Great. And I think the last transportation content of what has been a long and very fruitful day. We saved the best for last, with RXO, and very happy to have with us, CEO Drew Wilkerson and Jared Weisfeld, our Chief Strategy Officer. Gentlemen, thanks so much for being here again. Lots of questions, obviously on the demand side and everything else, but obviously, kind of center stage would be the Coyote transaction. Jared, I think you wanted to kind of kick off with a little bit of a opening statement.
Yeah, just quick disclaimer for everyone. During this presentation, the company may make certain forward-looking statements within the meaning of federal securities laws, which, by their nature, involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those in the forward-looking statements. The discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings, as well as in its earnings release. You should refer to a copy of the company's earnings release and investor relations section on the website for additional important information regarding forward-looking statements and disclosures and reconciliations of non-GAAP financial measures that the company uses when discussing its results. All right, now on to the fun stuff.
That was really impressive.
Record timing.
Yes. So, let's start with Coyote, right? Obviously, a transformative deal for you guys. Again, for those who are unfamiliar with the story and unfamiliar with the transaction, kind of, can you give us a little bit of history here on how did it come about? Obviously, it was a transaction that kind of went up for sale. Like, when did you guys decide that it was right for you, and then why, why was it right for you?
Coyote is obviously somebody that we've always paid attention to in the marketplace. If you look at when they started in 2006, they were one of the hottest names in transportation for 10 years. We knew that they had deep relationships with customers. We always had a ton of respect for what they were doing out in the industry. For us, whenever we went and looked at it and we said, "Okay, what's the customer overlap?" Very little customer overlap. Within our top twenty-five customers, there was only three customers where there was any overlap.
We looked at what's the carrier overlap. There wasn't a lot of carrier overlap either, and we saw that as a huge opportunity for us to be able to pull down purchased transportation, and I think that'll probably end up being the biggest synergy for us out of the deal. The third thing is, we looked at it and we said, "Look at where we are in the cycle." This was like a dream come true for us, to be able to buy a scaled asset at the bottom of the cycle, to position ourselves even stronger for the inflection.
Yep.
We feel like we're in a really good spot.
Got it. So is their product offering, is their business offering, is their targeted segmentation, like, materially different from yours? I mean, does that greatly expand your go-to-market?
They service all verticals, just as we do But if you look at what our core verticals have been, and our strongest verticals, have been retail and e-commerce, and industrial and manufacturing. Coyote has been food and beverage and transportation, and I don't think it's any secret that UPS is a large piece of the transportation business. When you look at it, again, that shows there wasn't a lot of overlap. Some of the lanes that we've got coming out of the deal are gonna make our power lanes even stronger, but it's in different verticals from where we are today.
Okay, got it. Talk to me about the purchased transportation synergy. Obviously, you're referring to the scale that you will have, kind of, once you combine the two entities. How many carriers do you expect to have, kind of, once you're combined, and kind of, where would you rank in the industry?
Yeah, it'll be over 150,000 carriers, Ravi, but, like, for me, that's not a metric that is important. I think that a few years ago, everybody got caught up with it. We're at 70, we're at 80, we're at 90, we're at 100, and it, it's really more of a vanity metric than it is anything else, because nobody has enough freight at this point to keep 100,000 carriers moving every single day.
Yep.
For us, we wanna focus on the carriers that we're doing business with every day, and how often are they coming back to us? And that number is strong. If you look at the carriers who come onto our platform, RXO Connect, they're coming back to the platform within a week, 75% of the time. For us, it's more about knowing who we do business with because we get to monitor the service. We get to monitor how well they communicate, what's the tracking like through the life cycle of an order? For us, it just creates a better experience for our customers if we have really good, strong relationships with the carriers that we're using.
Do you know why they're coming back? Kind of, is it that experience, is it the fact that they're getting the freight? And the reason I ask is, are you confident that you'll be able to convert that into the Coyote base as well?
Yeah, well, so let's look at first what the bases are. We built our base off of small carriers. Think one to ten trucks. Coyote was working with larger carriers and private fleets. Private fleets is something that, you know, brokerages have always tried to break into. But Coyote had an early head start, and they are well ahead of where we were from that standpoint. So being able to get different carriers onto the platform, yes, we'll absolutely be able to do that. I think your second question was, why on the purchased transportation do we believe that we'll see it?
Yep.
We've been deep into the data, and so some of it's still in the clean room, but you can go in and see that there are lanes that Coyote buys significantly better than what we do. We can see that there are lanes that we buy significantly better than what Coyote does. So whenever you start pulling that together and you say, "We've got an opportunity to share capacity and pull down purchased transportation," you should be talking about stronger margins at that point. So for us, what we're going to do, starting on day one, is we're gonna benchmark and say, "This is where the market's performing at. This is where RXO was buying capacity. This is where Coyote was buying capacity. How well do we pull that down to buy as one now?
Sorry, I was gonna put some numbers behind that, Ravi. I mean, the combined entity will have $5-$6 billion of a pool of purchased transportation spend. We are going to buy better as a combined entity, and the ability to go ahead and realize those synergies, to Drew's point earlier, could be significant. We think that has the opportunity to be the largest synergy bucket, and that's incremental, above and beyond the at least $25 million of cost synergies that we've already identified.
Got it. Why would one buy materially different over the other? Kind of given that you're, like, it's not like your size is, like, hugely different, right? So is it a market intelligence thing? Is it a freight density thing? Is it a size thing? And, what's the difference there?
Typically, it's a freight density thing within a specific lane. So, you know, if we've got a Laguna going back to Charlotte, North Carolina, and we're hauling that load ten times a day.
Yeah
We should have a good Rolodex of carriers that is doing that. Coyote may have the opposite. Maybe they've got the Charlotte to Laguna, where they've got the Rolodex. It's being able to pull off of each other's Rolodex to pull down. Maybe the Charlotte to Laguna, maybe we're only hauling that once a day. Coyote is hauling it ten. We should be able to. At eleven loads, we're going to buy better than what we were at one.
Got it. What's the customer reaction then to the announced transaction? And kind of, you know, how do you think that evolves?
It's been overwhelmingly positive. I spend a lot of time with customers. The thing that I hear back from customers is, they're extremely excited about the capacity that is going to get added in, in there for them. So when you start to look at it, typically, what happens for a customer in those instances is, they're going to see the benefit of scale. It will bleed over into a customer, whether that's having capacity into lanes that they didn't have a stronger capacity from us, or vice versa, they didn't have a stronger capacity from Coyote, but Coyote will be leveraging the capacity that we're bringing to the table for a customer, so there's a lot of excitement.
I think the one thing at the core of both businesses that we've all always been focused on is: What's our service? What's our solutions? What are we doing on the technology from an innovation side? And what is the relationship? And as long as we keep those four things as the core focus of who we are, I expect the customer reaction to be very strong.
Understood. Just from a housekeeping standpoint, you funded the transaction, but it's not closed yet. Kind of what are the next steps here?
Yes, if you break down the funding, on Monday, we announced the equity offering to complete the funding for the acquisition of Coyote. And pleased to announce that demand was incredibly strong, to the point where we were able to upsize the offering by more than 40%. So with that done, we've now have $500 million dollars from that offering, plus $75 million in the Greens hoe, combined with $550 million dollars, which we closed in a private transaction about a month ago from our two largest shareholders. So in aggregate, we have all the financing complete. We cleared HSR on August 1st, then we announced on Monday that we intend to complete the acquisition before next Friday. So we will complete the acquisition next week.
Got it. That sounds great. Maybe kind of shifting gears a little bit and kind of talking about the rest of the core industry. You guys have kind of long been viewed as, you know, having your finger on the pulse of what's going on in the marketplace. So what are you seeing out there? Kind of, obviously, there have been some signs of some seasonal improvement in 2Q. Kind of has that continued into 3Q, and kind of, how do you think this evolves?
Yeah. So we're still in a soft freight environment, and I think we said that on our earnings call, that what everybody was looking to see was the tightness that you saw in Q2, was that driven by produce season, beverage season kicking off, or was it something bigger in the market?
Our view then, and it hasn't changed, is that, you know, we're still in a soft freight environment. Load-to-truck ratio is sitting around three and a half to one right now, and tender rejection's sitting at, like, 4%-5%. Load-to-truck ratio needs to move to six to one, and tender rejection needs to get in the high single digits to low double digits for us to start seeing spot freight. But for us, we don't view that as a bad thing. We think, like, being down at the bottom part of the cycle gave us the chance to do the acquisition like Coyote. So taking advantage of where we are in the market is what we're focused on.
Got it. What have you seen for peak season? Obviously, we just did back to school. Kind of, how has that kind of compared to what you would expect to be normal?
I think it depends on customer by customer. You know, encouragingly, the retail inventory positions are the cleanest they've been in five years. If you look at the largest retailers in North America, their sales of inventory are now below 2019 levels.
So I think that's really encouraging as we think about the potential for restocking into peak season, as we think about the pre-staging, right? But I still think it also is going to ultimately depend on will the consumer show up? There are clearly some encouraging signs, year-to-date port volume strength at the big three here on the West Coast, up 20% year-to-date. So I think ultimately it depends on customer by customer. We're having conversations with customers, as you'd expect, daily. Some customers are expecting really large peak seasons, some are expecting no peak season at all, right? So I think we clearly haven't had one in a couple of years, so you know, the bar is low. But we're certainly hearing, I think, some encouraging things from customers, and inventories are in a really good position.
Do you feel like it, it's legitimately different customers are going to see different peak seasons, or do you feel like one side is wrong and the other side is, like, right, sort of thing?
Well, you saw it last year. Last year, I can think of two customers that told me they were going to have a peak season. They did. They had a peak season, but they typically sell at a discount to what some of the other retailers do.
Okay.
When you think about what, where the end consumers are spending their money is something to keep in mind. I think right now it is still a little bit too early to call on whether they're right or wrong, which is what the second part of your question is. I think as we get into, you know, late September, early October, is when we'll have a better feel for that.
Understood. What are you seeing on the capacity side of the equation here, both in terms of truck capacity as well as broker capacity? Like, are you also seeing an acceleration in exits of small brokers?
Yeah. So I'll take the first part. When you think about carrier authorities, we've had net monthly exits since October of 2022. So clearly, capacity continues to get removed from the market, but not at the pace that needs to restore supply-demand equilibrium.
Sure.
So if you look at-
At the current level of demand?
At the current level. I mean, if you look at 2023, about 450 carrier authorities per week were exiting. That number is down to 250 per week this year. But on the other side of this, you know, let's be balanced from the standpoint of not the greatest metric because not all carrier authorities are created equal. If you look at the exits that are occurring this year, it's actually larger authorities that are going under. Even just this week, there was a carrier operation that had 500 power units that went out.
So I think it's emblematic of the fact that we're still in a really difficult freight environment, and carriers, when you look at their operating costs relative to the spot rates, it's unsustainable to the point of, you know, $0.25-$0.30 a mile in the hole. So I think that's working itself out, and ultimately, either carriers need to accelerate from an exit standpoint, or demand needs to pick up in order to restore supply-demand equilibrium. On the second part of your question, it's really interesting. If you look at a two-year stack from a brokerage industry standpoint, 20% of brokers have left, right? There are 20,000 brokers in the industry.
And you had some capacity that came in during COVID, but that long tail of brokers that's out there right now, they're getting squeezed on both sides. If you're a small to mid broker, your carriers are likely going out of business.
Yep.
And your shippers, our customers, are likely consolidating or culling the carriers that they want to do business with. So it's really difficult for the small to medium broker in this environment. So that's happening right now. That's the cyclical aspect of it. Longer term, also, you know, the top 10 brokers represent 50% of the market. After we close Coyote next week, the top 9 will represent 50% of the market. Longer term, we expect that market structure to be winner take most from the standpoint of you need to be able to invest in technology, invest in customer relationships, service the freight, and we think the larger brokers are going to be able to do that best.
Got it. Just going back to your point of the hundred and fifty thousand carriers, potentially, but that's, like, not really a relevant metric. What would you want that size of the kind of? You said, you know, 75% of the carriers keep coming back over and over again. Is 75% of that number the right number? And I'm asking because as the bar gets higher for mom-and-pop truckers, right, in terms of service levels, insurance costs going through the roof, Clearinghouse, like, are you better off focusing on a smaller and smaller contingent of mom-and-pop truckers out there?
Yeah, so for us, I'm not going to get too worked up if the number comes down to 65% or if it goes up to 85%. I think we're in the right range. Because we'll always be bringing on new customers, I mean, new carriers who want to do business with RXO and who can potentially become into that same group of this, what the 75% is, that comes back week after week after week to do business with us.
Right.
So yes, I think that we're in the right range, and I won't get too worked up if it moves one way or the other within 5-10 percentage points.
Got it. You guys are pretty big in the LTL space as well, and we've seen the LTL market kind of go through a pretty major upheaval. What are you seeing out there? Obviously, there's some questions about whether there's too much capacity, kind of whether the post-Yellow dynamics are what people expected. Maybe you're in the sweet spot because you don't care because you don't have the assets. So, how do you see that playing out?
I would say, one, we weren't really impacted by Yellow. Like, there were some other brokerages who saw freight coming off of what happened with Yellow. But if you look at where we were winning business. We're winning business from our large truckload customers. These are customers who know our platform, who have seen our service, that we've got a relationship with. So it was a unique way for us to win business, and probably not how we thought we were going to start growing LTL when we first started doing it. Typically, you're thinking of smaller customers in a transactional way. These are large customers who are saying, "We've got $100 million of transportation spend. Of that, $5 million is in LTL.
Yep.
I'm spending more time on the five million than I am on the ninety-five because of claims, damages, lost shipments, you know, dealing with multiple carriers. Can you take the five million and run that as an outsource for us?" Our brokerage has been able to do a really good job of that, and it's something that I still expect, and we said in the last earnings call, we expect that to continue to see significant growth.
What's the ideal mix of deal in LTL?
You know, right now, we're at 17%. I would love to see that get up well over 30% over time.
Okay. Got it. I wanted to shift gears a little bit, and I'll come back to kind of margins and costs in a second. But obviously you guys are really focused on productivity, and cost out, and technology. So let's take those three things serially. Just in terms of productivity initiatives, like, what do you have in the pipeline? Kind of, you know, how quickly does that materialize, and what does the Coyote acquisition kind of do to what you have in the pipeline right now?
From a productivity standpoint, we talked about last quarter that over the last twelve months, productivity, as measured by loads per person per day we're up, was up 18%, and that's a really strong metric. But when we look at the headroom that we still have from a productivity standpoint, we think that it's significant. So I think that's one of the more important metrics that we look at. And when we look at the ability to go ahead and leverage a combined technology platform of RXO plus Coyote, we think that we have the ability to significantly advance the ball on productivity. So, you know, as you know, when we think about the beautiful part about the brokerage business is, it's incredibly scalable.
Yep.
So when we've got the ability to pump more volume through our call structure and leverage our people, leverage our costs more efficiently, that's going to be quite accretive to margins.
Ravi, it's really simple. Like, whenever I started in brokerage, I would take five to six minutes to build an order, and that was less time that I was spending talking to customers. That was less time I was building relationships, coming up with solutions for people. So we focus on, in our technology, what reduces the keystrokes, what reduces the clicks of a mouse that we've got, so that we can allow our brokers to go out there and say: We're going to spend time on relationships. We're going to spend time on solutions. We know that things come up, so we've got time for exception management. But we're not going to spend an inordinate amount of time on mundane task.
Got it. On that point, kind of obviously, you've been spending a lot on technology. So can you talk about kind of what the latest tools are in your tech arsenal? Obviously, you hosted a call last year on the, on your AI initiatives as well.
Yep.
So, what is in the pipeline?
Sure. We've invested hundreds of millions of dollars in the platform over the last decade when we were part of XPO, and I think the intention is to ensure that we're continually spending to ensure that the platform is competitive and best of breed, so last quarter, in particular, we talked about a couple initiatives, one on the LTL side, where we continue to increase the automation capabilities of the LTL platform, and that's significant. We continue to invest incrementally within cross-border functionality as well, and we continue to ensure that. You know, when we think about technology spend, we think about it across three main cohorts: our people, so our employees, our carriers, and our shippers, and effectively deploying resources across all three of those verticals.
The other thing to think about is, you know, we believe that we've got the best pricing algorithms that's out there. So, you know, our pricing suite of products, and we talked about this on our AI day last year, you know, they're pinged hundreds of thousands of times per day. So we're moving the dial faster than anyone in the industry, the ability to react quickly to market conditions. We think that's a significant competitive advantage.
Got it. Forgive me for this question, but it's coming from a point of ignorance. How not commoditized, but is this something that every major broker can replicate, or is this, like, really hard to do, and, like, there's a real secret sauce here?
The data is unique to us, right?
Okay.
Like, they don't have the same data set that they are pulling from. They don't have the same algorithm that goes into, you know, how much are we putting a weighting on our internal? How much are we putting on external data that we're pulling? They, you know, a lot of them, not, some of them do, but not, not all, less than a handful, have a managed transportation group that has $3 billion of spend that they're also adding in.
Sure
From that. So when you look at it, it's having access to a lot of data is the first step. The second step is knowing how to use the data.
Sure.
And we've shown that we know how to use the data. Even if you go back to the Q2 of 2022, that's whenever the market started to fall, was Q2 of 2022. You saw that we had contractual rates in place, but we pulled down purchased transportation faster than anybody else in the industry. And the reason that we did that is exactly what Jared's talking about, the thousands, hundreds of thousands of pings that our platform is doing on a daily basis, telling us to move the pricing in real time.
Yep. Just last question on productivity here. Do you have any targets or benchmarks on load to headcount or PT to revenues? Kind of, what are they and how are you together?
We haven't put anything out there publicly. We absolutely have things internally that we're looking for. What I would say externally is, we just announced that we were growing loads per head per day by 18% on a rolling twelve month. We're still in the early, early innings of where productivity can go. You know, if you think of, and you, Ravi, you've been on our brokerage floor. Some of our top brokers are doing 150, 200 loads a day. That's not the average right now, and so, like, they're not even close to average right now. So we need to be able to pull everybody's productivity up to what our top people are able to do.
What distinguishes someone good from someone bad? Is it just experience? Is it just knowledge of tools?
Technology adoption is one thing. The other thing is how well they can get their customers and their carriers to adopt the technology.
Got it.
If you think of somebody that's working with 10 to 15 carriers, and they don't have to make 10 to 15 calls right away in the early parts of the morning to compete over capacity, they have a carrier that can pick up their cell phone, book a load, negotiate, and do all of that with no human interaction, and they get to follow up with the carrier later and say, "Hey, these are some projects that I've got coming up. This is where we're hoping that you're starting to land your capacity over the next two or three weeks, because we're seeing something in this market." You get to work with them in a different way versus a transactional, tactical, load-by-load basis.
Got it. Understood. Maybe last one for me before I turn over to the audience here. Your biggest competitor kind of is going through a few, internal kind of initiatives and, you know, technology initiatives, go-to-market, kind of restructuring. Have you seen a change in how they're operating in the marketplace?
No. I mean, Robinson's a great competitor. I've said that, you know, every time that you and I've ever talked.
Yep.
We've talked about that, that they are a strong competitor. They're number one in the marketplace, and they've got great relationships with their customers. They're good operators. We've got a lot of respect for them, and, you know, we're pulling for them. You know, that's probably unusual for a competitor to say, but the better that they perform, the better it is for the industry. And so, like, that's... You know, when I go home at night, I got a Dave Bozeman fan club T-shirt that I wear. So we're pulling for them.
I want to see a picture of the T-shirt. I don't believe that for a second. Any questions from anyone?
Hey, thanks. Maybe you can just talk a little bit about priorities for cash, kind of post the acquisition. Obviously, decent amount equity funded, so it doesn't add too much risk to the balance sheet, but leverage has kind of crept up. So maybe just talk to a little bit about kind of balance sheet and cash priorities, going forward.
I would say, check the deal now, because if you look at it, our leverage was sitting at 3.2, and post-deal, we're more than doubling our brokerage size, and leverage is going to be 1.6. So leverage is actually coming down off of doing the deal, which is very unique for what we're doing, from that standpoint. So I think leverage is in a phenomenal spot of doubling the brokerage and being at 1.6 times. The priority for cash hasn't changed. You know, we're going to continue to invest into the business. We're going to look at opportunities to return to shareholders, whether it's share buybacks or something like that. And then we're going to continue to look at strategic M&A.
If we can find the right M&A at this point in the cycle and brokerage, we'd be crazy not to look at it. If there was something out there in managed transportation, we would absolutely look at it. If there was something that helped us expand a mode within brokers like LTL, flatbed, refrigerated, that's something that we would take a look at as well.
You obviously issued a bunch of equity to fund the transaction. Does that mean buybacks kind of go up your ranking of cash deployment, just to kind of offset that a little bit?
Be opportunistic and look at what makes the most sense at the right time.
Got it. Any more questions? No. Maybe just a couple of big picture ones to kind of close it here. So in the previous cycle, you did about $1 of mid-cycle EPS. Your peak EPS was about, like, $1.50 or $1.60 or so. Right now, obviously, you're well below that, as is reflected by the state of the cycle. Coyote aside, so without the synergy, the combination EPS, do you think we can get back to that $1 of EPS or so in a normal cycle?
Yeah, 100%. And I would argue that we'd significantly exceed that based on the actions we've taken over the last 24 months post-spin. So if you want to go through it, Coyote aside, and then we can get to that.
Coyote aside, yeah.
But last two years, we've taken out $65 million of annualized operating expenses from the model. A large percentage of which are structural in nature and will not come back when the market recovers. That's number one. Number two, within complementary services on last mile, we've taken significant profitability initiatives to be knocking on the doorstep of, call it, mid-single-digit type EBITDA margins, and we committed last quarter to at least $20 million, again, at least, of savings that'll flow through the P&L, so we'll hit EBITDA in calendar 2025.
So when you go through the business in terms of the operating efficiencies that we've enacted with respect to, operating expenses on the $65 million, cost of purchased transportation within last mile, the ability for this business to run past prior, I think is, significantly high. And then when you think about where we are in the cycle, last quarter, on our full truckload business, we're 30% below our five-year average in terms of gross profit per load.
Even if you take out the peaks and you take out COVID, we're still north of 20% below our five-year average. Then you layer Coyote into the mix in terms of thinking about what that combined pro forma normalized earnings power could be.
Yep.
At least $25 million of core synergies, combined with the synergy potential associated with cost of purchased transportation. The mid-cycle earnings power, I think, is significant, and importantly, the free cash flow generation capabilities of this enterprise are enormous. If you look at RXO standalone, $50 million of CapEx, $30 million of interest expense. You look at Coyote CapEx at about $20 million, pre-synergy, and then you think about every dollar of incremental EBITDA on top of that will hit the balance sheet at about $0.75 on the dollar. There's a significant potential for cash flow generation over the next few years.
Got it. So just on the Coyote side itself, kind of if we just did the raw math on what you've told us so far, our math comes to about $0.27 of addition to that, whatever the base EPS is, but I'd reckon you'd believe that there's a lot more opportunity there from the revenue synergy as well.
If you think about prior peak to trough EBITDA at Coyote, it's not too dissimilar from RXO, and then when you combine these entities together, part of the rationale and the strategic merits of this deal, we're going to re-accelerate the volume growth at Coyote across all levers, right? Core enterprise, small-medium business, mid-market. We're going to retain UPS as a strong customer. We've got the commercial agreement that extends through January of 2030 . The ability to go ahead and have this organization grow quickly with the synergies that we talked about, I think, the numbers you're throwing out are going to be low, yes.
Got it. Drew, you mentioned that, if there were more acquisition opportunities, you'd take it. Do you think that there's room for another Coyote-sized transaction? Not necessarily for you, but in the industry. Do you think, like, what you did has kind of set off a few alarm bells in other places that, others might look to do something similar?
I think that this has been a long time coming, and, you know, I don't know if this specific event kicked it off or if there's a string of acquisitions out there, but there's certainly going to be a lot of opportunity. There's a lot of private brokers that are out there today that are built up at size, and something will happen with them, you know, over the next 12-24 months. So yes, I think that, you know, what I've said in the past is, if the top 10 brokers make up 50% of the market now. I think as you look out five years, it's going to be the top four or five that make up 60%-70% of the overall brokerage market.
Got it. We have a little less than a minute left, and now I'm going to ask you about the digitization of the industry, which five years ago would have been, like, a top, a first five-minute question, which kind of tells you, A, how much the industry has evolved and kind of what you guys have done as well in the space. But when you think of the kind of quote, unquote, "digital brokers" out there, kind of, and everything they have done and those, the changes you've seen in that marketplace or with the exit of some key players there, how has that evolved, and kind of how much have they achieved kind of normalized operation, in your view, versus still having to find kind of, you know, stable ground?
Yeah. So I mean, I think first, the word digital brokerage.
Sorry, I take that back. A newer broker.
In general, it makes, like, you cringe, and you kind of want to find your way out the room because you don't want to be identified as a digital broker because all that means is you're losing money.
Correct. Yeah.
That's not something that we were ever really going for. For us, we were the, one of the first ones to i nvest in technology, and Jared talked about it. Technology that helps us from the customer standpoint, from the carrier standpoint, from an employee productivity standpoint. We'll continue to be focused on that. You know, for us, we never saw a differentiation coming in on the technology side. We did see some folks try to lead with price, but that doesn't help you for the long term. When you lead with price, you have to service the business, and if a customer lets you in on price, they'll throw you out on price. For us, we try to focus on three things and keep it very simple within our technology: customers, carriers, and people.
Got it. With that, I think we are a little bit over time. So, Drew, all we need now is the cycle to definitively show up. It's been a little bit coy. It's there, but I think it's imminent, so.
We're ready. We're ready for it.
Absolutely. Thank you, sir.
All right. Thank you.