Hello friends, welcome to the Logistics of Logistics podcast. My name is Joe Lynch. Thank you so much for joining us today. Today's topic is Trimble's Perspective, the future of freight with my friend Rob Painter. Today is a very special day because we're in New Orleans and it's the Trimble Insight Cafe Conference and even more special because we have Trimble CEO Rob Painter. Rob, thank you so much for taking the time. I know you're pulled in a lot of directions today.
No, I'm happy to be here. Welcome to New Orleans. Welcome to Trimble Insight.
Thank you so much for having me back. I interviewed you last year. Last year was when you had the big announcement with Platform Science here today in force. So anyway, please introduce yourself and your company and what you guys do and give us kind of the pillars for Trimble Transportation.
Yeah. So hey, I'm Rob Painter. I'm the CEO at Trimble. I've worked at Trimble for over 19 years. I've grown up in lots of different parts of the business. I've lived in the US for most of the time in Colorado, also lived in Europe for a bit. Trimble is a 48 year old company founded by Charlie Trimble in 1978 in November in fact. So we're just hitting that 48 year anniversary. Fun fact, I'm only the third CEO in 48 years.
I heard that. I heard that yesterday. Jonah McIntyre said he goes, 'It's kind of incredible for a company of this size, three CEOs.'
It really is incredible and that continuity in leadership and strategic direction has served us well. For a long time, more than 25 years, we've had a vision of connecting industries: connected supply chain, connected construction, connected forest, connected rail, connected utilities. We are at a point where we have manifested that into reality. The technology that exists today and the business models that exist today are really helping us accelerate what we call a strategy: connect and scale.
So who are your customers and what problems are you solving for them?
The customers we serve at Trimble are primarily in two industries: engineering and construction, and transportation. Within those industries, I'll get asked sometimes why those and what's common. This is solving problems that link work in the field and the office. We like dirty boots, real work in the real world. The fleet stack of Trimble technology intersects what I like to think of as the where, what, and why. The where represents positional intelligence, awareness, location awareness, and that goes to the roots of Trimble back into the 70s. The what looks like the problems a customer is trying to solve, which manifests usually as software. The why is the analytics, and these days we'll talk about AI and data. We've been doing AI for a very long time before maybe I knew we should have been talking about it. This intersection of the tech stack of where, what, and why applied to physical industries, connecting work in the office to the field, where the customer problems come down to needing to do work better, faster, safer, cheaper, and greener. When that's the nature of the problem, our technology makes a positive impact.
Yep. And I think either you or Michael had it yesterday that 1 million trucks are connected to Trimble technology and I think 60 billion dollars worth of freight going through the systems every year. It's pretty unique ecosystem that we've built.
Over 160,000 carriers are in our system, over 1500 shippers as well. So if you think about the corpus of data that is unique both at a carrier and shipper level, broker, 3PL for that matter, Europe centricity, North American centricity, actually global centricity. We do business in over 170 different countries.
Yeah, we were just talking about before we hit the record button before you came in. Trimble is global. When you Google the top logistics tech companies, I won't mention the names, but Trimble's on that list, but there's some above them where you go, they hardly even do logistics. I always have felt that Trimble flies under the radar. I said it last year when I was here. Every conference we go to, people say, 'Oh, we have visibility.' But they didn't create the visibility. Here's where the visibility is created. All of your partners in the pavilion area, they're the ones creating that connectivity with you and Trimble. Everyone else is saying, 'Oh, we have visibility,' and it's basically something they got from you guys.
Yeah. Well, hopefully you can help us change that. Amplifying the Trimble story and thanks for giving us this.
Thank you so much for having me. Usually when I talk too much at a conference, I don't get invited back, but I got here again today. You've been a repeat invitee.
So, I want to talk a little bit about you. Where'd you grow up? Where'd you go to school? Some career highlights before you ran the mothership Trimble.
I'm from the great state of West Virginia. I was born there, graduated high school and college there. In between, I lived a few different places, including here in New Orleans. So I've spent some formative years.
Yeah. You mentioned that at the conference. You said it's a dangerous place to live.
Yeah, you can get into good trouble here. You can get into bad trouble, too. But you can definitely find trouble in this city and a lot of fun and just great people, great community here in New Orleans. After I went to college, I've had jobs in consumer packaged goods and retail. I did go to business school and after that lived on the east coast and then the west coast and moved to Colorado in 2001. Fun fact, my path to Trimble was nonlinear. My wife and I actually met in California and just decided that we wanted to live in Colorado. So we drove out there with all our possessions in a car, planted a flag, made a life. It's the privilege of a lifetime to have been able to find Trimble, make my way here, and then to be able to grow up in the company.
Very nice. So you had options. What made you come to Trimble and stay at Trimble?
I feel like I work at the United Nations every day. I love the global context of what we do and to be able to work with colleagues who are from all over the world. I've literally seen the world through the lens of Trimble. I've been on the Great Wall of China through a Trimble business trip, in the Taj Mahal in India, on the top of Kilimanjaro. I could go on and on of the places I've gotten to see. I'm such a believer in globalism and the connectivity that happens to make the world a little bit smaller when you can get outside your own comfort zones. That to me was very attractive. The people at Trimble have always kept me at Trimble. I've always talked about people, purpose, and opportunity. Those are my intersection point with Trimble. The people, the global aspect of what we do, and really good, solid, kind people that we get to work with. I think about purpose. We spend more of our waking hours every day at work than we do with our friends and family. I want to do something that makes a difference. When we talk about purpose at Trimble, we talk about move the world, build the world, feed the world. An enormous amount of global commerce runs through Trimble. That engineering construction business we have, we're literally part of building the world. We're involved in the agriculture market as well. Some of those statistics I was talking about yesterday in the keynote: we're going to need 70% more calories to feed the world's growing population by the year 2050. Urban areas are going to grow by billions of people in that time frame and we expect a tripling of freight demand in the decades to come. I want to do something that makes a positive impact in the world. The good news is when you work at Trimble, you get to contribute to that as we help enable our customers to do their work better, faster, safer, cheaper. And by the way, when you do that, you're doing it greener.
Yep. I was struck by yesterday in the keynote where you guys had some video of your customers saying, 'Here's what Trimble did for us.' And these are not Microsoft, not Google. These were little trucking companies around the country. Well, not necessarily just little, got a lot of big trucking companies also, but really solving issues in a business that is really plagued with problems over the last couple years. Saving 5%, making 5% more, it's everything in this business. Last year I interviewed a girl named Cindy who's now a Trimble employee and she said the difference between us making money and losing money was Trimble routing. She's out in Nebraska and she said this is the nature of the business. If you're not on the right route, you're losing money. It's a hard business.
Yeah. When you look at the operating ratios of the companies that report publicly and of course private data as well, it shows that it's a business within margins. It benefits from anything that can help drive optimization and manage costs.
So I was bugging you the other day, first day of the conference on Sunday, and you're in a unique position because you serve the housing and construction business, but you also serve the transportation business. I know a lot of people in the industry tech now in the transportation business are saying if only housing starts to pop up a little bit. If we could just see come March and April a whole bunch of flatbeds moving, that would pop us out of this freight recession. What are your thoughts on that?
I also have a global lens on that too. I might have some different data points in Europe versus North America, but let's focus on North America given your audience. I would think about breaking the construction market down into some of the end markets. To the extent that there's any wisdom in this, it's about segmenting the market and finding the more attractive opportunities. The country itself is not going to be the same. Overall punchline of residential is not good, so sorry I don't have better news on that. We see that through our construction business as well. But in the construction business, data centers, onshoring, reshoring of manufacturing, renewable energy projects, just anything energy related overall are strong markets. I could look at the civil infrastructure coming off the bipartisan infrastructure law. It has driven a lot of infrastructure development in this country. The current administration and the policies they have are driving reinvestment back into the United States. That's a good thing for many pockets of the construction company and therefore for trucking companies serving those subsegments. In terms of the business that can be found and served relative to residential, there's in a way you could say there's 50 different answers in the US depending on which part of the country.
Yeah, exactly. There's building going on in Florida right now. I know that.
Lots of people moving there. But even that, we know the market has slowed down as well. Markets such as Texas though continue to be really solid. So follow the data within residential, as well as following the impact of tariffs. These have been inflationary to the residential market. Two data points I think a lot about relative to residential are interest rates and where these settle and how quickly they'll come down, as well as where we end up on tariffs. To the extent that trucking companies or anywhere in that supply chain can help reduce cost to the end product, that's going to be a good thing. If you're in residential construction, affordability is a pain point. So if through logistics you can help reduce the delivered cost, that's going to be a good thing to help you differentially stand out.
You know it's interesting even though we're in a freight recession there are companies doing well. There's companies that are investing and they're here. I've been to a lot of conferences lately and one of the things a lot of companies I talk to say, 'We're picking up ground.' The best companies grow during these times while their competitors are unable to invest in the latest technology, new trucks, new people, whatever. The best companies are saying, 'This is our opportunity.' So I think we're seeing at least for sure in the brokerage market, the top thousand guys, top 500 guys growing much faster than the guys at the bottom. There's a certain mindset in a given context.
I've tended to say when we've hit tough economic pockets, we want to position ourselves to exit a crisis in a stronger competitive position than how we entered it. That kind of mindset can carry into folks who are very forward with technology. This is not a new thought: technology as a differentiator.
Yeah. So you opened the conference with a great keynote about compounding interest. Talk about that and how it relates to the trucking business.
The story behind the story. I don't read a lot of business books anymore. I used to read them all. Each business book tells you this is the most important thing. You're like, 'I cannot have time for all the most important things if everything's the most important thing.' I'm much more fascinated by change and managing change through organizations and through humans because we're fundamentally wired to resist change. There's that quote I love: 'The pace of change has never been this fast. It will never be this slow again.' It's quite deep if you really think about it. This idea goes into mindset. We've heard the growth mindset versus a fixed mindset. I'm fascinated by this idea of just being a little bit better every day. Look at the data. Do you believe, Joe, you could be 1% better at your job or your life today than you were yesterday? 1%. If you were 1% better every day, in a year you'd be 37 times better. That gets to the power of compounding. One of the things I was talking about in the keynote through a story of compounding was given the group who was there, one of two choices: choice one, take a set of cash up front; choice two, take this magic penny that will double in value every day for 31 days. That penny 31 days later is worth over $10.7 million. The way compounding works is you don't really see those big gains until closer to the end of those 31 days. The point is that a lot of that work, that grind to get better, you have to be patient. You have to be courageous to stick with it, to start, just get started, and then be patient to continue on that. I feel like we've seen that and continue to see that in our own journey as Trimble as a company. The fruits of what we've been showing and talking about these last couple of days, that's not the result of work that happened three months ago. A lot of it started three years ago. You got to grind it out to put the foundational pieces in place such that then we can show, for example, the next generation TMS and our next evolution of where we are in maintenance, and now to be able to layer in AI on top.
Yeah, that's what I say all the time. We all want to get better every day. I want to be 1% better than I was yesterday. AI, you can almost guarantee if you like it this week, you're going to love it next week. If you love it this month, it's going to be great next year. There's been a big focus here. One thing I thought was interesting, I talked to Jonah, your head of product, yesterday. We had a conversation about startup AI companies that are all around and the incumbents who are implementing it like you guys. He said we have to be measured. We have to do it right. The largest companies in the world don't want risk. They don't want hype. They don't want overpromises. He said, 'We're moving in this direction, but if you look at the startups, they got nothing to lose. They have no customers.' He says, 'So they'll make bombastic claims.' When he started going over the gains you guys have had, they weren't being bombastic, but they were impressive. He talked about Trimble's been around a long time. He says, 'We have pre-internet stuff, then we have internet stuff, then we have AI stuff. And it's quickly moving to the AI stuff.' I think it also came up yesterday. We've had some big advancements in our space. GPS was one of them. TMS was another, ELD, and now the next one is AI. So talk about what you guys are doing with AI.
