Mike Hammel video1259962175

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Mike Ogle: Mike, we’re happy to have you with us today to provide your career path, your experiences, and your advice. Welcome to the Supply Chain Careers podcast.

Mike Hammel: Mike and Chris ap- appreciate the invitation, and look forward to the conversation, and hopefully we can share some insights about what it’s like being in supply chain.

Mike Ogle: And how did you become aware of and get started in supply chain in the first place? What were some of those influences, whether it was people or circumstances, that made it a successful career path for you?

Mike Hammel: Yeah, for me, I was quote unquote, “born into the industry.” Our family has a long standing history within transportation and trucking.

Great-grandfather actually started a trucking company back in 1919. So used to hear stories from my grandpa about leaving his last period of high school and there’d be a truck parked outside with him full of freight waiting for him to make deliveries. So got to hear about, his experiences, and then my dad and my uncles as they were growing up also being heavily involved in that trucking side of the business.

And they actually started their own company, Pitt Ohio Express, who’s an LTL carrier, a pretty large one [00:01:00] now. Basically that piqued my interest as a kid growing up hearing these stories, getting to see their operation, learning about it. Going on road trips, looking out the windows, looking for Pitt Ohio trucks or other trucks, and just being intrigued about, freight moving, where it’s coming from and how all that operation works.

Very much like my family members, I had expressed an interest to start working early as a kid. Got a work permit, 13, 14 years old, and show up at the docks, washing trucks cleaning the docks, picking up trash painting some dock areas and bumpers and things like that. That expanded when I was 18.

I actually got to start to, to work the docks, so unloading freight. Great job in the summer. Really, fast paced moving job. Got to experience what it’s like after the pickups are made from shippers, how the freight is moving across the terminal, cross docked, and loaded into, to outbound trailers for the line haul piece of the business.

Really enjoyed that experience seeing how that all operated and moved. And then when I turned 20, moved into the corporate office and started to learn a little bit more on the IT side, working the help desk communication with the different service centers employees and getting [00:02:00] to, to learn a little bit more from the tech side.

KDL is our company now. It actually came from PITT Ohio. It was started as a spinoff, and it was originally started as a full truckload brokerage service for customers that wanted to move larger shipments that was outside of the traditional LTL standard. So that’s how we got our legs.

When I first got involved, I was a truckload broker moving, quoting and moving shipments through the network. But it was also right around the time that TMS technology was just getting started. In our career, we’ve licensed and used various TMS systems and, I was still in my early 20s, not yet graduated from college, and as an intern, helping our company at KDL build some of their first pricing profiles and TMS users.

And as a young guy at the time, I loved technology. I was excited to see what it could do and then just remember when we first started rolling this out to customers, seeing that wow response because it was something new at the time that people didn’t have and allowed them to quickly, rate shop and make decisions on routing to improve their process, but also help, reduce some of their costs.

So really enjoyed that part of the business here. We’ve worked with [00:03:00] various TMS systems early on, but as we continued to expand this operation, what really started to excite me was, “Hey, I think we could, I think we could do this ourselves.” So instead of licensing it, you’re using that experience to create a system that was, shipper-friendly, user-friendly, and then build it around, the more advanced technology offerings, APIs that were coming to market at that time.

Really got excited about, again, from the youn- being the younger side, the tech side, which is something that is constantly evolving in this space. I know we talk a lot about AI and how that’s gonna con- you know, come into this space as well. Especially people coming in the industry, just good opportunity to get involved early while this thing is still young.

And actually spoke to a contact a few years back when AI was even, less developed, but he was pr-pretty insightful guy and was just com-comparing it to the internet in the ’90s, we didn’t really know what it was, how we were gonna use it, but we knew it wasn’t going anywhere.

And it was one of those things that you gotta get involved or you’re gonna be left in the dust. Throughout my career though like through contacts with that person and, just our family in general, you learn a lot from people in your career. And you asked about some of our, inspirations or people that have been most impactful to [00:04:00] us.

Outside of, those contacts, networking and customer relationships have been a big part of that process and, getting to know different contacts, d- different people in the organizations, in your organization or outside customers forming those relationships. We always say too, we’re always learning through time and evolving as people.

And the best way to do that is, is through relationships and networking. So we’ve learned a lot about that with some of those shared contacts, whether it’s a customer or friends in similar type roles, just picking their brains what’s happening in their world what’s in their space, even if it’s a completely different industry.

What are some challenges that you’re dealing with? How are you managing, from the people side? And just exchanging stories and information. It’s just, it’s a great way to learn. So those have been some pretty impactful relationships and contacts I’ve had throughout my time here.

But, last but not least KDL my two business partners there are my brothers older brother and a younger brother. And, not just business partners, but also accountability partners. We’re all very competitive people and as, we’ve continued to grow in our career, we alwa- we never settle.

We always are, keep changing and evolving as a company and as a person. [00:05:00] And a big motto that we have is, you have to keep changing. Companies that don’t change are the ones that are eventually fail. So we use those that, those thoughts to always, continue to push ourselves forward.

Chris Gaffney: So Mike, I am fortunate to have worked with other folks in family businesses and, to, to what you have done, to me is a very successful practice. Because if you’ve picked up the trash, you’ve done it all, and that gets the connectivity to the business and the respect for everybody involved.

I’m curious as you think about how you’ve grown up in the business, some of the key moves that you made, whether they were a lateral move or whatever, whether you said, “I really wanna do this”, or someone said, “We need you to do this.” I’d love to hear about a couple of those key transitions.

And then for our audience, who in many cases thinks, I can only advance my career by going somewhere else, how to think about, internal growth and development and transition as part of their career strategy.

Mike Hammel: Yeah. Chris, a great question and 100%. Y- I started off as a truckload [00:06:00] broker, moved into an account manager role, became eventually a manager of account re- management operations.

But yeah, like you said, a lot of the times it’s a door opens up and sometimes it’s unexpected, and it creates an amazing opportunity. Sometimes when somebody leaves a company, you wonder what the team thinks. Why did they leave? What’s the opportunity? But in reality, it should create an excitement, right?

There’s a new role that’s available. There’s opportunity here for me to step up into that space and show what I can do. And some of my growth Chris, came from exactly that. From the truckload broker side, we, I, we started out as that piece of the business, but as our LTL operation grew I started to move into that to learn more of that.

And I think that’s a huge value for people out there as well, is get involved in as much as you can in all different areas of the business, all different parts of the department. Create, become that Swiss Army knife utility player that knows everything about the business and that gives you such a competitive edge.

But also, when that door opens up and there’s an opportunity, jump on that. And we had that at, in our company as well. As a young guy, we clearly [00:07:00] had some leaders in the organization that were running the company and we w- I was trying to just prove my worth from the lower level.

But as things evolved, we had, a person that was overseeing our pricing procurement side leave and it created up a new window for me. I used that to move from just the client operation side to get more involved into the pricing and procurement side and expand on that to your point, yeah, I think it’s a great thing to think about when you have younger employees looking at how do I grow?

It- the- a lot of times they’ll look at what’s the next immediate seat in my current department? But you should be looking at outside, how do the other departments work? Form relationships with people in those groups, learn about what they’re doing, ask questions and raise your hand.

I think some of the employees that we’ve had on our team that have moved up the fastest are the ones that not only do a good job, but say, “Hey, I wanna do more. I wanna learn more. How do I do that, and what can I move into?”

Mike Ogle: Yeah, and continuing on that a little bit, I’d like to help people understand in our audience, what is, KDL about, helping them [00:08:00] understand the business that you work in what makes somebody successful in that space, thinking about on both sides of the contracts.

Those people that are your clients and those people that are internal trying to do that work. And then I I want to add one other little thing, because you’ve got that great operations kind of experience at the, as Chris said, picking up the trash and beyond, that how did that shape your philosophy as you bring people into the organization of helping them understand from the bottom up?

But start with the KDL side and how this business works.

Mike Hammel: Yeah. On our side it’s about moving freight from point A to point B a- and getting to understand how companies work. There’s 20,000 3PLs out there, so it’s, you have to be competitive and you have to differentiate yourself and add value there.

You can’t just be a company that does, simple procurement, provide a TMS, audit, and bill pay. Those we say those are prerequisites. You have to be more involved with a company and connect with them on various levels and see how things work. [00:09:00] That’s one of the cool parts about this job is that as you get in, out and on site and meet with customers directly, you get to see all of their operations.

And one of the things that has really become more in focus over the last few years is that transportation and freight touches every department. The school of thought forever used to be, oh, transportation, supply chain, that, that goes down to our shipping manager or our traffic managers back in the day.

But w- what especially post-COVID when adar- dealing with inflation supply chain issues, shortages, disruptions it starts to, get a lot of attention from the C-level from the finance side, understanding why costs are going up, how we’re managing those costs.

From the sales side, what customers are looking for orders inventory levels, backlogs. From the procurement side, who are you working with? What carriers are you using? How are you buying freight? Things like that. So it touches all those different parts of the job, which was very interesting when you first come to this because you start having meetings with people in every single department of a company, and you get to see the inside and workings of all different types of companies.

And you start to learn that a lot of [00:10:00] companies are built very similarly, even if completely different industries. They all have similar operations and strategies and struggles and you get to be part of that in, in every step of the way. And a lot of what we try to do, too as we’ve learned is you have to make contact with everybody in those different departments.

You can’t have a single point of contact, a strong relationship in one level, because ultimately that can create a risk, right? Especially within the last five years, you see a lot of turnover with people in positions and when you lose a connection there, it creates a risk. But more importantly every department has challenges that revolve around freight even if it comes to the back office and the accounting side.

So we wanna really preach to our team that we need those seven lay- layers of contacts. We wanna be involved in every certain dep- every department of a company get to know those people get to know what their challenges are, and then get to know how we work together to create those opportunities.

And that’s something that we’ve been really preaching to our team over the last few years is better engagement with those companies and be- better communication. We don’t want it to be a “Hey, I had a meeting, I [00:11:00] checked a box, I’m completed, I’m gonna move to the next customer.”

You wanna go into a customer, you wanna be an active listener, you wanna hear what they’re going through- and you wanna come out of that with some action items, right? And the best way to form customer- strong customer relationships is to develop those actionable items and then deliver on those.

Once you start to see success on that, then you start to build momentum and you start to get some traction. I think that’s a cool part of this job, and really when we look back at some of the strongest relationships and influences that we’ve had in our careers it’s some of those contact points that you develop, that you’re meeting with on a regular basis that you start to really form strong relationships with.

Just not from the work side, but then starting to trade, stories outside of that and get to know them better and it just builds on that connection. And we’re strong believers that to be successful and have a good relationship, you have to build that trust and prove your worth

Chris Gaffney: You are now a pretty senior leader in the organization, and you’ve grown up seeing various leadership models. I am curious today w- how do you view your responsibility [00:12:00] as a leader, right? You’ve been on you’ve been led and now you’re leading. And I’m curious, also how does that tie into how you think about teams both internal to the organization and as how you match up against key customers?

Mike Hammel: Yeah. A lot of it is based off of learning through our experiences. Hey what happened early in our careers? How did we evolve? What were some of those drivers that caused us to wanna change and continue to evolve? And looking back on it, when you start up into the, becoming a manager, overseeing people you look at some of the mistakes that, that you made early on.

A lot of it first-time managers, wanna prove their worth. They end up taking on too much work, turning it into a control issue, wanting to handle every task, wanting to handle every issue that pops up. Those are some of the things I saw early in my career that some of the mistakes I made with, not leading by example and not realizing that you had to teach and delegate to really get that team to evolve.

When you try to take on too much from a control side, you’ve got a less engaged team, and then you have a lack of development. And then it’s unscalable, right? So ultimately you [00:13:00] have one person that’s able to handle certain tasks, and then there’s a big gap between the people below you in that operation.

So that was something early on that we looked at and, or I looked at personally and said, “That’s something that you wanna change.” Also, as you move into these roles, so much of this is, putting your own f- stamp on things and building stuff ways that can be done differently.

A lot of times you step into a new role, a new operation, you’re trained on what the previous person d- did or how they handled it. And we often reference the, for our team, the butt of the ham story, right? Why do you cut off both ends of the ham? That’s how my mother did it. Why did she do it?

That’s how my mother did it. Why did she do it? It was because the pan was too small. So you have to learn that, just how things had operated and been done before is not the best way to do it moving forward. That was a pretty cool lesson I got to experience firsthand after that person that was overseeing our pricing and procurement side had left and I stepped into those shoes.

I got to see, how he was previously managing carrier relationships, handling carrier increase requests. So one of the cool things that we started to do at that time was, hey, carriers are often telling us, “We want more [00:14:00] information.

We wanna know what am I getting, what am I not getting? Can you give me some feedback on this? How far off am I on some of these increase requests?” So we used that as the opportunity then to revamp that department and start to m- do some extensive models on datas to show carriers, “Hey, based on what you’re requesting, this is what we’re forecasting.

Here’s what we would recommend. What are some lanes that-” you like or don’t like that you might need to want to improve pricing or take bigger increases on. So we started using it to better and improve our carrier relationships by just more communication, more collaboration, which was totally different than the previous manager had been doing.

So some of those experiences really helped from our side. The first time you do that as a manager, it creates excitement to say, “Oh, that’s cool. What else could we potentially do differently than what we’ve done in the past from an operations side?” But another big part too when we first started, growing as a company and taking on a bigger role as a manager is we didn’t use a lot of metrics at the time.

As you grow quickly people get busy, and you try to expand, hire, assign workloads, and it be- it became very difficult to determine workloads and, [00:15:00] when we do or don’t need to hire and are we doing things correctly and efficiently. And from our side, one of the things that was most impactful to us in our career was my brothers and I and the rest of our executive team decided to read a book.

We always wanna keep learning. That’s a good lesson for everybody. As you get advanced in your career, you’re always gonna continue to learn more or wanna learn more. But we read a book called Traction by Gino Wickman which was very impactful about the EOS model.

It’s all about metrics, accountability processing issues. It talked about the mistakes companies and managers typically make. And when we read the book, it was almost like it was written about us. So it was really cool to just k- Look back at, the, some of the things that, y- some of the strongest companies were doing and how they changed their operations, right?

It’s, not about getting into a meeting, trying to process an issue, arguing about it and not solving it. It’s about identifying what are the things we need to solve and, not leaving until you, you come to a conclusion on how you’re gonna manage those. But it was also about, setting goals and, from the people side developing people and making sure you have [00:16:00] people in the right seats.

And that was a huge thing for us. You can have somebody that’s really good at a specific job and, when you’re looking to potentially move into a a new management level or you might think that might be the pers- the best person for that job, but they don’t have the skill set to potentially run with that.

That was a big part of our operation is just looking at, developing metrics, accountability and determining who was the right person for the right seats and then really focusing on coaching which was a huge part of it as well. So many times I think early in the career is you hire somebody, you teach them the job, and then hope that they do a perfect, job every single time.

It has to be a constant engagement, and that’s something that you learn or at least I learned later in life, is it has to be, feedback, explaining the why. What are we doing here? Why are we doing this? What’s our impact to companies? How do we provide value? If you can’t do that then it’s gonna be turned into a superficial meeting, which is our biggest fear.

But we wanna give them feedback too, listening in on some of their meetings and calls without jumping in, giving them feedback after the meeting once. “Great job. Here’s, here are some things to think [00:17:00] about.” And then especially within this industry, it’s constantly evolving, so helping educate them on what’s happening in the market so that they can be a true industry expert.

Companies rely on that big time, or at least our customers do. We have– we live in this world. We know what’s happening at every, any given moment, and we need to explain to them so that they can explain to their customers as well. We always say that an- a surprise customer is gonna be an unhappy customer at some point, so we wanna be, we wanna make sure that our team is fully dialed into what we’re doing and what’s happening in the market so that they can be those experts.

Mike Ogle: Unless that surprise ends up being, “Hey, guess what? We went ahead and lowered your rates.”

I’m gonna toss in an odd question or a odd comment, just simply because when you mention the pan being too small for the ham. W- you’ve seen things happen over the years as far as sizes of different kinds of containers and such, and when trucks go to 53 feet, for instance, being allowed, yeah out on the road or setting that limit.

Things like that happen all the time that y- [00:18:00] you think it’s a small change, but it’s a massive change for the industry, especially when everything is electronic and changing.

Mike Hammel: 100%, and that’s, that happens every year. There’s some major change that that impacts shippers directly that if they’re not aware, it can cause major impacts to, to them from a costing side.

In the LTL space freight classifications are used for costing, right? And the NMFTA last year and has been doing this for some time, but last year they had a major consolidation of NMFC codes. Expiring old ones, rolling new existing codes into new density-based codes which is really where the industry should be going, right?

Freight classifications established a long time ago are not a great representation of what that freight is and how much space that takes up in the truck and what the density is. So that was a major thing, to your point, Mike, that, s- what seems like a small thing, NMFTA is changing some classes, making it density-based.

People need to be prepared for that. A- and they need to understand, is that the code I’m using? Is that the product that I’m shipping? And what is this going to do for [00:19:00] me from a cost side? And we were pretty proud of that last year. Some of the things that we do from a proactive side was identify all codes that were gonna be impacted, do a massive search on all of our codes that we have for our customer base, identify who’s part of that, take a look at those codes impacted, what were the densities going to be, what’s the new class gonna be, and then work with the carriers proactively to establish, FAQs, freight all kinds, to protect them so they don’t see major spikes in cost as a result of a simple change like that.

But yeah, some of the things in the industry are constantly changing that, that cause these types of headaches for shippers, so you gotta be aware, involved, and make sure that you’re being as proactive as possible.

Mike Ogle: And one thing I guess I would toss on top of that, when you talk about the importance of metrics if you just simply make those kinds of changes in a system, but they end up greatly impacting somebody’s metrics, either very positively or very negatively, you have to be very aware of that as a leader.

Mike Hammel: 100%. I think the biggest thing you can do is build that metric and have somebody constantly focusing on [00:20:00] it. Also early on in our career when KDL was very young, we used to, have our month-end financials and look back and be like, “How did we do? Oh, no, that didn’t go great,” or, “That could’ve gone better,” or, “That went really well.”

And, it’s too late to do that when you look at the financials and say, and see impacts there. You need to establish something up front and be looking at that on a regular basis. And we do that internally within our own teams. We have, each one of our departments has our regular, what we call the level 10 meetings, where we have a quick scorecard of the metrics that impact our operations.

And we do that for customers as well. We have identified quick access scorecards for the customer. What does it look like from their shipping levels? Average cost per shipment, average cost per pound. What do their lanes look like? Has any freight classification changed? So we push that information to them as well to identify and have a pulse at any given time on what’s happening there.

We never wanna look back and be like, “Oh, my gosh, cost per pound went up, by 10 cents. What happened?” So we do that for customers from not just the costing side and the pricing side, but we do it from their profitability side as well. We’re a big, believer in, on understanding what customers do with freight.

Freight can [00:21:00] have a huge impact to the bottom line. And identifying, what do customers do? What policies do they have? What gets billed back to their customers? What do they eat from free freight? And how does that all move together? And that’s something that we’ve really been focusing on, especially post-COVID in the inflationary environment is identifying how that freight is impacting their PNLs and giving them visibility that they didn’t have before.

But to your point, Mike, it can’t just be a one-time exercise. You need to be constantly reporting on that so that there’s never any surprises.

Mike Ogle: I’m gonna change this to a different tact here and go I wanna talk about where we think things are going. With all these different changes, and you say, keeping track of the changes and making sure that how you lead and the metrics and all these things end up connecting together with trying to understand the fast changes that we’re going through and trying to make these adjustments.

Are there some trends that you’ve seen in technology, in business practices, things that you [00:22:00] see are having a really huge influence on how people are going to do their work in supply chain, l- let’s say just over the next two to three, maybe five years?

Mike Hammel: Yeah I think the big thing that’s out there, we mentioned it briefly earlier, is AI.

So how are we gonna get an AI involved into the operation to allow us to grow significantly with, controlling our headcount that we have available? I think that’s the biggest thing that’s out there right now. I think AI is gonna … it’s already reducing a lot of administrative work less time preparing and analyzing data, quickly identifying items that need to be reviewed, and then getting that to a a decision maker to, to initiate those changes.

So that’s a big part of this. If we look back at certain things we’ve done, on our side, even looking at simple cost models, when you would talk to an analyst who would say how would you do that?” I’d extract data, format it into the system, I’d put it through a cost model, I’d get it back, I’d reformat it back into the template, I’d start to manually run equations, and you start to look at that and say how much time did that take?”

And sometimes it could be four, five, six hours for one, [00:23:00] one model. So we’ve been really focusing on, how do we use some of these tools and technologies? Maybe it’s AI, maybe it’s just, some system and process automation. But we’ve been really f- hyper-focused on setting up some of those controls in place or developing those types of programs that have allowed us to take a model from four hours down to about 30 minutes.

So we’re able to, prepare and work through information quicker which has been amazing. We’re also using it for research on market trends, right? Stuff is happening in the world. You had tariffs last year, you have the Supreme Court ruling this year, you have gas prices. Just kinda getting an idea on what’s happening out there, how people are responding using it as a tool to just kinda get, information quicker about what’s happening in the industry.

We can use it for simple things too, right? Some things that people are starting to expand and explore is setting up a AI to, read all your emails and then prioritize which ones you should be responding to first so that you can get through, faster results on those types of things.

In addition to that, outside of some of those simple admin stuff, Where I think, where it’s, t- in our space, where it’s going is better shipping [00:24:00] optimization, right? A lot of the systems that we’ve had in the past have been mode specific. You might have a TMS system that’s only LTL. Okay, now it’s LTL and it can do some truckload.

Okay, now it can do, also do parcel in there. The next step is, having a platform that can also do the international shipping there as well. I think that’s a big part of our space where it’s going. People need to be involved, companies to be involved in investing in that and building that out.

Because if you don’t, you’re gonna lose current clients to somebody that has that capability, because it’s gonna create an additional efficiency for them. So that’s a big part of the process and something of a focus on our side. From our customer side we have contacts that we, how are you using AI?

And they’re doing it for simple things such as, order processing. Hey, when a customer places an order and prepays for an order, we want the system to automatically create the information, the paperwork, assign the carrier, put the pro number on it, and then allow our team just to print out labels and BOLs without having to make any decisions.

They also use it for inventory levels. So reviewing the current inventory that they have in their warehouses, identifying where they’re starting to get low on, a- [00:25:00] allow them to shift inventories to be more effective. Or just better reading the data. A lot of times when we look at, hey, how do we reduce costs?

Sometimes you could have amazing pricing programs in place and there’s no meat on that bone. So you have to look at, what are my behaviors here? Where am I shipping to and from? I have five DCs. Why does the Pittsburgh DC always ship out to California when we have a Reno DC? Oh, it’s because we don’t have that inventory there.

Okay, let’s expand into what inventory is being shipped there. What’s the frequency of it, and what’s the cost of it, so that we can better plan from that operation And then from the carrier side too, they’re getting much stronger on, predict- predictive maintenance on vehicles.

So identifying vehicle health in real time gives them the ability to focus on some of their line haul trucks. When they think that this is getting near or having signs of some, of potential breakdown, they can take that truck out of a line haul operation and put it into a local P&D facility, so it creates less downtime and l- and less disruption.

So there’s a lot that’s happening there on the AI side, which I think is the, is a huge focus. It’s almost like when the TMS first came into play [00:26:00] in the late ’90s. It’s “Holy cow, this is gonna be a game changer. How do we take advantage of this?” But at the same time, we’re also being very cautious, right?

So it’s very new. You, we all have NDAs with clients, so you have to be very cautious about what you’re putting into a system. You can’t put in any personal data customer data so you have to be aware of that. You also have to be wary of some of the bots that people are creating.

You’ve read, you read horror stories about people that create bots that are trying to solve a problem, they can’t figure it out, and then people show up to work the next day and the server’s wiped out. So I think there’s a lot that we’re still expanding and investigating here. And there’s some limitations too.

I think it’s, the AI has come a long way. It’s not there to handle a lot of the tasks I think it will do in the next two to five years, but we’re all, we’re investigating in this and learning and pl- and, seeing what that capability is. Again, much like the internet in the ’90s, is it’s not going away.

It’s gonna change things forever, so we wanna be part of it and we don’t wanna be the, the last company there. I might not wanna be the first one that goes through some of those pains but I wanna be, close by.

Chris Gaffney: So Mike, I am fortunate to have grown up in this [00:27:00] field as well as you. I will say I started earlier by delivering the newspaper, but it wasn’t a family business.

But l- love the field. It’s g- given me some of my greatest growth and, opportunity to tackle challenges and see myself grow and have the ability to make a difference. It’s also a challenging and frustrating field. H- how do you balance that, for your team? How do you…

Are you honest about people coming in, say, “Hey, this is the wonderful side of this, but this is the reality. This is real work. This is 24/7,” that type of thing,

Mike Hammel: yeah, it is incredibly fast-paced environment, and we always tell people that up, right up front. And I think that’s actually one of the best parts about it, right?

It’s not a slow-moving board of the office type job. There’s constantly something happening, constantly something g- going on, and the days go quickly. But I think some of the challenges, Chris are contribute to some of the most exciting parts of the job as well. We’re in a really interesting time right now.

We went from almost felt three years of a soft market low to quickly being back almost in 2021 type levels with some of these cost increases and [00:28:00] disruptions. And by that I’m talking about, s- right off the bat, you have gas prices in March when the conflict with Iran started, where gas moved from about 365 a gallon for diesel up to, over $5 per gallon.

And that extended for, really since March, which was an immediate… you could have, your prices are all great. Not a lot of meat on that bone, but all of a sudden you’re seeing double digit increases in your cost because a result of some of those changes. We also have some major changes happening right now on the brokerage side.

Some new regulations requiring o- on CDLs and renewing CDLs, and the government really focusing on taking unsafe and riskier drivers out of the market. And freight has made the national news again recently because of these driver accidents, fatalities and- freight theft as well which became a, an enormous problem over the past two years within this space.

So there’s a lot happening right now from that side. On top of that Supreme Court had a pretty big ruling on Montgomery versus Caribe which now establishes that broker has, have liability in the event of a freight accident. So what does that mean for [00:29:00] brokers? So ultimately what we’re seeing is the number of CDLs is shrinking significantly as the government’s involvement and rightfully right?

Taking unsafe drivers or out of the market, which also reduces freight theft. But at the same time, because of this new ruling from the Supreme Court, brokerages are having to form massive compliance departments, right? People that are not booking freight, that are establishing processes and procedures to identify and evaluate whether or not they wanna use that carrier.

Is that a risky carrier? Is that somebody that passes all your tests? And make sure that you stick to that on every given situation and load. From the outside perspective it’s been a, it’s been a very stressful few months, and not just for brokers either. When we talk about all these things happening Whenever you take drivers out of the market, you have an immediate increase in costs.

Economy is up a little bit. It’s not booming. But you have, when you shrink, by X percent from the available drivers that are able to compete you start to see those line haul prices start to skyrocket. And we’ve seen a massive increase for the first time since [00:30:00] really 2021, 2022.

Post-COVID, we saw that, spike within the industry because consumer demand went way up. And all we were talking about then at that time was the average age of drivers, the number of drivers leaving the market, and we didn’t have the infrastructure or the capacity to move the freight.

And it wasn’t just over the road. This was, everywhere we saw this because of the increase in consumer demand. You would see on the news the strikes in the Port of LA or not, I’m sorry, the strikes, the the backlogs at the Port of LA, the number of ships just waiting to get unloaded, no space to unload the containers rails metering lanes because they don’t have enough capacity to move the containers, deconsolidating into truckload and just not being able to move the truckload because of lack of drivers.

So in ’21, ’22, you saw a massive spike in freight costs. But since that time the economy softened and because of where the price points were, you saw a huge increase in the number of drivers that were entering the market. So that has helped stabilize and bring prices down. But as that happened, you saw the number of accidents and the number of freight theft go up.

Long story short, we’re seeing that happen [00:31:00] again right now with lack of capacity in, in, in all modes, and you’re starting to see those price points really jump up. And when that happens, it creates a lot of stress for shippers, right? Because they have to evaluate and say, “What do I do with this?

How do I respond to my customer base on this?” Shippers have been dealing with this for some time. Last year, the big news article and one of the pain points, Chris, to, that causes a lot of frustration was the tariffs. Tariffs were getting rolled out. There were different dates on when these were gonna come into play.

Shippers were trying to bring in as much inventory as they could to try to prevent some of these tariffs, and then anything that moved after that, they had to figure out what they’re gonna do with that. So we’re in a soft market, and you’re getting, double-digit increases from tariff prices that a lot of smaller shippers didn’t know what to do with it.

Do I pass some of this off? Do I eat part of this? Big companies are the ones that do the best job of passing forward all costs to the end user. Smaller mid-size companies, especially in a soft market, have more of a fear of I don’t wanna lose that sale, so they end up absorbing a good chunk of that, that, that increase that they’ve taken, whether it’s from freight or from tariffs.

So that causes a lot [00:32:00] of stress For companies because the first thing they wanna do is a procurement exercise, right? How do I cut costs now? If I can’t pass this forward, what can I take out of the system? So it causes a lot of stress and anxiety with the customer base. We end up having a lot of conversations with clients.

A lot of companies are dealing with this. These are some things we need to look at. If there’s nothing to take out of the bottom line from the shipping cost, let’s talk about warehouse optimization. Are you moving it out of the right facilities? What are you billing back to your customer?

What does that impact? Do you wanna change that? Do you wanna increase your minimum order amount to try to offset some of this? Or if you’re doing, free freight, fuel just went up, 50%, maybe you start charging a fuel surcharge for the free freight customers just to offset, hey, there’s been a major shift in the, in, in what’s happening in the environment right now.

We need to think a little bit differently. We appreciate your patience. When things settle, we’re gonna, we’re gonna go back to the way that things were. But that, that creates a lot of frustration because from our operations team, every time we have a meeting it’s a completely stressed out client when you go through a time like this.

But Chris, to my original point, that’s part of the excitement, right? Is we’re seeing this [00:33:00] constantly evolve. It’s never a stale thing in sh- in shipping and supply chain that is predictable. It’s always evolving, it’s always changing, and we need to understand what’s happening and why, and again, educate our customers.

Be an asset for them. Hey, you’re going through this. I’ve got other customers that have done something similar. Here’s what we’re doing with them, and here’s what we’ve seen as a return on that. So being creative and giving them new ideas to help navigate through these times is, one of the more exciting parts of the job.

Chris Gaffney: Yeah, i’ll make a comment because you’ve talked about it a number of times through the, our discussion today, is, I’m an end of end-to-end supply chain person, right? I studied in, industrial and systems engineering and system includes multiple parties. And it’s clear that your company’s philosophy is we’re just not a transactional partner with the people we do business with.

W- we understand that if they’re gonna be successful, we gotta find ways for them to be competitive and stay competitive. And so I love the fact that you’re trying to bring solutions to customers. Clearly, that also hopefully [00:34:00] translates into your company being a more valued, durable partner with them and not subject to the next, RFP and that type of thing.

So that is off our script. I don’t know if you wanna comment on that, but it’s clearly runs through, all the discussion we’ve had.

Mike Hammel: Yeah, 100%. It’s helped us maintain and protect relationships with existing clients. We occasionally have a client that says, “Hey, costs are going crazy.

I’m getting the direction that I wanna have to look at a bid exercise.” And we say, “It’s totally fine. We’re happy to participate with you guys in this. But let me, while we’re doing that, let me talk to you about this.” And it answers a lot of questions. And I’ve been in rooms with executives when you talk about these things like what are you charging for freight?

Or when is it free? When is it not free? And when was the last time that you evaluated that? And if you haven’t moved that in 15 years, you know how much costs have gone up in 15 years? And do you take increases on your material every year, so you’re pushing more and more to free every year?”

So we’re trying to have creative conversations with clients. And it’s really helped us from existing clients where, you know we receive messages later “Hey, you guys were rock stars. We didn’t think about this. This has been something that, we didn’t really have a controller or person in place that manages this operation.”

[00:35:00] Sometimes sales was managing it, which was, a conflict of interest. But working with them to identify outside of just the procurement and the rate cut side because, as we mentioned earlier, you might, there might not be that much meat on the bone to improve that. And we look at, a lot of companies are measuring freight as a percentage of sales.

And we have a pretty cool marketing piece that is a nutrition label. Here’s an unhealthy company, and here’s what they’re doing from procurement and from w- warehouse optimization and from freight policy, and here’s what a healthy one looks like. So we use that to our advantage to say, “Guys, there, there’s a lot more that goes into for freight impacting your bottom line than just the procurement side.”

Chris Gaffney: Super. Thank you.

Mike Ogle: And I want– one of our favorite parts, and I think for a lot of our listeners as, as well, is the advice side of things. We always love to ask about things that you’ve learned over the years yourself and that you share with others that continue to be part of your mindset and things that, that you’ve heard from others as well, that you’ve taken to heart and you like to be [00:36:00] part of your career.

What do you have as far as that kind of advice?

Mike Hammel: Yeah, my favorite one actually comes from my dad. So right, he was heavily involved and one of the owners of Pit Ohio. He said, “It’s never as good as it seems, it’s never as bad as it seems.” And it’s a good, it’s a good mentality to always keep in mind in this space because there’ll be times when things are going great, and then something changes and sets- there’s a setback.

There’s gonna be times that you think that, things are not going the right direction, and you know how much worse is this gonna get? But everything changes, right? It’s never as good, it’s never as bad. I use that mentality too with some of our customers as they’re, they were going through some of these things with the tariffs.

“Hey, I got this tariff coming in October, and then there’s another one coming in January. I don’t know what’s gonna… what we’re gonna do. We’re gonna lose customers.” And we’re like, “Just, stay the course. Things will work itself out. Again, it’s never as bad as it seems.” And of course, some of the tariffs got rolled back and were extended out another year.

That- that’s a good mentality to always think about on the business side. The other thing is it’s everything is cyclical. The pendulum is always swinging. And that’s sometimes tough when it’s not in your direction to understand, but it moves from shippers to carriers.

And [00:37:00] it’s been on the shippers for the past, three and a half years, starting to move back to the carrier side right now because of lack of capacity. So truckloads are, capacity is reduced, costs are going way up, and shippers are deconsolidating and shifting into LTL mode. Now LTL mode is filling back up.

So it’s always moving that way. That was big for me in my career too in the 3PL space because, when I… not long after I started, we had, the Great Recession. It’s oh my gosh, like all the business that we had with all these clients, everybody’s doing less now. So it’s one of those things that, just stay the course, things are gonna move, the economy’s gonna pick back up, things will change.

But also history repeats itself. Right now, as I talked about the capacity issues, the gas prices it feels a lot like 2021, 2020, 2021. Gas prices even looks almost identical to where we were in 2022 during Russia and Ukraine. You saw a massive spike in March almost at the exact same time.

And prices went up to almost the exact same peak level. So it’s one of those things that especially in your career, when you go through some of these things, [00:38:00] you it has less of an impact on you. It’s hey I’ve been down this, I’ve seen some of this, stay patient, this is what we’re gonna do.

And especially as a leader, the biggest thing you can do is, continue to show that with your employees, right? Even when things are tough, have a positive energy and, explain how we’re gonna get through this and keep everybody involved and keep everybody active. But then also some of the advice too, I think we might have talked about a little bit earlier, as a person coming in the industry, get involved in as many facets of the supply chains you can.

Warehousing, inventory management, analytics, transportation, procurement. The more you can understand how everything operates, the better you’re gonna be as an individual and the faster you’re gonna grow in your career.

Chris Gaffney: So when our audience listens to this, and they’ll jump on and check your profile out, ’cause they’re gonna wanna come work for you, they’re gonna see a phrase, “People drive logistics.”

So my final question, what’s your view of, the best way to find the best people, how to bring the best people into this field and that type of thing?

Mike Hammel: Yeah. So we are really big on our culture. And another thing that we learned through Traction [00:39:00] is, hey, you gotta establish core values and you’ll figure it out over time what you look like and what you wanna be and you’re gonna hire based off of that.

We, we always, like many companies, you, we hire attitude, right? We can teach the skill. A lot of companies people that we hire, some of them have logistics, supply chain backgrounds, some of them don’t. But if you come in with a good attitude and a good energy, we can evolve and really help advance that person throughout their career.

We want people that, wanna have fun, wanna be accountable, wanna be a good teammate wanna have empathy. That’s big for us, too. One of the things we try to explain to our customers is when you hurt, we hurt. So we want people that are working alongside with each other, not just within their own department, but with other departments to help create growth for the company.

Because the better the company does, the more, chairs and seats that open up and opportunities to advance. So we’re really big on that, and we try to reflect that also with how we work with our customers directly. We’re really proud of the fact that we still have people answering the phones on our customer service team, and it’s one of our most highly complimented part of our programs from customers is, “I just wanna give you a shout-out.

Your team is incredibly [00:40:00] responsive. They’re very thorough. They follow through. They pick up the phone and call me. It’s not just an email response back.” But it creates such a positive experience working with clients versus where some other c- competitors are going. And we see this, too. W- I’ve seen this, had a bad experience just recently when I ordered some clothes online.

Shipment never came. It got returned back to the DC, and I tried to communicate with their customer service team, which put me through a bot which didn’t answer my question, that kept disconnecting me, and it just created a bad experience from working on that side. So we’re big believers that people make the difference here and w- we really are proud of the culture that we have created because ultimately, we want people that wanna be here and we want people to wanna have fun.

You should enjoy your job. It shouldn’t be a thing that you come to work and you’re upset and depressed and then you go home. You want, we want people that are engaged. Chris, to your point, that’s one of the most exciting parts of this job is it’s fast-paced, it’s always moving, and there’s always something happening.

So we really focus on that fr- from our side. But the, it’s not just about developing the people as well, it’s about, extending that outside of our company walls as well. We’re really big on what we call people drive [00:41:00] communities. And we’re getting a lot more s- s- involved with supporting local causes.

So some of the re- things we’ve done recently is we do a monthly trip to the food bank where we assist people with, shopping for their food, help them, guide them through the process. It might be their first time. They might be nervous. Making sure that they have a really smooth and positive experience.

This past Memorial Day, we had volunteers go out to the Allegheny National Cemetery and place flags on the on, on the graves of all the different soldiers. And we want people to be giving back to the community. That’s a big part of what we are looking for from our employee base as well.

And to, help participate, we allow them to take time off from work. Hey, you can use a half day of PTO without counting against your PTO to go volunteer, so we call it volunteer hours. So we want people to be involved in reaching out and making a difference within our community. But we also want people to invest in themselves as well, not just from the career path side, but also from the health side.

So one of the things that our teams was looking for as we continued to grow and expand within our building was a wellness center. So we built a gym and exercise facility in our office, and have been having [00:42:00] received amazing feedback from our teammates as a result of that. So we see people there in the mornings.

Some people will go at lunchtime, but, the most fun part of the day is after 5:00, 5:30, when feels like the entire second floor comes into that space. And good chance for them to, bond with each other not just on work-related stuff as well. Trying to create that positive experience.

Want people that wanna have fun and enjoy being here.

Mike Ogle: I love that aspect of it.

Mike, thank you for sharing your career path, your experiences, and your advice on this episode of the Supply Chain Careers podcast.

Mike Hammel: Absolutely, guys. Mike and Chris, appreciate your time, and enjoyed the conversation.

Chris Gaffney: Yep, super. I always learn, and I grabbed a few today.