Why a Global Company Bet on Downtown Chattanooga

Speaker A: So you will have noticed on the

Speaker B: Volunteer Roadmap that we have not recorded a lot of episodes in our hometown of Chattanooga. And I absolutely love the city of Chattanooga. I think it's the greatest city in the state of Tennessee. But we've intentionally got out to talk to people about their view in the industries, in the towns that they represent. But it was an honor and a privilege to talk to Steam Logistics COO Joe Saggio about why STEAM is headquartered in Chattanooga and avoiding all the logistics terms and all the three pls. When STEAM brought their headquarters to downtown some years ago, they did it and put it in a dilapidated building that had. There'd been ancient lore around it, right. Like it was a wine collection, it was a car collection, and nope, just an old building. But it was a dilapidated block where economic development could never take place. When STEAM moved down there, it changed the landscape of downtown Chattanooga. Sure, we hope that steam's fortunes got better, and they seem to be doing very, very well. But their commitment to. To helping develop downtown at a time when it needed was absolutely paramount for the success that Chattanooga is having now. In addition to that, they employ tons of local workers, they're involved in the community, and they're an industry leader. In the 3 PL and logistics world.

Speaker A: Success isn't accidental. But what business owners think worked and what actually worked are usually two different things. Hi, I'm Arch Trimble, and this is the Volunteer Roadmap where we map out what works for Tennessee businesses one town at a time. I'll figure out what really worked and show you the pattern behind their success so you can see what's holding your business back. Let's hit the road. Today we are honored by to have Steam Logistics COO Joe Saggio come and join us on the Volunteer Roadmap to tell us about the 3 PL world and how what STEAM is doing is making Tennessee a better place. Joe, welcome.

Speaker C: Thank you, Arch. I appreciate you having me.

Speaker A: Why don't you give us a little background? How did you get to be the chief operating officer at one of Chattanooga's best companies?

Speaker C: Yeah. So, um, thanks again for having me, and I'm excited to be here. Um, so I have been in this business a long time, over 20 years in logistics industry. And so, um, over the years, just as my career progressed, um, I was actually working at Mohawk Industries years ago, and I was actually a customer of Steam Logistics, believe it or not. And so during those three years, we had become partners, and they had done some work for me for our logistics needs. And I got to know Jason really well and some other people at the business. And after those three years, um, you know, I had been driving an hour each way back and forth to work. Cause I live in Chattanooga, and so that got a little taxing. I have three young children at the time, and so. So I was thinking I want to be closer back home in Chattanooga, um, so maybe I can find something closer just to this area. So I'm not driving to North Georgia a lot, because it was. It was a lot on me at the time. And so I reached out to Jason and. And just said, you know, hey, man, look, I'm, um, you know, possibly interested in. In talking to you guys about something. Something. Yeah. And we were industry friends, and we had known each other a long time, and we had done a lot of work together. Um, and I just known a lot of people in the Chattanooga, of course, in the logistics industry. And so it was just kind of like, yeah, let's. Let's connect and talk and. And just see where it goes. Yeah. And, um, so Jason and I, we met up and we had a great discussion about how we think about this industry and the business and what our vision was. And. And they were, at the time, a very small company at the time. And, you know, they were looking to add people who had been in the industry a while to kind of take them to the next level, you know, because at that time, they had been pretty stagnant. They weren't having a lot of growth, and they had kind of hit a roadblock a little bit, and they're moving the needle, but not probably as fast as they wanted to. And so I think they saw just this fate of, okay, we have somebody who knows the business who can probably help us get us to the next level. I'm looking for maybe a personal change, uh, in my time. And so it just kind of all came together, and I met with Adam, our cfo, and Steve, our president, and Jason, our CEO, of course. And it just all kind of. We all hit it off, and it was just like, hey, let's. Let's do this. Yeah.

Speaker A: Right place, right time, right.

Speaker C: And it just happened. Yeah, we. I came on board and been rocking and rolling ever since with them, so almost seven years now here. Okay. Yeah.

Speaker A: And, uh, you mentioned Mohawk Industries. Great company, but this, uh, podcast has made its bones by trashing the state of Georgia.

Speaker C: Yeah, There you go.

Speaker A: Humanly possible.

Speaker C: Go balls, right?

Speaker A: Yeah. Go Big Arms. We're glad that we brought a great recruit that's right into this town. So, you know, look I am a Chattanoogan, uh, and I grew up in this town, like our mutual friend Matt Soloff, when the aquarium was being built downtown. And it was the first thing that had happened of consequence in this community for decades. There used to be a Chattanooga Regional History Museum right down the road from here, but it had become a desert. After it was built, we saw a revitalization, and that lasted a good 20 or 25 years, but then everything kind of moved to Main street. You guys in 2021 prioritized coming back into downtown. And from what I see when I see your employees coming into this building every morning, I. I believe that that is economic development. Sure. But it's community involvement, too. Why don't you talk a lot about why you guys came here?

Speaker C: Yeah, no, that's a great question. And just for those who don't know, you know, the building we're in now was vacant for many decades. Did it.

Speaker A: Was it actually vacant, or did it hold a wine collection or Ferraris, like everybody said that?

Speaker C: Uh, yeah, they said there are some special things in here. I don't. I can't confirm or deny what we found, but, um. But yeah, there was some things going on in here that we probably can't talk about.

Speaker A: Okay, that's fine.

Speaker C: But long story short, you know, this was. This was a vacant building a decades. And it was an eyesore in the community because, you know, you have. You have a lot of traffic through the. Through the interstate here, so people would drive by, and it just was an eyesore. And at the time, we were exploding in our growth. So, you know, those Covid years. Let's go back to 2020. We were hiring like crazy. Uh, we were actually in a building next door to here. We ran out of space there. We had to go lease space in another building. And it was like, we're kind of disparate at that time.

Speaker A: I remember you guys were moving around.

Speaker C: We were moving around a lot. And we. And this building was sitting here, and we just thought, know, we're growing a lot. We need the space, and we can do something great for the community and take a vacant building that's been this eyesore, uh, and make it amazing.

Speaker B: Yeah.

Speaker C: And so that's what we did. We. We. We got with the community leaders, the mayor, you know, Congressman, um, Fleischman got involved, you know, there. So there was a lot of. Lot of support because this was amaz. This is like a nice hub that we could build out of. Right. And so. And so we did that. Um, we. We got all these People together, uh, a lot of great minds came and said, okay, let's, let's build this thing out. And we said, all right, we're in, let's do it. And we turned this thing into an amazing building. You know, used to just be totally

Speaker A: four brick walls, no windows, brown on the bottom, white. Nobody could figure out our cream at that point.

Speaker C: That's right. And so now, uh, it's this amazing four story building, plus a rooftop where employees can go work outside. They can have meetings up there. Um, you can have a beer up there after work. You know, it's just in a really cool, uh, place that we've built out here. And, uh, it's driven a lot of other developments. So as you know, there's a hotel now that just came live a few months ago. There's another hotel right next to us that's being built. And you can really feel like with this many people coming in every day is supporting restaurants and the ice cream shops and the aquarium and, and, and then you get this blend with all these tourists with the hotels now, and so people see what's going on here, and it's just been a really great thing for the community.

Speaker A: Yeah, revitalization isn't just new buildings. We've talked about that a lot. It's a vibe. And I think you guys, you did the community a service by restarting that vibe down here. Because this, to me, again, as a Chattanoogan, is my favorite part of town. My family grew up just across the river from here. We had our family company and I spent virtually every day of my life in this area, and it's so great to see it now. We've talked about downtown and how wonderful it is and how beautiful your building is, but everybody knows logistics. Very few people understand what A3PL is. Why don't you tell us what third party logistics does?

Speaker C: Yeah. Now, great question. So A3PL, third party logistics, as it's known, is a, is a company who matches, um, trucks and planes and vessels and rails and barges to a customer who has a need. We don't own any of our own assets.

Speaker A: No. No power units.

Speaker C: We don't. We own nothing. So a three plus this, you know, traditionally is a company that owns no assets, but they have access.

Speaker A: Yes.

Speaker C: And the shippers and the customers who need to ship need access. So companies like ourselves say we can, we can find you, um, you know, you need trucks, you need rail access or vessels or planes, whatever it is, uh, and that's our job, is to go find them a great solution. At a competitive price that can get their goods delivered anywhere in the world. Right. And so as, as a 3 PL, we feel like that gives us a little more of a strategic advantage because we can tap into access everywhere versus an asset which there are great asset based companies. They typically focus on what's their niche, what's their straight line. Right, that's right. And so there's certainly a need for that and there's a lot of great companies that do that. Um, but our goal is to really tap into how can we be that one stop shop for our customers and it gives us wider access. Right. And so that's traditionally what a 3 PL does. And I think what makes Steam a little bit unique is a lot of companies will start as maybe I do domestic freight brokerage. Right. Or maybe I'll do international only, or maybe I'll do, um, a very niche segment. And so over the years we thought, how do we kind of make our customers more sticky and do all their modes?

Speaker B: Yeah.

Speaker C: Right. If there are, if we're already doing their ocean freight, why can't I move their container and do the drage for them?

Speaker A: I don't want to farm it out.

Speaker C: I don't want to farm it out. And if I'm doing the drage to the distribution center, why can't I do their final mile. Yeah. To their customer or wherever it's going. And so that's sort of how we've thought about building that out over the years and now we've done that. So our goal is to do all modes for our customers. Um, so they're not, you know, shopping around and we're only doing one piece of it.

Speaker A: That's exactly right.

Speaker C: And over the years, you know, as we've grown that out, we found that customers tend to like that because it cuts down on five different invoices for five different companies. Five different communication streams from five different companies. Right. So now that it's all kind of consolidated here, um, it just makes life easier.

Speaker A: Just one person to call. Now you, you brought up a term that. Look, a lot of us know logistics, but drayage is that term that we hear about a lot. Yeah, I know enough about it to know that I don't know much about it. But why don't you explain drayage and how it fits in closer to the inline of what you guys.

Speaker C: Absolutely. So, so drayage, uh, in its purest form is moving a container from a port, a rail, a terminal that comes off a vessel or comes off the rail to on a Chassis to, to a distribution center, a warehouse. So it's not like a dry van that you would think about in domestic. Uh, it's a power unit with a chassis. The container comes, sits on top, and that's called Drayage Moving Ocean containers. So that could be a 20 foot container, 40 foot container, reefer containers, which are cold chain products. Um, and so we have a dedicated division here that moves, um, ocean containers for our customers. And that's what's called Drayage.

Speaker A: Very cool. Now, you mentioned access, right? So I know enough about sales to know that access means partnerships. I'm imagining that you guys aren't successful without having good partners in the industry. Can you talk a little bit about your partnerships?

Speaker C: Yeah, it's absolutely critical. Um, you know, we think about it as taking care of our partners. They're not just someone that we try to beat down on cost or push around and say, hey, you need to do this for us. It's the more you take care of your drivers and your partners that help you move the freight, the more willing they are to work with you and find a solution. At the 11th hour of the day, which happens all the time in this industry, we can make phone calls now to a partner of ours and say, hey, I have this emergency need. I have this hot shipment. We're going to cover it. Because you build those partnerships and you build that trust and confidence. Um, and it lets you work together as they think about your customers, their customer too, because we're all, at the end of the day, we're all trying to service, um, the end customer for sure. And so building those partnerships is absolutely key. Uh, and that, and that's the same regardless of mode, whether it's a domestic shipment or working somewhere overseas internationally, we have very strategic partnerships, uh, in Asia and Europe, wherever we need to ship to or from. And so we have a really true global reach with our partners, for sure.

Speaker A: So you talked about being nimble, right. Uh, my assumption is this company doesn't operate from its heels and it operates from the toes. You have to be flexible to be successful.

Speaker C: Successful, right. Yes. And it particularly because over the last several years, particularly when Covid started, nobody really knew much about supply chain or logistics unless you worked in the industry.

Speaker A: Nobody cared until they couldn't get their toilet paper.

Speaker B: Right?

Speaker C: That's right. So it's funny how like, you know, in 2020, it's overnight, like everybody became a supply chain expert.

Speaker A: That's right.

Speaker C: And, but, and my friends and people in my, you know, in my life that they knew what I did, but didn't really knew what I did. Now all of a sudden they're calling me every day and asking me, hey, what supply chain questions and the ports and the, you know. And it's just funny how it became mainstream news and everybody was interested in supply chain. But it goes to show you how integral. We always work behind the scenes. And so certainly that major event kind of exposed everything was really tied to logistics. And supply chain freight moves all over the world and everything we see and do and touch and buy and consume somehow is moved.

Speaker A: There's no doubt.

Speaker C: And there's companies like ourselves that do that. And so being flexible because of how many disruptions that we experience in this business, whether it's the tariffs this year or whether it's a war going on, whether it's a strike, um, you know, natural disasters, all sorts of things happen, um, that you have to be able to be nimble and quick and bring a competitive, uh, creative solution to your customer. Because sometimes they don't really care what the issue is at hand. They expect you to find the solution.

Speaker A: Yeah.

Speaker C: And so being flexible and nimble is absolutely important to be a 3 PL logistics provider.

Speaker A: So you, you mentioned problems.

Speaker B: Right.

Speaker A: And problems outside of your control. Your industry is dependent entirely on the whims of Washington. But lately, as we've seen, like, the cost of fuel is going through the roof because there's a squabble out in the Middle East.

Speaker B: Yeah.

Speaker A: How, how does. Gosh, I talked to somebody the other day that owned a boat dealership and they called me lamenting. They're like, I don't know if I can make it to boat selling season. He goes, I talked to a guy at a Harbo Newer City, and diesel was 895 a gallon.

Speaker C: Yeah.

Speaker A: How do you guys manage that? Uh, that's, that's got to be a big hit, right?

Speaker C: Yeah, it's very tricky. Um, you know, a lot of customers. And this is where it comes back to sort of partnerships. Yeah. Because your partnerships aren't just with your carriers and your network to move the freight. Partnerships are equally as important with your customers. And so they know what's going on in the news, they hear this and they see, oh, fuel's going up. So, you know, one of the things that we've done is we, we've had, you know, real conversations with our, our customers and, and just explained to them, and we, we try to think of ourselves as like consultants as, well, here's what's happening in the market. You Know, we're not here to take advantage. We're just showing you rates gone up, fuel's gone up. Um, sometimes we have to pass these things through for sure, or we have a conversation, we'll give a little, you get a little, and we'll find some median ground. Right. So those conversations have absolutely taken place. Some customers are amazing. Totally get it. We understand your service is great. We get it.

Speaker A: Yeah.

Speaker C: We want you to succeed. To some customers, it can be a little more challenging. Right. They're not all equal, but, but those, um, but those conversations around the fuel have been, have been pretty well, uh, received. But some have been certainly challenging. And we all know that, you know, the fuel right now has been stuck at a pretty elevated level. Substantial. Yeah, substantial. And so it's a real challenge in this industry because it puts a lot of pressure on, on the carriers, for sure. They're trying to make money, we're trying to make money. Our ultimate customers try to make money because they have an ultimate customer. So everybody's trying to figure out, how do I hedge, how do I take care of my partners? Um, and so we all can kind of win together. So it's not, it's not just a simple answer. It's. It's been challenging.

Speaker A: Yeah. And I don't mean to, to, to belittle this or anything, but it's sort of like keeping chickens in the wheelbarrow, Right? Because you've got so many parties all on the same page. But none of you guys are in the benevolence industry, Right? We're in the for profit industry because you guys have to pay these folks that are out here, and we hope that they spend their paychecks in Chattanooga, which only makes you guys better, Right? Let's talk about another issue that, that we mentioned briefly, and that's infrastructure there. Look, we are located in Chattanooga, Tri State area, Tennessee River I40, I75, I59. And look, uh, I worked for Congressman Fleischman, who you mentioned, uh, at the start of this, back when he was just Chuck and he and I used to walk up and down this street right here and thoroughly enjoyed working for him. Consider him a great friend now. But that lock was started before he got in office. Now I'm bad at math. Sixteen and a half years later, uh, it looks like we're finally getting to a theoretical completion date here in a couple of years. And again, I've been through that lock all my life. And when you're little, you're like, oh, my gosh, this is the most Expansive thing you've ever seen.

Speaker C: It's pretty cool.

Speaker A: And then you hear the Corps of Engineers say, we are the bottleneck on the Tennessee River. And we did a tour out there last year, and Casey Grohl, who works with Corps Engineers, she kept talking about the 800% increase going through. So when you see those barges going up and down the river.

Speaker C: Right.

Speaker A: That's one piece that fits through our lock right now. That's right. Going forward, nine pieces are going to be able to fit through there. How does that. What you guys do? How does it make your job more efficient?

Speaker C: Yeah, the Tennessee river is vital. I mean, you mentioned it. If you. If you step out just a couple of blocks from here now, you'll see multiple barges, fleeting, meaning they're in a. In a fleet together, either idle or waiting for something to happen. That's right. And it's a critical waterway for infrastructure, aggregate construction materials. Um, even the military uses the barges for. For certain transportation of vehicles and goods. And so, um, we've certainly done some. Some barge work in our past, and we've done some major projects that have gone down this river, which are really cool to see.

Speaker A: Yeah.

Speaker C: Uh, we did a major one a couple years ago that was started up in, actually, Wisconsin, worked its way all the way down, connected to the Tennessee river, ultimately down to the Decatur, Alabama area. And, um, and. And so we. We got to go on site and see that and the loading. And. And it's an amazing operation. But you're right, it's a. It's a critical piece of the infrastructure that services a lot of those kind of hidden things that people don't think about. Natural resources or whatever gets moved. But that fuels economies. Right. And so the waterways are really critical, and I'm happy they're getting that lock sorted out soon. Um, and for us, it's. We'll see a benefit from that, for sure.

Speaker A: Yeah, I'm excited. Potential new industries around. Now, let's talk about the next part of it. Tennessee has always been fantastic in that

Speaker B: they haven't had road debt. Right.

Speaker A: Like we. We fund our roads as we build them. Uh, we don't have bonds out for them. And that's great. It allows us to be a fiscally conservative state. We have a balanced budget amendment, but it also presents some problems.

Speaker B: Right.

Speaker A: Um, because we get bottlenecks and we have road conditions that may not be as good as they are in some other places. And I admire tdot. They put in a tremendous amount of work over the last couple of years, and each zone Got well over a couple hundred million dollars to help. We have the ridge cut and we have Moccasin bend here. And I know you guys are global, but talk about some of those challenges that you guys face here locally. I mean, look, you and I get stuck in traffic in our day to day basis. I'm sure your customers get, uh, stuck in it too.

Speaker C: Yeah. So I mean, you mentioned a minute ago about the i40 and i75 and 24. You know, that's a major freight quarter.

Speaker A: Oh my gosh. Yeah. One of the biggest in the country.

Speaker C: It is. And people don't realize like, you know, you think when you have Atlanta, when freight comes up, we're in the Southeast, but a lot of that freight goes actually to service the Midwest and upper Midwest, goes up to Chicago, St. Louis, Detroit, into the Northeast.

Speaker B: Right.

Speaker C: And so people just think we're reach. It's no, it's well beyond that. No, it feeds the middle, the heartland of the country as well through those corridors. And so yeah, it's a, uh, it's a challenge because especially through Chattanooga, how hilly is. And you mentioned the bend and the ridge cut. You know, there's so many trucks that go through there.

Speaker A: Yeah.

Speaker C: It just, it can be gridlock. And so they have done some recent development at the split, the i24 and i75 split, which seems to have freed up a little bit. But I believe there needs to be some, some deeper extension going east and west. Uh, going towards Nashville, for example, can just be, you know, you know, you've seen it yourself, you've been stuck in that.

Speaker A: Yeah, you're talking about a guy and me that grew up in north Chattanooga. We're moving out to Lookout Valley right now. And I'll be terribly honest to you, and I hadn't said this out loud, 30% of the reason that I'm moving to Lookout Valley is most of my business life is in middle Tennessee. Yeah. And so getting from my house through Lookout Valley would take more time than it would take me from Lookout Valley to get over Monteagle Mountain. And that's tough.

Speaker B: Right.

Speaker A: And we all hear tdot and they've got these incredible 10 year plans, but we are, we're geographically limited in the way that you can do business like that. And you know, they talk about that, the magic tunnel up in Nashville.

Speaker B: Right.

Speaker A: I don't necessarily think that that's uh, the answer down here, but I know very little about logistics. That's why I'm here talking to you. But I think we face some challenges that are Unique here. And hopefully if they're solved here, it'll solve some problems in other parts of the country. You know, western North Carolina, kind of the same thing. Because the efficient movement of freight, it's not about unclogging roads, it's about economic development. And every dollar that we can get here in our state improves our quality of life. Now, you guys have been an incredible community partner over the last number of years, and I know that, as you said, you don't sit on your laurels. We're not sitting on our heels. What do you, what's in the future? What's your five years out? What, what are you guys looking for here at steam? Uh, to continue to be an industry leader.

Speaker C: Yeah, we, we have some exciting plans. So one of the most recent things we've done is we've expanded our reach into the cross border network, which means into Mexico. Okay. So Mexico is now, you know, the US's largest trading partner.

Speaker A: That's right.

Speaker C: And it's absolutely exploded. And there's a lot of reasons for that. Tariffs, manufacturing coming back. But there's this larger strategic, um, thinking, uh, from D.C. to companies here, that North America can be self sustaining. Absolutely. And it can be.

Speaker B: Yes.

Speaker C: And when I say North America, uh, I don't just mean Canada, us, Mexico, but also Latin America. So you take the whole Western hemisphere, there's a big thinking of how do we sustain our own hemisphere. Right. And so what you're seeing is a lot of manufacturing coming back, particularly in Mexico. So the foreign direct investment, the fdi, has been in the billions and billions of dollars. So we opened an office in Laredo, Texas about a year and a half ago.

Speaker A: Oh, very cool.

Speaker C: Yep. And, um, and that team has grown very quickly and they are doing a great job down there. And so cross Border freight is, is, um, you know, they're really eating into the imports that we used to see out of Asia. Yeah.

Speaker A: And so that makes me happy, by the way.

Speaker C: It's, it's, it's closer, it's quicker, easier, cheaper, it's easier. Um, and, and you know, it's, it's right next door to us. Yeah. So, you know, your, your strategic planning gets simpler. How do you optimize your network, your inventory planning? All that gets a little bit easier because it's so much closer. And you don't have to worry about, um, strikes overseas or international conflict as much. That can really put a strain as, you know, on the international shipping like we're seeing because of Iran or the Houthis. And so it Causes rerouting in the ocean trade. So with the Mexico piece, that was one of our newest things and we're going all in on that and we just opened an office in Monterey, Mexico. Okay. Recently. Very, very recently. So I was down there a few weeks ago, um, getting that off the ground. Super excited about it. We're actually hiring right now some more people down there. And that's very cool. I'm super pumped about that. Because to us, we are very bullish on the cross border Mexico piece.

Speaker A: I think that it had been forgotten for a while. And look, we. NAFTA is nafta and it did a lot of great things, but it's antiquated at this point.

Speaker B: Right.

Speaker A: So like being able to see the future down there matters. Tell me this, because I had heard that you had opened up a border office, but dealing with Mexico, you know, we have less trade issues there, we have less conflicts there. But there's gotta be some issues dealing with our border to the south. Uh, tell me some things you've learned down there. I'm curious, as a guy who used to shoot, uh, winged birds down there,

Speaker B: like what do you.

Speaker A: How is dealing with the government? How is dealing with all the regulated like it. Tennessee and America are run at a pretty buttoned up order, comparatively speaking. I don't really know how to say it without offending anybody, but you know where I'm trying to go here, right?

Speaker C: Yeah, you're not offending anybody. It's sort of a, it's sort of the, a known um, commodity. When you tap into that market, you're getting into sort of a wild west environment.

Speaker A: Yes.

Speaker C: If, if you will. And I don't mean to say there's, there's nefarious things going on.

Speaker B: No, no, no.

Speaker A: But you guys are nimble anyways and you' to being flexible. So I think it's a good market for you.

Speaker C: That's right. But there are certainly challenges. M. It's not as just simple as like a domestic move here in the US you can't just say, I just want to do cross border freight.

Speaker B: Yeah.

Speaker C: You got to know what you're doing. You need people, you need to be have people at the borders. You need people who understand, um, the customs piece, which is a very integral, integral piece with Mexico because their customs is completely different in how we do it in the US you have to have people that speak Spanish fluently. I speak Spanish fluently. So you know, naturally for me, it makes a lot of sense to go down there and to lead our Mexico division and so I've been fortunate enough to, um, bring on some great people with me, and we've. And we've done that. And so, um, but you really have to go down there, get the lay of the land. You know, Laredo is the largest, busiest port crossing in all the United States. And people don't realize that. They think, oh, L.A. long beach or Savannah or Charleston or whatever. It's Laredo. Laredo dominates trade in the United States. And so, you know, you need to be there. You can't just say, I want to set up an office in Chattanooga and run freight from Chattanooga through Laureate. You need to be there. And so building those relationships, uh, on both sides of the border is key. And then once you're in Mexico, right, there's challenges. They have a different operating, um, infrastructure. They don't vet carriers like we do

Speaker A: in the United States.

Speaker C: The insurance liability is completely different. It's pennies to the dollars versus what liability is expected to be here. And so you have to really navigate the legality stuff. The financial system, um, the IVA and the VAT taxes are totally different. You know, there's this 16%. If you don't really understand that nuance, you're going to be on the hook for the Mexican irs, what they call the sat, uh, a lot of money if you don't do it right. So you have to really understand and know what you're doing and have the right people to go lead something like that. And so we spent the time to learn. We have experience, and we feel like we've done a good job with that. But it is certainly a different operating environment.

Speaker A: To me, it's so cool that a Chattanooga company is doing business globally, but it's not that they've found somebody else was doing it. They kind of were the spearhead. And I grew up spending a lot of time in Harlingen, which isn't too far from Laredo, and people do not understand how much of a transit hub that it is. It's, you know, you talk about while people are crossing the border and from Canada on vacation, you're looking at miles long lines of thousands of people goods, anything you can possibly imagine. And again, as we've talked about a couple of times, you guys have to be flexible, but you have to be on top of the ball. You have to know your business. Now, Steam's been successful. They've been very, very successful in Tennessee and a great community partner in Chattanoogan. Look, we've talked about some of the wins. I want to talk about a couple of things that maybe haven't gone so well and not that it didn't go well. I want to know what you've learned from some of those things and how it's made steam a better place.

Speaker C: Yeah, there's certainly been a lot of bumps and bruises and challenges along the way.

Speaker A: I would hope so. No successful business has ever not failed.

Speaker B: Right.

Speaker C: Absolute. Absolutely. And, and we have certainly fallen, um, on our faces. We've, we've been dinged and cut and some days it feels like, what are we doing? Right. Uh, but those are the things that make you stronger and, and light up more fire under you to keep going. So we've done, we've taken on some major things before, so I guess a couple of things in more recent memory. Last year we had sort of in our. We always talk about our future strategy. And so we knew last year was really going to be, uh, a real tech heavy strategy for us to get some things that we just needed to do to, uh, mature as a business. So to get an ERP system going through an ERP process is one of the most challenging things I think any company will ever go through. Um, it's very difficult and, you know, you're bringing everything into basically one source of truth.

Speaker A: Oh, yeah.

Speaker C: And it sounds very simple, but it takes so much due diligence. It takes so many, um, leaders from the different areas to really come together. And so, so while we executed it very well and our tech team, hats off to those guys, our cto, Aziz, is amazing. Um, that was certainly a very big challenge for us because while you go through that, you know, things happen. Oh, the invoices didn't go out today. Oh, well, we need to get paid, you know. You know, so you're like, wait a minute, what's happening? So you kind of have those freak out moments for a minute. You kind of coalesce and get back in the foxhole together. And so that was one of the, probably the most challenging things that we've gone through as a company. Um, and it's been over a year now, and we feel really great about where we are. And so, um, you know, no, no company will just have smooth sailing, you know, all the time. And so we kind of look at those challenging moments as like, we learned a lot from that. We got through it, it made us better for it. And now, you know, in our executive meetings, you know, our CFOs, like, our financials are in great shape. The system has been wonders, done wonders for our reporting, you know, so now the story is super positive. Going through it felt really challenging. So that's just one example, um, of something large that impacted all of us. And, you know, it creates, like, angst on the floor, too, of all my customers yelling at me because I don't have this invoice or can I have this number printed on the. Something as simple as that. The PO number is not on the invoice.

Speaker A: And I've always believed that there's three constants in life, and I've said this before on the podcast, is death, taxes, and change.

Speaker C: Right?

Speaker A: Changes that thing, that's really hard. Otherwise everybody would do it. But in your line of work here, that leading edge keeps moving forward, right? And if you guys find that stasis point, that happy point, you're getting smoked by the competition. In my belief, like, if you guys don't keep moving forward and you don't keep innovating, you're gonna have problems. Right?

Speaker C: 100. And in this business, um, we're already seeing it, and so one of everybody's talking about AI. But if you're not already engaged in some m. Form of AI into the logistics business, you. You will get left behind.

Speaker B: There's no doubt.

Speaker C: The business has become so expensive to operate now, um, in this industry, because margins, traditionally for brokers, you know, we're not making 25, 50%. You know, you're really grinding for every percentage point. It's volume. It's volume. And. And so this business is an absolute grind. We. You work hard for every penny. And. And so AI can come and help with some of those tasks, um, some of that sort of administrative lift that used to fall on people to do just data entry or tracking or, or scheduling or building loads in the system, all that kind of stuff. You got to start looking at that to help you. It's not to replace everybody.

Speaker A: No, no, no, no.

Speaker C: But it's to help you be more efficient, to be quicker, leaner, faster, stronger, nimble, all these things. And so there's a lot of companies in this space that have tapped into it, uh, and we are as well. We've made some good progress. Um, and we actually have another meeting, uh, later today to talk more about our AI strategy. And so we feel like if we aren't taking these steps, you will get left behind at some point because you just won't be able to operate it with the same type of cost structure that the old days. You know, that how you ran a business.

Speaker A: The interesting thing to me is, is I do, uh, I'm in Chattanooga Rotary Club, and I'VE been programs director this year, which is a thankless job where you just call and beg people like Joe to come and talk.

Speaker C: Right.

Speaker A: But I. And I always get accused of not paying attention because I'm like, they're taking notes and it looks like I'm checking Twitter. But everybody asks an AI question and they ask it in a scared way is, are you prepared for AI? I try and take a different view and say AI is endless potential. For me, it's just safeguarding the edges around it. If you believe that anything will be a panacea to your problems like that, that's going to be a bigger problem than it was before. So I think tech is the way forward. It's, as you said, it's not about getting rid of people because you've got a building full of people out there that have to make sales. I've never seen a computer make a successful sales call before.

Speaker C: That's right. We're a sales organization. We're not a tech company.

Speaker A: Yeah.

Speaker C: So that's not the goal.

Speaker A: Yeah, no. Sales organizations that aren't using tech don't say sales organizations for long nowadays.

Speaker C: Right, Exactly. Exactly.

Speaker A: I'm board chair at sempa and you talked about your erp. We have an operating system that's similar and we deal with hrsa and we're a federally qualified health center. Look alike and all of the things that we have to go to. I've said I'm not a tech guy. It'll make me suck my thumb and sit in the corner in the fetal position. But it allows us to do business.

Speaker B: Right.

Speaker A: So tell me this. What do you need in this industry? Like, what will make the industry better? What will make Tennessee a better place? More importantly, what will make Steam better? Because if Steam's better, Chattanooga is a better place.

Speaker C: Yeah, absolutely. No, we. So we feel like the future for this industry. But. But our company is. We've got to get our AI piece ramped up, which will support our sellers, our operators, to be lightning fast. Speed of execution matters in this business. So right now we are heavily involved with our AI partners. We have a strategic partner we are working with that we believe will get us to be quicker to our customers. Needs. Right. That's very important. This business. Sometimes the first that gets there wins.

Speaker A: Yep.

Speaker C: May not be the cheapest, but the first you can win a lot of times. And so that's, that's a big focus right now that we feel like we need as a company to take us to the next level. Um, the second is, um, we need a little bit of, uh, of market help that's, that certainly needs to happen in the industry. The domestic market is seeing a nice little, uh, tailwind now because capacity a

Speaker A: little, rebound things a little bit.

Speaker C: So market, little luck is always nice. Um, but, but beyond all that, it's, we are still really, um, invested in our, our culture and we feel like the people here are really important to help get us to the next level. Because you got to have a positive culture where people want to come here and say, if I grind my tail off day in, day out, I'm going to take home a really nice paycheck. Right?

Speaker A: That's right.

Speaker C: And we feel like we have one of, if not the best comp plan in the community for this type of role. We, um, we've always been proud of that. So people that come in and bust

Speaker A: it, they're gonna, they're gonna make money.

Speaker C: You know, you're in your 20s and you're gonna take home six figures. That's pretty impressive.

Speaker A: That's not a bad deal.

Speaker C: And um, and so, but you gotta work, you gotta work for it.

Speaker B: Right?

Speaker C: And so, but we want to create that culture where you want people to

Speaker A: want to come to work.

Speaker C: That's right. You're passionate, you, you, you care, you're, you're invested. And so, you know, doing all those things creates a company that people want to come be a part of. And, and so we've tried to be more intentional, um, about our culture this year. You know, that can kind of get away from you as you're in this hyper growth mode. Yeah, it's guns blazing and all that. And so of course, ah, any natural company that grew as quickly as we did, you know, you can kind of get lost in the sauce a little bit. And so as the leaders, you know, we sort of reached out to some of our teams. We wanted to hear what's bothering you, what can we do better? And so we're trying to listen to them and say, how can we make this a better place and be a, have a better culture here where we want to grow and have a, have a great place for people to come downtown and work, you know, and invest and be part of this community. So I think those are some areas that are really important to your question.

Speaker A: I think that's the most important thing that we've said in this podcast is successful companies are employee focused because if you have employees that know the product, if you have employees that want to work for that cause and provide for, uh, their families, you're going to be successful. I don't care if it's underwater, basket weaving, selling widgets, logistics, like if you have buy in from your everyday workers, you will be successful. And that's something I think steam has done from the top down. And they've always prioritized culture. And that's why I think you guys are a really great fit for Chattanooga. As we said at the start of this revitalization isn't just new buildings, it is a vibe.

Speaker B: Right?

Speaker C: Yes.

Speaker A: So I got one final question for you before I'll allow you to go back to your 3 PL world and give you your space back. Now, you said you are a native of Nashville, but you are also a Chad and Nugan by, by living here. Now, what is something from the state of Tennessee that is no longer here that you miss that you want to bring back? Nashville, Chattanooga, uh, Thompson Station, wherever it is, restaurant, vibe feeling, venue, anything. I'm, I'm trying to recreate a list and then go to the state and say, here's where we've screwed up. Please bring these back.

Speaker C: Yeah. Wow, that's a great question. There's a lot of things. I am from Nashville and I miss the old Nashville.

Speaker A: Oh, keep Nashville weird, by the way.

Speaker C: Right, right. So I'll say this. I, you know, I, um, I went to Lipscomb University and when I was in college and people still can't believe this because now when people see Nashville, it's millions of people down there, it feels like. And bachelorette parties and people from all over the country and all over the world, frankly, are just cowboy hats and cowboy hats. But when I was in college, it was normal for locals to go out downtown, what we call honky tonk. So we knew all the barmen, we knew all the, all the bodyguards that would let you in at Roberts and Rippy's and all those cool places. And I kind of missed that vibe from back in the day where you would see famous, uh, predators or some of the titans or country singers just hanging out and that was normal.

Speaker A: Broadway.

Speaker C: I remember hanging out in college, sitting with Steve McNair and Eddie George back in the day at the corner pub in Green Hills. And those days are long gone.

Speaker A: Yeah.

Speaker C: Uh, and that was a lot of fun and I kind of missed that Nashville had that big, small town feel where it was just kind of a good kept secret.

Speaker A: You know, I've, I've talked with this with a lot of people in Nashville. I've gotten to spend some time with Benton McDonough, who is the Nashville nightlife Czar out, uh, of the mayor's office. And one of the questions I posed to him was, why don't you see locals on Broadway anymore? And there's. Look, locals is a misnomer in Nashville now because it's not necessarily Tennesseans.

Speaker B: Right.

Speaker A: But Nashville's a tourist city.

Speaker B: Right.

Speaker A: And we've talked about change being one of those inevitable things, but I've always believed it's so vitally important to have. Buy in from your community in order to have these events. I think if you do, it makes them more successful.

Speaker C: So.

Speaker A: Yeah, no, I'm, I'm right there with you. As a guy that used to spend a lot of time in those places, and now I'm like, I'm gonna take my kids to a museum, we're gonna go to Wendell Smith's, and I'm coming back to the house.

Speaker C: Right.

Speaker A: Like it's. Yeah, three hour spurts and I'm done.

Speaker C: Yeah, yeah. We, me and my wife talk about it fondly. About, you know, just the old days, we call it. And it was just, it was, it was a great, it's still a great city. It is incredible. It's a great place. Um, but you sort of miss, you know, that small town because, you know, at Lipscomb, they used to have all those houses around. There were all college students. Yeah. Now they're all, they've all been developed.

Speaker A: Everything. Uh, Belmont's the same.

Speaker C: Belmont.

Speaker A: Right. You look and you're like, I feel like I'm in some sort of Greek city over here. That's right. Yeah. It's, uh, it's a different community. But as you say, I, I truly love Nashville. It's my second favorite city in Tennessee behind the one that we live in here. Uh, I want to say thank you, Joe, for hanging out with me Today, talking about the 3 PL world and what a great job Steam does for our community. Yeah, guys, if you enjoyed what we talked about today, hang out. We're going to go back to the studio, we're going to debrief, and we're going to talk about what we've learned about STEAM logistics and third party logistics today. Y' all have a fabulous day.

Speaker B: So after talking with Joe, uh, what

Speaker A: I realized was while having them relocate

Speaker B: their headquarters at STEAM in downtown Chattanooga was fabulous for economic development and the downtown redevelopment plan. It was more important for STEAM as a strategic location because Chattanooga has always been a transit hub ever since the Civil War. And before that time, Indians and Native Americans had been inhabiting the Moccasin Bench using the river as a highway. The same thing that we're doing now. With the expansion of the Chickamauga Lock, with the expansion of the interstate system around Moccasin Bend, hopefully and up through I75. With the Chattanooga airport developing, Steam is in the right place to do business. Centrally located between a tri state area and countless counties, they have the ability to put their finger on the pulse of the logistics market in this part of the country, and it makes them a global player.