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Increasing costs. Evolving consumer expectations. And accelerating disruptions. Today’s supply chain leaders face more challenges than ever before. Hosted by Karl Siebrecht, the Logistics Leadership Podcast features industry interviews, warehousing and transportation deep dives and the unique insights supply chain leaders require to compete and win in today’s environment.
Lior Ron 0:00
I fundamentally believe that a society, the next epoch of opportunities for technology is to digitize and hence support, transform, the physical world, physical goods, physical industries.
Karl Siebrecht 0:19
I'm Karl Siebrecht.
Jordan Lawrence 0:20
I'm Jordan Lawrence.
Mike Swenson 0:21
And I'm Mike Swenson. And this is the Logistics Leadership Podcast.
Karl Siebrecht 0:34
Welcome back, everybody. It's great to be with you again here on the Logistics Leadership Podcast. Jordan, as always, great to see you.
Jordan Lawrence 0:42
Great to be with you, as always, really looking forward to the conversation today.
Karl Siebrecht 0:46
And I'd also like to introduce Mike Swenson. Mike, it's great to have you join us, as well.
Mike Swenson 0:51
Pleasure to be here.
Karl Siebrecht 0:52
You know, on most of our episodes to date, we have talked about the warehousing piece of logistics and we have focused on how the consumer is one of the big drivers of that. We have talked about logistics, broadly speaking, in terms of consumers, costs, carbon, as being the main drivers of how to think about innovation in supply chains and logistics networks. But we haven't talked very much yet about the arcs in the network, the transportation lanes that connect all the dots on our map, all the warehouses out there. So we want to expand our conversation to include that and talk about freight. To do that, I'm going to speak with one of the great innovators in logistics, the Founder and CEO of Uber Freight, Lior Ron. So let's go have that conversation. And then Mike and Jordan, we'll meet back here to talk through some of the ideas that he shared. Hi Lior, it's great to see you again, thank you for joining me today for this conversation. I'm super excited for it.
Lior Ron 1:59
Thanks for having me, Karl, excited to engage in this conversation.
Karl Siebrecht 2:03
Wonderful. Would it be okay if you just tell me a little bit about your background to set some context?
Lior Ron 2:09
Of course. I'm Lior, right now CEO and Founder of Uber Freight, and a geek at heart. I've been doing technology for the past 25 years. I had the pleasure of starting my career in Israel and helping Israeli intelligence develop a bunch of cool systems and then moved to the States and had really the honor to spend five years leading Product for Google Maps, and really had that experience of digitizing a vast physical infrastructure. We've now over a billion of users globally and hundreds of countries. And the road led me about seven years ago, as I was doing my walkabout, to take a look at logistics and thought I can help do something as a technologist about digitizing logistics, and that led me to start Uber Freight.
Karl Siebrecht 3:04
That's wonderful. I would love to dig into that and just get your perspective on the compare and contrast of digitization in logistics, versus Maps and the other sectors and product areas you've been in across your career. What's the compare and contrast?
Lior Ron 3:23
I think it's a fascinating question. I start with all the similarities, that, to be honest, what partially inspired me to start Uber Freight. I fundamentally believe that a society, the next epoch of opportunities for technology is to digitize and hence support, transform, the physical world, physical goods, physical industries. And I had a first seat to that while we built Google Maps. When I joined, we had two million users in two countries, UK and the US, there was nothing else on the map. And just getting first seat of, let's transform this physical-first industry, paper maps, UML, the good old days, trying to navigate in an unfamiliar city or territory without much besides paper maps and paper books. And let's put this huge digital infrastructure in place to allow us to move to a digital-first reality of mapping globally. Let's put satellite data, let's put street view cars, let's map every street in every city, globally. It's a huge technical challenge. And just being able to be part of that was very interesting, because then what you get is a digital infrastructure for businesses like Uber, or like the many other businesses that were built on top of the digital layer of mapping. Same in logistics. You take a very physical-first, very analog industry, it's not just Uber, it's Uber and Flexe and everyone else, putting this digital infrastructure in place, then life can be more efficient, more connected, and a bunch of innovation can happen on top of that digitally. So I think that's a very strong similarity. I think the one dissimilarity I will choose is just how fragmented is the supply chain, and how much energy it takes to boil this ocean of digital infrastructure. And it takes a village to be able to do that. But it's a long process. And that's going to take multiple decades, I think, to fully be in place in terms of societal infrastructure. And that's why I think we need to take the long-term perspective here on the investment needed and the opportunities that that will entail over time.
Karl Siebrecht 6:03
Yes, I love that comparison. You know, it occurs to me while I'm listening to you is that one of the other differences is, with logistics, all of your customers, all of the service providers out there, there's infrastructure, there's technology already in place. And the new innovations have to figure out how to plug into that existing infrastructure at the same time it is trying to help innovate in advance the digital sort of architecture.
Lior Ron 6:30
Yes, this is much more about replacing the engines mid-flight because our respective customers have a business to run. And it's much more complicated to replace that engine from an enterprise B2B perspective than to offer a superior experience for consumers.
Karl Siebrecht 6:49
Right. Great. So let's double-click into the transportation part of the logistics world here a little bit. I'll start with a very kind of generic question for you. What do you see as the top trends or dynamics in the transportation industry today?
Lior Ron 7:09
I think the system as a whole is still sort of in recovery mode from what was the biggest shock to global supply chain in history. And I think the trends coming out of that still persist. One is really making sure that the system, the supply chain, is resilient. So there's not one point of failure or it's not one supplier that can fail, or it does know sort of critical inventory levels in the system that might be a bottleneck. So I think this was a big wake-up call for everyone to realize that the amount of planning and thoughtfulness you need to put to make sure you have a resilient supply chain that is ready for any sort of shock up and down in terms of demand is key. So I think we're still seeing a lot of that. The other trend that we clearly see is some of the reasons for that challenge in terms of resiliency, is fragmentation, and still continues to be the case where a lot of supply chains are extremely fragmented, in terms of supply base, in terms of geo footprint, in terms of the IT systems and the tech systems involved in managing the supply chain stack. A very clear trend we're seeing is towards consolidation. Supply chain professionals and supply chains want trusted providers they can rely on, they want less complexity to deal with so they can focus on the main business versus piecing all of this together internally. And that does lead to more and more focus on bringing suppliers that can aggregate and connect those systems. And we see that on our side for Uber Freight. We have a lot of momentum on the TMS side. And people are getting more and more thoughtful and aware of what a transportation management system can do, can help, to the operation. I guess the last trend I'll mention is the continuous nearshoring, again, back to resiliency. We have a large footprint in Mexico and we see a lot of momentum of people moving and diversifying the supply chains away from Asia, and putting some of that in Mexico in other markets. So those will be just some of the trends that we're seeing with thousands of customers that we talk with today.
Karl Siebrecht 9:51
That's great. Let's talk a little bit about digitization and let's together try to bring that to life and make it real. What are the benefits, like just the poor basic business benefits from digitization, and I won't try to lead the witness here, I know you've got your point of view. But you have talked about the fragmentation of the industry. Certainly, digitization can help that, but from a shipper perspective, from a CEO or CFO's perspective of a Fortune 100.
Lior Ron 10:29
At the end of the day, from a CEO, a COO or SVP of supply chain perspective, the supply chain is there to serve the customer needs and to do that in a cost effective and service effective way. Digitization can help accelerate cost savings and increased efficiency, and improve service and resiliency, for customers. At the end of the day, that's what C-level folks want out of the supply chain. Make sure the service is there and we can excel for customers and do that in the most cost effective way. I think the way digitization can help with that, first of all, on the service side, digitizing something means transparency, means everything's connected, means information can move in the speed of light, not in the speed of people. That allows shippers and customers to make informed choices to understand what's happening with the supply chain and not only have that visibility, but then act on those disruptions, on those types of supply chain much more intelligently. And make sure that everyone, the suppliers, the receivers, the customers, the B2B partners that supply chain is serving, you're seeing the same picture, can close the loop end-to-end and can just act on it faster. That just leads to better predictability, better service levels, and better customer satisfaction, whether it's a B2B customer or an end customer. The other advantage is, if you create that connective tissue, if everything's connected, then you can really unlock the next level of efficiency. To just name just a few examples that we are seeing on our side, we now have two million truck drivers on the network, so every other truck driver in the US. Once you, as a shipper, can tap into the long tail of basically every carrier in the marketplace instantly, the amount of pricing advantage, the amount of a cost discovery, the amount of a competitiveness in your supply chain grows to no end. The other benefit is, we can start planning things more efficiently. So we just published a big sustainability study and we've done a very full examination of what is the amount of empty miles in industry. And our number will be actually 30-35%. So a third of all trucks' mileage that are out there that we see driving next to us on the highway are empty, which is insane. If you digitize, if you connect, then we can start discovering the empty miles and get them out of the system and find loads for those back holes and design the supply chain to be much more effective. Case in point, now that we deploy the system to two million truck drivers, we can cut half of those empty miles. So an average truck driver in our network is only 15% empty, not 30% percent empty. Increased efficiency and waste coming out of the system, which leads to decreased cost.
Karl Siebrecht 13:50
Super clear and I love that example. You know, similarly, we've done and regularly do surveys of warehouse operators to understand what is the actual utilization of your buildings. It turns out there's in the neighborhood of 20-25% underutilized capacity out there. If you had your eye in the sky that could look underneath the roofs of all these buildings, you'd see about 20-25% empty capacity. And it's for a lot of the exact same reasons that you described in the freight industry as well.
Lior Ron 14:26
Wow. Digitization, a third thing, it creates transparency. As a shipper, as a customer, you actually know, maybe for the first time, oh, I have actually 30% empty miles on my network. 25 of my wealth is actually empty. Okay. We can actually act on that because this becomes a bit more of a software data science, actionable data problem we can act on if everything is connected and digitized and for me, that's the exciting next decade. I think back to the Maps analogy, a lot of the last few years, let's say the last decade, was, let's digitize, let's connect every track, let's connect every asset, let's get into every warehouse, let's connect visibility, all of that fun stuff. But that's just a precondition to now, okay, move to an era of action, of actionable insights of progress now, from the data on how can we start actually moving those KPIs and leveraging all of that richness of insights and new wealth of data that we now have to offer?
Karl Siebrecht 15:41
Yes, it's a precondition, I love that term. We think of it that way as well, once this is all connected, in a network that can be transparent, then you have the physical infrastructure in a more efficient way to move goods around. Only then can you build intelligence layers on top to really understand how to change your actions in the physical world because you've got full visibility of a very, very broad network. You know, one of the other things that I find curious, or not curious, but a critical element of the industry that creates some barriers, is, for the most part, big companies each build their own networks. They decide where the nodes and arcs of their networks are. They pick where their warehouse locations are, they pick which transportation lanes they want to turn on. And every company is doing that same thing. So you basically have this overlay of 1000s of networks all sitting on top of each other, but for the most part, not connected. I think that's another way to bring to life what you were saying earlier about the fragmentation. And to get to a more optimized view, it sort of implies or maybe literally implies that there is more shared infrastructure across these big shippers. What's been your observation over the years you've been in the industry about the willingness or excitement to share infrastructure? Is there still some hesitation? I kind of want my own infrastructure because, you know, it's special to me and I want full control? Or have you seen an increased willingness to share infrastructure?
Lior Ron 17:26
I think that question is in the heart of transformation. And I think this industry is going through a massive transformation that is enabled by data and technology, where, when I don't have the data, when things are not connected and I want to ensure an outcome, of course, I'll choose to own my destiny, to have my own network, to have full control on my own decisions. And as such, I'll be a bit reluctant to give that away. Once everything is digitized and connected, again, it's a precondition, then we can create the trust with those customers and if we can create the trust, then I think we can show the outcome, the savings, and if that's captured with enough trust, well, not only I'm getting the savings, but also I can trust the outcome and still have control of the outcome and not deteriorate what I'm trying to do. That opens the path to share and care and share those resources. We've seen this trend in almost every industry under the sun, right, the same journey has happened over the last two decade in an information technology and service where everybody used to own their own data store and their own server farm and slowly but surely, it took more than a decade, there was enough trust in cloud compute to be able to okay, I don't have to own it. I can basically just share that and use that shared infrastructure. I think the same is happening now on transportation. The same happened with Uber, I need to own the car, I need to own my fleet. But now I have enough trust in Uber as this like connective trusted tissue. I know that if I need an Uber, something will come up in a few minutes. I don't need to own it. I can basically tap to that on demand. And I think the same is happening on transportation but it's on us to create that level of trust with shippers and from my experience, if we create a trust, they are coming and that's the essence of what we're trying to do in Uber Freight. Last stat on that, we now manage $20 billion of freight under management and almost the sole purpose of aggregating all of that freight together is so we can go back in and offer shippers and supply chain decision makers ways they can benefit by tapping into the overall pool of freight versus managing their own staff. Because the reality of this industry as we know, I mean, the second you grow even below a Walmart, even if you were a huge shipper controlling billions of dollars of freight, you are seeing a drop, and you will see the sub scale. And you cannot benefit from what a much larger network can bring to bear.
Karl Siebrecht 20:36
Let's shift gears a little bit. There's been a lot of press for the past few years about a shortage in truck drivers. How do you think about that problem as it relates to the opportunity for driving more digital infrastructure going forward?
Lior Ron 20:54
Yeah, shortage of truck driving is one of the biggest issues I think facing us as an industry. If you just zoom out and look at the stats, the average age of a truck driver in the US was 35, 20 years ago, it was 45, 10 years ago, it's 55 now. It's the same baby boomers basically aging out of the industry. And it's just a job that young people don't want to do as much. Long hours, random facilities, not a great lifestyle, no ability to actually build a family. And as a result, I think we're facing a chronic shortage of truck drivers. And that's in parallel for us as consumers ordering more and more and more stuff to our doorsteps. And as we know, there's a truck behind every one of those packages. So that's a existential issue facing the industry. I think on our side and digitization at large, the first thing it can help with is, you don't need new truck drivers, you just need to make life for the existing truck drivers easier so they can be more efficient, so they can run more loaded miles not empty miles. And we spoke about the 35% empty miles and the reality of that is, if I took a shipment from Long Beach to Dallas, I'm going to run empty 100-150 miles getting to some other place in Texas, so I can have a load back to Long Beach. But if, in the app, I can connect to $20 billion of opportunities and if the algorithm can automatically suggest, hey, here's the load for you five minutes away, then that's all efficiency back into the system and driving hours we can basically add to the system in terms of capacity. If we can do something, and I think, Karl, that's a great segway for some of the joint topics that we can discuss between warehousing and transportation, if we can do something about their crazy, long idle time in facilities, because I think many uninformed listeners might think that truck drivers are wasting the time stuck in traffic jams. But no, theoretically they can drive seven, eight hours a day. In reality, they drive maybe four hours a day, because the rest of the time, they're just waiting to be loaded and unloaded in facility, idling the engine, adding carbon to the environment, not being paid and sort of blocking the entire supply chain in those facilities. So there's a huge opportunity to improve the in and out time, the utilization of those warehouses and facilities and as a result, you don't need more truck drivers, you need to make the existing day of those four million brave truck drivers in the US 10-20% more efficient and you solved it, and digitization is the key to be able to do that.
Karl Siebrecht 23:58
It absolutely is. And that same digitization is one of the big limiters on the warehousing side for why there are those long dwell times. There's not enough clarity in what loads are showing up when, to which dock door, to more efficiently staff and focus labor on the inside of the four walls.
Lior Ron 24:23
I'll give you a concrete example of that that I think speaks to the power of what we can do together as a facility warehouse provider and a transportation provider. Those truck drivers, their life is that facility experience and they have so much feedback and views to share. We've launched a simple feature about two years ago or three years ago now, allowing them to just rate the facility experience. The same way that you can rate your Uber driver, we sort of turn the power to them. Hey, the truck driver, just rate your facility experience one to five. Now, back to Maps. I used to run Google Maps. As consumers, we left reviews on point five percent of our restaurant visits. Point five percent in an Apple review. We gave that experience to truck drivers. Well, 50% of facility visits end up with an explicit rating, and a blurb of text or feedback to the facility on what they can do better. 50% of visits. They are so hungry for their voice to be heard and to provide feedback to the facilities on what they can do better. Now we have like five million of those facility reviews, we can aggregate, make sense of them, turn around, show that to the warehouse, to the shipper. And together, find a way to improve life for those truck drivers, whether it's in and out, whether it's where the doors are at, dwell time, and all of that. Back to transparency and digitization is data that those shippers just did not have before, they did not have any way to collect all of the data at scale. So it's for the first time demystifying that black box for shippers, and not only that, back to visibility, step one, action is step two, then providing them action, stuff they can do in the facility to improve the situation. And back to what digitization allows you to do: decrease costs, we can show them, hey, if you move your facility from a 4.1 star rating, to a four point three star rating by doing those five things, that will result in $17 per shipment reduction in costs coming in and out of your facility, because you will be a shipper of choice and truck drivers want to go to your facility more. And we can quantify for the first time in history that for them. If you do that, $15 reduction in transportation costs. So again, just an anecdote, but super important, I think for what digitization can unlock.
Karl Siebrecht 27:04
Very compelling. I want to come back to what some of the blockers are, some of the barriers are, to continuing the digitization journey in the freight business. You run a big business, $20 billion of freight under management. The freight industry in total in the US is maybe 600 billion, 700 now? Something on that order of magnitude. Is it ever going to get to, 50% of this freight is all sort of visible inside one or maybe multiple systems that are connected to each other? How do you get from tens of billions to hundreds of billions? What are the blockers?
Lior Ron 27:51
One is getting shippers over that hump of, psychologically, I'm in full control if I outsource, or if I connect, I'm in less control, and showing them all the ways they can trust and get efficiency and value out of moving to a system. The second thing I will mention is, and something we're very passionate about is, democratizing access to everyone in the supply chain. When we talk about this big number, $800 or $700 billion in the US, some of it, let's say, 200, 300 billion is with the big enterprise sophisticated shippers, there's a very long tail of 2, 3, 400 billion with those mid-market and small customers that are maybe less sophisticated or just don't have the supply chain manpower to put on supply chain issues and to actually connect them and to bring them along to the digital journey. That requires next level of effort. We need to meet them where they are, you need to ramp up to the platform. And I think that's something we focus on, how do we tap into the long tail and the small tail businesses, but that requires a lot of effort and a lot of ways to actually reach those customers.
Karl Siebrecht 29:14
Right. What advice do you have for, maybe it's a mid-market shipper or an enterprise at the smaller end of the spectrum, who hasn't yet made much progress on the digitization journey themselves? For a lot of the reasons you've talked about, they've got existing systems in place, there are costs to doing a new integration, there is some risk about potentially losing control. What advice do you have for a shipper like that to get started? Is there an entry point? Is there a way to get started where they can benefit from some learnings, test and learn in part of their business to get a feel for what the value might be?
Lior Ron 29:58
Yeah, I think my advice is, first and foremost, make it a priority. And if it's not about you, like anything else, it's not going to happen. It's just so easy to be drawn to the day-to-day. Especially in logistics, it's constant firefighting, there's always something pressing, there's always something that needs to happen now. But the reality is, if you don't put some of that infrastructure, that doesn't actually necessarily mean investment, like some people are still, I need to invest a decent amount of dollars or that amount of dollars. You can do things in a pretty cost effective way, but you have to make this a priority for your organization to start reaping the benefits. Because the reality if you don't, your competitors are, and that will over time be a competitive disadvantage to you. So it's both offense and defense. So firstly, pay attention, make it a priority, then you need someone that can walk you through that journey, and educate and be sort of the pivot point in the organization. That can be you, meaning there could be someone in-house, if you want to hire the expertise, if you have the talent base, if you're willing to invest in-house, or that could be someone on the outside, like a trusted vendor of some fantastic partners out there. Two of them are on this call, whether it's a Flexe, Uber Freight, but someone you can trust that can start helping you on that journey, and really sort of strategize, what are the opportunities ahead? And somewhere in between making it a priority and choosing a vendor or not, is connect with the peer community. There's so much learning one can have from connecting with the community and other decision makers. There's fantastic conferences out there for everyone, regardless of digitization or not in supply chain, I think it takes a village. So connecting with like-minded professionals that have sort of walked through the journey. And between making the priority, connecting with others and potentially partnering with partners, then you get to start having a lay of the land of what are the big opportunities that digitization will unlock? And what are the initial priorities you want to go about in doing that? And once you have a bit of a picture of what are the priorities, then, to your point, you can either choose to go all for it, and make a strategic move to partner with someone or you can dip your toe in the water and do a pilot on some facility or some system to just get the initial learnings and initial benefits. The last thing I would say is, always bring your organization to the journey by showing them the benefits, by involving them in the conversation, by inviting them to the meetings or by helping crystallize to them what is the ROI and what are the benefits your internal stakeholders will get from that digitization journey. And again, peers can help with that, or providers can help with that. But it's very important to keep those internal stakeholders along for the journey as well.
Karl Siebrecht 33:26
Because it'll be a lot of work for them as well, a lot of learning and you get them to see some of the benefits and get them recruited into the team, that will go a long way. We've each been doing this for a bit of time, Flexe is having our 10th anniversary next month. We've seen a lot of change. At times, it feels like the change has been slower than we would have imagined it should have been. But then the deeper you get into the business, you understand, it's what you said earlier, there's infrastructure that's already operating, the train's moving down the track. And I think there is no lack of desire on the part of our warehouse partners and our customers to want to be more innovative, to drive more aggressively. But there are very real, practical challenges with that. And namely, it's the existing businesses that they're running, the existing infrastructure that they're running their businesses on.
Lior Ron 34:29
I'll add one advice to build on that and to summarize, connecting to some of the things we spoke about. Every change, especially as we discuss B2B change, takes time. If you look at the shape of every technology change in any industry, it's initially slow moving, slow to ensure people understand how the technology can be deployed, people understand the insights. The early adopters start to understand the implications and then there's an inflection point where within it looks like in hindsight, things start to exponentially take place. I do think on various elements of the digitization movement in logistics, some things are fully inflicting, like we're seeing record activity in terms of people that want to join that Uber Freight network. But some things are slow and steady and take time. My advice, back to your question, my advice for everyone is, regardless if you are adopting fully now or not, you need to be in the game and just understand what is going on so you can actually have a point of view and you can actually plan ahead. Whether it's autonomy, we have now dozens of shippers that want to move those autonomous loads, because that's going to impact, not now, not in five years, but in 10 years, the shape of the supply chain and distribution centers is going to fully transform by autonomy. Well, you kind of want to be on the ground floor initially to understand sort of what will be the impact. And we can give many more examples. But I think the advice is, build early to understand the magnitude of the change and how it will impact you. That will put you in a position to then benefit as things mature and as more and more people adopt that.
Karl Siebrecht 36:16
Lior, this has been a fantastic conversation. I've learned a lot and it's been, just more than anything else, super energizing. Wonderful to speak with you. Thank you again for joining us here. And I look forward to continuing this conversation with you.
Lior Ron 36:31
Thank you for having me, Karl, excited about this platform. Energized from comparing notes from you, as well. Looking forward to continuing the conversation on and off the record.
Karl Siebrecht 36:44
Okay, guys, so that was something. Lior has a ton of breadth and range of perspectives. And he's also got the depth, too.
Jordan Lawrence 36:53
Yeah, Lior is a fascinating guy. There was so much interesting that was said in this conversation. One of the real basic points that was raised around that inefficiency, the 30% of all miles being empty in the transportation space. When we really look at it, we have applied all these digital layers, and Lior talked a whole lot about digitization and what that means, but really, to me, what Lior highlighted, and what I absolutely agree with, is that digitization, at the end of the day, for providers is about matching supply and demand in a seamless way. When you look either with a statistic, you brought up Karl, about underutilized capacity in the warehouse space, being similar to what they're seeing in the transportation space, that there's still a lot to be had on the digital nature of supply chain transformation.
Karl Siebrecht 37:49
That's right. Through one lens, it almost seems kind of easy. There's a lot of underutilized capacity, that's a function of supply and demand dynamics, and we've got to do better matching. And, boy, as soon as we can do that, everybody's going to be better off, right, we'll ship fewer empty miles so it'll be good for carbon, it'll be good for costs, probably even good for consumers. Maybe we build more reliability. It seems super basic. It's just really, really hard to do. So many companies have been building towards this for so long. There were some challenges that Lior keyed in on, did you guys pick up on some of those?
Mike Swenson 38:37
The challenge account that resonated with me was the idea of, in order to build these efficiencies, you have to have visibility into what's out there. And from a freight perspective, and a capacity perspective, it's a very territorial industry. Generally, your information is not only proprietary, but it's also your competitive advantage. So the comparison he drew to that of having servers on the cloud with the idea of, I'm sharing my network with someone else's network and trying to figure out how to come to a win-win situation, it's an interesting take in that, in a utopic world, that sounds the absolute way to go. It's trying to do that in an environment today, where the wheels are in motion and the bus at the same time, is a very interesting challenge to address.
Karl Siebrecht 39:20
That's exactly right. I think of it as, we can build a better platform, there's a lot of opportunity to build a better platform than some of the other, call it, older platforms out there. The reality is that all of these operations are running on some of those legacy platforms. And it's not enough just to build a new platform, you've got to build it, the platform and the business and get to scale in the context of the reality. There's a ton of systems out there and they just don't talk to each other. And that's kind of the complexity that you have to start with and realize is there. Don't underestimate that, right? And then as you build this better platform, and scale up this business, it's like, how do you do that, given the legacy systems that are already in place? And frankly, Jordan, curious of your take on this, that's very true in the freight world. It's also just true more broadly across logistics.
Jordan Lawrence 40:13
Yeah, absolutely. You know, I think Lior's exact metaphor, I'm gonna get it wrong, but building the airplane while you're mid-flight, was absolutely perfect in characterizing that.
Karl Siebrecht 40:23
Right, you think about Legacy ERP systems as an example. There's a lot of new ERP systems that are being built, there's a better way to do it. But the reality is, most of the big enterprise companies out there are operating some or parts or in some cases, most of their business, on these old systems. They want to digitize, even, in many cases, kind of know what that means and want to make it happen. But there's this legacy jungle of technology systems that you have to navigate. You can't just rip them out and replace them.
Jordan Lawrence 40:56
Another great point Lior brought up was around driver shortage and he actually had a really nuanced perspective here. One of the things that stuck out to me is, Lior's strong assertion that if we tackle the efficiency problem, then you tackle the driver shortage problem. And I thought that was really an interesting perspective. I've heard Eric Fuller, who was a previous CEO of U.S. Xpress, they were recently acquired. He gave a talk several times over the last few years around the driver shortage and said, even at the fastest rate of adoption imaginable for automated trucks, you would still have this never ending shortage. But I think, Lior adding this new wrinkle, that there is an efficiency gain that can address this problem, more than just the simple equation of number of drivers and demand for truckloads. That was just really fascinating.
Karl Siebrecht 41:54
I so agree with you. And this isn't a logistics-specific comment, but it's actually very similar to power generation. There's math and an argument out there that says, boy, if people and businesses could actually just be more efficient, we wouldn't have to generate much more power. Again, it's kind of this fairly elegant way to shine a light on an opportunity that may not be obvious on the surface. I love that. It comes back to better supply-demand matching, better utilization of the assets we already have. And by the way, these aren't just the physical truck assets, they're actually the people that are driving the freight around.
Mike Swenson 42:33
That brings up an interesting segue. I had a recent conversation as well, with Chris Reed, who's the Director of Business Development over at Bogdan Delivery.
Chris Reed 42:42
You can look back at the history and see things usually moved in these five and 10 year increments and it's just not like that anymore. It's quarter to quarter. We have to live in that world where we're going to have to continue to make the investments and do the things that we need to do to see the future through. If you have, you know, an open mind, you're willing to change and you have a diversity with the carriers, the partners that you're working with, you're going to give yourself the best chance.
Mike Swenson 43:12
Bogdan has not only a warehouse presence, but also a very strong transportation presence. So they see both sides of the supply chain push-pull effect.
Chris Reed 43:20
10 months ago there wasn't enough drivers. And right now there's maybe too much drivers for the current demand. But then peak season's right here. If you're just shipping from one facility right now, you have one warehouse, or one carrier for that matter, you kind of have to grow up, like that's just not the world anymore. Of course, if you go and you sign the five or 10 year lease, that could be devastating down the road. So being able to have smaller footprint, so it's not the 200,000 square foot facility, but maybe 10 facilities of 20,000, that's the mode to go and then of course, by being closer to the customer is going to be reducing the transit times and the costs. You want to have different carriers, you want to have different strategies in place. And the thing is, you can't just go and ask someone, hey, I need you to help me when I need help, but then not give them any. You have to make a strategy where you're going to be able to feed them some and, of course, how you split that up is going to be based off of price and performance and relationship and all of that.
Jordan Lawrence 44:26
Mike, those are some great highlights from your conversation with Chris. I think what really stood out to me is the comment around the driver situation in trucking. There were not enough, and now we swung the pendulum all the way to the other side to being too much. I think everyone's seeing this in the headlines. Really that highlights this supply chain bullwhip. But I think what's interesting about that is, each piece of the supply chain is in a different place on that bullwhip, whether it's manufacturing, warehousing or transportation. Obviously transportation is the fastest moving, and we've moved all the way to the other side of the pendulum and it feels a lot like warehousing and manufacturing, or somewhere else in that journey, but certainly poised to experience the exact same situation. So just really interesting commentary.
Karl Siebrecht 45:11
Once again, another fascinating discussion, hopefully some useful insight there for our listeners. And I would be remiss if I didn't point out that a couple of episodes ago, Matt from Zero100 made the comment that in a survey they had done, I think it was around 2014, where they asked respondents, what do you think about the Uberization of logistics? And that question kind of got laughed out of the room. And here we are actually talking with Lior about literally the Uberization of logistics. So it had to be said. Jordan, as always, great to be with you.
Jordan Lawrence 45:48
It's been a pleasure, Karl, as always. Mike, thanks for joining us.
Mike Swenson 45:51
Thank you, appreciate the time.
Karl Siebrecht 45:52
Yeah, let's keep the conversation going.
Narrator 45:56
You've been listening to the Logistics Leadership Podcast presented by Flexe. If you'd like to learn more about the podcast or join the Logistics Leadership community, check out this episode's show notes and visit flexe.com/logistics-leadership-podcast. Keep the conversation going: Email us at leadershippodcast@flexe.com. The Logistics Leadership Podcast features original music by Dyaphonic. The show's producers are Robert Haskitt and Adam Kapel. Here's a quick pro tip: Instead of chasing down the next episode, why not just follow the show and have it appear in your feed automatically. Thanks for joining us!