How Kevin Nolan Built A Freight Empire (Full Version)

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Andrew Silver, the former CEO of MoLo Solutions, has linked up with Paul Estrada, the former Director of Procurement at Niagara Bottling (a huge shipper) to start The Freight Pod. In their inaugural episode, they sat down with Kevin Nolan, the Founder of Nolan Transportation Group (NTG), OTR Solutions, Marquee Insurance Group, and Sope Creek. Before we begin on Kevin's story, we wanted to let you know that we summarized his interview with Andrew & Paul here for you to read. If you would prefer to listen to it, you can click here to listen to it on Apple Podcasts.

Background

Growing up in Georgia, Kevin Nolan was the kid you’d find handing out extra lunches, always craving those pats on the back. His desire to be well-liked combined with a competitive nature is the perfect mix for building an empire.

Kevin played college football and embraced the American Pie lifestyle while maintaining a 3.3 GPA. He majored in Business at Presbyterian College. At a career fair in South Carolina, Kevin was presented with two paths: selling insurance or joining CH Robinson.

Career Kickstart at C.H. Robinson

• In 2000, Kevin ended up working at CH Robinson because he felt his choices were limited due to his lesser-known university. He signed up quickly with the company, starting at 25k a year.
• “I got my first big award, and that’s when I realized how much I love the chaos and puzzle of the freight world."
• He was the Express Trainer at CH Robinson when they acquired American Backhaulers. Witnessed firsthand how amazing the American Backhaulers carrier network was. This move in 1999, when CH was worth around $2 billion, proved pivotal. Now valued at $13-14 billion, Kevin attributes this growth to the "power of carrier sales." "All freight covered with great carriers, people they have relationships with. American Backhaulers came in and helped propel CH Robinson to where they are today.”
• By the time he left the company in 2003, he had more than tripled his salary.

Transition to Sunteck

• After CH, Kevin was an agent at Sunteck. He didn't like the agent model. There were also legal issues due to his non-compete at CH Robinson so he left after a short stint.

Working At Waffle House

• In 2004 & 2005, Kevin took a two-year hiatus from the freight industry due to his non-compete – a situation he refused to have to deal with ever again. He had a wife and child at this point.
• Learned the Waffle House Way. The processes they had and the way to manage a large business effectively. Just as he’d reached great heights at CH Robinson, Kevin managed to take the crown as “Top Waffle,” recognizing him as the top sales manager across the company.

• Despite having the chance to take a top corporate spot at Waffle House, logistics is where Kevin’s heart truly was. “I knew walking out of CH Robinson that I was a badass freight broker.” After the non-compete was up, he went back to freight.

Beginning of the Entrepreneurial Journey

• Was again a freight agent from 2006 to 2007, but this time he had his own MC running. Would not sign any non-compete this time.
• By 2007, all loads ran through NTG. They had four employees. Cash flow was tight so collections was the most important aspect of the business.
• Despite full confidence in his capabilities, Kevin’s early fears revolved around scaling the business. Tackling challenges in talent acquisition, he learned to detach emotions from hiring and firing to keep the NTG momentum going.

Getting Shippers to Pay the Freight Bills

• For shippers who wouldn't pay their bills on time, he would fax black pages to them and call them to tell them he would eat all of their toner until they paid the bill.
• If they needed to get really dirty, they would change their number in DAT to the shipper's number (you can't do this any longer) and post the Miami to Chicago lane.

Nolan Transportation Group (NTG) Growth

• The Great Recession hit a year after they officially started. From 2008 to 2011, they were taking every load they could, even if it was only a $5 profit.
• Everyone needed to pay for themselves at NTG within 3 months of being hired. Each employee had metrics they needed to hit to stay.
• "I’ve always said we want to be top five.” Kevin's words echoed his ambition. NTG currently holds the #12 spot in Transport Topics' largest freight brokerage ranking. A shift to more contract freight aims to expedite their rank climb.
• Brought on Fritz Owens as his business partner & CFO when he had 13 employees. Needed help talking to banks and providing financial reports. Fritz brought financial stability and finally funding for the vision of large training classes. This was a crucial turning point in the expansion of NTG.
• “Our secret sauce is getting men and women up to speed fast,” Kevin reveals. Brokers at NTG navigate a landscape of set loads and high expectations. The benchmark is clear: miss the mark on loads, and you're out. Over 100 calls a day epitomize the relentless pace. It's more than a method; it's the NTG way.
• In 2016, Ridgemont Equity Partners, a private equity firm, acquired a minority stake in NTG.
• In 2018, Gryphon TI acquired a majority stake in NTG.

Beginnings of OTR Capital (Now OTR Solutions)

• Founded in 2011. Kevin's desire to start a freight factoring company came from noticing that factoring companies were getting paid around 5% (those were the rates back then) when all they did was get the POD and send it to the broker. Whereas, NTG was sourcing customers, carriers, and doing the invoicing already. Kevin saw an opportunity to get truckers paid at a lower percentage while also making money himself.
• OTR Capital started out of an NTG office and Fritz Owens, dubbed “The Adult in the Room”, became CEO of OTR.
• Now they are a multi-billion company, offering fuel cards, banking solutions (OTR Clutch), and website creation for trucking companies (to create more curb appeal).
• Currently, 15,000 truckers use OTR (3rd largest fleet in factoring).
• In 2021, Summit Partners bought control of OTR Solutions.  

Sope Creek Capital (Venture Capital & Private Equity)

• Founded in 2018, Sope Creek Capital (named after a trail in Georiga) provides venture capital to middle-market transportation and logistics companies. Currently, out of all of his projects, he is most excited about this one.
• Kevin’s eyes are all on freight tech and efficiency. When he is investing, he’s not looking for people calling themselves the “Google of Freight.” He’s after real, long-term growth and profitability.
• Kevin & his team have invested in Highway, Carrier Assure, and others.
• He does want to buy/invest in a TMS strictly for truckers. If you have one, reach out to Kevin on LinkedIn.

Scaling Multiple Businesses - The Challenges

• Andrew asked Kevin how he was able to step back from the day-to-day functions of multiple businesses. Kevin explained that stepping back was emotional, but necessary. He trusts his team to follow the game plan he’s established and their results speak for themselves.

About Companies Making Money During COVID

• "If you're making twice as much money, you hire a lot of things you don't need." Everyone hired non-revenue-producing people during COVID.
• "This is a winning environment if you execute correctly." The economic environment that existed during COVID is most likely not coming back any time soon. However, there are still ways to win in this market. It's still a lot better than the 2008 financial recession that Kevin worked through. Focus on what you can do and stay positive.

Final Thoughts From Kevin

• "A thousand good loads will be canceled by two very bad ones." The customer chose you to move their freight. They are putting their name on the line so make sure you do a quality job.
• If you take money from someone, that is hard-earned money. Make sure you respect it. Your name and reputation are all you got at the end of the day. Do what you say you're going to do. There is business for everyone.

Extra

Cradle-to-Grave vs. Specialized Model

At the beginning of the interview, the conversation led to a discussion of the pros and cons of cradle-to-grave brokerage models compared to a specialized model.

• Cradle-to-Grave Model: typically one freight broker takes over all functionalities and responsibilities over a given load. They need to have a customer that gives them a load, they then build the load in their TMS, schedule it, book the truck on the load, get POD, and send the invoice to the customer. TQL is the best example of a scaled cradle-to-grave model but seems like they are transitioning to specialized. Kevin initially began NTG with cradle-to-grave but has transitioned to specialized as his business has grown. He adds that this model works well for small to medium-sized (SMB) shippers, but not for enterprise shippers with contract freight. Andrew added that CTG cannibalizes a business.
• Specialized Model: this is essentially like an assembly line. Each person at the freight brokerage is designated a specific responsibility. Customer sales reps find shippers, carrier sales find trucks, accounting invoices, etc. MoLo Solutions, Coyote Logistics, and many others build their brokerages using this system.

How Many Calls Does Paul Estrada (A Shipper) Receive Per Day From A Broker? Between emails and phone calls, hundreds. Paul could tell if there was time put into the message or phone call. Did the broker reaching out do any research on him or his company? If there was no time or energy put into finding out about him or his company, he won't even respond. Can't give them a time of day since they didn't give him the time of day.

Different Approaches in Sales Between Andrew Silver & Kevin Nolan

• Andrew doesn't harass shippers and everything needs to be perfect. Kevin's approach is more aggressive. Will call a shipper every day.
• Secret Sauce of NTG: get everyone up to speed fast. Need to hit metrics or their out. Over 100 phone calls a day. Ground & pound. Paul adds that ground & pound shippers may work better for SMB. He hates it as an enterprise shipper.
• Kevin is a spot freight guy. Ten years ago 10% of NTG was contract freight, currently, that's around 40%. MoLo contract is around 60%. Contract freight has lower margins, but you know how much business you can expect for a given month. Spot freight has higher margins, but every day you are looking for loads to get from customers. Kevin calls contract freight insurance.
• Kevin believes that our industry is not a zero-sum game. Everyone could win. He is friends with his competitors since he knows they all could win.