00:00Kerry, can I just say Algorithm is literally my favorite company name that's ever been created
00:04because Rhythm, you know, spelt like Rhythm. That's totally besides the point. How difficult
00:09or how easy was it to convert your company? What was the structure in doing this from being
00:14a karaoke company to one that could disrupt an entire industry?
00:20Good morning, Danny. Thank you for having me on today. Excited to be here. So the transition
00:25from karaoke to AI logistics obviously wasn't easy. It required a few years of planning in which
00:33we identified an exciting new category that the market really hadn't seen yet. I mean, back in
00:38two years ago, nobody was really talking about freight as an orchestrated network. Nobody was
00:45talking about AI and the impact on logistics. And so we just saw a tremendous opportunity to get
00:51into the space and be one of the first movers and make that pivot out of consumer products and into
00:57logistics. So how do you do it? I mean, how do you take costs out of that?
01:02Yeah, great question. So look, if you think about the traditional freight brokerage model right now,
01:07that same model has been in existence for close to 100 years with very little change. And the way
01:13that the traditional brokerage model works is they think about freight as a series of one-off
01:18transactions. And why is that a problem? Well, look, today, roughly one out of every three miles
01:24that a truck drives globally is being driven empty. And by our estimation, that equates to over one
01:30trillion dollars a year of waste and inefficiency in the space. So what are we doing? What are we
01:36doing differently? And that's really what all of the media attention has been about over the last few
01:41weeks. And what we're doing is we're completely thinking about freight from a totally different
01:46paradigm. We're not looking at individual transactions. We're not looking at how do you get a
01:51load from point A to point B. What we're doing is we're thinking about an orchestrated network. And what
01:57does that orchestrated network mean? We're looking at flows. We're looking at how does a truck go from
02:03point A to point B to point C and then back to A again. We're thinking about and really the
02:08heart, the heart of
02:09the product is our AI predictive and optimization engine that is planning not just days in advance,
02:15but literally weeks in advance, predicting loads before they even exist and planning them out in
02:22real time so that these trucks can continue to stay as fully utilized as possible. Gary, is there
02:28anywhere else you can use this technology? Are there any other sectors or industries that you're also looking
02:33at disrupting? Well, I mean, certainly for now, look, there's a ton of blue sky when it comes to the
02:39truckload transportation space. You know, it's the backbone of the global economy. It's a $3 trillion a year
02:45industry. And so there's plenty of room for us to operate there. And I think the benefit of our orchestrated
02:52platform really serves the trucking industry the best because it's a dynamic network, right? It's different than
02:58ocean, different than air, different than rail. Those modes are much more structured in the way
03:04that they move goods. Whereas transportation with trucks, they're constantly moving all over the
03:10country. And that's really where our platform excels the most. I wonder, I mean, it's quite a pivot,
03:17obviously, from karaoke to trucking. But have you thought about other things, other businesses,
03:23Gary, that you could be disrupting? I mean, could you make another pivot?
03:27No, I think right now, look, we found, you know, when we when we built this platform back in 2018,
03:33nobody was thinking about this. Nobody was thinking about AI and the impacts on freight or
03:38looking at freight as a network. And so we see a just a tremendous amount of blue sky in the
03:44space
03:44to continue to grow. If we do look at acquisitions, it will be within this category to complement
03:50and expand upon the semi cap platform. What did you make of the reaction in markets to sell off
03:56CH Robinson 15 percent, Landstar System 16 percent? Did you look at that and maybe be surprised but
04:02say, yeah, that makes sense. That's just how disruptive we are?
04:06Well, look, I think that, you know, were we surprised? Yes. But at the same time, this was a conviction
04:14and a
04:14vision that we've had for a very long time. Right. Anytime you see an industry where roughly 33 percent
04:20is just completely wasted in the sense of empty miles and inefficiency, there's a lot of room for
04:26improvement. And I think what I've seen particularly over the last few weeks that's been the most
04:31exciting is that the conversations are starting to change. If you had asked somebody a year ago,
04:37everybody was saying, well, this idea of an orchestrated network, it's just too theoretical.
04:41Right. It's let's see it work in practice. Now, over the last two weeks, we've had some of the largest
04:47logistics service providers, carriers, bankers, analysts, all reaching out to us, inquiring as to
04:54how does this model work? How is this model going to disrupt the status quo? And I think what I've
05:00been most surprised about is just the open collaboration that we've been seeing from the industry in
05:05general. Well, it's I mean, this is the promise of AI. This is the good side of the coin. You
05:11can
05:12reduce friction, bring down prices and the end consumer can save money. Society benefits.
05:19It's a very serious story. But I have to ask the unserious question about your favorite karaoke song,
05:25Gary, because you must have one. I get that question actually a lot. So my favorite karaoke is
05:33don't stop believing just because classic. It's a classic. And also when you believe in yourself
05:38and you have conviction, good things tend to happen. And we've seen that play out here over
05:42the last few weeks. So I just have to go with that.
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