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Brokerage rivals Pyatt, Silver talk about the culture of competition

12 Nov 2019
Category: News
Author: David Vidri

In a conversation at FreightWaves LIVE about the future of freight brokerage, at least half of the time was spent talking about a somewhat unlikely topic – people. The chief executive officers of Arrive Logistics and MoLo Solutions, Matt Pyatt and Andrew Silver, joined FreightWaves president George Abernathy on stage to discuss the evolution of their industry.

Pyatt and Silver talked about the origins of the friendly rivalry between Arrive and MoLo, dished on digital freight brokerages, and doubled down on customer service, but the most surprising part of the interaction was how closely the two executives were aligned on the importance of people.

Silver defined ‘culture’ as ‘a way of life,’ and said that one of his challenges as a leader was to continue to get an ever-growing workforce – MoLo employs 210 people at its Chicago headquarters – to buy into the company’s core values, which center on respect.

“Our industry can be cutthroat and competitive, with people willing to screw each other over to make an extra buck,” Silver said. “I won’t stand for that. If you can’t respect people in our office and the people we partner with – our customers and drivers – then you don’t have a place here.”

Pyatt said that Arrive is trying to change the trajectory of freight brokers’ careers and end the cycle of burnout and churn.

“We had a four-hour executive meeting, and two-and-a-half hours were all about retention – what can we do better, how can we engage better,” Pyatt said. “The project was called EFM –  everybody fucking matters. We’re obsessed with it because we know our people differentiate us.”

Silver said that MoLo always strived to be the best in the industry, and early on, that meant emulating and beating Arrive Logistics, a company that he thought was the best. The first goal was to get to $100 million of revenue faster than Arrive did it, Silver said. Silver revealed that MoLo’s revenue goals are based on beating Arrive’s timeline, an initiative the MoLo team calls ‘Operation RRRUTA,’ or ‘Revenue Run Rate Up To Arrive.’

But the competition between the two brokerages is about more than just dollars; it’s also based on employee satisfaction. Arrive and MoLo had a friendly bet to see whose office would score higher in the Chicago Tribune’s Best Workplaces 2019. When MoLo ranked higher, an executive from Arrive came to MoLo’s office to congratulate the team and praise them for being the best.

Silver also fielded a question from Abernathy about whether he considered MoLo a digital freight brokerage. Yes, we use technology, he began, before saying that he thought ‘digital freight brokerage’ was a ridiculous term that described automated processes that had been in place at C.H. Robinson and Coyote Logistics for years.

“It’s not about how you service the freight as long as you service the freight – they have every opportunity to succeed, as long as they service the freight,” Silver said. “The challenge will be making money; at some point they will have to do that.”

The discussion of digital freight brokerages, cash-burning venture capital-backed logistics companies, bled into Pyatt and Silver’s comments on how bid season was going and the outlook for 2020. Silver said that hyper-aggressive brokers that had a lot of money and were willing to spend it may find themselves in a difficult position if the freight market inflects upward and they have to either raise rates or suffer heavy losses. Meanwhile, Pyatt emphasized building long-term relationships with customers.

“We aren’t giving away margins and we aren’t pricing to lose money,” Pyatt said. “We’re trying to find customers who want to get married, not just want to date, and we’re pricing reasonably and servicing the hell out of the freight.”

“I don’t know what’s going to happen in 2020; I don’t think anyone does,” Silver said. “Customers want rate reductions – I know that – and they’re going to get them.”

Pyatt said that the 30-cent deviation between average contract and spot rates meant that contract rates still had room to come down next year.

“I don’t see anything that will create volatility outside of a weather event or regulation,” Pyatt said. “The market is so mature and fluid, trucks come in and go out in terms of what rates are doing. In the last 10 to 12 years the only things causing disruption are significant events that remove capacity overnight.”


Photo Credit: FreightWaves, original article posted here:

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