Expedited Freight: Looking Beyond Traditional Modes | Episode 71

Welcome to Banyan Technology Tire Tracks. I'm Matt Collins. And today we have Ted McClain from Expedite All. Today we're talking about small truckload and expedited shipments and how they fit into everybody's freight networks. There's nobody more experienced. I had the pleasure of sharing a lunch with Ted at SMC3 this past winter. So without further ado, Mr. Ted McClain.

Thank you. Thank you. I appreciate the opportunity to be on this with you guys. Like you said, I'm Ted McClain. I'm the Senior VP of Sales with Expedite All. I'm about to celebrate my third anniversary here. I came here after about 35 years at Yellow. I've been doing this type business for a long time, but I feel very fortunate to have landed here where it's an outstanding service company and it's a lot of fun.

Yeah, well, you're in a great spot too because Expedited is kind of the sleeping giant in the industry, especially as fuel surcharges go up on LTL and LTL is getting more and more expensive in service. I guess with carriers shutting down due to the kind of the squeeze in the market, service isn't always guaranteed. At least for my days at TQL, I know when a load is hot, they're hot. And those guys are stressed out. So I know shippers are thrilled to pass it off to somebody who knows what they're doing. I mean, I guess, Ted, what have you been seeing lately? Would you say that the fuel squeeze is bringing more opportunity to you?

Fuel is part of it. The crackdown on CDLs is part of it. And generally, just our industry has been growing about 20 percent over the last few years anyway. And we attributed that to several things. One is that people aren't carrying the inventory they used to. There's a lot of lean inventory type things going on. The consumer market is a little bit more fickle. They may change their mind a lot quicker than they used to. And people are not carrying the inventory. And that means there's things run out a lot quicker. That is one of them.

The other is what we call the Amazon effect. I mean, everybody wants everything today or tomorrow. It's not where you could order it and be okay with it coming in seven to eight days. And then the other thing about that is that even back in the years in the LTL industry, usually about 6% to 7% of the shipments that we saw had some kind of expedited needed. They were premium LTL services where it was an expedited or guaranteed service. You combine all those things and it's an industry that's really in a market that's really growing.

That's a great point. I mean, would you say you run up against clients that are shipping guaranteed lots of the time and you're just hoping that stuff shows up? Because I know that's something that we'll bump into talking to clients where the guaranteed API that the carrier still didn't show up or it was a day late. And really lots of the time you only get the 50 bucks back, but there's no way to get that time back.

Yeah. Well, I mean, LTL has a huge space in the American transportation market. There's no doubt about that. And it's not going to go away, and we're certainly not going to replace it. But guaranteed LTL means it's just guaranteed for the service date that they've already published. That's pretty much all that means. If it's a four-day service point, they're just guaranteeing four days.

Now, there's expedited LTL where that usually takes a day or so off the transit, but it still goes through the same system of cross-docking, relays, transfers, multiple handlings, and all that kind of thing. So it's a premium service, but it's still not quite to the point of what we do.

Yeah, you've ran me through that a couple times, actually. That wasn't even the most thoughtful question. But okay, so some stuff is hot. What would you say does typically run through the expedited channel? I guess in my head, an expedited truck that has to show up. We're talking to a manufacturer. We're bringing in raw steel. If the truck doesn't show up, manufacturing stops and it's costing shippers thousands by the minute. What else is on?

It's more than just expedited though. I mean, that's our name, Expedite, but it's also dedicated. So if it's a shipment, like you said, that needs to be there as hot, or it's easily damaged, or it is very valuable or fragile, any of those things that you don't want to mix it into an LTL environment and take the chance on a damage or a misroute or anything like that, then it's a really good idea to put it in a dedicated vehicle. And we can right-size the vehicle to whatever it is that you have and what you need.

What would you say is some of those fun commodities you hauled? Everybody has a story for the coolest thing they've ever hauled. Do you have a couple for Expedite All?

Yeah. I mean, we do some stuff for some hospitals that are critical. I mean, we deliver early in the morning because the surgery is that day. That's pretty important to be there on time, you know?

Yeah, yeah. Of all I've heard, that sounds more serious than a whole lot of them.

Yeah, yeah. It's not just getting the piece there because somebody wants it. I mean, they need it. They got to have it. But some of the industries that we work a lot with, we do a lot of automotive, of course. Like you said, we're about the factory shut down. Robotics, electronics, pharmaceuticals, because we do have temperature-controlled vehicles as well. Medical devices because they're not huge. You're not going to put them on a 53-foot trailer, but you certainly don't want to put them into LTL.

Biotech, industrial machinery, that's really hard to crate. I mean, it would be probably fine in LTL if you could crate it properly. But I've seen over, like I said, 35 years of it, either they spend thousands of dollars on the crate or they don't crate it well enough and then something happens. E-commerce, there's any number of things. Really, anybody that has LTL freight also has expedited freight. If they try not to, and that's a good plan, but all plans don't always work.

Yeah, I remember you kind of gave me some insight to it. You said for every truckload of LTL that goes out of the facility, there's typically at least one pallet that gets left behind and is a great candidate.

Or maybe not left behind, or it's just late getting produced or ready to ship, or somebody just happens to need it faster than LTL. But usually there's freight there that needs to go faster than LTL can handle.

Yeah, and that's really why I like your guys' offering too, because something that is not nearly spoken about enough, it's something that I try to get out to all of our clients, is your guys' API, which has the built-in capacity. Because say that there was an LTL shipment that was going to run on an expedited network, but what LTL carriers consider expedited, a high-service carrier that's supposed to get there fast. They say it's two days, but then they miss pickup. That's something that API does not necessarily take into account. If you miss a pickup, the transit days are blown. That's something we track at Banyan, but your guys' API takes daily capacity into account. Do you want to run through some of the cool capacity stuff you're doing on API?

Yeah. For API, every truck in our network has GPS monitoring. So for us to show up as an option in API, we know that we have 20 trucks in the general area that could pick up within two hours or so that could handle your shipment. Otherwise, we don't show up in your API. And that's kind of the way it works. Anything that's three pallets or less, 3,000 pounds, three pallets or less, would go on a cargo van.

Now, a couple of difference is in what we do and LTL is important to note. One is how transit days are factored. LTL transit days across the industry, the service dates calculation starts the next day, the next morning, and it counts business days. Ours is a little different. Since ours is door-to-door, our service starts the day we pick it up. That's day one. And it runs right through the weekend.

So on an example of, let's say, an Atlanta to Los Angeles shipment, picking up Friday. If we're picking it up, it's a three-day point. So we're picking it up Friday, Saturday, Sunday. We're delivering it Monday from Atlanta to L.A. That's not special. That's just normal service.

For an LTL carrier, that calculation wouldn't start until Monday. Three-day service would be Wednesday if it's 100% on time. It's probably a four-day service for LTL because they would have to go through at least probably two transfer points, probably more.

Yeah. And that transit days, we were working on a sidebar trying to show – because there are some instances where you guys will show zero transit days. Like, hey, this is a same day delivery. And yeah, that definitely is – it's a totally different world than the LTL. Typically, people are auto booking and let it slap the BOL on it. It'll show up eventually.

Up to about 200 to 300 miles, depending on the location. If we pick it up in the morning before noon, we can usually deliver same day and up to almost a thousand miles next day.

Yeah. I mean, that's vastly different. And I guess in lots of cases, I guess Sprinter vans. We're running Sprinters. I had a little bit of experience hitting a – oh gosh, what's that? The DAT for Selectus. And talk about carrier vetting. You post the load up on Selectus, you get 15 calls. Everybody somehow has the same exact calculated rate and just cleaning up and tracking. How do you sort it out?

The load boards – our value proposition, one of them, one of them is the size of the network. We've got about 12,000 vehicles in our network with about almost 8,000 cargo vans. But the real strength of the network is the vetting process and the security of the network.

Taking Sprinter vans into account, they don't have MC numbers for the most part. So if you've got the best software in the world of whatever you think that is, you can't do a whole lot with a Sprinter van. You can check their insurance. And that's about it. Then you just got to hope and pray.

But we've taken a lot of further steps on that. We do full background checks. We do training, testing. They have to agree to be on our proprietary app for tracking 24/7. We have equipment inspections. And it takes a good bit of time to get. admitted into our network. It's not like you find something on low board, vet them out and put them to work. This is a weeks or months long process. And frankly, a lot don't make it through the vetting process, which we always want to have more trucks especially in the larger vehicles, like the straight trucks. But we don't compromise on the vetting and the security of the network to do that.

Yeah, I know the box trucks are the same way. It's very much more the Wild West. I mean, they still have MCs. But you're dealing with worlds of third-party dispatchers in a completely different country than the driver, and the driver has – there's just no oversight internally for some of these dispatchers.

So straight trucks, you guys are also managing. Some reefer as well. I mean, maybe you could fill us in kind of on what you guys are doing on the reefer space, what you've seen for reefer expedite. Because that to me strike as even more critical in lots of cases.

The reefer network is a very, very important part of what we do. We only have about 450 of those right now. We are growing that. We're growing that organically through a company that's helping us build them and then selling them back to our people in our network. But those guys stay busy all the time. I mean, if I were going to go into that business and buy a truck, that's what I would do. But it's a great network.

And it's so hard to ship smaller reefer shipments. LTL reefer is difficult. If you get a whole truck and you put three pallets on it, the risk is they're going to combine it with something else. And then you've got different temperatures, different things mixing. And that's one thing we don't do no matter what size the shipment is we never co-load anything even if it's going from Miami to L.A. with one pallet. That's it. That's all that's going.

Yeah. I mean that helps with timelines too. But yeah, that reefer LTL world, I mean somebody's going to make a whole bunch of money off that as soon as they sort out how to make it quick and easy for everybody.

Now, I will mention, though, the reefers and the straight trucks are not in the TMS because it's a very unique segment of the business. And we want to make sure if we put it in TMS, there's a truck available for you. On the Sprinters, we know that. On the straight truck and things like that, the sizes and the dimensions and stuff, we really need to know that a little bit more before. It's a spot quote network, but it works within minutes. So it's not a problem. It's just not API ready at this point.

Yeah. Yeah, certainly to promise the same capacity before returning a rate. I mean, I think everybody's aware. Nobody gets an instant reefer LTL rate unless you're running with one of the big guys. There's only two of them.

Right.

But yeah, I went down that path quite a few times. My TQL days, you have to call everybody. Somebody gave me a shot on a reefer LTL going out to the Cape, and I was all over that. He was like, "Oh, I'm from Massachusetts. I could probably find somebody going to the Cape," and it's just nothing. There's two carriers that'll do it and they want the business direct. Tough market.

It is.

All right. Well, I guess what about network strategy? I guess there's growth coming to reefer LTL. Where else are you guys trying to expand your network? What segments are you targeting? Where are you guys finding success?

The two markets, I guess, that we – or several markets. But one is the reefer van, the reefers. And then we're also trying to expand the straight truck network where we can get to the critical number to where we can start offering it in through API. We've also greatly increased the number of TSA certified drivers we have. We're at about – I think it's right now about 700. That allows us to make deliveries to the airport and those kinds of things. So that's a big market for us is with the freight forwarders and people who need to have that service.

Are you guys doing military too?

We can do military. Yeah. You just put that in the request and say, "We need to deliver this to a military base or whatever." We're not involved with the DOD or DOW department at this point. That's something that's in the works. But that will happen, but that's not been finalized yet.

I know a lot of people that use Banyan, they use it a lot for LTL. And just some of the key features that are different are when STL might be a good alternative to LTL. On the vast majority of shipments, it's not. I mean, LTL is economical. It's good. I mean, it's supported me most of my life. I love LTL. But I knew then there was times that I just couldn't do what people needed me to do.

But some of the difference is, like I said, there's no combined freight. It is cross-docked. It's not transferred. There's virtually no handling other than loading it on the truck and unloading on the truck. That's where all the damage occurs. It's not really driving down the road. It's moving it across the dock and stacking it on other freight. There's very few chances for the freight to get misrouted or damaged. Damage is basically if there's an accident or something. I mean we don't have handling accidents.

Another couple of things, depending on the freight that you have, you might look at something like STL. Because if your freight is a high class, an NMFC class, high class, you're getting hit with some fees that it may be more economical even or close to it to just ship it STL. Or you're getting a lot of reways, changes, over length feeds. We don't really care about any of that. If it fits on the truck, and obviously it's safe to haul, it's your truck. You put whatever you want there. We don't care if the class is 30 pounds a cubic foot or three pounds a cubic foot. It's the same for us as long as it fits the capacity of the truck.

Yeah, I guess that's kind of a big takeaway. You guys are really offering dedicated LTL. There's no such thing as dedicated LTL on the standard LTL network. It's not dedicated LTL, but it's dedicated freight for LTL shipments. Yeah, a pallet shipment is an LTL shipment.

What we want people to think about is to stop thinking, "Well, this is 10 pallets that needs to go truckload. This is three pallets that needs to go LTL." We want people to be mode agnostic. Basically, think of the shipment and what does that shipment – that one shipment need and use the mode that fits it. If it's three pallets that if it gets there in four or five days, that's fine. Obviously, you stick it on the LTL truck.

If it's 23 pallets and we can't handle that anyway, but stick it on the truckload. But if it's three pallets and somebody really needs it, or is very prone to damage or is high value, or any of those things, you might really consider STL move.

Yeah. I think that's a great takeaway too. I mean people are becoming more and more carrier agnostic. Think if it can wait, don't send it on a full truck. Send it rail. If you're within 50 miles of a terminal and nobody needs it, send it rail. If you're not worried about damage – I mean people are doing that now. Banyan has the multi-mode comparison, where if you wanted to compare volume LTL to just running it as a box truck. People are looking at that more I don't think nearly enough. And then even more people are looking at breaking down pallets and comparing to what it'd be parcel or inverse. If there's a bunch of parcel going to one place, they compare it to running it as an LTL shipment.

Yeah, I'm with you. I think you guys certainly provide a service. And if you think integrations wise, you guys populate into a TMS for the clients that you guys are already connected to. It's the easy button. It's like, "Hey, we're guaranteeing a pickup based on capacity or we wouldn't rate in a transition quick." And then for, I guess, the more complicated integrations where we're hooking into somebody's customer site, you guys are populated as the option for the customer who's ultimately paying for the shipping saying, "No, I want it here now."

Where we want to get to is that we need the people who make the decisions to know who we are. Because you've got a critical shipment. You're looking at your TMS and you see the usual players. And you know them. You've had their rep come to this vibe once every two weeks and brings donuts. I get that. And you trust them. And that's good. That's the whole idea. But we want them to know who we are. And for those instances when they do need that extra service, know us enough to trust us to take that critical shipment for them and not just some name that pops up on the TMS, but they don't know who it is. That's one of the points for doing this podcast is to help get the word out and spread the word.

Yeah, absolutely. Anytime I hear hot shot, I'm thinking Ted, because you know what's going on. I don't think I've ever had a question about expedited or how a kind of vague client need could be solved by you. You almost always have the answers. Yeah, hopefully this podcast, if you're thinking about expedited, you definitely get with Ted or reach out to anyone here at Banyan. We'll refer you to the right guy.

I did leave off one thing about the difference in us and LTL is that LTL, you kind of know where the freight is. You know where the last status change was. If it's going from Dallas to Los Angeles, you know it left Dallas and then it appears in Los Angeles. So with us, with the tracking, you would know that exactly where he is at all times. And that's a lot of comfort to a lot of people on critical shipments.

100%. Not only for the operator who booked the shipment, but the customer, you just kick them the link and everybody loves a live link. I just bought a new mattress. I did a box mattress, and it was sitting in McPherson, Kansas for three days. Well, I guess it's technically on the way from Los Angeles, but it's a hell of a ways away from Cincinnati. It's somewhere in McPherson for 3 days. But yeah, I think that's a great, great takeaway. I mean, the visibility you guys give is definitely in line with any dedicated and certainly for that of that size.

If anybody has business they think might fit into this network, we'd love to talk to them. We can we can talk to them, talk about how we would handle your freight and some service standards from wherever you have. And how we could help them as far as eliminating some delays, damages, loss freight and everything like that.

Yeah. Well, what are some of the next trade shows you're going to? Let's plug those.

Well, you know, I'm not going to too many more this year. I think I'm going to one, an air freight show in Miami later in the year, but I'm not even sure what it is. It's later in the year, but that's part of working with freight forwarders now that we have a good number of TSA drivers. Really, more of my time now is spent on customer visits. And we do really like to meet customers face-to-face, versus just phone calls, or emails, or video calls. We're all a little bit old school that way. There's a lot more trust and understanding when you've actually met with people and can talk to them face-to-face like that.

Yeah, it's seeing the docs, seeing their operation from the inside is always great too. And nothing better to seal the deal and make the promise than a handshake at the end.

Yeah, that's true. That's why we do it.

Yeah. All right, folks. Well, this has been Tire Tracks. Ted McClain filling us in on how expedite fits into all your guys' network. Once again, if you guys have any questions about expedite, reach out to your Banyan AM. Connect with Ted because these guys are really changing stuff up.

Yeah, if you want to look at our website, it has a lot of information on there, a lot of our technology that we've developed. It's just www.expediteall.com.

If you haven't seen the API yet, we'd love to give you a demo, show you how it works, because that's certainly a huge differentiator. We're just the tech guys, but their API is sweet. Think of it as your easy button. All right. Thanks for joining the Banyan Technology Tire Tracks podcast. Like, share, follow, all that good stuff. Thanks, everybody.