Business as Usual: PGT Services

Transcription: 

Okay, so good afternoon, everyone. This is Audrey Russo, President and CEO, the Pittsburgh Technology Council. It's another great day of business as usual. Joining us, as always, is Jonathan Kersting, Vice President of all things media and marketing for the tech Council. And we have a great guests today, who I will bring on in just a moment want to give a deep appreciation to our long term sponsor, Huntington bank, for all the work that they've done. Not just always, but particularly in 2020, they have been instrumental in making sure that the ecosystem in terms of business and tack and the relationships with the afford with the cares act, affordable cares, I'm wrong on the cares act is, you know, being leveraged. And they've done just an incredible job in terms of partnerships with our business community also want to stand. And notice that 40 by 80, is also involved in the work that we do at the tech Council. And that's the longitude and latitude of Pittsburgh, and it is the nonprofit arm of the Pittsburgh Technology Council. So we've muted your microphones. And we did that on purpose so that we don't hear any noise in the background. And I think everyone's lucky, my dogs are finally sleeping. So we won't have any kind of havoc, reeking of them trying to entertain in the background. But also we want to be honorable to our guests today, who is Barrett Rea, and I'm going to bring him on in one second. We also have a chat and the chat is for you to ask questions, ask questions and Barrett and not a time for you to sell your wares this or for any kind of personal, you know, promotion or marketing. So on that note, I'm going to jump right in and say I'm thrilled to have Barrett re president of PGT services. And I'm really thrilled that he's here today, because I think there's a lot of really important things that his company is doing that builds on the legacy of Pittsburgh and moves us into the future. So good afternoon, Barrett, thank you so much for joining us and really look forward to talk talking to you about the innovation that's actually happening at your company. But before we do that, let's talk about you, Barrett. And let's find out a little bit about who you are, what's your background, your journey for investment banking, to where you are today. So thank you better

for thanks, Audrey. And thanks to Huntington and the Technology Council for having me. I I grew up in Pittsburgh, in the north sales within North Allegheny High School, and then I moved away for some time I went away for college for undergrad actually moved back here for Business School went to I went to CMU. And then then from there, I moved to moved away for a while. So I moved to New York City to work in investment banking, with Merrill Lynch at the time in 2006. And, you know, went through the financial crisis in 2008. So went through a lot, a lot of change there. We got acquired by Bank of America. And I stayed there through all of that. And in actually 2010 I moved to Chicago. We had an office in Chicago that needed somebody who was my level and kind of in my field. So I was in industrials investment banking coverage. So like to Chicago a lot, had a couple kids there. Had a good group of friends. We were there for eight years, we enjoyed enjoyed the town, but it just wasn't home. My wife's from Pittsburgh as well. So we had an opportunity to move back. And we did that. So I came back join pgt became Chief Financial Officer at bgt trucking. We moved here we were blessed with our third child, we have three daughters, nine years, nine years old, seven and about 18 months 18 months later next week. So that's that's been the journey. It's good to be back in Pittsburgh. We've been here now for two years. So a lot closer to our family now. It's just been it's good to be back.

Have you noticed any changes?

All kinds of changes? Yeah. I mean, when you know everything from the career environment here from you know, with all the technology companies that have moved here and the hiring that's gone on, you know, the restaurants are way better than Plus, you know, taken advantage of less of that, you know, with the lockdown to everything but it's definitely a different town than than the town I grew up in. And I'll tell you what, I when I was growing up here, we would go on vacations, you'd meet people or when I went off to college, you know, you it Pittsburgh didn't have a great connotation outside of Pittsburgh, right. People would always kind of say Oh, you're from Pittsburgh, it just wasn't all that interesting to them. But now when I tell them I'm from Pittsburgh, and I told Pete, you know, people I was moving to Pittsburgh is totally different. Everyone says, oh, wow, I was there that I love that city. You know, they all have a story about when they went there, and it was just much different than what they expected. Yeah, they want to go back and that that kind of stuff. So the region's definitely come a long way in the last, you know, 1520 years.

That's great. Well, glad to have you back. So your company pgt itself is about to celebrate a major milestone about 40 years in business. And talk about talk about the history, give us a little bit of what you know, in the four decades.

Yeah, so I'll tell you, I'll tell you what vgt was founded by Pat Gallagher, when he was pretty young, so 40 years ago, he started the business, he's still CEO today. And it's still very active and in good health. And as a lot, a lot of energy for someone who started business for 40 years ago. So he was in his mid 20s. And he got into a tough business hauling steel, for some pretty big companies, US Steel among them, and you know, still still a big customer for pgt. Today, I'll tell you, I think what really separates pgt and lead to a lot of the growth was really, in this comes directly from Pat is the importance of customer service in delivering and relationships that you have with customers. And obviously, being able to, you know, adapt to changing environments over time, right, trucking is a tough business, you see companies come and go. So to start something with, it's been able to grow from one truck to a fleet of of, you know, roughly 1000 power units, you know, you know, you know, get that, you know, you don't do that without being able to kind of change with the times, right, it's a much different business than it was 40 years ago, both in terms of the just the technological environment, the regulatory environment, the way customers approach it, and the, you know, the the amount of competition. So, yeah, it's a tough business. That's the history of pgt its diversity. Yes, it's a more diversified company, obviously, than what the when it started really grew up with steel, steel base, taller, you know, PDT now, this lot of the Building Materials, Energy related work, project work. We recently set pgt services, which is the business that I run it, we just spun that off as an asset, it's an it were an asset, like, transportation intermediary. So you know, that's been been a growth business for ptts business that that BDT has some some experience and background around then. So this company turns 40, next year, we've got some you're working on planning some events and things like that. And, you know, we're gonna be rolling out a new 40th anniversary logo, so you just see a lot of good things for pgt. Now for the company's got a good base, that it can build off of and grow off of in the, in the future.

So talk about the services that you provide. Thank you that you've just launched. I mean, I think, you know, right, we've had COVID. And, you know, obviously that's has had an impact, we can talk about that. But you've also launched some services.

Yeah, so we're talking about PTT services a little bit. So PTT services is a new company, but was was was really the freight brokerage division of TGT trucking. So, we're a business that we arrange for transportation of goods for customers, but we don't own any trucks. So we have access to capacity from from from trucking companies, that are typically smaller companies, then that bgt that, that, that that may not get access to the kind of freight that we can, we can deliver. So that's what our business does, primarily. We, you know, the business grew within pgt over over the years really is just managing overflow freight pgt would have a number of freight out of particular locations and you know, could cover some additional loads by finding trucks from other trucking companies. And that's what really the brokerage business kind of grew out of, and it just got to the point where it was it you know, it was it was a percentage of pgt sales and it was gonna, it was it was it wasn't gonna really grow any faster than then the overall company was as part of BGP. So we thought it was a good opportunity to separate the company. And, and we've seen some dividends that come out of that we've been around strategy now we're bringing on our own customers. It kind of gives us you know, some freedom to experiment with things that as part of a bigger company, we got to be more, more careful about.

So it with it with pgt services, and if people are listening in, they're interested, they would contact you directly for their capacity issues. opportunities, and then you contact us directly.

Yeah. And what I tell you our spaces is it's a crowded space. So one of the things that differentiates us is one we know flatbed better than other freight brokerage or three pls, our people get the same, we actually when we hire people, we send them to train in blairsville, PA at bdts. trucking PTT trucking training facility, they get the same securement training as big as incoming truck drivers do other other three pls. And you know, they don't, they don't do that kind of thing. So we have more expertise in flatbed freight than than most other three PL so that's, that's really our specialty, we also we have a high, we have a high degree of focus on customer service. You know, I think everybody will say that, but we really do believe in that here. We have, we're not just a bunch of salespeople, we have a lot of operational staff here that actually moves most freight to come in that comes in. So we've got an operational focus and a flatbed focus.

I think there's a question though, about some history in there.

Yeah, Ken's always got some great questions. And he heard that guess. You guys were early adopters of compressed natural gas engines? And what is your experience been? Yeah.

Yeah, so it's that we've, we still have some in operation. It's not been a growth area within, within the company that, you know, the cng trucks do? Well, you know, in a route based type of, you know, kind of where they're where they can kind of make a loop and they can fuel they take a long time to fuel up? You know, I would, I would say that, where the industry is really going, as opposed to cng is towards electrification. So, you're seeing, there's a lot of, you know, with the, the Tesla trucks, probably the most well known is a company called Nikola, that has been in the headlines a lot lately, but but they've got a hydrogen fuel cell tech type of technology, a lot of the major truck OEMs are moving towards towards electrification. And I think you're probably going to see that as opposed to, it's opposed to cng. And over the over the road, I know, cng has been been very popular with waste haulers. So the big garbage companies waste management Republic have adopted cng in a big way, they kind of build their own infrastructure. And it's worked. It's worked really well for them.

So, you know, obviously, as I, as everyone knows, COVID has challenged all of us. Right? So talk about how COVID has impacted pgt. And how you have pivoted?

Yeah, so it didn't, I mean, it had it had an adverse impact. You know, immediately in the springtime, we had a lot of customers closed down both on the asset side and in the non asset side. So there was a lot less product to shift, we shifted to some other commodity commodities that we may maybe didn't do, as much of and tried to try to recoup as much businesses because that way, we held a lot longer, there was a there was a lot of demand for lumber in the springtime, you had restaurants rushing to build outdoor seating capacity index and things like that. So anyone who seems hard to get lumber, and there's a lot of moving around. So we did, we did more of that. You know, we had challenges. You know, as you can imagine, you know, just you didn't know if facilities were going to be open or taping, taking shipment, you know, from day to day. You know, then things rebounded, things rebounded over the summertime, there's a lot of demand for steel out of the automotive sector that's still going on. I think there's just a large industrial restocking that continues to go on. So the demand for freight is really high. The challenge now is fine to drivers use, a couple things happened. And that's always been a challenge, right in this industry that you hear the term truck driver shortage a lot. And that's definitely the case. So the couple things happen that are directly related to COVID. One truck driving school shut down in the springtime, so there were fewer new cdls are kind of coming into the system, a lot of them since reopen, but they're they're producing smaller classes with physical distancing limitations and things like that. So there's fewer new drivers that are coming into the system, there's a new federal drug clearing house that went into effect in the beginning of 2020 that have nothing to do with COVID but that that's taken some capacity out of the system as well now, that's, you know, a good thing to have kind of more visibility on who's failing drug tests and things like that. But it you know, it does it has it has limited capacity. So the result that we're seeing rates go up, which is you know, it's a good thing for for, you know, people in the business but would rather be able to increase the size of the fleet and find more drivers. You know, that just kind of live rates that are volatile and move around and things like that.

So are you seeing anything like that? You think? Because I think you are, like a bellwether, in many ways in terms of the economy? Are you seeing things come up that you think are predictions? You know, we're not gonna take, well, you're gonna bet on but what kinds of things are you seeing?

The industrial economy is still really strong. I, you know, the other thing that we're seeing, you know, everyone is seeing that there's a, the, the online, you know, the fulfillment and the, you know, the Amazons and the FedEx, there's an enormous amount of truck capacity that's going towards that business. So whether that's drivers moving, moving, you know, you know, going to work for companies like that, or companies that move a lot of that or power, you know, we will, you know, PDT and companies like PDT will, you know, during, during peak peak season, will, will provide power units to haul trailers for companies like that. So, there's just been an enormous amount of demand from from that side of the business, and I don't know when that's going to change, you know, that that, you know, obviously, it's a, it's a big season for them with holiday sales and things like that, but I'm not sure that that, you know, people are ever gonna come back to as much physical shopping and that sort of thing. So I think you're gonna, you're seeing that ripples through the supply chain, and that's having effects on, you know, a number of different businesses outside of that.

There, there is a lot of innovation going on in your industry, you know, marketing downstream. So many of those are happening right here in Pittsburgh, right? autonomous trucking, and, you know, a lot of our members, and they're they're here building What, what, um, what do you see? Do you see yourself in terms of innovation and technology? Do you think that that is part of your, you know, your best practices in terms of services? And what kinds of things? If a and then B would be what kinds of things? Would you like to tell our community about what you look for?

In? Yeah, I would tell you that what we we look for, we view ourselves as users of technology to make our business better and to differentiate ourselves with our customers. So I think what we're looking for, and there's there are some great companies here in Pittsburgh that we, we do business with, we seek to do business with that, I think it can benefit us in that we've, we've we've worked with both TGT and pgt services. So, you know, we, we want to we, you know, we want to work with technology partners, we can bring, you know, our business generates enormous amounts of data, right? It's a very fast paced business, there are things that our clients or customers demand, where technology can help help us, right, so, and I see it in a number of different ways. Visibility is an important issue right now. So dispatching and tracking of trucks, we do have technology that we work with, that helps us do that. But there's not, you know, that's an ever evolving field, where I think you can get better and better with that the analogy customers always use is I can order food on doordash. And I see, you know, where the driver is, you know, and when he's gonna show up all the time, why can't I do that with your trucks? With? fair question, right. So we're working with a number of providers to improve our service that way, actually, using there's a number of machine learning artificial intelligence type solutions to help us more efficiently match available loads with available trucks, there's potential for disruption there as well, there, there are there are companies there, they're trying to do what we do, purely, purely, you know, with, with a digital type solution, Uber freight is probably the best known as a con boy out there that does do some things like that. So we need to, you know, be aware of that threat, and, and be able to take advantage of products that make us be make us more efficient, so that we can, you know, be still relevant, right, you know, in the old days, you know, not all that long ago, you know, there's there are a lot of very small, you know, freight brokers that cooperate, you know, with email and Excel, right, and that's just not the way it's going to be. So we need to be, we need to be as close to the forefront of that as we can be. So we were very close to those kind of technologies. There's, there's some some areas that are really interesting around safety ELD there's companies here in Pittsburgh to keep them on, you know, mavens a company that has an ELD Yeah, this company that I deal with has a safety solution. And then you mentioned autonomous driving locomotion. Yeah. So you know, we we, you know, we want to be be involved with companies like that, and we We know those folks, and there's a lot of interesting things, you know, they're gonna happen to the industry is gonna look a lot different in the future.

So, you know, the demand surging, like you talked about earlier, and you also have a lot of expertise in flatbed, you you have what has been the impact of digital load matching technologies on on the industry itself. So, you know, just in the core benefits that it brings to shippers, and smaller trucking can,

yeah, so the core benefit is it can make company like, yeah, it can make companies like us more efficient, anything, the more efficiently matches loads to trucks, as the ability to increase capacity bring rates down, make goods move more efficiently throughout the system, I don't know that there's been a quantified full impact of that kind of technology that I can point to right now yet. But I do think you're going to see that it's just going to make overall supply chains more efficient. Also, the visibility, and, you know, what customers want to know when a truck are showing up, that enables them to do all kinds of things that they want to do, particularly around automating their operations. So if you have a distribution center, where you want to be able to unload trucks, with with autonomous fork trucks, things like that, you need to know with with with with a lot of precision when the truck is going to show up and be able to be unloaded. When a trucks run like me thinks it's it's, you know, the trucks 250 miles away, that there are a lot of factors that go into when the trucks going to show up some some within within the control the driver and the trucking company has some some just that are unforeseen. So being able to to understand and adjust to that, in the world that we're moving to is just becoming more and more important.

And so what do you think with the hiatus of training for truck drivers and changing in some of the laws you think that that will push automation even further? Or do you think that we just,

yeah, certainly, it certainly makes the motivation for for increasing capacity, that much stronger? Right. Before there were even LDS, you know, it there, there it was. It before there were electronic log devices, you know, truck drivers to capitalize on paper. And, you know, there's just a lot of opportunity to flout the regulations, right, that's a lot harder to do. Now, the regulations are stricter, that's taking capacity out of the system, the drug testing is continued to take more capacity out of the system. So there's really been nothing from a regulatory front or just from a from a business innovation standpoint, that's brought more people into truck driving, right? You know, it is a tough, difficult job. You know, the pay is, is okay, it's not great, it's a tough job that a lot of people just don't want to do. So So, you know, it can be a great career. And we, you know, we've got, you know, trucking companies PDT, especially have good opportunities for drivers. But it's tough to get people to come into this business. There's other impediments, you need to be 21, to drive a truck Interstate, across state lines. So that, you know, when you think about that, you know, somebody coming out of high school who's young considering getting into a trade, you know, it's three years is a long time to wait, right, they're typically onto something else that they're going to do. So, I think the industry loses a lot of a lot of people that way. So it's, it's just been, you know, there's not been a lot of development developments that have that have increased the available trucking capacity. It's only it's only gone the other way.

I know, it's interesting. Like, I wonder what the average image is of someone who's driving. And if we're gonna see that fall, you know, across the country, I

can't tell you exactly what it is. But it's, it's, it's well into the 50s. It's not it's, it's, it's skewed towards an older generation.

And so maybe they're

gonna retire. I mean, there's going to be, you know, we are facing, you know, drivers are retiring and younger drivers aren't, aren't moving. And maybe that changes. You know, maybe it doesn't, but it's certainly a challenge that the industry is facing. Mm hmm.

And I and I think that's why it's so exciting for the companies that you've mentioned, particularly on the autonomy side of the house that we're gonna see some shifts and changes. Yeah.

Yeah.

I think that's that'll be an exciting time because you're starting to get involved in more technology, and logistics, not necessarily just driving. Yeah. So what do you think what what do you think are the biggest opportunities in terms of 2021 that you're excited about in terms of your your space and your presence and

presence there so we are we're looking to grow so we've we've added staff since we since we separated from pgt Since we've come around business, so we, when we brought, you know, like I said, we brought on new customers, and we're building out teams to support that business. I think, you know, for us in 2020, you know, we were still pretty, we think that the economic environment is going to continue to be to be strong, we think that trucking capacity is going to continue to be difficult to find. And so that creates opportunities for people like us who, you know, have the ability to deliver that, to deliver that capacity. So, we feel good about the way we're positioned. And, you know, the customer base that we've been able to build it, I mean, for us, it's about, you know, growing the business, bringing on new customers getting more business with the customers that that we're with, you know, I would say from this from, from this group of technology focused group, you know, we're trying to stay on top of the latest innovation. So anyone out there who may be may be listening, you know, please reach out, you know, we've more than happy to sit down and spend some time understanding what, what you guys are working on, we can have, you know, talk about our operations and how, you know, we can work together to develop a solution that works for us and other companies like us.

So will you partner, you'll partner with companies that have young ideas?

Sure. Now, what have they are? Well, you know, we can have developers come in and see what we do, you know, someone who understands it is going to relate it to the to the business. You know, will, like I said, we've got a lot of things going on here every day. And we've got a lot of a lot of kind of workflows, processes, and we're looking to build and automate, we're looking to, you know, use technologies to make our operations better and more efficient so that we can be more relevant to our customers.

So what kinds of roles Are you hiring for? And what's it like to work at TGT services?

Yeah, so? Yeah, that's a good question. So the roles that we're hiring for, we're looking for folks who can can soak, the two things we're after is capacity sales reps. So that's someone who actually works with the trucking companies that are partner carriers, and find new ones as well, that can move the freight that we have coming in. So it's an operational role. It's, it's a, it's an interesting role for somebody who's kind of getting into the business, right? Because it gives you a good understanding of the way freight moves through the system. And it's fast paced, as a negotiation type elements come from Wall Street, it's we, our environment is a lot like a trading floor. Right? It's, there's when you think about it, that's kind of what we do, right? where we are, you know, I mean, we're sort of like writing a forward contract. And a lot of times, we'll price business and then we'll go, you know, we'll need to deliver on that at some point in the future. Right. So, so it's it's fast paced, it's day to day, it's finding capacity on the open market. It's a very, very collaborative environment. So you know, I'm in my office, we're actually working in the office. You know, we physically distance so as a result of that, we're kind of running out of space. But but but, you know, there's a lot of communication that happens spontaneously.

Yeah, I missed that. That's great that I missed that. That kind of collaboration and innovation. So my hat's off to you. I'm on a thank you, Barret Rea for being with us. We put the links out there, everyone Barrett said you can reach out to him, I guess we can find you on LinkedIn. And that might be a good way to stay connected to really know that there's a lot of innovation at your, at your feet right here. Bear right in Pittsburgh that are have deep capability in logistics, materials, as well as obviously, as we've seen in Av. So really want to thank you for taking the time out of your busy schedule. I hope that you're staying safe. And everyone We will be back here tomorrow. Is that right? Jonathan? We have people putting up the link, you can use QR code and you can reach out to Baron tomorrow. We have liftoff PGH. That's right, special guests, Tiffany Kelly and founder and CEO of Nitin Dale apps, and that is part of our partnership with the Jewish health care foundation. So I want to thank everyone. Thank you Barrett, again for being great getting an update on your industry. And we'll see everyone here tomorrow, same time.

Thank you.

Transcribed by https://otter.ai