Blythe Brumleve:
0:05
Welcome into another episode of Everything Is Logistics, a podcast for the thinkers in freight. We are proudly presented by SPI Logistics and I am your host, Blythe Brumleve, and we got a hell of a show for you today because we are going to cover a lot of ground. Guest today Matthew Leffler, from Armchair Attorney, also famous content creator in the freight space. We're going to get into a lot of legal issues going on within the industry and then we're going to get into a little bit of the power of content creation and maybe some Lord of the Rings talk a little bit later on in the show.
Blythe Brumleve:
0:36
No Rings of Power. This is a safe space from that abomination of a show which I'm still recovering from the PTSD from it. But yeah, we'll get into it later. We'll get into it later. Let's set the scene for today's show, because there's so much drama going on in freight when you have TQL getting sued, you have Convoy shutting down abruptly, you have Slink. io I don't know what the hell is going on with that situation. So this is why I wanted to have you on, so you could help us break down these complex industry things that are going on and then how we can sort of see the pathway out. So first, I guess, welcome to the show.
Matthew Leffler:
1:20
Thank you for having me, Blythe. It is always a pleasure to be able to talk with you, break down topics, find under understanding, find that place of compromise where we can both agree that we need more people to be fans of Lord of the Rings, even if all of the material that comes out isn't perfect. We don't want the perfect to be the enemy of the good, and even if it's not good, it could be better, and we want people to be encouraged that they should watch everything Lord of the Rings. It's very important.
Blythe Brumleve:
1:46
Well, hopefully my little increasing your volume there just didn't mess up as far as like computer notifications. So if you heard that, I'm sorry. I apologize that he was in the middle of a speech, but maybe I can remember that for later on in the show. If you start complimenting Rings of Power, I can just adjust the volume. Just mute me, is that?
Matthew Leffler:
2:02
the idea? That's. That's. I'm glad you have the power. This is what I always worried about when you had all the power Would it corrupt you and apparently like the one right, absolutely that siren, absolutely. No one can put it down, no one can give it up voluntarily. I understand, I understand. Thank you for having me.
Blythe Brumleve:
2:19
I'm so excited to be here. Yes, thank you for coming on the show, especially with such short notice. Like I said, there's just so many industry news topics that are draw. It feels like one after another. You can't really catch a break. It's almost similar to very much to like world news of all the you know worldwide drama that's going on. And then we have freight. That has its own little just not little, but a lot of industry drama. So what I was kind of hoping for is that we have a few different situations, especially around the freight brokerage space. So kind of wanted to talk about. You know, what's going on with three PLs right now? What's going on with freight tech? How do we move forward? So let's let's first start with the TQL situation. Now, tql is one of those brokerages that is made fun of a lot, especially in the meme space, but they are one of the top dogs, if not the top brokerage, in the entire industry. So what's going on with them and how should industry professionals, I guess, learn from this drama?
Matthew Leffler:
3:18
Yeah, so I have my, my TQL pen here. I got this from a dear friend of mine, charlie Safro. I love TQL. Let's let's set the stage. So a lot of stuff we're going to talk about is really market driven right About, like how the market and the freight recession has been going on and it'll continue for a period of time. Tql is this story, for TQL has nothing to do with the market. This has to do with incredibly bad leadership that is going to result in a massive amount of liability. So let's set the stage.
Matthew Leffler:
3:45
Tql is the second largest freight broker in the United States. They do about $8 billion a year in revenue, that's billion with a B. This is a big business and they have been brokering freight for over 20 years. Leader of this company, ken Oaks. So we're going to talk about Ken quite a bit. This case is really interesting. So here's the story.
Matthew Leffler:
4:03
Tql has this program and the program is for junior freight brokers. They call them in the lawsuit LAETs, the Logistics Account Executive Trainees, and once you pass this trainee period, you get to be something another name. They call it a Logistics Account Executive, but they call them a Junior Logistics Account Executive. This is what it's all about. Are you exempt or are you not exempt from overtime? This is the fundamental question that has been answered and asked over and over again in every single industry.
Matthew Leffler:
4:34
Tql took the position that if you are a Logistics Account Executive Trainee or a Junior Logistics Account Executive, you don't get overtime. And what we find is those folks, those men and women who go into the business of brokering freight, have about at the minimum, 26 weeks of being a Logistics Account Executive Trainee something like that half a year and they're working 60 hours a week. 60 hours a week. They're doing phone calls, tracking trays, cold calling all of the things that junior freight brokers do.
Matthew Leffler:
5:05
So in 2010, tql gets sued and they get sued under this thing called the Fair Labor Standards Act, essentially the statute that says who's exempt and who's not exempt. Lawyers were exempt. I don't get overtime. I can sit in a windowless office for 16 hours a day and it's always the same amount of money. I don't get more for working more, but in other spaces you do get overtime, and this was the fundamental fight. Blythe is whether or not these young, though, these junior executives or junior brokers, deserve or are required to be paid overtime. When this litigation started in 2010, it went to trial in 2022. The verdict came out in September 26, 2023. This is 13 years of litigation.
Blythe Brumleve:
5:51
Why did it take so long?
Matthew Leffler:
5:53
This is what we call bet the farm litigation, which is to say, this is the most challenging and difficult litigation you're ever going to experience as a business. If you lose, you can lose your business. So you fight tooth and nail about who the plaintiffs are, how you look at a class action suit, and so in this case, it's 4,500 brokers, all in the state of Ohio from 2008 to 2016. That is the class of people that are suing and it went to trial and TQL lost.
Blythe Brumleve:
6:26
Okay, okay, all right. Fourth out of TQL. First of all, I have a bunch of questions.
Matthew Leffler:
6:32
First of all, I love this, I love it.
Blythe Brumleve:
6:33
Okay, so TQL had 4,000 brokers that were affected by this in just the state of Ohio.
Matthew Leffler:
6:39
Yeah. So the way to look at this is TQL admits in their own depositions and in the discovery 95% of people who go into their program leave. They burn out, they go. So this is a meat grinder, this is an old school. Bring them in, break them over the wheel, throw them away and the cream will rise to the top and you move on. That is why you see me all the time talk about non-competition agreements, because that 95% that fail out all have a non-compete. They can't go back in this business.
Blythe Brumleve:
7:10
So that's one of those little kind of caveats to remember about this, so that makes a lot more sense now, while there's so many folks in Ohio that are making this or are making this judgment or participating in this judgment. Now my next question is how does TQL get to determine who is exempt and non-exempt?
Matthew Leffler:
7:32
from overtime? Yes, that's a great question. So that is the fundamental inquiry for this lawsuit is who told you to make them exempt or non-exempt? What was the reasoning behind this? And it's revealed in the deposition of Ken Oakes that he got that advice from the Transportation Intermediaries Association. He went to TIA and said, hey, I have these people, what should I do with them? And they said well, the other participants in the space call them exempt, we call them exempt, they don't get overtime. So those 60 hours a week, weekends, nights, holidays, whatever they're not going to get overtime. That decision was again made by TIA, or recommended by TIA, and Ken Oakes followed it. He didn't go to the outside counsel, didn't go to the internal counsel, just said I'll take that advice, that's so strange.
Blythe Brumleve:
8:23
Now go ahead. I'm sorry.
Matthew Leffler:
8:26
Well, this is the part that makes it so interesting. So these people that were working this job average salary was about, let's say, $36,000 a year. So if you're working that, you're probably making like $17 an hour or something in that range. If you're making overtime, your rate is time and a half, like $24 an hour. The liability in front of TQL right now, right now, for this one case in Ohio, on the most conservative estimate, is $100 million. On the high end it's like $200 million. Now why it's important to know these numbers and we'll talk a lot about it because it's amazing, but these are numbers that are uninsurable through your general liability policy. This is paid out of your operating capital. You have to take money from your bank and hand it to the lawyers and say here is your money and TQL lost.
Matthew Leffler:
9:19
They tried to make the argument that these freight brokers were administrative personnel, kind of like your HR department or your marketing department or your whatever payroll department, which can be considered exempt in certain manager positions. But for these brokers they were doing clerical work. They were all clerks They've called everyone to call them but they were just doing clerical stuff. And because they were misclassified and we look at these average amounts of 20 hours of overtime per person per week. And you take the 4,500 people, you can start doing those math and you can start getting those numbers. So that is why the litigation is so interesting, because this is how our industry operates. It is a systematic issue of how you classify a trainee. Once they start getting commissioned, you're done, you don't have to worry about it anymore. But if they're just getting straight salary draw, with no other commission or variable component, they're likely going to be considered exempt. I mean sorry, they're considered non-exempt, which means they must get overtime exempt being they don't get overtime. It's fascinating.
Blythe Brumleve:
10:22
I still have a bunch of questions about this one. Is it only exclusive to Ohio or does this have a chance to spread out to all states?
Matthew Leffler:
10:31
This is a contagion. So it's only Ohio. This one here is only Ohio. People keep asking, matt, can TQL handle a $200 million verdict? Of course they can. That's probably one quarter of their operating capital, their earnings, so they're going to lose an entire quarter of profitability. If you have four or five cases like this, your knees start to buckle. You get 10 cases like this, you're out of business. I don't care how big you are, how smart you are, and so this has the absolute potential to spread any place where TQL is doing this program and for any other freight broker who followed the guidance that was offered by TIA is also on the hook. Now two really cool things about this case. Oh good.
Blythe Brumleve:
11:17
Where did those balloons come from?
Matthew Leffler:
11:20
So Apple has a thing If you do this, it'll make balloons. I don't know how this works.
Blythe Brumleve:
11:24
Sorry if you're just listening. He just had a bunch of balloons go up in front of his face and I didn't know if that was a software thing on my end.
Matthew Leffler:
11:33
No, it's on my side and I should know that?
Blythe Brumleve:
11:34
Did you do that on purpose, based on the topic you were talking about?
Matthew Leffler:
11:37
No, I moved my hands, I talked with my hands.
Matthew Leffler:
11:40
I'm kidding, I'm kidding, I'm kidding. The first thing that's really interesting is this thing called liquidated damages. Liquidated damages is only awarded in these cases if it's shown that you didn't act in good faith. So there's a question that's given to Ken Oaks and TQL. When you were asked, are these people exempt or not exempt? How hard did you work to get the answer? Did you go to outside counsel? Did you go to local counsel? Did you go internal with your own company? How hard did you work? And under deposition, under the penalty of perjury? Ken Oaks says no, I just went to the TIA, I just asked them.
Blythe Brumleve:
12:14
That's all I did. Well, how normal is it to ask an association about hiring practices? You would think that if you've been in a brokerage business for at least 10 years, you have established hiring practices. So why, in that moment, did he feel as if he had to go to an outside association to ask a question that he probably already knew the answer to?
Matthew Leffler:
12:38
Yeah. So that's a really good question. I don't think we know the answer. I think there's a combination of. He knew TIA would likely give him the answer that he wanted to hear, because if you were to go into the wayback machine, you're going to add probably $10,000 to $20,000 in payroll expenses per person to do it the correct way, and that's really if your operating margins aren't super great. You're not going to want to make that change.
Matthew Leffler:
13:04
Number two a lot of these trade associations and I love them, I really do they make you think that they're indispensable. They make you think that they know everything about the law and compliance, and they don't. They're not fiduciaries, they're not out here saying I'll put myself in your shoes and give you the best advice. This is what everyone's doing. Okay, that seems like what I want to do.
Matthew Leffler:
13:26
So liquid data damages was essentially taking the total amount that TQL had to pay in backwages and doubling it. So that's how we get to the number from 45 million in backwages to potentially $90 million with the liquid data damages and if it's higher and I've heard inside people saying they think it's going to be closer to $200 million that's why it's so imperative. You have to do the job that you're hired to do. Now the part that I really find interesting if you're a corporate officer of one of these businesses and you're found to have violated the Fair Labor Standards Act, you are individually, personally, jointly and severally liable for the entire amount. So if TQL can't pay that $200 million and I can for this one it's on the hook for Ken.
Matthew Leffler:
14:16
And if you're a freight broker out there and I can't emphasize enough how important this case is if you're a freight broker out there and you follow this pattern and practice of how you classify your trainees, you are on the hook. You can be sued individually for everything that you have. I can pierce the corporate veil, I can get to your car, I can get to your bank account, I can get to your home, I can put a lien on your property and force a foreclosure. I will get paid. And so people have to understand when you make these shortcuts in making hiring decisions and classification distinctions, it's at your own risk, because if you don't know the law, it doesn't matter. We don't need you to know it, we just need you to know that we're coming for you.
Blythe Brumleve:
14:57
You know what this kind of feels like when you're driving down the highway and you see all those billboards that are like have you been in a truck accident? Call us and we'll get you the money you deserve. Is that kind of maybe what the future holds for freight brokerages?
Matthew Leffler:
15:12
Absolutely. I cannot emphasize enough the amount of people who have reached out to me, whether it's through Reddit or Twitter or LinkedIn, and said hey, do you know anything about Florida or Illinois or California, whatever? And these cases are going to come. They are going to come. And the other part that's important to note is, again, there's no insurance you can buy for this. Number two, you're personally liable for it. And, number three, it also rewards attorney's fees. So if you win, if you're the plaintiff and you sue and you win, you, the employer, have to pay the lawyer's bills for your side and their side. So the liability is substantial. And, tia, they made a statement when this case came out, when Ken Oaks was deposed, and they said they didn't agree with the ruling, which is to say, like they're not denying what they said, Like they're not saying we didn't tell him that, they're saying we disagree with the interpretation. So I'm telling you, frey Brokers, like if you think TIA knows what they're talking about as it relates to this issue, I would be very skeptical. I would take a beat and make sure that you actually are doing it correctly.
Matthew Leffler:
16:13
Now, this is the part of life I get really excited about because it makes it really keck. So let's say you are doing it wrong and you want to do it right. You're going to go to your Frey Brokers and say, hey, guys and gals, we're going to make you guys, we're going to make you pay you hourly. And they're going to say, well, that's weird, why is that happening? And they're going to Google it and they're going to see the case against TQL and they'll see people like us talking about it, because this case happened to Robinson, this case happened to Echo and they lost those cases. But those cases got buried because no one talked about it. This is why what we do is so important because young people don't know their rights. I have a bunch of pieces of paper on my wall that talk to me about how I know people's rights. So this is why this case is so interesting.
Blythe Brumleve:
16:55
It's really fun. Why do you say that? Because, just thinking of the model of Frey Brokers, I started working in one more than 10 years ago. It actually went out of business 10 years ago, so closer to like 15 years ago is when I worked in one, and it was just a constant effort for us to go to the college, down the road, find some people that are just fresh out of graduation and recruit them to come work for the Frey Brokers and you just make them hammer the phones. It sounds like that. That is just a normal thing that happens across Frey Brokerages. Is it safe to say that hiring practice will still continue? But they need to just classify them correctly.
Matthew Leffler:
17:39
Yeah, I think that'll absolutely, because it'll happen. So we need in this business, meat for the grinder and the meat can be off-shored labor which has a lot less rights to deal with and a lot easier and cheaper to do with. There's a lot of brokers have moved in that direction, but they still need young people in the United States to come and do these cold calls and do all the tracking, tracing, all this and they're going to do the same practice they always have. If they make the challenge, they decide to classify them as exempt. They're not going to be successful long term. They will come, and that they will come soon. And the liability is astonishing. It's astonishing and it's a massive amount. So we'll see what happens.
Matthew Leffler:
18:15
The next phase in the TQL litigation is the damages phase, so liability has been established. It is absolutely the case in Ohio. In this case, you have to pay overtime. The next probably month or two, we'll start getting the data about how much that's going to be and then it'll be settled or it'll be gone. The verdict will be issued and then it'll be appealed. Like there's no doubt in my mind, tql will appeal this thing, no matter what.
Blythe Brumleve:
18:39
That was going to be. My next question is how long is this actually going to take?
Matthew Leffler:
18:42
Yeah, I mean. So a good example to think about this is there's a Werner Enterprises case down in Texas, a horrifying tragic accident. $98 million verdict. Werner's appealing it. There's a lot of facts that are interesting in that case. But it's already over $10 million, maybe closer to $15 million, in interest. So if you decide you're going to appeal, you have every right to do so. But that interest doesn't stop. It just keeps ticking up.
Blythe Brumleve:
19:09
I had no idea there was interest on settlement awards.
Matthew Leffler:
19:12
Oh yeah.
Blythe Brumleve:
19:13
It makes sense, Otherwise you know.
Matthew Leffler:
19:17
There's pre-trial, there's pre-trial interest and there's post-trial interest, and it's absolutely collectible. So what the people in the TQL litigation are going to be entitled to is all of the back wages, the liquidated damages which is doubling the initial amount attorney's fees, pre-judgment, post-judgeant interest and any costs and the costs like TQL is going to have to make a website probably, and send out letters and emails to every former in person in Ohio and say, hey, you're probably part of this class, You're probably entitled to some money. Here's how you file your claim to get your capital and it's going to be wild. It's going to be very interesting over the next couple of months.
Blythe Brumleve:
19:51
Do we know if TQL changed their hiring practices like this when the suit first started, or did they continue as business as usual?
Matthew Leffler:
20:01
I don't know the answer, so it's conflicting. I've had former TQL people say that it's still done as a salary. Some have moved, said it's actually become hourly. It varies state to state but this is a federal statute so it all. Honestly, they will all have to be hourly as trainees. There's no doubt in my mind, and other big brokers that have been following the same pathway, will have to adopt a new strategy, because you cannot do this. It's not sustainable.
Blythe Brumleve:
20:25
I just find it so just fascinating that they would not conduct inside council or talk with them. I mean the brokerage I worked for, you know. I think at our peak we made close to 300 million. It's a drop in the bucket compared to $8 billion and you didn't have in-house I would imagine you should have an entire legal team of dozens of people and set an $8 billion operation.
Matthew Leffler:
20:52
So one of the things that's important to note in this litigation was this question of willfulness willfulness of TQL violating the law, and what willfulness means in the context of this case is the statute of limitations, like how far they look back goes from two years to three years. So if you knew the law and you made the wrong decision, your exposure is increased. So there's always there's an incentive, I think, for some people to have plausible deniability. So in this case, tql was not found to have willfully violated the law. Even though they were, they didn't act in good faith to validate the right answer. So here's the question If you go to outside council and they go to me say, matt, what should we do?
Matthew Leffler:
21:33
And I say, ah, you should classify them as non-exempt, because they're non-exempt. And they say that's going to hurt our business model. And I say I don't care about your business model, I'm talking about the law is. And they'd say, well, we'll do our own thing anyway. So there's a there's a level of being able to put your head in the sand and not actually be found to know the answer when there's no doubt, like they all knew what they were supposed to do. They just chose not to do it, and I understand that mentality to an extent.
Blythe Brumleve:
22:01
Are you in freight sales with a book of business looking for a new home? Or perhaps you're a freight agent in need of a better partnership? These are the kinds of conversations we're exploring in our podcast interview series called the freight agent trenches, sponsored by SPI logistics. Now I can tell you all day that SPI is one of the most successful logistics firms in North America, who helps their agents with back office operations, such as admin, finance, it and sales. But I would much rather you hear it directly from SPI's freight agents themselves. And what better way to do that than by listening to the experienced freight agents tell their stories behind the how and the why they joined SPI?
Blythe Brumleve:
22:41
Hit the freight agent link in our show notes to listen to these conversations or, if you're ready to make the jump, visit SPI3PLcom. Do we know how? Originally, because if you say, like you know, 95% of the brokers that came through this meat grinder end up just washing out how did they start to first like formulate that this is wrong, we shouldn't be doing this. You know we all need to get together and, you know, do something about this.
Matthew Leffler:
23:08
It takes one person. It takes one brave person who's like I think that this is wrong and I'm going to make a claim by myself with a lawyer and then that lawyer can then explore are there ways to get more people involved? But at the end of the day, most people don't want to be seen as litigious, like they don't want to sue their former companies. They don't want to get that mark on their resume that says I sue former employers. So for their own preservation, they're not interested in doing that necessarily.
Matthew Leffler:
23:35
The other part of it is it's a culture Like if you're, if everyone tells you and your HR people tell you this is the legal way we do it, you don't know any better. I mean, they're not hiring a bunch of lawyers like me to be brokers at TQL. If they did again, that'd be a bad decision. I wouldn't recommend it. But that's the issue. Like we don't actually know. You know how many people find out or how they learn about this, but what they're going to do is they're going to see, they're listening to podcasts like this, they're going to look at articles in freight waves and other publications and they'll understand they do have rights and then that hopefully gets them moving to make the phone call to the attorney and understand. Do I have a claim? What's the process for filing one?
Blythe Brumleve:
24:13
Do you have any kind of guesses on how prevalent something like this is happening across all freight brokerages? Is it 30%, 40%?
Matthew Leffler:
24:24
We're going to find out. I guarantee you, the next round of these litigations are not going to be just opposing the senior leaders of the folks at the company, they're going to oppose the folks at TIA and they're going to say tell me how many more people you told this to, because there's going to be freight brokerages out there. I guarantee you 10, 15 people, shops that have four or five employees that are considered exempt, working $32,000 a year at 60 hours a week. There's no doubt in my mind and in this environment which we'll talk about convoy, we'll talk about slink you don't have a lot of margin anymore. You don't have the war chest to fight that litigation, and so if you're already on the cusp of insolvency, this will destroy you. Litigation like this costs a company $20,000 to $50,000 a month, and that's before it's in trial. That's just doing discovery. So this stuff, oh life, it's so exciting, it's so much fun. The lawyers out there, they're chomping at the bit, they're like, oh wait, the billboards are going up, they're going up.
Matthew Leffler:
25:24
They're going up. Every loves every TA pilot fly and J call me, I'll get you money, I'll get you paid.
Blythe Brumleve:
25:31
Do you think this is still prevalent in the industry right now?
Matthew Leffler:
25:36
Oh yeah, absolutely 100%. I have no doubt. I mean, just from the inquiries that I've been fielding, it is absolutely prevalent, it still exists. As to how pervasive it is, I don't know, but it's clear that it's not a rare phenomenon from my encounters with folks in the business.
Blythe Brumleve:
25:53
How do you think this reshapes brokerage as a whole?
Matthew Leffler:
25:58
I would be very skeptical. If a broker can survive in that kind of environment, what I will say is it will exacerbate and accelerate offshoring and automation. A lot of the work that these entry-level people do can absolutely be automated. There's no doubt in my mind.
Blythe Brumleve:
26:15
The tracking and tracing. It will just increase it.
Matthew Leffler:
26:17
Yeah, You'll find ways to reduce your cost and reduce your liability. Offshoreing saves your life. It saves you in this. There's no overtime when you offshore. Maybe there is locally, but not to the extent we experience the United States. I think it just continues this trend that accelerates to automation and offshoring. The people who survive and want to do it all domestically, they'll have to make some changes.
Blythe Brumleve:
26:36
That means less operating margin probably Probably more investment in technology, which brings us to our next freight drama piece, convoy. Unexpectedly or maybe expectively, depending on how closely you follow the news declared that they were going under. I don't know if that's the right phrasing to use, but they ceased operations in their current form just a week ago. Depending on when you're listening to this, we're recording this in late October. Just a week ago, they ceased operations in their current form and now are exploring technology buyouts. They first entered the scene. I believe you probably know more about this than I do.
Matthew Leffler:
27:16
Yeah, I'm not sure. I think it was early 2015.
Blythe Brumleve:
27:19
I was going to say 2013.
Matthew Leffler:
27:22
Yeah, they're not super old. They're founded by non-drucking people. Go figures and that exciting. The reality is that Convoy came out thinking that they were going to create an application that truck drivers would use to accept loads. What Convoy? Their thesis was if shippers use our platform to find drivers, we can automate the finding of the driver. In that development, they ended up adding trailers into their fleet. They had about 4,000 trailers. Ultimately, their belief was they could automate and remove brokerages. That was wrong.
Blythe Brumleve:
27:57
That was a dumb idea. The digital freight brokerage movement, I think, is what they coined.
Matthew Leffler:
28:02
Yeah, exactly, they really did think that that category would remove the general freight brokers. The story of Convoy is fascinating. These guys and gals raised almost a billion dollars from a whole bunch of very sophisticated people. They played a game of how they valued the company. For your listeners who have a little mind for finance, the way we talk about value in transportation is a thing called EBITDA Earnings Before Interest, taxation, depreciation, amortization Silly Buzzword, but it really just says how profitable are you After you take out all this other stuff? How much money do you still have? These digital companies, these software companies? They don't have that. They take a dollar and then they spend a dollar or they spend two dollars. They don't ever actually have general profitability. When they go to market and they say how valuable are you, they look at their revenue and they times it by 10. If I'm a $300 million dollar freight broker, like you mentioned before, and I'm a technology company, I'm actually worth $3 billion, which is what Convoy's highest level of valuation actually was.
Matthew Leffler:
29:07
It's absurd, it's pretend, it's pretend money, it's a pretend way of communicating what you do. They're all trying to say we're going to be the Facebook of freight or we're going to be the Amazon of this or that and we're going to be the Uber of this. They get this crazy amount of pretend stuff but then ultimately the money runs out. When the money runs out, you don't have a business anymore. That's the story of Convoy. Convoy was doing great. I mean, they had all the great marketing, they had their logo on all sorts of places, but for them they weren't actually making money. They weren't profitable. They still had a need for investor capital to help them continue operations In this environment. There is no more money. No one's coming out there and saying I'll give you $500 million to keep your brokerage alive. For Convoy, when the money ran out, the business model imploded. As of this recording on October 25th, they're not in bankruptcy yet, but they are certainly on the cusp or likely preparing those same files.
Matthew Leffler:
30:09
This is a freight brokerage that had some software. Now the story we see now is someone might try to buy just the software, not buy anything else, just the tech. We'll find out what the value is, but I heard stories of this company going to big enterprise brokers and saying would you buy me? They look for how much? Oh, we want a billion dollars. We want our investors to be made whole. People who gave us money want to pay them back. They're laughed out of the room. They're laughed out of the room. I heard a number. Someone had offered Convoy $50 million. This is wild speculation. Don't take anything you hear from this as being accurate. But this is the rumor that I heard. What a far cry that is. You take a billion dollars in private money and you only have $50 million to show for that. That is absurd.
Blythe Brumleve:
30:56
Who is giving these valuations? How are they on two different sides of the spectrum here? Is it basically just you're worth what somebody's willing to pay?
Matthew Leffler:
31:07
That's to an extent. I think the story you tell is if I can take the market share, I can turn it into money. I can make it really profitable. Give me money and I will buy my way into being a real player. Then eventually I'll have so much market share I can make some adjustments on the sides and now we're making a ton of money. This is how technology has always been done. You look like Theranos, right? Elizabeth Holmes, yes, of course. She's a great person. She went out there and she convinced people. She made a testing machine that can do all this magical stuff, and she never did.
Matthew Leffler:
31:39
But the investors they have a fear of missing out. They don't want to miss the next Facebook. They don't want to miss the next Amazon, these companies that they have the right pitch man, they can make you think that they're going to be that thing. Who gives money to Convoy? Well, bezos did, amazon did. Oh my gosh, how could they fail if Amazon's throwing this money at them? This was the behind the scenes thinking is the smart money will throw at us and we'll eventually get to a place where we're dominant. The challenge they ran into, like everybody, is moving freight. It's not easy Just because you have an app that a driver may be able to give you track and trace information doesn't mean they're going to do it correctly and you still have to call if the driver doesn't show up, like there's still all these other problems. So this is why a convoy ultimately was unsuccessful, and I think they were too soon. I don't think that their hypothesis is wrong. I just think that ultimately they're not ready in this business.
Blythe Brumleve:
32:30
They didn't have enough freight people who understood it, and so this might sound like a really stupid question. Did they have any traditional brokers that worked in the convoy office?
Matthew Leffler:
32:39
Oh yeah, they became a brokerage. I mean they would take the investor money and spend millions and millions of dollars getting more technologists and getting more software developers, but they absolutely had brokers, like they probably needed a lot more brokers, just like when Uber Freight bought, I think, transplace. They had to buy the right mentality and I think that they mistook how valuable actual brokers are and the brokers that are real, like the real brokers, didn't have a seat at the table, as far as I could tell, with convoy. It was all technology people and they didn't understand what, when the market shifts because it always shifts how you prepare yourself for it.
Blythe Brumleve:
33:21
Do you think that at its core? Because, from a lot of just reading just after this news dropped, reading between the lines, I've never used convoy software. I wouldn't have a need to highly respect what they were trying to make waves. Ultimately, you shoot for the moon. Sometimes you miss, especially if you have. The biggest criticism I've heard is that they've done so much money, but I've still heard that the technology is quite good.
Matthew Leffler:
33:48
Yeah, I mean, I think that's someone will find value in good technology that can connect you to drivers, like there's something really important and useful there. But the reality was like you go to the trucker subreddit, to the freight broker subreddit and you see the money that's being posted. It's not great, it's not a terrific software. It doesn't really do anything revolutionary necessarily. I think if you were to put a fast forward, like 10, 15 years, yeah, you'll have autonomous trucks that can take digital requests from a technology convoy to go move a load for proctoring, gambling. That makes sense. That'll happen. But as of right now, most drivers multi-home. You cannot, as a truck driver, you cannot live off that app alone and be profitable. You are still going to DAT, you're still going to truck stop, you're still doing whatever you can find. So it was never a solution for everybody. It was a nice to have.
Matthew Leffler:
34:35
When convoy presented that to shippers, they didn't present it that way. Or to investors, they didn't present it that way. They'd say we have 80,000 truck drivers, or 100,000 truck drivers. Like, how many of them are used to your software every day? How often do they open the app up? Oh, once every two weeks. Okay, then you don't have 100,000 truck drivers. You have a fraction of that. So it's all about how they put this together, and I think the investors are not as sophisticated as they think they are, and I think that the technology companies don't do a very good job of understanding the space they actually want to occupy.
Blythe Brumleve:
35:06
So what do you think is next for these digital freight brokerages?
Matthew Leffler:
35:09
I mean, there are a few of them that are still, oh, bankruptcies, they what I mean. I think that the real takeaway for me, I think the real take sorry, I'm getting some lag on my side so I apologize I think the takeaway is gonna be we're gonna see a lot more bankruptcies. Many of these companies were not designed to operate in this environment economically and the access to cash is not gonna be there. The access to debt is not gonna be there. Interest rates are high. So the takeaway is gonna be some of them will survive, many of them will fail, and that is probably the best possible outcome, because we need to have the market reduce capacity for everything, and that may be useful. The bigger takeaway is, I think, this like then, the central thesis is correct Like, you will not need brokers to do everything. There will be so many other pathways to automate that process. I just think convoy came in too soon and they didn't have the right leadership to figure out a way to actually transition to a real business.
Blythe Brumleve:
36:07
Are there any brokerages out there that we can kind of like point people to that are doing things just from an outsider's perspective, doing things the right way, balancing relationships, sales and technology, that are kind of combining those three things the right way?
Matthew Leffler:
36:24
Yeah, I would say companies like Freight Vana seem from the outside to know what they're doing. I think Loadsmith is also kind of learning that same idea you need to have access to for these digital freight brokerages. I think you have to have access to trailers. Like you're not gonna make a great business model without having some trailer capacity you can promise to a shipper. But I think there are some that there have not been. If their operations are dependent upon investor capital, they're all gonna fail. If their businesses are actually profitable or break even without taking out a bunch of capital or debt, then they're in pretty good shape. So I think there are some that are out there, but those companies don't market themselves as technology companies. They're very clear we use technology. You can't run a business without technology. But you're not a technology company. You're a freight broker that has access to technology.
Blythe Brumleve:
37:12
Which I think, when everything is all said and done. I saw someone say this I apologize for not crediting you, but the best thing that Convoy did was to force other brokerages to adopt newer technology.
Matthew Leffler:
37:23
Yeah, I think absolutely. That's a great line. I mean, I think that's exactly right. We are in a below average industry. It's a massive industry, but it is not as good as it could be, and there's a lot of things that are wrong. One of the things that I think is wrong is technologies that aren't connected and not being innovated. Now you look at someone like JB Hunt, 360 or Werner with their technologies for Drop and Hook and Power. Only they're all gonna catch up. They're all there already and I think we'll see just more of that over time.
Blythe Brumleve:
37:50
Do you think when you say more of that over time, do you see a world where we just have like a I don't know, five to 10 really big tech-focused brokerages or cause? To me, like a freight brokerage has always been that thing where you could start and you could, as a blue collar job like you could well kind of blue collar that you could start and see a pretty good amount of success, you know, even just being a broker, being a freight agent, things like that. Do you see a world where those roles still exist in that way or is?
Blythe Brumleve:
38:22
it a world where like five or 10 companies are gonna dominate at all.
Matthew Leffler:
38:26
I think it'll always be highly fragmented and the value of a broker is not gonna go away Cause they're gonna know things that are just not on the technologies out there. That being said, it's not efficient. I mean, in my mind that's not efficient at all. I think you look back at the idea of, like before deregulation, when it was, all you know, a handful of trucking companies did everything. That was a simpler and likely, you know, easier to install model, but it's more expensive. So I think you're gonna have this, the same kind of challenge you see today, just at a different level. So it's still gonna be fragmented, it's still gonna have freight brokers, it's still gonna have technology. I do think that it would be nice if we could get a singular system that everyone can understand and use. But everyone is coming out and saying, well, we can do that, just let it be our platform first. It's like, well, we're not all gonna jump to you, you know I'll jump to me. So it's still gonna be fragmented at some extent.
Blythe Brumleve:
39:15
Which I think is good for overall competition.
Matthew Leffler:
39:17
So oh, absolutely, I think with autonomous trucks I mean, if we see the FMCSA come out really hard with a level four and level five automation, like truly no driver in the truck, then the need for and the desire and the ability to do a platform that doesn't involve brokers becomes a lot easier, Cause those robots don't take meal period breaks. They don't take that.
Blythe Brumleve:
39:36
I don't know that autonomous trucks are gonna happen. I'm one of the. I think the truckers have got to me.
Blythe Brumleve:
39:43
I was, you know, definitely, like you know, when you see these trucks up close and don't people, don't truckers don't kill me for saying this but they look incredible. The technology is so crazy. It's the the light arc and I love, you know, our archeological fan, I love that sort of stuff. So, like LiDAR cameras, the fact that these things are on the side of a truck, and if you've seen them like, I've seen them at Manifest, the future of logistics conference. It's coming up in January. You know, check my link in case you want to buy your ticket, save $200. Okay, quick plug.
Blythe Brumleve:
40:14
But a lot of those trucks. They're so impressive that you can walk up and the LiDAR cameras are by far my favorite, just because you can. You can see it in action where there was one of these trucks that they had a TV on the hood of the truck and then you could. People would be walking by on the trade show floor and you could see the LiDAR camera picking up every arm, elbow, finger, foot on every person that was walking by, very, truly impressive. But I just, you know, is seeing a lot of what's going on with crews out in San Francisco, a lot of those issues you know, with the bottlenecks, with the cars actually running someone over and, I think, dragging them for like 20 feet or something like a lot of those things. And that's just residential. I think residential is incredibly tougher for, you know, autonomous vehicles. I just don't know that. I see, I think, one bad accident from an autonomous truck, especially on a long haul, and that's gonna be it. The government's gonna shut it all down.
Matthew Leffler:
41:16
I don't disagree with you. Here's what I would say. First, I'm gonna introduce you to a friend of mine, michael Beezinger, from Kodiak. I want you to talk with him, so you can get him.
Blythe Brumleve:
41:25
I have interviewed the founder Dan.
Matthew Leffler:
41:27
Okay, there you go, he's great.
Matthew Leffler:
41:29
Yeah. So they are moving freight today with autonomous trucks, like they are moving things in trust state Within a given state. There is a safety driver who is sitting in the truck watching it go. The thing you have to keep in mind is the way I look at this stuff. If it's possible, it becomes inevitable.
Matthew Leffler:
41:46
So deregulation was the biggest innovation our supply chain had in 50 some odd years.
Matthew Leffler:
41:50
Independent contractor even more so the ability to control somebody but not have to pay them all these and slay benefits. So there's no doubt in my mind that these trucks will ultimately be more pervasive, they will become more affordable and I think there'll be a place where certain routes will be preferred to have robots do it, cause it'll be consistency, it'll be cost savings. The two biggest costs in transportation are labor and fuel and they kind of rotate which one's the biggest? Usually it's fuel, but if you can reduce labor cost, that is a way you bring down cost of goods and you look at things like Outriders, an autonomous spotting truck manufacturer this is on non-DOT regulated soil when they're moving these trucks around inside of a warehouse or a rail yard. So I see it as an inevitability. Now is it five years, 10 years, 15? I couldn't tell you that, but there's no doubt in my mind that if you look at the ATRI surveys like what motor care is care the most about? Their biggest concerns are about driver compensation, driver retention, driver shortage and all of those buzz words.
Blythe Brumleve:
42:52
I was gonna say, that's gonna get people triggered too. We need robot. You say driver shortage.
Matthew Leffler:
42:56
Yeah, I see, I'm with you. I think we have a shortage of drivers who wanna do terrible jobs but don't pay very well, like that's the issue. So we can't find enough drivers to work for 20 bucks an hour going over the road. They don't wanna do that. So, yeah, I'm with you. I just I do think that we'll see robots sooner than later. And for the robots listening, I'm on your side. I will betray the humans in a heartbeat, like I love. The humans are great, but I'm on your side.
Blythe Brumleve:
43:18
Yeah, listen. If you can do all of my marketing and cut a good clip for YouTube shorts, I'm on your side too.
Blythe Brumleve:
43:23
There you go see what I'm like, so I do think I think fully autonomous. I couldn't even guess if that would ever happen in my lifetime, but I do see a future with having autonomous trucks plus a driver. I still think you need someone there to take over. If there's congestion on the road, you have to have somebody make that quick adjustment inside the truck and override the technology Cause sometimes I just think that we're over reliant on technology when the human mind is still there. That can make a good driver is invaluable. An experienced driver is invaluable. The problem is is that it is similar to the meat grinder of the freight brokerage industry. You have the meat grinder of the recruiting process of these CDL mills and getting drivers that are being trained by drivers that are. You know, I've only been six months on the job before they become a trainer.
Blythe Brumleve:
44:15
It's that that is a level of danger, like even though I'm pro driver, but that is such a level of danger that you know there's folks out there that are doing a good job of spreading awareness about that. So I think that we need to have like a happy medium with the experienced drivers and technology. It has to somehow come together, because having inexperienced drivers in charge of you know something that's you know, 50,000 pounds, if not more, is just a recipe for disaster, I think.
Matthew Leffler:
44:43
Oh, you're exactly right. I mean, I think, just to build off that we saw Governor Newsom in California veto a bill that was going to mandate a safety driver in autonomous vehicles for trucking. And so even OIDA, who's the owner operators, their interest group they had tried to make sure that Newsom did not veto this, which was again letting someone not have a driver inside the truck. If the safety case can be proven out, I think it becomes impossible to stop At this stage. It's a really good collision avoidance system, like we have cameras facing the driver, facing outside, all these things, the sensors are everywhere. It is a matter of time before these things become more pervasive and for my purposes I don't see how it doesn't happen in a way that is profoundly changing to our industry.
Blythe Brumleve:
45:29
I mean, it could also have a massive effect on, you know, just autonomous technology in general. You know, I was reading a story the other day that was talking about or I was watching the All In podcast and David Freeberg, who is my favorite person on that show. He was talking about how much of just from a theoretical perspective, that we as a nation have become so risk averse that we have there's one cruise car accident and we halt the whole damn thing and we stop progress because of one incident, whereas if you compare it to human drivers, you know it's still the.
Blythe Brumleve:
46:03
you know, drunk driving, impaired driving, distracted driving not wearing a seatbelt or all leading causes of death just across the country. And so if we can have some of these technology solutions that can still give power to the driver, I think there's a happy medium, maybe that we can meet in the middle, where you know you still have the driver that's empowered to make a decision when it calls for it. But you know, for a lot of the, you know the everyday decision making, you know just taking maybe that decision making out of the hands of the dummies who are drinking and driving and who are impaired, driving and you know, causing accidents and ruining families.
Matthew Leffler:
46:40
Absolutely. I'm with you there, absolutely.
Blythe Brumleve:
46:43
All right and more positive news. The next one on this list is Sling. I'll be honest with you with Sling. This one came out of nowhere for me and I'm trying to understand where it fits in the overall sort of I guess news landscape outside of the owner just stealing money, essentially.
Matthew Leffler:
47:07
Yeah, I think we can kind of bridge it for both the convoy discussion and the TQL discussion. So TQL, fundamentally my opinion is a failure of leadership. It's leadership that was not proactive and being compliant and that's why they got hit. And then convoy was. You know, capital markets shrank, they couldn't raise any more money and they had to wind down. Sling is a combination of malfeasance of the owner, so Kirchner I think it's Chris Kirchner's name, I don't know, I never met him Found one of the CEO of this company, sling. I to this day do not know what Sling did. It sounded like they did something with data and machine learning and algorithms.
Blythe Brumleve:
47:40
So they did integration, software integrations.
Matthew Leffler:
47:43
Oh, perfect, yeah, that's what we need. We need more of that. So they had raised about $70 million or so over the course of however long they were doing it and their CEO Kirchner he had, I think it was their Series B, maybe even Series A had that money directly funneled to his bank account. And then he bought a jet and the Securities Exchange Commission said we don't like that, that's not what investors money is as one does yeah exactly.
Matthew Leffler:
48:10
So he got in trouble. He's under indictment, he's got all the legal stuff going on. But the reality was Sling is a technology company that had been valued at almost $300 million or some bizarre number they had gotten to, which was a function of their revenue times a multiplier, and we see this filing. It's a very strange filing. It's called an assignment for the benefit of creditors and I'll break it down because it's really interesting. But Clarissa Haas has a great article that came out with Freight Ways talking about this thing. I might have been mentioned in it with some background information.
Blythe Brumleve:
48:45
I did read that article. Great, I love Clarissa like part of her bank.
Matthew Leffler:
48:48
Oh, she's great, she's fantastic. But the story is like if you're going to go bankrupt, you have to file bankruptcy. A trustee is appointed to administer the state, like the bankruptcy estate, and then that trustee takes whatever assets you have and hands them out like pays off your legal defense, pays off the trustee court, pays off your secured creditors, pays off your unsecured and whatever's remaining if there's anything remaining that goes to the former shareholders. They get their money, whatever's left, on a proportional basis and they're done. What Sling opted to do is not do bankruptcy. So bankruptcy has two main things. The first thing is called the stay. The bankruptcy stay says all of your suits stop, now they're done. And the example I'll give you is in yellow's bankruptcy, the biggest trucking bankruptcy in US history. They had gotten sued for a violation of a war and act. It essentially is like if you're going to do a mass layoff, you got to tell your people, you got to tell them hey, we're going to lay you off in two months. Well, that lawsuit, that litigation was stopped and it got brought into the bankruptcy court Because the bankruptcy court's saying I don't care what's happening anywhere else in the country. This is the only thing that we're talking about is the bankruptcy. Everything else is stopped, so the stay is incredibly powerful.
Matthew Leffler:
50:03
The other thing at the end of bankruptcy is the discharge. All your debts are gone, walk away. Maybe there's a payment plan, maybe not, but you get to get your debts discharged. So the ABC, the assignment for the benefit of creditors, is like a bankruptcy light, for lack of a better word. The company chooses who will be the person who they're going to assign their rights to. So imagine you have your own rights as a person. You just give them to someone to be your power of attorney, or like Brittany Spears giving that power to her parents. That's an example. Exactly A conservatorship is very similar to an assignment for the benefit of creditors. You're giving all of your rights to this other entity and they're going to deal with everything.
Matthew Leffler:
50:45
So what we find with Slink's filing? It's really sad. They have about $1 million. They have about $1,500,000 in cash on hand and about $1,500,000 in accounts receivable. They have a bunch of laptops and then they have their intellectual software technologies and they owe about $1.5 million. So whatever valuation they have, whatever amount of money they brought in, that is. All that's left Is about $1 million in cash, bunch of laptops and some intellectual property, and someone will buy the intellectual property. Someone will buy the laptops and if there's money left over, the shareholders, like Goldman Sachs, will get some of that money.
Blythe Brumleve:
51:29
So with the TQL incident the executives are on the line for some of that financial obligations, but not in Slink's situation. The executives are not on the line.
Matthew Leffler:
51:39
So Slink's situation. Raising money and failing to make a profitable company is not a crime. That's just bad luck as a business and your shareholders, your investors, will lose out their money. What Kirschner did is a crime. If you say I'm going to use this $25 million and I'm going to hire the best developers out there and I'm going to hire the greatest marketing people you can imagine, and then you say put it in my personal bank account and I'm going to buy a plane, that's a crime. You're going to have problems. He'll have to reimburse the company and it may or may not be a good amount. It probably won't be able to be reimbursed, like they'll sell the plane wherever else he has.
Blythe Brumleve:
52:16
I was going to say why don't they just sell the?
Matthew Leffler:
52:18
plane. Oh yeah, they'll sell everything. They're going to sell it all, and he's probably going to go to jail, I'd suspect, and then that money will go back to the estate or the back to the company that's been assigned its rights to some other entity and it might still survive. Slink may still live at some point, but as of right now it's not bankrupt, so it's still alive as an individual business. It's winding down.
Blythe Brumleve:
52:43
I mean it's a lot. But I also, especially when the convoy news dropped, I just couldn't help but think, because I went through a business closure, an abrupt business closure asset-based 3PL 10 years ago shut down abruptly and it was so traumatizing to have these outside bankers come into the office and start dictating what you should do, what emails you're allowed to send, just dictating your role as an employee. And they start doing a lot of shady things and you see all of the TVs and the chairs and the printers and the computers. They start getting post-it notes on them depending on who they're going to sell all of your equipment to. It's like you just watched your entire life career-wise just be put up for auction and you have no control over it whatsoever. So I have deep empathy for everyone at convoy, at maybe at Slink, if they're going through the same things. What is there any positives we can take out of these cases? Is it maybe readjusting the market back for better market conditions? For the rest of us who have survived, what does that look like?
Matthew Leffler:
54:02
So the most effective companies in the space are able to flex when markets are good and when markets are bad. And I've been in transportation for a minute, right, my dad's a roadway guy. My grandpa had a small fleet of grain hauling trucks Ebs and flows is the business. This is how it is. The reality is we don't see a path to real recovery and freight until at the earliest Q2 of next year. I've heard Q4 of next year. I've heard even Q1 of 2025. And if that happens, many companies will fail. Many people experience what you experience, which is watching a company wind down, be auctioned off, chopped up and pieced out to make the shareholders and make the debtors get their money back. I don't think there's any real silver lining other than we must have the capacity removed Come heck or heck. There's a great number of companies that will not survive.
Blythe Brumleve:
55:01
And, like you said earlier, the cream rises to the top.
Matthew Leffler:
55:04
Yeah, this is the way it's always been. Like that's. The thing is like this is a bad turn, maybe worse than two. Maybe I'm part with 2008,. But the reality is like this is how it's always been. It's always been feast famine, feast famine, and people get sent home because the day there's no work for you today, and I think this will just encourage people when they look to make jobs and make changes and look for companies that are really stable. Publicly traded multinational corporations are probably going to be fine Like they're going to be fine. It's the small mom and pops, he's privately held, or any company that exists off of investor cash, and if the business is all about like we finished our series B and we raised $10 million, that money will be spent in 12 months and then you have to get more money and if you haven't shown the thesis that you're correct in your assumptions, that will go bankrupt too.
Blythe Brumleve:
55:54
So I guess sort of the next phase of this conversation. Hopefully you don't have to go any time soon.
Matthew Leffler:
56:00
I got to tell the world. I just wanted to make sure we're good, we're good.
Blythe Brumleve:
56:05
I wanted to say, too, that, unfortunately, that company I worked for 10 years ago closed down, but they were also started in late 2008, 2009. So they started in the middle of a downturn, probably one of the worst freight recessions that we've ever seen. So I do think that we're going to see you know that that's where the new businesses are. Sort of what is the analogy? That, like the forest fire, burns everything down, so new growth can start. So I think that that's probably a safe analogy moving into 2020, 2024 and 2025. But I also think it's a good indicator. If you are, you know, maybe you're listening to this and you're one of those unfortunate employees for so long, sorry that you're going through all of this but I also think that it's an opportunity maybe to think about entrepreneurialism, which is, you know, something that both of us have taken the leap on and you know, for you in particular. I'm just curious. You know you have armchair attorney.
Matthew Leffler:
57:00
You are still a practicing lawyer or I am yeah, absolutely, I practice, I dabble.
Blythe Brumleve:
57:07
Okay, and what else do you have? I know you've got a bunch of other things going on. So I wanted to talk to you about that as well.
Matthew Leffler:
57:13
Yeah, so my background is eclectic, as you kind of mentioned. So the armchair attorney is a law firm that I own and operate. I have a very small client base. It is my hobby. I'm very clear about that. It is a hobby to run my law practice Very, very limited client base. I like it that way. I have a software company that is for the inspection and repair of commercial trailers, because I love trailers. And then I am currently the vice president of sales and marketing for a company called Contract Leasing Corporation, a 32-year-old trailer leasing business with over 18,000 trailers in circulation. I work underneath the founder, mike Gore. It's a fantastic business and I finally get to put my love my love of commercial trailers and my desire to help people understand things together, and so those are the things that I do. I'm a gecko enthusiast. I have four children. I have a 10-year-old, a 7-year-old and I have twins that will be one year on November 15th.
Blythe Brumleve:
58:11
I'm sure they are so cute.
Matthew Leffler:
58:13
They're ridiculous. Oh, I have no idea what I'm doing.
Blythe Brumleve:
58:16
The favorite part of my Twitter slash X feed is seeing the updates of your children's growth progress.
Matthew Leffler:
58:23
They're walking now and they're making noises. It's absurd. It's not what I anticipated at all, but it's going fast. They say the days are long, but the years are fast. These years are very, very fast.
Blythe Brumleve:
58:38
So one thing that I don't hear people often say is I love trailers. So where does that stem from?
Matthew Leffler:
58:46
Oh my gosh, this is my most favorite thing to talk about. So I'd mentioned my father, a roadway guy, in 1976. First job was night supervisor at their facility in Chicago Heights, managing union mechanics suit and tie every day, every night. Really. It wasn't until 1991 that he had a chance to bid on a garage for a company called RPS. So RPS instead of a roadway package system.
Matthew Leffler:
59:12
So the old days, cf, which is Father of Freightways, roadway and yellow were the trucking companies. They were everything, everything we see today. Like people say, oh, I'm ex-Google, I'm ex-Apple, no, no, no, are you ex-roadway, are you ex-yellow? Oh, I want to talk to you because that's interesting. But our job with my father's company called Outsource Fleet Services was maintaining equipment for RPS, and RPS only had trailers and dollies the things that connect the trailers together when you have pups. That company eventually became FedEx Ground and so we were the biggest vendor of maintenance for FedEx Ground for 20 years and what we did was we fixed trailers for money.
Matthew Leffler:
59:54
So trailers are something that I deeply, deeply care about. Now we talk about transportation, and transportation is really an exercise in trailers. So something is made and it's put into a container and in that container is a type of trailer tossed on a boat. The boat brings it to a port. The port takes it off the boat and either puts that container, which I think is a trailer, onto a train, which is a type of trailer, or onto a chassis, which is absolutely a trailer. Those things then go to a distribution house or warehouse or a brake bulk center and they get taken off the one container and they get put onto a dock and then likely into a trailer. Now that trailer, that trailer's journey, can go anywhere like a truck stop or a warehouse or a distribution center, and that stuff in the trailer gets unloaded and then put on a shelf or brought to your front door, and so trailers are all that matter in supply chain. The track and trace of Project 44 is the four kites.
Matthew Leffler:
1:00:56
All of these guys and gals are looking for information about the truck. Where's the driver? What's he doing? Is he going to be there on time? It's all a proxy for one thing the trailer. Where is the box with the things that I want? You asked me, matt Lefler, what do you want to know most about the shipment that you have coming in? I want to know when it's going to be here. I don't care if the driver's on his rest period or on his 10 hour sleep or birth. I really just want to know about that box. So there are five million trailers in the United States Five million. About 80% of those are dry vans with swing doors. So I love trailers. I can talk about trailers forever.
Blythe Brumleve:
1:01:33
I love trailers. You're kind of blowing my mind right now, because I just assumed this is going to sound like such a dumb question are all semi trucks, technically, trailers?
Matthew Leffler:
1:01:45
So a truck is not a trailer. I mean a truck is a proxy, it's the power source. So in our business we ask to a motor carrier how many piece of equipment do you have? It's power. Which is the truck? It's either a box truck, it's a straight truck, it's a class eight truck sleeper, or day cab. That's the power unit. Oh, okay, the trailer is going to and the tractor trailer is a term of art. Tractor trailer means trailer. So it means, like the 53 foot trailer, the 28 foot pop, whatever, but the trailer is the thing. That is where all the freight goes inside. You can't put freight in the sleeper. You got to put it all into this beautiful, beautiful box.
Blythe Brumleve:
1:02:24
So well, I used to, because I have speaking of, I have this book back here called the Box, which talks about the revolutionary concept of creating a container.
Matthew Leffler:
1:02:37
And how it Containerization absolutely.
Blythe Brumleve:
1:02:40
It's the single greatest invention because it brought the most people out of poverty all across the world streamlined shipping and transportation options. So now maybe our trailer is more revolutionary than the container.
Matthew Leffler:
1:02:55
So containerization was about bringing a process and a set of dimensions that we all agreed with. So it's really funny because, like, we say containerization but there's two types of containers. They're either 20 feet long or they're 40 feet long. So they come. If you look at this stuff that comes out like on any board about this data, they come TEUs 20 foot equivalent units. So a 40 foot container is actually two 20 foot equivalent units, because it's just two of the 20s. But so the container. So in a container setting.
Matthew Leffler:
1:03:33
A container is like a marine container. It's intermodal, it can go to multiple forms of transportation, so it can work on a boat, it can work on a train and it can work on a truck. So that's what makes the containerization model so amazing. You can get all of the cranes that lift them up to be uniform. That uniformity brings a level of consistency that was never there before. It was always like, hey, I got this trailer full of floor sweepers, like what do you want me to do with it? I don't know, move it to Dallas. So this is why containerization is absolutely one of the biggest innovations. But it was predicated on the chassis and the trailer and being able to move those things together. So containers are in my mind, a form of trailer, and I think the chassis that they sit on top of is also a trailer.
Blythe Brumleve:
1:04:17
That was going to be my next question. I'm like what's the difference between a chassis and a trailer? So it's Okay.
Matthew Leffler:
1:04:22
so a chassis, a chas, this is beautiful. This is like four more hours of this. We're in good shape. So a chassis is the subframe and the tires. So a chassis really is just a BLT brakes, lights and tires. It's beautiful and delicious To have the chassis pulled by the power unit. Whether it's a Drage company or motor care, whatever they are, that container gets onto the chassis and it gets locked together with a pair of pins and those pins make it so if it doesn't fall off, because that would suck if it fell off.
Matthew Leffler:
1:04:53
So the main types of trailers in our country there's about maybe 700,000 to 800,000 chassis in the United States. Most of them are owned by three companies. Those three companies are DCLI, track and FlexiVan. Those three own 80% of all chassis in the United States and likely in North America. They are at the rails or at the ports or everywhere. Then there's like people who own their own chassis, like JB Hunt or Schneider, and there's companies like me, clc. We lease them. So I own about 3,000 chassis. I lease them out to people whenever they want them. It's a really cool business. And then the trailers, the big vans and all that. There's about, like I said, 5 million of those guys and about 80% or 53 foot vans with swing doors, because that's for truck load. And then, if you're talking LTL, it's pups, 28 foot pups with roll-up doors.
Blythe Brumleve:
1:05:46
How are they evenly? I guess we said, you know, three companies own the majority of chassis. What about trailers? Is it kind of the same dynamics or is it more private?
Matthew Leffler:
1:05:55
That's a really good question. I would say there is a disproportionate amount of trailers owned by the mega-carriers. Those small fleets also have it. So in the old days and I mean like pre-deregulation you used to have one piece of power with about seven to 10 trailers. So that was the dichotomy is you'd have one to seven or 10. As time has gone on, we have connected systems, we have telematics. There's not the need to have so many. These days the margins tend to be one power to probably one and a half to three trailers. So if you're a company, it's an asset-based company and you run trucks, you probably have a handful of trailers. So it's the same kind of disbursement you'd have with just power units. Generally the vast majority of trucking companies are less than six trucks, but they're mostly power only. They're mostly just drivers and sleepers. On the other side are the mega-fleets that have hundreds of thousands like extra-lease owns 100,000 trailers in their fleet. Fedex has 100,000 trailers. It has probably 200,000 if you count the chassis, the containers and the vans.
Blythe Brumleve:
1:07:00
And I imagine this is where your software comes into play.
Matthew Leffler:
1:07:04
Yeah, in software If you're ready to talk about it.
Blythe Brumleve:
1:07:06
I'm not sure if you want to.
Matthew Leffler:
1:07:07
Yeah, I'd love to. My software stuff was a labor of love. If you look at the numbers, one in five commercial vehicles on the highway at any given time are unsafe. They're not legally allowed to be on the road. That's one in five, that's 20%. If I said to you, hey, I have five gallons of milk here, one of these gallons of milk is unsafe, but I don't know which one, You're probably going to say, Matt, I don't want to buy any of those milks. And I'm going to say you don't get a choice because that's all that it is.
Matthew Leffler:
1:07:38
So my thought process as a lawyer has always been if you maintain things properly, you are going to have a lot safer vehicles and a lot less injuries. And uninterrupted freight delivery is really important, like on time, undamaged, safe is critical. So my software I incubated it with Michelin last year. We got our seed capital from Michelin to build out the prototype, the MVP. That was finished in, I'd say, September, and over the last few months we've been getting ready to deploy it in its initial testing.
Matthew Leffler:
1:08:12
And it's really about scheduling trailer services. So the company's called Lefler Technologies but the product is called Trailer PM and the PM stands for Preventive Maintenance. Car Wash is a phrase, Trailer PM is the same sort of thing. It's like you want to get your trailer inspected. Well, I have people who can inspect your trailers and then you can document it digitally, and it's just about making the process of scheduling a service easier, because most people don't necessarily know how to do it. And, having been a vet, I've done hundreds of thousands of services with trailer companies for my career and I know a thing or two about trailer and I love it.
Blythe Brumleve:
1:08:48
That's.
Blythe Brumleve:
1:08:48
I mean, I just I'm sitting here and I'm thinking back to like 2020, when we're all stuck in our offices and we can't go to anywhere and we can't network with anyone, and so you see this sort of just massive boom of content creators within the logistics space going on.
Blythe Brumleve:
1:09:04
You were one of those folks and now you have a whole ass business, a whole ass software offering SaaS product that you've likely connected with other folks using content marketing. I just I think it's. You have such a great story of seeing what's going on in the market, giving your perspective on it, and then seeing problems that you can expertly fix based on your experience and your expertise, and then going and doing it. I think that's such a beautiful thing and I think that your story is. You know, as we started off with the first hour of this show talking about all the bad things that are going on, I think more light should be shined on folks like yourself, who did it the bootstrapped way, who have a business that will probably be profitable like right from the jump. I just you know, congratulations on all the movements and things you've been doing, and I just I think it's the power of content marketing in this space.
Matthew Leffler:
1:10:05
I appreciate that I learned a lot from you. Like you don't know that, but like I we've talked about this before, but you were one of the first people out there who were making consistent content that was really interesting and useful. Like I didn't watch freight waves most of the time, I watched your content because you're good at what you do. I found it to be cathartic for me, like I started off making things that were just for me. Like, if you find my earliest stuff, it's really really, really rough, and that's okay because I found joy in the process. What I found the most interesting over time was the amplification of important things, and so we talked about the TQL thing as a good example.
Matthew Leffler:
1:10:44
The Echo and the CH Robinson lawsuits around misclassification those are forgotten. No one knows. I mean industry folks that are really involved know, but young brokers have no concept of this. The power we have in our voices to talk about things that matter is incredible, and people like you can put their thumbs on the scale and put out messages that people in the past could never hear. So this has been like an amazingly positive part of the journey. I will say that I don't view myself as a content creator or an influencer. I look at myself as a megaphone screaming into the void and, like some people listen, they go. Man, I love that thing, some people don't. I assume no one listens to anything that I do. But then I get feedback and people reach out and they say I've enjoyed it, I like it, I want to learn more, and the more you dig into this industry, it's fascinating and it's also very depressing.
Blythe Brumleve:
1:11:40
I say on the show all the time, we have so many stories to tell, so many and within your own organization, of what kind of freight you're moving and versus like the stories that you're telling and shining a light on, I'm curious if there's any underlying, maybe legal issues or crime stories. Fraud is obviously a huge issue going on within the industry. Is there anything that we should be paying more attention to that isn't getting a lot of?
Matthew Leffler:
1:12:06
knowledge. Yeah, so there's so much, and I'll say that the one case that I'll start with is when I briefly alluded to, called Werner Enterprises, and it's down in Texas. This story you've probably seen it, most people, your viewers, have probably heard about this. But the story goes truck driver is driving in the snow and he's going 50 miles an hour under the posted speed limit, never loses control. In the opposite lane, opposite side of the direction of traffic, another pickup truck is driving. That pickup truck loses control, crosses the center line, smashes and head first into that Werner truck. One child dies, another child is permanently injured. Question is who's at fault? Who's responsible?
Matthew Leffler:
1:12:52
It goes to trial. It goes to trial and Werner is found to be 70% responsible. 70%. This is a truck and company that never lost control of the asset under the posted speed limit. The verdict the verdict $98 million, 98 million.
Matthew Leffler:
1:13:10
And here are the facts that were not in Werner's favor. The driver had been driving for less than seven days, brand new CDL driver. The trainer was asleep in the berth. I wasn't paying attention. The dispatchers hadn't warned this driver about driving in bad weather. This driver had never driven in bad weather and he was told you must make this time you must make it there.
Matthew Leffler:
1:13:33
So why this case is so interesting right now is one should anyone expect someone else to lose control of their car in the opposite side of traffic and hit you and you could be responsible? That's crazy, that's bonkers, it's absurd. More importantly, if you are following this thing called F4 preemption the idea of broker liability you could be a broker who brokered that truck to move that load. Let's say it's not Werner, let's say it's some random trucking company. You, mr or Mrs Broker, could be the one who gets sued for $100 million and you would have no way to protect yourself. So this thing is going to the Texas Supreme Court. It will go there and that's where it's going to live and die. It can't go to the US Supreme Court. It's a state issue only. But if this type of stuff happens, werner self-insures for $10 million. They have an umbrella policy for anything above $10 million. With the interest we talked about, they're over $115 million right now. This case should make everybody go. What.
Blythe Brumleve:
1:14:34
Yeah, I cannot believe that that would even be something that could be brought to trial.
Matthew Leffler:
1:14:40
So Werner thought that that the same thing. Werner thought they were going to do a much. They're going to get a dismiss and say look, this is no, there's no legal liability for us, because our guy was going safely. He wasn't. He didn't lose control, he didn't go crashing someone else.
Matthew Leffler:
1:14:53
Someone else, like literally from the other side of the road, smashed me and they made the critical error that any lawyer who worked their medal and I don't want to put slag at other lawyers you never go to trial if there's a dead child involved you just don't do it Like it doesn't matter what the jury hears you say. All they're going to say is how much liability insurance did the pickup truck driver have? Oh, like $100,000, $200,000. How much do you have? Oh, unlimited. Yeah, this kid's going to need therapy for us their lives. This mother lost her son. Like this is why you don't take those cases to trial. But Werner may, may be successful on appeal hard to say. But if that stands, the liability insurance that people are going to have to buy is going to be very expensive. It's already very expensive.
Blythe Brumleve:
1:15:39
It's a lot.
Matthew Leffler:
1:15:41
Isn't it heavy? It's a lot we covered it's so heavy.
Blythe Brumleve:
1:15:43
I know, I know I do feel like I have to say that I mean, obviously, that story is tragic and it's something that could be industry changing along with the TQL verdict. I'm tired of talking about these depressing stories. I don't know how to segue into something a little bit more lighthearted.
Matthew Leffler:
1:16:08
More positive. I thought we did. I mean, the thing is like the trends I think are important Things to note for all your audience is if you're a worker, you have a lot of rights. You don't know about those rights. Schools need to do a better job of educating people about what their rights are, especially things like non-competition agreements and how to negotiate those things.
Matthew Leffler:
1:16:30
I feel like we are seeing as the industry continues to be in this dark slump. There are positive things coming from this. There's more accountability and we're seeing the fraud Like in the good times. You don't see the fraud, you don't see the theft. You just see everyone making a bunch of money. When the tide's lower, every ship begins to sink and you can see who the bad apples really are, and that's important. I mean we all have to behave like someone is watching us, because someone probably is. So I think there's some positivity coming out of this in so far as it's showing us the actors we didn't like, like TQL, are actually worse than we thought, which is great. Really, really, really confiding. I don't think you're going to be invited to any TQL events anytime soon.
Matthew Leffler:
1:17:17
They won't let me follow them on Twitter. I'll be honest with you. I've tried. They won't let me.
Blythe Brumleve:
1:17:21
They will not. I thought they had their tweets protected.
Matthew Leffler:
1:17:24
They do. I can't even look at them. For a while I was harassing them on LinkedIn. I would say harassing, it's not the right word. I was engaging with them. They weren't very big fans but for some reason, if I ever go and look like who's looking at my profile, it's a lot of people from TQL.
Blythe Brumleve:
1:17:41
It's a lot of people, poor social media manager. Just let me post in peace.
Matthew Leffler:
1:17:48
We just gave them a great thermos. Why are they talking about non-competition agreements?
Blythe Brumleve:
1:17:52
Where are we at with non-competition agreements? Is that an issue still?
Matthew Leffler:
1:17:56
Yeah, I mean. So for those of you who've been following this, there's been this thing called the Federal Trade Commission and they put out a proposed rule that would ban non-competes for everybody. So let's talk about some statistics. About one in five 30 million American workers have a non-compete 30 million people as a condition of employment. About 30 to 40% of those people make under $15 an hour. So it's a really interesting thing. They are disproportionately affecting all sorts of different protected classes. The history of these things is also fascinating. But the FTC came out and said look, we believe that because of non-competes, american workers are making $300 billion less a year than they're supposed to be. Because the non-compete makes you can't go and get another job or make your own company, so it artificially depresses your compensation. So the FTC said we're going to ban these things and over 20,000 comments were made. One of them was made by the American Trucking Associations. They believe they're great, go figure. But the FTC will have a final rule, probably next year, and it'll likely ban non-competes.
Matthew Leffler:
1:19:05
The problem is that it is unlikely that the Supreme Court would allow that type of rule to pass. So there's this thing and this is going to be esoteric, so I apologize. There's a thing called the non-delegation doctrine. All it means is, if you're Congress, you shouldn't give authority to an administrative agency unless you've expressly said that. And the case I'll use is you might remember, during COVID, osha said we're going to mandate vaccinations for people with over 100 employees. And everyone was like what, when did OSHA get the authority to mandate vaccinations? Like, who gave them this authority? So that was sued. It went to the appellate courts, went to the Supreme Court. At the Supreme Court they asked the question does OSHA have the authority to mandate vaccinations? The liberal minority said yes, they can. The conservative majority said no. No, if you want to give people vaccinations, go back to Congress and ask them to mandate it. Don't come to us and make us do it. So that is the example of the non-delegation doctrine.
Matthew Leffler:
1:20:18
So the FTC is gonna put out a rule and say we wanna ban non-competes. What American businesses are gonna say is why are you getting involved in a contract between me and my employee? They can choose not to sign it. I don't make them sign it. Why are you getting involved? And the Supreme Court in this environment is likely to say go back to Congress and ask for something. So there is another thing. It's called the Workforce Mobility Act. It is a bipartisan piece of legislation in both the Senate and the House that is stuck in committee. That would ban non-competes as well. If that were to get passed and signed, that would ban them and it would be okay. I think the FTC's action is likely not gonna be effective. I think it's gonna be overridden. I don't think it's gonna be legally enforceable. I could be wrong, but our court is very conservative and very hostile to things like this.
Blythe Brumleve:
1:21:08
And I've heard of even fast food workers Like if you work at a sandwich shop you're being forced to sign a non-compete so you can't go work at another sandwich shop.
Matthew Leffler:
1:21:18
So that was the Jimmy John's case. This is great, the great sandwiches, freaky fast. They also had freaky non-competition agreements, these guys. They had a two-year non-compete that would affect anybody within three miles of a Jimmy John's store. So if you work for Jimmy John's, you can't work anything within three miles of a Jimmy John's. If that company had 10% of their revenue coming from like cold sandwiches and they were suing, they would sue people. Trunk Club in Chicago, like you would send us your dimensions, will send you outfits that look really nice. The designers, non-competition agreements. You can't go work for another company designing outfits. It's pervasive. This is the thing that I think is this is towards the end. I like this part. So the history of non-competed life. Have I ever talked about where these things came?
Blythe Brumleve:
1:22:03
from. I don't think so, but it sounds like some kind of like corporate America BS.
Matthew Leffler:
1:22:08
Oh, it's so much worse than that. So after the civil war, we had this freeing of indentured slaves. We freed the slaves and one of the things that the South did was say, well, how can we prevent our former slaves, now workers, from going and working somewhere else? Non-competes began. They began as a method to circumvent the slavery of abolition. They became the way you'd say you can't go work over here.
Matthew Leffler:
1:22:40
I have been trying for my for last year or so for people to understand that non-competed agreements are not about contractual rights between workers and their bosses, though they are. They are an aspect of diversity, equity and inclusion, because they were designed and they disproportionately affect people that are in protected statuses, cause we knew what we were doing. We knew exactly what it was. You're not gonna go work at the neighbor's plantation because he'll pay you 25 cents an hour more. You're gonna work here. If you go there, I'll sue you and the old days, like you could. A lot of things would happen in the old days. So these things exist because of that. That is their history, and companies who don't understand or do understand and just don't care. They're wrong. They're wrong, but that's the price?
Blythe Brumleve:
1:23:25
Why treat your employees better, you? Could just sue them into oblivion or scare them into that. You're gonna threaten legal action.
Matthew Leffler:
1:23:34
Absolutely. We look at TQL as like the poster child. They sue everybody. They hire people knowing that 95% will not stay. Those 95% will never get a job in transportation, at least for a year, because they're not in compete. And they also steal from their workers, like if any company should fail, it should be them. That they're not going to cause. They're making a bunch of money, so very fun. That's why they're inviting me to their cocktail party.
Blythe Brumleve:
1:24:01
I don't think you're gonna get an invite anytime soon, and I think it really is an important thing, because think of all of those people that we turned away from the industry that maybe could have found a really good home and excelled and made a really good life for themselves, and instead they were put through the meat grinder, as you say, and now they'll probably never come back because of the way they were treated.
Matthew Leffler:
1:24:27
And this is the thing I think is so diabolical is it means that you're not gonna become an entrepreneur, you're not gonna be able to grow in this space. We want talented people that are excited about this business and we do everything to make it impossible. And so I look at this and I get excited because people are finally talking about it and they're finally motivated, like the people that I hear from all the time. They're pushing back and I like that, but it is a very dark, dark chapter in our country and I look forward to the day that non-competes are gone.
Blythe Brumleve:
1:25:00
All right, couple last questions yeah.
Matthew Leffler:
1:25:04
I'm, so I try to be excited and happy. We're just talking about the most depressing things in the world.
Blythe Brumleve:
1:25:09
We have to talk about these things right, Because education is powerful and the more you know, the better situations that you can put yourself in, you can put your clients in, your business partners in. So it is better for the industry to sort of shine a light on a lot of the pardon, my French, the fuckery that's going on. It's so bad.
Blythe Brumleve:
1:25:28
it's so bad Corrected because otherwise these shady actors which there's always been shady actors, and transportation since the dawn of time, being able to shine a light on them, to weed them out, so the cream rises to the crop, is sort of a I guess, a theme of today's episode. But one final question were you one of the 30% of people that actually made it through all episodes of Rings of Power?
Matthew Leffler:
1:25:55
Those are hurtful words and of course I did.
Blythe Brumleve:
1:25:58
I did too. I did. I'll say I think I said that stat wrong real quick. 67% of people who started Rings of Power never finished it. That is an astonishing stat for a TV show that had a billion dollars put into it.
Matthew Leffler:
1:26:15
Yeah, there's a big hole in my heart, almost the same size as the plot holes within Rings of Power. I know it's got problems, I know I do. I hope that we get to hear stories that were never told and never even contemplated by Tolkien, like in the far far west, like in the, like, maybe the blue wizards we get to see, Like I'm hoping. Can we talk spoilers? If you're not talk spoilers?
Blythe Brumleve:
1:26:40
I don't know what your audience? First of all audience. Don't waste your time watching this garbage show. Just go watch the movies. Read the books, watch some quality programming, the extended editions, watch that I hope that's not Gandalf.
Matthew Leffler:
1:26:55
It should not be Gandalf. He was not there in the second age, he was there in the third age. There's no point to have him there.
Blythe Brumleve:
1:27:01
I think, the reveal of Sauron was.
Matthew Leffler:
1:27:03
I liked it. I liked that part of it. Galadriel is far better in the books and in the movies than in the story. She seems like a petulant child. I did not like her as a character at all. It was very disappointing.
Blythe Brumleve:
1:27:16
The abomination Is what they did to Galadriel.
Matthew Leffler:
1:27:21
She's one of those powerful elves alive. She existed. Smart wisdom.
Blythe Brumleve:
1:27:25
You didn't need to put a sword in her hand for her to be considered strong.
Matthew Leffler:
1:27:29
She's giant, she's like six feet tall, she's.
Blythe Brumleve:
1:27:32
Her hair was not a raggedy mess like it is in Rings of Power. Her hair is literally compared to the light of the two trees.
Matthew Leffler:
1:27:43
Yeah, that's what it was Exactly right. Feanor asked for her hair and she denied him. Gimli asked the right times.
Blythe Brumleve:
1:27:51
I think she denied him.
Matthew Leffler:
1:27:53
It's right. Gimli asks one time and he gets three hairs. Like that is incredible. That moment when I was watching, I teared up. I'm like that is amazing. The Balrog should not have been shown and Duren's Bane has nothing to do with the second age. This is more like fan fiction at this point.
Blythe Brumleve:
1:28:12
No, the Balrog, you have Elron walking to the. Where did he walk to? And, like dress robes, they took no water, they took no supplies, they just casually took a little walk.
Matthew Leffler:
1:28:27
Me thrill does not come from lightning strikes. I am fundamentally like that is the stupidest thing.
Blythe Brumleve:
1:28:34
And you know what too, the forging of the range would have been so great to show, except for they showed it in the wrong timeline. They put Galadriel there when she wasn't there in the forging of three rings, and then they made it that you have the Sauron. I don't know like it was a great value. Sauron, that is essentially telling the world's greatest Smith how to mix metals, and it's like this is basic.
Matthew Leffler:
1:28:58
Yeah, yeah, metalers. You never heard of that.
Blythe Brumleve:
1:29:00
Basic knowledge that he should have. And yet you have this great value Sauron coming in to save the day.
Matthew Leffler:
1:29:08
I think it was like the nine rings that went to the men and the seven went to the dwarves, like those rings were all made first. Like the three rings the elves had were not made anywhere near Sauron being there. He left. He was, he did not know they were making them and he gave all those rings to the elves and then the elves put them on and he put his one ring on them. They're like oh, take them off, we don't want this. So I'm gonna watch it Like I'm gonna watch the next season. I'm probably gonna hate watch it too.
Blythe Brumleve:
1:29:34
That's right, that's right and I'm gonna be so mad. I've never been so just Watching any show, ever. I've never been so mad, really, just angrily turning it on. Like it got to the point where, like my fiancee watched the first episode with me and he fell asleep during the middle of it, woke up and he just sees me like just seething, just mad, and he's like who Rage? Never watched another episode with me. But I guess you know, I guess you know, following a similar format to the rest of the show, we start with the bad and then with the good. We do have, you know, some sort of nature's healing moments where Peter Jackson is coming back to the Tolkien Middle Earth universe.
Blythe Brumleve:
1:30:18
I didn't know this. He's making an animated show, sort of a Lord of the Rings anime style of the war Rohirrim. So the writers of Rohan, that's going to be the show that he is making next.
Matthew Leffler:
1:30:32
I wanna pitch to you a watch party that we do for Ring of Power. That'd be great.
Blythe Brumleve:
1:30:39
I think the fans would be so excited for the opportunity to listen to our articulate you wanna see me like break a bottle on the ground?
Matthew Leffler:
1:30:46
This was just pouring just tons and tons of drinks. It's like that's gonna be fine, we're gonna keep going. It's gonna be amazing. I can't wait. I can't wait.
Blythe Brumleve:
1:30:53
I like chaos, so I'll do it.
Matthew Leffler:
1:30:56
What's your alignment? You chaotic, neutral.
Blythe Brumleve:
1:30:58
What do you mean? What's my alignment?
Matthew Leffler:
1:31:00
Like oh, you never played D&D.
Blythe Brumleve:
1:31:02
Oh no. I didn't Okay, that's one nerd culture that I did not get. It felt very. I did love the movie. I saw the movie recently.
Matthew Leffler:
1:31:09
I had not seen the movie. I wanna see that movie. I didn't see the movie.
Blythe Brumleve:
1:31:11
The movie is really cute, it's funny, it's got, all it's good. But I never got into D&D. It just wasn't my thing, so I'm sorry.
Matthew Leffler:
1:31:21
Yeah, I can understand that. I played in a basement rolling my D20. And it was very cool.
Blythe Brumleve:
1:31:25
I do think the culture around that is really cool, like I just saw it. Speaking of which, I just saw a TikTok creator who, like, specializes in making a holder for all of the dice and your, I don't know. It looked cool.
Matthew Leffler:
1:31:38
Yeah, I have a whole bunch of dice. You need like a four-sided die, a six-sided, a eight-sided, 12-sided.
Blythe Brumleve:
1:31:43
Well, this, I mean it had magnets and everything in it, so it looked very nice. So I love the culture of D&D. It seems like they have a really powerful little you know fan world to live in. But I live on the Lord of the Rings side of things. I was on the Star Wars side of things for a very long time and I'm a little distant.
Matthew Leffler:
1:32:01
I like the next generation, Next generation Star Trek with the card.
Blythe Brumleve:
1:32:07
Star Wars.
Matthew Leffler:
1:32:08
Oh, star Wars, I like the Star.
Blythe Brumleve:
1:32:09
Trek Star Wars.
Matthew Leffler:
1:32:10
Is that on that Boba Fett guy, best bounty hunter who then became a local crime lord? That show is depressing.
Blythe Brumleve:
1:32:17
No, he didn't really become a crime lord. He came nothing Like he just did nothing.
Matthew Leffler:
1:32:24
Let's take the most exciting character, an interesting character, bring him back to life and let him run a small like-.
Blythe Brumleve:
1:32:31
And then not even put him in two of his own episodes.
Matthew Leffler:
1:32:34
In his own show, and no one wears cool helmets. Just let him walk around and-.
Blythe Brumleve:
1:32:37
Just bring Mando back, baby Yoda, and then he'll solve everything.
Matthew Leffler:
1:32:40
And he was also what was in Game of Thrones. He was, oh man, the guy from Dorne. Yeah, oberon Martel, oberon, tyrell. No, not Tyrell, it was not Tyrell.
Blythe Brumleve:
1:32:50
Martel, oh Martel.
Matthew Leffler:
1:32:51
Maybe I don't know, tyrell's word.
Blythe Brumleve:
1:32:53
Margery. Yes God, what is her name? The older woman who had that great line, Tel Cersei, it was me.
Matthew Leffler:
1:32:59
Oh yes, oh God, these names I should know better in a minute.
Blythe Brumleve:
1:33:03
All of these fake world histories that we know.
Matthew Leffler:
1:33:07
People are gonna be listening for that part and they're like wait. They're like they're gonna try to remember these different fantasy worlds and they're gonna be like this is the best part.
Blythe Brumleve:
1:33:13
No, they're just sort of all meld together. But yeah, I would say Game of Thrones like Westerosi is definitely. I would say my rankings and then I want to hear yours. So I would definitely do Lord of the Rings, game of Thrones, house of Dragon, and then I'd probably go Harry Potter still, and then maybe Star Wars. I think that that's my nerd fandom hierarchy. And Marvel. I gotta put Marvel in there too.
Matthew Leffler:
1:33:41
I've become a Narmoth Castlevania. Like there's a lot of good anime stuff. Like I played all the games like Symphony.
Blythe Brumleve:
1:33:46
Knight.
Matthew Leffler:
1:33:48
So I really love those. I'm really loving the boys and Gen V stuff too. That is on Amazon it's super cool stuff.
Matthew Leffler:
1:33:56
Very cool For me. Lord of the Rings takes it in a big way. I think if we stay in the same fantasy world, Dragon Lance is also really, really good. These were like there's hundreds of books of these characters that were in like medieval kind of stuff. It's so good. Oh, I had so many books when I was a kid and then I'd say Game of Thrones, I like Game of Thrones. I didn't like the writing very much in Game of Thrones. It just seemed, I don't know. I liked it for the most part, but I got to a point where it reminded me of the Silmarillion, like just history stuff, and I just didn't like that.
Blythe Brumleve:
1:34:30
And I hated the.
Matthew Leffler:
1:34:30
Silmarillion. I hated that book.
Blythe Brumleve:
1:34:32
It is a tough read, a very tough read.
Matthew Leffler:
1:34:35
It's a history book without any real things happening.
Blythe Brumleve:
1:34:38
This. I haven't picked up that book.
Matthew Leffler:
1:34:42
I don't know since I was a teenager, but there are so many cool stories Like Glorfindle killing a Balrog by himself, like that, or Faeanor fighting a bunch of Balrogs, like there's great stories, but yes, they're difficult.
Blythe Brumleve:
1:34:54
That's why I like the guide books, like the handbooks that like explain what different things are. Like I used to be, I used to have the guide book, like the Almanac, almost, or the Thessaurus, whatever it's called, or the guide to Middle Earth, and then I would be reading it at the same time and I'd have to look up what each thing meant, and then I started just reading the guide book after that, Well, there's Fandom has a great set of information about it.
Matthew Leffler:
1:35:17
And then Nerd of the Rings is also like a YouTube channel Fantastic. I love his content. It's excellent.
Blythe Brumleve:
1:35:23
Yeah, there's a lot of different. Like YouTube, when the YouTube sphere I first started getting into YouTube because of Game of Thrones, so I would watch all the history lore videos on there, and then the I would say New Glass F-Full with Rings of Power. Coming back in the YouTube era, it led to so many new YouTube channels covering it. But it also, like you know, emergency awesome or like a screen crash or you know these guys that I watch specifically for, like their Star Wars takes or Marvel takes.
Blythe Brumleve:
1:35:53
I started listening to them on the Lord of the Rings or the Rings of Power, and I'm like no wrong, Like are you with them in the bathroom? That's not real, You're wrong.
Matthew Leffler:
1:36:03
Wrong Charlie? No, don't like it. Don't like it. I hope we see maybe Tom Bombadil or someone really neat would be cool. Like to see some like.
Blythe Brumleve:
1:36:13
I don't trust Amazon to do. If Peter Jackson couldn't do that character justice, I damn sure don't trust Amazon to do that justice.
Matthew Leffler:
1:36:20
It's hard to explain. You're right, I don't think we're gonna see that I look forward to. Like the falling of Numenor will be interesting, like the way that it fell in the books is really interesting, and if we see that same sort of thing.
Matthew Leffler:
1:36:33
We saw that she had a vision of it happening, so that's gonna be really cool. She can see. I love it, I liked, I enjoyed it. I did not like any of the characters at all, but I did like the fact that we have the world of hobbits again, kind of God, they were the most annoying thing, little jerks. We're a fairly good meeting. One person gets injured. They just leave them behind. They leave you behind, yeah.
Blythe Brumleve:
1:36:55
Very slowly walking away.
Matthew Leffler:
1:36:56
Yeah, they're all monsters Like. I don't doubt you. That's where probably Schmeegle comes from.
Blythe Brumleve:
1:37:00
I suspect they settle down on a river somewhere Makes sense. They're evil in their bones and they take branches to their head and think that it's camouflage. I just anyways, I don't know. I've already said enough nice things about rings of power.
Matthew Leffler:
1:37:17
So we gave them the eyeballs. We needed to give them eyeballs, and I think it's important that our culture knows how great Tolkien was, even if they forget the books ever existed.
Blythe Brumleve:
1:37:26
No, they need to remember how good the books were and how. I think that Tolkien was maybe one of the last creators to devote his entire life to something. Maybe George Lucas, of course too, and George RR Martin to an extent, maybe JK Rowling as well, but Tolkien devoted his entire life to creating this universe and just maybe completed 60% of it. It was really up to his family, his son, to be trusted with respecting what he wanted for that lore and then to continue to build on it, and that's what I hope. As far as overall, just rings of power in general, I hope that it creates other things that are more faithful to what Tolkien originally envisioned, and especially if, as AI increases and the capabilities for some of these smaller creators to really be able to make a fan fiction, that is good.
Matthew Leffler:
1:38:25
If your head set on you can live in that, that would be amazing.
Blythe Brumleve:
1:38:29
I'd be ready player one. I'd just never leave the house. I already got the Gandalf stuff here in the back that I could take with me.
Matthew Leffler:
1:38:37
Just screwing you shall not pass. I have that sign on my office door.
Blythe Brumleve:
1:38:42
It doesn't work, by the way.
Matthew Leffler:
1:38:43
I think when, if we do see the FMCSA put out a speed regulator of 68 miles an hour, then you can, you shall not pass in the back of a trailer would be fantastic. Everyone would be so happy.
Blythe Brumleve:
1:38:53
That's perfect. We tied it. You found a great way to tie it all together with all the drama that's going on in freight, all the drama that's going on in TV. It's a good opportunity to use platforms like this to be able to talk to experts like yourself and be able to get just a clearer head about what the hell is going on in the industry. So hopefully next time we have you on the show. It's not much time passes, but hopefully we're talking about less drama and more fun things, about trailers and cool stuff going on in freight.
Matthew Leffler:
1:39:23
I hope we can do that. I will say it's gonna be a very dark few months. We're gonna see a lot more chaos and a lot more interesting companies not doing so well, but we will have good things to talk about and anytime I can come back black you know I'm a fan.
Blythe Brumleve:
1:39:38
Well, until then, where can folks follow you? Follow more of your work.
Matthew Leffler:
1:39:42
Oh yeah, you can find me on LinkedIn, Matthew Leffler, my law firm, armchairattorneycom. Tiktok, I'm armchairaddyatty. It's not particularly good, but there's lots of Gecko videos on Twitter or X armchairaddyatty ATTY is the abbreviation for the word attorney, and if you're ever thinking about trailers, you're thinking oh man, I wish I had more, I wish I had less, I wish I knew more about trailers. I buy them, I sell them, I lease them, I like to look at them and talk about them.
Blythe Brumleve:
1:40:10
That's a hell of a way to end the show, matthew. Thank you, I hope you enjoyed this episode of Everything is Logistics, a podcast for the thinkers in freight, telling the stories behind how your favorite stuff and people get from point A to B. Subscribe to the show, sign up for our newsletter and follow our socials over at everythingislogisticscom. And in addition to the podcast, I also wanted to let y'all know about another company I operate, and that's Digital Dispatch, where we help you build a better website.
Blythe Brumleve:
1:40:41
Now, a lot of the times, we hand this task of building a new website or refreshing a current one off to a co-worker's child, a neighbor down the street or a stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website.
Blythe Brumleve:
1:40:57
Well, that doesn't happen at Digital Dispatch. We've been building online since 2009, but we're also early adopters of AI, automation and other website tactics that help your company to be a central place to pull in all of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as $1,500, along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus freight, marketing and sales content similar to what you hear on the podcast. You can watch a quick explainer video over on digitaldispatchio. Just check out the pricing page once you arrive and you can see how we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go Jags iße.
