Did you know that the average age of a professional driver in the US has been growing steadily? This is not a good sign because this can lead to disruption, especially in the chemical industry. Considered as the backbone of a lot of industries, drivers deserve respect and proper pay. To learn more about the freight and transportation industry, join Victoria Meyer and her guest, Brian Fielkow. Brian is the CEO of Jetco Delivery where they provide a wide array of logistics and transportation services. Join in the conversation to know why you need to know your market for maximum efficiency. Learn why safety is the foundation of the transportation industry. Discover why the number of professional truck drivers is dwindling down.
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Driver Shortages And Sustainability With Brian Fielkow
I'm speaking with Brian Fielkow who is the CEO of Houston-based Jetco Delivery and EVP of Montreal-based GTI Group. Brian has got 25 plus years of leadership experience leading, growing and transforming multimillion-dollar organizations organically via mergers and acquisitions. With Jetco and GTI, he is leading a company whose operations include intermodal, flatbed, heavy haul, van and freight brokerage services. We are going to be talking a little bit about logistics, supply chain, what's going on and factoring into that. Brian, welcome to the show.
Victoria, I appreciate being here. Thanks for having me.
I'm delighted to have you here. Tell us a little bit about Jetco and GTI.
Let me start with Jetco Delivery. Jetco was started in 1976 by a gentleman named Mauris Mattern with a couple of trucks. He grew the company. I had the fortune of acquiring Jetco from him in 2006. I'm also proud to say Mauris is still a part of our team this many years later. We have grown the company and got terminals in Dallas and Freeport, Texas. Our main terminal is in Houston. It's an intermodal, flatbed, heavy haul and freight brokerage.
Be strong on the inside, unbeatable on the outside.
In 2019, we joined the GTI Group based in Montreal. GTI has trucking operations in and around Montreal. Our partner company in a trial is called Precision Specialized. We have freight brokerage operations throughout North America. It has been fun to take this company. My clock starts in 2006 and see what we were and now the company we have become, especially combined with GTI. It has been a thrill to be part of the evolution and watch the company grow. Along the way, we take some very good people with us and watch them develop, and grow.
It's interesting because freight and logistics, in many ways, is such an old-fashioned industry but critical. Being able to evolve, grow and create value in that space is important.
In some ways, the industry is still set in its ways as old-school. Those days are dying now. Many trucking and logistics companies and I like to consider ourselves among that group, have made investments in technology, fleet, safety, and most importantly, people. I have always taken the philosophy of, "Strong on the inside, unbeatable on the outside." In my years at Jetco, I have always focused on internal strengths. Mostly, the right people, culture, equipment, systems and technology create an offering that the clients keep coming back for.
I'm going to loop back to that because we will come into talking about competitive advantage. Let's jump first into the world of logistics and supply chain. In particular, since the start of the pandemic, logistics and supply chain disruptions have had a huge impact on the chemical industry and, frankly, all industries. We have seen this globally and domestically. There are lots of stories. The cargo is tied up in ports and not being able to get the product to move when you need to. Pricing is going up significantly. Reliability is decreasing. Lead times are increasing. Can you break it down for us in terms of other than just a sheer aspect of COVID causing somewhat to port disruptions? What else is going on that's causing this disruptive time in logistics?
COVID triggered something that was already there and in process, which is the supply chain rebalancing itself, new shipping opportunities, onshoring and nearshoring, all of these things serve as they come into play will continue to alter the supply chain. In my world, which is trucking and freight brokerage, it's all about the professional truck driver. If anybody has ever thought there's no driver shortage, let's have that conversation. The average age of a professional driver in the US has been growing steadily. The average age is around 55 or 56. It's not a good sign. It means that we are not attracting people into the industry fast enough. We are in an economy where the demand is high and driver supply is constrained. That's what creates a lot of disruption that people are seeing.
You mentioned the price is going up. That's a big deal because we've got a pair of drivers and we are in a competitive market. For too long, truck drivers have been grossly underpaid when you consider the amount of work they do, how strenuous and taxing the work is, driving through congestion through traffic and doing it every day safely.
For too long, truck drivers have been severely underpaid.
If the market is correcting itself in a way that creates better pay ultimately, maybe that will create a little complaining of, "My freight is costing more." Long-term, as a supply chain industry, we have an interest in having our trucks seated. You can only do that by attracting people to the industry. The correction that's going on is necessary.
I heard numbers and the cost of freight has, in some cases, quadrupled. That may be more ocean freight rather than domestic freight. To a certain extent, maybe it is the domestic freight. How much does it go into the driver? Is this a case of supply-demand? Where's the money going?
From a trucking standpoint, I can tell you our rates haven't quadrupled anywhere close. I know that due to the capacity limits over the oceans, steamship line rates are going way up and that may have something to do with it. Our rates reflect a need to be profitable and pay our drivers more. I like to tell people that I'm not in the trucking business. I have left the trucking business. I'm in the business of providing professional driver services. That means that I need to pay the drivers the right amount and have locations that treat our drivers right so they are willing to go back again.
If a driver doesn't want to go somewhere, especially if a shipping location has a bad reputation, it's not driver-friendly. There are long wait times and no facilities to use while you are waiting. If it turns out that's a facility that nobody wants to go to, I can't send the driver there. People must become shippers of choice and make sure they are taking care of drivers. I don't mean we have to have the red carpet rolled out and a gourmet dinner. It's just common-sense stuff that's still all too lacking in the supply chain.
I know you service a variety of industries. Do you see that there are similar issues across the industry? In the chemical industry, a lot of it is considered more hazardous materials, perhaps when we think about the product side of it. The equipment side of it is a little bit different. Do you see different impacts depending on the industry?
There's no question. You cannot look at the trucking and logistics market and make any generalizations. If you look at rates in demand, it's all micro-economy. The micro-economy is maybe geographic, industry and more likely, a mix of things. Even though generally, the demand for freight is high and things are booming, some industries still haven't recovered.
Big and heavy capital projects are trying to recover as we get into 2022. On the other hand, other businesses did great throughout the whole pandemic, Last Mile and Right Fit. People quit taking vacations during the pandemic so they spent money on home goods, repairs, and house upgrades. It was and is a tale of several cities. You can't generalize. It is niche by niche.
How do you approach those niches? I think of the trucking, logistics industry and professional driver services. You think a lot about the tail end drivers because that's what we see visibly. You've got a big back-office operation. How do you pivot and adjust to those changing dynamics?
Never let your customers commoditize you, but don't treat your customers like a commodity either.
Most importantly, we have made a deliberate decision not to be a spot player. In other words, we don't make our living on load boards or transactions by transactions. Therefore, we take time to get to know our clients, their industries and understand the flow. We do a lot of work, for example, in Houston with residents, we have worked with our clients to help them load heavier, export containers to get better payloads and lower costs per ton.
Also, residents have their personalities. The export market and domestic market, one may be more dominant than the other. There's pricing. Sometimes, we know with resins, when it rains, it pours. When there are export resin markets, everybody wants to export at once and then it dries up for a while. You learn the market that your customers operate in and try to be the best business partner to them as you can. The only way that I have figured out how to do it is to study the customer's needs and the industry in which they operate. Never let your customers commoditize you but don't ever treat your customers like a commodity either.
It sounds maybe that gets to the source of some of your competitive advantages. We are going to touch on that. Where does Jetco create a competitive advantage? It seems like a pretty crowded market in this area.
The market is crowded but it's not crowded with the A-players in the industry. I'm proud to compete against many companies that I consider the best in class. What we do to create a competitive advantage is in several things. It's a tailored approach to our client by client. No two clients have the same needs. The more we get to know the client, the better we can service them. It's not always about rates. It's about operational efficiency. If somebody saves $10 on a load and this is a cutoff, whatever they saved is nothing.
We work with our clients to be on top of their needs and pre-plan to the extent possible. As I said before, we are in the spirit of, "Strong on the inside, unbeatable on the outside." We are very process-driven. We try not to run a company and we don't run a company that's sort of an à la carte. You get something different on Monday than Tuesday. If you are rooted in the process, it creates certainty for your employees and the outcomes for your clients. I spent a lot of time on our process, challenging, refining, learning and getting better. That ultimately spills right over into service, predictability and reliability.
The competitive advantage is a lot of this stuff our customers don't see. They will see our trucks and marketing materials. They will interact with our sales professionals and customer service professionals. Every one of that customer touches has to be excellent but it's all the stuff behind the scenes in terms of process and making sure that we are hiring the best. I don't think if I get twenty driver applicants, I will be lucky if I can hire 1 or 2 because we are not compromising our standards.
We are a professional environment of the company because we are hiring the right people that spills over to customers. For us, everything starts with safety. Safety is the foundation. We put a lot of time and effort into our safety culture because we recognize that safety is the foundation of an operationally excellent company. If you are not safe, you lose your privilege to do business with the best clients. We are well aware of that.
That resonates well with what the chemical industry views as well. There's this huge recognition that we have to be safe across all of our operations, whether it be in the manufacturing site or on the road as it gets delivered. The other piece is the aspect of that final delivery to a customer has a huge impact on a chemical company's customer's perception. It may be something that's not in their hands to control. It's in your hands to control. Being able to team up and create that influence together is part of the customer experience. That becomes critical.
We are keenly aware that we are a representative of the customer that hires us. If the customer hires us to pick up at their location and go to point B, when we get to point B, we know we are representing that customer. We've got to be professional. Sometimes there are problems and issues arise. That's part of what we do but then we resolve them with our customers. We know that we are an extension of the customer and a reflection of the decision that they made in hiring a first-quality carrier to represent them.
We started out talking a bit about where some of these shortages and disruptions are. When and how are they going to get resolved? What is it going to take to smooth out the logistics and trucking environment?
We are definitely at a peak. I have been a part of Jetco since 2006 and this is not the first peak I have seen. The markets will correct themselves. As the rates continue to increase, that will bring more people into trucks and then trucking companies will buy more trucks. You've got this persistent cycle of, "When you are in this market, then people think it's never going to end." They over-expand and all of a sudden, you are over-supplied and then we go back down.
We are at this peak for a while but I don't think that this peak is going to be all that different than other peaks and corrections. We went through a really bad correction in 2016 and a minor one in 2019. As we were coming out, that's when COVID hit. What I have noticed is if we run the clock back to 2014 or 2015 to 2021, I can tell you that at least in our business, the cycles have become much more violent.
You see higher highs and lower lows, and both are lasting a shorter time. Our strategy has always been staying the course. We know in a down market, which of our clients stuck and worked with us, those clients are not having a capacity problem when it comes to our trucks. We are focusing on the long-term. We can't control the market and cycles.
There's nothing out there to tell me that this cycle will not ultimately sort itself out like every other one, up or down. We are a lot less about playing the cycles. We are a lot more about finding people that have ongoing needs, are less in tune with the cycles and are more in tune with getting their product to market, regardless of the economy. That's our client, our relationship and where we excel.
One of the other areas that we talked about is driver shortages. How are you or the industry working on attracting more drivers?
There are a couple of things. I mentioned pay and I do believe the pay is a gateway issue. The pay alone won't do it. Most tracking companies treat their drivers probably pretty well. We work together but I would call on shippers and the traveling public to have more respect for the drivers if you are not doing that already. It's up to all of us to understand that professional truck drivers are the backbone of our economy. There's a respect element and a pay element. There are a lot of people out there that say, "We are not going to worry about this because, in ten years, it's going to be autonomous anyway." What I would say is, "Check back with me in ten years because it's not going to be." It's not happening. If you define autonomous as truly driverless and no human being in a truck, forget about it. That will happen the day that you get on an airplane and the plane takes off with no pilot in the cockpit.
The more you know the client, the better you can serve them.
I'm not coming to you and saying it's a horse-and-buggy. There's nothing about technology. I love technology because it's redefining the driver experience. If done right, technology is going to pull the driver back into the truck and attract a new generation. The truck driving experience, whether you are talking about how the truck drives, safety or ergonomics, it's all changing for the better in a driver-centric way.
Will the time come where there's no human being in the truck? Sure, but probably not in my time and not until we have an autonomous infrastructure. We are even having a hard enough time getting our infrastructure built and maintained. I'm not holding my breath. I'm excited about what the truck manufacturers are doing and so far as it brings the drivers back into the truck with pay, treatment, respect and technology.
As a shipper, the biggest thing a shipper can do is waiting time. If we have a waiting time at your site, can we charge for it and do we charge for it? Sure. Does it pay the bills? Barely. It pays the driver and a couple of bucks for the truck but we make our money rolling. Our driver makes his or her money rolling. When we have undue waiting time, it eats into our productivity and what we can pay our drivers. The best shippers in my mind are the ones that understand that they need to get the drivers safely in and out with as little waiting time as possible. Waiting time is an absolute killer. All we have to sell is time. If it's wasted and eaten up, you can't get that back.
There's an opportunity if you are a Lean Six Sigma believer in reducing that wait time, all the aspects that go with it and when you are on-site. That's where it hurts everybody, not just the shipper but the customer as well. One of the things that we talked and I talk to people a lot about is sustainability. When I think about driving personal vehicles, at least EVs, Electrical Vehicles are the hot topic. There are some predictions that it's going to take 75% of all vehicles sold will be EVs, whether it's 5 or 10 years. There are various points of view on that. How does that factor into trucking?
Sustainability needs to be of continuing and growing importance for the trucking industry. It's not just the EVI and it's going to have a place. We placed our first order for natural gas trucks. We are going to be trying out trucks that run on recycled natural gas. I don't know how this works but I have read they have zero or negative emissions because you are transmitting using waste. Those are interesting ways to promote sustainability. Let's not forget that diesel trucks are becoming more environment-friendly every year. If you are using a 2004 truck versus a 2021 truck, the number of knocks that truck spits out is a night-and-day difference. Even the conventional traditional diesel technologies are important.
I would also say to a shipper, "Check your payloads. If you are shipping air, stop it because you want to maximize your payloads." We will run day cabs, for example, because a day cab weighs less, which means we can ship more. We want to help our customers maximize their payloads because if I can get this cargo in the market in nine trucks instead of ten, we have cut the truck completely off the road.
Sustainability certainly has a kind of truck. EV, gas and all of that are important but how you operate is equally important, especially that we are talking to a chemical audience here. Look at your payloads, work with your truck or figure out how to maximize your payloads to the safest possible extent legally. Don't ship air.
The chemical companies and most people I know would agree with you. They recognize they need to optimize that. A lot of times, there are certain limitations due to the roads and bridges' capabilities. I know there are a lot of work potentially that's going to be happening on American infrastructure. Hopefully, some of those load issues get resolved, as well as bridges and other things get improved.
It's up to us as the trucking company to know what our weight is and make sure we are going along a route that can accommodate that weight and that everything is legal. I'm saying that if I can haul more weight legally, let's do that. As far as the infrastructure goes, it looks like we are finally getting progress on a pretty big Infrastructure Bill. From what I have read, the bill is not going to please everybody but let's not worry about perfection.
Let's worry about having money to repair our roads and bridges, build new ones and make sure that we hand over to our kids a better infrastructure that was handed to us. If we do nothing, we are not going to do that. I know there are a lot of politics and people have opinions on the Infrastructure Bill and what's going on. You are getting some bipartisan momentum. It's going to be better than anything we have seen in a long time. I'm excited about it. We need the supply chain to support it.
Brian, I appreciate you taking the time to talk with us. This has been a great conversation. It helps to address what's a hot topic across the industry. Anything else you would want to share with us?
Not really and I appreciate the time to chat. We've got a lot of short-term things that we are focused on, no matter where we are, who we are in the supply chain and I get that. Make sure you are thinking long-term because that's what matters. This thing is going to cycle around. It always does. Make sure that you are building your network to accommodate your long-term concerns and then figure out your spot strategies to get through the short-term. Don't let the short-term make you lose sight of the long-term because that's what's important.
Thanks, Brian. I appreciate it. Thanks, everybody for reading.
About Brian Fielkow
In his dual role as CEO of Houston-based Jetco Delivery and EVP of Montreal- based The GTI Group, Brian leverages his 25+ years experience of leading, growing and transforming multimillion-dollar organizations organically and via mergers and acquisitions. The companies’ operations include intermodal, flatbed/heavy haul, van, and freight brokerage.
As Jetco CEO over the past 14 years, Brian developed the company into one of the Gulf Coast’s premier trucking and logistics providers. Under his leadership, Jetco built a premium service model that differentiated the company in a price-driven industry. Brian has maintained a focus on people, fleet, technology and innovation to provide an excellent client experience.
When GTI acquired Jetco in 2019, Brian spearheaded the integration of the companies’ culture and operations by leading strategy, marketing & sales, and safety.
Brian is a well-respected speaker, author, and trainer on the topics impacting the supply chain and on how to build a vibrant company and safety cultures.
Prior to Jetco, Brian served as an executive in the recycling industry and as a corporate attorney in Milwaukee.