Katie:
Welcome, everyone. Thank you so much for joining us for today’s webinar. My name is Katie Faulkner and I am with the content marketing team here at FreightWaves. I’d like to welcome everyone to today’s presentation in partnership with Logixboard. We’re very excited about today’s topic, and we’ve got a great group of gentlemen who are going to share their insights with you shortly. But first, let me jump into some housekeeping items for you guys. If you have any issues that come up during the webinar, please feel free to reach out to our team in the audience chat function, which you can find in your webinar console. Also, if you have any questions that come to mind, during today’s discussion that you’d like to ask the panelists, go ahead and enter those through the Q&A box, which is also in your console. You can shoot those to us at any time. And we’re going to try to answer as many of those as possible during the discussion and try to get to any of them that we missed at the end of the presentation. Lastly, I just want to remind everyone that we will also be sending a link of this recording to you tomorrow in case you’d like to view it on demand or share it with your colleagues. So at this point, I think it would be great to warm up with a quick poll question. I’m going to go ahead and share that with the audience. You should be able to see this on your screen and go ahead and select the answer that best pertains to you. The question is what CMS does your company currently use? Once you guys take a look at that for a second. Got some good ones on there. So go ahead and feel free to submit your answers. At this point, I’m going to go ahead and hand it over to Zach Strickland, who is our Director of Freight Marketing here, or excuse me, Freight Market Intelligence here at FreightWaves. And he’s going to get started with today’s presentation.

Zach:
Thank you for that, Katie. Yes, Zack Strickland, Head of Freight Market Intelligence here not Marketing, at FreightWaves. Thank everybody for joining us today. Today, we have a pretty solid little topic to go into. I’ll introduce myself a little bit here. So head of freight market intelligence. And basically, it’s my job at freight waves to deal with the data. Get in there and get dirty. We obviously we have a platform, a very technologically driven platform at that. And today we’re going to talk about how that is relevant in closing forwarding contracts using digital tech. So it’s, I’m joined by two experts in the field here. Julian Alvarez, CEO of Logixboard and Adam Hill of Scarborough International, and they are going to take us on a journey to tell us exactly how they can leverage tech in closing more forwarding contracts. But without further ado, I’m gonna go ahead and toss it over to Julian. To start us off and give us a little background and intro on himself.

Julian:
Perfect. Thank you so much. My name is Julian Alvarez. I am the CEO of Logixboard. Based in Miami, we are a customer experience platform for freight forwarding companies around the globe. Have customers I believe in 17 different countries, hundreds of customers, most of which use Descartes, Magaya, or CargoWise as their operating systems. Super excited to be here and thank you everybody for joining.

Zach:
All right, Adam, give us a quick intro of yourself.

Adam:
Sure, my name is Adam Hill. I’m the President Chief Operating Officer of the Scarborough Group. We are a group of 5 3rd Party Logistics (3PLs) companies that really operate in the space from the factory to someone’s door. So everything from international forwarding, customs brokerage, all the way down to warehousing, and econ distribution.

Zach:
Right, good stuff. So we did have a bit of a survey. Or I should say that Logixboard did a study here. Asked shippers a few questions, VCOs, around the importance of digitization. So the analysis was, of course from surveying 100 plus the VCOs. And there were two key takeaways here from this, so we go on to the first one here: How important is online shipping visibility when working with a freight forwarder? So I don’t know that there’s a lot of surprises here. But I actually took a few big takeaways, Julian and Adam. So I’d kind of like to get your thoughts on the results here. So 45% of the shippers transition or fired a freight forwarder due to inadequate technology. And you can see that it’s actually considered a very important piece of what a freight forwarder does. What do you guys think about that? Was that shocking to you? I’ll wait, let’s lead off with Adam.

Adam:
No, I don’t think that’s shocking at all. And I think that when you start to look where our world is headed, especially the past couple of years, right, like we went from a very, I mean, even our industry as a whole has been very paper based since really antiquity at this point, and so getting ourselves back to where we are today, and the last two years have just fast forward in the amount of digitization we’ve needed not only in our own shop, but just across our industry as a whole. So this is not surprising to me whatsoever. You know, we brought a new sales director in probably five years ago now. And it’s very first comment, I think on his first day was whatever we had was terrible, and we needed something new. And so it’s been a long conversation and a long uptick. And I think, as a whole, the industry has done a pretty good job, especially here recently at really starting to put some investment behind their technology and what they’re ultimately going to offer their customer.

Zach:
All right, Julian, I got a little bit of a question for you on this. So I think obviously, it’s a critical component. Why do you think as Adam said, this is becoming more important to people over time?

Julian:
I’m glad you asked that question. That’s what I was thinking about talking about. So that’s perfect. I think there’s two things honestly, when we started the business, it was 2016, we kind of identified that visibility and customer experience was going to be really critical for freight forwarding companies. But I remember chatting with freight forwarders, kind of 2016, 2017, 2018, 2019: and at that point, really what was driving this was kind of the Flexport effect. And online freight forwarding companies coming to market with a new paradigm. But at the end, just being traditional, you know, being freight forwarding companies with great tech, and a lot of people I think, doubted whether that was going to be a model that worked or not. And that model started to advance I think some freight forwarding companies started to lose deals to some of the online freight forwarders like Flexport. But that was a catalyst. I think when COVID hit it was a huge accelerator though, right? You have all industries kind of starting to digitize really rapidly, what you would usually see take 10-15 years happened in a time period of a couple of years. And it was several things, I’d say Flexport effect was one of them. COVID coming in and forcing everybody to digitize was a second. The biggest one, though, in my mind has been there’s been a huge shift in shipper expectations or BCO expectations. If we look five years out, 10 years out, the need for having great visibility, and a great experience was not as strong. But when you have BCOs coming to their freight forwarding company or their customs broker and saying, “Listen, if you don’t give me good visibility, and you don’t give me a good experience, I’m going to churn and go work with another provider that can offer that to me,” I think that ultimately will drive the market, BCOs coming in. And we’ve seen that accelerating it started accelerating with COVID, as supply chain disruptions started to increase, it accelerated even more. And by now it’s almost becoming status quo, where bcos expect kind of this technology from their freight forwarding or for their customs brokers. So I’d say a multitude of things. But ultimately, what drives us the most today is that expectation from your customers that they need to have much better technology and much better visibility than what they had even a couple of years ago. Right?

Zach:
Yeah, and then obviously, the data backs it up, in terms of the supply chain disruptions with COVID. And everything, you know, some of those tasks that used to be very simplistic and you can rely on them have become a lot more chaotic, obviously. So yeah, I think I think at this point, technology has grown into not just something that you could have or should have, but something that you have to have to manage a lot of the day-to-day so well.

Julian:
One thing I would add there as well, I think the paradigm has also, you know, also shifted a little bit where before, I think freight forwarding companies and you know, just companies in the logistics space in general, used to see technology much more as a cost center. But as they’ve started to implement new technologies, I think people have understood that there’s really strong ROI behind those investments. So we have this thought internally, which is how do you couple great people at our customer’s operations with great tech, so maximize the ROI out of that. And that can come in the form of efficiency, it can come in the form of increased revenue, which we’ll cover today, which is either winning new contracts, you know, contracts or increasing share of wallet. So when people look at kind of their tech stack, I think there’s a multitude of solutions there. Each one of those should drive a really strong ROI. And I think that’s been a big shift also, are providers like us and other providers in the market coming in plugging in some holes that the TMSs have and being able to drive tremendous value for companies as well.

Adam:
So, you know, if you think back to where we were, even just a few years ago, everyone’s always had some level of visibility. And I think Julian nailed it. There’s there were some folks that came into the marketplace, whether you like them or don’t like them as a conversation for another day, but is that they provided a superior tech product. And I think that you started to see even the largest forwarders in the world at this point, playing a little catch-up across the globe, right? And I think most of that catch-up has been done. As far as what’s out there. I think that in all the mid-market, forwarder industry, there’s still a lot of ground to gain in that market as far as their adoption of tech and what their clients are looking for. But I also think that, you know, as, as we’ve all changed over the past couple of years, the idea of visibility existing has existed for a long time. And I think it’s that we’re also used to this look, or this feel of something that that feels good, right? We take a look at it and it’s not just like a spreadsheet on a screen. While the data may be the same, as it’s always been, there’s this new requirement of kind of user interface and new requirement of look and feel that’s very different than where we were just a few years ago. And I think that’s probably, you know, in the poll question, that’s a lot of where you’re getting at is, I think a lot of those folks, there is a look and feel requirement. And there’s an expectation that that provides really solid data. And I think that that’s where, you know, I think the question behind the question here is as good as all of this kind of UI tech is becoming is really, it’s the data behind the data, right? It’s what kind of real feed are we getting from the steamship line? What kind of real feed are we getting? How accurate is that feed? Because I think that’s really where this starts to get interesting.

Zach:
Some questions coming in for you, Adam. You know, one of them. And I think we can combine these two, what CRM program does Scarborough currently use? And can you share how Scarborough has evolved your shipment visibility and the impact that has had on staying competitive in the market?

Adam:
So when, so we’re actually a customer of of Julian’s. And so I got the opportunity to talk to his team. Man, it’s gotta have been a few months ago now and had a good time doing it. And I told them, the same thing that I tell our staff here is, when we go visit a new customer for a first time, there’s usually kind of three hurdles that we have to get over, right, hurdle one is this idea is is our price point competitive, which is actually what you’re getting ready to hit on, I think, in the next slide, too, right? Like, how competitive are we? Are we the cheapest, maybe, maybe not, but are we competitive, and everyone has their own idea of what that value idea is like, I’m willing to pay five extra bucks or 500. That’s very individual different. The next piece is technology. And in the way that I like to think of it is, if I’m coming to you, Zach, and you’re my contact, and I’m coming to you and saying I want you to switch your customers brokerss or freight forwarding, or I want you to move your e-comm distribution center. At some point, you’re gonna have to go uphill and say, to whomever and say, hey, look, this is the change I just made. Well, yeah, there might be a cost savings, but especially if there’s not what are you getting for that value? And that’s where technology, in my opinion really comes into play? And what are we getting for that technological value? And then ultimately, for us, it comes down to people. And so And for me, we win deals when we get to people. And so for me, that’s, that’s where it is using that technology is to get us over that big hump where we’re competing with the largest forwarders in the world and saying, wait a minute, we compete on the same level. As far as the individual question on CRM programs, we actually use the dynamics 365 CRM program. I know that’s not necessarily what we’re kind of in here, but they asked, so I’ll answer.

Zach:
There we go. All right. I kind of want to move forward here a little bit to get to some of this stuff, because not necessarily just yet. Katie, the next one. This slide right here kind of stood out to me is that people were really willing to pay more to get access to good technology. I mean, what would you say? I’m going to point back to Julian here. What would you say a good methodology is for developing an ROI. When you’re thinking about developing your technology. How should people go about looking at this when they’re trying to evaluate the market?

Julian:
Interesting. So, I’ll answer the question you asked me I think in terms of like, how should you think about ROI for developing technology? I think if you’re actually thinking about building something, then I think it should be a calculus of how much is it going to cost me to build. One. How much does it cost me to maintain? But second, how much does it cost me to continuously evolve that software? I think a lot of people, particularly at the enterprise level of freight forwarding companies that we see will go build their own technology, they’ll spend millions, if not 10s of million dollars building it all of a sudden to realize that two years later, that technology has gone completely stale, because you have software providers that all we do is raise money to invest into building those products off the shelf. But the question that I think you were answering is much more like how do you quantify ROI for great tech? Again, I think it depends, you know, I don’t want to talk exclusively about Logixboard here. I think there’s a lot of internal tech that companies can buy today, whether it’s your TMS, whether it’s plugins, to that TMS that are much more focused on efficiency, they’re very much focused on how are you saving your team hours a day? And what does that translate to cost savings, or to efficiency? Where we’ve really focused on and I think that’s where the majority of our value has been driven? To kind of two things, are we helping you to increase revenue? And I think one of the interesting, something that we’ve started to look at recently, actually is revenue per employee, is that increasing substantially like are you being able to scale and win more business without having to necessarily hire and higher a lot more people, that’s one. The second are you increasing share of wallet? You can certainly use technology to go out and win new contracts, but you can also use technology to increase the share of wallet that you have with your existing customer base. If you’re working with shippers, the majority of them are working with several freight forwarding companies, probably less customs brokers, but more freight forwarders. So there it’s can you offer a better solution than some of your competitors and start to carve away at some of that market share? And that’s something that we’re consistently seeing with our customers, honestly, regardless of what operating system they use internally, regardless of what markets are going after. And regardless of what geography they’re in, as well. So for us, specifically, I would say tied directly to revenue with those two components. There is also the efficiency component, and kind of the underlying one at the bottom of this is risk mitigation, you have a market that’s changing really, really quickly, you have online freight forwarding companies raising all of this money, really with the premise of we’re going to come in and capture substantial market share. So how can you invest in how can you partner up with the right folks to make sure that they keep you continuously ahead of that digital curve and almost insulating your business from any potential disruption? That one is a little bit less quantifiable? It’s much more will I have a great business in 10 years? Or will I not be there anymore? Go ahead.

Adam:
Is that you brought up an interesting point. And it’s something that just kind of here. Is during the pandemic, there’s always been this old adage in our industry is that you date your forwarder and marry your broker, right? And so I think what you also saw during the pandemic was, you started to even date more forwarders. And so you started to really because capacity was so tight, because at the end of the day, it was about can I get my freight moved, not necessarily who can move my freight, in that decision, all of a sudden started to expose. A lot of shippers do all sorts of different technologies across our platforms. So they might use me and then our next door neighbor and the neighbor after that, and all of a sudden, you know, they’re getting exposed to 10, 20, 30, 40 times more freight forwarders than they ever have in the past simply because they’re looking for that opportunity to move freight. And so now as the industry is starting to shift back, right? We’ve seen significant decline in rates, we’re starting to see capacity open up a little bit. And people are starting to, I think, find their new home. And where does that new home start to land is now where I think you really hit on, am I willing to pay a touch more? Because I know these guys handled my stuff well? Their technology is good. It’s this one? Do they give me the customer service and the intention that I ultimately need? Were in the past, you know, it was very much a kind of one-to-one type competition. We’re now here in the last few years, it’s very much been a one-to-many type of competition where there has been so many new forwarders in the marketplace. So people buying from whomever they thought could get them space has exposed folks. And so Julian talks about return and so in that world for us, it’s been how do we make sure that plays in that market? So as capacity comes, comes back in market and as we have the ability? Do we keep that business that we were able to gain during those tight times because we’re able to do those things well, and so I think that’s really where the return starts to come in.

Zach:
Yeah, I think you guys are making both great points. But at the end of this, I think, here’s, here’s the big telling takeaway. You know, I think during the pandemic, a lot of people started to realize the value of customer service. And especially technology-enabled Customer Service at that, you can see number one, and number two here, cutting edge technology and customer service sitting at the top and the price became less important. Now, I got to ask you guys this, do you think that this pandemic changed the outcome of this survey? Or do you think it would have looked largely the same before?

Adam:
I think it changed it. If you go all the way back (for those of you who were around during the recession), coming out of ‘08 to ‘10, the industry went very cost-focused during that time. And as we came back out of it, we kind of cycled into this service level industry. And then mid-20, teens, we started to cycle, I felt like for to kind of cycle back away from it more to this price-driven model. And I feel like the pandemic all of a sudden said, price be damned, I need someone who can take care of my stuff and someone who can get it here. And so, for firms like ours, that’s great news for us, because that’s, that’s our bread and butter is that customer service, and then visualized type attention. And so I do think the pandemic has made a massive impact on this survey, I think if you would have given this exact same survey in 2019, I think the price is going to be a lot higher than where it is on this survey today.

Zach:
Julian agree, disagree?

Julian:
I would agree with that completely. The pandemic had such a massive effect. I mean, first of all, you’re talking about a massive industry that is incredibly competitive. So even if you’re competing in terms of price, like ideally, you’re being able to, you know, get the capacity and the price where you’re competing with other providers. But assuming that you’re competitive on price, like these two, I think will continue to be the most critical. It just accelerated the digital transformation of the space where I think people’s expectations are now like, I need to have the best experience possible, I need to be able to trust my partners that they’ll actually be able to give me great service, great execution, but also great visibility. Especially as you have supply chain disruptions, like everybody needs to understand where their things is, is allowed. It allows them to plan their business in a much better way. So I would say if anything like the left has probably gotten bigger than we can see them in that chart. Right.

Adam:
So the real question is, when do we swing back?

Zach:
Yeah, I mean, if you think that we’re gonna swing back, I think there’s still a lot of people snaking it. I think we’re early, but I think you’re right. I think we’ll have a little bit of hedging back. But this is a great question. Do either of you think (let’s start off with Julian this time) that we will eventually see price takeover on service, again?

Julian:
I think this is a much better question for Adam. Actually, I think it’s his market. So he can probably talk about pricing way better. I can answer the technology one. I don’t know if I can answer the pricing one like Adam can.

Adam:
But at the end of the day, it’s not just freight forwarding, right? I mean, I think we all feel that you walk into a grocery store or restaurant and things are different now. And, you know, I’m very service oriented, just myself. And so you go in and you can’t find the human to talk to or something along those lines. And at what point does that become the norm? I don’t know. And so and I think when that becomes the norm, then we start to shift back to price. I don’t think it’s the norm. And I think there’s still a lot of uncomfortable feelings when you walk in and you can’t find someone to talk to. And it’s no different in our industry, right? When you can’t get somebody on the phone. You can’t talk to someone. And the question becomes is, when do people trust the technology? And I think that’s the that’s kind of the bottom in question here, which goes back to my original point about it’s really the data behind that technology that is the ultimate trust factor in all this and I think it’s it’s coming it we’re not there yet, but it’s definitely coming.

Zach:
Yeah, I was kind of setting you up a little bit. And I can fill in for Julian here. Trust you both. You both said it. You both said trust and I think that that’s going to, that takes a lot longer time to rebuild once you’ve been burned in the past. And, you know, I think I think that’s a big critical factor of what everyone’s still trying to reach back for. So until that trust becomes consistent. We’re obviously going to be in a period of time where, you know, having some of this like technology is really objective and it’s there to perform tasks that make things easier for you to do and also present to your customers that they trust. And so, with that being said, I’m going to point to Julian on this because he got out of the last question. Let’s, let’s go to the next speaking point here, which is really what would you consider the three core roles of technology are in growing your business?

Julian:
So I think the first one, what we have seen, just in general, as the market has continued to evolve a lot of people needing to higher and higher and higher and more people to be able to service our customers, I do think technology should allow you to scale in a much better way, you know, continuously impact your margins in a positive way and continue to grow without having to add additional headcount. The second one, it should help you deliver much better experience, right. And on a much better experience side, the biggest asset that freight forwarding companies have today is probably their relationships with other freight forwarders. Globally, if you’re in the SMB and mid market, which are the customers that we work with, but the most important one is your existing customer base, think investing into how do you deliver the best experience possible to that customer base is incredibly critical in there, what we see you increase customer retention, like churn so should significantly drop for you. And you should be able, you know, again, I’ve said this before, increase share of wallet with that existing customer base. The third one here is a little bit of the topic of conversation today, it should allow you to go into new customers and be able to win new business, Adam, I think is, you know, hit it right on the money. Price is incredibly important. If you have good price technology really helps take you over the top, especially if you’re competing against orders that don’t have that type of technology. So I see kind of that three-pronged approach scale, satisfying and increasing revenue with your existing customers and winning new business. I think it’s just a matter of the question of when do people want to do this, right, Adam and us have been working together for several years, I think that has accelerated. And he’s been able to take advantage of the technology and a really good way to accomplish some of these things. But there’s also kind of the other side of the coin. It’s, you know, something that we often hear from some of the companies that we’re working with, will talk to them, and they’ll tell us listen, I’m not ready. And they’ll call us six months later, or eight months later, and tell us my biggest customer just called me and told me that if I don’t give them an experience, and better visibility, they are leaving me in 90 days. So I think you can either take kind of go on the offensive and really look at technology, like how do you squeeze as much out of it right now to be able to leverage that to increase revenue. You can also you know, also take the defensive position, which is wait until you’re in trouble. And obviously have to iterate and pivot really quickly to be able to satisfy your customer needs. But that’s generally you know, generally how I think about it, what do you think Adam?

Adam:
So for us, you know, when when we look at technology I really split it down the middle. So for me, I have the back of house, right? I have all of those things that are all about efficiency and driving efficiency through the system, whether that is a better way to pick a product, whether that’s taking data and converting it off of PDFs, because unfortunately, most of our industry still lives that way. and converting it into usable data that allow my team you know, my focus internally here is I want to pay my people for their brain, not their fingers. And so if we can get them to a spot where we’re allowing them to do less of that work, and more work, where they’re providing solutions and conversations to our client base, then the technology is providing the return that I can’t even measure at that point, because they’re allowed to really do their job. And on the flip side of that is how am I taking that technology and taking that stuff, and that presenting the quote-unquote, experience to the customer. Right. And so for me, those are two very different things. And on the back of house side, we’re very much an r&d firm. Right and, and we invest in a lot of stuff, and some of it frankly, doesn’t pan out. But on the front of house, I am very cautious of our customer base and as much as I do want to push and I agree you have to be on the offensive here and really take those opportunities to push new potential products out out to your customer base. And so that’s what we did. As we’ve launched our own tracking tools. It’s what we’ve done when we’ve watched some of our own analytics that run behind it. And so for us, it’s all about how do we present as Julian calls it a better experience for our customer day in and day out. And so, for me, it’s really that both sides, it’s how do I get my team more efficient, so they can spend more time using the industry experience knowledge to help our customers through issues, and then on the flip side is, how do I then present that experience as a digital front back out to my client base?

Zach:
Yeah, I think you’re making, probably, to the closing points there, like, tech helps you become more cost-effective by making the process more efficient. But it also provides a better customer experience on the front end. So you can see that front of house really kind of proves that point that Julian was talking about there, which is obviously revenue and market share growth by taking care of your customer. So we’ve got a couple of questions here. I’m going to pause for a second and take a few of these because I think they’re actually really relevant to what you were just talking about. And either of you feel free to chime in here. So are in your experience, are customers asking for enhanced visibility solutions, or also a modernized quote, to booking experience? So which one a quote to booking or visibility solution or or both?

Adam:
Short answer yes.

Zach:
Is there was one and not over the other?

Adam:
So for so I really feel like in our industry, and I think I’d be really curious Julian’s thoughts here, because him and I have talked about this idea. A lot, actually. You can’t focus on both at the same time, right, like, so which one do you pick? So we picked visibility first. And now we’re coming back after the fact and working on this enhanced quote, to quote, to bookings type tool. That for us was second, we’ve seen other players in the same space, do the exact opposite, and really focus on quote, game, and not really focus on the visibility side of it. And so, I mean, like I said, I’m really curious about some of Julian’s thoughts here, because I know him and I have gone round and round our fair share of times over this exact topic. Alright, Julian,

Julian:
I feel like I’m gonna walk out of this with a product commitment. So I appreciate whoever asked the question. But you know, what’s interesting, actually, the product that we have in market today is actually the second product that we’ve built, the first product that we built, had visibility and quota booking actually, all of it integrated. And what we ended up realizing is that we couldn’t do both Well, at the same time, there were so much efforts to do either one of them that we really had, we want it to be able to go to the market and say we’re going to give you the best product in the market, or none, at what we’re really, really good at. And in that sense, we chose to go visibility first, it sounds like I mean, so that Adam, right. For us, it was the most important problem to solve is being able to tell your customers, where’s my stuff? That seems really critical. At the end of the day, though, it does need to evolve and be both, I think it starts with visibility. I think that when we built our first product that had both, we saw much stronger usage on the visibility front initially. So we think visibility has been a problem that people need to solve. And it’s really critical today. And I think that’s proven to be the case. But when we start thinking about having a cohesive kind of customer experience, it has to include the different touch points that your customers are going to have with you. So visibility is one the booking process is another, we’re actually working on that already. The quote processes are another. We’ve thought about this as how do you offer a visibility layer? And then how do you start moving much more into the execution side of things, giving your customers the ability to pay online, giving your customers the ability to book online, to request a quote online, to place an order online, to communicate, etc. And all of that needs to tie back to your operating system. Like having systems that are disparate from your operating system. I think that in today’s market is not feasible. It just detracts your operators from being able to be much more efficient, that almost loses on the efficiency premise. So they need to be connected. And I think ultimately, you want to have one single customer experience layer. Regardless of what systems you have internally, you can have three, four, or five different systems internally, you want all those systems to be tying into one single pane of glass, where they can see what’s happening, and execute on it as well. At the end of the day, your customers pay you to abstract the complexity away from moving freight, and you want to be able to give them one single platform that’s really easy to use and takes that complexity away as well. So I’d say both are really critical. In our mind, though. Visibility was where we started and we felt that that was the first problem that really needed to be solved and I think it’s turned out to be true for now.

Adam:
Yeah, I think the other piece on on on top of that comment is that, you know, we all have to meet our customer where they are at the end of the day. And visibility is where everybody was. And so asking a customer, you know, they’re so used to firing off an email or doing something, but then telling them, “Hey, by the way, I need you to go key this request into a different system to get me information” is now asking them to do more. And so what are they getting in return for that, and that seems to be for, at least for our client base, something that’s been a lot slower uptick as far as things that they’re interested in doing. As far as going out and providing that layer. And that’s why we chose visibility first because that’s what our customer base was really demanding. And it was a lot easier for us to meet them where they work, because they always say, Well, you just click on a link, and it’s there. Not now you have to type in. Here’s our quote form, please go fill it out. And so that’s just it’s a different conversation. And I think that some customers like that idea, because it’s all pretty seamless. They get it, they can book it. And what we’re honestly trying to do is find the hybrid between the two, right? How can we function in both worlds? And that’s the piece that is probably the million-dollar question, right?

Zach:
I think that ties really well with the survey results as well. I mean, when you looked at people saying, “we’d rather have service versus price”, visibility is very service driven. Whereas the quota booking is very price driven.

Julian:
Adam, I wanted to ask you, I know visibility is something that people are actually demanding. But are your customers calling you and telling you like, I need to have the ability to quote and to book online?

Adam
Yeah, and I think you nailed it. So for us, if you look, we are in that, you know that that medium size type category. And so while we do have offices around, we don’t have offices everywhere. And so we do work with other forwarders around the world. And actually, it’s more demanding in a forwarder-to-forwarder market than it is demanding today in a shipper-to-forwarder market, right? And so in that forwarder-to-forwarder market, I’m getting that demand. And frankly, I want to help expedite that demand on our front because for them in quoting speed kills. When you walk into a store, you know about how much you’re going to spend on something. And I feel like it’s the same way our shippers know about what they’re going to pay for something. And so if you’re the first guy back with a quote, and it’s in that ballpark, oftentimes you’re going to win that deal. And I can’t tell you how many times we’ve been slow to the game, for whatever reason, and we come back like, “Hey, you were cheaper, but someone quoted me two hours ago, and we already booked it.” And so from a forwarder-to-forwarder standpoint, as you look globally, you know, while I work a lot, and I’m awake, most of the working hours around the globe, I’m not awake 100% of the time, and my teams aren’t awake 100% of the time. So if they need a rate overnight, and they can get that business, ultimately, that benefits me. And so I think that forwarder-to-forwarder, that’s probably where we have a bigger demand today than we necessarily do with shippers. And I don’t even think it’s us, I think it even looked at some of the largest orders in the world who have offices everywhere, right? Like that demand in that inner office between Asia, in the US, or Europe and Asia, or Europe in the US, all of a sudden, we’re playing with time zones, and it’s 10 o’clock in the morning here and Europe’s gone home. But you need origin rates, because you just had your largest customer ask you from an origin that they typically don’t ship from out of Europe for an import into the US. Now, unless someone has all of those stacked up somewhere, you’re asking that origin office, what are those? And so if you can produce that level, that layer to me is where the key piece of all this is today is it’s a lot of intercompany forwarder-to-forwarder type conversation, we do have some customers saying “hey, can we book this online after you quote us?” And those are the things that that we’re still getting there. And I think even when you get into the quoting aspect of it, there’s really two pieces of that there’s the “Hey, give me my quote”. And then there is once I have a quote, “hey, I want to book it”. And so even to us, those are two different things. And so right now, we’re really focused on that. They already have a quote, how can we make booking easier? Not, how can we make quoting easier if that makes sense? And I think the forwarding aspect is the opposite side of that coin. Right. It’s how can make quoting easier, not necessarily booking easier?

Zach:
So I think we’ve got another question. We’ve already kind of discussed this a little bit in the way that you guys have answered these questions, honestly. So it’s basically about leveraging tech to close the deal. And what you’re doing is you’re answering all these questions that matter to your customers. And that’s how you leverage the tech you’re using to help you close the deal. So we have a question here. And it basically kind of sets up that question, I think, and it says, I’m a new freight forwarder. And I’ve quoted many shipments, I have a great tech system. And I feel like I am communicating very well, but can’t seem to get the shipments, I am charging about 10 to 15% of my carrier costs, how else can I break through and get the shipment? So I think we’ve talked about visibility, and you know, the front-end booking process, but are there other ways that technology can help him leverage the situation?

Adam:
No. And this is where this is, where would Julian and I both use the word Trust, right? You even brought it up. And we have a saying from our founder here, that no one cares how much you know, until they know how much you care. Right. And I think it’s building that level of trust with your client base. That’s how you do it. During the pandemic sales cycles got shortened to unbelievable speeds, because people were just looking to move a piece of freight. Typically, sales cycles in our industry are long, and it’s because you’re building trust me how often you switch a bank, right? You don’t just decide tomorrow, you’re switching a bank? Well, your customs brokers kind of like a CPA at some level, how often you switch your tax person, how often you switch, you started to think through those things, and you build a relationship you build trust, long before you get any deal. And so, you know, that’s one of the things that I do still appreciate customers brokerage market, the forwarder market is, there is still I think I still a large majority, where you do have to build that trust. And while it’s good and bad, right, it makes your own client base, more loyal. But it’s also harder to win a new piece of business simply because that client base is low, because they have trust wherever they are. And it’s not until that trust is broken, that then you get those opportunities that maybe move a little bit faster. So for us, it’s about how do we continually build trust with that client base. And, you know, I give you a great example, we were founded in 1984, we still have our first customer. I have our first handwritten customs entry on the wall in my office, and which is kind of neat. But that idea of how do you keep that trust? And how do you build that trust takes a long time? And it’s not something that happens overnight? I believe me? I wish it did. But there’s definitely a double-edged sword. And I think it’s the same for Julian, right, like Julian. I mean, Julian, how long did we talk? I mean, how many calls how many hours that we spent on the phone before? I was like, Okay, let’s do this thing.

Julian:
I think building trust is paramount, I think being able to prove value is paramount. I do think Adam though, like, what, when we started working together, Scarborough was a very established business with a really strong reputation. So I think, what we found, and I think, taking Scarborough, and like already an established business, I think when you’re a small freight forwarding company, getting to that level of maturity, it’s a lot different to talk about it when you’re a much more mature organization than when your way smaller. I think being able to partner with the right folks that are not just giving you technology, but are also doing some of these, like helping you learn how to sell with tech, that’s something that we’re consistently focused on internally, we have an entire customer experience team, my co founder actually runs that team, like there are certain nuances to being able to sell with tech, how you position it, how you go into a deal with it. So partnering up with companies that understand or have seen that motion be successful, I think can be really helpful. The other thing I would say, if you want to grow your business, you know, start marketing a lot more. That has been one of the things that to me has been really interesting. Once you’re an established business, bringing in leads, you already have a brand in the market, so people will naturally come to you. But we’ve seen some of our smaller customers, we give them collateral, they start posting on LinkedIn, and all of a sudden they’re getting leads coming into them that do convert into business. So I think there’s probably things that you can do there, not just in terms of tech, but finding the right partners that can guide that process for you are using other levers to get the business off the ground, especially if you’re a young organization just kind of starting to break through.

Zach:
Yeah, those are good points. So we have another relatively good question here. I think it’s an you know, you’re kind of touching on this right now. I think Adam, you said it just a second ago that you really can’t replace trust building with technology. But are there other parts of your of either of your internal operations or your customer-facing interactions that you found that you cannot replace with technology?

Adam:
I mean, for us, it’s that full customer experience because that’s what we’re built on right and do I think they’re are models that work? Where entire businesses that rely on tech to be that customer service facing aspect? You bet. And so for us, it is it won’t replace our customer service. And it’s not because it probably can’t. But it’s because we made the decision that it won’t. And I think that for us, you know, I think that question is kind of tough, because there’s probably a lot of things that at Tech can supplant across any organization. And at the end of the day, it’s a business decision. And really the value from our business, what are we willing to do, compared to not willing to really sign off the tech. And so for us, signing off the tech is about efficiency gains, and a better overall experience, it’s not about getting to the best bottom line on our p&l. And while that is a model that works for a lot of people, it’s just not one that we’re interested in. And so I think from that perspective, there are things that we can’t replace due to tech simply because of that.

Julian:
Yeah, I see i the same way as Adam, honestly. I don’t see tech replacing people. To me running a business is like, how do you put the right people in the right seats and have them focus on the right things that are adding a ton of value. You’re typically hiring people that have really strong domain expertise, and they’re really good at specific things. If there’s tasks that they’re doing that are very repetitive, that aren’t adding tremendous value, that are not requiring a ton of their domain expertise to be able to do very well, I think those are the things where tech fits seamlessly, right? Like if you have people in your operation, that are sending hundreds of Excel tables or reports to your customers on a daily basis, like those are things that can be automated. And you can take that time from your operators to actually focus on how do you provide the best experience possible, essentially, how do you communicate more with your customers? And how do you focus on problem-solving? There’s so many fires to put out, I think you want people to focus on those things, as opposed to some of the more manual or repetitive tasks that people do today. So I entirely agree with that, um, honestly, like, I think we talked about this internally, coupling great technology with great people, we think that’s the winning business to building a freight forwarding company for the next 10, 20, 30 years. It’s not just great tech, it cannot be just great tech, it’s continuous improvement on both sides on the technology side, but also on the people side as well.

Zach:
Yeah, and we’re getting some pretty good questions coming in here. So I want to go ahead and make sure we get to some of these before we run out of time here. So we’ve got another question. Now this kind of pivots us back a little bit into how can tech help us? We’ve addressed you don’t want to be a fully tech-oriented situation because you lose some of that personal interaction, and that trust factor isn’t there as much. But tech obviously supports that function. But in this question, how can tech support in difficult markets like Africa, where each country has its unique documentation requirements, which vary product to product, and also transparent on freight rates and capacity? So essentially, how can tech help you with something that isn’t necessarily as structured as what you’re used to? And then this situation?

Adam:
I think it’s a great question. So while we don’t have our own offices in Africa. But we do have our own offices in Mexico. And so just looking at kind of the structure around what the United States looks like, and how we operate compared to that same exact structure in Mexico is very, very different for us. And so the technology investments there, specifically in Mexico look very different for us than they do in the United States. And it’s all about getting to the same ultimate goal. First off, it’s how do we make our team better and able to focus more on our client solution rather than just keying in the next piece of data for them? And then, you know, how do you turn, like we talked about, how do you turn that around? And that turning around piece and giving the customer visibility and some of those markets is unbelievably difficult? It’s something that I think we’re all trying to figure out. What’s the best solution for those types of markets? And I do think it’s tough as far as different documentation requirements and things of that nature. You know, I do think tech can help with things like that, right? You don’t have to memorize for if it’s going to South Africa, I need X, Y, and Z. But if it’s going to, you know, Egypt, I need a, b and c. And so in those scenarios, tech does help right, it prevents some of that requirement need to maybe know off the top of your head and so I think that’s where tech starts to help. And when I think about that, to me, that’s really that backup house, making sure that our operators are better able to serve our client.

Julian:
I would add a commentary here as well. The aspect of kind of the documentation requirements, I think that can be solved by having a really strong TMS. There’s TMSs like CargoWise Descartes, like some of these TMS already have customers in these regions, and they’re global players. So I think, at the core of it, you need to have a really strong TMS in your operation to be able to do anything outside of that, like, it starts with the TMS. Once you have an established TMS, then you can start thinking about how do I automate some of the booking process. How do I provide great visibility? How do I provide great analytics? But that TMS component is really critical. So I think partnering up with a company that has a presence in that region, or even a global player solves a lot of the challenges there. When it comes to how do you leverage visibility in other markets, I actually think it can give you an even bigger benefit when you’re operating in markets in the US, a lot of companies and a lot of the companies that we end up working with now are playing defensively, again, they have their customers coming to them and saying like I am churning I am leaving, and that you’re almost scrambling to figure out how do you catch up? And you need to go figure out how do you partner with a provider that can get you up and running really quickly. That’s something that we focus on. On average, we get our customers up and running in about eight days. So how do you get up and running really quickly, but that’s playing defense in other markets that are not the US, Canada, maybe Europe, it’s there, you’re playing offense, actually, there, you’re going against your competitors, which typically don’t have anything. And you’re being able to come in and say like I have really great prices, I have a great, you know, great service. But by the way, I have something that no one else has in this region. I think that gives you an even bigger leg up. So I’d say yeah, today we have customers in about 17 different countries, and we’re seeing that value be able to be positioned really strongly regardless of region. It’s just in some markets that are less advanced, it’s much more playing offense in markets that are a little bit more developed. Sometimes you can play offense, but other times you can find yourself playing defense, which happens less in markets that are not as mature.

Zach:
All right. Let’s move on to our last couple of questions here. So if technology is becoming an important part of differentiation and sales, shouldn’t forwarders be building their solutions in-house? I think you’ve kind of touched on this earlier, Julian, a little bit in terms of, you know, the cost-effectiveness of this versus, you know, input implication. So I’ll go ahead and let you kind of reiterate this when I think a little bit.

Julian:
Oh, it’s a really good question. Building Technology is incredibly, incredibly expensive. We have raised $50 million in venture, and most of those funds are entirely deployed towards building and building the best product that scales. What we have seen, I think, if you’re an SMB, or a mid market company, carving out the necessary budget to be able to build this for yourself is almost cost prohibitive. You’re talking about spending five to $10 million on trying to build something similar. And I think it doesn’t make sense when you can buy that for a fraction of the cost from a player that’s going to consistently innovate on your behalf. If you’re an enterprise company, I do think that’s where it starts being more of a question, do you want to have the flexibility to build something entirely how you want it, and there you’re not spending five to 10 million, you’re spending much more. The trade-off there, though, is you’re building something it can tend to take you millions of dollars 18 to 24 months just to start getting something up and running. And then the question that I think a lot of people miss or the aspect that a lot of people miss is technology within two years becomes stale. You can build something today. It’s built, that’s what you carved out a budget for. But if you don’t continue to innovate, two years from now you’re already behind the game. Our customers are going head to head against Expediters against Kuna Naugle. I spoke to a customer last week they went head to head against Flexport. They went head to head against Kuna Naugle in their biggest customer ever, and they ended up winning the business. And they went back and said, How did we win this? And they said, Well, you had the same level of tech as Flexport, but better execution. And you had better technology than Kuna Naugle did when it came to my customer experience. When you start talking about investing that heavily into technology that potentially becomes stale that quickly. I think that’s where it comes in. And I think you can even see it reflected in the TMS market, right. enterprise companies would typically build their own internal solutions. And now most of them have transitioned to working with CargoWise, or with a Descartes, or with BluJay, with other systems. So I think the path that we’ve seen on the TMS market of going from home build to actually using something that is a SaaS solution will also happen on the customer experience front and will also happen on the different parts of the tech stack that free float companies have. Yeah, and to me the turnaround time, how do you focus? I think, to me, the most important part internally, how do you focus on having the best data sets to be able to support the organization and the different technology initiatives that you have in the best way possible.

Adam:
So I guess, to kind of finish off Julian’s thought, so this is a conversation him and I had a few years ago, hell him and I had it two days ago, I think. But it’s something that it’s a tough decision either way, right? In there are pros and cons to both sides as you start to look at this idea of off-the-shelf. Off-the-shelf brings so many proponents to it. It’s quick. I mean, you know, you’re talking about writing a check and getting operational in eight days. That doesn’t happen if you build it in-house. But then there are things that maybe I would want different, that if I’m the only customer that wants them, it’s not going to get done in the same amount of time as if I’m doing it in my own house. And so there are a lot of differences there. And it’s a fine line of when do you make that move? When do you not make that move between this idea of build in house to not build in house. And it’s a tough decision either way. And for us at this point, you know, we’ve gone off the shelf and pushed really hard and hope that maybe some of our things that we want, maybe came to light a little sooner, but other than that, it’s something that for us has been a game changer in something that’s allowed us to really propel our business forward with getting something off the shelf that that’s highly functional and something that’s working really well for our client base. And so, you know, maybe in a few years when we’re 4x where we are now it’s a different conversation. But until then, I think I think we’re in a great spot.

Zach:
Good deal. Well, thanks, you too. I guess we’re running right up on time. Great insights, and I’ll hand it back over to Katie.

Katie:
Yeah, guys, thank you so much. I think that was a wonderful presentation. And like Zack said a lot of great insights into into today’s topic. I want to be sure to thank Julian Alvarez and the entire logic sports team, as well as you, Adam, with Scarborough group. We really appreciate your time today. And Zack, thank you had a wonderful discussion with everybody. I want to also just really quickly remind the audience that as I mentioned earlier, we will be sending out a link of the recording of this webinar and an email tomorrow. And that way, you know if you missed it, or if you want to share it with somebody, it’s a great way to go ahead and pass it along. Thank you all for joining us for today’s presentation. We hope you tune in next time. Take care.

Julian:
Thank you so much. Bye. Thanks all. Bye bye. Thank you