Warp Is the LTL Network of the Future with Daniel Sokolovsky
Joe Lynch and Daniel Sokolovsky discuss how Warp's technology-powered freight network is modernizing LTL across the U.S. — connecting shippers, cross-docks, and carriers in one operating system with real-time tracking and AI-powered routing, without owning terminals or trucks.
- One operating system connecting shippers, cross-docks, and carriers
- AI-powered routing and freight consolidation
- Real-time LTL visibility
- Modernizing LTL without owning terminals
Transcript (auto-generated from the episode audio)
Hello friends, welcome to the Logistics of Logistics podcast. My name is Joe Lynch. Thank you so much for joining us today. Today's topic is Warp is the LTL network of the future with my friend Daniel Sokolovsky. How's it going, Daniel? Hey, pretty good, Joe. Nice to see you again. Thanks for having me. It's easy for me to say your name is a a tongue twister. So, Daniel, please introduce yourself and your company and where you're calling from today. Yeah, absolutely. Hi everybody. My name is Daniel Sakalovski. I'm the co-founder and CEO here at Warp. I'm calling in from Los Angeles, California. You got the name just perfect that time. Good job. So, what does Warp do and who do you serve? Absolutely. So, Warp helps brands and retailers save money on their transportation. We tackle their inbound supply chain, outbound store delivery, as well as their returns network. And effectively we've created a hub and spoke model that is very flexible and allows them to customize their needs while constantly looking for the lowest cost solution. Yeah. So today's topic is Warp is the LTL network of the future, but you guys are not a traditional LTL company with your all your own trucks and um you know a whole bunch of terminals across the country. Please explain. Yeah, absolutely. So we leverage an existing network of smaller businesses that effectively uh play a large role as in our network. Um we have three different pieces of our operation. So local uh that's primarily made up of um delivery service providers as well as other carriers that have cargo vans, box trucks, 53-footers. Um we also have a long haul or line hall portion of our business which is primarily run and operated by existing carriers, typically larger carriers that have a large asset base of of trucks and drivers. Um and then from the cross talkinging perspective, we utilize a network of again like I mentioned smaller businesses, medium-sized businesses that um are able to go out and help us as part of our network and we provide the technology to every single part of these businesses and every single one of these providers um to make sure that everything is connected and everything is working seamlessly. So if I did do a shipment with you, I might be working with two or three different trucking companies. one that's local to me that picks it up, takes it to the longhaul facility, the long haul driver, and then the local driver on the other end. Um, but ultimately, Warp is the one who says, "We are fully responsible. It's our technology, and we're the ones who will make sure you're from beginning to end, you have the service you need." Yeah. And we're we're actively operating this network, right? So, we're not just going out and saying, "Hey, here's our technology. You figure out how to work with it." We're going out and giving pricing for shipment, working with the providers in our network, working to make sure that everything is properly dialed in. So, it's almost like we're we're running a network of trains. The assets may not belong to us, but we need to make sure the trains are running. I don't think anyone cares who owns the assets as long as somebody's responsible and I can get it for a good price. And, you know, before we hit the record button, we were talking about the LTL world. Um, I'm I'm an advocate. I'm not I'm not against LTL, but it does lack sometimes the flexibility we all want and need during CO. We had problems and again it it it's these are very difficult businesses to create. I remember talking to um a private equity guy, Ben Gordon, years ago. I don't hope I don't misquote Ben. Sorry, Ben, if I do, but I asked him, "Why don't we have more LTL companies?" He said, "It's a very difficult business." He says, "Because you have to have lots of density." So I have to have a lot of shipments that are going from Chicago to Detroit and Chicago to Grand Rapids. So you got to get that density right. You got to buy all the trucks, all the terminals. And if it was really easy, we'd have a whole bunch more LTL carriers. So I think you guys have kind of come at it, said we're going to be really good at the technology. And I correct me if I'm wrong. You couldn't have done this 10 years ago because the technology wasn't advanced enough for us to for you guys to manage it. Yeah, absolutely. I mean, 10 years ago, the technology that was available, you know, I I think was good for figuring out how to do parcel in a better way, right? But I think parcel is a lot easier than LTL. Um, and I think LTL is such a more complicated beast with so many more touch points, so many more things to do, so many more places that something can go wrong that I think it's really the advent of AI and and all of the new technologies that are available today that have helped us do this. But yeah, you know, I think I I think the technology for us is the backbone of our business. Yeah. And you know, one thing I should also point out, I I know somebody's saying, "Well, I'd rather work with an LTL company that owns all their own trucks." there's a very good chance that the LTL company you're working with is using um other companies to move the line hall. So that is very normal. And again, no shade, it's just that's the nature of our business. Yeah. I mean it's it's no one's building a church for Easter Sunday, right? So I think that that's kind of what happened during co but it's also what's happening now is LTL carriers especially the national ones are leveraging a very large network of agents that are either doing line halls some local pickup and delivery sometimes they're outsourcing their facilities and their terminals so I think you know we're just not masking it right right and and again I don't think it used to matter a lot more if you were say a broker and you said oh I don't own trucks and I joke about my podcast. I've made those phone calls where you say, "Hey, I'd like to help you with your freight." And they go, "You own your own trucks?" No. Click. But we don't see it that way anymore because we've recognized that whether you're a freight broker, a 3PL, whatever you're saying, an operator in the middle, um, they add value and people recognize that. And by the way, when I used to be at a little 3PL, we did mostly LTL and I remember shipments that would go to the middle of the country. I want to say like Wyoming or you know out out kind of in the sticks those were always delivered by partner carriers to the LTL companies. So it's this is not um what you guys are doing is not like brand new in the in that you're leveraging carrier partners like everybody has for a long time. Yeah, absolutely. I think I think what we're doing that's different is we've finally really pierced through being able to take the technology and have it, you know, control and make every single piece of this chain more because I think that that's been the biggest thing that's been missing. Daniel, before we hit the record button, I said this to you was a friend of mine and I uh Tyler started a new uh freight brokerage and I remember him asking we talked on the phone a few times about it and he says I want to do something that makes us different from the other carriers and I said I would I would leverage small trucks. I'm a big believer that the innovation uh happens between the boulders. Truckload is a huge boulder. LTL is a huge boulder and I think companies like Warp are the innovators in the middle and it's basically providing some of the advantages of truckload uh and some of the advantages of LTL that you can't always get and um we'll talk about that a little more as we get into it. But first tell us a little little bit about you. Where'd you grow up? Where'd you go to school? Some career highlights before you started Warp and why did you start Warp? Yeah, absolutely. So, um, you know, I've kind of been on the podcast before, so I won't Yep. It's been a while, though. Yeah. Uh, I won't go into the entire life story, but yeah, I grew up, uh, born and raised here in Los Angeles. Uh, my parents had a career business when I was growing up. So, I spent a lot of time working in the courier industry. I ended up going to school to college, uh, at Berkeley to study math. Uh, while I was there, I ended up creating a small food delivery marketplace. Um, after kind of really getting my, you know, getting my feet wet in hyper local, hyper fast delivery, I kind of, you know, expanded out a little bit, slowed down, uh, to create Axelhire, which was a last mile regional delivery carrier. And I remember that. And then in 2021, uh, broke off to go out and co-ound work with Troy. Now, Axelhire is still out there, right? Yeah, absolutely. It's been rebranded to Jitsu. Um, so it operates under a new name, but it's Wait, what's the new name? Jitsu. Jitsu. Okay. I I didn't know that they rebranded. All right. I get it. So, continue on. Why did you start Warp? What was kind of what the hole in the market that you thought, I can fill that up? I think really it was like a similar kind of methodology for the previous businesses too, right? I think when when you think of Axelhire and kind of what we were able to do there was we created a Hopkins spoke operating network specifically built for parcel delivery that leveraged third party assets, right? We had a network of independent contractor drivers, delivery service providers. Actually over there we op we we leased and operated the facilities but in in in the world of LTL I don't think you need to do that in the exact same way. Um and so we basically took a lot of those similar methodologies and applied it to a a massively harder problem if you want to say that. And I think for me it's been about the challenge, right? Every single time it's can you actually go out and create these networks, enable these small businesses, actually do something that's valuable to our customers, um all while going out and creating best-in-class technology and and cultivating a best-in-class delivery network. Yep. What year did you guys start? Uh end of 2021. So really our first full year in operations was 2022. So right in co towards the tail end of co I would say you know after a year we very quickly entered the freight recession that we that we kind of continue to Yeah. Yeah. So I know CO lasted longer at least the rules did out west I I I live an hour outside of Detroit and it just kind of faded away here a lot little faster. But um during COVID um people were on the podcast and there was embargos. the LTL companies would say, "I know you've been shipping with us for the last three weeks um for last, I'm sorry, last three years, but we're not accepting new business for three weeks because we got to catch up." They had such an overwhelming amount of business. And so there was all of a sudden a whole bunch of shippers and you might be supporting a, you know, a a fulfillment warehouse or a factory and now I'm shipping my LTL shipments. Maybe I'm combining some of them, putting them on trucks, and now I'm going to carry more inventory. People started using sprinters. They might have been using econolines, straight trucks, box trucks. It was all hands on deck. So, we saw that happening even, you know, the market reacted to what was basically LTL being overwhelmed. So, you guys started right about the same time. So, I imagine it was a good time to talk to some of these LTL shippers who said, "Oh man, you called the right day because our usual carrier can't help us." Yeah, absolutely. I would say for the beginning, you know, that was easy. And I think over the past few years, things have been more difficult in the LTL industry, but I think we've continued to expand our network. We've continued to expand our technology. We've continued to uh improve our customer promise and our customer commitment. So I think that as LTL continues to you know evolve and I would say you know just last weekend or the week weekend before last there's a big evolution in the industry with the whole freight class changes and everything that happened around that um but I think as it continues to evolve it looks like at least that a model like Warp um is continuing to be more and more promising. Yeah. So what you're referring to is NMFTA uh is the National Motor Freight Transportation Association and they are the rulemaking group for the LTL companies. But um by the way they do a cyber security event every year. I went last year it was in uh Cleveland, Ohio. Went to the Rock and Roll Hall of Fame. It was fantastic. Everybody came and talked about you know the cyber security threat. And by the way a lot of people were there to talk about what happened to them. A lot of times you get religion on the cyber security uh after the fact. But anyway, MF NMFTA has taken a leadership position in cyber security, but they've always been the rulemaking organization for the LTL carriers and they are making LTL easier and easier because the class system, which by the way, no, nobody who's listening to this podcast created that class system. It was created a long time ago and it's been our job in the industry to make it a little more easy and because it's never been quite as quite as easy as we want it to be. You go, I'm shipping a chair and it's wooden. And they go, oh no, that's metal and we're charging you more. And you go, it's a chair. I don't know what I need to do. But um you said something last time we spoke. You said, Joe, we're classless over here at war. Please explain. Yeah, I mean we don't we don't believe in having to, you know, classify shipments in the same exact structure. I think um shippers and I think everyone wants things to be a lot easier and a lot and a lot less complicated. And that's kind of what we pride ourselves on. All of our pricing is dimensional based. So we actually charge a flat per pallet rate um depending on you know pallet size and and speeds and and different things like that. But we give a flat rate to the customer as long as there's no you know surprises. um aka they give us, you know, something completely different than what they told us they're going to. Um they're they're build exactly um what what we give them up front. And I think that creates a lot of relief for many businesses because from what I hear from, you know, people on the street is that, you know, over 30% of LTL bills have some kind of accessorial, some kind of pricing change, whereas for us it's it's none. Yeah. And that's always been a challenge with LTL is that you say you get charged differently for different classes. So I say, "Oh, I think this is class 65." And then they go, "Oh, no, actually that's a class 85." And you go, "God, oh my, I didn't know." And um in the past there's a lot of times people would ship something class 65 for 10 years and then they get a new 3PL. Joe Lynch knocks on their door and says, "Hey, let us manage your LTL." And they say, "Sure." And I go and I talk to my partners and they go, "Yeah, that's class 85." And now my new customer all of a sudden's like, "Why am I why did I go with you? All you did was raise my cost." That is very consistent. So when I used to manage a little 3PL, we measured on-time performance. We measured some sort of cost measure, usually cost per mile. It's not perfect, but it's pretty close. And I always measured billing accuracy because it's very difficult to get your bills right and it is a it is a sore spot for the industry because when we talk about auditing bills and a billing accuracy if I tell you it's going to be 800 bucks and you go, "Okay, cool. I'm going to make I'm going to make $1,000 on this sale that I just made for this pallet." And then I come back and go, "Oh, hey Daniel, bad news. It's actually $1,300." Now you just lost $500 that you can't necessarily recover and our relationship is forever frayed and and now I got to go back to the LTL companies and argue. I can eat that as the little 3PL or I can beg them to give it me an exception or I got to pass it on to you or you got to pass it on your customer. It breeds distrust and I know the LTL people and NMFTA is working hard on this. I think they made great advances, but it's still an issue. We got to get to a place where when I quote you something, it's correct. And by the way, if you make my if may you make the driver wait an extra hour, yeah, that's on you. If you didn't weigh it properly, that's on you. But as far as the class stuff, we got to get that right. And I think shippers just it's too confusing for the person actually doing shipping. It's I completely understand. If you're making the driver wait, obviously that's on them. if they're if they don't have the right weight, the right dimensions, that's on them. But going out and figuring out, you know, essentially a a law book of of what these classes are and what they should be and trying to navigate through it, like it's it's it's nearly impossible, right? And and yeah, you can use AI, you can use chat GPT, you can use all these different things. They have a pretty good sense of what the classes are, but even those systems are getting confused because there's redundancies in in in the writing as it is. It's funny when you have a system in place, it's just not easy to pull it. It's just like, you know, you look at our keyboards here. Our keyboards were designed so our typewriters wouldn't jam. It's deliberately slows us down. But when we moved away from typewriters, we still use these old keyboards that are deliberately slowing us down. And I feel like that's what happens when you end up with a standard. It's really hard to pull it out. But um yeah, there is another another way you can be classless like Daniel and the guys over at Warp. Um, I'll throw in another issue that is consistent in LTL. Uh, when I was doing LTL, sometimes I'd have a customer say, "You absolutely positively can't stack on this on this thing on this product." And we would say, "Okay, well, we'd rather you package it in a way that it can be stacked on." Because the LTL companies, their profit is based on, "I got to fill this truck. I I want full trucks. Everybody shipping wants full trucks and to say, "Oh, I'm going to ship this cross country without it being stacked on where I now I have to put it at the top." It's a problem. And by the way, we all used to put those cardboard cones on top of uh on top of our package to make sure no one um stacks it. It reminds me I was uh I was in Laredo with uh a company I was advising and I said, "Come over here. Look at there's all these there was somebody sweeping up the the terminal and there's a whole bunch of these cardboard cones that were crushed. I go that's what happens to your cardboard cones. So your guys back back in the Midwest, they put the little cardboard cone on and this is what happens to it. Somebody stacks a pallet on top of it. And it it's just really not in the LTL carrier's business to say, "Yeah, I won't stack on your stuff. In fact, I'll just if if I have a whole bunch of customers want that, I'll just ship my truck half full. It's it's difficult for them. And I know people are trying to come up with shelves and stuff. I know that's a possibility, but it's not it's not it's not easy. Now, with your model, it's a little different. Please explain why you guys can accommodate no stacking a little better than the traditional LTL companies. Yeah, so we just we don't stack any pallets at all. Um, and I would say that's just, you know, a big part of our business. It makes our pricing a little bit higher depending on which, you know, what exact pallet that you're shipping and things like that. But at the exact same time, it relieves a significant amount of potential damages. It relieves a lot of issues. I think for 3PL's, it makes things easier to discuss when a customer is asking for you because Warp does not stack pallets, period. So, even if you pick you say, let's say I got a 53 ft truck over in New York and it's going to LA, are you shipping that all the way across the country? No stack. No stack. Unless the customer stacking it by themselves. I mean, we're not, you know, if a customer decides to stack pallets, we just charge that as one pallet and it's not up to us, you know, about those, but we are not stacking the pallets ourselves. Yep. And then the local delivery is typically going to be what what kind of vehicle is going to do the local delivery a box truck nowadays. It used to be very frequently with a cargo van as we were building up the density and things like that. In some markets that's still the case but the vast majority of our deliveries are happening on a box truck. So the box truck is dock high. Yep. Dock high liftgate driver assist. All of those things are included by default on every single delivery. So that's what makes us a pretty good choice for delivering malls. Lift gates on all of them. Driver assist included on all of them. That's rare because you have to ask for a liftgate and pay extra on every shipment on LTO. Yep. That's nice. So I'm assuming there's you guys measure damage. I'm assuming there's less damage with this methodology. Significantly less. Yeah. I I would say right now we are probably the best LTL network out there in terms of delivering, you know, things that can are higher like have a higher likelihood of getting damaged or have a higher likelihood of having some kind of confusion at either the pickup site or the drop site because we use a network of different types of equipment that we're able to customize based on those locations and it allows us to be a lot smarter when we show up. Nice. Now, is there any kind of freight that you don't want to move? We're not the best at rolling doing like rugs and carpets and things coming on rolls, right? Our our network is really built for moving pallets. So, I would say there are those types of things that are, you know, rolls, kayaks, canoes that we're we're probably not the best carrier to handle. Um, we we are primarily built for moving pallets ice freight. Interesting. Interesting. And no cold chain. Obviously, that's not the nature. LTL doesn't always do well with that either. So, we are building something. there's something in the works um that basically helps us to uh compete against FFE and some of these cold chain LTL carriers out there, but we're not ready to talk about it yet. No. Well, when you are, come on back. Um so, we've talked about the shipper side. They're they have they have you guys don't stack at all. And so, that's that's a plus. you are an alternative to the other LTL companies that I'm assuming LTL companies say they go everywhere but they're using carrier partners. Are you guys better when it comes to this areas that might be less traveled? Yeah, I mean we we admit that we use carrier partners first off. Um but I also think that our technology stays and the experience stays identical regardless of who we're using, right? So the same experience that you're getting in Los Angeles with us, which is the first market that we opened and our dentist one is the exact same experience that you're having in Wyoming or Idaho or wherever else. Right. So are you guys you're nationwide, right? We're not fully nationwide. We have about 1,400 lanes that we service right now. Oh, I thought you guys I thought last time we Okay. So where where are you not as solid as you'd like to be? We're expanding. So we're in every every top metro area we already cover. We cover from a local pickup and delivery perspective every, you know, every single one of like the top 50, top 75 cities across the US. Um, what we're doing right now is actually expanding our connections, right? So, right now we connect about 1,400 lanes. Like I mentioned, we believe we need to get to about 2400 2500. Oh, wow. Be able to cover the whole country. So, it's interesting. There's places like I'm in Michigan and I think Michigan's like the 10th largest state, something like that. It's small compared to California, but it's good size. And I think 80% of the population of Michigan is in south south southern Michigan. So as soon as you go, you know, I'm guessing somewhere past Midland. Uh there is um not very many people, but they're up there. The upper peninsula is massive and uh it's growing. And it's cuz everyone's got cottages and houses up north. used to be cottages. Some you say, "Hey, come to my cottage. I'm on Lake Michigan." Now, if they say cottage, they mean big house on the lake, which is But anyway, more and more people live up there. And I'm assuming, oh, I know this. It's difficult for the LTL carriers to say, "Yes, I'm going to go from Detroit to Traverse City because it's not as many. It's not a major metro. It is a major metropolitan area, but not as big as it should be to have a the density that they want." Absolutely. And I think with us is we're we're continuing to refine our pricing. We're continuing to refine the locations that we service. Right? We're just we're we're 3 and a half years in. I mean, at this point, we're still just getting started. So, I think one of our big priorities has been expanding out our network. Right now, we measure so we measure what percentage of quotes that we return a rate for, meaning this is actually quotes that we can cover. And right now, that number is about 40%. And so, our goal as quickly as possible is to get it to about 60%. And as we continue, um, we're also about to start dialing in our pricing, you know, and and making that a better experience for our customers. Yep. Now, let's switch gears for a second and talk about why this is a big advantage for the carriers, both the bigger truck comp, the bigger trucks, the 50 53 foot of the 48, but also the all the locals. Why do they want to work with you guys? I think for the locals, there's a a source of consistent steady work that's that is pretty straightforward, right? They're not going out and having to chase, you know, across all the different apps to go out and get a bunch of pickups and deliveries. Instead, they're getting routes for the day and they're able to go out and and really plan out for a few hours or for a full day or for a few days of work. I think that's something that makes us really stand out from, you know, some of our competitors in that local pickup and delivery space. And I think for the long haul operators, um, they enjoy the consistency, right? Our network is relatively consistent. We're planning it. We're scheduling it in advance. It's not it's not very last minute. And I think that makes things easier for fleets and fleet managers to really plan. That's that's that's a that's a big plus. And I think if you're, let's just say I started a a business and I said, "Hey, I got a box truck and I'm I'm keeping kind of busy here and there, but um I can work with you when it makes sense so I can plug in some freight to keep me, you know, I might have might have said I'm going to go pursue all this work myself, but if if you say, "Yeah, I I can get you 20 shipments a week." Okay, now you let me start my business now. Uh maybe I'm just fortifying my business, getting a little supplemental income that I wouldn't have otherwise gotten. Yeah. So I mean I'm a big believer in enabling somebody to do that, right? It's for us is I I'm I'm a very big believer in entrepreneurship and and motivating entrepreneurs and and and fostering that. Um, so from our perspective, yeah, I mean, we're we're a good spot to, you know, go out and get a truck, you know, do a few routes, at least have us be some kind of subset of their business that allows them to jump start and get their own customer opportunities. I I'm also a big believer in small businesses need to go out and and get their own customers, right? And not just rely on, you know, networks and and businesses like brokers and Warp and things like that to be their primary source of business. Um, but we are one of those sources right now. I I I do think in some markets there's enough to start a business around us. I have had um a lot of carriers call me over time and what the number one thing they say is I just want good shipper freight. Meaning I don't want to work through a broker and I always say, "Well, hire a sales guy, right? That's that's the easy part. Get a website. Get get active on the social media." But I another way is do is find people who you want to work with, who you trust, who you feel like you can make some money with. Now, I'm not I'm not here to shade any brokers, but sometimes you hear names where they go, I can't make any money. I I own my own trucks, but I don't make any money from working with them. It's I'm staying the same. Then move on. There's there's great there's great brokers out there. There's great companies to work with. And to your point, doesn't hurt to go out and get your own customers so you get a sense for what that cost you too cuz it's not free. And I think when you start getting your own customers, they can also see the challenges that a broker has, right? Because I think a lot of carriers, you know, there's a lot of chatter about being anti-broker, but I think at the exact same time, the broker has has a hard job to do as well. So I think it's a the more awareness, the more visibility that we have across all of these different parties, the better. And you know, that's why we try to be as transparent as possible. Yeah, speaking of which, we're talking about the broker carrier summit which is coming up in Orlando. I plan to be there. You should be there too, Daniel. We were talking about what conferences should go to, but that one's coming up. That's a good one because it is all about improving the broker carrier relationship. Um, so getting back to it, if I'm a uh a local driver, the advantage of is I can I can supplement whatever business I have working with you guys and it's steady because you got you got some you got some uh you got some business going on. Now, what about these long haul drivers? Are the you are you their only customer for this load or are they able to maybe I got maybe I got 16 pallets and I can fit eight more on. Is that is that a a use case? No, we're not working with partial carriers. So yeah, the you know the Warp that that full shock is basically Warp and they're not able to go out and partial it out and and that's not something that we work with right now. Did you ever try that and you didn't like it? I mean it's something that's that is being done left and right, I think. And and there's a lot of you know underground if you want to call it double brokering. Oh yeah. Oh yeah. Yeah. And that's not something that that we, you know, try to work with. Again, our network is more about quality, about precision. Price is something that we're continuing to dial in. But the biggest thing that we're providing to our customers is peace of mind. And I think when you start using partial carriers, there's there's not very much peace of mind. Yeah. Yeah. The the challenge is is if you say, "Hey, we don't do any stacking." And if they're say, "Oh, well, we we had no choice this time." Well, you're like if it's all your if it's your if you're responsible for all the freight, you say, "No, this is the rules of working with us." So, um, now one of the one of the complaints sometimes, and again, I know the industry's done much better. One of the complaints of LTL compared to truckload is handling. And I'll I'll talk about the old way of LTL. And it was I was shipping something from Texas to Detroit, I might take it, you know, from Texas to somewhere in Kansas to a terminal, take it out of one truck, put on another truck, go to Kansas to, I don't know, Ohio, and then and then Ohio, get on another truck, and it moves up to Detroit. Um, so your stuff is being handled. Anytime stuff is getting handled means it can be broken, it can be lost. Um, more handling, more cost. Everything's bad about handling. Now, are you guys still have the same I mean, are you still doing handling with your stuff or is it less handling with your network? I would say on some lanes, it's a lot less handling, right? So, we have a couple of lanes, there is no handling at all in between them. And remember that the system is constantly optimizing specifically to get rid of inefficiencies. those additional handling stops, the additional line holes, those are all inefficiencies within the system. So our algorithm is constantly working in order to you root out those types of effic inefficiencies. But at the exact same time, if it is more efficient to go out and make a stop and handle it and whatever, we still do that. But I would say in our high density lanes, we don't do that. In our lower density lanes, we do. Yeah. Yeah. So getting back, that's a great point. So if it's, let's just say, from Los Angeles, I'm just going to make this up. from Los Angeles to Vegas, I'm assuming you're really solid and you say there's no handling. That's just that's a direct from one from one local area to another local area. But if I'm going from LA to Wyoming, middle of nowhere, somewhere in middle of nowhere of Wyoming, there's going to be some more handling. And I think and that's that's true also for the LTL carriers. But your goal is to optimize that out. Yeah. And I would say is that the carriers don't always need to handle it, right? And there's a lot of opportunities where you do, there's a lot of opportunities that you don't. There's also a lot of opportunities to constant to change the order of the stops that you're doing, right? And I think a lot of carriers just because of the technology that's available out there are doing this in a static way and not a dynamic way. And so I think right now that's a yield issue that it causes for them, right? they can probably increase their yield or lower their price or whatever they want to do if they start going to a dynamic optimization. But I think it's hard to do that. And you know, carriers that have been that are coming, you know, that are legacy and have legacy tools, legacy technologies have a much tougher time doing that than than the ones who are having, like I mentioned earlier, best-in-class um technology. Yep. Yep. And you know, um, we had we had some high-profile LTL companies go under in recent years, and I think I think a few of them were union. And that that I'm not anti-UN, but if you drive me out of business, I would be very anti-UN. And um, obviously, you don't have the same issues with a network like yours. You don't have if somebody says, "I don't want to work with you anymore." They don't work with you anymore. you your your uh network is ever growing and contracting as as need be. Absolutely. And I think that's the beauty of this kind of system and specifically the challenge we set out to to go out and and and tackle, right? I think specifically what you just described is the concept behind Warp. Yep. Yep. And so I want to talk we didn't we probably should have done this at the beginning, but I'd like to do it now. Um I want to talk about traditional LTL versus Warp. And so I'll describe what I think is how a traditional LTL works. And there's there's I'm going to miss some details here, but let's just say I'm shipping something from where I live, the Detroit metro area, to LA, where you live. So, um, I would call an LTL carrier. Uh, I would say, "Please pick up these two pallets that I need to get out to Daniel." And they would they would send a truck over uh late in the afternoon, and they would pick it up. They take it back to the terminal. Um, most likely from Detroit to LA. They pick it up the next day. Um, they're going to have a stop. It Well, they might have a direct truck going from Detroit to LA. I'm not positive, but there might be stops. It might go to Vegas. It might go somewhere in the depending on the carrier. That's a those are two big cities. So, maybe it's got they have a direct route there. But they could also say we have to stop in Vegas and not go and send some of the stuff or stop in Phoenix, send some pallets. But eventually it gets out to uh LA. They they have a local I mean their their local truck delivers it the next day. And um that whole system the way they're billing is with the class system and the class system is not easy. I mean even even with the changes it's it's it's challenging compared to no class like you have. So um so with that methodology they own all the trucks. Now they might not own the line hall. they contract the line hole and if it's they probably have their own terminal with their own trucks in LA and in Detroit, but if you're going somewhere in the middle of the country, less likely they're going to use partner carriers and they'll tell you. So, um so the challenges with that compared to your model is they do stack. um they do have a class system and there are there are technically um technically you're going to have bill auditing problems that you will never have with yours and then potentially there's also the more handling in the LTL system just because of the nature of their business. Now contrast that with what you guys do. Yeah. So I think let's start from the ordering process. Right? Right now a shipper goes out, they may work with a 3PL, they may work directly with the carrier. Some carriers don't have digital coding functionality. Some carriers do. So I'll say we have digital coding functionality, right? So somebody can log onto our website, put in their details, get it a 3P, they can call their 3PL or email their 3PL. That 3PL can log in or, you know, connect our APIs together, get a code directly from our system. They can also send us an email, right? Get whatever kind of format of it they want from a quoting perspective. At that moment, um, our shippers are able to make a decision, right? So, the first thing is that they're going for is the speed and the cost. So, going based on where it's coming from, where it's going to, we may or may not offer different speeds. All right? So, our speeds can be, hey, here's a direct offering, right? Where we're picking up and delivering it right away. Here's our kind of regular offering or standard offering which is our typical LTL network and in some regions now we offer an air offering as well right and so that's the fastest possible called cross country in one day. Um and so I think that the first thing is we're offering shippers the capability to choose between different levels of speed. Okay. So let's start with that. The next piece is that when our driver shows up to basically go out and pick it up from their pickup location, one of the first things that they're doing is that the B also has QR codes on it that they're able to go out and apply to pallets. If they're applying QR codes to those pallets, the driver is able to scan them in at that moment. So instead of just getting a regular old pro number sticker, putting it in there potentially a different pro number being used for the shipment or whatever happening because of that whole you know manual pro number kind of addition is not happening right and the driver is able to to take it on and we start getting visibility and tracking the custody immediately from that moment. The next piece is that as they are getting updates from us, our updates are happening pretty quick, right? We're not using EDI. We're not doing updates every 4 hours or 6 hours or 8 hours. Uh shippers are able to get updates as soon as they're available. They can also go out onto our tracking link and sign up for an email or a text message to get an update. So the second that it arrives at the first terminal, the second it departs from that terminal, they're able to get some kind of notification immediately of this is what's happened. So I think there's an increased level of visibility. At the exact same time, uh we're going through like I mentioned, we're dynamically optimizing. So we're not just committing to those speeds, but if we're able to do it faster for cheaper, then we do it right. So if all of a sudden we have a a volume shift going from one place to the other, great. The system reacts and changes the route for the vehicles and changes the middle mile um basically configuration. On top of that, as this freight is moving through the network, we're also going out and we're providing communications to different people that are involved. For instance, the drop off location may actually need to have an appointment. With us, appointments are a default option. We send every one of our locations the capability to book an appointment. And so once they book it, they're also able to sign up for tracking. They're also able to get visibility and kind of watch the shipment as it's going. And I would say it's less about watching that one and it's more just about being notified on the times that you need to do something. Like I love when FedEx goes out and tells me I have a shipment coming to my house between this time and that time, right? Why doesn't every LTL carrier have that yet? It's it's a technology problem. Um and so we've we've been able to solve that too. And then you know obviously at the very end of the journey they get their bill. Their build is exactly you know what what they were coded and it makes the transaction a lot easier for everybody, right? Right. And again, that I used to say this when I worked in the LTL business. I would always say to my carriers, the distrust that you and I bring to our shared customer is ridiculous. When I say it's $400 and it comes back, oh, it's actually $480. It just feels it's more than just the money cuz all of a sudden their profit margin went from whatever to lower than whatever. No one likes it. Um, now do you work with brokerages and 3PL's? Yeah. Yeah, absolutely. We work with, you know, most of the top brokerage out there right now. If any brokerage wants to sign up, our rates, our coding API are readily available. Just send us an email and we'll get you the API key. So, you say API, so that means you just plug right into their transportation management system. Yeah. Uh, depending on what CMS that they're using, many of them are also using kind of coding engines like a banyan or an SMC or something like that. were integrated directly in those two. So they can pull directly from our system directly with their TMS if their TMS is already integrated from a number of different coding engines. Um and then anytime they can also just send us an email too. So, I think from a brokerage perspective, this is kind of a no-brainer just because when I look at the LTL carriers, I um I don't know how I haven't paid close attention, but there used to be 25 that made up 90% of the business, and I think the top 10 made up like 80% of the business. And now it's probably the top nine make up 80% of the business. Um but most of the companies aren't national. They are regional or super regional, meaning they do two regions or three regions of the country. So I don't think we have national coverage for the vast majority of LTL carriers. Am I right to say that? Yep. There's only a few carriers, a handful literally that are out there that do national. You mentioned FedEx. I think they're one of them. Um UPS, which is um changed their name, didn't they? T force now I don't know if they still are national coverage but it's hard to again this this is a very difficult business that they're in. They're buying all those trucks. They're buying all those terminals. The advantage you you and guys you guys have is you say we are focusing in on our technology and on our customer success. We don't own these trucks. We just make sure they go the right place at the right time. Yep. Yeah. Which is a problem on its own, right? It's a challenge. Oh yeah. Yeah. Now, let me ask this. You're working with carriers every day. All these all these lanes almost national. Um I'm assuming not all every day are perfect. Are you are you calling the uh herds, so to speak, when they aren't performing? Yeah, constantly. We're constantly supervising. We're constantly monitoring performance. That is a big part of our business right now. Yeah. Yeah. Well, it it's, you know, I think the nature of our business is not every business is good for every company. Sometimes there's really good business that you say, "Yeah, it's great for someone, not great for me." So, move on. Find find business that's better suited for you and your trucks. Um, so this seems like a slam dunk though for the uh getting back to the brokers because you can give them an instant price and if somebody says I can't have anybody stack, I need this is special handling or whatever they want to say or they just got burned by some one of the LTL carriers with a a big um price hit. You got you got an alternative. By the way, when I was selling LTL, a lot of times you go into the sales call and they say right off the bat, we don't work with so and so and so and so cuz somebody decided they did something wrong. Who knows? Could be they they uh screwed up a shipment for us in 1998 and we don't work with them anymore. And I would always just say, you just took two two of the top carriers out of the mix. It's like taking um tools out of my toolbox. You guys don't have to worry about that. Yeah. I mean, from our perspective, you know, we still have a reputation. We still need to make sure that we're performing at quality. Um so I I think it's I I think look, why why don't people want to work with an LTL carrier again? because the LTL carrier has somehow screwed them over so much that they never want to work with them again. All right, so there's a certain level of toler like UPS and FedEx get delayed. Not even an LTL parcels get delayed all the time, right? People are still using the parcel companies. One of the reasons why is because there's less competition there. There's fewer companies to use, but even then you're you're willing to excuse something like a one-day delay or a two-day delay or whatever h happens. But the things that are inexcusable are lost for you, right? Hey, I put a shipment in through this network and it never showed up. I don't have it anymore. The things that are inexcusable are, hey, all of a sudden they're they're sending your customer a bill for $2500 for something that your customer already paid you $800 for and questioning why they're going out and getting that bill. What's inexcusable is that all of a sudden that shipment ends up in a completely different side of the country and all of a sudden you need to go out and get it. what do you even tell your customer because no one has visibility and can't tell you what it is. So I would say is that we we we help brokers solve many of those headaches because we give transparency because we we give visibility because we let them know what's going on but at the exact same time the network still has incidents right like we don't we're not always perfect and I can't sit over here with everything come on I know you're perfect. Yeah. Um but I think we're we provide a lot more visibility and transparency into what's going on. Yeah. By the way, I said this before we hit the record button. What do we want in this world? We all want options. We none of us want to be limited on our options. And I think you mentioned the parcel. For a long time, we had UPS, FedEx, and I guess we had the United States Postal Service. Now, you look and go, there's dozens and dozens of companies. Some are regional, some are super regional. Amazon, there's the couriers. There's just well your old company. I don't think they're a parcel company, but they're a delivery company. There's overlap. The world's changed. We all want more options, and this is a great option. And again, I think it's overnight through years or so. You guys have basically built a national uh coverage, and um it's working. I I I know you guys are growing like a weed. So, congratulations. Yeah, thank you. I mean, we're there's a lot of effort that goes into it. I would say we're far we're far from where we want to be right now. Yep. So, Daniel, I'm going to summarize. Oh, I almost forgot. Freight fraud. Freight fraud. Freight fraud. Freight fraud. Everybody's talking about it. How does that impact you guys? And what are you guys doing to prevent freight fraud from entering into your biz? Yeah. So, at this point, we've put in a significant amount of layers of security and protection in the system. um and not only security on how a carrier gets in but also how they continue to be in our system right there's a lot of the whole concept of you know buying MC numbers buying existing MC existing emails and things like that so at this point we have layer upon layer upon layer of protection that we basically put into place to make sure that this is not happening and at the end of the day I would say is that we're working less and less and less and less frequently with new carriers right I think a lot of it is that as we were growing as Our footprint grew as we kind of grew in that regard. Yes, there was a lot of new carriers entering our network and we had to figure out ways to identify bad actors and who are medium bad actors, you know, things like that. Um, but nowadays we're continuing to use our existing carrier base as much as possible. I love it. I love it. And again, there's so many people are concerned with uh very brought I I don't say it I don't say it every podcast, but I say it quite a bit. I am concerned that we are headed for a digital 911, a a cyber 911 where somebody hacks into our systems and shuts down half of our half of our business world, half of our our lives that are all online. It's happening right now actually. It's uh the the the whole uh all of these different hacks that have been happening. Sia got hacked last year. That's what's happening by the way. It's just people aren't talking about it, but it is exactly happening. And I also argue that existing LTL carriers and people in the logistics industry are in no way prepared for that. Yeah, we we had two large LTL top 25 LTL companies, maybe three last year get uh hacked. It just And by the way, there's no shame into this. We had a few years ago the crowd strike. It wasn't a hack, but it was a vulnerability that hit Microsoft. It also hit uh the airlines. And again, it wasn't a hack. It was just they had some vulnerable code somewhere. It was crowd strike. But we also saw AT&T. These are technology companies. If those kind of companies can get hacked, um we're at risk. And when I went to the cyber security conference last year, somebody from the White House said, "We've never seen as much activity from um China, Russia, North Korea, Iran trying to hack into our systems." And it used to be just businesses and he says now it's especially um logistics companies. And the reason it is is because they saw what happened during CO. Um we had some we did pretty well. We were pretty resilient, but there was some areas of brittleleness. So we can always get better and that we should we should get better after instances like that. Anyway, I'm going to summarize what we talked about. Daniel, then I want your final thoughts. I'm talking to my friend Daniel soi and I'm talking about Warp is the LTL network of the future. And so, um, LTL, it has its place. It it's it's been there for a long time, but it has some issues. Uh, it has a class system and, um, it's not always easy. Although we made some improvements recently, billing accuracy can be a problem. And sometimes you have to do an audit on all those bills and you find you thought you were paying 800 for that shipment and now it turns out it's going to be $1,500. It's bad. No one likes it. Secondly, we have stacking problems. Um, some number of LTL shifters, I know this because I lived it, say, "Don't stack on our pallets. Don't stack on our stuff." And that doesn't really work for the LTL carriers because they're trying to fill that truck. Full trucks are full trucks are better from a cost perspective and they're trying to they're trying to beat a price. Um sometimes you you're also paying extra for a liftgate and for the most part I don't even know if you can get driver assist where the driver gets out and helps. Is that is that normal in in the LTL business? Yeah. Okay. So, um so there's there's challenges. Um traditionally people have talked about too much handling. You know, if they have to stop multiple places, um you know, they have an estimated time. So, they say, "I'll estimate that that's going to get there on Thursday morning." Um but there's no guarantee. So, if it's a day late, that's so be it. All I gave you is an estimate. It's it's it's better than having to get a full truck, but we never truly had a lot of alternatives. It was either you went with a full truck and tremendously overpaid to move your two pallets or went LTL. And by the way, there's not a ton of options. Most of the LTL companies are not national. And the ones that are national, you are paying for that privilege um to work with them. So, and by the way, the LTL carriers don't necessarily want to work with every broker. I can tell you, um, I won't mention the names. Some of the very top LTL companies won't work with companies that specialize in LTL. And if they do, they give you big fat pricing that doesn't let you win any business. Now, I understand if I owned if I owned tens of thousands of trucks, I might not want any broker in the middle either. But if you're a broker and you say, "I need to move LTL shipments and I can only get two or three of the top LTL companies to work with me," you should call Daniel. He's classless. Anyway, um, switching over to Warp, the advantages are all your all your trucks, local deliveries are with liftgate, with driver assist. It's just come standard. You think you guys are doing a better vis better job in the visibility of this because of of the way you've set this up. You guys don't own your own trucks, which means you focus in on developing a really great carrier network. And also, uh, since since you don't own terminals, you say we can deliver anywhere, you know, and again, everybody's going to struggle with the middle of nowhere in Northern Michigan, but um, you're set up for that. and um broker broker friendly 3PL friendly and working really hard to make sure freight fraud doesn't seep into this business. Anyway, uh what am I missing here? Oh, you guys think of yourself as a lot more dynamic, a lot more flexible than the traditional LTL carers. And and right now the if you're working with them, they have they have routes and if you're outside that route, good luck. So anyway, enough of my blather. Put a big old bow on this one. Final thoughts on the topic, Daniel. Yeah, absolutely. Well, Joe, as usual, you know, thank you very much for having me. Um, I think, you know, we continue to make headway and and and uh on our on our network to be on our on our mission to be the LTL network of the future, I would say. Um, you know, a lot of our focus right now is expanding our network, making sure that we're appeasing our customers, making sure that our systems are working and, you know, we are looking for people to go out and try us out and, you know, test out the work concept and test out the work model and let us prove that this kind of thing works. And, uh, thank you very much for having us for having me here. It's always a pleasure to be on the show. Yeah. One last thing I didn't ask. Where did you come up with the name Warp? Oh. Um, we we wanted to come up with something that really hit the nail on the head of what we want to be. And as we were going through different names and we went through and and talked to a branding agency about all these different names, but Warp was the one that really stuck out and that's what we're trying to do. Make it so easy that it just works. Yep. Yep. And by the way, the website I like is wewarp.com. an interesting new change to the website. I would recommend you guys all go to it. Daniel, I'll make sure I put a link to your LinkedIn profile, a link to your website, a link to any other links you and your go to market team give me. And uh you anybody who's a broker or shipper interested should reach out and talk to Daniel. Again, I highly recommend this. I think we're all looking for alternatives and I I I especially think of people who feel like the LTL model doesn't work for them because of the nature of their freight or brokers who say, "I would love to be able to support my customers with LTL, but I can't because the LTR carriers don't want me." And and there's tons of that there. I think there's 25,000 brokers. I guarantee there's a quite a number of them who say, "I called all the LTL companies, but they don't we're too small or some other reason they don't want to work with you." Yep. Anyway, Daniel, I was talking to you about conferences before we hit the record button. So, I'm going to the Ayanna conference. That's the Inner Motal Association North America and it is in Long Beach, LA. I think I'll see you there, right? Yeah, absolutely. I will be there. And that even What is that? An hour from your house. Yeah, it should be less than an hour from my house. No matter what, when you say LA, you should just go. It could be three blocks away. What's that? An hour from your house though. I see. Yes. With Yeah, but when is there no traffic? Um Um and then there's the broker carrier summit coming up in October in Orlando. I hope to see you there. Uh the CSCMP conference is also in October. that's in uh Maryland. That's an excellent conference. And then last but not least, there's the Trimble Conference. Uh that's all the the tech stack for the trucking companies. That's that's an excellent conference. I went last year. I'm going this year. That's in New Orleans this year in November. So anyway, hope to I know I'll see you at the Ayanna one and I think hope to see you at some of the other ones. Yeah, absolutely. See you there. Daniel, thank you so much. I know we've been trying to get this on the calendar for the last couple months. Thank you so much for finally taking the time. Yeah, absolutely. Joe, thank you for having me. Always a pleasure being here. Yep. And thank all of you for listening my podcast. Your support's very much appreciated. Until next time onward. You have been listening to the logistics of logistics podcast where we engage with leaders in the logistics and supply chain community. 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