlanta, Georgia heard around the world. Supply chain. Now spotlights the best in all things. Supply chain, the people, the technologies, the best practices and the critical issues of the day. And now here are your hosts.
Scott Luton (00:00:41):
Hey, good afternoon, Scott lewd and Greg white with you here on supply chain. Now welcome to today’s live stream. Greg. Today is a special episode of supply chain buzz right here in supply chain. Now, are you excited? I am brought to you by hurricane Zaida this special edition of the supply chain, right? Seriously. I’ll tell ya. Um, as, as we both have felt firsthand, that was a fast moving storm that really packed a punch, uh, inland, right? Yeah, yeah. Did, uh, two days without power. We’ll give you a lot of empathy for people who go through this frequently. Like the folks on the Gulf coast. I mean, we barely got skimmed and, uh, it was tough to deal with no doubt. Well, uh, on a much lighter note on this episode, we’re going to be sharing key insights from one of the leading transportation industry resources.
Scott Luton (00:01:32):
Of course, we’re talking about the U S bank freight payment index, this one for Q3 that we’re going to dive into and review. So looking forward to that, right? One of our favorite parts is we’re going to get key takeaways, both from the data and the pro to no there, but also on the shipping and the practitioner side we’re we’re, we’re, we’re balancing what the data tells us with what our shippers are seeing day in and day out, right? Yeah, that’s right. What people are experiencing on the seas and the skies and the streets that is right. Hey, before we introduce our guests, we’ll do two things. We’ll say hello to a few folks. And then also wants you to kind of weigh in on own us banks prowess when it comes to serving the industry. Sure. Real quick, looking forward to having a wide, uh, the wild wild West audience here.
Scott Luton (00:02:17):
We’ve got Mike aver with his good afternoon. Mike, of course, clay Phillips. Uh, the, the dog is behind the scenes making it happen. Him and Amanda, Tina, Tina Elliot is with us here via LinkedIn. Great to see, uh, Tina of course, Daria has joined us for a lot of these, these lobster rooms, Daria Patel. Hopefully this finds you well, Jayman Jayman is with us and that’s an important one. So Jayman leads our logistics and beyond series freight is, is his back, his, his, uh, right up his alley. He’s going to be driving conversations in the comments as we dive into this data, Greg, uh, Prateek, Sophia, Wilma Kayvon, we got, we’ve got the full gang here today. We dive in. Let’s do it. All right. So let’s set the stage a little bit, Greg. So tell us, tell us about U S bank and how they power the transportation industry, which of course is the backbone of global supply chain.
Greg White (00:03:09):
Yeah. I mean, the reason that they can offer us all these compelling insights right in this report. And I hope because you had a couple of days, I encourage everybody to do your homework this weekend, which I did by candle light, watching, reading, reading the report over once, once again. Uh, but look, us bank does 20 did $28.8 billion worth of freight pregnant payment transactions last year. So that’s an incredible amount of data for the whole industry. It gives them a ton of data to be able to analyze and look at and help us understand what has happened in the last quarter. And of course, because they’re a bank they’re limited to saying that, right? I think they can’t say what the future could hold, but that’s what we’ve got other people here for is to say, Hey, here’s what the data tells us. Here’s what is happening on the ground. And here’s what we can expect into the future. So we’re going to talk a little bit about all of those things, not just what the data says, the what, what it means to people’s lives, what it means to the transportation industry and a little bit about what it’s telling us for the future
Scott Luton (00:04:15):
Standing let’s do it so real quick. Uh, professor AA is with us and Chris Barnes just joined us as well amongst the others that are tuned in across five social platforms. So welcome everybody. Let’s welcome in our featured guests here today. So we have Bobby Holland, vice president and director freight data solutions with us bank. And he’s joined with Eric Olson outside sales manager with total quality logistics, LLC. All right, good afternoon, Bobby. How are you doing well? How are you? Great to have you back. We’re much better back in an hour, Greg, and you are going to be much more educated from Bobby and Eric and Eric. Good afternoon. How are you doing?
Greg White (00:04:59):
Doing great, Scott, thanks for, uh, thanks for having me on, and I’m glad to see you guys
Scott Luton (00:05:03):
Up and running. We are too, I’ll tell you it’s been an eventful weekend, but Hey, you know, there are folks that are struggling far worse than wifi and power, and those folks certainly are in our thoughts and prayers right now. So, um, on a much, a lot of note, Greg, let, let, let’s dive in. Let’s get to know our guests a little bit better. I want to start with Bobby. Our listeners may, uh, recognize Bobby from some of his past appearances here, but Bobby, in a nutshell, tell us about Bobby Holland.
Greg White (00:05:31):
Uh, see, I come from a software engineering software architecture background. I’ve been with U S bank for about four years. Um, and myself and my team, uh, we are a product team that are responsible for creating as the name of the group is free data solutions. Uh, we use the data from our st cloud platform and that’s why we’re here.
Scott Luton (00:05:53):
That’s why we’re here. That’s right. And there’s so much the insights. Uh, Greg and I really enjoy diving into this each quarter because Greg’s, we’ve talked about, um, I don’t have any truck driving experience. I’ve shipped some of my career and the wealth of data here, especially balanced on the, from the data and business side with shipper that we’re gonna learn more about a provider, uh, really offers a balanced view. So Eric, uh, for our audience, Eric Olsen with TQL. Tell us more about yourself.
Eric Olson (00:06:22):
Thanks, gab. Um, yeah, Eric Wilson. I’m with total quality logistics. I am currently outside sales manager here. Um, I’ve been at TQL for about 14 years and sort of seeing every part of the company in that time. Um, I spent some time, uh, on the sales side and spent some time on our risk management side, product management, even over on the finance side. That’s how I, uh, started our relationship with us bank. Uh, now my team is, uh, responsible for relationships with some of our key customers and key outside vendors. And so, uh, we’re constantly having conversations, watching the market, trying to determine what happens next, trying to determine the best ways to provide the best service that we possibly can. We’re kind of a unique position here at TQL. Obviously we’re a, we’re a broker, so we kind of sit in the middle. We’re not, you know, we’re not full carrier, we’re certainly not full shipper. So, uh, I, you know, I hope I can provide some perspective kind of from both sides of that today. I certainly don’t claim to be the, the voice of one or the other or anybody really, but it’s been a huge where he was interested in Q4 has been interesting as well. And I’m, I’m looking forward to tackling what the index shows. That’s what Bobby
Scott Luton (00:07:21):
Outstanding. So Greg, uh, in the comments, uh, folks are diving right in, it looks like a lot of weekend recapping twin leaves and football. It was hopefully hope that they’re ready for freight. So Greg take it away.
Bobby Holland (00:07:34):
Yeah. Um, well I think it, you know, what would be great is to understand Bobby, maybe remind people a little bit about what I shared just a couple minutes ago about what it is that makes us bank such a great resource for all this data. Um, and then share a little bit about what the freight payment index is, what it analyzes, how it works. Okay. Well, as you had mentioned earlier in the intro, uh, we process almost $29 billion annually and, uh, payments, uh, ship shipments, uh, payments. And with this data, we collect terabytes of data. And so our ability to take this data and do the, the requisite analysis as enabled us to create this index and the, you asked what the freight payment index is. And it’s basically a tool that we’ve developed that extrapolates the, the economy at large, from our data. Uh, we compare, um, our treatment, uh, shipment data payments data from, uh, quarter to quarter to create our quarterly index. It’s a chain based index. So each quarter is the, you know, as compared only to the previous quarter, um, as, as opposed to year zero, getting all nerdy here. Um, but the idea is that because it enables us to compare, um,
Greg White (00:08:56):
We’re calling it same store sales type algorithm. It allows us to compare similar activity across quarters so that we can accurately measure the deltas and not just measure us bank’s business performance. So that’s why we believe it. It’s a, it’s a good indicator of what’s going on in the industry and the economy at large. So that’s how it works. Yeah. And I think the important part of that is, is that kind of same store sales model, right? It’s the same metrics compared against one another from quarter to quarter and year over year. So you don’t get those variances if, if a new carrier comes in or something like that, that can really impact things. It is apples to apples every quarter and every year. And that, that gives us a great jumping off point. So Eric knowing that, and of course, knowing that you’re in the middle of the transaction, you do get to hear from the carriers and from the shippers, both. Tell us a little bit about how you all use it or how you use the carriers and shippers that you work with. Use it. Yeah.
Eric Olson (00:09:58):
It’s, it’s a, it’s a valuable source of information, right? We have so much data coming in. That’s that’s specific to us, right? We’re, we’re monitoring the market on the carrier side, we’re monitoring the market on the shipper side, we’re trying to make predictions about what’s going on. We have all kinds of key internal metrics, but also we want to make sure that we’re, uh, you know, really have a good objective view of what’s going on outside, outside of these walls, outside of our business. Because again, we, you know, we’re a, we’re a large company, we move a lot of freight, but we, we don’t move really any major fraction of it overall. And so us bank is a really, really valuable resource to sort of throw into that mix as a, as a data point for us to use, you know, their, their customers, their shipper customers are some of the largest companies in the country in the world.
Eric Olson (00:10:39):
And we’ve always found that their information is pretty representative of what’s going on in the freight market at large. Um, especially over the last couple of years, there’s been, there’s been such a huge emphasis on data in this industry, um, that we would be doing ourselves, our carriers, our customers, a disservice, if we weren’t, you know, looking at everything that we possibly could. So, uh, the U S bank has always played at, has always played a pivotal role in that. Um, again, we know that we sort of, we know what their shippers are moving. We know how reflective of it is the market at large. And so when you know, this is always a day, one hour, one kind of spread it around and everybody take a look at it when this index comes out.
Greg White (00:11:17):
Yeah. All right. So a couple of quick comments, four, we’d dive in with this quarters index with Bobby. So of course Mike States, we all know freight drives the economy in many ways. Mike, great to have you here with us here today. Uh, they’ve been says that he, uh, uh, David says he’s always ready for freight Scott, always ready for freight. And then, um, let’s see, Jayman called out again, the 29 billion worth of transactions. And as, as Bobby said, the terabytes worth of data, you know, here in the information age is certainly one of the great advantages is we’re able to not just all that information,
Scott Luton (00:11:54):
But dive into that truly big data and figure out what the signals are versus the noise. And that’s, that’s really in my, in my view, what makes, uh, reports like the freight payment index so valuable, right. Brig?
Bobby Holland (00:12:06):
I can’t remember the specific number, so I won’t quote it when we’ve done this in the past, but it, that 29 billion is a significant portion of all of the freight transactions in, in the country. So, um, yeah, it’s, I mean, it is a huge dataset by analysis standards. Bobby would say that as a relative oversampling, I mean, it is a huge statistical sample, so it ha it is a great indicator of what’s going on in the marketplace. Agreed.
Scott Luton (00:12:35):
Uh, professor a says, he’s quoting hosts way. If the wheels aren’t turning you, aren’t earning agreed there, professor, thanks for bringing that in. And, uh, Jayman says, uh, finding a true objective data resource to make better decisions is huge. Agreed. All right. So, uh, let’s bring Bobby Holland back in and Bobby let’s, uh, let’s let’s, you know, at a 50,000, um, uh, foot level altitude level, let’s kind of hear what you say the data is telling us, especially from a national point of view. So what are you seeing?
Bobby Holland (00:13:09):
Well, the data is telling us currently that, uh, we experienced a recession as we, uh, had, uh, outside sources that, that, uh, called that in Q2. And what we see, uh, the result of and coming out in Q3 is how well the industry is, is managing itself through, uh, through that. Um, we see that the shipment index was up 6% from the second quarter, which was the largest quarterly gains since Q2 2019, uh, still down from a year earlier of 7.6%, but the spend index, um, had more than twice the, the velocity at 14.6% over the second quarter. Uh, and this is for a variety of reasons, which I’m sure we’ll get into as we continue to walk through this. But what it says is that a lot of the decisions that were made in Q2, uh, we’re seeing the results of that. Whether the decisions be around, uh, the stay-at-home orders and COVID, which obviously restricts and dries up a lot of things or the decisions that the carriers and the shippers have made to adapt, uh, their particular businesses to, to, to cope and to deal with and to succeed in, uh, in the adaptive or the new marketplace.
Bobby Holland (00:14:24):
So we see a lot of that and we see that it’s, it’s, you know, we see main drivers such as, um, e-commerce retailers. Uh, we see home improvement stores, uh, grocery stores and residential construction. And these are all things that never really, um, shut down, but because things are starting to open up the activities increased. Um, we see a continued strength in e-commerce sales, um, as well as brick and mortar stores as well. Again, as people start to go and start to feel better
Greg White (00:14:53):
About going out and shopping, as opposed to, you know, obviously online is, is a part of our life, you know, going forward online shopping is, but even being able to go to the mall, you know, as things opened up in early Q3, uh, you know, we can see that that, uh, impact on freight. We see other parts of the industry struggling, you know, can tank tanker trucks continue to struggle because they’re still down. So we still see that, uh, we see flatbed carriers having strong volumes, but, uh, industrial side of flatbeds, uh, are still down because chemicals are down and metal production is down. So again, a lot of mixed things going on, but all in all, we see things generally picking up and that’s what we stayed in Q2 as the trajectory of the virus goes, that’s where freight’s going to go. Right now, things are opening up and people are starting to feel better about being out about it in most cases. And so, uh, let’s start to reflect that in ship shipping in the trucking industry,
Scott Luton (00:15:51):
Outstanding Bobby, uh, Eric, I’m sorry, Greg, I want you to weigh in on something. Bob has shared there before we start moving more towards regionally.
Greg White (00:16:01):
Yeah. Well, I think the surprise, I guess shouldn’t have been a surprise, but that the tanker volume was down. That’s, uh, honestly when I read through this, that was a bit of a, of a surprise for me. Uh, but I get it, uh, you know, and I think the, the other thing is with home improvement, I think this really speaks to, and maybe Jayman can address this too, but I think this really speaks to the, the diversification of transport types in the transportation industry. I think flatbeds, I just think all flatbeds, right? Not an industrial type versus a, you know, uh, commercial, just playing commercial types. So, um, I had not thought of the variants at that level of, of micro detail. So that’s, that’s really interesting. Um, and I think, you know, one of the other things we’ve got to think about is that, um, the cases of COVID are up, and I know Bobby can’t really speak to the future is there, but the cases of COVID are up. And yet, as he said, people are really a whole lot more comfortable. I think we’re starting to discover that the mortality rate is very, very focused on a limited population and much, much lower than we expected it to be. So I wonder how that’s going to impact the future, but certainly that’s going to impact the future.
Scott Luton (00:17:23):
So, uh, good stuff there, Greg Bobby, uh, at, uh, again, a very high level, cause we’re going to go region by region here momentarily after we get Greg and Eric and the audience weigh in on some of these initial observations, but give us a couple thoughts around what we’re seeing regionally.
Greg White (00:17:38):
Well, the, the, again, the main takeaway is that, you know, most, everything is up. Um, apart from the shipment index in the Southwest, all of the other indexes across the regions were up sequentially
Bobby Holland (00:17:50):
Over Q2 and Q3. And again, the reason we have the regional perspective is because there are different influences. We can take the national view and that’s obviously a compilation of conglomeration of everything, but when you break it down by region, each region has different influences that, uh, at different drivers that will moderate how their shipments and spend are impacted. And again, we see that in the fact that the Southwest was down, um, a half a percent from the previous quarter, whereas all the other shipment and spend indexes were up
Scott Luton (00:18:24):
And, and, and led the led by the Southeastern region, which we’re going to, we’re going to dive more into, um, Eric and we’ll bring you back in here in just a second to get some of your initial reaction that some of these high level observations, but let’s, uh, Greg, let’s share a few comments here. Uh, we’ve got, we’ve got no shortage of peer says it completely agree that value is not the incredible amount of data, but the thought process and delivering information that is factual and usable and peer, I get your, your second question. I’ll pose that to, uh, Bobby and Eric, as we get, uh, dive in deeper here. And Jamie says, great point, Greg open deck market is very niche-y and the acid, that’s a word. We make words all the time now of the buds, so runs a wide range of industry sectors. Um, all right. So Eric quick comment on, on some, what you’ve heard here, just kind of setting the table.
Eric Olson (00:19:14):
Well, we certainly experienced the increases that Bobby talked about quarter over quarter. You know, the way that, the way that we saw things happen in the spring, um, with lockdowns, with the, the height of the life changes regarding the pandemic was kind of a bottoming out. And then it’s been, you know, it’s, it’s been a steady increase in at times a pretty dramatic increase since then. Um, you know, some of, some of what we’ve seen even even year over year, we’ve seen, we’ve seen stronger. I, you know, I’m, I’m interested to kind of dig in more into some of these regions with the year over year cops to find out about that. But we, um, the thing that always interests me is, is obviously again, we talked about [inaudible] so much information and Bobby touched on, you know, you touched on it when you were talking about this, that the consumer is the driver of all this, right?
Eric Olson (00:19:59):
Like there’s so much of this demand. So much these increases that are consumer based. I would, I would love to see a breakdown someday of, of, by your different segments. Exactly what those, what those indexes look like quarter over quarter, because we see it regionally. We’ll talk about this a little bit when we get to some of the regions, but, you know, sometimes even a larger, uh, sometimes even a region that’s a part of the larger whole, there are pockets within that region there that are, you know, not reflective of what the rest of the region is doing. So I’m curious to dig more into the specifics on that, to find what you’re, what you’re missing. I’d love to see it, you know, I’d love to see it visualize that would probably be, uh, uh, fun intersecting lines in some cases, but we can, we can talk about that more as we go,
Scott Luton (00:20:34):
Eric, I love how you think you’re painting a picture, a data masterpiece, at least between my ears. All
Bobby Holland (00:20:40):
Right. One thing that go, go
Eric Olson (00:20:42):
Get you up here, here. All right. Like the, the clean, usable data is important. And, you know, it’s just, again, maybe it’s just, maybe it’s just even at the pic, the pictures help, right. I mean, I, you know, hearing about it, thinking about it, percentages are great, but when you can, we can kind of see the movement over time. That really, um, an important part of that is sort of, it’s sort of where you’ve been like, okay, here’s how things are now, but where do we come from? You know, is it, is it better than it was a year ago? Is it better than it was five years ago? Do we think it’s going to continue that that visualization is, can be really powerful.
Greg White (00:21:10):
All right, agreed. Uh, Greg, I’m going to pose a couple of questions here as we kind of do some color commentary before we dive into region by region. And Greg, we’ve got a couple of interesting questions here and Bobby want to pose these to you and, and Greg and Eric y’all feel free to weigh in, of course, PR says, Hey, how much of the increase is due to the channel recovery and increased imports? Uh, Bobby, any, any, um, response you have there? I can’t quantify the exact percentage, but we do know that that’s part of the reason that the West region, um, had posted such a strong gain is due to the strength of, um, imports from Asia. So, um, you know, LA long beach, Oakland and SeaTac, uh, altogether have about 40% of Asian shipping and again, uh, strong port volumes helped to improve, uh, the West.
Greg White (00:22:04):
So it’s significant. Yup. Okay. Good stuff. There’s a lot about, uh, about jam ups in which Jaman should probably run down there and help with long beaches as usual jammed up and just a ton of, of congestion in that port. So maybe Jamie, you could jump down there and help him out. You know, I think another thing that’s important to think about for this year is Bobby. Think back to when we did this, the first one of these, um, we, we knew that 2019 wasn’t anomaly as far as shipping, right? And we talked about that in the very first one of these analyses of the freight payment index of how much higher it was, then 2019 and how we expected towards the half, second half of the year. This was before pre COVID, correct where the second half of the year, we expected it to get pretty ugly in terms of shipping.
Greg White (00:23:01):
And instead we’re seeing, we saw the big dip of course, but for, you know, kind of forced by COVID, but we’re starting to see it come back. And if you look at the numbers compared to 2018, instead of 19, it’s not as big of an issue as it might appear. I mean, in terms of a drop. So I think that’s something we have to acknowledge as well, is that 2019 was such an anomaly in terms of volume right point. Great. Right. Because of that, you know, as we did stated to your point, um, it was at such a high or relatively high velocity, uh, at that point that even though some of the drops sounded catastrophic, we have to remember the starting point. Right. So, and we’re still, you know, we’re still through that. So
Bobby Holland (00:23:46):
Everything was still going on stronger than I think that people realize even with pre COVID. And so it kind of helps put these numbers in perspective.
Scott Luton (00:23:56):
Yep. Um, one of the comment, right before we go region by region is professor AA talks about how he wonders, how much of the freight is trending towards warehouses and last mile delivery rather than to retail stores. And one of the things that report call, uh, uh, calls out and we’ll, we’ll probably talk more about it is the restocking that was taking place to catch up on inventory that thankfully we’ve, we’ve made a couple, a few strides in and, uh, curious to see how much of the, um, the volume that, that drove Bobby any quick comment on that.
Bobby Holland (00:24:29):
One of the themes that we saw throughout was that retail spending was still, um, you know, pretty stable, uh, obviously, you know, with ships in, in, in things, um, and stores closing or shutting down, stayed home orders. Um, the online shipping was pretty constant. It actually increased. Um, because again, what else are people going to do? They can’t go anywhere. So, you know, between grocery deliveries and other deliveries and, and other, um, online shopping that stayed fairly consistent. So what we’re saying is that retail sales, now that the malls are opening back up, we’re starting to see more of that. They were always spending, people are always spending money on retail, but it was just mowed mainly online. But now we see it starting to go back up. Now that those stores are back open on the brick and mortar side.
Scott Luton (00:25:19):
Gotcha. Okay. And
Eric Olson (00:25:21):
We saw, I think we saw an outsize impact from that, um, on the pricing side too, because as you know, as e-commerce grows overall, and as it really became as vital as it was during the pandemic, you know, those, those delivery windows are really important. If you gotta have a courier bring out to somebody’s house the next day or two days later or something like that. So there was, um, a lot more, you know, as, as capacity tightened, there’s a lot more inherent risk. And the types of shipments that, that carries we’re taking, uh, the penalties for late deliveries are more, the, the service expectations from the, from the shippers are more. And so that, that all factors into the pricing. So when you see, when you see the spend, start to diverge from the volume increase, in some cases, I, I really think at least we see regionally in some of those areas with a lot of, you know, e-commerce hubs or, or heavy warehousing type activities. We see the spend increasing even more because of that.
Bobby Holland (00:26:10):
We had a, um, came across an article that talked about, you know, Amazon being impacted by trying to, to, I want to say bargin, cause I don’t want to, it’s not that it’s not, I don’t mean it a negative thing, but basically enter that and start to compete with, um, other resources for truckload capacity. Right. It kind of dovetails with what Eric was saying, as far as they’re having to compete is such a shortage, but they’re putting pressure on that marketplace. And so we can see the impact of that as, um, the rates kind of output outpace the actual shipment volumes,
Eric Olson (00:26:45):
Bobby. Sorry, what was it, what was the name of that company? You said amp that up. Thanks.
Bobby Holland (00:26:52):
They seem to be coming on pretty strong. Eric, maybe, uh, Greg talk about them once or twice. Maybe Eric will fit right in with [inaudible] residents, uh, uh, professionals with a nice sense of humor. So, um, and by the way, welcome their fault and welcome host way as well. Your ears may have been burning. We were quoting you earlier in the live stream. Yes, sir. One final comment that comes from my aver, a wall street journal quote, the last week, a 21.2% increase in containers that are sitting more than five days at the port of LA kind of summit stuff you were talking about earlier, Greg. All right. So we’ve been promising going region by region. We’re going to get a little more detailed into some of these differences. We’re seeing Bobby let’s talk about the Southeast first. What, uh, give us, uh, a take or two on that.
Bobby Holland (00:27:38):
Well, the Southeast was up 12.5% over the second quarter and it was actually up 5% from a year earlier. So again, just, uh, pretty good, pretty good number there. Um, only region to post double digit gains and shipments and spend while also having that year over year increase. And we can see a lot of reasons for this. You know, again, the stay-at-home orders were lifted a lot earlier, um, in the Southeast region and stayed that way. Uh, we can also see too that the summer and Q2 that, um, people were getting to go vacation. Yeah, the numbers were down from, you know, a traditional tourist season, but people were still wanting to get out people still wanting to go to the beach. And even though the numbers were reduced, they were still out there over what they were earlier in the year. And so we’re seeing again, um, as things shift, uh, industries, we’re seeing that spending increased on those vacation activities and all the things that support that.
Bobby Holland (00:28:38):
And then we also of course have the storm prep and, and storm damage repair. So again, this is one of the reasons why the Southeast tends to stay stronger for a variety of reasons, but that’s what we saw in Q3 outstanding. Hey, uh, to our audience. Uh, y’all tell us what you’re seeing, whether it agrees with the data and what Bobby and Eric and Greg are sharing, or if it doesn’t, we’d love to get your take whether, you know, by regional or in the bigger picture. All right. So Eric, uh, staying with the Southeast quick observation from you,
Eric Olson (00:29:13):
You know, the Southeast, we tend to see some of the most intense seasonality there of anywhere, you know, in a non pandemic year. And so what us banks are, what Bobby sees in the, in the numbers really, really tracks, right. That intense seasonality is always there. We, we, I mean, we tend to win free, you know, a lot of our contracted freight out of that region, just because of the flexibility that we have. And so we’re always, um, we’re always kind of battling that. And I think that, that when the right, when some of that seasonality should have been kicking in again and Q2, um, a lot of lock downs happen. And so when, when everything opened back up, uh, especially coming to you coming out of the Southeast, like it really is a, it really exacerbated the seasonality that, that we see. So that was a region of particular, a particular interest in, and, you know, a huge upward trend for us as well.
Greg White (00:30:03):
We’ve seen a lot in the Southeast of, of shipments that were going into the Northern Northern ports going into Charleston and Savannah as well. And a lot of China shipments because in the, again, Bobby early in the year, because of the jam ups on the West coast, they were sending it through the canal to, to Charleston and Savannah and Jackson anyway, some of the other, uh, East coast ports or Southeast ports. And I think that has had a big impact that is probably staying. They aren’t getting better, unfortunately in the Northeast ports and, and the problem continues to exacerbate on the West coast ports as well. So we’re going to see a lot, I think we’re going to see a lot of that movement towards those ports, at least for goods that are, are coming in and staying East of the Mississippi. Yeah, no doubt.
Scott Luton (00:30:56):
So Larry shares needed more trucks in the room. Agreed that in one of the constraints we had, there was, uh, the drivers, not only, of course, we all know that about, uh, about the ongoing driver shortage, but the social distancing guidelines that everybody was most of the following prevented a lot of the training, uh, and getting out the door of new drivers. Right. Um, so, so no shortage of challenges as we, we scrape claw and, and get herself out of, uh, a lockdown phase. All right. Um, and also one other quick comment, Robin says, thanks for content guys, Rob. I agree Eric and Bobby, uh, bring it, uh, Bobby in particular, every quarter. I love, I find this, this conversation and observations and the data fascinating, especially, you know, since, uh, transportation is not where I spent the bulk of my, uh, supply chain career. All right. So let’s keep driving. We go from the Southeast Bobbie to the Northeast. So tell us more.
Greg White (00:31:56):
Well, the Northeast, um, as we all know, I’ll know from news reports and all is hit the hardest or, uh, period to hit the hardest with the virus. And so I’m still coming out of that still coming out of that, um, just more recently had, you know, uh, lockdown relief, if you will. Uh, so it only increased 1.7% over the second quarter, but it’s still an improvement. We’ll take it. Uh, the spin deck index though, however, was up, uh, 12.1%. So again, that usually indicates a capacity shortage, um, significant volume declines, um, during the previous six quarters. Uh, and again, uh, manufacturing is big up here, so, uh, that’s still, you know, struggling to ramp up. Um, so we’re still, you know, with the recovery appears is going to be a little slower than in some of the other regions. Um, but Chitman started to increase in the third quarter. So we’ll see what it looks like in Q4.
Scott Luton (00:32:55):
Good news. Hopefully more of it head Eric, I’m gonna get you to wait one second here. I want to bring Jameson’s comment back in and speaking of drivers and training, we need more creative and effective training methods, given new safety limitations, that training challenge, one of the most fascinating little details in the report, very good. A us bank,
Greg White (00:33:16):
Yes. Bobby addressed that specifically that, or your team, Bobby. Sure. You didn’t actually type it. But anyway, they addressed that, that of course people are trying to train drivers, but because of the social distancing measures and, and capacity, uh, in the training facilities, they weren’t able to train as many new drivers not to mention that, you know, that a lot of the incoming generations are not inclined to be drivers. And I, and I think we have offline, at least discuss, discuss how the industry needs to address that is to get, you know, it’s to make it more palatable, to be a driver. A lot of people don’t want to drive for seven, 14 days straight. Right. And a lot of it too is, um, I’ve read about, um, you know, a new regulation that’s continuing to come on board that is keeping the attrition, you know, higher than the industry would like a lot of drivers just saying, you know, we’re not doing this anymore. And so, you know, you take that and couple that with, uh, inability to properly, you know, provision more drivers. And then you add on top of that, all the decisions that were made in previous quarters to adapt, uh, then that’s why we’re we’re right for capacity shortage now.
Scott Luton (00:34:32):
All right. Uh, Eric weigh in on this or the Northeastern region.
Eric Olson (00:34:38):
Yeah, I think, um, we were pretty well aligned with what, with what Bobby said there. I mean, he, you know, again, he pointed out kind of the spending index going up. We have some, a couple of key internal, uh, capacity indicators, and we saw those really increased the sort of above peak 2018 levels in the Northeast for at least part of the quarter. So, so there was some sign to us of some more activity there, but, but you know, again, overall it was, um, the, the longer lockdowns coupled with sort of, you know, uh, growing limited manufacturing and all that kind of, sort of kept it more in line with the quarter over quarter, then the rest of the regions for us too
Scott Luton (00:35:11):
Outstanding. All right. The whole drive. It always does the driver comments and conversation. We’re having gets a ton of attention, lots of passion around that. I do want to share a Greg going back to your point about the using the different ports. Uh, I’m gonna read, cause they’ll cut off Eric and Bobby don’t want to call images here, but he says the owner of crane logistics was interviewed a few years ago about a publication. Uh, and basically he or she said that there’s too many in LA in long beach. His, uh, team’s drivers were able to make more turns in Savannah. So it’s freight forwarders. We’re going to ship everything through Savannah Charleston, Jacksonville, as opposed to West coast ports. Interesting. Mike, I appreciate you sharing that. And here here’s one segment that we all, uh, I’m sure. Welcome. So AA says I see no shortage of food on my table and necessities in my home due to a robust and resilient freight and logistics. Thank goodness. Can I get an
Bobby Holland (00:36:04):
Amen there? Yeah. And
Scott Luton (00:36:07):
Then finally, one thing about the drivers, again, it gets a ton of attention, but Larry makes a great point. How about treating drivers better as well? A network perhaps truck stops the secure parking areas and free showers. Good stuff there from Larry. Okay. This is a fast moving conversation. Greg, are you buckled up? We’re going to move.
Bobby Holland (00:36:25):
Yeah. I mean, this one has been deep. Hasn’t it already? I mean, yeah, I’m ready. My hands and arms are inside the vehicle. Yeah,
Scott Luton (00:36:34):
There we go. Because we’re going to the Midwest and that’s, that’s your old stomping ground and the pride of, uh, what did Kim call you? The Wichita wizard, I think is what he called you. Cause that’s your hometown. But Bobby, tell us about what you’re seeing from the Midwest.
Bobby Holland (00:36:51):
Uh, two and a half percent up over the second quarter and shipments. I was the first increase in five quarters. Um, lot of COVID spikes, uh, in the Midwest. Uh, we know that some of the places didn’t even really shut down like the other ones did, but they’re also, uh, so because of that, you know, they were a little bit stronger in some ways, but, um, now that they’ve started some partial shutdowns in order to deal with that during Q3, um, it hurt spinning a bit. And then we also had the big Derechos storm that was a negative impact, um, disrupted things. They’re going to be dealing with that as well. Um, but again, they were also hit by the driver shortage. So impact felt, uh, across the board in a lot of places.
Scott Luton (00:37:45):
Mm, yup. Um, good stuff there and we should welcome. And Rhonda, Rhonda, I could not see your name on LinkedIn, but the team has pointed out. Sometimes we have a little connectivity issue there, but Rhonda welcome. And thanks for joining us here via LinkedIn. Okay. So Eric, your take on the Midwest.
Eric Olson (00:38:01):
Well, I think go back to something that I said early on in the conversation is that even, even in these regions, which are, you know, breakdowns of a whole there’s pockets within them, that can really, um, that are really outliers to the rest of the region. I mean, I think you look at the Midwest region here on the map, um, and it’s just, it’s so large. And so geographically diverse, right? You have, you have sort of rural agrarian areas to, to big cities, to, to manufacturing locations. And, and there’s a lot of, there’s a lot of e-commerce in there. So we, again, you know, our, our capacity indicator showed some, some pockets that had showed huge growth in both volume in spend. But, um, again, the, the different lockdowns, the disruptions to some of the food supply chains that are based on in that area, um, I mean it did it kind of tamped it down, right. It made it, uh, as inconsistent or more consistent as anything else. Again, it’s just it’s. So I, again, I, I keep, I keep thinking about these as hyper-specific ways of describing things, because one part of the Midwest was, was not like another on a day to day, week to week basis, but, you know, overall sort of the, the heavy areas pull it all out for us. We saw, we saw tremendous growth in spend and in volume there
Greg White (00:39:08):
Neglected to mention spend was up 8%. So again, once again, spending outpaced the shipment growth. So again, using indication of capacity issues. Yep. Good points there, Eric, is that, I mean, is that, and I know you may not work specifically that area, but is that in line with what you have seen is that there, there is a shortage of capacity in the Midwest.
Eric Olson (00:39:33):
Yeah, it is that that’s one of, that was one of the key areas that we, that we identified. And again, part of it was some of the availability shifted with the disruptions early in Q2 and, you know, everything is still stabilizing, but again, there’s a lot of e-commerce hub activity coming into the Midwest, right. Again, that’s, that’s sucking up a lot of it that’s, you can look at capacity two ways, which is the truck availability and what the cost of that truck is, is going to be. And then sometimes, um, you know, you’re focused on, you’re focused on the price and sometimes you’re focused on just, just getting the truck. Well, we saw a lot of that. Hey, you know, we, we gotta get a truck, we have to get this picked up. And, and I think that as you know, e-commerce makes its way across as they were here in Cincinnati.
Eric Olson (00:40:16):
And I’m, I mean, I’m six hours from everything, right. It’s a good, it’s a good place to be. You know, I can, I can get to Bobby, you know, I can get up to Chicago in five, six hours. I can get to Atlanta. And in seven you can, you can get to so many places it’s even, you know, nine, 10 all the way to the East coast. So we’re seeing a lot of that come in here because as those quick deliveries, uh, become more prevalent, you know, this is a good, it’s a good place to be.
Greg White (00:40:40):
It’s interesting that there’s so much energy in, in the Midwest, right. With, well, I guess most of it technically in the Southwest, but there’s still a lot of oil and gas in the Midwest and with the tanker volumes down, um, there must have been something that substantially replaced that to keep that from just absolutely crashing. Right. All right. And know, we all love the Midwest. Uh, that’s been a couple of years in Wichita. I spent spent some time working for Cincinnati farm as well. Eric great cities. Great cities, indeed. All right. So moving Bobby, we’re gonna move to Midwest and we’re gonna get some of your observations as it relates to the Southwest, which was a bit of, uh, of, um, um, outlier based on the other regions in the report. Right. Uh, as we stated earlier, this was, uh, the shipments index, the Southwest,
Bobby Holland (00:41:35):
Uh, dropped a half a percent again, it’s the only one of the indexes, the regional index is that dropped. Um, but again, even though it dropped spend was up 12%, um, didn’t quite recoup. The 14% drop from two, uh, from Q2 over Q1. Um, but again, capacity shortage, um, lower energy demand, uh, was offset by increased, uh, trade truck, transported trade with Mexico. So, um, that’s what kept this region kept this region rolling. Cause I think last, uh, the last index, we talked about how the Southwest was, was nailed across both across the board for both of those because of the lower energy consumption and, uh, trade was just starting to ramp back up, um, post COVID. Yep. So, all right. So Eric weigh in on the Southwest.
Eric Olson (00:42:31):
Yeah. This is, this is one where I love to see sort of an industry by industry breakdown because we, um, I mean, it’s pretty rudimentary, but with, with a lot of Texas being near both, you know, a port and a border crossing, it, it had, it shares a lot of similarities. It’s Southern California, at least, at least based on what we saw, we saw, you know, uh, some of the most difficult capacity situations that we saw anywhere in the country, in, in Q3 of the year, sort of in, you know, down near Laredo all the way up the Gulf coast area when, uh, the automotive industry kind of turned back on and more things started crossing over the border from Mexico there, but this was I’m sure, you know, I’m sure if you isolate oil and gas from the numbers that I, I think the situation looks a lot different and we, I mean, we, we really, really felt that for, for most of the quarters.
Bobby Holland (00:43:13):
Interesting. All right. So Greg, your, your comment here, whether we, you a lot more in the Midwest or the Southwest, what’s something that really stood out. Well, I think mine was more of a question I wonder in as much as us MCA is now in place, if that didn’t have some impact on the cross border shipments, if the hopefully ex expediting of those shipments, uh, vis-a-vis less difficult, um, regulation and less difficult documentation. If that didn’t hold some of this up, I don’t know if Bobby you’re you or Eric might’ve signed seen either of those things be an impact, but USM CA is one of those things that we just haven’t really talked about this year because we, well, like everything else COVID right now, like I said, we did see the trade volumes with Mexico, um, improve and, you know, empirically, you could probably attributed that attribute that, um, as you stated, um, but that was, like I said, that’s what I’ve said. Uh, the drop in energy volumes. So, so a couple of comments from the audience here. So Jamie talks about the Southwest varies so greatly from shipping point to shipping point, Eric Olson, the spot on here as to the, of the region,
Scott Luton (00:44:32):
Well said there, Jamie, and I think this is Rhonda. So, uh, clay and Amanda y’all correct me if I’m wrong here. Rhonda says still seeing the impacts on the shelves and Arizona notice some items are limited or completely gone and replaced with other items. I would imagine this is a change in production variables too, from different companies, interesting commentary diet cherry, dr. Pepper is missing much to my wife’s chagrin. Um, and we know that Coca-Cola cut 200 labels out of their product mix. Um, and many companies have gone to one, one or two types of particular products to facilitate a more expeditious production. Right. So that could be part of it. Adaptation going on there is, uh, continuing along this trend, uh, David, who I believe is in Canada, Greg, right? Yes. David tell us because remember, uh, he, he’s the one who mentioned Thanksgiving.
Scott Luton (00:45:35):
Yes. Uh, he says most of the items and the supermarkets here are on a limit yesterday’s grocery shop only allowed me to take approximately half my wow. Wow. How about that? Um, and Rhonda says, uh, Sprite, Zinni Costco Sprite, zero that she’s missing, right? Yeah. I mean, I bet we all have something that, uh, we’re having, I dunno, probably not me. I don’t really very much, I’m very adventurous, some diet. Well, what’s interesting though, this, this, this little wrinkle is conversation. We’re having Bobby, Eric and Greg is, is it’s really, uh, illustrative of this year and how consumers really now know and see when, when supply chains do exactly how it impacts them as simple as just not having the Coke of your choice, uh, at your disposal. And it really is something we’ve all probably been guilty of taken for granted for most of our lives, just out of sheer accessibility. And that’s one of the civil law lessons, several linings here in 2020, just sheer appreciation for all of the question for Cincinnati, right. Eric is, can you still get all of the types of five-way Chile that are usually available in Cincinnati? Sorry.
Eric Olson (00:46:53):
Uh, I have not noticed any kind of supply shortage there. I think that, you know, we have strategic oil reserves for the, for the nation, I believe. Uh, there’s an undisclosed location somewhere deep under the strategic, uh, strategic shifts.
Scott Luton (00:47:08):
That’s good. And the Montgomery instill has ribs. That’s, that’s the important thing and the sauce. Yep. Um, let’s see here at Jeff shared one last comment, and then we’re gonna knock out this last region. Jeff says, Hey, likewise, Greg I’m in Toronto limited number of certain supplies now, and towels are still out. So folks are still feeling the pains for sure. All right. So Bobby so much digest. It’s tough to get through all of this outstanding information and really the, the commentary from this panel in our, in our audience, uh, in an hour. But Bobby tell us about the West,
Bobby Holland (00:47:41):
Uh, West had a strong, quarterly gain of 8.8% in shipments, but the spin index jumped 21.7%. That was the most of any other regions in the second quarter. Uh, and this was up four tenths of a percent year over year. Uh, so we saw, you know, the only reason to see both spending gains both sequentially and year over year. Uh, one of the things that surprised me was the port volumes. Um, and again, we can attribute that to retailers, replenishing, depleted stock or depleted inventories. And we see this also as a temporary thing. Um, but it should bleed over ideally into Q4 as we enter the holiday season. But, uh, the West had strong housing starts, uh, and the wildfires perversely, you know, may keep that as a trend as they work to rebuild afterwards, uh, again, improve retail sales. And, uh, again, that was a, it was a surprise to me that the West was so strong given all the stuff that they’re going through there
Scott Luton (00:48:44):
Agreed, Eric, your take.
Eric Olson (00:48:47):
Yeah, I think again, uh, Bobby has the extremely, well-developed a huge amount of database index by my sophisticated at the clay equation of, are you near a port? And a border really comes into play here with, with Southern California because that, you know, you see how much the spend index outpaced the rest of the index. And I mean, that, that was what we saw. We, you know, we were having, you know, determining how to price bids and then having conversations with, with shippers and carriers about pricing. And, you know, we could look at an average and say, okay, this is, uh, you know, 35% since the bid, when to place it there, but we would be up 90, a hundred, 110% sort of in that, in that pocket. So once, once everything came over from China and a couple of that, again, with, with the seasonality, that’s always there with, with produce and different commodities like that. And it really, really, really, uh, drove, uh, mid-roll the situation while down there. And it hasn’t, I mean, it’s, it’s, let’s let up some, but when we talked about the internal drain situation at the ports, that’s contributing to that, just sort of continuing right in the Q4, just as we start picking up purchases for the holidays and again, all seasonality. So
Scott Luton (00:49:52):
Thank you for sharing. Yeah.
Bobby Holland (00:49:55):
Major problem that these West coast ports
Scott Luton (00:49:59):
Yep. Agreed. Uh, as we wrap up the region by region, um, review Greg, any final comment, and then we want to kind of pick their brain, Eric and Bobby on, uh, what may lie ahead, right, dad.
Bobby Holland (00:50:12):
And I think that we want, you know, again, I want to go back to the fact that we have to compare this to 2019, which was an exceptional year by any standard and all things considered. This is pretty encouraging and actually took me
Greg White (00:50:28):
From last quarter to this quarter to figure out why rates could be up when we’re, you know, when we’re still talking about shipments being way down. And we’re talking about capacity being very tight, but shipments are way down only in regards to 2019 and capacity is, is actually down. And as Bobby and Erica both said not growing at the rate that we would have expected it to because of the shortage of ability to, to train new drivers. And I think ho suede, um, talked a little bit about the difficulty in getting new drivers in, because who wants to like, you know, like we said, who wants to be away from their family so much, but he had a great potential solution, which is training couples. Um, and I’ve seen some of those cool rigs that are basically an RV that pulls, pulls a trailer. Right. So that maybe, maybe that’s part of the solution who knows,
Scott Luton (00:51:25):
Hey, quick programming. I think Bobby does have a hard stop at one. So Greg, we’re going to close or that you’re a couple of questions of Bobby first and Bobby, uh, if we have to smoosh you out and then reconnect after the fact, we will, but really appreciate what you and Eric has shared. Yeah.
Greg White (00:51:42):
Yeah. Um, what, I mean, what do you think is the biggest takeaway here? I mean, you’re the expert, I just have an opinion, right. So what do, what do we take away from this quarter and what do we expect from Q4 and maybe even into the beginning of the year, because I think we’d all like to see 20, 20 go away. So can you give us some insight or even just hope? Well, you know, I think hope is a good word. Um, the insight that we can take away is that, you know, the, the improvements in the economy are not fictitious. Um, we have, you know, transportation data that proves that, you know, the economy is bouncing back, you know, to what extent is to be determined. Um, and again, we’re always going to caveat it. Um, the trajectory is going to follow the virus if we have, you know, any issues with the second way, were any of those things that they had been predicting back at the beginning of all this hit in Q4, you know, all bets are off, but it’s, uh, it’s looking to be a strong, if any indication let’s put it that way, it looks like it could possibly be a very strong, uh, holiday season.
Greg White (00:52:49):
I think a lot of these companies are banking on that. So as far as what goes, uh, in January, who knows, you know, the elections tomorrow, that’s all I got to say. Yeah. Enough said there. Right. Uh, although I feel like we ought to say just one word there, Bobby, and that is vote. There you go. I’m going to still get impacted. So what you got to do. Yep.
Scott Luton (00:53:18):
So, um, let’s go ahead and we’re going to circle back with you, Bobby, let’s make sure folks know how to connect with you and also know how to, uh, sign up for the freight payment index.
Greg White (00:53:32):
Um, my contact information is on LinkedIn and under Bobby Holland, uh, us bank, um, is to get to, to get to the index. It’s a free subscription. Uh, you can go to freight.usbank.com and there is a landing page. It kind of describes what the publication is and gives you the ability to sign up with just a small amount of information. And it will get emailed to you find publication quarterly
Scott Luton (00:54:00):
Outstanding. And you know, Greg we’ve made it easy. One click, we’ve got a direct link in the show notes. Uh, it’s free to sign up as Bobby suggested and it’s chock full of, uh, great data, uh, every quarter, right, Greg?
Greg White (00:54:14):
It is. And I mean, it’s actually an interesting read. I mean, um, it’s really informative. It’s very concise. Um, and, uh, it’s helpful obviously to people who are in the industry, I think clay is dropping it in the comments thread here. Also, Bobby, I have one suggestion for your marketing folks. Since you have the title sponsorship for the Viking stadium, you know, the NFL is enabling voting at football stadiums around the country. Maybe you could have a stand where people could sign up for the freight payment index at at least us bank stadium. I’m sure joy and Ashley are watching and writing that down as we speak. Awesome.
Scott Luton (00:54:56):
Um, Eric, if you don’t mind, if he can stick around with us, a couple of final questions for you and Bobby will be respectful of your time. I know you run with three full, thank you, love what you bring to the table each quarter for our listeners and, and frankly for the supply chain now team big. Thanks for what you do, Bobby. Yeah.
Greg White (00:55:15):
Thank you guys. Thank you, Eric. Appreciate it. Always. Great
Scott Luton (00:55:21):
Big thanks to Bobby Holland, vice president director, freight data solutions with us bank. Thanks Bobby.
Greg White (00:55:27):
Scott Luton (00:55:30):
All right, Greg and Eric, you know, we’re always calling audibles, you know, with live streaming. You never know Murphy’s law is alive and well. Uh, but I think Bobby runs from meeting to meeting to zoom call to meeting to me
Greg White (00:55:43):
Well, and we made him move this meeting because of the weather last week. Right? So, and by the way, thanks to Eric also for clearing his calendar to be here for this as well. Everybody had things to do so absolutely appreciate everyone’s time, but I think in a way, a great bonus for our buzz, uh, community to, to see this on the buzz. Right. Agreed great for us too, because we’re getting to have some great concepts on this.
Scott Luton (00:56:13):
Hey, uh, we’re going to get, Eric’s take kinda own Greg’s question here, but before we do, let’s just read a few comments here. There’s a ton of soft drink conversations. Evidently it was a lot of dr. Pepper fans and somebody that we have a few people who I don’t think our Cincinnati natives commenting on their various, um, five way chilies, Chris Barnes guidelines.
Eric Olson (00:56:38):
I was promised no, no Chile talks.
Scott Luton (00:56:42):
It’s a very controversial season, Eric.
Eric Olson (00:56:47):
Um, again, I’m, I’m from Detroit originally. I moved into it and I, I try to stay out of it.
Scott Luton (00:56:52):
Smart. Very smart. Very smart. It can be, it can be really heated. No joke. That’s right. That is right. Hey, really quick. A few comments here, going back to drivers, Mike, her shares that he had, uh, we had a couple of team who drove for eight years together, lived out of their rig until they saved enough to build their home. Wow. One of the most dependable teams we had Jamie follows up with that and says, seen some solid teams like that as well. And his experience, they always seem like they were having fun while they did it. He, they have a YouTube channel is the question I would ask. Right. You think about all these digital nomads with their YouTube channels and their vans, right. It’d be interesting to watch a driving couple. I agree. Sounds like great. Um, uh, real-world TV to me. Yeah.
Scott Luton (00:57:39):
So clay to Greg’s point, we have dropped the link to the, uh, freight payment index and the comments and salsa on the show notes. Thank you. And, um, let’s see here. There’s one other I was going to share here. Oh, Jaymin also want to say solid stuff. Eric Olsen, really Doug hearing from your point of view. So appreciate it. Good stuff there. Jayman all right. So Greg, let’s see if Eric will break out his crystal ball just a little bit here with us here today. Now that we shed the suit, right. Eric, you can share with us what your, what you think is coming for the future. We won’t tell Bobby I’ll pass.
Eric Olson (00:58:21):
Oh, uh, no. I, uh, I think that all of all the discussion that we had today and kind of what Bobby ended it with really focused on it. I mean, we, um, the transportation indicates that the, what the economy is doing is rail. We, we, you know, we see it in the numbers and again, I mean, us bank’s numbers are, are, are really, really good. They’re, you know, they’re not just looking at it, different markets and different economic indicators. I mean, they’re, you know, they’re paying freight invoices for some of the largest companies in North America, really good handle on, on what’s actually, you know, what’s actually going on on a sequential basis like that. So I just think, it sounds like Bobby and I are kind of on the same page and, you know, the consumer, the consumer is so important in all this.
Eric Olson (00:59:01):
We’ve seen strong consumer demand. We’ve seen strength in all these consumer driven markets. So I think the question is going to be how, how strong does that stay and, and does some of the industrial, whether it’s energy, whether it’s something else does that catch up because, you know, if it doesn’t, then we’ve still got, uh, we still got a busy Q4 ahead of us. We’ve still got a lot of potential disruption. We still have a capacity issue. Um, and if, if that industrial catches up even a little bit, I mean, then, then you’re talking about really, really some explosive growth in shipments and in spend in the headaches and everybody’s going to have to deal with. And so again, us, you know, us sitting in the middle, we’re always making sure that we’re take care of our carriers as best we can. And we had some, the comments in there earlier about, Hey, let’s, you know, let’s treat drivers better.
Eric Olson (00:59:45):
That’s such a, such an easy thing. And so obvious and something that has to be brought up again and again, because it just, it just gets lost in business, you know? And then, um, on the shipper side, we, you know, we want to make sure that we’re being realistic about what the, what the environment is. I’m happy to get on here and, and talk about this. I, I, I liked that U S bank makes that information available for free because it, it, you know, when things started to explode in Q3, it didn’t, it didn’t exactly make sense. You know, the economic news was all doom and gloom. Um, there were so many lockdowns, everything was just so different. And, and we were sitting here looking at our volume numbers, looking at the, the, you know, the KPIs that we have on, on what the market’s doing.
Eric Olson (01:00:23):
Like, wow, how much longer can this keep up, keep up. And now, you know, give me a little bit better handle on it. I don’t want to overstate how, how strongly we feel about it, but we’re, you know, we’re at a, an elevated level with capacity tightness. Uh, we have all kinds of disruptions that are just kind of looming over us, and then we have the fourth quarter seasonality ahead of us. So I think it’s going to be, I mean, I guess, depending on what your take on it is either going to be fun or terrifying, or, you know, maybe, maybe both.
Greg White (01:00:53):
So, um, you know, it’s a fascinating time to be, um, in supply chain, for sure. It’s been one of those years. That’s, uh, of course presented a shortage of very unique challenges, but it’s been one of those years also as well. I think we can all probably speak to, that’s going to make the industry much stronger. I hate to use that word resilient, but using that in a very meaningful, practical and definitive way. Um, and as Greg and I like to talk about this is, you know, what, we have been experiences and work, uh, been experiencing and working through now, we’re going to be business schools are going to have plenty, uh, to study for, for years to come. Right. Great. They are. And I think, you know, one of Eric’s observations, I think Jamie may have already commented on this is it doesn’t make sense or it’s not intuitive, right.
Greg White (01:01:40):
Or it’s not what we would have expected, or it’s not what common sense would indicate the truth is. And that’s the beauty of what Eric said, the numbers don’t lie. And regardless of what we expected or what we think is coming in the future or what, uh, you know, or what we’ve seen in the past, these numbers. And I, I can’t, I can’t state it strongly enough. The objectivity of this, these numbers is so important because, um, to quote a great philosopher, they ain’t got no dog in this fight, right? They’re just reporting us bank is just reporting what the data is telling them. They’re not trying to boost shipments, not trying to boost
Scott Luton (01:02:20):
Prices. They’re not trying to facilitate carriers or additional drivers or anything. They are just reporting what they are seeing in the marketplace with a huge percentage of the transactions in this marketplace. And it’s super valuable, unbelievably valuable. I really appreciate you bringing socrates’ perspective into our conversation here, Greg. Um, Hey, getting aside, Eric really appreciate your time. I love how well versed you are both at national level and region Maria in which, which really pairs well with this report from us bank, the freight payment index, let’s make sure folks know how to connect with Eric, Greg.
Eric Olson (01:02:59):
Yeah, sure. Well, I appreciate the chance to come on and talk. And I, you know, I, I, uh, we had a lot of smart people around here that helped me do my homework. I knew I was coming on with Bobby that I couldn’t, uh, I couldn’t rely on my, my whip and guile. Uh, but I am, you can find me on LinkedIn. You know, my, uh, Eric Olson, I’m here at total quality logistics. Our social media here at TQL is life at TQL. That’s on Facebook and Instagram. We, uh, we like to, you know, publicize a lot of the fun stuff we have gone around here. We do a lot of things for the people that work here for our families. And, uh, you know, again, like I say, uh, I think, I think Jaymin said scary fund for the fourth quarter. It, it certainly will be in, and we are, uh, working to make sure that we’re, you know, providing the best service to our customers and to our carriers.
Eric Olson (01:03:38):
And we’re also trying to stay involved with the community. We’ve got an initiative right now, uh, for our moves, the manner to donate a million dollars in transportation over the next couple of years. And so, you know, working with our employees, our shippers with, with anybody that wants to get involved, looking for ways to make an impact for, for donations, for things that people need help transporting. So we are, we are keeping our eye on everything. Um, and we are, you know, really, really excited about what the, what the future holds it’s been. Uh, you know, obviously it’s been a hard year and there are plenty of people out there who are, who are still struggling. Right. And, and we want to make sure that we’re not, um, we’re not losing sight of that. So, so we’re going to work hard. Uh, we’re going to get involved in our communities and when we’re going to do whatever we can to make sure that we can make, you know, Q4 in 2021, the best, the best we possibly can. Yeah.
Scott Luton (01:04:24):
Standing, you know, uh, Greg, when we’re doing our homework on TQL, as Eric joined the program very first, then it comes out through any girl, Google search is some of the cultural, some of the community program that y’all do. And Eric really appreciate that a lot of kindred spirits in that regard. Um, but yeah, and let’s not, let’s not under estimate Eric’s wit and guile because while he didn’t get much opportunity to present it here, we can tell you assuredly from the preparatory conversations that he’s got it. So, so I can’t wait to, we ought to have a show where he just gets to tell us well, thanks, Greg. I know we had a little bit of AB challenges as, as, as commonplace in 2020, but I thought Eric brought it. He always, we, we just didn’t get to have, you know, as much fun conversation cause we had the banker here, you know how that works well, uh, really enjoyed it. Eric really appreciate, uh, your time, both pre-show and, and throughout the live stream here today, love the balance. Greg we’re big fans, Greg and I, and the whole team here are big fans of, of kind of presenting that balanced approach when it comes to comprehensive data like this. And, uh, Eric really enjoyed your, uh, that practical point of view that you did bring
Eric Olson (01:05:40):
Well, thank you guys. I appreciate the pen words again. I thought all that stuff was supposed to be off the record if we need to raise the blind. So my, my face is shrouded. I might be for another day. No, thank you. Thank you again for the opportunity. And I, you know, I’ve, I’ve thanks to Bobby for, for the insight. I learned something every quarter, when everybody next, I learned something from every one of these discussions, I have the opportunity to take part in and we, again, we’ll, we’ll apply that here. You know, we’ll apply that here as best we can to help everybody. So thanks guys.
Scott Luton (01:06:10):
I’ll have to get you connected with Jaman and maybe, uh, we followed up with, uh, uh, an appearance of yours on logistics and beyond our logistics and transport area theories. So, uh, but all a huge, thanks Eric Alston, outside sales manager, total quality logistics, and you’ll find his information. One click in the show notes. Thanks so much, Eric.
Eric Olson (01:06:31):
Thanks guys. Go flyers. Have a great cue for them.
Scott Luton (01:06:34):
All right. The university of Dayton that’s um, that was an expedited smoosh in and switch out there. We won’t waste any time here. This is the, uh, the buzz own supply chain now lively conversation dedicated to freight and uh, all things, transportation, uh, focusing on the freight payment index, Greg let’s, um, let’s take a few comments, which you think. Yep. Yeah, let’s do because I got some intellects out here we need to acknowledge that’s right. All right. So Jamie, and I’m gonna put you on the spot. Uh, you sent me some observations over the weekend, as you kind of dug in and, and, and shared some of your key takeaways from the freight payment index. I would love for you to share one or two of those in the comments and the you’ve already dropped some knowledge there. I’d love to, to share those with the audience.
Scott Luton (01:07:23):
So Jayman, that’s a challenge. Um, if you choose to accept it. So a couple of comments here, let’s start with, um, so going back to that, that, uh, driver couple, that team that might share, he said they were at a grand junction, Colorado when they built that house, they saved up for, uh, the guy continued driving and, and his wife got a job as a school bus driver. So they kept serving industry and serving the community, but that would be a great Gregg, a great, uh, guest to give them a future show for sure. Yeah, no doubt. Um, let’s see here, Jameson says great point, Eric, when he said it just doesn’t make sense, the best way to describe Q3 and 2020 as a whole completely agreed. Jayman our friend T squared via YouTube is back. Greg. I saw this question. That is a great one. It really is. And we will have to circle back and see if we can’t get some perspective on Jameson. Don’t feel free to, to, uh, share. But he says with Coca-Cola shuttering 200 brands, is that going to create a capacity issue, newly increased capacity, no longer being used. It’s a great question. T we’ll see if we can get some money.
Greg White (01:08:33):
I can’t recall the proportion of their sales that those brands represented, but I know it was, it was less than half. Yep. So a lot will depend. Plus also, I don’t know the specifics of their fleet, but I know they have significant dedicated fleet or owned fleet or bottler owned fleet that may not really impact the overall capacity in the marketplace. I’d love to, if someone knows I’d love for someone to sound off on that agreed,
Scott Luton (01:09:05):
Uh, Rhonda shares, the housing market is booming in Arizona to home improvement opportunities and money investments in our economy. That is a great point, big impact that has throughout industry, certainly supply chain
Greg White (01:09:18):
Great news for Arizona because it was down for a significant amount of time. That is right.
Scott Luton (01:09:23):
So Jaymin says challenge accepted big bear to him was what we discussed. The big call-out of the challenge of driver training. Agreed. Jayman agreed. And you know, that gets each time Greg, that gets so many, uh, comments and, and passion in, uh, in these live streams and other programming ton of, um, uh, educated opinions around that huge issue. We’ve got to tackle Jayman shares because it was a challenge even before safety measures related to COVID we’d need better driving training programs as this helps, not just in onboarding, but helping keep drivers own and prevent burnout and leaving the industry.
Greg White (01:10:04):
Great. I think we need to rethink driving overall. Uh, you know, one of the things that I’ve seen, uh, posited out there is relay driving, you know, never get outside of a day or two of your, of your home port, your, your hometown, whatever it is, shift the trailer to somebody else, and then find, find a haul home, something like that. Uh, with, with the advent of technology, there has to be the ability to do that. I mean, we, we have hundreds of thousands, maybe more miles of, of Bob tailing of, of empty, um, trailers and, and, uh, tractors. So we must, there must be some way that we can include that addition into the mix and optimize for that. Yep.
Scott Luton (01:10:53):
Good points there, Greg. And I think it’s inevitable. I really do. Uh, Jaman says also interesting that the Midwest, according to again, the freight payment index had first freight index increase in five quarters. Um, well, no shortage of conversations. We’re going to have to wrap up here, Greg. It’s fascinating. I love these conversations between the data and then some of the stories and observations you get a perfect mix. Um, as we mentioned, Greg, we’ve got linked to the report folks in sign up for, but also if you want to learn more about supply chain now, programming go to supply chain now.com where we are working hard, powering the voice of supply chain, featuring conversations, just like this from both our panelists. And of course our community that jumps on and shares what they, what they think. Right. Greg.
Greg White (01:11:45):
Yeah. Yeah. I mean, we want to give voice to this industry and it’s getting it big time. And you know, our goal is to make sure that the whole world is part of that voice and that the whole world hears that voice. Yep.
Scott Luton (01:12:00):
And it’s just that simple that’s right. Um, one final programming comment here. If you are a driver or if you know a driver we’d love to interview you as part of our programming, we’d love to get your experiences firsthand. I completely agree with what Greg was saying. And some of the comments was saying that is so fascinating to many people. You don’t have to have a YouTube channel. You don’t have to even have social media. We’d love to get your story front and center here at supply chain now. So read out, uh, Amanda and Claire, I believe are still with us. Uh, you can reach out in the comments here, or you can shoot a note to firstname.lastname@example.org and we’ll get you teed up. All right. So Greg final comment from you, and then I’m gonna sign off.
Greg White (01:12:43):
Well, I mean, look, I hate to keep going back to it, but every time we do this, this is the fourth quarter we’ve done it now. Correct? Every time we do this, um, I recognize how valuable this data is. And this time, what I recognized is the valuable th the, the, the value in it is that it is objective data, right? It is objective. It’s not provided by one side or the other, trying to do something or represent something with it. That is incorrect. That is an incredibly valuable service to the industry. So, uh, if you want objective data and you need it, right, no fake news here. If you want objective data, this is the place to get it. Yes.
Scott Luton (01:13:27):
Agreed. And yeah, we didn’t call this out, but, uh, Bob Costello with the, uh, American trucking association is, is part of the data and part of the, the, um, uh, the economic inputs. So you talk about getting some, some non-biased impartial information. You can make better decisions with, uh, so good stuff there. All right. So big, thanks to of course, Bobby Holland, where us bank, Eric Olson with TQL big, thanks to the whole team over at us bank. We’ve enjoyed all of their, their prep on the pre-show side. So, um, really appreciate that to our audience. Again, check us email@example.com. Let us know what you’re hearing, experiencing, you know, give us that voice that guides all of our programming decisions here on behalf of the entire team here at supply chain. Now Greg white and Scott Luton signing off today. Big thanks to Jaymin our fearless transportation logistics leader, who from the cheap seats, but Hey, do good. Give forward, be the change that’s needed. And with that said, we’ll see you next time here on supply chain now. Thanks.
Would you rather watch the show in action? Watch as Scott and Greg welcome Eric Olson and Bobby Holland to Supply Chain Now through our YouTube channel.
Eric Olson is currently Outside Sales Manager at Total Quality Logistics (TQL). Eric leads a team focused on face-to-face interactions with potential clients. He also supports relationships with TQL’s largest clients and certain key vendors.
In his 14 years at TQL, Eric has held roles in business development, risk management, product management and in finance. This experience allows him to play a key role in translating and communicating the complexities of the business relationships in the industry both within TQL, and externally to clients. Eric is a graduate of the University of Dayton and lives and works in TQL’s home city of Cincinnati, Ohio.
Bobby Holland is responsible for the Freight Data Solutions team at U.S. Bank. Bobby has over 36 years of broad-based data processing, software engineering and consulting experience. He has leadership in multiple industries including insurance, large-scale billing, customer care services and banking. His specialties include systems integration, enterprise applications architecture, agile methodology, DevOps practice, systems engineering, object-oriented development, analytics, and product and project management. Bobby’s current focus is in analytics and data-related product management for the freight industry. Bobby holds a degree in Computer Science from Metropolitan State University.
Greg White is a host and principal of Supply Chain Now. Greg is a founder, CEO, board director and advisor in B2B technology with multiple successful exits. He recently joined Trefoil Advisory as a Partner to further their vision of stronger companies by delivering practical solutions to the highest-stakes challenges. Prior to Trefoil, Greg served as CEO at Curo, a field service management solution most notably used by Amazon to direct their fulfillment center deployment workforce. Greg is most known for founding Blue Ridge Solutions and served as President & CEO for the Gartner Magic Quadrant Leader of cloud-native supply chain applications that balance inventory with customer demand. Greg has also held leadership roles with Servigistics, and E3 Corporation, where he pioneered their cloud supply chain offering in 1998. In addition to his work at Supply Chain Now and Trefoil, rapidly-growing companies leverage Greg as an independent board director and advisor for his experience building disruptive B2B technology and supply chain companies widely recognized as industry leaders. He’s an insightful visionary who helps companies rapidly align vision, team, market, messaging, product, and intellectual property to accelerate value creation. Greg guides founders, investors and leadership teams to create breakthroughs that gain market exposure and momentum, and increase company esteem and valuation. Learn more about Trefoil Advisory: www.trefoiladvisory.com
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