🏆 How Kevin Nolan Built a Freight Empire

Good Monday Morning. Today's feature story takes you inside the journey of Kevin Nolan, detailing how he built a sprawling freight empire. In other news, we explore the dip in consumer credit card spending and its broader impact on the economy, how the migrant crisis has businesses hesitating about nearshoring, and discuss how fuel costs may ramp up carrier exits this winter.

In today's email:

• Three Freight Headlines: Credit card spending dips signifying economic slowdown, migrant crises disrupt U.S.-Mexico trade and border operations, and rising fuel prices mask trucking capacity threats.
• How Kevin Nolan Built a Freight Empire
• Around the Freight Web: These few areas contribute half of the U.S. GDP, AI is cutting international shipping costs, Tesla faces racial harassment accusations by the EEOC, plus more.
• Freight Meme of the Day

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🐔 WHAT’S COOKIN’ IN FREIGHT

💳 U.S. Consumer Credit Card Spending Dips. U.S. consumer spending is slowing, with credit card spending on retail and food service falling from a 10.1% difference from typical levels in August to just 4% in September, as reported by the Bureau of Economic Analysis. Consumer confidence stood at 103 in September, a drop from 108.7 in August. Predictions of an economic slowdown, rising fuel prices, and the resumption of student loan payments are some factors leading to this spending contraction. Retail giants, including Target and Home Depot, are already reporting a decline in sales, reinforcing the concern.

🚧 Migrant Crisis Hampers U.S.-Mexico Trade. A surge in illegal migrant crossings at the U.S.-Mexico border is causing disruptions in supply chains for American businesses. The U.S. Border Patrol reported a record high of 22,000 detainees, up from 7,696 in June, leading to border point closures and delays. Mexican railway Ferromex suspended operations, while U.S. Customs and Border Protection temporarily closed rail and truck crossings. Companies seeking to move operations closer to the U.S. are reevaluating their plans due to increased uncertainty. The disruptions are among the worst seen, impacting businesses and highlighting the challenges posed by the ongoing crisis.

⛽ Fuel Price Surge Masks Trucking Capacity Threat. Diesel prices for Class 8 trucks have surged by 16%, concealing a deteriorating trucking market. Rising fuel costs inflated spot rates in September, but without factoring in fuel expenses, rates are actually trending lower. Demand has risen by 15% since April, yet it hasn't significantly affected carrier availability. The sharp rise in fuel costs exacerbates carrier exits from the market. This could lead to a tighter market in 2024, even if demand doesn't persist.

TOGETHER WITH RAPIDO

Rapido is a top nearshore staffing company providing logistics and supply chain talent to companies in the United States. Based in Guadalajara, Mexico, Rapido offers a unique combination of cost savings and access to a skilled workforce, making it an attractive option for American logistics businesses.

See what makes nearshoring to Mexico an attractive option for scaling a logistics company and how partnering with Rapido Solutions Group simplifies the whole process.

How Kevin Nolan Built A Freight Empire

Andrew Silver, the former CEO of MoLo Solutions, has linked up with Paul Estrada, 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 on Kevin Nolan

Growing up in Georgia, Kevin Nolan was the kid 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."
• 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

• He was again a freight agent from 2005 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 were 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.
• In 2016, Ridgemont Equity Partners, a private equity firm, acquired a minority stake in NTG. In 2018, Gryphon TI acquired a majority stake.

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. As 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.  

👉 We couldn't fit everything we wrote about Kevin and his journey in this newsletter, so here's the link to read the rest of the story (it's worth it).

TOGETHER WITH ISOMETRIC TECHNOLOGIES (ISO)

Today's newsletter is also brought to you in collaboration with ISO, the industry leader in delivering unparalleled transparency and reliability in logistics performance through their one-of-a-kind scoring system.

AROUND THE FREIGHT WEB

🗺️ U.S. GDP and Freight Hotspots. Just 23 small blotches on this map contribute to half of the overall US GDP, highlighting crucial freight destinations.

🤖 AI in Freight Forwarding. Ryan Peterson, Flexport CEO, emphasizes the company's new GPT-4 based AI tool's role in reducing freight forwarding's labor cost and operational time, sparking debates on long-term employment impact.

🚫 Tesla Faces Racial Discrimination Suit. The EEOC sues Tesla for alleged racial harassment, continuing the series of accusations against the automaker’s workplace environment.

🚚 Spot and Contract Rate Gap. The freight industry battles a 74-cent gap between spot and contract rates, underscoring the ongoing struggle and adaptation needed in the current market.

📦 China-Russia Trade Imbalance. The China-Russia trade imbalance post-Ukraine invasion resulted in 150,000 stranded empty containers in Russia, disrupting global container availability and pricing.

FREIGHT MEME OF THE DAY

Also, check out:

• 🎧 The FreightCaviar Podcast. Listen to this week's podcast on Spotify & Apple Podcasts.
• 🤝 Master the essentials of freight brokering with Freight360's comprehensive online course, tailored for both aspiring brokers and current agents looking to enhance sales and operations. Receive $150 off your course with our code FREIGHTCAVIAR. Click here to learn more.