Why the Yard is Your Supply Chain’s Biggest Bottleneck (And How to Fix It) with Adam Newsome

Joe Lynch: [00:00:00] Hello, friends. Welcome to Logistics of Logistics. My name is Joe Lynch. Thank you so much for joining us today. Today’s topic is why the yard is your supply chain’s biggest bottleneck and how to fix it, with my friend Adam Newsome. How’s it going, Adam?

It’s

Adam Newsome: going great

Joe Lynch: So Adam, please introduce yourself and your company and where you’re calling from today.

Adam Newsome: Absolutely. So my name is Adam Newsome. I’m CEO of Laser Logistics. I’m calling

Joe Lynch: Alpharetta, Georgia.

Adam Newsome: And Laser [00:00:30] Logistics has been in business since 1996, so we’re celebrating our 30th year. And what we perform is yard management services for the supply chain. Our revenues are approaching eight hundred million.

We have about sixty-three hundred employees, and really all we focus on is the yard for distribution centers and manufacturing facilities throughout the US. We are in about 43 states plus Canada. We’ve been fortunate enough to be doing this for three decades now

Joe Lynch: Wow. Wow. So just yard.

Adam Newsome: [00:01:00] Yeah. Yeah, I know most people would never think that the market was quite

Joe Lynch: big.

Adam Newsome: But to be honest with you, Joe, the, the– it is something that’s evolved over time with the supply chain, especially over the last thirty years. So kinda right place, right time for us as well. When you think about it trucks over the road delivering product it used to be they took the truck, backed up to the dock, waited for it to be loaded and unloaded.

But as we had hour supply regulations that were enforced more strictly for safety reasons throughout the US, it became important

Joe Lynch: create

Adam Newsome: [00:01:30] drop trailer programs. So obviously our market has grown over the last three decades quite a bit, as most people now do not do live loading and live unloading.

It’s an inefficiency and something that, to be quite honest with you, if you’re still doing live loading and live unloading, you probably have an opportunity to become more efficient

Joe Lynch: Yes. There’s some old sayings, and I’ll, of course, I’ll say them. One is the innovation is between the boulders. So if I’m running a manufacturing facility [00:02:00] or, a food facility, whatever I’m making, inside my four walls, inside my factory, we have done time studies. We have gotten really efficient.

We’re using automation. We have best practices that make sure we’re effective getting the job done, doing it with the least amount of resources, really efficient, making sure no one’s getting hurt, making sure nothing’s getting stolen, nothing getting broken. We’re guaranteed we’re gonna get the safety, the quality, the [00:02:30] cost, the delivery. Everything’s right in my four walls. My over-the-road trucking company or 3PL that I’m working with, they’re doing that But those are the boulders, and what in between them is the yard. And that’s where things can go astray. And right now, in our industry, a lot of things are going astray. And we got a lot of cargo theft, we got a lot of cybersecurity issues. The yard [00:03:00] is probably the f- the first defense against that. Not the only one, obviously, but it’s… And it’s an attack vector that we can work on. And I know that’s not the only thing you guys get into, but we gotta get way better at the yards. And by the way, if you’re not from a business, a big business, like I’m from automotive, the yards can be absolutely enormous.

And I’ve said a few times lately on my podcast, just before COVID I was down in Laredo and we [00:03:30] were driving somewhere, and we drove by miles and miles of FEMA trucks. Miles. And I was thinking, “Who’s managing?” It’s the government, so who knows who’s managing it but that’s a big challenge.

And there’s some… Unless you got a good yard management solution, there’s somebody saying, “Hey, Tony, what I need you to do is go get that trailer. It’s last four digits is 785 or 7856.” And he goes, “Where’s that?” [00:04:00] “It’s kinda down there towards the end.”

Adam Newsome: Yes. It’s like an Easter, it’s like an Easter egg hunt sometimes if you don’t have some order to the chaos

Joe Lynch: Yeah. And you guys is it, is outsourced service what you guys do?

Adam Newsome: Yes. So we provide the truck and

Joe Lynch: labor and

Adam Newsome: the management, most importantly of the yard activities. For example, an over-the-road company will bring in a trailer, and basically what they wanna do is drop their trailer off and pick up their next load and get back on the road.

[00:04:30] Because that’s how they get paid, is by the mile or by the transaction as well. So it’s all about efficiency for them. The advantage for people inside the warehouse is, you were talking about it, where they know where everything’s at, is that they don’t have to wait for a particular truck. They can organize their day because hopefully the product or the trailer is already on the facility, so when they need it, they can bring it to the door.

Because otherwise, if you’re waiting for product and there’s an accident down the road on the interstate you got guys sitting on the dock with nothing to [00:05:00] do because they don’t have it. So it’s all about the efficiency there at the yard. And you mentioned, of course, the fact that, you’ll see hundreds of trailers around these facilities and thousands sometimes as well.

And yeah, it’s about organizing that chaos. For years we’ve been trying to work with our customers and certainly have did a good job of it, of saying, “

Joe Lynch: Hey,

Adam Newsome: you know where every little piece of inventory or product is inside those

Joe Lynch: walls.

Adam Newsome: But that’s your product outside those four walls as well.

And if you don’t know where it’s at, you’re missing [00:05:30] an opportunity and you’re being inefficient in that regard.” So it’s really all about getting visibility into the yard. But also an important part of what we do is that you gotta move the trailers and you gotta be there. Again, reliability is everything for us.

Because another part of this is that inside the warehouse you may have

Joe Lynch: 100 people

working.

Adam Newsome: Certainly there’s automation going on, and that’s bringing those numbers down. But you have a lot of activity. But you may only have one truck outside. So if we don’t show up, have a truck that works, have a qualified driver, and we don’t manage the [00:06:00] process, you can again drive inefficiency inside those four walls.

So that’s what we’ve been working on for 30 years and trying to bring that solutions to the market

Joe Lynch: Yeah. And I think what we’ve done in this industry is get more and more specialized we always say there’s an expert in this. So if I’m a freight broker, I say, “Oh, I work with a capacity management company. I also work with a highway or those kind of companies that will help me prevent freight fraud and vetting my customer, vetting my customers.” [00:06:30] When I used to look at a transportation management system, it was self-contained. F- 15 years ago, somebody told me yeah we had our– We just plug into the TMS.” And I was like, “Why the hell would they let you plug into that?” Now that’s the norm now, is that I got a TMS and I integrated a whole bunch of other companies.

Why? Because they’re all experts in something. They bring something that I can’t do, or I can do, but maybe I choose not to. If I’m a, if I’m a- [00:07:00] I’m a food company and somebody says, “Hey, your yard’s not as efficient as the rest of your organization.” I guess we could become yard experts, or I could call somebody like Adam and say, “Help me.

I don’t wanna become experts. I want you guys ’cause you’re already experts. You got the best practices, you got the tech.”

Adam Newsome: And what you’re really describing is the evolution of Laser. So we started in 1996 with one account in Macon, Georgia. And so from there, for the next probably five, six [00:07:30] years, we just stayed in Georgia because people thought about this as local. Basically, you could think of it that there’s three ways you can do your yard work.

You can do it yourself, which again, that’s not your core focus as a business. Again, you hopefully make widgets or you sell widgets and things like that, and you need to put all your energy and time

Joe Lynch: that.

Adam Newsome: And again, you need a specialist there. Which leads you to people like Laser, and those were generally thought of as, as regional people.

The third people that can do it is typically you would go to maybe your [00:08:00] trucking company that was my dedicated carrier or performing work for me, and you’d say, “Hey, you’re doing a lot of freight with me. Can you also do

Joe Lynch: spotting?” Again, not a

Adam Newsome: specialist. But what happened with Laser was, is that we went out of state for the first time, because up until then, people thought of the- about these as kind of mom and pops.

But we were really the first mover to say, “We can do this on a national level, national scale. We can provide that service

Joe Lynch: reliability.”

Adam Newsome: And that’s what set us on our path to grow to where we are today, is being able to bring that type of service, that [00:08:30] specialization there as well to our customers as well.

And as we, perform the services, customers trust us. Say, “Can you do it over here?” So it was a show-me situation, where as long as you did the job and you were reliable and safe you got more opportunities, because again, you were specialized in this.

Joe Lynch: this. Yep. I love it. I love it. So who’s the ideal customer for Lazer Logistics?

Adam Newsome: Yeah, it’s quite interesting you mention that because again, these days we’re an AI economy without a doubt. But for Laser, our core [00:09:00] customers are more some of the non-sexy parts of the S&P sectors. We’re gonna be looking for s- consumer staples, consumer discretionary, food and beverage, materials, kind of those more there.

It’s gonna be high volume customers that we’re looking for. They ship a lot of products, so they need to move a lot of trailers

Joe Lynch: well.

Adam Newsome: And those are typically the ideal customers for us. So again, you could be talking about large box retailers, major food and beverage shippers, and certainly you have your consumer product goods.

Those are our core. We do some other business in [00:09:30] pharmaceuticals, and

Joe Lynch: also

Adam Newsome: touch industrials certainly as well. But again, it’s gonna be somebody with high volume that has the need to do drop and hooks with their trailers. If they’re only moving one trailer a day, two trailers a day, probably not gonna need our services there.

Just wouldn’t drive an ROI for us

Joe Lynch: them. So do you guys load and unload these trucks, or are you everything but the loading and unloading?

Adam Newsome: And we’re everything but the loading and unloading. Again, you mentioned earlier specialization. I think that’s one of

Joe Lynch: of the

Adam Newsome: reasons we’ve been fortunate enough to have the success we [00:10:00] have. We never strayed from what we were. We were, a yard management company as well. We never got into trucking.

We didn’t get inside

Joe Lynch: warehouse. And that’s not

Adam Newsome: to say that we don’t have great partners that we work with and certainly both customers or vendors or things like that, but we have always stayed true to what we do there. And that’s all about that transition zone in the supply chain. Again, where you’re moving goods off

Joe Lynch: truck

Adam Newsome: onto the warehouse or from the warehouse back onto a truck.

And that’s really where when you think about the supply chain, that’s where you can [00:10:30] gain velocity because a truck can only go so fast. A train

Joe Lynch: can only go so

Adam Newsome: fast. An airplane. So the only way you can make sure your goods go, you move them closer to the people, and then you make sure that you’re really efficient getting them on and off of those trucks

Joe Lynch: Yeah. You can look at what we do as a relay race, right? So there’s the guy who’s running the over-the-road piece, and then he hands it off to the guy in the yard, and then that guy hands it off to the guys on the dock. And traditionally speaking, inside the [00:11:00] facility running like a, a top.

Just clockwork. Guy over the road, running well. Guy in the middle of the yard, he’s walking. He’s, so every- everyone else is saying, “Hey, we’re gonna break a record.” Wait, why is the yard management guy walking? That’s… Yes, the drivers they, drive all the way across the country sometimes, get to your facility and sit. I’m telling you, it, it’s, I say it all the time. That’s not even courteous. [00:11:30] I don’t s- say it probably once a month, but I’m gonna say it again. Adam, if I got in my car and drove from Michigan down to Georgia to see you And I got in your driveway and I called you. I said, “Hey, I think I’m sitting in front of your house.”

You go, “Oh, hey, Joe. Wife and I are out shopping. We’re gonna have lunch and then we’ll be back in a few hours.” I’d be like, “Oh, I have a brand new enemy. I hate Adam. I hate this guy.” I’m egging his house. We do that to drivers and say, “Oh, it’s just business.”

Adam Newsome: Oh it, you’re right. We had [00:12:00]

Joe Lynch: Again, don’t- it’s not right.

Adam Newsome: No. It is, and that’s something we’ve been trying to solve is, again, we want a laser yard to be something that carriers wanna come to. They understand that

Joe Lynch: organized

And they’ll… And they might even go there for cheaper, a dime. I’ve heard people say this, “We’ll go a dime cheaper per mile because we know we’re gonna get unloaded or drop and hook really quick.”

Adam Newsome: Well, especially in a world in which we’re committing competing for limited drivers. Again, if you’re a trucking company, you’re saying, “How can I make my freight, my business more [00:12:30] attractive to the drivers?” Because otherwise, you just have to raise your rates, you have

Joe Lynch: raise

Adam Newsome: what you pay them if it’s inconvenient.

So again, yeah, no, the yard is a huge part of it as well. And again, I think that’s why we’ve had such success growing with our customers, is that they do see a difference between when they run it themselves, they have a competitor that’s maybe a local. Because again, we try to add that value-added services, and we certainly approach it from the perspective of, how can we help our drivers?

How can we help the over-the-road drivers? ‘Cause that’s what we

Joe Lynch: rely on

So tell us a little bit about you, Adam. Where’d you [00:13:00] grow up? Where’d you go to school? Some career highlights before you joined the mothership, Laser Logistics, and why did you join?

Adam Newsome: It’s great you always talk about yourself,

People love

Joe Lynch: But,

Adam Newsome: But my story is really based in trucking

Joe Lynch: well.

Adam Newsome: So I grew up in East Tennessee, a little town called Morristown Tennessee, outside of Knoxville. My father had graduated from the University of Tennessee, and so Wes

Joe Lynch: was hosting. Go Vols.

Adam Newsome: Yes, thank you very much.

We need all the help we can get. He had gotten into trucking after he graduated in the LTL business, [00:13:30] and then as deregulation came about in the ’80s, he started his own trucking company. So I basically grew up working on the docks, dispatching as a teenager. And the one thing my dad had told me is, “Whatever you do, don’t get into trucking.

Don’t get into trucking.” So I thought I was gonna be a lawyer at the time, and I certainly went about that. I went to college at the University of Tennessee. I graduated undergraduate. But a funny thing happened in between undergraduate and and law school, and of course, I was working dispatch, paying my way through.

I [00:14:00] got a phone call from my dad in the summer of ’96 saying, “Hey what are you doing?” I said what do you think I’m doing? I’m in college.

Joe Lynch: drinking

Adam Newsome: and partying and having a big time,” he’s like there’s maybe this opportunity in Macon, Georgia that we’re looking at.

Why don’t you come down here and look at it with me?” And so it was Keebler Foods, and we were blessed to have the opportunity to meet a customer who’s still our customer today, David Leach. He was working with Keebler at the time. And at the time, Dad thought about getting into brokerage, and that’s what they were

Joe Lynch: talking to

Adam Newsome: David about, could we broker some of your [00:14:30] freight and help you with that.

David said that’s great. I like you guys, but but hey, you got to go to corporate office to get the hunting license to do that.” But in the meantime, there was this little truck going back and forth across the street, and Dad just asked a natural question, “What’s that little truck doing?”

He goes that’s my spotter.” He said tell me more about it.” He said we’ve got this guy that that does it and runs it back and forth.” And and Dad asked the next question how long has he done it?” “So I think since the plant opened up about 20 years ago.” And he said, “And guess what?

He just came in here with a rate increase, and I have no idea how we’re gonna [00:15:00] handle this, ’cause I don’t even know anybody that does this as well.” So Dad asked the final question. He said do you mind me asking what he’s charging?” He said, “No.” He said, “I got no clue what I’m gonna do with this.” And so Dad did the math on the back of a napkin and said, “We can do that.”

Now, I wish we still had those gross margins, but that just shows you the maturity of the business at this point in time. And so that’s how Laser got started. So I certainly used some of my borrowed funds for going into law school and contributed some of the capital and helped start the business there in August of 1996.

But I still thought I was [00:15:30] gonna be a lawyer, even though I kept working for Laser in those first three years. So I practiced law from about 1999 till 2003,

Joe Lynch: 2003,

Adam Newsome: and in Tennessee. Had a great experience, but, once you get trucking in your blood, trucking’s in your blood, and you just miss the fast pace, all the anxiety and everything. Not that being a lawyer didn’t have anxiety, but for me had the opportunity to come back because Dad was saying, “Hey, we’re gonna grow out of state for the first time, and I think we can really take this thing and make it something bigger.”

Our revenues [00:16:00] at the time were probably about $6 million So I looked around, I was about to get married, a great time in life to do these things, and I said, if I’m ever gonna leave law firm, now’s the time to do it. Because if I stay much longer, I’ll make partner,” and then kinda life has a way of putting golden handcuffs on you, so to speak.

Or I don’t know if they’re even gold, maybe bronze. But at least, I would’ve had a career there. So I made the decision to leave, and that kinda set us on our path. And I’ve definitely enjoyed every step of the way. Not every day, but I’ve enjoyed every step of the way.

Joe Lynch: Yeah, you said something [00:16:30] spotter. So for people who don’t do it every day what does a yard spotter do?

Adam Newsome: Yeah, so the orange spotter is a little bit different than an over-the-road truck. And unless you’ve been on distribution centers or maybe in distribution parks or industrial parks, you may not have seen one. It looks like a little tiny truck in many ways, but it can tote the mail. It definitely is very powerful

Joe Lynch: call those tugs. Is that, does tugger the same thing?

Adam Newsome: They are called by everything. They’re called yard goats. They are called spotters. They’re called shunters in [00:17:00] Canada. There is really no official name. They’re a yard truck I guess is maybe more the appropriate name as well. But we refer to them as spotters

Joe Lynch: spotters

Adam Newsome: because they spot trailers.

Joe Lynch: move it from

Adam Newsome: one spot to the next.

And the key differentiation for these trucks

Joe Lynch: that it

Adam Newsome: has a hydraulic fifth wheel, and it has a very tight turning radius, so you can put the trailers in some really tight spots. And also it has a rear door exit where you don’t have to step down. You just go out the rear door to hook up the airlines.

So it’s all designed for efficiency that you can move trailers without [00:17:30] having to get up and roll up the landing gear or otherwise. So it’s a little efficient truck, but very

Joe Lynch: powerful truck.

Now, is that a truck, those, those spotters or tuggers or whatever you wanna call them, do you guys buy those p- on behalf of your customers, or are they buying that and you guys are just operating them?

Adam Newsome: Now we own over 3,000 of them. We buy them and and certainly then use those

Joe Lynch: perform

Adam Newsome: the services for our customers

Joe Lynch: So you guys are s- your guys, are you able to train those truck tuggers?

Adam Newsome: [00:18:00] You mean the drivers or? Oh, a-absolutely. Because, the way we think about it too is that you can have a CDL, and again, you can be million miles safe, you can drive every week and stuff, but you rarely back up

Joe Lynch: trailer.

Adam Newsome: We’re backing up a trailer about every 10 to 15 minutes and then that’s probably on an average, sometimes much faster as well.

So you have to have a skill that allows you to back a trailer up. And if you’ve ever been trying to put a boat into a boat dock and getting yelled at by everybody, you can imagine what that’s [00:18:30] like as well. So just because you have a CDL doesn’t mean you’re trained. So we spend an awful lot of time, road testing and yard testing our drivers to make sure that they can perform the work.

Because again, it is different than over the road

Joe Lynch: Yeah. And I gotta tell you, I’m… I thought about this when I knew I was interviewing you. I was down in San Luis Potosí. Big company up here had factories down there. And this was just before COVID. And I remember [00:19:00] there was a new facility and w- I was helping them select their 3PL. And I remember I’m at the new facility and they said, “Oh, we gotta get, we’re gonna bring s- a couple trailers over from across the street so we can show how we’re gonna load trucks, s- going northbound to the US.”

And I was like, “All right, cool.” So we’re wandering around there, a whole bunch of us, like probably five Americans. Some of us who were consultants who were charging a good amount. And then [00:19:30] somebody said, “Yeah, nobody can drive those across the street because we need a driver.” And I said who normally does?”

They go the guy who does it comes in on Wednesdays.” And I was like it’s a…” It was like Monday. We just got down there. So we’re wandering around and they’re like maybe when somebody drops off for us, they’ll do it.” I’m like, “No one’s gonna drive your trailer across the street. Their, that’s not their job.” But even the they’re signing up for a whole bunch of hassle. So basically, [00:20:00] because we didn’t have a solution, we didn’t get done what we were supposed to get done. And you go, it was driving a couple trailers 500 yards.

Adam Newsome: Again, your trailer may be 25 feet away from the dock,

Joe Lynch: it

Adam Newsome: might as well be 100

Joe Lynch: miles away. ‘Cause if you

Adam Newsome: Because if you cannot get that trailer to the dock, and we talk about this a lot with our customer, again you’re stuck. And again, it’s amazing how important, again. And we think about it this way.

When we’re [00:20:30] having a good day, the phone doesn’t ring. That means we’re doing what we’re supposed to be doing. But when we’re not doing our job or when there’s an accident or when somebody doesn’t

Joe Lynch: up,

Adam Newsome: that’s when you really know how important you are because everybody and their brother will call you because you’ve got literally the operation shut down.

It’s a choke point, is another way of thinking about these transition zones that we talk about between the supply chain. It’s just like when the train shows up at the rail yard, somebody’s gotta be there to help get the freight off as well. Otherwise, the train can’t keep going. So [00:21:00] again, these transition zones are critical, especially in a world in which Amazon has changed everything.

Now when we order something, I used to, think about it getting here in a few days. Now we want it here this afternoon. That requires a supply chain that is very efficient

Joe Lynch: So before we hit record, we came up with five topics we wanna talk about, so I’m gonna set them up there and you’re gonna knock them down. So the first problem is this yard black hole, which is there’s blind spots where the trailers are.

[00:21:30] So- shippers lose track of their trailers. So they’re out there. We know they’re out there. No- we don’t think anyone’s stole them, but if you can’t find them, might as well somebody has stolen. So they– If you can’t verify kind of the loaded versus unloaded and tell me where all my trailers are while they’re in the yard… And by the way, we spend a ton of money saying, “I want visibility on my tr- trucks all the time. I’ll tell you where, I’ll tell you where it is within centimeters.” Then I get [00:22:00] it to the yard, and I don’t know where it’s at. It’s somewhere within this four square miles that I call my yard. So how do you guys help solve that?

Adam Newsome: The first thing is you gotta organize the yard as well. When we first started back in ’96 basically everything was on pen and paper as far as the yard audits. And what you would do is, and I remember it well, getting up around four AM, go out there and walk about 100 trailers. I’d write down the trailer numbers and the names.

I would see [00:22:30]

Joe Lynch: they

Adam Newsome: were loaded or unloaded, and then I would turn that in to the customer, to their dispatch office. And then from there, they would try to plan their day. “Here’s what we got on the yard, here’s what we don’t have.” You can pretty much imagine that piece of paper especially with my handwriting, was not great.

You were not able to sort it, use it in Excel, and things like that. And that’s where the industry was. And in some ways, the industry has stayed there over the years as well. Now, over probably I would call it the last 20 years, we’ve seen certainly a lot of capital come into [00:23:00] companies performing yard management systems.

These are technology solutions as well. And you were mentioning early TMS and

Joe Lynch: TMS and WMS,

Adam Newsome: and that’s meant to be the middle area between the WMS and a TMS as well, is called a YMS as well. But unfortunately, we’ve never really seen, anybody kinda dominate that space as well. And why is that?

That’s because, again, you have to have good operators that know how to use a system. Technology’s great, but if you don’t have great adoption, you’re not gonna be able to get it as well. But we’ve started to move away over this last [00:23:30] 20 years from pen and paper to where we at least now are getting closer to real time because we have systems.

They check in at a guard shack, it tells them where to go, but they may not go there and put the trailer there as well, and that creates some havoc as well. But you’re starting to get where you’re getting closer to real-time inventory. And what Laser’s doing about this as well is that we are in the process right now of rolling out a pilot with our camera vision, laser vision as well.

‘Cause we’re putting cameras on the trucks, and as they drive the yard, they can then [00:24:00] see the trailer. And with AI,

Joe Lynch: AI,

Adam Newsome: they can actually read where it’s at,

Joe Lynch: geospatially locate it as well,

Adam Newsome: and update the system. So we are seeing a lot of improvement over time. But again, there’s a wide gamut between how people still manage that inventory.

But that’s why it’s a black hole as well, is because, again, technology has not quite gotten there. Adoption is not quite where it needs to be.

Joe Lynch: Yeah. I worked in automotive for a long time, and there was always people would store stuff in trailers. They’re like, “Oh, those prototypes, they’re out in a trailer.” And I was like, “Where is it at?” They’re like, [00:24:30] “Oh, it’s out the dock here.” And then, it’s a blue one. You can’t miss it. And y- you’re always wandering around. And by the way, Michigan’s c- cold three or four months a year, and then it’s hell hot for three or four months a year. And I know down south it’s way too hot. The whole idea of wandering around looking and paying people, after a while, if that’s somebody’s job where you say, “It’s your job to walk around this dusty yard all day in the hot sun,” they’re gonna do [00:25:00] it. And how much inefficiency where you say I’m supposed to take that trailer and unload it, move it, unload it, and instead I’m wandering around.”

Adam Newsome: Oh, absolutely. There’s so much time spent looking for the inventory. Again, even in yards in which they do have a YMS, again, you’re dependent on human accuracy in many ways. If I tell a driver when he comes into the yard to put it in slot one, two, three he may put it in slot four, five, six as well.

Now, in the [00:25:30] system, it may show it was there, but when the driver comes to look for it, the trailer’s not there as well. So you’re back to that Easter egg hunt. But that’s, again, why we think technology with cameras eliminates that because as the truck

Joe Lynch: driving the yard,

Adam Newsome: it’s doing what a human would have to do and it’s much more efficient

Joe Lynch: So this is like the, that, that camera is basically AI vision, right?

Adam Newsome: That is, yeah. Computer vision, AI vision as well. But it’s the whole idea, and then the key part about that is you wanna integrate that into your YMS. And so [00:26:00] that’s what we’re really proud that the technology and the software has gotten to that point now, and we’re looking forward to bringing that to the

Joe Lynch: the market.

Yeah. Adam, it’s kinda weird. Now I can tell you where your stuff is on the ocean. It used to be a black hole for the ocean. Now I can tell you exact- hey, that’s about 800 miles out in the ocean But I can’t tell you where that trailer is in my

own lot.

45 feet away from me.

Adam Newsome: No, that’s, there’s no doubt about it. And again, if you [00:26:30] think about it, where does the money flow? If I’m a large CPG, I wanna make my product, my deodorant, and I wanna make as much of it as I can, as cheap as, as I can. So I’m gonna invest heavily inside the

Joe Lynch: walls.

Investing outside

Adam Newsome: four walls, again, is probably an afterthought. And we see it in the yard conditions as well. Now, we have seen over the years that as customers have recognized the importance of those transition zones and trying to set up a good facility to attract good carriers with good [00:27:00] drivers.

We have seen some customers put the capital work to improve the operations, invest in technology solutions

Joe Lynch: well.

Adam Newsome: But it’s still a wide disparity out there as well. It’s not a universal solution yet to this black hole

Joe Lynch: Yep. Now, you mentioned a YMS, yard management system. Man, we– So we started with the TMS, which by the way, when I s- first time I saw a TMS, I remember showing it to a customer And they looked at me like I was Steve Jobs, and I thought I might [00:27:30] be for a minute.

I, I– it was just so cool, right? And I thought, “This is the silver bullet. This solves everything.” And then WMS, I was like, “Oh yeah, that makes sense.” And then we started having all the extra APIs that plug in, and each one, the visibility tools, we needed every single one. So this yard management system, critically important.

Now, is that something that’s proprietary to you guys? Do you guys?

Yeah.

Adam Newsome: For years, as I mentioned, these [00:28:00] YMSs spun out initially from WMSs. It was like, okay, I know where all the inventory is inside, and you saw some of the larger ones, say we’ll create a YMS.” Again, it wasn’t necessarily a great tool, and you saw some specialization start in the early 2000s or mid-2000s as well.

And so for a long time, we worked with these third parties. We would bring a solution to the customer and say, “This is what you should invest in.” And sometimes they would pay us, and then we would pay them as well. But probably about call it 2021, [00:28:30] 2022 we started to say, “You know what? We can do this better.

We can develop our own system as well.” And that’s when we developed what became NexUS now as well. We started with a basic inventory system called Power Yard. We made an acquisition of a, a system called Spotlight, and then we’ve rebranded it and certainly added a lot of bells and whistles to it, and it’s now called NexUS, and that is a proprietary system.

Joe Lynch: How do you spell that?

Adam Newsome: N-E-X-U-S.

Joe Lynch: Okay. All right.

Adam Newsome: Yeah. And it is and we have it deployed,

Joe Lynch: most people

Adam Newsome: don’t realize, [00:29:00] in over 120 locations. Again, we service about 800 yards, and again, certainly we have deployment goals over the next couple years to put us around 350. Now, some of our customers use other YMSs, and we’re certainly happy to operate those as well.

But we believe by controlling the system and, more importantly, the data, and going back to the accuracy, that we can help solve that problem that we just discussed about the black hole

Joe Lynch: Yep. So the next problem I wanna talk to you about is this problem of gate bottlenecks, [00:29:30] slow turn times trailer shuffling that leads to Detention and demurrage charges, depending, if you’re at the, the ports and the ocean carriers. These costs are real. But on top of that, we already talked about the delays to the drivers. And these drivers are on, if you’re working with big brands, they have on time and in full is, rules their world. They cannot be slowed down at the yard. So how does Lasership help me get [00:30:00] out of some of these dwell time fines and some of these just basically things that make you late, things that make you slow?

Adam Newsome: Yeah, it’s interesting you mention that. We actually, originally did not set out to run gates as part of our services. But almost by necessity, we got pulled into it because that was the choke point, and it was causing inaccuracy in what trailers were on the yard. And

Joe Lynch: didn’t

Adam Newsome: have an updated system as well.

So slowly over time, we started developing more of a [00:30:30] gate service that we offer. Now, this is a labor-based service as well. We have over 300 people that work in gates for us right now running those facilities. Why is that? Because there is a direct connection between that and the yard inventory, the accuracy of it, as well as the throughput for the over-the-road drivers as well.

But again, that’s a labor solution. We’re gonna continue to look at certainly automation, and we’re certainly proud about that. I mentioned certainly laser vision that we’re bringing. There is also coming very shortly laser gate. These are automatic gates that

Joe Lynch: [00:31:00] be

Adam Newsome: used where you just, again, as they pull in, that the cameras will read the truck.

It’ll either match up with the TMS saying, “This is on the schedule, not on schedule,” and allow them in. That’s a very simple way of looking at it. There’s a lot more technical features to that, certainly security as well that goes along with it. But again, technology is gonna help those bottlenecks that are at

Joe Lynch: gate

Adam Newsome: because there’s nothing worse for a driver when he pulls up to the gate and he’s 14 deep there as well, and you’ve got somebody at the gate shuffling paperwork, it’s not the right paperwork, [00:31:30] and there’s no way around this ’cause there’s only one way in, one way out as well.

So again, technology is where we’ll have to lean on

Joe Lynch: find

Adam Newsome: more and more solutions for that as well. We certainly did as much as we can with our labor, and we train them well. We do things, but it’s gonna require more technology and infrastructure to help us at those gates.

Joe Lynch: Yeah. It’s interesting, when we talk about trucking. For a long time, we would just go there’s this huge driver shortage. Oh, we got a driver shortage. Yeah.” And then somebody said [00:32:00] on a call I was on a few years ago, “We’ve always had a, a driver shortage, and we always will.” And more and more people have said the last few years, and I agree with them, “It’s not a driver shortage.

It is a utilization problem.” They can drive 11 hours. They don’t. The reason they don’t is ’cause they get to a yard, and they don’t get unloaded. They don’t get to a dock, and they don’t get unloaded. And that’s not how they get paid. And I think Adam, in let’s say another world, you and I own a trucking [00:32:30] company, and we are moving freight from Detroit to Atlanta, back and forth, and we got three or four places we’re delivering.

And when we find out one of them can’t get me unloaded, it just takes time. And some of these others say, “We’re drop and hook. You get here, we’re gonna get you unload- we’re gonna t- get that, we’re gonna put another trailer and you’re gonna be back on the road before you know it.” The other one’s like, “Hey, sometimes you get unloaded fast, sometimes you get unloaded slow.” We as the trucking company are at some [00:33:00] point, are we gonna raise rates for the guys who can’t get us unloaded?

Adam Newsome: Oh, absolutely.

Joe Lynch: Again,

Adam Newsome: it’s all about efficiency. And again, when your primary metric for getting paid is, the transaction, the per mile rate as well, you have to reflect it in your rate, that inefficiency at times. So there is just such a criticality within the supply chain for efficiency as well.

And you mentioned detention though, Joe, just to touch on that for a minute

Joe Lynch: well.

Adam Newsome: And there’s certainly two types. There’s the driver detention, but there’s certainly the asset detention as well. Some [00:33:30] people use demurrage, different terminology for it as well. So certainly we talked about the gate, getting it in and out as fast as possible for the driver themselves.

That’s one piece. The other piece is you’ve talked about the trailers just kinda getting lost on a yard. Funny enough, trucking companies don’t forget they’re lost a lot of times, and they’ll certainly send detention bills to the customers for that asset there as well. And again, that goes back to why visibility on the yard is so important.

Then it’s process. It’s not just visibility. Again, you have to have process and adoption of [00:34:00] these things. You have to have a first in, first out. You have to make sure, “Hey, am I loading the oldest trailer on the yard first to get it off the property to stop the clock on that detention as well?” So absolutely, these are real costs that are based on inefficiency and are many times driven by what’s happening in that transition at the yard

Joe Lynch: Yeah. What’s interesting now is we have the, the over-the-road guys have gotten really good at pricing. So we kinda are using a lot of automation where somebody says Detroit to Atlanta. Boom, it’s this much money.” And it [00:34:30] doesn’t matter if I’m the slowest or the fastest, but at some point I’m going to pull my business away from the guys who can’t get me unloaded. If I can’t get more money for it, I gotta I, all my drivers say, “Joe, Adam, thanks, but no thanks. I don’t want that lane anymore.”

If you move me to somebody who gets me unloaded d- to a drop and hook or somebody who just says, “Hey, it’s a live unload, but it’s fast, it’s predictable. I know what I can expect.” That’s good. The, the other where they say, [00:35:00] “Hey, s- I know you just drove, I know you just drove for 800 miles, but how about you sit in your truck for a little while?” We gotta do better, and I think the yard management is a big piece of that. Next thing, the spotter. So you guys are outsourcing these, this challenge. So I, could have my own facility. I go, “Hey, I got a spotter. I got Bob out there. He’s been doing it. He knows what he’s doing.” At some point, there’s gonna be issues.

He’s gonna quit, he’s gonna [00:35:30] go away. I don’t really own the process, Bob does, right? And so I’m assuming sometimes companies call you and say, “Hey, we got old Bob doing this, but he- he’s getting he’s gonna retire in five years.” Do you guys– would you take Bob on and say, “Yeah we’ll make him an employee here and we’ll we’ll make sure he’s following the best practices that we’ve learned across the whole country?”

Adam Newsome: Oh, yeah. A lot of our business that we continue to win is where people that have insourced it currently are moving to an outsourced [00:36:00] solution. The market is about an $8 billion market within the US annually for spotting services. Again we’ve had multiple studies over the years performed on that as well.

And again, when you think about our revenues approaching eight hundred million, about ten percent of that market roughly there as well. What makes up the rest of the market? Certainly there’s probably about forty, forty-five percent that’s still insourced in there. Now, you’re certainly gonna have some people that like maybe a Walmart or somebody like that, that owns their own trucks and they have an expertise in that, that will [00:36:30] continue to probably be insourced on the yard because they’re used to dealing with CDL drivers.

But you’ve got a lot of other companies who maybe got into it by accident or somewhat, like you said, had old Bob out there as well. And suddenly they look up one

Joe Lynch: day and,

Adam Newsome: “What am I about to do? I’m about to drop $150,000

Joe Lynch: buying

Adam Newsome: a new truck because this one’s there. I’m looking at the fact that I’m trying to manage I don’t have any backup plans if Bob gets sick

Joe Lynch: God forbid,

Adam Newsome: takes vacation as well.

So I need to turn to a professional company that can help it.” And that’s where Laser

Joe Lynch: [00:37:00] comes

Adam Newsome: as well. And that’s when– Yes, but to your point, absolutely. As we’ve taken over insourced deals, we’ve certainly found some great employees, great teammates that have come from these companies. And in many ways, they really like coming to work for us because they were somewhat neglected sometimes by their company

Joe Lynch: the, they’re the core of your business and they’re an add-on to the other business. This is the same issue we have with private fleets. Private fleets are often run by large trucking companies. And the reason that is the case is because that food manufacturer [00:37:30] that says, “We got eight hundred trucks and we’ve been managing them.” The problem is we’re not a trucking company, we’re a food company. Why the hell are we dabbling in trucking? Now, as soon as you give it to a, a big company, you give it to Ryder or Schneider, Ruan or whoever they say, “We’re gonna recruit, we’re gonna retain them ’cause they’re the core of our business.

We’re gonna make sure they’re meeting all best practices. We’re gonna have ongoing training. They’re– If there’s a new federal regulation, a new [00:38:00] OSHA thing- We’re on it. Where the, the, if it’s not the core of your business, you might not be that on top of it. And, that’s not to… Also, there’s peak surges.

I’m an automotive guy. During launches, man, there, there’s, there is a craziness. In the retail business at Christmastime, there’s a craziness. We know there’s some peak times, and maybe I need three spotters for that month. I’m assuming I can call you guys and go, [00:38:30] “Hey, help me out, Adam. I need more spotters this week.”

Adam Newsome: And that’s absolutely where the investments we’ve made over the year to build up our networks, our pods, as we would call them. So again, in Dallas, we’ll have over 400 people working there. And the good news is about, you were talking about our ideal customer earlier, a lot of these are counter seasonal to one another.

We may have food and beverage that’s certainly in the spring or even the winter building up inventory, certainly depleting it during the summer months, and then kinda [00:39:00] softer volumes as you get into September, October, November there as well. At that same time, our retail customers are picking up.

Generally speaking, we’ve had a crazy world since COVID, but generally speaking in a normal cycle, you would see them picking up. So we’re able to move our drivers around in a way in which if I’m only got, Bob out there working, I can’t create three more Bobs there. But whereas we can move our labor around within these dense markets and allow the service to be met for the customer

Joe Lynch: Yeah, and I think when you’re, when [00:39:30] it’s your core business and you’re doing the training and you’re retaining drivers longer because they, it is the core of your business, there’s gonna be fewer accidents. There’s gonna be fewer, less liability. You’re not gonna… I’m not saying if you’re, if you got one guy and you kinda trained him internally, who trained him, right? Nobody. He learned on the job. He figured it out, and maybe he damaged some trailers along the way. Maybe he damaged some freight along the way. No way to run a [00:40:00] railroad. This is, this specialization is here for a reason. Every time we get a new specialist in this business, you go, “Why do we have that?” ‘Cause it’s better. Th- this

is just better. Oh, there’s–

everything. You mentioned

Adam Newsome: one of our core values, which is we keep

Joe Lynch: other safe. Safety

Adam Newsome: is everything. Again, most people think of the, over the road, bigger traffic accidents

Joe Lynch: well. But an

Adam Newsome: accident’s an accident, and if we knock off a trailer door or

Joe Lynch: we

Adam Newsome: bend landing gear and stuff

Joe Lynch: that,

Adam Newsome: To us, [00:40:30] that’s an accident.

That may be an afterthought

Joe Lynch: somebody

Adam Newsome: else for an over-the-road company or maybe somebody else. But for us, an accident is an accident ’cause it can lead to behaviors that could lead to more severe accidents as well. So our training is very much focused on what happens in

Joe Lynch: yard.

Adam Newsome: We refer to it as our big six.

Things that you wouldn’t think about there as well. Three points of contact are everything

Joe Lynch: us

Adam Newsome: because you do get up

Joe Lynch: down

Adam Newsome: out of the truck more often than an over

Joe Lynch: road.

Adam Newsome: Making sure that you have secondary securement for the trailer doors, [00:41:00] making sure that the airlines are hooked up properly, making sure that the fifth wheel connects, and that you do a proper tug test there as well, making sure you observe

Joe Lynch: five-foot

Adam Newsome: rule.

All of these things are what we focus on because they represent about ninety to ninety-five percent of our accidents. That’s the specialization and what it means when you bring somebody like Laser in versus maybe somebody else that’s not their core focus.

Joe Lynch: Yeah. Yeah. That makes so much sense. And, next one I’m t- gonna talk about is cold chain stuff.

So [00:41:30] we have reefers and sometimes there are issues. So the over the road, we’re tracking it all along the way and then drop it off, and we’re getting much, much better at when something drops out of temperature control. But that cold chain is usually kept cold by a diesel engine that’s attached to that trailer. Those can run out of gas. And by the way, I’ll tell you a story and you tell me how you s- you prevent this. A food [00:42:00] company that own trucks, th- they told me this, not on the podcast, of course. They said, “We were moving s- some stuff that was going to a grocery store. Couldn’t deliver on a Friday. Brought it back to the terminal.”

They said, “Make sure this stays, this, this temperature stays in range until Monday when we deliver it.” This was before we had all the fancy sensors. This is probably 10 years ago. And it ran out of gas and it, what- [00:42:30] whatever happened, it st- it started going out of temperature range. Sunday night, these two guys show up at the facility, they go, “Oh, damn, were you supposed to make this shift th- this day going or was I?” “I don’t know. Who’s gonna tell the boss?” “I… Let’s just plug it in. They’ll never know.” ‘Cause it’ll be cold on Monday morning. So Monday morning they got in, and what I just described there if you’re in the warehouse and you’re saying, “I already screwed up last week.

I don’t [00:43:00] wanna lose my job. I’m just gonna plug it back in.” If people make a mistake I shouldn’t lose my job. The hell with it. I’m not telling anyone. Now, maybe I… Who knows what went wrong there. When there is something comes out of temperature range, the it’s a disaster. That potentially means that you’re delivering food that is You’re gonna poison the customer. We had this earlier, a few weeks ago, this whole lettuce thing ar- around the country where [00:43:30] every- I remember somebody, I got a burger and they had some lettuce on the side. I go, “Hey, what’s this for?” And they’re like, “Oh,” and they go, “Oh, you’re one of those guys.” I go when they say don’t eat lettuce, I’m not eating it.” It’s lettuce. If they said potentially a burger making you sick, I’d be like, “Yeah you gotta take some chances.” But it’s lettuce, get it out of here. That’s a huge issue that this letting a reefer get out of cold chain temperature range is disastrous. And [00:44:00] for a food brand, it’s perhaps the worst thing that can happen to you, ’cause forevermore you’re like, “Oh, by the way, I don’t like to go get XYZ chicken nuggets ’cause remember they poisoned someone?”

“Oh, that was 10 years ago.” And people don’t forget.

Adam Newsome: No

Joe Lynch: So how do you help me stop that?

Adam Newsome: Yeah, what it comes down to, and unfortunately, we’ve bought some various products over the years where they did get out of temperature range while in our custody there as well. But the first thing is you gotta have a very well-defined process with the

Joe Lynch: It’s

Adam Newsome: gotta be [00:44:30] clear who owns what.

You were talking about your example, somebody looked at somebody and said who it is. You gotta make sure the process is very clear and there’s clear ownership. Second thing you do, you gotta have accountability. And unfortunately right now, it still requires a

Joe Lynch: of

Adam Newsome: manual checking of the reefer temperatures.

Now, technology will continue to help solve that. But you were talking about, you can call one of the cold chain carriers, and they can tell you the temperatures on all of their reefers throughout the US as well. The problem is once they drop them off, now you’re on a [00:45:00] yard with multiple reefers and multiple carriers

Joe Lynch: well.

So it’s more- Like juggling.

Adam Newsome: Exactly, because now it’s not that I can call just this one carrier. I’ve gotta call all those carriers, say, “What’s going on, and what, what’s happening there as well?” So for us at the yard, we have to make sure that we take control of what we’re supposed to take control of, that we check it when we’re supposed to check it.

But it is still very much a manual process as well. But it also requires good record keeping, good systems, and again, that’s where how we designed Nexus, as we’ve said, to [00:45:30] make sure that we can quickly record those temperatures. And if it’s out of range, do you have automatic alerts to let them know, “Hey, I need to get this trailer to the door within the next hour or else it’ll spoil,” and things like that.

So having good process, good accountability, and certainly having good technology solutions. And those technology solutions will continue to improve

Joe Lynch: Yes. The Food Safety Modernization Act, which I don’t know, it’s what, seven, eight years old now. Longer than that. Pr- signed by President Obama, so even that, back then. [00:46:00] When we made that update I did a lot of training for companies on that, and- The expectation is there’s a chain of custody, and you need to be able to prove that it stayed in temperature range. Otherwise you’re violating the Food Safety Modernization Act. Of… That won’t be tolerated. The FDA expects this, and I’m not saying they check on that stuff every single day.

Clearly they don’t. But we owe it to our customers, and I think the big food companies would say, [00:46:30] “Yeah, obviously we’ll want safety as our top priority. We’re gonna show a chain of custody from the time we left our facility to the time it got to our customer is gonna be safe.” And I think the vulnerabilities is always in the handoffs. So I can be in temperature control in my facility, now I put it on my dock. Did it sit on the dock for 45 minutes? It sure shouldn’t, right? Not in the hot sun. I gotta make sure that got into a truck, and then on the other end, I gotta make sure [00:47:00] that when it was received, that maybe it didn’t get un- unloaded right away.

It has to stay in temperature range or disaster.

Adam Newsome: Well, and I think the key there too is you mentioned that documentation and process, those are the things that I mentioned, our role in these things on our part of that. When you’re thinking about the custody and the FDA comes in, and I think about where we were 20 years ago or more, 30 years ago on these, that part of the custody might be a piece of paper to have a scribble on it saying, [00:47:30] “Here was the temperature at this time,” and maybe that’s a five, maybe that’s an eight, I don’t know things like that as well.

And that’s why, again, having modern technology solutions for this to capture that data in a usable database with processes underpinning it as well to say, “If it gets out of this range, this is what I do, and then I can document it every step of the way.” That’s what we bring to the table, and that’s what we wanna be a part of because again, food safety is everything.

You mentioned the lettuce outbreak. Hey, I’m still not eating salad. Again, [00:48:00] that, that is

Joe Lynch: something That’s just an excuse now.

Adam Newsome: that and I want my ice cream. But but certainly, again, these are really critical things again, and they’re so important for America when we think about that. So we play a vital role and we take that very seriously. A lot of people say we keep America rolling and they’ll talk about trade.

That’s a real thing. That is a real thing. And I know you appreciate this being in the industry

Joe Lynch: Yeah. And I think one of the things is there’s more cold chain every year.

It’s not gonna get– it’s not gonna be less, it’s [00:48:30] gonna be more. A lot of drugs now are required, especially these biologics. Those all have to be within cold chain. And the compliance and the regulations that they have to meet, it’s just the bar is much higher. And again, we accept that bar is higher on the road and in our facilities. The gap, and I’m not saying everybody’s making this, ev- not like every yard that’s not managed by Laser Logistics is wrong, but you take some, some chances because you probably don’t [00:49:00] have the processes and the technology and the best practices that make sure you’re not the weak link.

Adam Newsome: That’s right. There’s no question about it. And again, that’s why we spend so much time, and it’s about professionalization and specialization a- as well. Do you really wanna trust somebody that doesn’t have 30 years of experiences? Joe, we move over 30 million trailers a year. And so again, one of our big things is that we feel like we have a commitment to our customers as well that’s been [00:49:30] honored time and time again as well.

We’ve been through those situations where you have to check the custody as well. So again, being a trusted partner is something that you work very hard for, and you can lose really quickly if you’re not dedicated to it every day

Joe Lynch: Yep. So the last thing I wanna talk to you about.

I’m gonna s- I’m gonna throw in a bonus one, whether you like it or not. The last thing I’m gonna s- the second from last thing is a lot of those tugs, tuggers or whatever, these spotters- … they were [00:50:00] always diesel. But we’re starting to get complaints. By the way, if you go, I just t- spoke to No- Noel Hasegawa out at Port of Long Beach.

He’s the CEO now. I interviewed him when he was COO, and they have a big smog problem out there. I know Colorado has a big smog problem. That smog is causing asthma in Long Beach, LA area among the children. And so they’ve asked us, “Hey, could you help us?” And usually when you think about drayage, [00:50:30] you go, “Oh, yeah, we’ll put our old trucks to do drayage,” not the newer ones. Now we’re starting to see some compressed natural gas for drayage. But if I still gotta again, imagine all the tuggers they got out at Long Beach or in LA at those ports. Those ports are massive. They’re switching. So they’re switching to n- the newer fuels. Talk about that

Adam Newsome: Yeah. Listen, this is something we’re very proud of. Even before we went to electric trucks in 2017 and we’re one of the first [00:51:00] adopters of some of the new technologies we believed in, you gotta

Joe Lynch: reduce

Adam Newsome: idle time. Idle time is the enemy of the engine and it’s the enemy of the environment as well.

So how do you reduce idle time? So you gotta have telematics on the spotters. We’re one of the few, if not the only companies out there that have telematics. We’ve had those since 2014 on our trucks. And what does that give you? That gives you the opportunity to say, “Who’s idling?” We target 15% idle time because we have so much data over the years.

When we originally started our idling program back in [00:51:30] ’16 we were idling about 50% of the time, and that’s still the

Joe Lynch: industry Really?

Adam Newsome: Oh, absolutely. And in an industry in which fuel is a pass-through because these are dedicated contracts and you can have a dedicated fuel bill for somebody as well, that’s real money as well.

So it’s not only right for the environment, it’s not only good for the engines, but it’s also good for the customer’s bottom line because they don’t get additional fuel from just sitting there idling as well. So we still continue that program today. We monitor it every day. I still get my daily idle time [00:52:00] report that breaks it out by region so we can see who’s above the 15% or the variance there.

We get temperature readouts associated with those regions, average temperature, because again, when it does get warmer, we don’t want people to suffer, and we will see a spike in idle time due to air conditionings, and same thing when it’s cold. But during the more temperate months that you’ll see in

Joe Lynch: spring and

Adam Newsome: the fall, we see our times go below 15%.

It works out to about an average there

Joe Lynch: well.

Adam Newsome: Again, that’s specialization. That’s where we come in looking at the little details that maybe other people don’t think [00:52:30] about. But let’s talk about the EV trucks that you mentioned as well. So in 2017, we were fortunate enough to make the decision, I guess you could say to buy three of the first probably 10 that was manufactured at the time using some of the new total EV technology.

Now, I gotta be honest with you, I didn’t think they would work. I wasn’t a real believer, but apparently I can’t read the newspaper, and I wasn’t reading about things like Tesla and what was going on with the battery technology,

Joe Lynch: the

Adam Newsome: battery technology is really the secret here. It’s the magic sauce as well.

So around [00:53:00] 2021 we started seeing a, another competitor pop up that was a very a smaller company, a mom and pop. And I was like, “Why are they on these bids? They only got 10 trucks. What are they doing here bidding?” They were bidding all EV

Joe Lynch: EV

Adam Newsome: solutions at the time. I said wait a minute.

We’ve got three EV trucks. I’m gonna go up there and I’m gonna tell you how this really looks.” To my great surprise there, when I talked to the drivers, and I kinda asked them in maybe not the best way, I said you don’t really like these EV trucks, do you?

Joe Lynch: You like

Adam Newsome: You like these diesels better. You like this that’s a real man’s truck.”

Kinda like to

Joe Lynch: [00:53:30] the

Adam Newsome: bravado that we sometimes use in trucking. And almost sheepishly, the drivers looked at me and they said, “Actually, we like the EV spotters better. The EV yard trucks is better.” And that’s when I had a big aha moment. I said, “Oh man.” I said, “I’ve got this wrong.” Then I started looking at the maintenance data and the performance data of the trucks, and I said This is a pretty good mousetrap.

In fact, it’s a better mousetrap. So at that point in time, we actually went and bought that company and we’ve expanded. We’re now up to about a hundred and sixty-five of our assets of about three [00:54:00] thousand that are EV and continuing to grow along the way. Certainly one of the big things is that we need the customers to help us with the charging station.

Now, the good news is we can put this on private property as well. So we don’t have to depend on public charging stations, which are getting more prolific over time as well. But we’re able to set up the charging station there on the property, and sometimes that’s the delay, is that we have to get a maintenance person at a facility.

And I know you’ve dealt with it in your career as well, and sometimes that can be challenging. But once you get the infrastructure set up, we know [00:54:30] how to run them twenty-four hours a day by using opportunity charge, and it’s just been a great thing. We see lower turnover at these facilities, certainly lower maintenance, and again, you have no fuel bill in this case as well.

So again, we’re very excited that we’ve been a leader in this space and we’ll continue to deploy these assets over time

Joe Lynch: Yeah. Now, is the total cost of ownership for those EV spotters cheaper?

Adam Newsome: It’s a great question. Our math would say that we are now at cost neutral as well. You have

Joe Lynch: much more That’s all you need. [00:55:00] Yeah,

Adam Newsome: exactly, because again, think about the wins you get, what I just said, better for the environment, even better than our idle time. That’s still fifteen percent idle time, and you’re still burning diesel while you’re performing the work, so it’s still a better mousetrap.

So you win right there. And there’s all kinds of things that you’re able to report, certainly that are required now under the different regulations, both state and federal. So yes, it is a big win. So our math is coming out that it is cost neutral. Why would I say that? This is a long-term asset.

Now I’m– again, I mentioned twenty seventeen. We have data that nobody [00:55:30] else has, just period. That’s just a fact ’cause we’ve had them longer than anybody. Those trucks are still running nine years later. So a lot of it right now is about how is the asset life. When you really think about or I think about total cost of ownership, I look at, what is the total asset life and what does it look like over time.

So we’re still formulating really the first full life cycles of these in order to answer that question. But we’re very comfortable now that we can go to the customer and make it cost neutral for them to switch to EVs as well

Joe Lynch: I’ve been in a number of yards [00:56:00] when I was a, when I was a kid, I worked at boat yards and stuff, and I always remember those, those, trucks that we used that to move stuff around, move the boats, constantly diesel being puffed in your face. I can guarantee those drivers are happier with those electric

Adam Newsome: Oh, absolutely. And again, you think about it, you’re sitting on top of a combustible engine. So you think about

Joe Lynch: gets hot. Yeah.

Adam Newsome: heat, you think about the noise. And that again, was probably the most compelling [00:56:30] thing for me when I went and met for drivers late ’20, early ’21. And when they told me it’s a better truck, and it wasn’t just the performance of the truck, it was the fact that they didn’t feel beat up at the end of the day as bad as a diesel truck will make you feel.

And certainly you mentioned it, the knocks and stuff that gets into your

Joe Lynch: got, in those busy yards, there’s a whole bunch of people running around, but it’s probably a safety issue. But there’s people in those yards, and they’re all breathing that in and it’s not good for the environment.

And by the way virtually everybody who’s a big [00:57:00] company they have sustainability goals and consumers are buying based on those. So don’t worry about what’s going on in Washington. People always go, “Oh, now that Trump’s in, we don’t have to worry about it.” Nobody needs to worry about what happens in Washington.

It’s stupid stuff usually. C- customers, end customers want the biggest brands to be clean and green. And it’s not easy to get cleaner and greener overnight, but this is one of those things where you go, “Yeah, we made a switch.” [00:57:30] And, right now there is not an electric vehicle that’s gonna take you…

we can’t replace the Class 8 with electric. But we can do the tuggers, and that is something that you can report to the sustainability gods within your company, and it’s good news.

Adam Newsome: Absolutely.

Joe Lynch: Absolutely. And we’ve certainly benefited from that.

Adam Newsome: Again, yes, it’s the right thing to do. Let me first touch on what you said there about the politics of it. I have a real simple view, like most people would. Is it the right thing to do? Yes. [00:58:00] Okay let’s do it. Let’s until you tell me that it’s not the right thing to do, not an opinion, not part of some other political policy, I’m gonna keep doing it.

So again, and then to your point, though, now again, yes, you’re right. Certainly part of our strategy is that we saw the way the world was going. Sometimes it’s right place, right time, as we all know, and good fortune. But as we saw this technology come, seeing the way sustainability was becoming more of a priority for companies serving the consumer obviously we took advantage of that, and it certainly allowed us to grow our [00:58:30] business not just with the EV trucks themselves but also allowed us to get more opportunities for business ’cause we’re a trusted partner again.

We’re bringing them solutions to their problems, and in this case, sustainability. And it allowed us to get access to our customers at different points in their org chart, places we never normally would be. We’re over here in the supply chain, transportation, warehouse world. Suddenly we’re talking to their chief sustainability officers.

Meaning, again, it just opens up a better, more thorough partnership with your customers

Joe Lynch: [00:59:00] Yeah. My buddy Matt McClellan over at- Covenant Logistics. He’s head of, I think he’s VP of innovation and sustainability. And when he got over there, I think it’s a publicly traded company. It’s a big company. And he said he went, when he got there, he went and talked to their 10 largest customers and said, “Do you have sustainability goals?” Every single one did.

Adam Newsome: And again, some people have shied away from it during this time, but again, it’s a better mousetrap. It’s the right thing to do. [00:59:30] And again, it’s one of the few use cases right now within our industry, as you mentioned, class eights or not, where you actually can get to cost neutral. And guess what?

That wins

Joe Lynch: Yeah. And it’s not easy in our business because you can’t really do too many things that are gonna cost money. So if you said, if like you said, it’s cost neutral. Had you said, “Hey Joe, it costs an extra 100 grand a year, but it’s cleaner and greener.” It’d be like you’re not gonna be talking about that too much. You’re not gonna go, you’re not gonna knocking on doors saying, [01:00:00] “Hey, it costs a little extra.”

We’re in a business that is all business. Margins matter. Gross margins matter. So we have to always make sure we’re able to save the money and be cleaner and greener. This is a bonus question, and I hope you don’t make me cut this one out ’cause I didn’t talk to you ahead of time. But we have a huge cargo theft problem and a cybersecurity problem. Freight fraud is rampant, and it used to be very [01:00:30] opportunistic where people go walk by and go, “Hey, I wonder if there’s Xboxes in. Let’s pry that truck open.” Now it’s sophisticated. There’s cartels involved, and it’s a huge issue. How can you guys help me fix that?

Adam Newsome: Yeah. I think the biggest thing is we can handle what our part of the supply chain is, and that’s again, working with the customer at their facilities. Now we don’t own these facilities as well, and a lot of times we don’t provide the security. But what we can do is be a good partner, make sure [01:01:00] that we’re helping them design the processes that are there.

And you’re right, criminals are incredibly creative as well.

Joe Lynch: And they come up with

Adam Newsome: ways to cut the fences, sneak in, sneak out, things like that. So again, it’s really about being a good partner. Part of being a good partner though too, is that still theft comes

Joe Lynch: down to

Adam Newsome: one individual or a group of individuals making a decision to do something wrong.

So you wanna make sure that your hiring practices don’t allow you to be a part of the problem [01:01:30] as well. So we also do criminal background checks, and again, the professionalization around those things as well. Because again, the human element in the crime is real, and so you don’t want to be a part of that

Joe Lynch: well.

Adam Newsome: So we try to control what we can control and our part of the world as well. And a lot of that’s bringing best practices

Joe Lynch: customers

Adam Newsome: saying, “Hey, you need to quit having a wide open yard. You need to get everything coming out of one place one gate. You need to have cameras on there as well.” Standard things that a lot of people know throughout the industry.

But again, where we can contribute our [01:02:00] experiences and and hopefully our expertise we try to do it as well. But a lot of it’s just being a good partner that understands their role and that makes sure that we’re not part of the problem, we’re part of the solution.

Joe Lynch: the solution. I was I was at the IANA conference, Intermodal Association North America, in Long Beach, and there was a guy, and he’s a Mexican guy, but he’s lived in the US, he’s lived in Mexico, he’s back in Mexico now. And he was explaining to me about cargo theft, and he said increasingly, these cartels and others are saying, [01:02:30] “We gotta place somebody inside the port, inside the railhead, inside the yard.” And so if you don’t do your due diligence, like you just said you guys are doing, then you end up, as you said, being part of the problem. And so if– it’s a funny thing. Any place where you don’t have best practices, where you don’t have a, a compliance mentality, things go a little off. And and, every once in a while there’ll be some scandal in the football world, [01:03:00] and and what the scandal… By the way, I’m a U- U of M fan, so trust me, I just experienced it. We have a new coach because of that. Now we have a compliance mentality. So if somebody, you had a big, you run a big company, if somebody comes into you and says, “Hey, this happened,” and you go, “Oh, come on. Come on, Bob. Th- this isn’t a real issue.” And you s- you, you explain to him why it’s not an issue, and it really is an issue, now you’re in trouble. So the the not being, having a compliance [01:03:30] culture which by the way, that is the opposite of what we had in the past, which was probably, especially in our business, a good old boy culture.

It’s like, “All right, come on, we’ll have a, we’ll go have a beer and talk about it, and it’ll be okay.” Not anymore. Best practice is compliance, have a process, have a technology, have some double checks to make sure this can’t go wrong.

Adam Newsome: For me, I think regulation is not always a bad thing. Again, everybody always talks about too much regulation, and certainly there is that as well. But there’s a [01:04:00] reason we have regulation, and it is meant to protect us as the consumer as well. Now, when it goes too far, that’s a whole other issue as well.

But I actually welcome that. The only thing I really want, like we all do, is I just wanna know what the rules are. If you tell me what the rules are and what the best practices are, then I’m there. But again, because I believe the companies that we work with, the Fortune 50, Fortune 500 companies, they value working with professional companies that respect the law, that follow the compliance, and that bring best practices to them as well.

So I [01:04:30] welcome it. And again, if you’re looking for a professional company that adheres to that, that’s us

Joe Lynch: Yep. Yep. I’ve gone way over my time with you, so I’m gonna summarize what we talked about today, then I wanna get your final thoughts on the topic. So I’m talking to my friend Adam Newsom. We’re talking about why the yard is your supply chain’s biggest bottlenecks and how to fix it. So the first thing we talked about is this black hole where the trailers are out in the yard. And we can lose track of all those [01:05:00] trailers. There’s– I’ve done it. I’ve wandered those yards. Some of them get really big, and not everything’s labeled uniformly. I need a yard management system, and I don’t have one. I know there’s people going, probably rolling their eyes and going, “Another system?” I’m assuming it also connects to my warehouse management system and my TMS. So this is just another great data point that I’m losing right now, and I think s- people will be shocked when they see how much time they’re, they got trailers sitting around in their yards. But we [01:05:30] waste a lot of time running around the yard looking for the trailer. And L- Laser Logistics knows how to manage that. That’s what they do. We also have spent a lot of extra money that we don’t need to spend on detention, demurrage. These are the– This is when you– And I know some people are saying that’s only at the port. When your assets are not getting unloaded, that’s a problem. When it takes a long time to get this stuff taken care of because you can’t find it, that’s a huge issue, and you end up paying. [01:06:00] You’re paying some sort of penalty. It might be on an on time and in full penalty ’cause you couldn’t get the stuff sent out. Again, Laser Logistics specialize in that. Let’s talk about the spotters. So you might have a spotter who works in your yard. I guarantee he doesn’t have his own best practices. He just does the job every day. You need to have the best practice. You need to have somebody who recruits, retains, and trains those guys every single day, who does the OSHA compliance, make sure they’re meeting the fed regs, give them the right equipment and the right [01:06:30] technology to make sure they can manage that.

But als-also, when there’s a peak surge, when it is Thanksgiving time and you need three extra spotters for two weeks, LaserShip can help. Old Bob is in trouble that week. We talked al- about cold chain. Cold chain reefers come out of temperature control in yards because you don’t have the trailer atta-attached to it. This is a chain of custody thing. We need to be able to [01:07:00] prove to our customers that stayed cold the entire time it was supposed to stay cold. It didn’t lose temperature range during its two days in the lot or 12 hours in the lot. We also talked about converting diesel yards to EVs. This is just a no-brainer. We’re gonna get cleaner and greener, and you might as well be able to go to the su- the sustainability guy and say, “We are upgrading our yard. Not only are we better in our yard, but we also are cleaner and greener.” And [01:07:30] customers count. Customers care about this stuff. And I guarantee, I’ve been in big companies where they say, “Hey, how you, how are you doing something for sustainability?”

You just roll your eyes. You’re like, “God darn it. Everything’s cutting costs. Everything is how to go faster.” And now you say, “In addition make it more environmentally friendly.” Last but not least, we talked about security. Your yard has a lot of attack vectors. You gotta have the best practices applied, and you don’t know the best [01:08:00] practices. Laser Logistics does. Anyway, Adam, put a big old bow on this one. Final thoughts on the topic.

Adam Newsome: I think it is– first of all, thank you so much for taking the time to talk with me about these issues. Again, it is an afterthought a lot of times. Most people, when they think about a supply chain, do not think about the yard as their first thing, as we’ve talked about as well. But when you think about a connected supply chain, every piece of it plays a part in, and any inefficiency is gonna cost money and time as well.[01:08:30]

So again, this is where we’re experts in this space at The Yard Management. We move over thirty million trailers a year right now, and we’ve been doing this for thirty years, something we’re very proud of, and certainly having been a family business and having the opportunity to work with my dad and of course my uncle and sister still.

We’re very proud of it as well. And we’d love to bring that opportunity to other customers as well. And certainly, we thank the opportunity to tell a little bit more about our industry as well. And it’s just a great honor.

Joe Lynch: Thank you.

Yep. Thank you so much. I’ll make sure I put a link to your LinkedIn [01:09:00] profile, link to your website. Any other links you and your go-to-market team give me, I’ll put those in the show notes. So what conferences will we see you and the fine folks from Laser Logistics at in the coming year?

Adam Newsome: Yeah, certainly we’ll be at Manifest, we’ll be at ACT obviously for clean energy as well. We’ll be at RILA and Food Shippers, and I’m sure there’ll be a few more that we’re at along

Joe Lynch: way.

Adam Newsome: But we’d love to have the opportunity to meet with anybody

Joe Lynch: I love it. I love it. I always say to people, “Oh, you’re going to Manifest, I’ll see you there.” Now I stopped saying that because unless you plan it, you’re [01:09:30] not gonna see everybody. It’s gotten really big. But it’s the Super Bowl of logistics, and it’s usually right around the Super Bowl.

Adam Newsome: That is right. That is right, sir. Yes

Joe Lynch: I’m a Lions fan, so it’s okay for me to be on the road on Super Bowl Sunday.

It could be worse.

Adam Newsome: You could be a, you could be a Falcons fan.

Joe Lynch: You could be a Falcons fan. Excellent. Thank you so much for taking the time. I really love what you guys are doing, and this is, we… The title of this was why this is the biggest bottleneck in your supply chain, the yard. [01:10:00] I truly think it is one of those places. It’s just, it’s overlooked. It, we take it for granted, and we lose days, we lose hours on a regular basis because of what we’re doing in our yards. Anyway, thank you so much for taking the time, Adam.

Adam Newsome: Thank you. Appreciate it. It was a pleasure

Joe Lynch: And thank all of you for listening to my podcast.

Your support’s very much appreciated. Until next time, onward and upward.