Carpooling For Freight
Pat Dillon, Chief Financial Officer, Flock Freight joined Grayson Brulte on The Road to Autonomy podcast to discuss the current economic outlook and Flock’s carpooling for freight model that unlocks value for shippers and carriers.
The conversation begins with Pat sharing his insight on how as CFO, he is preparing Flock Freight for a potential recession in the United States which is currently being forecasted at 50% according to the Bloomberg United States Recession Probability Forecast.
We are certainly cognizant of the broader macro environment and how that impacts our business. It certainly means that as consumer behavior changes or industrial production, the demand for freight transportation has an impact on that, so that certainly translates into our business.
– Pat Dillon
While Flock Freight is still a growth company, the company is taking prudent measures to be prepared for the scenario that the United States economy falls into a recession. One of the company’s economic advantages is that they operate an asset-light shared truckload platform that enables cost savings for their customers.
Shared truckload would mean that we can take a 20 ft shipment from Customer A and a 25 ft shipment from Customer B and pool those together into a single truckload, so it never has to go on a hub and go through a warehouse. And you are getting point-to-point transportation. It’s essentially carpooling for freight.
– Pat Dillon
Shipping using shared truckloads can reduce carbon emissions up to 40% due to higher utilization through fewer driven miles. As an important metric as this is, truck tonnage in the United States increased 7.4% in August 2022, year-over-year. The growth can be partially attributed to the catch-up effect as the global supply chain has begun to normalize.
While the global supply chain has normalized today, the freight market will continue to fluctuate with the driver shortage and a potential slowdown in consumer spending. Creating opportunities for Flock that CNBC has taken notice as the company has climbed from #42 on the CNBC Disruptor 50 list in 2021 to #14 in 2022.
With a potential recession on the horizon, Pat discusses what impact consolidation in the truck freight market will have on Flock Freight.
Unlike a lot of other markets that might already be pretty consolidated, were further consolidation has signifiant pressure on margins, this is not that type of market. It’s hyper fragmented and we do not see it having much of a day-to-day impact from that perspective on Flock Freight.
– Pat Dillon
From a technology perspective, autonomous trucks are preparing to scale and the timing could not be better as there is a growing demand for freight and a growing driver shortage.
Like a lot of things, there are big problems throughout the truck freight world and big problems are big opportunities. That’s how you create new capacity when you are constrained on the number of drivers.
– Pat Dillon
Autonomous trucks will compliment Flock Freight as they be able to provide autonomous shared truckload capacity. As new technologies come online such as hydrogen fuel-cell and electric heavy-duty trucks, Flock will look at ways to potential integrate those technologies into their platform.
Wrapping up the conversation, Pat shares his thoughts on the future of freight.
If you are a player in freight you will need to be able to have a more diversified approach in terms of the offerings you give to your customers.
– Pat Dillon
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Recorded on Friday, September 30, 2022
