ECHO
#Well, <UNK>, that tends to be true with LTL where you pay by the pound.
But in truckload we are paying for the full truck for the full trip from point A to point B.
The weight is really not a factor.
Yes.
I don't have our weight per shipment in front of me, but I would say that it's true that in past in the soft economic situations you will see LTL shipments average weight can decline and if it does decline, that can pull down your revenue per shipment.
And our weight didn't move that materially so a lot of it was fuel and just actually a little bit of softness on the rate side that we saw on the LTL side.
Yes.
<UNK> mentioned it I think in his prepared remarks in the script and I'll kind of repeat it.
I think that there are three kind of big areas that we have seen that we believe there's opportunity.
The first, and probably the biggest of the three, is the ability to grow our truckload business.
And the reason we see opportunities to do that is that Echo historically had a much stronger network west of the Mississippi and Command had a much stronger truckload network east of the Mississippi and both of us have respective customer bases that kind of reflected the ability to execute in those parts of the country.
Not that neither of us didn't do business nationally but our strengths were in those regions.
So we believe that there is opportunities for all of our sales people to continue to grow and expand our relationships with their customer bases based on this more competitive and effective network.
And we have already seen anecdotal evidence of that.
We have had sales reps that may have struggled on a lane previously running around really happy with the new capacity that we have and the ability to execute on the specific lanes, not enough quantitative evidence to really gloat about but just to give you the anecdotes from some of the sales people that are dealing with freight every day.
The second piece of the puzzle was to drive additional Managed Transportation business due to the 200 Command reps that have significant customer relationships.
And we have already seen a couple of wins.
<UNK> highlighted $6 million of new business signed.
And there's a long sales cycle there so it's not overnight.
But we believe that the transactional or brokers that part of our sales force has always been a key component to driving our managed transportation business.
And so by expanding that sales organization in that way, tapping into those relationships and educating our people we think that's another nice opportunity to grow.
And then thirdly we can expand our LTL and parcel services across the Command customer base.
Historically Command was a 95% truckload business, did not offer LTL services across our customer base.
And now that they have access to and the technology to implement the LTL capabilities that Echo brings to the table which include very competitive rates of over a hundred LTL carriers it makes them much more competitive and able to expand that service.
So those are the three primary drivers and ---+ that lead us to the revenue synergy opportunities.
Yes, <UNK>.
I mean we really ran them as two separate companies right up until October when we physically merged the two and merged the technology.
And the LTL platform was just released to the Command people about a month ago.
So we really spent the better part of the last year thoughtfully looking at the two organizations, figuring out what the structure of the new combined company would look like, looking at compensation plans, looking at best of both processes, finding the right technology solutions to support those processes and then working out the physical logistics of the move and the training and the implementation of the new system all the while writing the code to complete the integration.
So it was a lot of work and it's really just now that we're able to start going after those synergies.
Thanks, <UNK>.
Well, I think you tend to get a lot of the annual bids come up in the second quarter.
So, we saw some of that impact in Q2 and probably the bulk of it in Q3.
I would also say that the cost of a truck has been a little bit volatile.
While it's generally been soft we see moments in time or weeks at a time where it suddenly gets tight and prices spike up so that's probably added a little bit to the compression.
So it kind of feels like we're at a turning point and we can't predict when it changes.
We can't tell you with any certainty when it gets tight and how quickly after that the market reprices but that's the predictable pattern.
I would say that we have only been live for 10 or 11 days so I think that we have seen a little bit of variation and I would say it was down a little bit and then came back up.
So, but to some extent we have seen a little bit of an uptick, yes over the course of that 11 days.
In terms of what's going to ---+ how it's going to play out for the rest of the quarter is not only our execution and learning curve but the market will dictate some of that as well.
So we're hopeful to see a return to the higher growth rates for sure.
But at the same time it's a forecast looking ahead and want to be careful to just make sure we communicate this is where we are today and as you know the market sometimes acts in ways we can't predict.
So be careful we're not getting too far ahead of ourselves there.
Thanks <UNK>.
Hey <UNK>.
Hi <UNK>.
Well, I think <UNK> well articulated the fact that it's largely driven by the economic environment and the supply and demand of capacity, but I would also say counter to that, that we're real excited about this technology that we have deployed because we believe that that technology will make us more effective in sourcing trucks and almost gamifying the process of finding a truck and pricing it to the customer in a way that maximizes or optimizes our margins given the market that we're in.
Yes.
I mean that's one of the reasons we're so excited about this technology is we think it's really a game-changer for us in how we execute on truckload.
But after 11 days it's just not enough time to brag about it.
When we talked to our West Coast people in Long Beach they definitely felt impact from Hanjin in the way of delayed freight.
Some freight may be shifting modes.
But it was hard to quantify so I don't know that we can really give you anything to hang your hat on in terms ever something that's quantifiable.
And I would say the same thing with the hurricane.
Now the hurricane happened to occur while we were going through our conversion.
So normally when there are natural disasters it's definitely a negative effect in one aspect but also there are opportunities to move water and release commodities into the affected area and I would say that we probably weren't as aggressive on that as we would normally be given that we were going through a conversion and, as we said earlier, kind of in a defensive mode.
Thank you.
I would just like to thank everybody for joining us today on our third quarter call.
We're real excited about everything that we have recently accomplished and looking forward to what we can do with it going forward and we will talk to you next quarter.
