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Brett Suma, Bot Auto | A Trucking Company that Drives Itself · Freightvine

• Chris Caplice: Hello and welcome to the Freight Find Podcast, your source for all things freight transportation. I'm Chris Kaplis, Chief Scientist at DAT Freight and Analytics, and today I'm joined by Brett Suma, CEO of Bot Auto. This is the fourth episode in my Autonomous Freight series this fall. Now, Brett spent about two decades at night transportation, working his way from operations to running how the company orchestrates its freight and capacity. He then founded Loadsmith, a brokerage built around a future of autonomous trucks, which kind of makes sense. And along the way, they developed an internal tool that became Trailer Hawk AI that was sold to Wabosh, and he eventually sold the brokerage to Freight Vana. So now he's here leading bot auto. In April, Bot Auto ran a commercial load from Houston, Texas to Hutchins, Texas on public roads with no driver in the cab and no remote driving. Brett explains that Bot Auto sees itself as a trucking company that happens to be autonomous rather than a technology vendor. In our conversation, we cover a lot of different topics. Brett makes the case that a human-driven truck is limited by the 70-hour rule to be have about 36% utilization. An autonomous truck, on the other hand, can run roughly two and a half times that. He describes tractors as capacity nodes on a demand grid and why that matters for volatility and freight cycles. We also discuss what it takes to map a network and his goal of 1 billion autonomous miles by 2031. Following my conversation with Brett, I'll provide a truckload market update. So let's get started. Hi Brett. Welcome to the Freightvine podcast. Brett Suma: Chris, thanks so much for having me. I appreciate it. Chris Caplice: Yeah, so I want to talk about Bot Auto, the company you're with, but first I want you to talk about your path that took you to an autonomous trucking company or a trucking company that has autonomous driving, let's put it that way, not not just a pure AV company. What tell us about your journey, how you got up here in your career. Brett Suma: well, I was fortunate enough early in my life to land at night transportation, which growing up in Phoenix was a very noticeable company around town. You know, you you could drive on the freeways and see the trailers everywhere. And so very early in my in my life I started working there, worked there all through college. always thought that I would be an entrepreneur, but what I found was that it was such an entrepreneurial organization. And so so starting in 1999 and then really going you know going through school, graduating, and then recognizing that the company had significant growth plans and they really wanted to foster growth from within. So they wanted not only it to be an organic growth in terms of revenue and tractor count, but also organic growth in terms of their people. And so I got Probably a lot of opportunities that I otherwise would not have had had I been working for a more mature business at that point. but I was lucky to be working at a company that was 10 years old, that had significant financial capability to scale, and then a real desire to scale. And so I was lucky I spent the first 10 years of my career really learning directly from the founders on how to build and scale. a transportation company and then I spent the whole yep. Chris Caplice: So you on the were you on the op side, or you on the business development side, or which side were you on? Brett Suma: I was an operator. so I worked in operations. I did have a few years stint of of doing sales and business development. I I got to work directly for Keith Knight in in our in our sales office in Southern California, which are you know three years that I could never give up in terms of my freight education. so I spent that first 10 years kind of working in, operating, and sales was always kind of an extension of operations. and then I spent the the the last 10 years of of my career there really working more at a higher level, working on the business, training and developing young leaders, and then also having P&L responsibility, large P&L responsibility, as well as kind of like the the culminating piece of my career was I was really responsible for building how all of our freight was orchestrated and how all of our capacity was orchestrated. So So that was I think the precursor to me eventually deciding to go out and do my own thing. but that, you know, those ten year, you know, I call it two different careers, but those two different ten year careers there really informed how I view the world around you know, building scaling a a profitable trucking company. Chris Caplice: Yeah, so when was when did Knight and Swift merge? When was that? Brett Suma: so the night swift, that was started in the in twenty eighteen. the the talks around that. And so Chris Caplice: Okay. Yeah, yeah. Brett Suma: you know, perhaps maybe a little actually a little before, you know, twenty seventeen kind of culminated in twenty eighteen. I I I left after the culmination of that of that acquisition. So yeah. Chris Caplice: But then you got to do some of your entrepreneurship, your entrepreneurial Brett Suma: Yeah. Chris Caplice: activity. So tell me tell me about that. Brett Suma: Yeah. So I you know, a lot of people don't know the the origin story of Lodesmith, but I'm gonna share it with you here real quick. mostly because you're you're in in Boston. but you know, when I got to my 17th year at night, I decided that I was gonna work there for 20 years and then I wanted to try and do something different, something for myself. and really wasn't sure what that what that was gonna be. And so I decided that I would go back to school. And I would figure it out by putting myself in a uncomfortable situation of, you know, being being back in school, in an executive type, you know, you know, role and working with people who were from all varied backgrounds. And so I I ended up getting accepted to a program at Harvard to get my masters at Harvard. And so I was working at night and going to school at Harvard and Ultimately, the culminating I I I took a course and we had to write a business plan. And so this was, you know, 2018, and all this emerging technology conversation around autonomy was starting And so I wrote this Chris Caplice: Right, right. Brett Suma: business plan around building an an autonomous, a natively autonomous trucking company. and I like could not put it down. And so Chris Caplice: So so did everyone at Harvard were they freaked out? 'Cause trucking and Harvard don't necessarily mix that well. Brett Suma: Well, that's the thing. that's I was mostly Chris Caplice: Yeah. Brett Suma: there with like bankers, y you know, and and and so so and that was my my theory was not necessarily that I would stay in trucking. My theory was put myself into a situation with people with varied backgrounds and kind of discover what was next. but I ended up writing this business plan as part of this course and it just I I just couldn't put it down. And so ultimately, you know, even in my business plan, you know, David Sem and Jessica Kane. My partners are are noted in it in their respective roles. And so ultimately I ended up deciding when I hit my twentieth that that was what I was going to do. And so we we all, when we founded Lodesmith, it was the thesis was that we could build a a completely native autonomous trucking company. And so and it was based off of this this this, you know, business plan that I wrote. And so I do have the distinction of then I dropped out of Harvard. So So we ended up you know, going into business and and founding Lodesmith and and our ambition always was to build a fully autonomous trucking company. And we had had a plan in terms of how we were going to do that and what were the steps that we needed to do in order to to accomplish that goal. and we can walk through that if you'd like. But you know, ultimately that that's been this has been my passion since 2018, really. Chris Caplice: So so what happened to Lodesmith? Brett Suma: Yeah, well, great story. So you know, so we've we founded Lodesmith. We moved, you know, we we started July first of two thousand and nineteen. and we scaled to, you know, we scale our our plan was to do it in a sequential way. And so we recognized that we could go in and build a a a a freight network that had density and and repeatable moves by by operating as a freight brokerage. And so we we thought we could scale as a freight brokerage. so step one was to to build a freight brokerage and focus in on you know lane selection and lane density. step two was to then capture more customer freight and capture more stickiness by operating as a power-only freight brokerage. So deploying trailer pools with our customers. And then step step three would have been to deploy autonomous trucks whenever autonomous capacity became online. We could then replace our purchase trans with with autonomous trucks. And so Chris Caplice: Sure. Got it. So it was more, it was it was hub to hub for the most part. Is that is that fair? Okay. And trailer pool, power only, that's interesting. That's when Brett Suma: well yeah, essentially. Yep. Essentially at the time, yeah. Yeah. Chris Caplice: that started bubbling out. That's a hard network to manage. Brett Suma: Yeah, yeah. that was our sequential build. We scaled Chris Caplice: Okay. Brett Suma: Lodsmith and in, thirty thirty months. We were doing a hundred and twenty five million annual in revenue. we deployed our trailer pools. And, you know, one of the things that that ended up coming out of that was we ended up incubating a business within our business called Trailer Hawk AI, which was Chris Caplice: Hm. Brett Suma: a trailer technology management platform. And you know, as things happen, That that business ended up becoming something that we thought was was significant in in the industry. And we ultimately were approached by Wabash to purchase trailer hawk AI. and so you know, when you're you're running two businesses, essentially you're running, you know, 125 million plus freight brokerage, along with managing all these trailers and building a technology company on top of it. and somebody comes and wants to buy that technology business, you we we listened and and ultimately we decided that that's that we wanted to build that business. so we ended up exiting both businesses. We we sold our freight brokerage to what I would say is a you know competitor but very friendly competitor in Frey Vana. and simply Chris Caplice: Okay, yeah, sure. Brett Suma: because we have very similar backgrounds. I just was on the phone with Shannon from Freight Vana an hour ago. and so we sold our our freight brokerage to them and then a month later we sold Trailerhawk AI to Wabash. And go ahead. Chris Caplice: So that's really can I ask a question about that? Because it's really it reminds me of Slack. You know, do you know the software Slack? It was originally Brett Suma: Uh-huh. Yep. Chris Caplice: developed, they were developing a game and the game didn't take off, but the way they communicated with each other became the product. Is that the same Brett Suma: Yeah, yeah. Chris Caplice: thing here? So did you need this trailer hock, this this tool to manage that that those pools and then it became its own thing? I mean, it seemed like you needed that to run Lodesmith. Brett Suma: Yeah, look, I think that you're exactly right. What what we realized in the early days of operating our trailer pool was that if we were operating the the whole entire thesis of of trailer hawk was that in order for our trailer to be able to be hauled by an autonomous truck, it would have to pass a C VSA level two inspection and be completely roadworthy. And so so how do we operating without any human drivers of our own. How do we ensure that our equipment is loadworthy and roadworthy? And then how do you have a chain of custody throughout the entire transaction of the load of that trailer? So, so that was so, as we were starting to think about the future of autonomy and how we were going to deliver you know, a roadworthy trailer, that was really how, you know, the concept of trailer hot came up. And then as, as things happened, sometimes, our our brokerage was doing well and we had grown, you know, significantly. But this, you know, this, you know, technology business was something that that we felt that the industry needed to have. And and and there became a point in time where we knew that we wouldn't be able to scale Trailer Hawk while also operating a freight brokerage because one of the things that Trailer Hawk does is it does ingest your driver information and your load information. And so we couldn't go to a customer and say, Hey, we want to build an API connection with you and we want to ingest all of your driver information and your load information, but we're also operating a freight brokerage as well. Chris Caplice: Yeah, even even if you said there's a there's a Chinese wall and you're not gonna cross it, no one believes you. Yeah, yeah. Sure, sure. That's a perception. Brett Suma: Yeah. Yeah. Yeah. I wouldn't have believed me. Right. so, you know, so yeah, it it you know, so so ultimately Chris Caplice: No, but it's Brett Suma: we had to do that and and we ended up going to Wabash. And so we spent, you know, 18 months there kind of building the the the product into, you know, what was going to end up becoming a a product that they could sell into their trailers. Chris Caplice: Which which makes sense. That's a that that's a natural fit. But I'm always amazed that entry you start off in one direction and then the pivot and or you something you didn't see coming and that that's the where the value is and do do it that way. But let's Brett Suma: Yeah. Yep. Chris Caplice: let's talk about bot auto now. So what drove you to bot auto and then we'll talk about what it is. Brett Suma: Yeah, so during our journey of loadsmith and and and our ambitions to be a fully autonomous trucking company, we obviously had to have autonomous developer partners, right? And so one of our very, you know, our very first autonomous driving system partner was Too Simple. Chris Caplice: okay. Brett Suma: And and so so we had a reservation with Too Simple to to you know bring 250 of their, you know, autonomous driver system into, you know, into our network when it became available. And that's ultimately how I ended up meeting Chowdy, who is the founder of both Too Chris Caplice: Right. Brett Suma: Simple and of Bot Auto. Chris Caplice: I was wondering how that connection was made. Okay. Brett Suma: Yep. Yep. And so Chowdy and I have had a very you know, we're a very kindred spirits relationship for, you know, several several years. and so he and I have been you know friends and close and and you know what I would say is peers in the industry, although, you know, wildly different backgrounds and and capabilities. And so you know, too simple ended up going, you know, going out of the autonomous, you know, driving systems. business and that left a void for us at Lodesmith. And so I became very close with the team at Kodiak and held a a very large reservation at at Kodiak for their driver. have a tremendous amount of respect for them and their team. and so that was kind of our plan. We were just going to continue to you know execute our plan at Lodesmith. And Chris Caplice: Right, right. Brett Suma: and then ultimately when we exited the the the two businesses, I sat on Kodiak's industry advisory council and and when we had our successful exits, I still was on their advisory council and you know and still very very close and friendly with them. But as my time was coming to an end at at at Wabash, you know, I was approached by bot to have a conversation. And it was just simply, hey, would you would you have a conversation? And so Chowdy, you know, to his credit, flew to flew to to to Colorado. And we spent a day together. and we we talked about autonomous trucking and we talked about how how to scale and how to go to market differently and how to show up with customers differently, and what were the constraints that existed currently, and how can we remove those constraints going forward? And and so we just, you know, and it it was it was very informal, it was you know, just a back and forth dialogue. and you know, the way we ended it was that he wanted me to come. to to bot auto. And you know, I explained to him that that I I can't be me without my partners, David and Jessica. And so we talked what that would look like. And, you know, ultimately we decided to formalize the the relationship. And so I started, you know, nine ironically ninety ninety days ago today. Chris Caplice: Okay, well well happy 90th day. Brett Suma: Thanks. Chris Caplice: Yeah. So th it's it's an interesting move. So th the the founder of Too Simple, which was an early pioneer in autonomous, but auto bot I I keep wanting to say auto bot. Bot auto is a very different company. So Brett Suma: Mm-hmm. Chris Caplice: how how can you compare the two to help us under 'cause most people have heard of Too Simple. it went under for many different reasons. How is bot auto different? Brett Suma: In a lot of ways, okay. Chris Caplice: Yeah. Brett Suma: you know, first I would say it would be hard to argue to convince me, in other words. It'd be hard to convince me, given the time that I was involved at Two Simple, I had spent time with all of the other autonomous driving systems, right? So I had ridden in all the trucks. it you it'd be hard for you to convince me that Two Simple was not, you know, emphatically the industry leader at the time. and so so they were, they were the industry leader, I I think they were widely considered right up there by most people in terms of leading the industry. and so, you know, then, you know, and then fast forward now to bot, and I would say that, you know, we're a relatively newer entrant to the industry. and I think that that actually really favors us. Chris Caplice: Mm. Brett Suma: and I think that that really favors us because we're we're we have entered into and are building an autonomous driving system in the age of AI. And so our models and our technology platform are wildly different than they would have been you know, three years ago, five years ago, eight years ago, 10 years ago. And so the our ability to to build the technology. deploy it, refine it, learn, have a a continuous learning of it is is wildly different. And so so you have this you have this situation where we really think that we're coming to age at the very right time from a technology perspective and fully taking advantage of the abilities of of AI to to expedite you know all all of the things that we're doing. at the same time, you know, we I think that that the the learnings of of Too Simple are if you really want to be able to scale, you have to be a developer operator. and so and and that's the one big difference, right? That's the key difference. So there is a technological Chris Caplice: That's that yeah, that seems to be the key difference. Yeah. Yeah, because Brett Suma: difference for sure. There's a philosophical difference around how to actually scale. Chris Caplice: That's what that that's a area I wanna g dive into a little more because if I'm not wrong, you guys refer to yourself as a trucking company that happens to be autonomous, not a tech vendor siving selling a system out. So that that's a big difference. Right? So you I think you Brett Suma: Yeah, well and if you look at Chris Caplice: call it TAS, is that right? Transportation as a Service. Which it's always been a service, but now it's an autonomous service, right. Brett Suma: Yeah. Yeah. Yeah. I I I look at it and I I I you know, we can call it tasks if you'd like, but you know, I I I look at it as, you know, it's a capacity business is Chris Caplice: Hm. Brett Suma: what it is what it is. And you know, if want to say that the that the tractor, that the autonomous driving system in the tractor is, you know, is a product, you can absolutely say that. the business is not an autonomous driving system. The business is a a in like an intentionally designed network that can freely move capacity along the network and gain demand. And so when I look at when I look at the business that we're building, I don't look at it as tractors. I don't look at it as as the tractor being the product. In fact, I refer, you know, individually I refer to tractors as capacity nodes. Chris Caplice: Okay. Brett Suma: on a d on a demand grid. Chris Caplice: Okay. Brett Suma: and so as you start to see more more forward thinking from us, you're gonna see that capacity grid powered by bot is a is our product. And so so yeah. Chris Caplice: So so that makes sense. So you're providing capacity to the network and your your primary one of your primary customers now is Ryan Transportation. Is that is that right? And so Brett Suma: Mm. Yep. Yep. Uh-huh. Chris Caplice: operating and I think if if I'm not mistaken, in April you did the two hundred thirty mile Houston to Hutchins, Texas load with nobody in the loop. And we can talk about what that meant. But was that was that a test to see if you could do it? Was that a commercial load? I know you weren't at the company yet, but are you still doing these things now and what's the reason for doing that? Brett Suma: Yeah, wasn't a test. you know, Chris Caplice: Mm-hmm. Brett Suma: we can move humanlessly from from Houston to Dallas. we do it. that was the fur Correct. Yep. No no Chris Caplice: So on on public roads, no one remote driving, no one in the cab. Brett Suma: nobody in the cab, nobody remote remoted in. Chris Caplice: So loading, unloading, or is it all drop and hook? Brett Suma: I'll drop and hook. Yep. Yep. Chris Caplice: Okay. Yeah, yeah. Brett Suma: Yeah. And so that particular evening we did we did what is the the first humanless commercial load on public roads. and so so that's that's an important distinction. you know, in and in terms of capabilities, you know, that that proved to us that that we're capable of doing it. now we have to move to, you know, repeatability and to scalability. Chris Caplice: Right. And so l let's talk about that. So what is preventing it from scaling up now? You right now you're about about a dozen tractors, is that right? What Brett Suma: About fifteen. Yeah. Chris Caplice: fifteen and the and these are retrofitted tractors used using essentially Brett Suma: Correct. Yep. Yep. So we up we upfit them. Chris Caplice: self developed software? Brett Suma: Yep, self developed software, our own proprietary sensor layout, you know, our own com compute sec. Yeah. Chris Caplice: Does it use the trailer hawk for the trailers? Not yet. Brett Suma: No, not yet. That's something that that that that we are we're we are actively a Wabash customer for for Wabash for their trailers as a service business and you know very close with them in terms of conversations around around trailer hockey. Chris Caplice: So so if we look at the whole transportation network, you've got first mile, maybe drayage things out and back fifty miles, then you got the middle mile that's going maybe four, six hundred miles, and then you've got last mile, maybe a multi-stop thing. Brett Suma: Mm-hmm. Chris Caplice: Where are you see yourself fitting into this, or do you see bot fitting in some other aspect? Brett Suma: Well, obviously the middle mile is, Chris Caplice: Okay. Brett Suma: you know, that that's the middle mile is the is the the bulk of of transportation. you know, when we when we talk about solving for things, I'm not sure that that it's overly complex to solve first and last mile challenges. There doesn't seem to be a driver shortage in the first and last mile. you know, and and so and and the there's a lot of reasons for that. when you talk about the middle mile over the road trucking, irregular route specifically seems to have you Chris Caplice: Yeah, sure. Brett Suma: know more challenges. you know, and and then even if you talk, if you're if you're really looking forward and you really understood where my head's at, if you want to talk about actually moving the needle in terms of of carbon emissions, first and last mile is not the area of focus because the overwhelming majority of carbon emissions on a on a load are in the middle mile. They are not on the first and last mile. And so the deployment of of low emission or zero emission drainage trucks isn't really moving the needle in terms of overall Chris Caplice: It does for certain things. So there's a lot more idling for drayage pickups. I like at a port, you just have a row of trucks just idling. And so there's a lot of that's why California, you know this better than I do, the E V mandate. And so whether that'll be adopted by other states, there are some benefits for having EVs for the drayage moves because they're just Yeah. Yeah. Yeah. Brett Suma: I'm not saying there's not. Yeah. But but the overall mean majority of those jurisdictions also have a zero idle. Well, they Chris Caplice: Yeah, 'cause the miles are the middle mile. Yeah, yeah. Brett Suma: also have a zero idle policy too. And so so you really you're not supposed to idle, but but the overall majority of emissions are in the in the middle mile. So it seems like the majority of of problems to be solved are in the middle mile. They're not in the first or last mile. now that now how do we are are we able to go from hub to hub? Yes. Are we able to go from point to point? Yes. So We we can go from from point to point from customer point to customer point. and and that's you know, that's a solution that we currently build and offer to customers is point to point. So picking up a trailer at a customer's yard and delivering it to their yard. so so those are the things that that that we can do. I just said the greater the greater benefit is going to be in that middle mile segment or you know the the the loads the the the the freight opportunities that exist that are the most difficult for drivers and for, you know, replacement drivers. Chris Caplice: you view this solution for the A Vs as to help solve the driver shortage? Is that one of the main motivators? Brett Suma: I think that when we talk about the driver shortage, there is a shortage of drivers that are willing to do some elements of work that exists within the industry. Right. And so so in terms of solving that problem, yes, I think it solves a problem when it comes to the driver shortage of you know, certain types of of jobs that That drivers are less and less wanting to do. Now, there it also solves problems around safety, it solves problems around, you know, accident rates, it solves problems around equipment utilization. a lot of the things that exist that create what I would call, you know, supply and demand inequities that that that exist. I think that the biggest thing when you talk about our our business is that by building the capacity grid and deploying you know, supply nodes on capacity nodes on it, we are able to offer a much more stable capacity to our shippers during all periods of whether you're talking about freight cycles, seasonality, or you know, individual market volatility. and we're able to do that for a lot of different reasons. But one of the largest reasons is that our network. allows our capacity to have optionality. And so we can move along the network and provide capacity along that network that allows also allows us to utilize our tractor for a lot more than standard human driven truck can. I think the one number that most people probably don't recognize is that the the real benefit for us is the 70 hour rule. It's not necessarily the 11 hour rule But when you think about 70 hours in an eight day period, the most that a human human-driven tractor can do is 36.5% utilization of time. and so we're able to generate you know, exponentially more capacity with our individual tractor than a human-driven tractor can. So our tractor Chris Caplice: So the Brett Suma: lives and feels on our network, you know, like two and a half times what a human a human driven tractor does. Chris Caplice: Yep, yep. For the utilization. So let me just make sure this is th they're not EVs. Brett Suma: I I would love them to be. One of my biggest, Chris Caplice: But then Brett Suma: one of my biggest, you know, talking points when we talk about the benefits of of A V is that it solves a people problem, right? So it solves, you know, a work, a labor problem. it it cr it will create better and more first and last mile jobs. Okay. so it solves a a labor problem. Solves the society problem when you talk about safety and road safety and on-road highway deaths. and and and when you talk about total land and transportation cost, the ability for us to be able to have a more elastic capacity across the network that's not tied to a specific domicile or operating area, all of a sudden we're able to supply a much more consistent amount of capacity. without fluctuation. So you're not gonna have huge, huge increases and decreases in spot. and then lastly from an environmental perspective, I think that AV is absolutely the precursor to a more nationwide EV play simply because the infrastructure will follow once you're able to have what we call programmable capacity. And so when you Chris Caplice: Yeah, that's that's a that's a big leap there, Brett. Could the EV because if you talk to some people, if you look at if all trucks converted to EV tomorrow, the grid is dead. It it cannot support what it is. And Brett Suma: for sure. Yeah. Chris Caplice: so so question here's a thought that I had, and we'll come back to the other stuff for EV. It's not it hasn't made great inroads in class eight yet. people are working on it. Tesla's got some stuff going, they're doing with with Pepsi and all that good stuff. But my contention is all the AI development, the st data center development is putting so much money into this and then they're having to generate their own electricity. It's gonna improve the grid that eventually when the data center bubble crashes and it will, right, you're gonna have all this extra capacity now and the grid and that might open the door to more electrification, is my sense. But it's I I where would you put it out? How how many years before class eights are more than half of them are EVs? Ten years, twenty years, thirty years? Brett Suma: I th Chris Chris, when I was what I was describing as A V being the precursor to EVE, my mind is set on what what trucking looks like in 2050. Yeah. These are not Yeah. These are not Chris Caplice: Twenty fifty, okay. Which is getting closer every day. That's only twenty four years. Brett Suma: Yeah, these are not problems that I think are solved Chris Caplice: Yeah, yeah. Brett Suma: in in the in the short term. I just think that until you can get to a programmable capacity, you're not going to be able to deploy ev because to hey, look, the power grid's one thing, and I totally agree with you in terms of power generation to support the data center there is an interesting theory around data center power consumption that it'll actually create it's it's very similar to what I'm talking about. so if you think about data center power you know consumption and how it's constant, it'll actually create more stability in the grid. Okay. Chris Caplice: Is it? Brett Suma: It's well, that's what they say. I I'm I'm not I'm not in that business. Chris Caplice: Okay. I I Brett Suma: Yeah. That's what they say. Okay. so if you have a more constant demand, right? Supply can then can then you know meet that that constant that constant demand. It's similar when you think about how trucking will look in the future when you start talking about programmable. capacity and the ability to move capacity along a a a grid that it doesn't have a domicile, it doesn't have an operating area, it can move based off of demand signals. And so that that creates a longer term Chris Caplice: That's so so that's that's really interesting. And one of the challenges with middle miles, you know this twenty years with Knight, is the big problem of middle mile compared to first mile, last mile, is balance. You have deadheads, you right? You have to go. So the move you do, Houston to Hutchins, I imagine there isn't a a load waiting to come back to Houston. So Brett Suma: no, there is. Yeah, that's a that's a lane that that's easy for us, yeah. Chris Caplice: So you have an easy so for you to grow, and my my question is for you to scale, for any kind of middle mile company to scale, it gets hard because it's not just growing one corridor, you have to grow a network. And so is Brett Suma: Correct. Chris Caplice: is your idea that similar to what you the trucks in in the future will be something like what the the rail cars remember rental rail cars in the eighties where you'd have and they'd move anywhere. And you know, you'd have accounting systems, so how much you get paid but being on what track. Do you view These trucks to be like nomads to just go around anywhere, or do you see them in set corridors? Brett Suma: So what's interesting is that our our lane deployment strategy, Chris Caplice: Uh-huh. Brett Suma: okay, it's very, very intentional and very sequential. And so as we build more and more network lane, okay, in our technology stack, it unlocks more and more freight opportunity for us. Okay. And so one of the most important things is what is your conversion of of network miles? And so for every one mile of map that we build. we can we create 8.65 miles of network capacity. And that's in what that means is that Chris Caplice: I don't know what that means. Can you explain that to me? Brett Suma: we we take them we take the time to map a mile. So if we're gonna map you know if we're gonna map from Houston to Phoenix as an example, that that that's a process that we have to build that that into our network. Okay. So Chris Caplice: so you're you're physically mapping it for your system. So you n okay, got it. Brett Suma: Correct. Yep. So for every one mile that we do that, we actually Chris Caplice: Yes. Brett Suma: create eight point six five total cumulative network miles. And that's an important thing because for us doing it in a sequential way, we're going to be able to build a significant amount of network capability and capacity rather quickly by doing it in a very in in a in a very intelligent sequential way. And so that that is giving us the ability to Rather quickly, okay, our our big North Star in our business is to run a billion autonomous miles in 2031. And in order for us to do that, we have to build, we don't have to do a lot. We have to build a very specific sequence of of mapping in order to unlock a huge, tremendous amount of freight in in our network. Chris Caplice: Now that's that's a little tricky, Rick, for d forget the technology, the just the the regulatory side of things. You're operating in Texas predominantly, is that a fair statement? Brett Suma: Yeah, but but our network i i we if we if we were done building our mapping today, we could operate our entire network with the regulatory environment in the states that we that we want to. There is there is currently nothing preventing us from executing our plan. Chris Caplice: Yeah, but it's so you don't see many autonomous things up here in Boston. We're we're old school, right? We probably have courses. Brett Suma: Lot of reasons. There's a lot yeah, a lot of reasons there's a lot of reasons for that. yeah. Chris Caplice: Not saying it's good, not saying it's bad or anything like that. But I mean, there's a reason why a lot of the autonomous vehicles, the testing, the pilots and operations are in Texas, Arizona, New Mexico, Southern California. Do Brett Suma: Yep. Yep. Chris Caplice: you see that GM? Because I mean it's flat, it's dry, right? And it regulatorily friendly-ish at times. You know, Texas gets Brett Suma: Mm-hmm. Yeah. Chris Caplice: a little weird sometimes. but as you expand out of that area, there's some other obstacles to scale, or do you see those as not insurmountable? Brett Suma: I don't think that they're insurmountable. I also think that when you look at how freight moves in the United States, it's pretty predictable and understandable on how freight moves. And so you know, we recognize is that we have to go get our share of the freight that exists in the market. You know, I am a firm believer that there is no market maker. that exists in our in our industry. When I worked Chris Caplice: I agree. Brett Suma: at Knight Swift, we were the largest, we had the biggest stick of anybody and we moved one percent of truckloads. Chris Caplice: If yeah, yeah. it's shocking, Brett, how many shippers don't know that, don't realize that. No one makes the market. Walmart doesn't make the market. Schneider, Hunt, they don't make the market. No, yeah, you're right. You're absolutely right. Brett Suma: Yeah. so we we feel like it's it's our race to run and it's our race to win because we have a differentiated we have first off our technology we think is cutting edge and and better and faster. And then second, we think that our go to market strategy is less constrained than our competitors, for lots of different reasons. And you know, lastly, we believe that we're going to be able to build quickly and deploy effectively and and and and increase utilization significantly. Chris Caplice: So today, this summer, so in twenty twenty six, are you operating humanless loads? Is that once a month, once a week, daily? How how what's the frequency of this of the humanless kind of loads going? Brett Suma: Yeah, that's a that's a great question. And from we we are operating humanless operations on a monthly basis. we did that first commercial run back in April. Subsequently, since then, we've just been operating humanless, you know, humanless, you know, testing runs, not doing them commercially. So, and you know, there's a lot of reasons for us choosing to do it that way. but the reality is is that we are running running humanlessly. and and doing it on a monthly basis. Chris Caplice: So my guess is with the market changing, it's getting tighter now in the last six months, cer certainly. is that increasing demand for for your services? Or is that making it harder to break? Brett Suma: Well, I yeah. I'm I I'm having a lot of really great conversations with a lot of my longtime you know, peers in the industry around everything that's happened, from a regulatory perspective, you know, from from lawsuits, from liability, you know, what does it look like from a carrier vetting perspective? and so yeah, there's there's there's a lot of opportunity that exists. for us. And I I think that as the the competitive landscape changes more and more, specifically around, you know, insurance and liability and and carrier selection and and, you know, look, I I think that you know, the things that we have to be great at are everything around the the the roadworthiness of the equipment that we put on the road combined with our safety case. for our autonomous driving system. and I think that as as we move forward, again, if you're looking in 2050, I think that our competitors in the trucking space are going to have to make significant investments in their equipment monitoring and their you know pre-trips and post-trips and and everything around the roadworthiness of their equipment. I think that there's gonna have to be significant investment from our trucking peers to catch up with what we're doing just from a an equipment roadworthiness perspective. Chris Caplice: Okay. And so who are your main customers at this point? Are they shippers, brokers, other carriers where you're providing supplemental capacity? For right now, where are they? What is that rough percentage and where do you want it to be in the next five years? Brett Suma: Yeah, that's a great question. And the answer is all of it, right? So, you know, we we have brokers that are very interested in partnering with us to provide them, you know, purchase transportation and committing to long-term agreements around purchase transportation. That's I think one of the other benefits around our our ability from a pricing perspective is that we can provide a three year or a five year price. because we understand what our costs are. and we understand provided we have a fuel surcharge, we know we can project out into the future you know, what our what our costs are. and so we have brokers that are very interested in buying large chunks of capacity on our network. we have shippers that are, you know, whether they're private fleet shippers or shippers just in general, that are very interested in using us from a, you know, from a consistency perspective of capacity. and then we also have conversations with large carriers around what does it look like in the future for them from an autonomy perspective. again, we feel like our our platform has much less constraints than our than our comparators in the autonomous driving system setting. And from a liability perspective, we think that that we're much more compelling for carriers. Chris Caplice: So when you talk to a potential new customer, broker, a shipper, a carrier, and y do you go in as, hey, we're here to provide extra capacity, or do you go in and saying, hey, we have A V huminless trucks? And if they f when they realize that it's gonna be humanless, what what is their reaction? Is that something that is attractive to them? Is it neutral? They don't care, or do you find that to be a hurdle that you have to overcome? Brett Suma: that's a wonderful question. And if you were to read my business plan that I wrote in 2018, one of the central theses of that of that business plan was that there we are on the at the time we are on the precipice of a generational cohort change in terms of who are the decision makers and policymakers. And the the irony is is that Robo Taxi is great for autonomous trucking because anybody that has ridden in a in a robo taxi understands it and can appreciate it for what it is. But when you think about generational cohort theory and this changeover in terms of decision makers and policymakers, the answer to your question, Chris, is that it really depends on what generation the person I'm talking to is from. And Chris Caplice: So a quick quick quick quote on the On robotaxis, which I think is so I heard a great quote is in The Economist. They said the amount of time it goes from miraculous to mundane is minutes. And I I haven't I haven't been in one besides like in twenty eighteen with Otto back in the you know, that I haven't been to any have they hit Colorado yet? Do you have them zipping around your neck of the woods or is it mainly in San Francisco? Okay. Okay. Brett Suma: No, not not not where not where I live. Not where I live. But I've ridden them in in Arizona for sure. Yeah. Chris Caplice: Yeah, yeah, yeah, yeah. Brett Suma: No, you're right. The mundane piece, like I'll I'll I'll be honest, I've told our team, you know, our demo ride in in Houston is 45 minutes long. I said, you gotta figure out how to do it in about 15, because it's it's yeah, you're like, wow, this is amazing. And then 25 minutes into it, you recognize that you're just sitting there having a conversation, not really paying attention to the the the fact that the truck's driving itself. and so Chris Caplice: That's that's pretty amazing. Brett Suma: again, when we think about our advantage in the market is that when we think about the decision makers and policymakers changing and becoming younger, the conversations I have depend on what what generation I'm speaking to. But you know, we are on the very beginning here of Chris Caplice: Yeah. Brett Suma: what we believe is I I feel like when I started in transportation, there's been a lot of evolution thus far. Okay. I think that we're on this like beginning of this transformative period. Chris Caplice: Yeah. Yeah. So and one of the big advantages we haven't talked about, that I I believe you guys promote is your cost per mile for the AV The numbers I saw is like below a buck ninety a mile versus I think the latest ATRI numbers are like two twenty six or something. So there is a big cost advantage. Now I assume that depends a little bit on frequency loads and all this kind of d other topology, but that's to me that's the a huge selling point. Brett Suma: Well, I think look, I think when you when you when you're when I'm in front of a customer and I package it all together and I kind of walk them through, and and I'll never forget, I sat on a a shipper carrier panel when I worked at night, you know, fifteen years ago, I probably was on this panel. And the question to the to the shipper was, you know, what do you look for in a carrier? And his response was very candid and I appreciated his response. He said, lowest sustainable price. Right. And then they asked me the same question and my response was highest sustainable price, right? Like, and so the reality is that that's that is the conflict that exists in the in the industry. And so I was just on a on a conversation earlier today with an a large asset carrier talking about all of the the the significant rate increases that they're going after with their customers. and it's like this pendulum that just continues to to to go back and forth. and When I think about the business that we're building and our ability to offer a the a very sustainable rate over a period of time, because we're able to program our capacity, we're able to have network optionality, we can move our capacity along the network without having to worry about any operating area or or domicile of the driver. our ability to to utilize that asset. Two and a half X a human driver. We don't have to build what I call the driver infrastructure that has to exist to attract, train, develop, retain drivers. you know, look, I I go to some of these you know, large trucking companies, you know, facilities, and it's great. I mean, you can go bowling at some, you can play basketball, you can watch movies, you know, there's There's diners, you know, there's all these things that exist to support the driver and they and they've and they all should exist to support the driver, right? But we don't have any of that infrastructure, right? Our our truck, I always th this kind of the the way that I always looked at it was that from you know, we're on September first. I would love every if I if I was running a large trucking company, I would love if every driver of mine was willing to just go to California. And just operate out of California for the next four straight months. But then at the same time, I would want them at on, you know, January 5th, I'd want them to all go home. And then I'd want every California driver that I had to move to the southeast for for the first quarter. And you can't do that with with humans. You can't, you don't have that elasticity of capacity because they have a domicile. They have, you know, they have their their area of operation. And so and and they deserve to have all of that. but we we just know that we can offer something that's different. and that's going to be a longer amount of less volatility. Chris Caplice: so two questions. Do you see this bot's main roles surge, where seasonal temporal surge happens and it moves and and so your fleet kind of moves where that demand is? 'Cause we all know it moves around the country or based on seasons and things like that? Or do you see it more as a steady state for the base, you know, the the Chicago runs that are going back and forth, back and forth? Brett Suma: Yeah. Here's here's what I can tell you from an AI Chris Caplice: Okay. Brett Suma: perspective. If you were to if you're gonna take today and fast forward five years from now, okay. And so in five years from now, we have X number of trucks and and we're running X number of miles. Because of the advancements in AI and because of the advancements of of predictive analytics and demand signals and how capacity in our network will move, I will go home on Labor Day weekend and I will come back. on Tuesday, and my network will have shifted capacity along the network to take advantage of demand signals without me having to do anything. And so in five years. In in less Chris Caplice: I'll take that. Brett Suma: in less time than in less time than five years, but I promise you that in five years, the network rebalancing will happen through AI, through demand signals, through predictive analytics. And it will move capacity along the network in a way that's programmable that that that that does not exist currently. Chris Caplice: Do you think that bot can operate alongside other autonomous vehicle operators? Or do you think it's gonna be Game of Thrones? There's gonna be one operator out there. Brett Suma: No, no, no, no. There's no the this isn't a winner take all business. Chris Caplice: Yeah. Brett Suma: Right. It's too it's too large. It's too Chris Caplice: Yeah, yeah. Brett Suma: it it you know, it needs to be, you know, large in order for you know for things to work in the United States. It needs to have lots of players. I wish everybody the best at every company that competes with us. and you know, that's the when when I when I left Knight and I started Loadsmith I had a great conversation with Gary Knight about competing with them. And my response to him was, Hey, look, you guys move one percent of the truckloads. There's there's plenty of growth opportunity for everybody. Chris Caplice: Yeah. Brett, last question. Last question. We talked about the volatility, the cycles. It's usually every three years, roughly, you give or take, you know, for the last, certainly starting in the 2000s. Before that, it was we're still digesting deregulation, but we have these cycles. Do you think that those cycles will go away in five years or become more volatile? Brett Suma: I think that in five years you're not gonna see the the A V won't have a huge impact in terms of volatility within five years. but I think that if you're looking out like I talked earlier, between now and twenty fifty, I think that that you're going to see a significantly different business operating environment Chris Caplice: Mm. Okay. Brett Suma: for trucking. and again, transformative like it's like it's never been before. Chris Caplice: So because the capacity is untethered to a domicile and can move where the demands are for that. That'll be interesting. Well Brett Suma: Correct. Yep. Chris Caplice: I'll I'll have you back on in five years to see how we're progressing. How's that? We'll see where we're around. Brett Suma: Yeah, that would be great. Chris Caplice: Yeah, Brett, thanks so much for joining today. I really learned a lot today. It's been a great conversation. Brett Suma: Thanks so much, Chris. Chris Caplice: All right, everyone, stay tuned for the truckload market update. Hello and welcome to the weekly truckload market update for the week ending twenty four October, twenty twenty six. Okay, let's start with dry van. We found that the contract rates dropped slightly week over week, 0.6%. That's more like noise, right? A little vibration month over month. It's still up 5%, and year over year it's up 16.5%. Spot we found to be up 2.5% week over week, 5.4% month over month, and up 38% year over year. We found the spot premium ratio to be 3.7%, which means spot is higher slightly, 3-4% higher. on average than the contract rates. That's for the dry van. And the new rate differential is 11.7%, which means the average contract rates entering are about 11.7, 12% higher than those that are exiting. And again, that's on average and that's dry van. When we look at temp control, we see contract rates dropped slightly, 2.2%. We saw month over month they're still up 0.5%. And year over year they're up nine point three percent. Spot rates for temp control are up 0.8% week over week, 1% month over month, and 23.4% year over year. The spot premium ratio for temp control is 5.4%, and the new rate differential is 8.1%. Flatbed. We found contract went up 1.3% week over week. Month over month is barely flat, 0.1% different. But year over year, it's about 15% higher. Spot, we found week over week 2.8%, 6% month over month, and year over year it's 33.4%. The spot premium ratio is 0.7% for flatbed, which means they're equal. They're I mean they're right in the same equal, because this is an an average. And the new rate differential is 9.5%. Finally, intermodal. We found contract rates increased week over week 2.1%, 6.3% month over month, and 9.9% or 10% year over year. We don't look at any of the spot information because we don't get much for intermodal, but the new rate differential is about 3.2%. And let me just remind everyone that all the data we're showing here for this analysis was submitted by shippers. For what they paid to brokers or carriers. Okay, so how do we summarize this? Well, what I'm showing on the screen, if you're watching the video, is the most recent week, nineteen to twenty-four October, and data from the previous week, twelve to eighteen October. And you can see the differences. basically week over week, contract rates bounce slightly, plus or minus two percent. That's that's just noise that's happening. Remember, in the rate here, a one percent change is less than two cents a mile, right? It's right within there. spot rates rose slightly across the board, reflecting volume increases in the fourth quarter. And the spot premium ratio is positive across all modes, flipping positive for flatbed and temp control. So that's kind of showing that the signal, this the cycle is kind of tapering off. and the new rate differential is still projecting nine to eleven percent, depending on the mode for contract increases, except for intermodal, which has been plugging along at about 3% for the last year. So that's it for the Truckload Market Update for 24 October, 2026.