Issue #6: How I got my start with Mexico

I've been asked often enough how I, a gringo, got involved in cross-border Mexico freight. It's addicting and I love the complexity of it all. Read more for the backstory.

The Beginning: $400 Paper Loads

My journey in logistics began in the summer of 2007 as an intern at Coyote's original Lake Forest office. Those early days were a deep dive into the world of load tracking. My tasks ranged from incessantly calling drivers to provide them with vital load information (yes, even faxing them directions in that pre-smartphone era!) to ensuring they were on schedule with their pickups and deliveries. It was a crash course in the logistical ballet of freight management.

As the summer progressed, I transitioned to a more challenging role in coverage. My primary focus was on truckloads of paper rolls, each weighing a hefty 45,000 lbs, and destined from Staten Island, NY to Worcester, MA. Despite my persistent efforts and offering carriers a flat rate of $400, the rejections were frequent, often ending with a swift click on the other end of the line.

Post-internship, I pursued my cinematic dreams at a film school in Chicago, maintaining a part-time role in Coyote's IT department. After two years of film studies, in 2009, I packed my bags for Los Angeles, fueled by aspirations of making a name for myself in the film industry, particularly in music videos. However, reality soon set in. Confronted with the tough love of my father's ultimatum to either self-sustain in LA or return to Coyote, I chose a middle path. In 2010, I moved to San Diego with a plan: work in freight for a year, save up, and then give LA another shot.

Fast forward to 2024, I'm still here in the freight industry. It's been a journey filled with unexpected turns and life lessons, but looking back, I don't harbor a single regret.

San Diego

Living in San Diego was an experience I cherished, but I soon realized it wasn't the place for me to fully advance my career in freight. During my three-year tenure at the San Diego office, I delved into the complex world of battery freight logistics. This wasn't just about moving automotive car batteries; it encompassed the entire supply chain, dealing with new and used batteries, and managing the nuances of lead, plastic, and packaging.

One of my regular tasks involved covering a lane from Phoenix, AZ to Yuma, AZ. I collaborated with a unique carrier, one that specialized exclusively in these types of loads, and together, we managed to secure a healthy profit margin. However, when an opportunity arose to handle similar loads for a large CPG (Consumer Packaged Goods) customer, I hit a roadblock. This carrier, accustomed to the more relaxed nature of battery loads, balked at the CPG freight due to its challenging logistics: late-night pickups, prolonged loading times, and stringent delivery schedules.

The transparency of Coyote’s TMS (Transportation Management System) added another layer of complexity to this situation. The system allowed everyone on the team to see each other’s monthly commissions, sparking a competitive environment. My colleagues could see my success with the Phoenix to Yuma battery loads but also noticed my absence in the CPG lane. This led to a misperception that I was cherry-picking the easier, more lucrative loads, while in reality, it was a matter of carrier preference.

The pressure from my team was a catalyst for change. Determined to find a solution, I embarked on a mission to identify alternative carriers capable of handling the Phoenix to Yuma CPG loads. I expanded my search to include carriers within a 150-mile radius of Yuma, reaching into Calexico, CA. This exhaustive search led me to TBM Carriers. While they were initially hesitant to take on the Phoenix lane, our discussions opened up other opportunities. I began loading them on routes from Washington and Oregon back to Southern California, laying the foundation for what would become a significant and lasting business relationship.

Moving Back to Chicago and Launching Coyote Mexico

In 2013, driven by ambitions to grow my career and step into a leadership role, I made the strategic move back to Coyote's headquarters in Chicago. There, I joined the Private Fleet group, a move that marked a new chapter in my logistics journey. My time with this team lasted just under a year, but it was significant. I continued working with TBM Carriers, not just for battery and west coast freight but also for new opportunities.

Early 2014 presented a turning point. A salesperson circulated an email across the carrier department, inquiring about our capacity to handle shipments from Mexico — specifically, transporting toothpaste from Nuevo Laredo, TAM, to destinations in Georgia and Ohio. Sensing an opportunity, I reached out to TBM with this inquiry. Their prompt response with competitive rates led to us securing and successfully executing these loads. The commissions from these Mexico loads surpassed those from both the battery freight and private fleet bookings, igniting my interest in further exploring the Mexico freight market.

This shift in focus caught the attention of Coyote's COO at the time. He approached me one day, questioning my newfound focus on Mexico freight over the private fleet. My explanation, centered around the higher profitability of Mexico freight, was met with an unexpected response: I was tasked with the challenge of expanding our Mexico freight business. Suddenly, I found myself collaborating with a Spanish-speaking colleague in a small corner of the office, both of us diving headfirst into the intricacies of Mexico's logistics landscape.

Our initial task was to price an RFP for an industrial products manufacturer. This exercise was a hands-on lesson in pricing cross-border freight, where we discovered the strategy of splitting and individually pricing the different legs of the journey at the border. This approach paid off when we won business from the RFP, opening doors to more significant opportunities.

The customer requested a meeting in Laredo at “our facility” and then introduced us to their customs broker, Carlos Zuñiga. They requested a meeting at our Laredo, TX facility to discuss the final steps of our arrangement. There was just one hitch in this plan — we didn’t actually have a facility in Laredo.

My First Laredo Trip: Discovering the Heart of Cross-Border Freight

Ahead of my inaugural visit to Laredo, I reached out to the customer's customs broker, Carlos Zuñiga, to discuss our next steps. Carlos extended an invitation to tour his facility in Laredo during our meeting. His offer was generous and heartfelt, epitomizing the phrase “Mi casa es su casa.” That initial conversation was a glimpse into the welcoming spirit of Laredo, a city pivotal to cross-border logistics.

The meeting with the customer at Zuñiga’s facility was a resounding success, paving the way for us to onboard this new account. Laredo left a lasting impression on me. Despite its modest size, the city buzzed with an energy unique to the freight industry. It was a place where logistics visibly pulsed through its veins; trucks adorned with familiar logos, sprawling terminals, and the likelihood of bumping into a trucking company owner at any local diner. Laredo embodied the essence of cross-border logistics, where every corner had a story to tell.

Returning from Laredo, I was compelled to share my experience with the entire company. In an email that I still recall vividly, I described Laredo as the "Mecca of cross-border freight," a hub that drew in those who shared my passion for Mexico freight. This communication sparked a surge of interest within Coyote. We began actively promoting our new cross-border services to all our shippers, tapping into the burgeoning potential of this market.

The enthusiasm was contagious. We rapidly expanded our operations team, bringing in Spanish-speaking colleagues eager to embrace this new venture. This growth was not just in numbers but in expertise and dedication. Eventually, this expansion led us to establish an office in Guadalajara, now the heart of our cross-border team. The journey from that first trip to Laredo to the establishment of our Guadalajara office was a testament to the opportunities and growth that cross-border freight offered.

Coyote's Acquisition by UPS: A New Horizon in Logistics

In 2015, a pivotal moment unfolded while I was in Puebla, Mexico, visiting a major automotive supplier. An email from my dad announced to the entire company about imminent rumors of UPS acquiring Coyote. His message skillfully balanced the news, reassuring us that while the acquisition was on the horizon, it was a gateway to unprecedented growth and success. He emphasized the sheer scale and resource advantage of partnering with a global giant like UPS, urging us to embrace the excitement of this new chapter.

The following two years, as I continued to develop Coyote's Mexico operations under the UPS umbrella, were transformative. I was introduced to the intricacies of global supply chains, gaining a holistic understanding of how packages journeyed across the world. This period allowed me to synergize Coyote’s specialized cross-border truckload business with UPS’s extensive global forwarding and parcel solutions. It was a time of learning, integration, and exploration.

During this phase, I devoted myself to exploring UPS’s expansive network, seeking out untapped opportunities that could benefit Coyote. This relentless pursuit of new possibilities earned me the nickname 'The Forager' from Matt Connolly, a UPS executive. The name aptly captured my approach and soon became a part of my identity, sticking with me even after my departure from Coyote in early 2018.

Founding Forager: A Tech-Driven Odyssey in Logistics

In March 2018, I turned a new page in my career by leaving Coyote with a vision to dive into the tech world. Inspired by the likes of Uber Freight and Convoy, I was drawn to the innovative culture of tech-forward companies but also felt a tug to step away from freight. However, fate had other plans.

During a brainstorming session with my close friend, Jordan Salins, we toyed with the idea of a tech venture akin to 'Uber for Boating,' a service where boaters could order snacks, food, and drinks directly to their vessels. It was a promising concept, but practicality set in; in Chicago, such a business would only thrive a few months a year unless we relocated to a year-round boating haven like Miami.

Simultaneously, discussions with Project44 and two Canadian brokers kept pulling me back to the familiar realm of Mexico freight. The brokers' rigid, off-the-shelf TMS systems highlighted a gap in the market for a more flexible, tailor-made solution for managing the nuances of cross-border freight. These talks often ended with vague assurances, signaling to me that genuine innovation in this space was unlikely to come from existing players.

Enter Ted Alling, whose advice resonated deeply with me: true control over one's destiny comes from building one's own business. I pitched this idea to Jordan, coupling it with my initial designs for a bespoke TMS that would revolutionize cross-border freight management. Thus, the seeds of Forager were sown.

We brought on board Jessie Essman as our third co-founder, creating a strong foundation with my expertise in freight and Mexico, Jordan's financial acumen, and Jessie's operational prowess. Our fundraising journey began auspiciously, securing $1.25M in a pre-seed round led by TFI International, followed by a cumulative raise of $15M across three rounds.

At the heart of Forager was SCOUT, our secret acronym-laden platform that combined a shipper portal for instant quotes and bookings, an internal TMS for freight execution, and a carrier portal. We had created a digital cross-border freight brokerage from scratch.

However, scaling Forager presented its own set of challenges. Our growth hit a plateau as we realized the need for a larger US network to offer cost-effective cross-border solutions. Our financial margins mirrored a heart rate monitor, fluctuating with market trends. This led us to explore M&A opportunities, culminating in a deal with Arrive Logistics that closed in January 2022.

The journey of building Forager was filled with valuable lessons, many of which I shared in a recent Founder-to-Founder post.

Forager + Arrive: Blending Cultures and Visions

The acquisition of Forager by Arrive marked a significant transition for our team of around thirty employees. We had cultivated a small, agile startup capable of swift action, and now we were integrating into a company with a workforce of over 1,800. This shift posed a daunting challenge for our close-knit group, accustomed to the familiarity and autonomy of a smaller entity.

Mergers often bring a host of integration challenges. We faced questions about cultural alignment, team integration, job security, product consistency, and operational changes. These concerns loomed large as we contemplated how our roles and responsibilities would evolve within the larger framework of Arrive.

Remarkably, Arrive’s leadership team went to great lengths to facilitate a smooth transition, earnestly incorporating elements of Forager’s culture into their own. This genuine effort to blend the best of both worlds played a crucial role in retaining most of the Forager team within Arrive.

As a founder, experiencing your startup’s acquisition is bittersweet. The entrepreneurial drive to create and lead is often at odds with the structured environment of a larger corporation. I wasn’t in complete alignment with every integration decision, but this journey taught me the importance of building consensus and navigating the complexities of a larger organizational structure.

Throughout the M&A process and integration, I focused on three key stakeholders:

1. The Employees: Contrary to the cold calculus of legalities, the true value of a business lies in its people. Every decision was weighed against how it would impact our team, ensuring their concerns and futures were given top priority.

2. The Carriers and Customers: The end of our Forager journey had its share of turbulence. A paramount concern was ensuring that our carriers were compensated and our customers’ freight continued to move seamlessly.

3. The Investors: Our investors were our champions, supporting us through thick and thin. Their commitment was instrumental in Forager’s survival and growth, even as challenges mounted.

My tenure at Arrive was a period of substantial learning and minimal regrets. It was an opportunity to reflect on my journey, absorb new lessons, and prepare for future ventures.

My Next Play

In early 2023, the leadership baton for Arrive’s Mexico operations was passed to Jess Billedo, a leader with an exceptional ability to execute and guide. Her competence gave me the confidence to transition my responsibilities and step away from Arrive by the end of September. After a very brief vacation in October, I started working on my next project.

During my tenures at Forager and Arrive, I had crossed paths with investors intrigued by my journey and eager to collaborate on future endeavors. Rekindling these connections, I initiated discussions to raise a pre-seed round, aiming to build a business that would stand the test of time. My vision was clear: to amalgamate my learnings from Coyote, Forager, and Arrive into developing software that revolutionizes the entire supply chain industry. The quest for a technical co-founder led me to interview over twenty candidates, ultimately finding the perfect match amidst the challenging times at Convoy.

My journey, especially since that eye-opening trip to Laredo in 2014, has consistently circled back to the complexities and potential of cross-border Mexico freight. I’ve become convinced that the freight industry is ripe for a technological evolution, deserving of solutions crafted by those deeply familiar with its unique challenges. Such expertise cannot be gleaned from brief stints or surface-level engagements; it requires profound operational experience fused with exceptional technical acumen.

Looking ahead, I see a future where freight brokerages and forwarders are not just surviving but thriving, propelled by advanced technology, enriched data access, and increased automation. Imagine a world where logistics professionals focus more on nurturing relationships and solving critical problems, rather than being bogged down by routine tasks like appointment scheduling and paperwork handling.

The concept of nearshoring, as I've previously discussed, is not just a trend but a burgeoning reality. With global disruptions like the Suez Canal incident, the signs are unmistakable: Mexico is poised for monumental growth as manufacturing shifts closer to consumption hubs. This expansion will necessitate sophisticated tools and systems for logistics providers, 3PLs, and trucking companies operating in Mexico – tools that we intend to provide.

My ambition with this new venture isn’t to disrupt; it’s to foster a meaningful evolution in how cross-border freight operates. To make this industry not just more efficient but more intuitive and interconnected.

Stay tuned for more updates in the next few weeks!