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 Tech 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. Anyway, please introduce yourself and your company and what you guys do and give us kind of the pillars for Trimble Transportation.
Yeah. Hi, 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. 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 yesterday. Jonah McIntyre said, 'It's 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. And for a long time, actually more than 25 years, we've had a vision of connecting industries: connected supply chain, connected construction, connected forest, connected rail, connected utilities. And 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 are problems you solving for them?
The customers we serve at Trimble are primarily in two industries: engineering and construction, and in transportation. Within those industries, I 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. So, the fleet, the stack of Trimble technology intersects what I like to think of as the where, what, and why. Where represents positional intelligence, awareness, location awareness, and that goes to the roots of Trimble back into the 70s and we can talk about that later. What looks like the problems that a customer is trying to solve that manifest usually as software. And the why is the analytics, and these days we'll sure talk about AI and data, and we've been doing AI for a very long time before maybe I knew that we should have been talking about it because it's everything that we want to talk about today. This intersection of the tech stack of where, what, 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, and we can double click and be more specific about the nature of the problems in the transportation industry, 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, I'm sorry.
It's a pretty unique ecosystem that we've built. Over 160,000 carriers are in our system. Over 1,500 shippers as well. So if you think about the corpus of data that is unique both at a carrier, 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 and 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. And I always have felt that Trimble flies under the radar, but I've said it last year when I was here, every conference you 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, whatever you want to call it. But they're the ones creating that connectivity with you and Trimble and everyone else is saying, 'Oh, we have visibility,' and it's basically something they got from you guys.
Yeah. Yeah. 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.
You've been a repeat invitee.
Thank you so much. 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.
Okay. I'm from the great state of West Virginia. I was born there, graduated high school and college there. In between, actually, I lived a few different places, including here in New Orleans. 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 in most of the East Coast and then the West Coast and moved to Colorado in 2001. Fun fact of my path to Trimble was nonlinear. My wife and I actually met in California and just decided that we wanted to live in Colorado. And so we drove out there with all our possessions in a car, planted a flag, made a life, and so it's the sort of privilege of a lifetime to have been able to find Trimble and make my way here and then to be able to grow up in that 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. Exactly. 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, and the Taj Mahal in India, and the top of Kilimanjaro, and I could go on and on of the places I've gotten to see. And so I'm just such a believer in globalism and the connectivity that happens. It'll make the world a little bit smaller when you can get outside your own comfort zones and see that. So that to me, I was very attracted to that with the people at Trimble has always kept me at Trimble. And I've always talked about people, purpose, and opportunity. Those are my intersection point with Trimble. So the people, that gets to 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. And so some of those statistics I was talking about yesterday in the keynote, we're going to need 70% more calories to feed a 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 these decades to come. I want to do something that makes a positive impact in the world. And the good news is when you work at Trimble you get to contribute to that as we help enable our customers again 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, this isn't Microsoft, this isn't Google, these were little trucking companies around the country, not necessarily just little, big trucking companies also, but really solving issues in a business that is really plagued with problems over the last couple years and saving 5%, making 5% more, it's everything in this business. Last year I interviewed a gal named Cindy who's now a Trimble employee and she said the difference between us making money and losing money was Trimble routing. And she said it's that, they're out in Nebraska and she said just the nature of the business, if you're not on the right route you're losing money. And I was like, it's a hard business.
Yeah. Yeah. Where you look at the operating ratios of the companies that report publicly and of course private data as well 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. And I know a lot of people in the transportation business are saying if only housing starts to just 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, right? If it's 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 and if to the extent that there's any wisdom in this it's about segmenting the market and finding the more attractive opportunities. You know, the country itself is not going to be the same. By the way, overall punchline of residential is not good, sorry I don't have better news on that and we see that through our construction business as well. But let me tell you, in the construction business that we have, data centers, onshoring, reshoring of manufacturing, renewable energy projects, just anything energy related overall are strong markets. And really, I look at the civil infrastructure coming off the bipartisan infrastructure law 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 and that's a good thing for many pockets of the construction company and therefore for trucking companies serving those subsegments as it were. That's a good thing in terms of the business that can be found and can be had and that can be served relative to residential. Okay. 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.
Yeah, lots of people moving there but even that 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 data is following the impact of tariffs. These have been inflationary to the residential market. And so I think two data points I think a lot about relative to residential are interest rates and where these settle and how quickly, set a different way, how quickly they'll come down as well as where we end up on tariffs. And to the extent that trucking companies or anywhere in that supply chain can help reduce cost to let's say the end product, that's going to be a good thing because if you're in residential construction that is a pain point for affordability is the cost. So if through the logistics you can help reduce the cost, the delivered cost, hey that's going to be a good thing to help you differentially stand out.
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 and I've been to a lot of conferences lately and one of the things, there's 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, in new trucks, new people, whatever. The best companies are saying, 'Okay, this is our opportunity.' So I think we're seeing at least for sure in the brokerage market we're seeing the top thousand guys, top 500 guys growing much faster than the guys at the bottom.
I can see where there's a certain mindset in a given context in that 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. And that kind of mindset can carry into folks who are very forward with technology. And this is not a new thought. Technology is a differentiator.
Yeah. So you opened the conference with a great keynote about compounding interest. So talk about that and how it relates to the trucking business.
Yeah. Like the story behind the story. I don't read a lot of business books anymore.
I used to read them all. And then each business book tells you this is the most important thing. And you're like I cannot have time for all the most important things if everything's the most important thing. And I'm much more fascinated by change and managing change through organizations and therefore through humans because we're not fundamentally wired to resist change. And then there's that quote that I love. It's that 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. And so this idea and it goes in mindset and we've heard the growth mindset. A growth mindset versus a fixed mindset. And I'm fascinated by this idea of just being a little bit better every day. And look at the data. Do you believe, Joe, you could be 1% better at your job or your life today than you were? 1%. Okay, here's the thing. If you were 1% better every day, in a year, you'd be 37 times better. Okay? And that's this gets to the power of compounding. So, one of the things I was talking about in the keynote through a context of a story of compounding was this. Given the group who was there, one of two choices and choice one take a set of cash up front and choice two take this magic penny and this magic penny will double in value every day for 31 days. That penny, 31 days later that doubles in value every day is worth over $10.7 million.
