LTL Technology Deep-dive with Lance Healy

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In this episode, Lance Healy, Co-Founder and CEO of Freight Facts, joins Host Brian Glick, CEO of Chain.io, to discuss:

• Lance's journey into LTL technology
• The evolution of APIs in freight
• AI and automation in freight
• FreightFacts freight scoring
• The future of LTL and industry standards
• Balancing work and life as a founder

Lance Healy is the Co-Founder and CEO of Freight Facts, the industry’s first data driven shipper scorecard relating to LTL shipping location attributes and behaviors. Prior to Freight Facts, Lance served as the VP of Innovations at Optym, that focused on developing applications for LTL Carrier line and P&D optimization. Prior to that, Lance was the Founder and President of Banyan Technology that pioneered API connections to LTL Carriers in the late 1990’s. He was awarded a US patent on LTL Carrier Dynamic Pricing in 2017.

Lance serves several positions on numerous industry associations including the CSCMP, Center of Excellence chair of Technology and Awards committees, and serves as a chair of Digital LTL Council workshops defining the next evolution of efficiency through APIs.

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Episode Transcript

[00:00:00][Music] Brian Glick: Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On this episode, we're going to speak with Lance Healy. Lance is a long time technology expert in the LTL space. He's launching a really cool new product. In the upcoming months, and I'm very excited for us all to hear about it.

[00:00:22] And for you guys to get to listen to me, learn about something I know very little about, so I hope you enjoy the episode. [Music] Lance, welcome to the show.

[00:00:32] Lance Healy: Thanks Brian.

[00:00:33] Brian Glick: Yeah. Just tell us how you got into this and why you stayed.

[00:00:38] Lance Healy: Yeah. Well, like everyone else, I lost a bet. Um, and, uh, no, I actually had another company that was arbitraging construction materials in the mid to late nineties in the dot com boom era.

[00:00:52] And we were taking advantage of massive pricing discrepancies and we're double blind bill of lading, buying anonymously, and setting up a marketplace. And then I had to coordinate all the freight. I'm like, how hard could it be to coordinate freight to a construction site with double bind bills, the lady. And so it began.

[00:01:14] And so that business really gave rise to a lot of commercial industrial stuff. So heavy LTO, we actually couldn't afford the SMC license, SMC three licenses to get the czar tariffs. So we're like, Hey, we know the internet. Let's just create these new things called APIs and build those directly to the LTL carriers.

[00:01:36] And then we can just get our rates directly.

[00:01:39] Brian Glick: That must've been a journey.

[00:01:43] Lance Healy: It was, I mean, it was backward, you know, very few trucking companies could spell APIs, but we were kind of the first ones to build those. And we just did it for our own use back in 99. And then a bunch of our customers said, wow, how did you do that?

[00:01:59] And we said, we just built this thing. And they're like, could we use that and put our account numbers in? We're like, yeah, I think so. And then we struggled to figure out, Hey, we should charge for this. And so in 2001, we launched Banyan  Technology and we just said, let's just charge a hundred bucks a month, you know, cause we're still doing construction materials.

[00:02:20] And, uh, like four years later, somebody called us a SAAS model and I was like, what'd you call me? Um, I'd never heard of that before. Um, and, and then 2001 hit commercial construction, absolutely just took a dive after 9/11 and so we just decided to pivot and said, Hey, let's leverage this little new tool that we built and let's switch from construction material exchange to freight connectivity software.

[00:02:53] Brian Glick: So that's, it's always really cool when those things happen. And I appreciate that you did not do something that a lot of people who start companies do, which is make the story sound like you did it on purpose. Oh yeah, no. Like that's a very common thing though, right? Not to get geeky, but to like retcon your own story, right?

[00:03:14] Absolutely. Kind of. Oh, yeah, yeah, no, we, we always wanted to be in the LTL trucking pricing market, but we started by construction, right? Yeah, it

[00:03:24] Lance Healy: was, uh, let's let's, it was a pivot from one desperation to another. And you know, it worked out and just fell in love with logistics and LTL especially. So it's kind of where I carved out my niche and made my home.

[00:03:38] Brian Glick: So I was having a conversation a couple days ago with someone about AI bots and or agentic AI or whatever you want to call this. I'm not going to ask you a question about AI technology, but the thing they said to me was in the freight brokerage world, this is moving very fast. Yes. And where I spend most of my day, which is in the international world, it's not quite as fast.

[00:04:04] And the same thing happened with APIs. Right. So you were there for that journey, right? And like an international, like, I'm literally still trying to get major freight forwarders to have published APIs in the international space. Why do you think those markets are so different in the way that they're adapting these

[00:04:27] kind of technology trends? Like, what do you think is different in your world?

[00:04:31] Lance Healy: I see the LTL space. I think it's high volume. It's how do we get more efficient at this? So there's a real desire to see more throughput. I always got the impression we work with several freight forwarders with my last company and and a lot of those were very, it's very artisanal. That's my impression from the outsider going in. It's like, Hey, you've got, you know, free forwarding is like witchcraft and, and an art because it's got all of these things.

[00:05:01] And so trying to automate that, it's like, well, it's kind of taking that artisanal aspect away. So that's always been my impression from the outside, but I don't know if that's true or not.

[00:05:12] Brian Glick: No, I think there's something to that. You know, I know a lot of freight forwarders will say, kind of privately at least, like, if I don't do all of these things, why am I here? Right?

[00:05:26] Lance Healy: Right. It's like I'm adding value because I know these things.

[00:05:26] Brian Glick: I guess the LTL space is more transactional, right? There's just more like you're doing a thing and it's a little bit more commoditized maybe is a fair way to put it.

[00:05:41] Lance Healy: Yeah, I think it's so much more complex than just truckload, right.

[00:05:45] Which is a B and some triangle points or whatnot, but LTL is a lot more complicated with accessorials and things. It's a little more akin to some of the international, but, but I think there’s so many options in international and how you do things and which ports and so many different tools to play with.

[00:06:05] It will come. There's no doubt it will come. And I think where we're seeing it, the AI's creeping into LTL and those brokerage operations is in the rote tasks, the email responses, the check calls, a lot of that being automated through AI and AI voicebots. There's a ton of that stuff happening. So it'll come.

[00:06:25] Brian Glick: What are you working on now? It's been a couple of years since Banyan and, uh,

[00:06:29] Lance Healy: yeah, yeah. Exit happened about three and a half, four years ago. One of the things I got, I got a patent on a dynamic pricing while I was at band and for LTL and one of the challenges I ran into was I could tell where the LTL carriers needed more weight in a particular lane to get a direct point.

[00:06:48] So they didn't have to do a break bulk in a stop, but we couldn't tell if it was a customer I wanted that freight from. So, oh, yeah, this guy has a 60 minute dwell time where an LTL carrier is expecting 12 minutes or they pay in 120 days, yay. You know, it's so that was a huge component that was missing is a customer qualification. So if we're now able to, we're creating, FreightFacts is the name of the company, and we're essentially collecting data from all the major LTL carriers and then creating a scorecard on the shippers themselves and 3PLs.

[00:07:25] So it's kind of the mirror piece of everyone's rating carriers, right? But no one's rating the shippers and holding them accountable. So the idea is it's almost like a credit score, but on freight attributes rather than lending practices.

[00:07:39] Brian Glick: That's really interesting. I've heard this talked about for years, right?

[00:07:45] And it's like a very big panel topic of being the shipper of choice, right? Like it becomes almost a cliche at certain events, right? But we can't mention them. It's fine. We're not a competitor. This is just for fun, you know, but like Why pick this problem?

[00:08:04] Lance Healy: There's a lot that comes through this, and there's been a lot of LTL consolidation in recent months and years.

[00:08:09] And what that's created is an environment of it's not quite an oligarchy, but there's definitely less carriers. So there's the ability to work with that, like in full truckload. 300,000 independent carriers. Hard to corral those fruit flies. Right? But when you have 20 to 30 meaningful carriers, you can come together and say, Hey, let's create this accountability and let's improve the industry as a whole because now shippers have a history that follows them.

[00:08:38] They can't just jump from carrier to carrier to carrier. Right. With these same bad practices. Now you have a freight score of, you know, 430 on a 900 point scale, they're going to see that. And the good news is, and the real intention is it also tells you, here's how you can get better. Here's how you can improve.

[00:08:57] You know what? Your dwell times are horrible. Like work on this. You know, there's some assessorials that you need to work on better classification. All those things result in just making the entire industry more efficient. And for me, that's super exciting because. Once you have a freight score, now you can build things on top of that.

[00:09:15] Now you can build in dynamic pricing that says, Hey, because you have a freightscore of X or Y I'm more akin to give you a lane special because now we can make our operational networks more efficient. RFP processes get much more accountable and smoother rather than roll the dice or hopefully this turns out.

[00:09:36] So, yeah, I think there's a lot that can come of it. So,

[00:09:38] Brian Glick:  remember doing RFPs as a customs broker, and one of the things that would happen all the time is we would lose business that we had because we would go into a customer and we would quote them in the RFP based on knowing them. And we'd be like, this is the floor that we're willing to go.

[00:10:00] Because, you know, this EDI and the other go, yeah, and 87 percent of it's wrong. And we have the data, right. And we have to manually adjust, you know, the 87 percent of your shipments. And then it's somebody who doesn't know the business would come in and they would bid 30 percent less than us. And we'd be, you know, and it would be like one of these, you'd be very upset that you lost it.

[00:10:20] But at the same time, you'd be like, I feel bad for the other guy. Good luck with that. So essentially you're going to put a flashlight on that a little bit so that the other guy knows not to go underbid that. I mean, not, I'm going to say, I'm going to avoid the C word here, but like the facts of the matter, right?

[00:10:39] They can still underbid the business, but they know they're underbidding the business.

[00:10:43] Lance Healy: There's some transparency there, right? I don't think transparency is bad for anyone. You know, it's going to change some practices, but it's all for the better.

[00:10:52] Brian Glick: How much inspiration did you take from other industries or other places where scoring like this happens?

[00:11:00] Lance Healy: Um, huge. Uh, so, you know, two business partners, uh, in this venture, uh, Pat Martin and, uh, Mark Maskin and, and they've really been kind of noodling this around for, for a little while. And, you know, we looked at, okay, how would we model that? How do we do that? You know, I looked a lot at credit bureaus and how they started, actually started with tailors in England back in the 1800s that were just wanted to get rid of the deadbeat customers that went from different tailor to tailor.

[00:11:32] And that was the first concept of a credit bureau.

[00:11:34] Brian Glick:  You know who was a real problem for those tailors in London? Winston Churchill. I've read an excellent biography of Winston Churchill and there's a little bit deeper book that's just about his finances that I read one time. Like just about like through the course of his life because you know he was kind of born into

[00:11:57] aristocracy, but not really. And like his finances always were like all over the place, ups and downs. And there'd be all these letters home when he's off, you know, in India or wherever he was coming back and being like, okay, tell the tailor and the haberdasher and like, okay, give them this much money and them this much money, but leave this and tell them that I need an extension.

[00:12:18] And it was like very much that. And the turn of the century. Yeah.

[00:12:24] Lance Healy: We do have a 900 point scale on the freight score, which is not a coincidence. So somebody says 780, they feel pretty good about that as a score. Yeah. So looking at that, it started with some MVP, you know, 25 most important things, but really worked with a lot of the carriers to define, Hey, what are the most important factors to you?

[00:12:47] And you know, when you're considering how to price a customer.

[00:12:50] Brian Glick: Why not just go do something completely different after Banyan? Why stay, why stay like, let's get to, let's get to the, like, what makes you personally decide I want to stay in LTL?

[00:13:04] Lance Healy: Yeah. I honestly, um, so I used to do like 15 shows a year. It's just, uh, there's a family that's been created in this little niche market.

[00:13:15] And honestly, I love the people. And I've got some political capital built up over the last 20 plus years. Really, that's what it was is I just, I didn't want to leave the industry and there's so many problems to solve. I didn't have to.

[00:13:30] Brian Glick: Outside of what you guys are doing, like what else has you excited?

[00:13:35] Lance Healy: Oh, actually I'm super bullish on, there's a digital LTL council that has, has come together over many years that has finally found a really great home in the NMFTA.And they're kind of a governance standard body. A lot of folks think of them like the masons of LPL, but they just create this. Okay. This is what it's going to be. We've created these tools to normalize how you communicate with all the LTL carriers that the industry has now come together and said, okay guys, let's all get together and create a standard API connection for

[00:14:14] pick up, pre pick up visibility in transit. And so there were 40, 50 plus people that all came together from all different roles in the industry and said, hey, if we were going to build APIs from scratch,what would we want them to do? How would they act? And then create the standard for everybody to adopt.

[00:14:34] And the most exciting part of that, and I'm super geeking right now in LTL, but is defining standards for accessorials. Defining standards for exception codes. Because now once the industry has those standards, instead of burning a ton of IT time on normalizing those standards, we can now build on top of those standards and put some AI bots on it and put some agents on it and stuff and say, Oh, okay, I got this code.

[00:15:02] It's not. I got this code from Pitt, Ohio, but that means something different from Estes or Oak Harbor. We can now build and as an industry become more efficient, Okay. There's no competitive advantage on differences.

[00:15:13] Brian Glick: Well, so I was going to go there for a second. Yeah. One of the things in a lot of industries, and you know, LTL is certainly one of them, and I would actually, Ocean Freight is another, the complexity of billing and accessorial codes in particular, is a, not wonderful, but factually accurate way to make money, right?

[00:15:42] So, you know, the, Oh, my customer can't really audit my bill. And even if I'm not doing something unethical, I'm less likely to kind of, have the little bit of extra money that's sloshing around in maybe some accidental, you know, and again, I'm giving the best possible for this, but like, but like, you know what I mean?

[00:16:04] Like, like there's like, look, when you get your, when you get your cable bill or your cell phone bill, and there's like the, you know, this, this recovery charge and you're like, I don't even know what that is, you know, like, you don't have the energy to fight it. Right? So. Take me behind the curtain.

[00:16:23] Like, are there people who are upset about this or?

[00:16:26] Lance Healy: No, no, not really. Because there are so many people that I think the only people that may be upset about it are the freight bill and audit folks. Some that are adding questionable value. They find the same error every month. And instead of fixing it, they just bill for correcting it.

[00:16:43] So the hopes are that you can now correct the issue instead of just continuing to pay to fix it every month. But a lot of them are behind it as well. It's going to make their jobs more efficient and automated.

[00:16:56] Brian Glick: So explain something to me that I have absolutely no idea about. So I don't even know if this is a valid thing, but I'm going to get and try to make a transfer from the world that I spend in.

[00:17:06] Like one of the challenges that tends to exist when I look at ocean freight audit is the structure of the quote and the contract is not very good. And therefore what you are subject to paying at the end is sometimes interpretive or carrier A and carrier B, your quote is foundationally different, especially on, you know, any kind of longer term basis versus a, you know, a one off quote, does that same thing exist in truck?

[00:17:38] Is there like what, like in our, like an actual legitimate, I can sit down and say, no, I think I should have paid this. And you say, no, I think you should have paid that.

[00:17:46] Lance Healy: So yeah, in LTL we have a little thing called incorporated by reference. So on the bill of lading and when you engage with the carrier, each carrier has about a 300 page document that is called the rules tariff.

[00:18:01] And nobody reads it, but it's there. Now, with AI, you can set up bots and agents that would actually consume that rules tariff to be able to digest it and say, Aha, you know, page 122, subparagraph 9, sentence 4 says, you know, you have to do this. So that very much exists in the LTL world and every carrier has their own rules tariff and people negotiate discounts off of a published tariff and then can waive rules and also do a FAK, which is freight all kinds, which for everyone who's listening, do not do that.

[00:18:46] It's just, it's just lazy padding. So you're going to pay more for everything because you don't want to actually class something. So there's your giveaway. Stop doing everything.

[00:18:55] Brian Glick: By the way, exact same thing on Ocean Freight. Yeah. I mean, like that's what, like you sit down with your carrier and, oh, I don't, you know, I'm not going to be subject to your GRI increase this year.

[00:19:08] And I'm going to, I want this percentage off my fuel and, you know, I'm good, but I have to give you this volume on this lane and this volume on this lane. But I'm not actually going to fulfill those. And then how are we going to fight and this and that, right?

[00:19:24] Lance Healy: Different vessel, right? Yeah. So you guys, I suspect Oceanal will be coming along.

[00:19:28] What you were talking about was definitely LTL 20 years ago. Where it was just it was all kind of in the mix and a little bit of wizardry and don't worry about the invoice . We'll just argue about it at the end of the year.

[00:19:46] Brian Glick: If you weren't doing this, what would you be doing?

[00:19:47] Lance Healy: Yeah,  I'd be a full time dad rock band.

[00:19:53] I knew guys. Yeah. Yeah. No, that just doesn't pay well

[00:19:58] Brian Glick: Tell everyone about your harmonica.

[00:20:00] Lance Healy: Oh, well, yeah. So, um, yeah, no  actually, I'm a drummer in a band for about 15 years, just starting our 16th year, actually. skinny little kid from Cleveland, Ohio, but yeah, we just play out ofbars and cover our bar bill usually.

[00:20:16] And we have a great time, but that's what I do. . And racing sailboats, but  I'm not good enough to do that professionally. So that's just, that's fun.

[00:20:26] Brian Glick: What problem would you like someone to fix in the industry besides the one that you're fixing?

[00:20:34] Lance Healy: So I'd love to see asset neutral optimization. And I think we're going

[00:20:38] Brian Glick: What does that mean?

[00:20:38] Yeah, that's a fair question. So that is, you know, LTO carriers build a hub and spoke, asset heavy hub and spoke networks with the proliferation explosion of local delivery companies. The only thing they're missing is line haul to connect the dots. So you have companies that have, you know, they're in all the NFL cities, okay.

[00:20:58] 79 different cities. They've got great P and D coverage and all you need now is how to connect those. With a line haul network and boom, you've got now some pressure creeping in on the LTL companies. I think it's ripe for the taking. It'll be interesting to see who kind of steps up and claims that. But the technology is there, the infrastructure.

[00:21:24] So

[00:21:24] Brian Glick: take, take me back through that again, but explain it to me like I'm five.

[00:21:27] Lance Healy: Yeah, there's local carrier companies that are in multiple cities, right? 20 different cities, but they're not connected. They only serve in those markets. So all of a sudden you connect those cities and I said, okay, I'm going Cleveland to Dallas.

[00:21:45] Great. I've got P and D coverage. I just don't have a line haul. Well, I can find on any load board line haul coverage and be able to do that. Similar to Roadrunner's kind of direct points network.

[00:21:57] Brian Glick: So essentially the ability to create an LTL carrier out of a network of local delivery assets, and then some truckload to move things between.

[00:22:08] Lance Healy: And you don't necessarily have to own the assets.

[00:22:12] And that's the asset neutral optimization piece. [00:22:16] Brian Glick: That makes a lot of sense. It sounds a lot like freight forwarding.

[00:22:18] Lance Healy: Right? It does. It's just OTR in it.

[00:22:23] Brian Glick: So yeah. Cool.

[00:22:26] Lance Healy: Yeah, that'd be fun to see.

[00:22:28] Brian Glick: Well, uh, we're running right up on the half hour here. So tell me a little bit about how people can learn more about FreightFacts.

[00:22:36] I'm very excited to see the feedback that you get over time from the market. Cause I think it's a really interesting, challenging problem.

[00:22:47] Lance Healy: It's going to run the gamut of sheer terror and appreciation, but website’s, freightfacts.io. We are pre-launch at the moment. But we're onboarding LTO carriers now and pre registering some good size three PLs and shippers directly.

[00:23:02] So.

[00:23:03] Brian Glick: Awesome. Well, one last thing. So we are recording this on Christmas Eve.  I'm sure that I'm, my team will not be publishing it on Christmas day, hopefully. So as someone who builds a you know, substantial team and, and has, but has a, the mentality of, of someone who starts companies, like it didn't seem unnatural to either of us to be sitting here on, it's not, it's not, it's not the evening of Christmas Eve.

[00:23:31] It's 9:30 in the morning, but you know, till I say, Oh, like, like, I think, I think I reached out to you on Friday and it's Tuesday now, and we're already recording and we're like, there was no question in either of our heads that like, yeah, of course we're working and you'll probably work tomorrow in between family things and so on.

[00:23:48] As you build your team at Banyan, how do you balance that mentality that that's very natural to you with having employees who you wouldn't expect that from? Like, how did you think about the balance of being a founder versus building a team? I know heavy question to just drop at the end there.

[00:24:09] Lance Healy: No, no, that's okay.

[00:24:09] I think both for me and my business partner, it was always, you know, We signed up for this, uh, employees sign up for being an employee. You have an agreement of, Hey, I'm, I'm looking for your time or this much time a week, depending on what your flex schedules are, but just set your expectations reasonably and know that if you've got great employees, you want to keep them.

[00:24:32] So don't be an ass, um, and be respectful that this is just work for them where for you and I, this is like life and identity and everything else,

[00:24:45] Brian Glick: Whether that's healthy or not is a completely separate podcast.

[00:24:48] Lance Healy: Decidedly not, um, but just trying to keep that in check and just, you know, if somebody was on vacation, I do not want to hear from you.

[00:24:57] I do not want you scheduling meetings. When I had meetings, I did 12 Webexes when I was on my spring break with my kids and it was horrible. Daddy's up at the condo, not at the beach. I just did not want that, you know, cause that's, it's not why they're here.

[00:25:12] Brian Glick: Yeah, absolutely. No. And I, I appreciate that insight.

[00:25:16] And again, we'll get the link to FreightFacts in the show notes and excited to see the launch. And I'm even more excited again to see the, to see the, the reception. I think it's a, really important and valuable thing that people, there are things that once they exist, people quickly forget that there was a world before them.

[00:25:38] Right. And they go like, of course, how did, like, how did my predecessors operate without this? Like someone who joins the industry next year,  will go like, yeah. Like how could you possibly price something without knowing the quality of the ship? Right. And I have a feeling you're building one of those things. So, yeah. Thanks so much for being on the show.

[00:25:54] Lance Healy: My pleasure, man. Absolutely. Thanks, Brian.

[00:26:00] [Music] Thanks again to Lance for an enlightening conversation. And he and I always have so much fun chatting when we get to see each other at events. And you know, that's really the reason I do this podcast so that we can all participate in those conversations and get educated on such interesting corners of this giant global supply chain that we're all a part of.

[00:26:25] Hope you enjoyed the episode. We'll have links to Lance's new company down in the show notes, as well as some upcoming, really exciting announcements here at Chain. There's going to be a new product launch coming up that you should make sure you're keeping an eye on, on our LinkedIn feed to make sure that you hear about that, especially if you've ever had any challenges of getting too much data in too many different formats from all of your different free providers.

[00:26:51] So that's your little teaser, and I hope you enjoyed the episode and I will talk to you next time on Supply Chain Connections. [Music]

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