2026 Trucking & Logistics Trends: Derek Rodriguez on Market Challenges and Transportation Finance

WEBVTT 1 - > Jesse Stakes: Hey everybody, welcome to this week's episode of Making Sense of It All. I'm your host, Jesse Stakes, and today I have Derek Rodriguez with KC Financial. Derek, thank you so much for joining me. 2 - > Derek Rodriquez: Glad to be here.

3 - > Jesse Stakes: So, we were talking a lot off-camera before we ever got started with this, and over the last couple of weeks about doing an episode, and we really wanted to talk about the transportation industry as a whole. Not just focus on your company, but talk about the industry 4 - > Jesse Stakes: Where it's been, where it's going, and just kind of educate people as to, you know, if you're not part of that transportation and logistics industry, what has happened here in the last 5 to 10 years?

5 - > Derek Rodriquez: For sure, and I think the thing that a lot of people don't know about transportation is it's so much larger than people realize. You know, every product in every store, on every shelf in all of America was on a truck at some point, so the transportation industry is massive, it's a huge part of everybody's daily life. 6 - > Jesse Stakes: No doubt, and I think that, I mean, just to piggyback off of that, you know, sometimes people think about planes, trains, and automobiles, but even if it comes on a plane or a train, it still has to hit a truck at some point in time.

7 - > Derek Rodriquez: Exactly, exactly. It always finds its way. 8 - > Jesse Stakes: So, let's kind of talk about… I mean, I know that we were… we were talking about kind of where it's at right now, or we wanted to talk about that, but… but let's take a step back, because you were saying something to me off-camera, and I think that it was kind of something that people probably don't realize. 9 - > Jesse Stakes: The transportation industry was hit really hard, probably harder than most, by COVID.

So, over the last 6 years, it's been… it's been a, you know, somewhat of a recession in that industry, am I correct? 10 - > Derek Rodriquez: Yeah, so what happened during 2020 is, you know, much like every other sector in America, there was a boom. People were buying, prices were surging, and, you know, transportation blew up. People were buying trucks and trailers like crazy, you know, businesses were booming, freight was up, everything was going great.

Well, what that did is it drove 11 - > Derek Rodriquez: demand, and so pricing on trucks and trailers was through the roof, all time. You know, for years and years, new trucks and trailers were kind of at a set price, right? For the first time in decades, you know, all of a sudden, the manufacturers are realizing what the demand is, and they're raising prices on new equipment. 12 - > Derek Rodriquez: Well, at the time.

13 - > Derek Rodriquez: you know, banks were wanting to lend on all of it. I mean, they were gobbling up all the business they possibly could. You know, when you were working a finance deal, you could pick and choose what bank you wanted to work with, because they were all as aggressive as possible. What happened is, you know, that dream, it started to come down, right?

14 - > Derek Rodriquez: the back end of that caught up with everybody, and so the market went through this big correction. Freight rates plummeted to an all-time low in our industry, and that in turn affected the market as far as pricing on trucks and trailers. And so, what happened was, at the height of it. 15 - > Derek Rodriquez: You know, brand new trucks, historically, you used to be able to go buy them for, you know, $140,000, give or take, specifics, right?

16 - > Derek Rodriquez: at the height of this pricing boom, you know, I was seeing invoices from customers spending a quarter million dollars on a new truck. Wow. And banks were financing all of it with no money down, and so what happened when freight crashed… 17 - > Derek Rodriquez: these customers are no longer making the kind of money they were making, and they took on all this debt, so they start slow paying and defaulting, and so these banks are starting to see huge default numbers, which, you know, is extremely common.

As a lender. You expect to have a certain percentage of defaults. Well. 18 - > Derek Rodriquez: When you're lending on equipment that is now 2, or in some cases, three times overinflated, and those are turning into losses, you know, a lot of banks, like on a used piece of equipment, say they lent $120,000, 19 - > Derek Rodriquez: and it defaults.

Well, now they've got to go, and they can go get $35,000 or $40,000 for it at auction, and they're having to eat the loss on the difference. And what it did is it… 20 - > Derek Rodriquez: it drove a lot of lenders out of the space. You know, we lost a couple dozen banks. You know, some went out of business altogether, some exited transportation completely with no plans of going back, and then some had to merge with other banks or get their portfolios bought out, and so it… 21 - > Derek Rodriquez: It created this… this massive, 22 - > Derek Rodriquez: hurdle to overcome, where all of a sudden, financing semis and trailers was no longer easy.

And, you know, the remaining lenders that stayed in the space, you know, names that people have heard of, you know, BMO, Crossroads, to name a couple of the big players. 23 - > Derek Rodriquez: They then began scrutinizing the types of deals that they decided to do, and so transportation went from this, you know, booming… 24 - > Derek Rodriquez: eat-all-you-can-eat type of industry, to all of a sudden, it's harder to get a semi-financed than it is to go buy a house, and finance a house, or to go get a business loan, and it just… it's… 25 - > Derek Rodriquez: We've spent years now recovering from that, and it's finally 20… into 2025, now into 2026, we are starting to see the industry heal, but the transportation industry as a whole is very cyclical, and this particular cycle has lasted longer than any other cycle in the past.

26 - > Jesse Stakes: So, I'd like to take a step back, because I think a lot of people that are in the transportation industry, or that are around it, understand a lot of this, but people that are outside of it, they may not, and it's so… 27 - > Jesse Stakes: Number one, a semi in and of itself is a very specialized piece of equipment. You see a lot of them on the road, but they're… but it's not like you can take a semi and convert it into a daily driver, or it's not like it can be converted into… 28 - > Jesse Stakes: An average car or truck to where somebody's gonna drive it to a different type of a job.

29 - > Derek Rodriquez: Yeah, so a lot of these companies, the misconception, too, is they have to buy trucks and trailers, right? They're constantly buying and offloading them. So these semis, I mean, they're running between 120,000 and 150,000 miles a year, right? It's a business-essential piece of equipment, and so… 30 - > Derek Rodriquez: A lot of companies have contracted, lanes, or contracted relationships where they haul freight.

Well, the place that they have to contract with 31 - > Derek Rodriquez: mandates that they have newer and lower mile equipment, because, you know, the newer and the less miles it has, the less likely it is to break down. And when a truck breaks down, all of a sudden the freight that's in it is late, and 32 - > Derek Rodriquez: And it kind of trickles down in the supply chain there, so a lot of places want you to run newer stuff, lower miles. 33 - > Derek Rodriquez: And that means that these companies that have relationships and contracts like that want to keep their fleet new, right?

34 - > Derek Rodriquez: The other part of it is, a lot of these bigger companies and medium to large-sized fleets run on a depreciation cycle, so they have a semi for 2 or 3 years, maximize the depreciation, and then they want to offload it, bring something else on. And so, in our industry, it's… 35 - > Derek Rodriquez: Buying constantly, and in turn, you know, a lot of these companies aren't paying cash for that stuff, so they've got to utilize financing for it. 36 - > Jesse Stakes: Yeah, so on the… so I'll ask on the flip side of that, you've got these… you've got these newer pieces of equipment that age out of, say, like, your A freight.

37 - > Jesse Stakes: What about your B and C players? Does it create a huge market for that used equipment? That there's an opportunity for resale there, an opportunity to finance those pieces of equipment again for, say, someone who is an owner-operator, or somebody who is… somebody who is doing maybe less business, or less volume, but they can still use that piece of equipment? 38 - > Derek Rodriquez: Absolutely, yeah, so there's a huge market for that, and the usable life of a semi, theoretically, is a million miles, right?

The sweet spot that a lot of the medium and large-sized fleets offload them is usually around that 400, between 400 and 500,000 miles, and 39 - > Derek Rodriquez: And, you know, it's a good economic point for the smaller guys who maybe don't run as many miles, or are just starting to cut their teeth, where they can't afford to go. 40 - > Derek Rodriquez: and get a bunch of new trucks, you know, that there's a sweet spot there for guys like that to scoop those up and put them on the road.

And what I see is a lot of guys, when they get started, you know, and they've got 41 - > Derek Rodriquez: A couple trucks, or 5 trucks in their fleet, or something like that, you know, that… 42 - > Derek Rodriquez: those price point used trucks are good for them to get the commercial credit set up and to get their business started, and, you know, they've got a growth plan where they want to transition eventually into brand new or newer equipment, but it's difficult for a lot of people to start there at day one.

43 - > Jesse Stakes: No doubt. 44 - > Derek Rodriquez: We'll start with that used stuff. 45 - > Jesse Stakes: No doubt, no doubt. So, so what economic indicators are you looking at going into 2026?

What are you seeing, and, like, why is it that those indicators that you're kind of utilizing, what makes you feel positive about the future? 46 - > Derek Rodriquez: Yeah, so, great question. It's really about keeping your ear to the street, right? So, we represent a ton of, I would say, medium to large-sized fleet customers.

You know, one of my best customers happens to be one of the largest trucking companies in America. They've got 47 - > Derek Rodriquez: between trucks and trailers, almost 10,000 assets on the road, so they've got a pretty good idea of the industry, and so… 48 - > Derek Rodriquez: you know, we regularly talk to these guys, I'm talking to them every week, and you start to hear trends from some of the big players, and they've got a really good inclination of where things are going.

And I'll tell you. 49 - > Derek Rodriquez: towards the end of 2025, you know, that early December, and then especially here in 2026, 50 - > Derek Rodriquez: everyone's positive, you know, freight rates have come up. You know, a lot of companies are going… transitioning away from getting by and making enough money to survive to profiting again. And, you know, I've reviewed financials from 51 - > Derek Rodriquez: 2025, and you can tell that, you know, company financials are starting to reflect that, where they're starting to profit again.

I'm seeing less losses, bank statements are looking better for these companies, you know, it's… 52 - > Derek Rodriquez: less low-ending monthly balances, you know, it's good deposits, good ending balances. You know, what happened when freight rates were low is a lot of these, you know, we lost a lot of 53 - > Derek Rodriquez: trucking companies to bankruptcy, but the ones that survived, a lot of them were kind of month-to-month, just trying to survive until things healed, and it did take a long time.

So. 54 - > Derek Rodriquez: To answer your question, it's a lot of… 55 - > Derek Rodriquez: Of talking to the big players in the space that live in it, and the overall 56 - > Derek Rodriquez: vibe of the industry is positive. There's… the freight rates are going up. That's something that you can look at and see online, and the other part of it is, you know, the banks are a good indicator, too, right?

57 - > Derek Rodriquez: Over the last 3 years. 58 - > Derek Rodriquez: Rates in our sector have done nothing but go up, and banks' credit boxes have tightened, and navigating a, you know. 59 - > Derek Rodriquez: semi-truck loan has only gotten more difficult, and I would say over the last few months, you're starting to finally see banks loosen up a little bit more, they're easier to work with. You know, some have an appetite for this type of stuff, again, and 60 - > Derek Rodriquez: especially the last two years, you know, 2024 and a good bulk of 2025, transportation was, like, kind of… no one was.

61 - > Jesse Stakes: Kind of a bad word. 62 - > Derek Rodriquez: Yeah, no one was excited about reviewing a transportation finance deal, because the bank knew that there's a high chance that maybe this defaults. And so, you know, every which way, it's starting to turn more positive and excited, and we're definitely seeing it. I can tell you that we're busier than ever.

You know, in the last 6 months. 63 - > Derek Rodriquez: We've got more volume than we've had ever in our company, and 2023 was our biggest year, and that was… 64 - > Derek Rodriquez: Before things got really grim, you know, the first half of 2023 was huge in transportation, and… 65 - > Derek Rodriquez: We're doing more volume now than we did in 2023, so we're starting to see the industry recover. 66 - > Jesse Stakes: Yeah. Do you think that it's a lot like the real estate industry, where you had all… everything gets busy, and so everybody kind of jumps into something that becomes a popular industry, and then as things slow down.

67 - > Jesse Stakes: then the pretenders get out of it, because there's no more hot money to be made. It's all, like, if you're in it, if that's what your profession is, then you're committed to it, those people stay in, and they end up benefiting when things turn. Do you see the same thing? 68 - > Derek Rodriquez: 100%.

I couldn't tell you that the theme of the last few years is when you get a new customer, they started their business in 2020. So many trucking companies started in 2020, you know. 69 - > Jesse Stakes: Right. 70 - > Derek Rodriquez: booming, and you could go get a truck and essentially print money, right?

Put a driver in it, and go nuts. And so, what happened is, in 2020, SBA lending was real big, and people were getting money to grow, and a lot of people grew way too fast, and 71 - > Derek Rodriquez: the downside of that is as soon as the market turned and they're making less money, those are the guys that went bankrupt and defaulted and kind of hurt the banks, right? So, it was huge in 2020, but the guys that survived it, and especially the guys that have been around prior to that.

72 - > Derek Rodriquez: Yeah, they're the ones that are going to be in this industry for a long time. They're the ones that are starting to do well, and there are new companies being formed, but it's a lot less, at least from what I see, than 2020. 2020 formed businesses, it was massive. 73 - > Jesse Stakes: Yeah, so the growth that you're seeing now, it's real growth.

It's organic from the industry that's gonna be sustainable, not necessarily that explosive growth where people, like you said, people just buying trucks, saying, hey, I'm gonna get into this business, and… 74 - > Jesse Stakes: when things turn down, they have to actually make a living and out… go out there and fight for a dollar. They don't really know how to. They just… they only… while the phone is ringing, they were making money, but if it's… but if they have to go out there and actually chase it in, they don't know how to do it.

75 - > Derek Rodriquez: Exactly, and it's… I mean, just for numbers' sake, in 2020, a guy could buy a truck, could buy a semi, buy a used semi, have a $2,500 monthly payment, put a driver in it, you know, pay the driver, you know, whatever, but that truck could generate $30,000, $40,000 a month in gross revenue, and… 76 - > Derek Rodriquez: You know, a guy could go out and get an SBA loan or, you know, just leverage himself and go get 5 or 10 trucks and put drivers in it, and all of a sudden, he's got a pretty good.

77 - > Jesse Stakes: No doubt. 78 - > Derek Rodriquez: Right? 79 - > Jesse Stakes: Oh, yeah, absolutely. No, I think it's… I think it's… I mean, it's… and I think you see that in multiple industries, where things get hot, it becomes attractive, it benefits people in the short term, maybe on the, you know, like, on the financing side.

80 - > Jesse Stakes: In the long term, it hurts them because they end up taking back a lot of assets. But no, I think it's… I think it's very, you know, it's a very well… well-made point, and I think that people can relate to that in a lot of other industries. 81 - > Derek Rodriquez: Yeah, I would compare 2020 trucking to, like, Amazon dropshipping and some of those other trends that, you know, the early people that got in, and especially in, like, the dropshipping, you know, they're killing it, but now it's… 82 - > Derek Rodriquez: pretty oversaturated and difficult to penetrate, but I would compare 2020 in the transportation business to something like that.

You know, it was hot and trendy, and a lot of people dove in headfirst. 83 - > Jesse Stakes: No doubt, no doubt. You know, another thing that is incredibly trendy right now, it's another thing that everyone's talking about, is technology, automation, and innovation in industries. I don't think that there has been one industry probably touched more than the transportation and logistics business, in multiple ways, but I'd love for you to talk to the audience a little bit about how artificial intelligence, how automation 84 - > Jesse Stakes: Is being utilized in the transportation industry today.

85 - > Derek Rodriquez: For sure, yeah, and it… I think this industry specifically, it's gonna take a lot of time for it to actually trickle down. You know, this industry is ran by… it's an old business ran by, you know, old-minded people, and… 86 - > Derek Rodriquez: you know, that shows with the electric semis. You know, that is a technology that does exist right now, and 87 - > Derek Rodriquez: there's not very many of them on the road. You know, West Coast is mainly where they're at, and the companies that bought them bought them just to take advantage of the tax subsidy that they got.

88 - > Jesse Stakes: Right? 89 - > Derek Rodriquez: So, that hasn't trickled down yet, and a lot of the, you know, I think the top 10 or 20 trucking companies in this industry kind of man it together, and they're very outspoken about not wanting 90 - > Derek Rodriquez: electric, you know, semis, although I don't think they're gonna have a choice here in a few years. It's… it's… the world is heading that direction. I think where you see a lot of the automation and, you know, technology starting to 91 - > Derek Rodriquez: affected is in the technology that these companies or these drivers use in order to, like, book their loads and kind of manage it that way.

There's some transportation companies that now have developed or are developing their own proprietary load booking software, and there's companies out there that'll 92 - > Derek Rodriquez: you know, hire you on and teach you how to be an owner-operator by allowing you to use their technology, and they're profiting from all these different, you know, you can book your loads through them and give you the freedom to do that, but they're getting money on that, and they're getting money on every dollar you make, and 93 - > Derek Rodriquez: they're setting you up with a, you know, fuel discount program, and I think that is really common now, and I think it's really… 94 - > Derek Rodriquez: Affecting the whole… 95 - > Derek Rodriquez: freight brokerage and load board type space, and, you know, that is… it used to be the Wild West, and now it's a little bit more structured and things like that.

96 - > Jesse Stakes: I'll tell you, one of the most impressive pieces of software, and this really has nothing to do with automation, per se, but when… one of the most impressive pieces of software that I saw that has been developed in the last 15, 20 years within the transportation and logistics space is really controlling your asset as well, as far as understanding how your driver is driving that vehicle that you're giving 97 - > Jesse Stakes: I think that's as one of the most impressive pieces of technology that I've seen, as far as telling you how much they brake, how fast they drive it, where they're at, to where you make sure that you maintain a level of control over that asset that you've invested in, that you've financed.

98 - > Derek Rodriquez: Yeah, so I… funny enough, I… I was a part of a large deal on some brand new Volvo semis for a big customer of mine, and 99 - > Derek Rodriquez: We were intimately involved in that with the dealer, we did the financing, and one of the things I learned from that transaction is Volvo actually offers a service to their customers on their new semis, where every quarter. 100 - > Derek Rodriquez: They will fly a technician out to your office, and they will go through the data of that particular truck as far as fuel mileage and how… every metric of how it's performing, and then they can actually log in and tweak things and almost tune the truck to, you know, if you need more fuel mileage out of it, or… 101 - > Derek Rodriquez: You know, if it's running lean, or whatever it is, they have the capability to see all the data, and then make changes to make it more efficient to your type of business.

102 - > Derek Rodriquez: By efficient, you know, these loads, for everyone out there that doesn't understand, you know, a semi-trailer could have anything in it. You know, it could be fully loaded at 80,000 pounds, or it could have 5,000 pounds of freight in it, right? And that truck could be driving across the plains in Kansas, where we're at. 103 - > Derek Rodriquez: or up in the mountains, and so you need different horsepowers and gear ratios and specifications, depending on what you're hauling and where you're hauling, and so having data, you know, from a manufacturer like that, being able to make changes and tweaks, I mean, that's massive, because 104 - > Derek Rodriquez: in this industry, you know, if you can get an extra… we laugh, like, our personal vehicles.

If somebody said, hey, I've got a way to get you an extra half a mile per gallon, I'd be like, well, that's not really 105 - > Derek Rodriquez: Right? 106 - > Derek Rodriquez: on a truck, if you're running 150,000 miles a year, and somebody can get you an extra half a mile per gallon, I mean, that adds up. And if you've got a fleet of trucks that you can deploy that to, that's a lot of extra money in your pocket. 107 - > Jesse Stakes: No doubt.

No, it means a lot more than to the average consumer. 108 - > Jesse Stakes: So, you had mentioned SBA a little bit ago, as far as them jumping in, and they did. They financed a ton of stuff in 2020 to 2024, and probably a lot of things that they shouldn't have. But what other things now, as far as what you're seeing through current federal and state regulations, what things are really impacting the industry?

109 - > Derek Rodriquez: Yeah, it's a good… that's a good question. I mean, it's… it's… 110 - > Derek Rodriquez: like, in terms of what banks are seeing, that's… is that what you're asking? Like, what do banks scrutinize when they're evaluating if they should do a loan? I mean, it's really like bank statements, and banks really don't like 111 - > Derek Rodriquez: SBA lending, or, or… 112 - > Derek Rodriquez: you know, what is it?

There's lines of credit out there that are kind of malicious, and so banks are really evaluating. They see, obviously transportation's already a high risk, but they see that you had to go borrow money to make payroll, and that 113 - > Derek Rodriquez: you know, you're barely skirting by, all of a sudden, the risk profile of that deal is exponential. And so, what you're seeing is these guys, you really have to build a… not only does the customer, but, you know, a company like us, you gotta build a story for these customers, and really.

114 - > Derek Rodriquez: drive home why they need the equipment, why they need the purchase, and sometimes back that with data. And so I've had… 115 - > Derek Rodriquez: recently, you know, I've had a customer provide me with, and they're a sizable fleet, but provide me with their forecast for the year, and growth plans, and things like that. And so, you know, SBA lending at this point is kind of a red flag, and 116 - > Derek Rodriquez: You know, things of that nature. A lot of companies are trying to borrow to stay afloat, and those are the people that nobody wants to lend money to in the transportation space.

117 - > Jesse Stakes: Yeah, no, I think it's a great point, and I think it's given rise to a lot of non-bank lenders as well, like, because when a bank tells somebody no, or when somebody who's trying to get financing gets told no. 118 - > Jesse Stakes: I would say 9 times out of 10, that person doesn't say, hey, well, maybe I need to rethink my approach to this. They're gonna find… they're gonna try to find a yes. 119 - > Jesse Stakes: And I think that that really is something that I have seen, where it's… it has given rise, it's given opportunity to a lot of non-bank financing, a lot of higher interest financing out there, so it puts people in an even tighter spot than what they were looking at when they were planning on buying something with potential bank financing.

120 - > Derek Rodriquez: For sure, and I would say the other overarching, like, issue that they're facing, and not to get political at all, but. 121 - > Jesse Stakes: Political, there's no rules on that. 122 - > Derek Rodriquez: So, the transportation industry is dominated by, you know, immigrants, right? I mean, these guys come over to America, and they're happy to drive a truck, whereas as Americans, you know, we may look down upon something like that.

It's a hard job, there's no way around it, right? I personally, I couldn't live in a truck for 2 months out at a time, and live on the road, and drive 8 to 10 hours a day. 123 - > Derek Rodriquez: I certainly couldn't do it, and so it's dominated by immigrants because they can come out of a really bad situation and come to America and really build a life for themselves, and so 124 - > Derek Rodriquez: the huge overarching issue in our space right now is non-domiciled CDLs. And so, if you're not a U.

S. citizen and you're here on a work visa. 125 - > Derek Rodriquez: you will have a non-domiciled CDL, and that's a… it's a… it's a thing that you provide CDL on every loan, and it basically lets the bank know, hey, they're not a U.S.

citizen. 126 - > Derek Rodriquez: they're only here for a limited time, and so that unlocks a myriad of additional documentation. It's like, okay, we need to evaluate their work permit or their green card, and start looking at 127 - > Derek Rodriquez: when does it expire? Because it's not a very fast process to renew that stuff, and there's a chance that they don't get approved for it, and so what we're seeing now is… 128 - > Derek Rodriquez: a lot of banks are saying, hey, we're not comfortable with all the ICE stuff going on, you know, lending to non-domiciled or people that are here on work permits, because… 129 - > Derek Rodriquez: For a short bit of time.

130 - > Derek Rodriquez: all of a sudden, people are disappearing, and they're getting, detained, or deported, or whatever, and now the bank's gotta go locate that asset, repossess it, blah blah blah. So we're seeing a lot of… 131 - > Derek Rodriquez: of scrutiny on that, and so what they're doing is that, you know, they're still lending to these guys, you just have to provide more documentation, and a lot of times the term length will reflect, you know, hey, we don't want to lend it past when their work permit or their green card expires, because 132 - > Derek Rodriquez: they could, you know, get denied a reapproval or whatever.

So that… that is the hugest pain point in our industry right now that I don't think a lot of people are talking about, is navigating that. And there was a… probably a 2- or 3-week period a few months back where 133 - > Derek Rodriquez: the whole industry just stopped. Everyone was terrified, no one knew what was happening, you know, customers were like, hey, we're not… we're pausing on the order, we're gonna pause on the deal, banks were, hey, we don't know what's gonna happen if we're gonna be able to close this, and everyone kind of panicked for a little bit, and then… 134 - > Derek Rodriquez: It lasted maybe 2 or 3 weeks, and then things kind of went back to normal, but… but now, you know, each lender has issued, here's a path to how you can do a deal with us, here's what we're not willing to do, and here's what we'll look at, but we may need this additional documentation.

135 - > Jesse Stakes: I think it's… it makes me think of unintended consequences. It's unintended consequences of these laws being enforced where they haven't been enforced in the recent past. It's lenders that have not thought about those things because they didn't have to. 136 - > Jesse Stakes: And now, all of a sudden, all of those what-ifs are creeping into an underwriter's mind, and creeping into, how are we going to look at this deal, and what's the worst case scenario?

And I think that whenever you're borrowing money, if you're not… if you don't think that your lender is thinking, what's the worst case scenario, then you're approaching it wrong from the beginning. 137 - > Derek Rodriquez: In everything that's happened since COVID, you know, it's obvious that everyone's very apprehensive anyway to transportation, and it's a very risky industry, but these banks, you know, they make a lot of money on these portfolios that are transportation, but… 138 - > Derek Rodriquez: Yeah, I mean, they're… anything that, like this that comes up, they're gonna look at it with a fine-tooth comb and decide if it makes business sense to proceed with a loan or not.

139 - > Jesse Stakes: Derek, you said it in the beginning of this, and I want to reiterate it, the world, or this country, runs on transportation and logistics. If trucks aren't on the road, nobody's getting what they're buying at the stores, nobody are getting… none of them are getting their Amazon packages. 140 - > Jesse Stakes: Walmart doesn't exist. I mean, none of this stuff happens without transportation and logistics, so no matter how risky something becomes, or, you know, it's a credit profile that people have to just figure out how to get comfortable with it, because the industry's not going anywhere, it's not disappearing.

141 - > Derek Rodriquez: nowhere. Yeah, it's going nowhere. That's exactly right, and it's unfortunate that the collateral damage of the post-COVID effects of the market crashing and pricing, and it's really unfortunate that we lost a lot of good lenders in this space, and 142 - > Derek Rodriquez: on the counter to that is we're very fortunate that some of the pillars of commercial equipment finance stuck around and found a way to survive it, but yeah, I think forecasting to the future and… 143 - > Derek Rodriquez: You know, given how the cycles of this industry have come and gone in the past, there'll be new lenders that pop up, there's gonna be 144 - > Derek Rodriquez: banks that come back, there's gonna be private equity that wants to, you know, do a transportation portfolio.

There's gonna be a new wave of banks that'll come back into the scene, and that's always been the case. Sometimes a lender will come in hot for a year, and they'll load up their portfolio, and then they'll… their investors will say, hey, you know, great job, but we're gonna pause on that, we're happy now. 145 - > Derek Rodriquez: And that's part of it, so… 146 - > Derek Rodriquez: There's… there are pillars of banks that have been in this industry, and they're, you know, Crossroads, I mentioned earlier, they're a big-time bank, and their whole business model is semis, right?

They don't… you can't go open a checking account with them. They only lend on semis, it's all they do, and 147 - > Derek Rodriquez: you know, they survived it. There's other banks that you can go get a checking account in that come into transportation, they lend hot for a year, and then they pause for a year, and they come back and forth, and… 148 - > Derek Rodriquez: It's just how it is in this space. 149 - > Jesse Stakes: No doubt, no doubt.

And I think… I would argue that any space, any type of industry. 150 - > Jesse Stakes: it all is cyclical, everything has its ups and downs. There's, like, you know, there's another way to say it, I mean, I always believe there's two sides to every coin. As something happens that's negative to one side of the coin, there's another side where there's a huge positive impact on it as well, and I think that there's always opportunity 151 - > Jesse Stakes: If you're looking at it from the side of the coin that is experiencing success from whatever is happening in that moment.

152 - > Jesse Stakes: One of the things I wanted to ask you before we wrap this up at all, I'd love to know, Derek, what is it that… about this industry, what is it that inspires you to do what you do now? 153 - > Derek Rodriquez: Yeah, I think it's… I think it's a lot of fun. I'm a nerd about this stuff. I really think, you know, we're advisors to customers.

You know, the way our model works is we… 154 - > Derek Rodriquez: we essentially are advisors to these customers. Like I said previously, it's very daunting for a guy to try to go get a loan on a semi, or 10 semis, or 100, or the trailers that they pull. It's so much work. You know, I've been fortunate enough, I… 155 - > Derek Rodriquez: I've bought a couple houses, I've sold them, and I would have never been able to complete that mortgage without the guy that helped me, right?

It was overwhelming, the amount of documentation and paperwork, and without an expert there to hold my hand and tell me exactly what to do, I would have probably given up and never proceeded with it, and 156 - > Derek Rodriquez: That's what we do, right? We try to make it easy. We're pros at this. We know how to fight the credit analysts.

We know exactly where to go. We know exactly every lender in our industry that lends on semis and trailers. 157 - > Derek Rodriquez: We know what they like, what they don't like, we know what they'll consider, even if it says on a piece of paper, we don't look at that. You know, we try to make it easy on these customers, and… 158 - > Derek Rodriquez: it's a lot easier for some of these guys to just come to us and trust that we'll take care of all the legwork and make it real simple for them, instead of them trying to go and find it on their own.

And so, you know, we've built a whole model on that. 159 - > Derek Rodriquez: And what was the rest of your question? 160 - > Jesse Stakes: Yeah, no problem. I just… how did you get into it?

Like, what was it? 161 - > Derek Rodriquez: Oh, yeah, no, exactly. So, yeah, sorry. I lost my train of thought there, but in that sense, we act as advisors to these customers, and I say every day to all my guys, it's like, you know, we come in and we solve problems for a living.

That's all we do. 162 - > Derek Rodriquez: it's almost like a toxic relationship. Some days, I want to just go home and shut my computer and 163 - > Derek Rodriquez: and yell at the sky, but… but I'm addicted to the feeling of solving those problems, and helping people, and really, truly, you know, we've been able to take 164 - > Derek Rodriquez: You know, 100 customers, you know, guys that have these real dreams, and you know, it's really nice to help a guy get his first truck, and get his business started, and know that, you know.

165 - > Derek Rodriquez: he's either escaped some bad situation in another country, or he's just a guy with a dream and trying to provide for his family. It's really satisfying to help that guy with his purchase. It's also really satisfying taking some of these customers that we've met that had 5 or 10 trucks, and 166 - > Derek Rodriquez: and seen them grow into the dream that they've had. You know, I've got customers that I've met when they had 5 trucks, and they've got 50 now, and we've done all their financing and helped them grow.

I've got other customers I met that had 50, and now they've got 500, and it's so fun to be a part of that. 167 - > Derek Rodriquez: You know, on the contrary, we represent some very, very large companies, and it's extremely fun to be able to say, hey, every single day when I'm driving home, I see one of their trucks or trailers, and we do financing for them, and we're a big part of their growth, and… 168 - > Derek Rodriquez: I don't know, it's satisfying, it's addicting, it's fun.

No day is the same, it's… every day's new challenges. Sometimes they're frustrating, but, you know, it's a good time to get to the end. 169 - > Jesse Stakes: I think that's fantastic. If people like what they've heard, if somebody's listening and they would like to have a conversation with you, they'd like to learn more about your company, what's the best way for them to get ahold of you?

170 - > Derek Rodriquez: For sure, yeah, our website, www.kc-or-financial.com, a ton of info on there, pictures, contact info for myself, my whole team, and again. 171 - > Derek Rodriquez: We're advisors in this industry on transportation and purchasing.

I can't tell you how many times customers pick up the phone and call me and say, hey. 172 - > Derek Rodriquez: this dealer's offering me this, what do you think? Is this a good deal? Or hey, this random bank reached out to me, and these are the terms they're offering.

Does this sound legit? And we're happy to give our opinion, you know, I think that 173 - > Derek Rodriquez: that goes a long way with people, too, is being honest, right? Even if it means that there's no money in it for us. 174 - > Derek Rodriquez: the way people keep coming back is just by being honest with them and giving them a real opinion, and I think there's a huge lack of that in this industry.

This industry is… there's a lot of malice in it, and so when you can be honest with people and 175 - > Derek Rodriquez: put your best foot forward, I think it really, it shows, you know? People come back to us and trust us with our word. 176 - > Jesse Stakes: Can't agree more. I think that's the best way to be as a human being and as a professional.

I think if that's the way that… if everybody was more like that, this world would be a better place. 177 - > Derek Rodriquez: I agree. 178 - > Jesse Stakes: Derek, I want to thank you very much for joining me. I hope that you'll consider coming back on the show.

I'm sure we just scratched the surface, and I think there's probably a lot more to talk about, and to focus on certain topics, do more of a deep dive, but for now, I really appreciate you joining me, and I'll catch you down the road. 179 - > Derek Rodriquez: Absolutely, thank you for having me on, I really appreciate it.