#11 – Matt Weiss

Yeah, thanks for having me.

Mark Taylor:

Thank you for being willing to come on. This is a special one for me because as we were kind of talking about, you were one of my first, I’d say, three big influences in the warehousing business. It was you, Summitt Hogue and BJ Patterson. And so you kind of round out the [inaudible 00:00:52]-

Matt Weiss:

That’s good company.

Mark Taylor:

… of influences. Yeah.

Matt Weiss:

Appreciate that.

Mark Taylor:

Of course. So I’ll start just how I start everyone and just why don’t you introduce yourself. And how did you get into the world of logistics?

Matt Weiss:

Sure. Yeah. Well, about 20 some years ago, just out of college, I actually pursued outsourced logistics. I remember writing a letter, sending it to some companies, and one of them responded, a company by the name of Fritz LynnCo. But anyways, that was my start. It was an ocean freight. I was an ocean freight analyst, primarily on the import side. Took it serious. I really loved routing cargo from overseas, especially China.
And through that first job, I think, it just led to another. So wound up getting acquired by UPS, then called UPS Supply Chain Solutions. So I was part of that group and benefited from that acquisition as I moved into some warehousing positions, ended up in the industrial engineering department as a project manager, and I was onboarding customers like Halliburton and just the biggest of the big transportation customers for the West District.

Mark Taylor:

Sorry to interrupt, but what does a company like Halliburton need in terms of… What were the types of things you were moving for them or helping them move?

Matt Weiss:

Yeah. As my role, I was coordinating the onboarding of that company under our network. And so they were moving a massive amount of air freight, mostly air freight that I was working on, especially with all of their locations in Norway and through different ports into the United States, and then also some export back out. So each of the offices, the branch locations had a role in it, mostly the Houston office. That was quite an experience. I was probably way underqualified, but I guess, if you’re going to jump into it, that’s how you do it.

Mark Taylor:

Absolutely. Yeah.

Matt Weiss:

Yeah.

Mark Taylor:

Sorry to take you off that little rabbit hole.

Matt Weiss:

No, it’s fine.

Mark Taylor:

So in that position, then how did that kind of keep growing?

Matt Weiss:

Sure. I had still kept touch with some of the Fritz people. Fritz was a company just full of great people. I think there’s even a Fritz network out on LinkedIn and things like that that people still connect. So I had gotten a call to join a company called Panalpina, a Swiss freight forwarder that ended up, I think, getting purchased by DSV not too long ago, but they were sizable in the world, but not too big in the United States. So it was nice. I was representing kind of an unknown name versus a UPS.And for some reason, I enjoyed that.
So it felt like a small business, but it was strapped to something sizable that had good capabilities. I spent some time there, did some warehousing in that role as well before meeting eShipping. And eShipping was about 12 people at the time, so it’s not what eShipping is today. But it was a good experience transitioning to eShipping, very small company, big impact, and you were able to really spend time with good people. It was all about the people at that point in my career, not necessarily the job.

Mark Taylor:

What year was that when you joined and it was about 12 people?

Matt Weiss:

Yeah, I think it was November of 2007.

Mark Taylor:

Okay. So I mean, just right at the beginning of very, very shaky financial times?

Matt Weiss:

Yeah. We didn’t feel those, shakiness. We were out there selling, trying to close big accounts. When you’re small, one big account can change everything. And so I enjoyed that part of it. We went and tackled mostly domestic transportation right out of the gate, wasn’t getting heavily involved in the international probably until about 2010. But yeah, those first few years at eShipping, we hit LTL really hard and went out and developed a managed trans product for that mode, if you will. So it was a good run.

Mark Taylor:

How would you, at the time, because I mean there are a lot of trucks out there, a lot of competing companies for LTL, what were some of the ways that you would differentiate yourselves in the early days?

Matt Weiss:

Well, that’s a good point. I mean, we were selling against the carriers a little bit. Back then, I think, companies were looking for a more comprehensive solution. And so it was a bold move actually, I remember by our CEO at the time who decided instead of competing transactionally against freightquote.com and some of these others, let’s take a more scholarly approach and let’s try and sell something more value added. And that sounds great in marketing, but that means you’re shutting down a lot of transactional in order to just focus on larger customers. And so that’s what we did and it paid off in the end.

Mark Taylor:

Yeah. So was there a time when it was everybody’s kind of looking at each other doing what I call the horse eye roll, where you’re not sure this is working?

Matt Weiss:

There was some frustration in the beginning I think because customers would call in and say, “Hey, I have a shipment to move.” And we would come back and say, “We don’t move shipments. We manage transportation for customers.” And so it was a lot harder of a sale. We turned through some salespeople that had a tough time with that. We also migrated from a franchise model into doing our own thing. So there was a lot of, it wasn’t easy, but like I said, credit to the owner of the company because he knew what he wanted to be and he established that. And my job as COO was to execute that vision. So that’s what we did.

Mark Taylor:

That’s awesome. So from 2007 to 2010, what was the growth like? You went from 12 employees?

Matt Weiss:

Yeah. I probably won’t share revenue numbers, but everybody in the industry knows it’s probably like a million dollars per head. So yeah, went from 12 to I think 60 employees really, really quickly. I don’t know if that was 2010 or what. I haven’t thought about it in a long time. But we ended up managing several large customers that really kicked us off. Fracking was good for us at the time. I remember that was a big deal. But we didn’t sit back on our laurels, we went out and got other customers.
And so by the time fracking, I think it was about 2013 or ’14 that ended, we weren’t reliant upon those customers. So just looking back, just did a lot of things right. Just did what the book says, right? Diversified your customer base and also diversified modes instead of just managing one mode of transportation, we branched out into truckload and international as well. So used my background in international to get our licensing, and then just started moving one shipment at a time and kept selling. Hired a lot of salespeople and then eventually rounded out all modes service to a marketplace that I think by 2017 really, really needed it.

Mark Taylor:

When you would hire a new salesperson during that time, what was kind of day-one talk? What was the expectation? I mean, did you have the playbook or did you expect them to just bring in, come and walk in the door with the contacts and get to going? Or was it just smiling and dialing? How were you doing it in the early 20-teens?

Matt Weiss:

It was a mixed bag, I tell you that. Yeah, I don’t know, I don’t think we ever figured it out, honestly. I mean, we tried hiring inexperienced reps with a lot of grit, kind of that worldwide express model, and then we tried the experienced enterprise sales rep. And I think both have had the same turnover, it was just hard. It’s sales, it’s competing. So I think, at the end, it was about mentality. Maybe then it was experience, maybe luck. I don’t know. I mean, I was in on a lot of sales, but I would just get brought in when we got to a certain level and usually took over. So it wasn’t really judging salespeople performance at that point, it was more about let’s just do what it takes to win.

Mark Taylor:

Right.

Matt Weiss:

Yeah.

Mark Taylor:

Sounds like it was a very collaborative kind of more of a team effort.

Matt Weiss:

Yeah. You make a good point there. I think that was it. Bring in as many resources you can on these larger deals because they were big enough to afford the reason to.

Mark Taylor:

Right.

Matt Weiss:

Yeah.

Mark Taylor:

That makes sense. So then that gets us to, I guess, let’s say 2010, 2012, 2014, somewhere in there. When I met you, you guys had nearly, you were starting off launching your actual warehousing services.

Matt Weiss:

Yeah.

Mark Taylor:

So between that, from, I guess, let’s say, 2010 to, we met around 2019, I believe, early 2019, were you just growing that international piece, that kind of diversified services piece, but it was still primarily moving freight? Or did you guys start offering other, I guess, you call it modalities I guess, but warehousing? I don’t think you did manufacturing, but was warehousing your first offshoot? And then what was going on at eShipping between 2010 to you launching warehousing?

Matt Weiss:

Yeah. I think I said this to someone who asked me this question a year ago, how do you look at growing a modern day logistics company? And I looked at the LTL as a mode and I looked at the truckload as a mode, but I wanted to build a truckload business that could stand on its own two feet. And so I think we did that. And that was, to its credit, it’s a very different mentality from truckload to LTL. If you go to a truckload conference and ask people in-depth questions about tariffs and schedules and how the LTL networks work, they won’t probably know.
Just like if you go to an LTL SMC3 conference or something and ask them about how the DAP board works, they’re probably not going to know. So it’s weird just how one mode is so, it’s a whole different industry. So each time we built a mode, we almost built a new company inside our company. And so we got to international, international is a freight forwarder. You can’t put your hands up and say you’re not the carrier because technically you’re a non-vessel operating common carrier. So you have different liability, you have different contracts, if you have contracts, you manage the transportation differently than being a middleman or a broker.
And so we built those all kind of standalone, but all under the eShipping name. I think what you’re asking is then with the warehousing, was that our first company we didn’t build as a mode? And I would say that and a trucking company. I don’t know if you knew we had a trucking company, but we don’t ever talk about it because it didn’t go that well.

Mark Taylor:

Well, I was actually going to ask, did you own any of the assets? Did you ever get into the assets?

Matt Weiss:

Yeah, we did. And maybe this is my fault, but again, a whole another industry, a very competitive one that dates back longer than me. And it was difficult. It was so difficult that I couldn’t find the right people. Once you made money, I always joke, you hit a deer and you lose it. So at the same time, we started a warehouse company, eShipping Distribution Services. We had a trucking company as well, but basically by request, just said, “Hey, can we close that down and we just focus on the warehouse?” And so that’s really why when we met eShipping Distribution Services was the going thing at the time because we had just really focused on closing down another one, another business and then poured all my time and effort. Because at that point, eShipping was running. We had a whole vice president suite and several hundred people that all knew where they were supposed to be. It was sort of on rinse and repeat by then.

Mark Taylor:

And then you were kind of charged with the warehousing operation, with coming up with building a small team when you first started?

Matt Weiss:

Yeah, it was fun.

Mark Taylor:

I think it was you, Brad and Luke, if I remember correctly.

Matt Weiss:

Yeah. Exactly, yeah. When I was the COO of eShipping, I hired Luke to be the vice president of that warehousing company. After maybe six months or a year, I think, it was requested that I go be the president of just the warehousing company and go sort of grow it like we did the transportation side. And so it was hard to transition because I had just built that eShipping for, I guess had that over 10 years.

Mark Taylor:

Yeah.

Matt Weiss:

But ended up making the transition and bringing Brad with me, who’s a stud. And many of the reasons we were successful is because of Brad. But we built that thing on Luke’s back really. Luke had the experience. Luke could be inside a facility, he could do everything from strike the floor to be a vice president. So it was magical for us three to be able to work together and build what we built in a very short period of time.

Mark Taylor:

Yeah. I mean, I do have to comment, I mean, your timing was quite good.

Matt Weiss:

Okay. Yeah, maybe a little help from the market.

Mark Taylor:

Well, I mean, no. I don’t say that to take away from what you guys did. I say that just because it’s like if you ever looked at anybody who textbook timed the market intentionally or by accident, you guys started around what, 2018?

Matt Weiss:

Yeah, I think it was just about then. Yeah.

Mark Taylor:

I think late 2018 was, I believe, when you guys took the building in Ontario.

Matt Weiss:

Okay.

Mark Taylor:

But you had an operation in Kansas City much before that, didn’t you?

Matt Weiss:

Yeah, we operated all of 2017 for sure.

Mark Taylor:

Okay, yeah.

Matt Weiss:

And we started in Kansas City with, credit to North Point, I’m not sure if you know who they are.

Mark Taylor:

No.

Matt Weiss:

But I still remember that they should get some credit, they gave us a poll-to poll-section. So kind of like your story, honestly. They gave us 2,500 square feet and said, “Hey, if you grow, just basically tell us the honor system what you use.”

Mark Taylor:

Okay.

Matt Weiss:

And they’d probably kill me if they heard me say that now. But that’s how they were. And we ended up just, I mean, we couldn’t even, we stopped taping it off because we were just growing so fast. We kept bringing more and more and more cargo in and racking and went from 45,000 square feet in three months to renting a hundred, then I think we did 170 and then maybe 370 in just Kansas City.

Mark Taylor:

Yep.

Matt Weiss:

And that was before we did the California thing. And we were doing a lot of pet food, so it was a big space hog, but it got us started. We ended up opening up the one in Inland Empire. It was small. Six months, we grew out of it. I think when we met, we weren’t there much longer, but then we ended up opening up the other cities after that. Kind of using a similar model, but going a lot larger because we kept growing out of them so fast. So we were opening up 150 to 200 and some thousand square feet out in Northeast Chicago, Dallas, et cetera.

Mark Taylor:

And then from the time you started building the warehousing company, it would’ve been, I guess, you said 2017. And then eShipping was sold in what year?

Matt Weiss:

I think it was 2022.

Mark Taylor:

Yeah.

Matt Weiss:

Yeah, that worked out well.

Mark Taylor:

That was solid.

Matt Weiss:

Yeah, no, it was a good bolt-on as part of the eShipping package, if you will. And I don’t know that we ever thought it would get that big that quick, but we took on a lot of business. There was some hardship in there as well.

Mark Taylor:

Of course.

Matt Weiss:

I think there’s a lot of credit to, again, the owner of eShipping who took some risks probably against some judgment. I don’t know about better because it worked out.

Mark Taylor:

I think this is fascinating because you’ve got the slow grow model, and fortunately you guys had this engine that you were willing to take a portion of the proceeds that that engine was generating and then pour that into something that Chad had to make a decision, “I think this is going to pay off.”

Matt Weiss:

Yeah.

Mark Taylor:

It’s rolling the dice again, no matter how you look at it.

Matt Weiss:

Yeah, definitely. And you said Chad, the CEO, yeah, I think he put a lot of, maybe too much, trust that I would be able to pull out of the basement there for… But we had taken on, I mean, hundreds of thousands of square feet and filled it because we knew how to sell. I think that was an important part of eShipping’s history is just having gone through that many salespeople to arrive at what we had. We really did know how to sell.
But once the buildings were full and cost structures changed with labor and taxes and mitigated rents started climbing and so forth, we quickly found ourselves in trouble. And I think that was probably one of the most stressful times in my life, just trying to figure out how do I make good on the trust that he had placed in me? And so I remember taking Brad and Luke to kind of a retreat, which we went to this nice place. It was comical. It was like a lake house. There was a big lake and we probably were supposed to go out and relax, whatever. I mean, we hold up in this one room and literally hashed it out for three days trying to figure out how are we going to make this right? How are we going to take care of our customers but still take care of our people?
And I won’t say exactly what we did, but it was not one thing, it was a thousand levers. Inch by inch, we just started to carry ourselves out until we were in the black and then took that same mentality forward and made us better business people. And with the market and some luck and a lot of prayer, we ended up pulling out. So it was a great business from there on in, honestly. And I think it still is today.

Mark Taylor:

It’s the relentless pursuit of forward progress.

Matt Weiss:

Yeah. I think just getting our butts kicked there really made us better, but I don’t really not want to do that again, if I can avoid it.

Mark Taylor:

Well, actually it begs, rather than just assume, so what would you say some of the number one, or I guess having lived through that experience, what were some of your lessons learned that you didn’t know prior to getting into it?

Matt Weiss:

I think we made some assumptions that were wrong.

Mark Taylor:

Yeah.

Matt Weiss:

But had we made those right, we would’ve been smaller.

Mark Taylor:

Okay.

Matt Weiss:

So persistence mattered. We could have quit. I’m sure that crossed some people’s minds. But I told someone recently, I’m probably too dumb to quit, I just figure it out. But no, I think if we would’ve known, taken on as much business as fast as we did, that it would’ve created the hardship, we would’ve slowed down. But then in the end, we wouldn’t have amassed such size so quickly. And I’m not saying we were huge, but we definitely, I think, went as fast as you should go. So a little faster and doors might’ve came off.

Mark Taylor:

So if you were charged with doing it over again, how would you do it?

Matt Weiss:

Probably same way. Someone else’s money, right? No, A, I think I could do it again. I think the market matters. Sales matters, the rates, the service you get, the people. But the industry’s tough right now. I mean, you know. You’re still in it, right?

Mark Taylor:

Yep.

Matt Weiss:

So it’s one of those things where I can’t sit here and say I could deal. I’ve not dealt with slow times for sure, and we knew the slow time was coming. I mean, even before I retired, we had a doomsday prep. We joked and called it back in March of last year. So we already knew the slowdown was coming. As a matter of fact, it came about six months later I think than we predicted. So I think those guys were well-prepared, as prepared as they could be with that much space at that point. I mean, we could have taken down, I’d say, three times as much space during when the market was good and we played it slow because we knew it was just a blip.

Mark Taylor:

It was a temporary thing.

Matt Weiss:

Yeah. But you did the same thing.

Mark Taylor:

It was the bull whip effect as they like to say.

Matt Weiss:

Oh yeah, you knew too. Because you see it coming so fast and you say, “This isn’t.”

Mark Taylor:

It’s like make hay while the sun’s shining.

Matt Weiss:

Yeah. You’re watching companies make decisions that you need to just say, “This isn’t good long-term” your customers, and so I think a lot of those customers now are feeling.

Mark Taylor:

Yeah, I think there’s a lot of pain. And our mutual friend of course is Summitt.

Matt Weiss:

Yeah, absolutely.

Mark Taylor:

That’s how we know each other, that’s how we met. And I think he would agree that during, probably after, I mean latter half of 2020, when just everything had moved to, stores had very modified hours if they were open at all, everybody started still, you didn’t know at that time if the pandemic was going to be something that you really needed to worry about. People just didn’t know. So there was I think a lot of fear that was driving so much more of that online retail, e-com buying and everything like that. So you had this giant shift from the brick and mortar backwards to warehousing, and all of the stock was staying in there of course, I mean, anybody listening to this knows.
But then you had people who very opportunistically started going after every square foot that they could get because they could fill it and nobody had an opportunity. The customers didn’t really have much of an opportunity to balk at the price at that point. They could balk, but I mean, they had to pay it eventually if they wanted to store their goods. So you had this giant kind of bubble pop up. I still see buildings where they were trying to get, they signed the lease at $1.75 triple net.

Matt Weiss:

You’re talking California?

Mark Taylor:

Oh, yeah.

Matt Weiss:

Yeah.

Mark Taylor:

But I mean it was happening all over the country, not $1.75.

Matt Weiss:

They’re building big bombers out here in Midwest. I don’t know who’s going to film them, well, someone will fill them and then-

Mark Taylor:

It’ll eventually.

Matt Weiss:

Class B space will probably open up again and there’ll be some deals and then it’ll be 3PL time again.

Mark Taylor:

Yeah.

Matt Weiss:

It’s a cycle and you just got to know where you’re at in it to play it.

Mark Taylor:

That’s exactly right.

Matt Weiss:

Summitt’s a good guy to partner with if someone’s going to do that because, and I’m not just plugging him here, I should say, I listened to his podcast where he commented when he met me, but yeah, I’ll say it again. I didn’t hire him for his experience. It was at the time that long ago, it was just because his character. And he actually would go after the landlords, but in a professional way where after the deal’s done, I actually, I don’t know if he knows this, but I would call them and say, “How’d he do? He do okay?” “Yeah, he did great. He represented you guys well, but he didn’t take me off.” So that’s the way to be. So at least back then, he would hustle for us and deserves a lot of credit too for it. I’d say if there was more four of us in the beginning, not just three of us because Summitt was a big part. He was coming with us on our meetings and we’d make them come out and eat pizza and ice cream.

Mark Taylor:

That’s great.

Matt Weiss:

Yeah. Good guy.

Mark Taylor:

Yeah, Summitt’s great.

Matt Weiss:

The other trick is the general managers. You go open a building, you leave it there and who you have there. And that was another trick. We learned that if you hire somebody that’s average, you’re going to be in trouble. So you had to find these above average character people that just wouldn’t quit, just would stay but not blow apart their family, somehow balance it, figure it out. And so that’s probably their magic now is they have a few really strong regional managers that were promoted out of the GM role, so they know how to run these places and they know how to find people to run them too. And so scaling a business is probably just important as being able to open warehouses and fill them, being able to actually manage that so customers don’t get forgotten and people stick around with retention.

Mark Taylor:

Right.

Matt Weiss:

People’s difficult. So yeah, that was another secret sauce. Now, they have good people.

Mark Taylor:

So one of the things that you guys really had is you had all these nice warm intros from more than a decade long building of the transportation arm.

Matt Weiss:

Yeah.

Mark Taylor:

The original thing. So I mean, all these people have freight, you have to assume, “Hey, just curious, where are you storing it?”

Matt Weiss:

Yeah.

Mark Taylor:

If you were going to go back and prospect today, how would you go dig up those leads?Matt Weiss:

You mean because I wouldn’t have?

Mark Taylor:

Yeah. Let’s say you didn’t have the transportation arm.

Matt Weiss:

Well, I wonder if there’s a belief that we grew it because of the transportation arm. And I would say we used them the best we could, but it was difficult to, like I said, two different industries. So ultimately, we did figure that out, but it wasn’t probably till close to the end there. A lot of our sales came probably very similar to how you get yours in that at any given moment, there’s a hundred people looking for a facility in a particular city.

Mark Taylor:

Right.

Matt Weiss:

And so you just got to find a way to intercept that traffic. You’re laughing because you know it.

Mark Taylor:

It’s true.

Matt Weiss:

It could come from an agent that’s paid a commission off the deal, a referral fee to one of these referral agents. So I think I would do the same thing I did in the past was just be very open in that industry where your opportunities come from. Because on any given day, someone can intercept that information of someone needing a deal, and before you know it, you just filled up that missing piece of your warehouse with the perfect puzzle piece of business.

Mark Taylor:

Right.

Matt Weiss:

I think putting those deals together was just, that was the exciting part of the business. I mean, the not exciting part is these facilities are 24/7, there’s always people in there, which means there’s always people that can get hurt or worse. Customers are always calling because they’re reliant upon you. And the orders never stop, hopefully. And then when they do come, it’s usually Black Friday or something, and they all come at once.

Mark Taylor:

Right.

Matt Weiss:

If it was so easy, customers would just do it themselves.

Mark Taylor:

Of course.

Matt Weiss:

Yeah.

Mark Taylor:

I think one of the big things I’ve learned is bounding contracts. So you get let’s say the large customer that says, “Hey, I’d love this deal and I’m going to bring you this much business.” And so you do the math and you figure it out and you say, “Oh, okay, yeah, I can make that work.” And then they show up with a quarter of the volume or a third of the volume, and then now you’ve got this unprofitable thing that you have to go back there. So I think building the correct levers is one of those things that you just have to learn through experience and go ahead.

Matt Weiss:

And I think I probably left that part out. That was probably an early on success factor in the way we structured our agreements with customers in terms of flexibility. So we asked them for a little bit of, I guess, minimums and some expectations there that, I would say honestly though, most of them made good on. So I think the ones that had planned to cheat us didn’t come aboard. They would say, “Well, none of your competitors are forcing us to sign a three-year agreement at this much of a minimum per month.” And we didn’t win those, but we did have some stable business. And when it turned down, we weren’t the only ones left holding the bag, they had to pay a little bit too.

Mark Taylor:

Well, I know there are some of larger operators who effectively, okay, we know you’re projecting acts, and if it goes over a percentage of what you say you’re going to give us, then there’s a premium associated. And if it goes below the percentage by that same percentage, so I mean it’s up or down. So if you end up dumping a bunch on us, then you’re going to have to pay a premium for it. But if it falls below, you also have to pay a premium.

Matt Weiss:

Yeah.

Mark Taylor:

And if you can do that, then that’s fantastic.

Matt Weiss:

Yeah. If you can manage it.

Mark Taylor:

Right.

Matt Weiss:

And deal with the bill when they say, “Hey, we have a billing discrepancy, and nobody can figure out the algorithms and how that thing was billed.” But I mean, I’m sure Amazon has just totally captured that concept with their customers. But we try to keep it simple. We did a little bit of that. I’d recommend companies do it. I think companies are fine paying their fair share. It’s just that sometimes it’s tough to know what that is and agree upon it.

Mark Taylor:

I think a lot of that has to do with the transparent pricing at the very beginning.

Matt Weiss:

Yeah.

Mark Taylor:

And I’ve always sold even before I was ever in warehousing to look, I point out the things in the contract that I would personally find contentious if I were in their position. Or not even contentious, but it’s, “Hey, really be aware of this.”

Matt Weiss:

Yeah.

Mark Taylor:

I think in 3PL or in the 3PL industry, for instance, I almost always, when I’m having a conversation with a customer, point out the limits of liability and say, “There’s almost no world where 50 cents a pound is going to, or 25 cents or whatever you’re charging as a 3PL is going to cover a general loss event.”

Matt Weiss:

Yeah.

Mark Taylor:

But that’s also why you do need to be serious about having your own insurance.

Matt Weiss:

Yeah, I think that was always a tough topic with customers because they would want to pay us whatever it is, $4 maybe, to touch a pallet and then us risk $2,000 of liability just by having that pallet. And we touch it like 12 times unloading it, staging it, putting it away, unloading it, repacking it, whatever it is. Maybe it’s not 12, but the point is.

Mark Taylor:

I’m sitting here thinking, if you’re touching it 12 times, whoa.

Matt Weiss:

We’re really bad. Well, if you move warehouses as much as we did, we probably touched it more.

Mark Taylor:

That’s fair.

Matt Weiss:

But it’s got to be, you can’t put yourself out on the hook unless they want to pay a lot more and they don’t want to pay a lot more. So there’s a lot of customers that get it and then there’s the same ones that continually drive 3PLs to make dumb decisions and say, “Sure, well, if we break it, we’ll buy it.” And then the next thing you know it’s not equitable and they’ll part ways in a year, two years, whenever the agreement’s up. We stayed away from those. There was just enough business at the time. But yeah, with things getting tougher, I’m sure that the upper hand goes to the buyer.

Mark Taylor:

Well, one of the things I really appreciate about the industry, and this is just kind more us reminiscing than anything, but I mean, it’s fine is I know there were a lot of times when you would refer me something or BJ would say, “Hey, do you want to take a look?” And vice versa. And I’d ship something over to you and say, “Hey, we can’t touch this, but if you can, go for it.” There’s a nice amount of camaraderie I would say, especially among the independent operators.

Matt Weiss:

Yeah.

Mark Taylor:

When you were there, did you guys get in with IWLA at all?

Matt Weiss:

We started to.

Mark Taylor:

Yeah.

Matt Weiss:

Probably about the time things were tough, we let that one go, from a money perspective. But to your point, I think I didn’t get involved there because at any time I did feel like I could pick up the phone and call the owner of one of those warehouse chains, whether it was Weber or the Arizona guy, I forget his name now. It’s been so long. But all the owners where you can just pick up the phone and call them and they’re happy to give you 25 years of their experience or just say, “Yeah, we can take a deal for you guys or we’ll share a customer or help you guys out.”

Mark Taylor:

One of the biggest things that’s changed a lot is I call it the advent of the 4PL.

Matt Weiss:

Okay.

Mark Taylor:

Yeah. We’ve got, of course-

Matt Weiss:

We stayed away from those too.

Mark Taylor:

So we’ve worked with some before and you know what you’re getting into, it’s fine. And I mean, I’ve had positive experiences with them. But with everybody wanting to be a 4PL now, I think there’s a lot more people out there trying to take this asset light model and just say, “Okay, well, I want to give you this and I’m going to refer you this business and I want some kind of commission on an ongoing basis.”

Matt Weiss:

Yeah.

Mark Taylor:

And you’re like, ‘Well, I mean, I appreciate that, but your commission is more than my profit margin.”

Matt Weiss:

Yeah, exactly. They’re okay with it.

Mark Taylor:

What’s that?

Matt Weiss:

They’re okay with it.

Mark Taylor:

Oh, they’re fine with it.

Matt Weiss:

For sure.

Mark Taylor:

Yeah.

Matt Weiss:

If it worked, we would’ve done it. We just tried it and just communication was tough. And I know they have different ways how, they’ve got that figured out. But yeah, the asset line is, eventually we ended up selling to private equity and it was good for a lot of us in the business. In fact, it was great experience. But leasing a warehouse in that model, it starts to raise more eyebrows. They’d like an asset line too.

Mark Taylor:

Sure.

Matt Weiss:

They want to have some flexibility. And I get that part. And I got it when we were going through it. That was another reason we probably slowed down, just probably being more calculated on when to open and so forth.

Mark Taylor:

When you were towards the end, what was your threshold of, I have 5, 10, 60, 75, a hundred percent of the building before you opened it? What was your kind of magic number?

Matt Weiss:

Sure. No, that’s a good point. Well, for clarity, we’re talking multi-client, right?

Mark Taylor:

Yes.

Matt Weiss:

Dedicated is a whole different animal.

Mark Taylor:

Yeah.

Matt Weiss:

And we did sell one of those and it was good for us. But as far as multi-client goes, right about the time I left, we were trying to parlay multiple deals together to take up probably more than half the facility, and we were looking at 150 to 200,000 square foot facilities. So I don’t know what that tells you. But in the beginning, I mean, I think we could have just used one customer, small one even, and we were still filling them because we were kind of selling scared at that point, just trying to fill space. So yeah, I’d say we wanted about half the building full.

Mark Taylor:

So half the building pre-sold before you would say, “Okay, let’s go sign this.”

Matt Weiss:

Yeah, you’d still lose.

Mark Taylor:

Sure.

Matt Weiss:

I mean, you’d lose for at least the first year, break even from the second, maybe make it profitable third. So in PE world is still good, but you’re also putting pressure on yourselves to fill it because the sales team doesn’t take the pressure.

Mark Taylor:

Right.

Matt Weiss:

It’s the person that puts together the proforma and requests the funds and so forth and says, “Yeah, I’ll stick my neck out.” So there’s only so many of those you want to do. And I did a few.

Mark Taylor:

This is a nice parlay because you have not only the front row seat to going from a very small 12 person company up to 60 very, very quickly and then beyond, and then kind of what I like to, pulling the entrepreneurship move where you are the entrepreneur within the company.

Matt Weiss:

Sure.

Mark Taylor:

Launching a business and then preparing it for sale and then having it be a very, very significant, especially you created, of course, the transportation baby, and then you went on and warehousing was completely yours and Luke and Brad and Summitt. What were you doing to really kind of prepare yourself for sale? Or did you guys just get to the gate and said, “Oh, here’s the giant due diligence piece,” or was there anything that you were kind of preemptively doing a couple of years before you even met the buyer? Or did it just all come out as a result?

Matt Weiss:

No, there wasn’t anything special, to be honest with you. We weren’t packaging it up. I think the owner, the Ridgemont Equity Partners, they got a good company. They really got what, they knew what they were getting because we were consistent, we had a rhythm. The owner ran it pretty hard. And in the sense of people share those horror stories where a private equity company comes in and now things have changed. “What’s changed?” “Oh, they demand more, make us do more with less and all.” We didn’t experience any of that. We ran the business normal. We went out for some different private equity companies and had already known some, and then it was just paperwork. So yeah, I mean, there’s a lot more to it that I can’t say.

Mark Taylor:

Of course.

Matt Weiss:

But yeah, it was pretty event endless, to be honest with you. The company ran similar at that point, culture wise was similar. I mean different than when we started, right? Culture changed pretty dramatically from 12 to 100 to 200 to 600 people, whatever there is now. But from time of ownership, change wasn’t huge and we didn’t prep a ton for it, to be honest with you. We didn’t tighten up any different, batten down the hatches any different. Yeah.

Mark Taylor:

Well, I mean, as I think I personally am in this for the long haul and logistics, I enjoy it, I love it, but even so, we maintain, for instance, one of the things we do is we get certified financial audits every year.

Matt Weiss:

Yeah.

Mark Taylor:

And that’s just one of those things where it’s I don’t want there ever to be a question as to did we do anything?

Matt Weiss:

Sure.

Mark Taylor:

And so I didn’t know if there was any kind of special sauce or if it’s just like, “Oh, no, this is how we do things and just business as usual.”

Matt Weiss:

Yeah. Well, there might’ve been, I’m sure, we had a CFO and a CEO that was working on those things, but I would’ve been involved in some way from an execution standpoint, I didn’t sense it really. It wasn’t super surprising, but more just because the owner was a friend of mine and he was in my wedding, so I could tell when he was getting ready. And it was good. I mean, I wasn’t upset and I stayed on for a year after and then just started praying, saying, “Where am I needed most?” And it didn’t feel like I was needed there. So hung it up at the end of, what year is it, ’23, so hung it up at the end of last year. And yeah, I don’t know if I’ll ever get back into it, but I don’t have any plans to.

Mark Taylor:

So you’re only about just past nine months?

Matt Weiss:

Yeah.

Mark Taylor:

Does it feel like a lifetime ago?

Matt Weiss:

Yes.

Mark Taylor:

Yeah.

Matt Weiss:

Yeah, all this is, I told you beforehand, it’d be tough for me to even remember confidential information, probably don’t even have to worry about what I overshare because it’s been so long. Yeah, it feels long. And plus, I started helping out this company here that I joined and it’s a whole nother animal. And still people, which is great. Still get to work with, I mean, really awesome people. Hopefully sharing some things that I’ve learned along the way business wise and leadership wise. And that’s been fun for me.

Mark Taylor:

Have you ever been asked to kind of distill your top three to five leadership principles?

Matt Weiss:

No. I don’t even know if I could.

Mark Taylor:

Try, if you want.

Matt Weiss:

I would say that maybe the first one’s work on yourself. I think people are watching, so I have a pretty strong regimen, mind, body and soul from the moment I wake up. Probably for others, maybe not even for myself. I have four kids too, so they’re watching.

Mark Taylor:

Sure.

Matt Weiss:

I think meet people where they’re at. I’m probably not a tyrant, I’d probably maybe allow stuff to go on a little long and then figure out a way to help the person through it than cut them loose. But I don’t know if that’s a good thing or a bad thing, but it’s my thing. And then I’d probably say just care for them. I think that maybe is the second one too, but just caring for people like you would for your kids because they’re just people, they’re God’s children, so find a way to bring them through whatever you’re trying to bring them through. If you’re talking leadership, right?

Mark Taylor:

Yeah.

Matt Weiss:

So that’d probably be my three. I’ll have to work on those, you’ve challenged me.

Mark Taylor:

Yeah. I think from a leadership perspective, I think those are great. I often think about what would I tell my younger self? And some of the things I’d tell my younger self are it is so easy to expand your lifestyle and almost impossible to squeeze it back down. I remember when I graduated college, my first job, I think I was making $2,500 a month, I mean, that was gross.

Matt Weiss:

Yeah.

Mark Taylor:

And I thought I was rich. I was just like, “I can afford to be on a dating site. I can take myself out to dinner every once in a while.”

Matt Weiss:

Well, you’ve seen what I drive.

Mark Taylor:

Yeah.

Matt Weiss:

So I probably am averse to spending money. So I’m smiling when I say that. I know I have to for business, but I love to invest, not necessarily in stock market or whatever. I used to joke and say I’ll buy a chicken if it gives me eggs, but I don’t spend a whole lot. So still live in the same place when I first started eShipping, and we’ve just, my wife and four kids are happy. So why change it? And so that’s been our motto is to live like when we started. And of course, that’s a big reason why I was able to just walk away from the logistics industry, but yeah.

Mark Taylor:

What was your favorite thing about logistics just being in it?

Matt Weiss:

Well, I know a lot about it. It’s certainly a nice thing to have. I was lucky to fall into that. I mean, I started out with Fritz guys who’ve been doing it for 20, 30 years, teaching me about ocean freight, and it was awesome. I mean, the ability to learn ocean freight, air freight, customs brokerage, by the time I was in my mid-twenties, only to jump into warehousing, an engineering group and to learn the ins and outs of warehouse pricing and fulfillment. I was doing fulfillment back in 2004 for UPS Supply Chain. And so then jumping into sales of international air, ocean, customs brokerage, also selling some warehousing at the time, and then jumping completely in a different direction over to LTL. Each one I had to become an expert in. And so I think what I liked the most about logistics is I know it. So walking away from all that knowledge is weird.

Mark Taylor:

I could see that.

Matt Weiss:

Yeah, it’s not necessarily worth holding on to either just for that.

Mark Taylor:

And you might be overselling what you walked away from in terms of, you’re still, well, no, I don’t mean it that way because I love logistics, but I’m saying from the perspective of you walk away and you’ve got the leadership capabilities, and I mean that’s what you’re really focused on. You’ve got the sales skills, you’ve got the basic, I guess, the things that you have to build the frame.

Matt Weiss:

It was like an avenue for the leadership is what you’re saying.

Mark Taylor:

Correct.

Matt Weiss:

Yeah. It turned out to be.

Mark Taylor:

It’s like from a business perspective, it’s like the skeleton is either sales or operations.

Matt Weiss:

Yeah.

Mark Taylor:

And so building that base in there and then everything else becomes-

Matt Weiss:

It’s hard. I mean, logistics is very competitive. And so once you go through it, you learn how to operate in a competitive environment, and then it’s chock-full of leaders. Because as I’m learning working for an engineering firm, you can’t just hire for leadership. They actually have to have a certification, an engineering degree. I mean, it’s like real, where in logistics, you can just look across the table and grab somebody with highest character and let’s go, let’s teach them the business. So coming out of the logistics industry gave me a chance to really watch a lot of leadership, people I’ve hired, people I’ve worked with and then worked for.

Mark Taylor:

Yeah. One of the things I really do love about it is, kind of to your point, well, I’ll say it a different way, I guess what it means to me is just the visceral nature of it, you can’t fake it. The package either shows up or it does not show up.

Matt Weiss:

That’s true.

Mark Taylor:

It either shows up, and that’s the other thing. If something comes into that warehouse, it left it somehow or it’s still there. And so it’s like you operate on these very easy, simple assumptions and then figuring out what happened to it in the middle or how to make it more efficient, it’s just this really interesting complex problem.

Matt Weiss:

Yeah. But you learn a lot about business being in transportation and logistics because you’re rubbing shoulders with so many components of other companies that you learn a lot, where stuff comes from and who really makes stuff, whether it’s an auto part or clothing.

Mark Taylor:

Right.

Matt Weiss:

It’s coming from similar manufacturers overseas. It’s not, it’s branded, it’s not necessarily made by that company. And you just start to learn how things work. Sometimes my kids ask me questions, I’m like, “Why do you think I would know that?” “Because you know so much.” It’s like, “I’ve got you tricked.” But yeah.

Mark Taylor:

Yeah. Well, I see a future where you might get back to it somehow.

Matt Weiss:

Well, I’m committed to where I’m at right now because I feel like I’m supposed to be here at the engineering firm. But yeah, no, it was a lot of years and I know it’s really tough. I’ve gotten a lot of calls from people, so they were telling me how hard the marketplace is and how hard it is to grow and sell, but also how hard just the warehousing side to fill those warehouses. A lot of customers are dialing down inventories and order volumes have dropped, so I’m not running towards it, I promise that.

Mark Taylor:

That’s fair. But like I said, your timing was so impeccable in the last time maybe you’ll start to see that swing. But no, I mean, I can tell just you walking me around the new gig, it’s like you’re very happy where you are.

Matt Weiss:

Yeah.

Mark Taylor:

Enjoying life. You seem very relaxed.

Matt Weiss:

Yeah, definitely more than I’ve been in the past. But I think my faith is strong and that’s guided me and guided me here at Herzig Engineering. So if I stay within that walk or that calling, then kind of feel bulletproof.

Mark Taylor:

Yeah. Did you know, I mean, I don’t know if you felt it or did you ever start to go down the automation path or consider any automation strategies?

Matt Weiss:

With the warehousing? I didn’t personally, but I let others talk about it. And you’re smiling. When I find something that works, then I like to just pour gas on it. And up to that moment, we hadn’t done any automation, might’ve had some motion sensor lights. I used to tell customers, that’s our automation. They automatically go off when no one’s over there. It’s fantastic. It works every time. But I was just so enamored with our pricing model, our contracts, our sales ability, how we opened up facilities, the type of facility. We had really kind of figured out, I don’t know if you’ve seen or read the book Moneyball, but we figured out the Moneyball metrics of the business. So I mean, Brad, he’s got them all, he’s got the secrets to how that business should work. If you listen to him, because that’s a key, you can grow it. And so there was no automation in those metrics. It took none of that. Now, I know that’ll change, so I thought it was good for someone to be looking at it. It just wasn’t me. Yeah.

Mark Taylor:

Well, it’s good.

Matt Weiss:

Yeah.

Mark Taylor:

So if you had any advice to, I’m assuming in the current role, you’re getting to work with a lot of young, bright-eyed individuals and you’re getting to flex those leadership muscles still. And I’m sure you’re bringing lots from the logistics space into this journey as well. Because I mean, it’s still logistics, you still are delivering a product.

Matt Weiss:

Yeah.

Mark Taylor:

It’s just a file.

Matt Weiss:

Yeah. Yeah. It’s a study. We deliver a review.

Mark Taylor:

Study a file.

Matt Weiss:

We engineer studies for companies.

Mark Taylor:

Exactly. It has to go from a raw product to, or I guess not a raw product, but I mean you’ve got your raw materials that then go through a program and knowledge through the knowledge conveyor and all that sort of stuff, and then you deliver a product. So there’s logistics to that too.

Matt Weiss:

Yeah.

Mark Taylor:

I actually have a decent number of college kids that listen to this thanks to, Professor Brandon Chicotsky has hosted me at TCU a couple times.

Matt Weiss:

Okay.

Mark Taylor:

Or at least once I should say. And so I know some of his students have listened in. What are some of the things that you’d give advice to on some of the younger, bright-eyed leaders of tomorrow?

Matt Weiss:

Sure. Yeah. Well, I tout faith as the most important thing for me. So if I left that out, I’d be kind of posing. Right? So I’d start out with if you’re going to focus on your faith, then doing so in the workplace means find yourself some people to be around. If you’re going to become the average of the five people you’re around, it matters where you work and who you work for, probably less to agree what you do. And then there’s so many ways out there to, I don’t know, I hate to use this term, but become better. And reading isn’t fun for me, but to quote somebody else, I need what’s in the book. Right? And so looking back, I read and I remember and then I’ve worked hard at building good habits, eliminating bad habits and then focusing on my faith. And I think that’s the best advice I can give, to myself too. I’m still working on that.

Mark Taylor:

Yeah.

Matt Weiss:

And I got four kids watching.

Mark Taylor:

You got the four kids watching.

Matt Weiss:

Or maybe listening. Yeah.

Mark Taylor:

Yeah. You’ve told me before, you’ve got a bit of a working farm that you run.

Matt Weiss:

It’s theirs now.

Mark Taylor:

Yeah?

Matt Weiss:

But yeah, I would be guilty of encouraging them to be a bit industrious. I have four kids who have chickens, ducks and dog, cats. They’re homeschooled, so they’re on the “small farm” quite a bit, but that gives them an opportunity to, as long as you keep the TV off or whatever, the screen time eliminated, they got to go find something to do. So that could be anything. Yesterday, they were having a competition on building a mousetrap that can catch the most mice in the pole barn. And we didn’t help them a bit. I don’t actually think they caught anything this morning, but it kind of surprised me. We have a cat, maybe that was it.
But no, they just do stuff like that. And they still do sports here and there and piano and they’re in youth group. But I probably didn’t take away any opportunity for them that I probably had along the way of just saying work can be fun, it can be meaningful. I always joke and say if God didn’t invent work, men wouldn’t talk to each other. So you and I wouldn’t know each other. So praise God for work.

Mark Taylor:

Do your kids do any gardening?

Matt Weiss:

Yes, my oldest daughter is pretty much the one that’s spearheading the garden right now.

Mark Taylor:

Okay. What do you guys got growing?

Matt Weiss:

Weeds.

Mark Taylor:

Weeds? No.

Matt Weiss:

It’s Missouri, it happens overnight. No, I think she’s got the run-of-the-mill flowers and tomatoes and squash and snap peas and I’m trying to think of what else she’s brought in the house. Some of those nice smelling green herbs.

Mark Taylor:

Herbs.

Matt Weiss:

I don’t know what they are.

Mark Taylor:

Rosemary probably.

Matt Weiss:

Stuff like that. Yeah, she’s pretty good.

Mark Taylor:

I mean, that’s great though because I think one of the most revolutionary things we can do as just normal everyday folks are gardening.

Matt Weiss:

Yeah.

Mark Taylor:

Knowing how to grow your own food.

Matt Weiss:

Yeah, they can do that. They’ve learned. Admittedly, I was gardening when I thought that would be a stress reducer until the weeds came up and I was like, “Oh man, this is tough.” But we work on cars. I told you, we restore old off-roaders and stuff that doesn’t have to look pretty.

Mark Taylor:

Yeah.

Matt Weiss:

We can just get out. We have some land, obviously, so we build trails and try and bury them in the creek. Been good.

Mark Taylor:

That’s great. Well, I’m interested to watch what you do here at Herzig. Said it, right?

Matt Weiss:

Yeah. Herzig.

Mark Taylor:

Okay.

Matt Weiss:

Yeah. I tell you, we’re going to grow it.

Mark Taylor:

I know. I know you will.

Matt Weiss:

We’re going to [inaudible 00:59:28], we’re going to hire the best people and we’re going to have a culture that’s just like what I’m used to and it’s going to be fun.

Mark Taylor:

Actually, I had lost a question and you just reminded me. So if I had to characterize the central theme of your entire career, it’s building the right team.

Matt Weiss:

Yeah, it’s cheating. I feel bad saying I built this or I built that because-

Mark Taylor:

I don’t think you’ve ever said that.

Matt Weiss:

I recruit people and they have been nicer to me than ever in building the businesses. And yeah, there’s a whole team left over at eShipping or eShipping Distribution that really should get the credit. And I know that sounds humble, but if you watch day in and day out, I’m not even really sure what I did to be honest with you besides that. But I did recruit the people and did bring them on board and worked with my friends.

Mark Taylor:

Did you figure out kind of a playbook or was it always just a gut feel on the hiring?

Matt Weiss:

I mean, I made hires that didn’t work out.

Mark Taylor:

Well, of course.

Matt Weiss:

So I don’t want to start out by thinking I always had the right pick. But started, I think I picked the people that I just sort of had chemistry talking with and working with.

Mark Taylor:

Yeah.

Matt Weiss:

And then usually we could figure out the rest.

Mark Taylor:

I think a lot of it had to do with, it sounds like you had a very rich culture and part of that was coming from the very specific customer that you went after and like, “We’re doing this because we are a solution. We’re not a transaction.”

Matt Weiss:

Yeah.Mark Taylor:

I think even that alone, I mean, having people that you work well with, but being a solution to me is something you can take pride in.

Matt Weiss:

Yeah.

Mark Taylor:

Versus doing a transaction, yeah, if it’s a very hard one, fine. But if it’s something where it’s like you don’t get to, “Okay, you only get to celebrate that one thing and then gone,” it’s like you lose out on the camaraderie.

Matt Weiss:

Well, with the people, I used to have a saying, it was like the only scalable way I could share with my people on how to hire them was just if you can’t, when you introduce them to the company, say, “Hey, I’m proud to introduce Mark Taylor, then don’t hire them.” Don’t look at the resume, don’t see where they went to college, I could care less whether the person has a degree or whether they’ve done that specific work before. I don’t know if that’s good or bad, but that’s just how I did it.

Mark Taylor:

Well, to your point earlier, I mean, you can do that in a transactional business and it’s, not a transactional, but I mean in logistics, that works.

Matt Weiss:

Yeah,

Mark Taylor:

You can train everything that you need in many cases. And of course, there’ll be sharper tools that come along that can do, are better suited to certain things, but at the end of the day, we’re not building bridges.

Matt Weiss:

Yeah. Well, we’re close to it here.

Mark Taylor:

And you are here.

Matt Weiss:

Yeah. Now it’s like-

Mark Taylor:

No, it’s a completely-

Matt Weiss:

… you got to have letters behind your name.

Mark Taylor:

Right.

Matt Weiss:

And in addition to all those other things I mentioned.

Mark Taylor:

Right.

Matt Weiss:

Yeah. We’ll find them.

Mark Taylor:

I know you will.

Matt Weiss:

We’ll go out there and get them.

Mark Taylor:

Yeah. Well look, once again, always a pleasure.

Matt Weiss:

Yeah.

Mark Taylor:

It’s great, I’m so happy we actually just got to sit across from one another.

Matt Weiss:

Yeah. No, thanks for making the trip. Appreciate it.

Mark Taylor:

Like I said, it’s Friday afternoon, I appreciate you sitting down with me.

Matt Weiss:

Yep.