200,000 drivers didn’t disappear overnight. Plus: Dalilah’s Law targets foreign dispatch, a broker ran a $1M USPS scam, the dashcam war escalates, and more.
B1 visa drivers and illegal operators are not the same thing. Here's the difference and why conflating them is hurting the industry.
Good Monday Morning. We're excited to bring you one of our favorite podcasts ever. We sat down with industry veterans Eddie Leshin and Brian Winshall as they took us through their trailblazing time with American Backhaulers and the shifts they witnessed throughout the broker industry to their look toward the future with 4PLs like Sheer Logistics. Plus, we take a look at more execs ousted from Flexport, the entrance of a new autonomous trucking company, and the Yellow shutdown ripple effect. Also, keep an eye out for DAT's impending user security enhancements and potential challenges with Hurricane Lee.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
🚚 Argo AI Founders $1 Billion Comeback. Argo AI founders, previously backed by Ford and Volkswagen, are introducing Stack AV, an autonomous trucking venture supported by $1 billion from SoftBank. Previously involved with Argo AI, the team has ventured into autonomous trucking, securing $1 billion from SoftBank. Despite challenges in the sector, such as Embark Trucks' financial woes and Waymo's pivot, Pittsburgh-based Stack AV is determined to make a mark. Their strategy includes optimizing routes and focusing on varied delivery stages. All eyes are on the venture to see how Stack AV will stack up.
🧹 Flexport Cleans House, Six Execs Swept Out. Last week, we wrote about Dave Clark stepping down as co-CEO at Flexport. Flexport's board cited overspending without revenue growth. Clark, who joined Flexport a year ago, aimed to expand the company's logistics operations and added last-mile services through acquisitions. Now Flexport's founder, Ryan Petersen, continues to clean house, ousting at least six executives, including former Amazon executive Teresa Carlson.
📉 Old Dominion's August Performance Impacted by Yellow's Shutdown. Old Dominion Freight Line experienced a significant change in August metrics, attributing it to Yellow Corp's shutdown. Revenue per day only declined by 1.4% YoY in August, compared to a 13.3% decline in July. Tonnage was down 6% in August, an improvement from July's 11.1% decline. The shutdown of one of its largest competitors, Yellow, indirectly boosted Old Dominion's shipments. Analysts expect the company's Q3 results to outperform expectations.
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In 1990, Eddie Leshin became employee #44 at American Backhaulers, a company synonymous with the evolution of freight brokerage. In our interview, Eddie recalls Paul Loeb, one of the founders of American Backhaulers, mentioning they were in the so-called Bronze Age of freight brokerage. At that time, the term "broker" was taboo and frowned upon. They spearheaded efficiency and change in an industry that had recently been deregulated (1980).
Before deregulation, carriers were paid for round trips on outbound loads. Often, carriers would deliver the load and return home empty. Recognizing this inefficiency, Paul Loeb & Jeff Silver founded American Backhaulers, named so because they provided carriers with a backhaul home. Consequently, shippers no longer had to pay roundtrip rates, though this meant more work for the carriers. They needed to adapt to the evolving industry and started utilizing brokers for their return trips.
A snapshot of Eddie Leshin's career:
A glimpse into Brian Winshall’s career:
Though Eddie and Brian parted professional paths after their tenure at American Backhaulers, they remained in close touch. Eddie took on the mantle of COO at Coyote Logistics in 2010, a position he held until just before its 2015 acquisition by UPS. Brian, on the other hand, remained with CH Robinson until 2015, dedicating nearly 16 years to the company. Post-CH Robinson, he became an EVP at AFN, which was eventually acquired by GlobalTranz in 2018.
In 2020, Eddie a Partner at Woodlawn Partners (a Private Equity Firm), reached out to Brian to discuss the potential of buying and investing in a managed transportation company (4PL). Recognizing the intrinsic value such companies offered to shippers, they both envisioned a significant opportunity. These managed transportation firms are rarer than standard freight brokerages, offering greater value. They demand significant investment, deliver consultancy, and work closely with shippers to make strategic decisions on their behalf.
After a minor hiccup along the way to find the right company, Woodlawn Partners identified the ideal managed transportation company: Sheer Logistics. We had the privilege of interviewing the Founder & CEO of Sheer Logistics a few weeks ago.
Our interview with Eddie & Brian is one of our favorite podcast episodes we've produced. We highly recommend it to anyone interested in the history and evolution of freight brokerage & managed transportation, as well as the significance of creating a company that both customers and employees cherish.
FACTOR WITH OTR SOLUTIONS
OTR Solutions is laser-focused on helping brokers & carriers scale and protect their businesses. Quick pay options, 24-hour margin funding, and maintaining cash flow with OTR Solutions help you compete with the biggest brokers & carriers in the industry and stay afloat. You work hard, let OTR Solutions work for you. Read more here.
AROUND THE FREIGHT WEB
🛡 DAT's Security Boost. After years of scam concerns, DAT Freight & Analytics introduces multi-factor authentication starting Tuesday, addressing user security complaints.
📈 Miller's Labor Insight. Supply chain expert Jason Miller shares that unemployment rate concerns are eased by data suggesting a controlled labor market cool-down, supporting FOMC's upcoming decisions.
🌀 Hurricane Havoc on Supply Chains. Hurricane Lee's potential U.S. landfall poses a risk to supply chains reminiscent of past disruptions. This article breaks down the cost intense weather episodes have on the industry.
📦 U.S. Import Surge. Container imports rise to pre-COVID levels as U.S. ports see increased volumes. Data suggests a blend of peak season demand and shipping capacity strategies.
FREIGHT FEST IN HOUSTON, TX
Don't miss the biggest transportation and logistics conference of the year: Freight Fest, taking place in Houston, TX from September 28th to October 1st. Use our code, FC15, to receive a 15% discount on your ticket today. Learn more by going to FreightFest.com.
FREIGHT MEME OF THE DAY
200,000 drivers didn’t disappear overnight. Plus: Dalilah’s Law targets foreign dispatch, a broker ran a $1M USPS scam, the dashcam war escalates, and more.
FMCSA cracks down on MC numbers. A $158M trucking Ponzi. Middle East surcharges.
The domino effects are just starting to hit. Plus: FedEx dethroned UPS, Mexico truck production plunges, another $26M AI supply chain raise, and more.
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