The TRAFFIX Report: The Strategic Forecast for North American Freight with Alex Fuller

Joe Lynch: [00:00:00] Hello, friends. Welcome to the Logistics of Logistics show. My name is Joe Lynch. Thank you so much for joining us today. Today’s topic is the Traffix report, the strategic forecast for North American freight with my friend Alex Fuller. How’s it going, Alex?

Alex Fuller: It’s going fantastic, Joe. I’m glad to be here.

Joe Lynch: I’m glad you’re here too. So Alex, please introduce yourself and your company and where you’re calling from today.

Alex Fuller: Absolutely. So Alex Fuller, and I’m with Trafix. We are a [00:00:30] North American third-party logistics company. We’ve been around since 1979, and we really focus on helping shippers solve shipping problems. So we like to dive in, find solutions for really nitty-gritty things maybe think outside the box, come to the, come up with different solutions for how to move freight.

What really differentiates us is that, we’ll sit down, we’ll walk through, we’ll map out supply chains, we’ll talk through here’s [00:01:00] opportunities and then we really pride ourselves on high service- Yeah … which is becoming a bigger issue in the market today, which is what we’re talking about today.

Joe Lynch: Yes. I should point out that this is Traffix with an X at the end, not a C. So some people might be thinking we’re saying traffic. We’re saying Traffix. And Traffix is one of the biggest logistics companies in America, right?

Alex Fuller: Yeah we’re about 800 employees. We have offices across US, Canada, and Mexico. We do a lot of cross-border freight. And yeah, Trafix with an [00:01:30] X ’cause we fix problems. Exactly.

Joe Lynch: like it. So do you guys have some areas of specialization, verticals that you work in a lot?

Alex Fuller: Yeah we’ll work with all kind of different industries, but we’ve especially found a lot of solutions for energy companies, so either solar, oil and gas, that kind of thing as well as high tech, aerospace, electronics, and manufacturing.

Joe Lynch: Nice. Nice. It’s interesting because I’ve said this sometimes on my podcast as of late, we have all sorts of i- [00:02:00] issues facing our industry, and we’re gonna talk about some of them right now in a minute. But I believe that we’re seeing a lot of the volume move to the top companies, and I think there’s a reason for that.

I think the larger companies are able to bring the resources, whether it’s people or technology or just the a- the ability to invest. Because I think I used to think, “Just get me a truck,” right? “Alex, I call you, you get me a truck.” Now I feel like when I talk to [00:02:30] Alex, I’m saying, “Alex, I need you to bring me– I need trucks, I need a scorecard, I need technology, I need data.” It’s starting to be, “I need a partner,” rather than just, “Get me trucks.”

Alex Fuller: Yeah. It’s absolutely. If I just have one truckload to move, yeah, you can call anyone, you can move it. But when you start getting more and more complex, you have deadlines hit, you have hundreds and thousands of loads, that’s when, yeah, you’re shifting away from [00:03:00] just find me a truck to we gotta build this whole system to keep it flowing.

Joe Lynch: Yeah, and it’s– if you’re a smaller shipper and you got two shipments a week, yeah, it probably doesn’t hurt that you’re working with a mom-and-pop broker. You might prefer that. But as soon as you get to a certain scale, you need somebody who can be a true partner. And I think it– I think in the past, you would look at a big shipper would pull their brokers or their carriers, pull them along “Hey, we need this, we need that.”

Now it feels like the [00:03:30] bigger companies, like the Traffics of the world, are starting to lead and say, “Here’s our solutions,” and show up with a lot more than they did in the past.

Alex Fuller: Yeah, and we try to fit that, that middle spot where, there, there are some giant companies out there that maybe you’re just a number, and if you need help, you’re gonna get a 1-800 number. You have the mom and pops that maybe have a limited scale of resources. We try to fit right in there where we have all the technology, we have all the solutions, but there’s also a whole team ready to help you

Joe Lynch: [00:04:00] Yep. We’re gonna also talk about the challenges that are going on. So for the last– you’ll give us the context in a minute, but it seems as if if you’re a shipper, you’ve had the wind at your back for a while, the really inexpensive rates. And by the way, I don’t believe all shippers are looking and saying, “Hallelujah, we have cheap rates and all the carriers and brokers are going away.” I think most of them want you to make a fair buck. But now it seems as the market’s shifting, and we’ll talk about that in a minute. But first, Alex, tell us a little bit about you. [00:04:30] Where’d you grow up? Where’d you go to school? Some career highlights before you joined the juggernaut that is Traffics.

Alex Fuller: Absolutely. So yeah Alex Fuller. I’m passionate about supply chains. I love logistics, all that kind of stuff. And I like helping companies grow. I also have a marketing background, so I’m all about how do we use supply chain to drive that top line. About me, I grew up in Kansas City.

I went to undergrad at Brigham Young University out in Utah. I spent a few years at a CPG company managing a warehouse, importing [00:05:00] stuff from overseas driving a forklift, managing a team, running RFPs for freight. So I spent a lot of time on the shipper side. From there, I went and got my MBA at University of Virginia.

Spent a few years with UPS and UPS Supply Chain Solutions learning freight forwarding, air, ocean, domestic air freight. And then I found Trafix, and I’ve been with Trafix for the last couple years.

Joe Lynch: So what impressed you about Traffics? You obviously had some options with your background.

Alex Fuller: Yeah. I was excited about [00:05:30] their position in the market and their adoption of technology. So there’s a, it’s very, Even though we’ve been around for 40-plus years, we don’t have a lot of the baggage of these huge legacy systems. We can be right on the cutting edge and adopting AI with smarter decision-making and better solutions.

So that was really attractive, as well as just the team. It was great people to work with. They’re all down to earth. You have a lot of people from the Midwest and from Canada and and just some good, salt-of-the-earth people that are [00:06:00] fun to work with.

Joe Lynch: Yeah, you guys have– you guys are cross-border specialists too, which the the– I know you specialize in a lot of

things. I bring that up because, you know, that’s been s- top of mind lately. It’s not everybody is good at getting stuff in and out of Mexico and in and out of Canada. Before we hit the record button, we were talking about the Gordie Howe Bridge, soon to be open here in the– between Detroit and Windsor. We’ve always had the Ambassador Bridge, which I think is the– I think that Windsor-Detroit [00:06:30] border is the busiest border in, in the world. I wouldn’t be surprised if Laredo passed them, but it’s still wildly wildly busy, and I think the new Gordie Howe Bridge is state-of-the-art, and it’s gonna make it a lot easier to get stuff over the border. That’s another topic for another day,

Alex Fuller: I did a couple years with customs brokers and customs brokerage, and yeah, that, that’s a whole world where it’s great until you have a problem, then it’s a big mess,

Joe Lynch: oh, yes. Yes. So before we get [00:07:00] into into the topic today, which is we’re gonna get– talk about the f- the freight market here in North America, talk about s- Who are– what are some of the areas of specialization you guys w- have?

Alex Fuller: So definitely cross border. We do a lot with a lot of US, Canada, US, Mexico. We do a lot of work with companies that are… They’re looking for additional solutions. Hey, I’m my, my carriers aren’t picking up, or I’m running into [00:07:30] issues, or, if we could just do X, Y, Z, we could unlock a lot of savings in different parts of our company, or we could gain additional sales.

And so that’s where I get really excited and we, it’s a lot of fun to sit down and say you thought these constraints always existed. We actually have options. We have capacity that might open doors to you that unlock savings or unlock growth.” And that, when they’re, when a shipper’s growing and we’re growing together, that’s what’s really exciting.

Joe Lynch: So before we get into the freight market in, which by the way, you guys are big enough [00:08:00] that you can tell you, you actually can see what’s happening in the market. You’re large enough, you have enough freight. Um, but give us some context. Take us back to the olden days, pre-COVID, and walk us up to today.

Alex Fuller: Absolutely. And honestly, this context is really good because there’s a lot of people that are probably new in their position that haven’t seen a freight cycle, or at least, haven’t seen one- It feels like we haven’t had one. I know. Yeah. They’ve… and the last big, run up in rates was [00:08:30] COVID, and that was a whole…

Now that, that’s, there’s always an asterisk on that’s, it’s a little different from other freight cycles. If you’re two, three years in a job, this is all new territory. So- … going back typically in a cycle you have prices rise as demand rises, and then you have drivers and carriers enter the market to, the supply comes in to meet demand.

It levels out, and then you get an oversupply of capacity, demand decreases or at least stays the same, you have rates go back down. So over, two, [00:09:00] three, four years, you have this wave of prices up, prices down. Boom and bust. Exactly, yeah. And, it can be frustrating for drivers of, “Hey, I’ll go drive truck for a couple years, and then maybe I’ll go find a construction job or whatever.”

Joe Lynch: Yeah. And if I could add something to that, it’s, it’s very predictable what happens, these kind of these up and down cycles. And if you owned a, let’s just say you own a small trucking company and I own a small trucking company. We don’t even know each other. And the market’s heating [00:09:30] up and some of my customers say, “Hey Joe, we have more business, uh, than we can handle.

Can you get a could you get another truck?” And I might, maybe I go find an owner-operator, maybe I hire somebody, might g- maybe I get a new truck. You’re doing the same exact thing. We’re both being completely normal, rational people. My customer has more freight. They ask me to help, so I bought a new truck or a used truck, or I got an owner-operator.

You’re doing the same thing. And maybe I’m pulling people who used to, as you mentioned, maybe they’re [00:10:00] working as their warehouse manager and they say, “Hey, rates are really going up. I’m gonna jump in.” And then at some point, it just goes the bus cycle happens and trucks leave the, leave. Maybe the oldest trucks are no longer needed. Some of the drivers who say, “This isn’t worth it anymore for this life is very tough. I’m gonna go back to the warehouse I used to work at.”

Alex Fuller: Yeah, exactly. and-

Joe Lynch: Nobody’s being irrational on this

Alex Fuller: Yeah, and it sounds hypothetical, but the- there’s a mechanic that works on my car. I called [00:10:30] him a month ago, and he says, “Oh, actually I’m not a mechanic anymore. I’m driving a truck.” And it’s oh, I’m s- I’m seeing the market in action right here. So y- so yes, this happens. It’s happened many times over the last 20, 30 plus years. And it happened again in COVID. Now, that… There’s an asterisk on that, and it exploded ’cause there was so much demand for things. And so we had a super bull market. Not bowl, bull. Yeah. So y- lots and lo- you know, rates skyrocketed ’cause everyone wanted to ship things.

Joe Lynch: Oh, and [00:11:00] everybody, I bet you had the same thing I did. People called me and said, “Joe, how about you and I buy a truck?” I heard somebody get 18 grand to move something from California to Saskatchewan. I was like, “As soon as we buy a truck, the rates are gonna bust.”

Alex Fuller: Yeah. And, yeah, exactly. 2021, you had all the… They were hearing those stories, and people were doing it, and, and then 2022 kinda came around, and you it started to crest. ’23, ’24, that’s when you hit that bust where, quarantines ended. The demand for [00:11:30] physical goods, it didn’t…

It declined. So freight declined. And over the past three, four years We’ve had this whole correction where there’s less freight demand, and so rates went down. There was an oversupply of drivers, oversupply of capacity. Rates have come down, and we’ve been in this freight recession for two, three years, which has been tough for drivers and carriers, tough for brokers.

It’s been great [00:12:00] for shippers.

Joe Lynch: And if I could add something into that, and I’d love to hear your two cents on it. During COVID, um, there was also– people started getting money from the government. So that’s why a lot of people were buying stuff like, “Hey, here’s a check from the government,” and maybe you lost your job, maybe you didn’t, but a lot of people got a lot of money.

Companies got a lot of money. And, So they invested in trucks or they put it in the bank or whatever they did with it. But there was also these really high rates. So a lot of companies might have [00:12:30] been bolstered by the high rates and the government check, and they just may have said, “Hey I got six trucks.

I’m gonna hang on to them, and if there’s a bust cycle, I’ll survive it.” So it’s, so it might have extended the long… Basically what we needed is armies to leave the field, and they didn’t leave because they were a little flush from COVID. I was I don’t… That’s hard to

Alex Fuller: No,

Joe Lynch: nail down with statistics, but I believe that’s some of what happened

Alex Fuller: absolutely. Yeah. And, [00:13:00] they… You invest in trucks, you invest in these businesses, and because you have so much financial backing, you’re able to r- you know, you’re able to push off paying the bills or going under for longer. And so you hang on there. Absolutely. That wa- that was definitely part of it.

Joe Lynch: Yep. so we’ve had this long period since COVID, And I think a lot of people,

I’ve felt on my podcast two, three years ago said, “Joe, we hit bottom. And we hit bottom, and we just stayed at the bottom. We didn’t seem to come back out of [00:13:30] it.” And everybody would say the end of 2023. Just feel it, beginning of 2024, and then people stopped even saying anything. When I’d ask people on the podcast, they’re like, “Who knows?” Like it’s– we’re in no man’s land. We’ve never had this long period where rates were down and it felt like nobody could invest in the space. By the way, wrong way to say it. The top companies like Traffix and the other top 100 logistics [00:14:00] companies, they gain ground during these kind of times, ’cause they’re saying, “Yeah we’re capitalized.

We, we have resources. We will continue to grow,” while some of the smaller companies maybe can’t do the same.

Yeah. Oh, you’re the hero. You’re the hero over there,

Alex Fuller: as a shipper, I can get low rates, I can get high service And if any provider comes to me and says, “Hey, we need to increase your rates,” I can just say there’s 30 other guys knocking on my door that don’t need a rate increase.” And so that that’s part of the dynamic as well [00:14:30] of why for several years there– Because there was so much capacity, rates were able, they were basically at breakeven level for a long time.

Joe Lynch: So Alex Fuller, you’ve told me that you’re, you guys are starting to see rates go up. The market is reversing finally, or changing, whatever you wanna call it. We’re moving into a new cycle. Talk about that

Alex Fuller: Absolutely. Over the past couple years, you’ve seen a couple false starts, which is probably why some of your guests have been like, “All right it’s gonna happen.” This is [00:15:00] it. And, I was almost convinced by, I was convinced that 2025 was gonna be it. Everything was pointing to it.

Then you had the trade policy uncertainty come in. Oh, the tariffs probably hurt. Yep. It threw– That threw a curveball that extended it, another year. And then we came to peak season 2025. So November, December 2025 we saw demand a lot stronger than I think we anticipated, and I think capacity was a lot lower [00:15:30] than the trend had put it.

And some of that come, carriers are constantly going under from, as rates stay low, you have carriers drop out of the market as financially doesn’t make sense. So economics was pushing carriers out. But then end of 2025, you also had a lot of carriers leave because of enhanced enforcement of English language rules and immigration- those kind of things that probably pushed more carriers out than just eco-economics would.

Joe Lynch: Yes. Yes. And by the way, I’ve ha- talked to Jason Miller from [00:16:00] Michigan State on the podcast, and I’ve– By the way, if you’re not following Jason Miller from Michigan State on LinkedIn, you’re doing yourself a grave disservice. Jason is of the opinion that to come out of the bust cycle and get into the boom cycle, you sometimes need an external thing for the market, which sometimes is the housing boom, where it says, “Hey,” all of a sudden rates are low enough that a whole bunch of builders decided to build houses. It might also, I think Craig Fuller from, [00:16:30] no, no relation to you, Craig Fuller fr- from FreightWaves, he recently posted that we’re starting to see a whole bunch of stuff move, uh, in the manufacturing space here. So s- we’ve talked about reshoring and nearshoring and all that. Stuff is moving back here, and we might be coming into a manufacturing boom. Um, it– Some people say this is just simple supply and demand. Others say we need an external factor. Who knows? It’s just whatever’s happening, you [00:17:00] guys are seeing the beginning of rates going up

Alex Fuller: Yeah. And I think the last– the first four months of 2026 tell a really interesting story that, that probably relates to both of those of, some kind of dam being broken. December rates jumped quite a bit and we’re like, “Oh, this, this is a bit more than the fla- past few years.”

But, we’ve been tricked several times. It’ll go back down- Oh my God, we have … just like it has before. And so then you come to January, you had a few weather events. Again, hey, we’ve seen this [00:17:30] before. Rates are still high, but we know after the storms it’s gonna come down. Then we got to February, rates were still high, and it’s hey something’s different.

Something’s not following the pattern we’ve seen in the last three, four years. We’re seeing rejection or EDI rejection rates. So that’s companies, shippers saying, “Hey, I need someone to pick up an order,” and carriers saying, “Oh, I don’t– I can’t pick that up. I don’t have a truck for you.”

Joe Lynch: Those are the tender rejections, right?

Alex Fuller: Exactly. Tender rejections.

Joe Lynch: those are going up.

Alex Fuller: [00:18:00] Tho-those jumped up in January, February quite a bit above 10%. So 13, 14%. Anything above 10% is usually inflationary territory. That’s gonna drive up rates. Meaning, if I’m asking for 10 trucks, I’m only getting nine, that… that’s a lot of issues that supply managers have to jump on.

Oh, shoot, I gotta find a truck that, I’m– the, my routing guide’s starting to break down. So you get to February and a lot of shippers, [00:18:30] and frankly the whole market, was maybe still in denial of, “Hey we keep thinking rates are gonna go up.” I keep being able to say No, like I’m, I keep telling my providers I’m not gonna accept price increases.

But around the February timeframe, that’s when everyone across the whole market started to say, “Hey, there, there’s something different here. Th- this isn’t like ’25, this isn’t like 2024.” And that’s the point or the inflection where companies started to [00:19:00] realize, “Hey we actually do need to do something because we– the spot market is jumping and a lot of trucks aren’t picking up at those contracted rates, so we probably need to do some renegotiation on contracts.”

Joe Lynch: Yeah, and you did touch on tariffs. The tariffs put a lot of indecision into shippers where they started just saying, it just slowed things down. And that was like the last [00:19:30] thing. By the way, the idea of the tariffs, which is let’s kind of force manufacturing back to the US. I think most everybody’s “Yes, we would like, especially the strategic manufacturing back here.” So I think the robots we use are gonna be made here. I don’t have a robot yet. I’m sure you have a few, but I don’t. The robots are gonna be made here. I think more cars are gonna be made here. Um, and when I say here, I think I should have said also Canada and Mexico. That’s why you need somebody [00:20:00] who can move the freight over the border. Um, I think all the data center stuff, that’s a high security thing. I think we realized during COVID there are strategic goods that we want manufactured here. We don’t ever wanna find ourselves again in a place where you say, “Oh, the stuff we need to survive is across the ocean, and the ocean is jammed up with boats.”

Well,

Alex Fuller: Yeah. No I’ve met a lot of smarter than me people that, [00:20:30] that’s a lot of people. A lot of people that are very smart on trade policy, and the more I talk to them, the more I realize that’s not my wheelhouse. But yeah, I totally agree that it created a lot of indecision and it created some unique circumstances in 2025

Joe Lynch: they were pulling stuff ahead,

Alex Fuller: there- Let’s pull up ahead.

Let- hey, let’s br- you know, in April, in May, let’s bring in a whole year’s worth of inventory and let’s draw it down. And then because we have these higher tariff costs, let’s switch our inventory [00:21:00] strategy to more just in time. Maybe we’ll hold less inventory. So in 2025, you saw intermodal volume jump up because I’ll, I bring it on the boat and then I, I have no more room.

Sure, let’s throw it on a train and it’ll take an extra week. That’s good news for me. I save money and I don’t have to store it as long.

Joe Lynch: Yeah you talked about pulling it ahead. So what was happening, now just–

Alex Fuller: Yeah.

Joe Lynch: What was happening is thought if there’s gonna be a tariff, so I was– I’m gonna have to pay more for that good that’s coming [00:21:30] from Indonesia,

so let’s say. And so I buy it before the tariff changes. So there was a whole bunch of– There was some good volumes m-months there because of the pull ahead, and– But people didn’t wanna carry that excess inventory. And again I’m of two minds. I just want supply chains to work well, and I want us to do well. I Want everyone to do well. And I think it makes sense that we do bring stuff back. Some manufacturing belongs here. It go– It’s [00:22:00] shocking not that I care that we do textiles here, but it was shocking when they said, “We need to buy masks,” and no one makes masks.

You’re like, “Nobody makes a mask here? It doesn’t s- this isn’t rocket science.” But we got really good at outsourcing stuff mostly to China, some to Mexico. Mexico, we can get our stuff if it goes down there. Right now, I think labor costs are cheaper in Mexico than they are in China. So what we’re seeing is a repositioning of supply chains.

I think we [00:22:30] also recognized, especially during COVID, but even before COVID, that we want shorter supply chains. And a lot of stuff is moved to automation. So a factory that might have left Ohio in 1988, moved to China whenever they were making, let’s just say, some sort of manufacturing good, might have been completely automated in China.

Now, when it moves back here, it’s not gonna be the same 300 guys in that factory. It’s going to [00:23:00] be an automati- automation. But we do want shorter supply chains, which tend to be cleaner and can be more responsive.

Alex Fuller: Yeah and that’s– there’s just been a huge wave of nearshoring to Mexico o-on that same point of, if we can automate it, sure, let’s build in the US. If it is still labor-intensive, how do we build up the infrastructure in Mexico to, to at least, when we need it quickly, we don’t have to wait for a boat or pay extra for a plane.

We can just throw it on a truck and drive it up

Joe Lynch: [00:23:30] Yeah. Yeah. Get- guess my point, put a sharper point on this is I think most of us are like, “Yes, let’s bring certain industries back to the U.S.” But the tariffs really put a wrench in the freight market because we all thought we’re gonna see a recovery. I think when the new administration got in there, they did cut a lot of regulations. There was also a push to push out some of the people who shouldn’t be driving for us. So we all thought, “Oh, this is it. This is it. We’re gonna, we’re [00:24:00] gonna see a boom.” And we didn’t really.

Alex Fuller: There’s a couple big enemies for supply chains. It’s, unpredictability and volatility. Yep. And so we had to wade through some of that. I think a lot of that settled down in 2026. Yep. But again, it’s also the economics driving this of we’ve had capacity reduced quite a bit, and demand is at least flat, maybe [00:24:30] rising in some areas.

And so that’s why in March, in April, and now in May, we’re seeing huge jumps in both contract rates and spot rates for trucks. So contract rates, on average up 10% year over year, spot rates up 40% year over year. That- that’s massive gains that we haven’t seen at all for the past three, four years.

And reacting to that, a- again if you’re new to your position and you haven’t seen one of these freight [00:25:00] cycles, and e- even if you weren’t around during COVID, it’s a new paradigm where suddenly I can’t have service and price. Sure. I start need to doing some- … some comparisons.

Joe Lynch: You mentioned volatility, and I say this too much in my podcast,

so I won’t go too deep into it, but years ago, I read a book w- by some Navy SEAL, and he used the term– It was during COVID, and he used the term VUCA, which is stands for volatility, uncertainty, complexity, ambiguity. It’s a business term originally, but the military kinda took it over [00:25:30] because they felt like, especially in the Middle East, there was a lot of VUCA, meaning this is a volatile situation, a lot of uncertainty, the c- there’s complexity here, and it’s ambiguous.

And I think, boy, when you say VUCA to a supply chain logistics guy, we go, “That is our world. We live right there.” VUCA is a big part of our world. We didn’t touch on it yet, but obviously there’s stuff going on in Iran and the Strait of Hormuz. How has that impacted, uh, freight markets?[00:26:00]

Alex Fuller: So I’m gonna avoid any geopolitical talk, but I will- Let’s avoid that … I’m gonna talk about diesel rates. ‘Cause I think diesel rates are very interesting and very important. So normally, or not normally, but be- when diesel rates spike- That doesn’t always get passed on to freight rates.

So if we look back a couple years ago- … there were times when diesel jumped, but freight rates stayed, like the carriers just had to absorb that cost. That didn’t get passed on to shippers. [00:26:30] When diesel rates jumped in late February, early March, suddenly we have a, an understandable reason that a shipper can go to their CFO and say, “Hey, I need a bigger logistics budget this year.”

Like it, there is an u- there’s an underlying supply-demand issue with carriers, but then we’re throwing gasoline, or I don’t know, that’s a bad pun. We’re throwing fuel- That’s okay … on the fire- … of increasing rates with [00:27:00] skyrocketing diesel rates. And so I think overall, the economics were pushing rates up, but then you add the Iran conflict you have diesel rates jump dramatically very quickly, and suddenly, everyone understands, “Okay, I know why our supply chain department needs a bigger budget.

That makes sense. Okay we’ll, let’s figure that out.” And I think that’s one of those dams being broken, where shippers are able to understand internally, “Okay I see why the market’s [00:27:30] changing and I need to raise rates.”

Joe Lynch: Alex, am I right to say this, that more and more shippers are saying, “Okay, I wanna know what the truck and the driver costs, and then separately I wanna know what the fuel costs, ’cause I wanna make sure, I just want transparency into it. Because I, um, you’ve seen this too, where somebody says, “Oh, fuel rates went up, so my broker and carrier are making more money.”

And I’m like, “Why are they making more money?” The same truck you got last week, why are you making more money? Gas went up.” [00:28:00] And wait a sec, that, that can’t be right.

Alex Fuller: No, yeah and that, that’s a best practice that we encourage, and I’d say the vast majority of shippers, i- if not all, it’s hard to come up with examples that don’t do something with that, of some kind of fuel table, fuel surcharge, even breakthrough fuel where, you know I get it, like when fuel goes up, we’ll pay that, but let’s figure out the freight by itself.

So that, that’s absolutely best practice. But I think what it does, so yes, like a responsible [00:28:30] supply chain manager has that in place, but that responsible supply chain manager can also internally go to his leadership team and say, “Hey, my, my budget’s going up because of fuel.” It’s also because of these other economic factors that are driving rates up

Joe Lynch: Yeah, you mentioned Breakthrough. I had them on the podcast not so long ago. And what they’re saying is we’ll… And you see them, I’m sure you see their name in s- contracts now. A lot of shippers are saying, “Hey, this is– We just wanna make sure p- fuel is passed [00:29:00] through.” I do believe our industry is getting much more comfortable with that kind of transparency, where you say… And if you’re a big shipper and you’re working with a great company like Traffix, they don’t want you guys going out of business. You’re a great resource to them. So they’re saying, “Hey, Alex, I wanna make sure you guys are making a buck, but I just wanna kinda know, did the, when I’m paying you more money, was it because of gas or was it ’cause of trucks or drivers?

What’s driving it?” Because if you’re spending a lot of money, you gotta explain to your boss and your boss’s [00:29:30] boss, and big companies don’t like

opaque.

Alex Fuller: No, yeah, absolutely. It becomes, yeah. Having that transparency and knowing what portion of it goes to fuel, it, I think it makes sense across the board. And it’s- Sure … a huge fan of that, and I think it makes sense for everyone involved.

Joe Lynch: So we’re talking today it’s March. March? Listen to me. May 6th. Feels like March 6th some days here in Michigan. It’s not qui- we’re not quite to summer yet. It’ll be 90 in a week or [00:30:00] so. That’s how it always goes, from 45 to 90. But what do you see for the rest of the year? So we-we’re, we’re midway through we’re in the second quarter.

What do you see for the rest of the year?

Alex Fuller: Absolutely. Quarter one rates are up. Quarter in, toward- towards the end of Q1, you have fuel, et cetera, sub, accelerating that. In Q2, there’s a few things coming very soon that are very important. So the second week of May, so May 12th through the [00:30:30] 14th, you have DOT Week, and that’s gonna be a very interesting week.

What is-

Joe Lynch: for people who don’t do this every day?

Alex Fuller: Absolutely. So DOT Week is a week where there is enhanced inspections of carriers. It’s like a blitz over 72 hours of regulatory agencies stopping trucks and, looking at logs, looking at equipment, making sure it’s all safe, making sure all the, a- all the rules are being followed, which is great.

I wonder why-

Joe Lynch: I wonder why they do that in a one week. It just seems like [00:31:00] it should be a surprise inspection to me, but I get it. Th- they must be doing it for a reason. I’ll give them credit for that.

Alex Fuller: And that’s the thing. Because it’s announced ahead of time, because everyone knows it is, you might have…

Joe Lynch: Everyone get in order. It’s a

Alex Fuller: truckers might say, “Hey I’m not gonna drive that week.” And it’s not even for nefarious reasons. It’s more like- Just-

Joe Lynch: hassle factor.

Alex Fuller: yeah, I don’t wanna be stopped on the side of the road for, or at a way station for, a couple hours.

So- You’ll have potentially a lot more capacity leaving the [00:31:30] market. That’ll drive rates even higher. And then that’s temporary, right? That’s just for a week. But then right after that- But it-

Joe Lynch: Put– when you lose capacity for a week, it doesn’t go away in a week. It lingers because

Alex Fuller: If leaders… and right after that you have Memorial Day, which typically has been a good barometer of, okay, how sensitive is this market to disruption? ‘Cause there’s a lot of drivers that, especially now that they’re making good money, they’re like, “Hey I wanna go spend that weekend with my family.

I’m not [00:32:00] gonna, I’m not gonna drive.” And so the back half of May, we could see rates jump up even further, at least spot rates jump up even further. That kinda kicks off the summer, where you have beverage demand go up. You have a lot of produce season going on.

Joe Lynch: Automotive launches

Alex Fuller: Yeah, exactly. Like all these, all the fun stuff of summer, that all moves on trucks, and, that’s potentially gonna push up rates, or at least keep them [00:32:30] where they are, keep them elevated. And then, maybe you have some decreases back to school time. But then you’re right into peak once again, 2026. So potentially we could see spot rates where they are now, either stay where they are now above $3 a mile or even higher the rest of the year.

And so a- as we look at it we’re like, “Hey, this isn’t a blip. It’s not a one-time thing.” It’s not hey, by June everything’s gonna [00:33:00] be down to where it was last year. As we look at the data, and because it’s this new cycle, it really looks like, hey, w- this is gonna be a longer term impact probably for the next nine, 12 plus months.

As, we need time for more drivers and more carriers to come into the market. That takes a while before we see rates go back down to where they were the past few years.

Joe Lynch: So over the next couple quarters, rates going up steadily or going up and s- [00:33:30] plateauing or…

Alex Fuller: What do you, what do you- Yeah,

Joe Lynch: sorry to– I know that’s a, that,

Alex Fuller: Very yeah. No, let’s get our crystal ball out and let’s, you know- Okay … if whichever economist you wanna trust. But assuming the economy stays strong and that freight demand picks up, you could be looking for full year 2026 year-over-year freight budgets.

They could be up 15, 20% versus 2025. Yep. If capacity com- comes into the market really quickly, [00:34:00] if maybe freight demand stalls a little bit- Then maybe you’re in the 7% to 12% range year over year for freight costs. But it’s probably double digits for the rest of the year. Not saying it’s gonna go up double digits.

It’s already up double digits where we are now. Yeah. It’s probably gonna stay around that.

Joe Lynch: Y- there’s some interesting things that happen when

you’re slow and then you speed up. So the first thought is, “This is excellent. We got a whole bunch of business.” But what tends to happen I’m an automotive guy, so we have boom-bust cycles when I was growing up. [00:34:30] When there’s rapid growth, what happens is you outrun your cash flow a lot of times.

So a lot of people will struggle. Now, I will say in our business, we’re pretty good with, With the factoring and other options for carriers. So we don’t have that happening as much as we did in the past, but it is something you have to definitely consider because the, the– obviously the bust cycle is bad for certain carriers and certain brokers, and good for the shippers. But also when you start that [00:35:00] rapid growth, it’s exciting and it’s a little heady, and then you realize, “Oh my God, I just put all this money out there and now I don’t have I can’t make payroll. I can’t pay for my trucks.”

Alex Fuller: and, if I’m a, if I’m buying trucks right now, I also need to keep that freight market in mind. And hey, rates are probably gonna be great the rest of the year as a carrier, but, what goes up always comes down. So y- if I’m planning for investments that aren’t gonna pay off for three, four, five years, [00:35:30] then yeah, you can run into trouble that way as well.

Joe Lynch: Yep. Yep. Before we wrap this bad boy up today let’s talk a little bit more about Traffik. You guys have offices all over the US and Canada?

Alex Fuller: Yeah. Yep. Chicago, Toronto, Guadalajara, all over the place.

Joe Lynch: Oh, wow. And are you– you have any assets, trucks?

Alex Fuller: We have a few, but we’re primarily a broker.

Joe Lynch: Yeah. That’s funny because, God, 20 years ago, 15 years ago, I I may remember making phone calls and they– [00:36:00] I worked for a non-asset-based company, which I would call and say, “Hi, this is Joe.” And people would go, “Do you have trucks?”

Alex Fuller: Yeah. Yep

Joe Lynch: “No.” Click. You’re like, “Whoa, wait, what? What just happened?” But I think now a lot of shippers see the brokers and say, “They’re bringing me resources, they’re bringing me technology.

They got me rates that I don’t s- I seemingly can’t get by myself.” So in the past it was like you guys are just a middleman.” I used to say, when I sold freight [00:36:30] services, “I’m bringing you a cheaper price with technology, with a team. You can call me a middleman if you want, but you can’t do it as well without me, and we’re cheaper than you can do it on your own.”

Alex Fuller: Or if you wanna hire your, a whole team that does what we’ll do for you, yeah, you might be able to- … figure it out. But yeah, there, there’s a lot of value add there that beyond just the truck, absolutely.

Joe Lynch: And I think companies like Traffik’s bringing me technology and constantly innovating in a way that I wouldn’t do internally.

Alex Fuller: Yeah, [00:37:00] exactly.

Joe Lynch: And I think what’s also interesting is you guys also I know you don’t own warehouses, but you have relationships with warehousing companies, so you guys aren’t, Even though you’re not taking physical control of these assets, you’re u-utilizing these assets a- for your customers

Alex Fuller: Yeah the warehouse side, we’ve seen a lot of interesting solutions with that, especially with tariffs or short-term needs. So we- Yes.

Joe Lynch: that’s what I was getting

Alex Fuller: Yeah we can do, short-term warehouse solutions, month-to-month type things where, “Hey, I, I [00:37:30] don’t need to go sign a three-year lease. I just have a bunch of stuff I need to put somewhere for 30 days that, that’s without our help, that’s really hard to go to a warehouse and say, “Hey, I wanna sign a 30-day lease.”

A lot of times they want longer term leases. So that’s a sweet spot on the warehousing side where we can provide some short-term support that maybe it’s harder working directly with

Joe Lynch: This becomes particularly important when you’re talking about a company that does a lot of cross-border, because we talk about just-in-time for a moment. So if I– [00:38:00] just-in-time is very difficult if I have to cross a border and that border isn’t consistent for whatever reason. So as an automotive guy, we used to– I was– did lean, and I remember when we would do workshops, we would circle every warehouse and say, “We don’t need this warehouse.” First, that was just like the blanket statement, no warehouses. The only time we– when we’d say we need a warehouse is when there was something coming from overseas or from over the border, and it wasn’t consistent. And then so I [00:38:30] didn’t want to take a big invest– I didn’t wanna see the suppliers that we were doing the lean for take big investments in this stuff. But this is where you guys come in. So you’re– th-this is– and I think this is a big change from what we saw even a decade ago, where you have companies like Traffics. It’s, the lines are blurring between used to be or a transportation, or we’re a warehousing company, or we’re assets only. It’s ev-everybody’s l- the top players just are going where [00:39:00] their customers need them to go.

Alex Fuller: Yeah. We’re, what’s your problem? And we’ll find a solution to it. Absolutely. So it, what, if I’m bringing something in and there’s a hold on it, or I have to avoid demurrage charges, those kind of things it’s a lot cheaper to throw it in a warehouse than to leave it at the port.

And that’s- Yes … that’s, that’s where I get really excited because hey yeah, we’re getting a little warehouse business, but we’re actually saving this customer like hundreds of thousands of dollars of fees.

Joe Lynch: And they don’t have to go pick a warehouse. They don’t have to have that skill set. You guys pick [00:39:30] warehouses, you have warehousing partners, and they don’t have to say, “Yes, I just signed a two-year lease for a warehouse that I need for three months.” Let Traffics get– let Traffics wade into that challenge.

They know how to do it. Stay in the shallow end. That’s where I try and play. I’m gonna summarize what we talked about today, Alex, and then I want your final thoughts on the topic. So I’m talking to my friend Alex Fuller, and today’s topic is the Traffix Report. It’s like traffic, but with an X at the end. And we’re [00:40:00] talking about the strategic forecast for North American freight, and that’s more or less the over-the-road freight. And, You gave us a little bit of a background. So we had COVID. It was a crazy time and a difficult time for a lot of people. Um, y- if you were in the freight business, though, it probably was a boom time. Rates skyrocketed, and we just seemed to– the money was being minted. By the way, we didn’t get into it, but venture capital was investing a lot of money into the space. Some of it in retrospect, [00:40:30] probably foolishly. But that’s the nature of being a venture capitalist. You take big

Alex Fuller: You, you see where there’s money being made, and then maybe you get a- … ahead of your skis a little bit.

Joe Lynch: Yeah. So after COVID, we had a bust cycle, and I– we all thought go a year or two,” like most of these, but it didn’t. It just kept going on and on. And I mentioned to you on my podcast, I asked people, when will we see rates start to go back up?” And it’s just seemingly, I think it’s close to four years.

This is just a, an [00:41:00] unprecedented market, and probably based on what happened during COVID. What you’re, what you guys are seeing from your internal key indicators is that rates are going up and that if you’re a shipper, you should expect your rates to go up over the next couple quarters for sure. And pro- and most likely, we don’t know what’s gonna happen in 2027.

Let’s get through 2026 first. I’ll talk to you next year.

Alex Fuller: About 2027. Yeah. And I, and hopefully it’s not a surprise. I think a lot of rates have already gone up for a lot of [00:41:30] shippers, and it, and then it’s now a decision of, how hard can I push against rates and beat down my providers? Or how do we work together and say, “Hey I need my stuff picked up.

I need access to some reliable capacity. I don’t wanna pay out the wazoo, but let’s figure out a solution we can build together that I can rely on.” Yep. And I think that’s a new discussion that is, because we’ve had low rates for so long, that’s a new discussion for a lot of people.[00:42:00]

Joe Lynch: Yep. I didn’t ask you this, but I should have. Are you guys seeing shippers do, and are you guys, with your customers, are you doing more RFQs, like quarterly RFQs or even seasonal ones?

Alex Fuller: Yeah, there’s lots and lots of RFQs. I work with our pricing team and figure out, what’s our long-term strategies for pricing. And the duration of RFQs has definitely shortened, which I think rightly so before we’d get lots and lots of annual [00:42:30] RFQs, which we still get some, but I think shippers realize that when you’re pricing that far out with us with so much volatility currently, you have to price in a lot of risk.

And so if we do a six-month RFQ or even a three-month RFQ, I’m able to potentially get better rates because less of that risk- … is priced into it.

Joe Lynch: Yeah. And you know this better than I, Alex, you might be competing against someone who says, “I’m gonna be really aggressive and I’m gonna win the business. I’m gonna be f- five [00:43:00] percent cheaper on average than Alex.” Hallelujah. And if rates go up and I can’t support what I bid, I will just call the shipper and say, “Hey, we can’t do this, but I know you guys like us.

Can you raise the rates?” And I think there’s people who do that. I’m the no, no hate. I understand why they do it. The other way is I’m gonna make these, I’m gonna make these rates a little fatter so I can [00:43:30] support this no matter what. No matter what the risk is, no matter what happens, I can support it. Now you look like your rates are the highest. So it is very difficult, and the longer you put it out there the worse the predictions are. So if you’re a shipper, it used to be very painful to get an RFQ out once a year. It took a year to forget what you went through. Now the tools, especially for companies like Traffix

has that says we can do an RFQ.

[00:44:00] You know, maybe, maybe you did it for a season and you said, “These guys didn’t work out, so we’re not gonna– We’re gonna, the seven or 10 lanes that aren’t performing, we’re gonna redo a, just a short one.” It, it’s, it’s– I think it’s better for the carriers. I think it’s also better for the shippers, because I don’t want somebody to commit to something that they’re either gonna lose money on or i- unable to support. That’s not a long-term relationship there. And that’s, I think, most of them are looking for us today

Alex Fuller: It, I think RFQs [00:44:30] can be a lot easier, so it’s, it isn’t this- Yeah … horrible, ordeal. We have new tech. We have new technology for that. Yeah, new technology and, so the pain of RFQ, I think is less But I think the ROI on doing it more often is pretty evident. And you avoid, those unpleasant conversations of “Hey, I know we bid that, but actually, we need to change that.”

So

Joe Lynch: Yeah, I didn’t know, I didn’t know there was a meteor gonna hit the Earth that week.

Alex Fuller: anyway- And so I think the underlying theme [00:45:00] is, with a few of your providers that you really trust, a lot of open communication can probably help you out and save you money. If you’re willing to give more information, that’s an opportunity to maybe mitigate some of these increases.

Where is there flexibility? Where in your s- pickup times or equipment or whatever, where can we find unique solutions so that, y- like the market’s going up, but maybe there’s something we can find to mitigate that. Yeah.

Joe Lynch: That’s moving from different modes to different [00:45:30] times and that’s why you need a partner, and I’ve said it many times on my podcast, but I’ll say it again. When you pick a partner, pick a company like Traffik, you gotta make sure that they are ca- capable of actually being a true partner. And once you commit to them, you gotta make sure you vet the, vet them so you can make a commitment. I think the idea of saying, “Hey, I sent you an Excel spreadsheet with all of our lanes for next week. Bid on them, and then I’ll decide who’s [00:46:00] best.” That’s the old way of doing things. I think now it makes much more sense to say “I don’t want somebody who’s gonna save me 100 bucks on next week’s shipments.

I want somebody who’s gonna save me 5% over the course of a year on all my shipments, and I’m gonna commit to their technology, and I’m gonna commit to their processes, and they’re gonna get to know us, and it’s just better.” I think you make– I think you save money and get better service when you make those commitments to the, a good partner. Now, if you [00:46:30] pick a bad partner

Alex Fuller: and, hey, I don’t need to hire two people to babysit my carriers. That, that’s another cost too. Yeah, absolutely. Having those systems, having someone you can trust, and then a- also allowing your providers to learn your business. They like, if the longer they’re with you, they understand, “Hey, Bob at this warehouse, even though it says 11:00 AM pickup, it actually, it…

He’s a little funny. It’s actually 6:00 AM,” whatever. There’s all these like intrinsic knowledge that- [00:47:00] Yes … you learn over time, and then you’re able to serve them better.

Joe Lynch: Put a big old bow on this one, Alex. I’m gonna summarize one little bit. So we talked about COVID, we talked about post-COVID, and now it seems like we’re finally, if the key indicators from T graphics are starting to show rates have gone up, and I don’t think this is a, this is not news to people in the industry, but I think some shippers are probably saying, “Hey, what’s going on?” And I think some carriers and brokers are saying, “Finally.” But it’s time to [00:47:30] to ask your partner, if it’s traffic, “What can I do? I know rates are going up, but can you help mitigate this in some ways?” And I know they can. You gotta have the right partner. Somebody else who might just pass on and say, “Hey, prices went up.” So what? You guys are meeting with these guys and saying, “Hey, maybe there’s something we can do.” Anyway, final thoughts on the topic. Put a big old bow on this one, Alex.

Alex Fuller: absolutely. It’s it’s a new [00:48:00] market, it’s a new world, it’s a new paradigm, and it’s actually really exciting for Traffix because this is where we thrive. We’re able to meet with shippers, we’re able to map out supply chains, and we’re able to find solutions that other providers can’t give them.

So we can find opportunities to, to reduce the impact of rate increases. We’re able to… Or, “Hey, this service is really important. I need trucks.” That’s where we can really rely on our strategic capacity to help out. So it’s an exciting [00:48:30] time meeting with customers. I get excited with that because we’re able to find savings, we’re able to find service solutions and, we’re just trying to guide through this change because there are new people in this market.

So we have our Traffix trends report that we put out every quarter, goes in a lot more detail of the specific information we’re seeing. We go over specific modes like, what’s going on in the reefer market, what’s going on in LTL. We talk through all that that you can get from our website, but really it’s, how do we help [00:49:00] people be successful in their jobs, get freight to where it needs to be, and make sure everyone’s successful.

Joe Lynch: I love it. I love it. So Alex, what I’ll do is I’ll put a link to your LinkedIn profile, link to your website. Any other links you and your go-to-market team give me, I’ll put in the show notes. And you mentioned the traffic, traffics trends. I’ll make sure I put a link to that. If you send it to me, I’ll make sure I put a link to that in the show notes.

So I really appreciate you taking the time today, Alex.

Alex Fuller: Yeah, Joe, it’s great to be here and I appreciate your time

Joe Lynch: Yep. [00:49:30] And thank all of you for listening to my podcast. Your support’s very much appreciated. Until next time, onward and upward