2 min read August 2022 — AGX Freight is a full-service transportation and logistics platform. Invest: spoke with Chief Operating Officer and Executive Vice President Ike Sherlock about the company’s plans for expansion in Florida, the value of the human component in their operations and the top priorities for AGX Freight in Jacksonville.
How is AGX Freight in Jacksonville changing for the better?
It’s been a fantastic year. We have record revenue growth, some of it was planned and some of it was market-based organic growth. We’re growing in agents, trucks and client acquisition. We’ve been really excited and humbled that we have many clients trusting us with freight. We were recently honored to be recognized as a safe small fleet in Florida at the Florida Trucking Association’s Annual Conference that was recently held in Cape Coral.
What is your role in mitigating the disruptions in supply chains over the past year?
We’ve primarily seen growth through our logistics broker division. We’ve been able to do that through an expansive network of asset-based carriers and with the cooperation of drivers across the country. We strive to be the preferred logistics company that truckers want to work with, can trust, will treat them fairly, and with respect. When truckers work with us, we assist their operating cash flows by offering freight transport work that keeps them moving and we pay fast. Mutual communication is paramount. These essential workers have enough stress in their lives. We focus on treating all truckers with the respect they deserve. Treating people well is how we do business and how we deliver a superior service.
What are AGX Freight’s plans for expansion this year?
We’re going to be adding warehouse services in Jacksonville. The warehouse business is booming and there’s no available capacity. We have clients that could really utilize warehouse services in Jacksonville and they’re having a hard time finding that. We can couple transportation, especially from the port or rail, and put that warehouse in the middle. It’s a service that our clients need and benefit from. The warehousing is going to be a huge new service offer for AGX and a big change for us. We have people here who come from a warehouse background. Additionally, we’re growing our truck fleet in Jacksonville. We’re focused on having new space ready by the fourth quarter of 2022. Jacksonville is growing as a significant player in the warehouse and logistics services markets. JAXPORT going to 47 feet deep and adding a turning basin gives us all sorts of flexibility for more product coming into Jacksonville. JAXPORT is becoming a world-class port due to a great deal of planning and foresight.
How important is the human component in logistics despite technological advances?
We think it is critical that our clients and truckers hear a real person answer when they call on us. In our experience, clients don’t feel comfortable trusting their supply chain to a portal. They want to talk to a person. They want somebody to assure them that we understand how important their product is to them. We understand that if freight doesn’t arrive on time, the client’s supply chain may be negatively impacted. For example, we understand that if the food products don’t arrive on time and in fresh condition, consumers can’t find the products they need to feed their families. That human component will always be there between the truck drivers and intermediaries. We have 24/7 operations coverage while many brokers do not. We think the automation will continue to evolve, but I don’t think I’ll ever be comfortable with a driverless, 80,000-pound piece of equipment going down the road.
What legislation or regulatory proposals are you following?
The AB5 law in California is a big concern of ours. It’s intended to protect gig workers. Now that it has, at least temporarily, survived judicial challenge, California appears to be attempting to reach commercial vehicle drivers and owner-operators. If I’m a one-truck owner-operator working in California, I may have to pay additional taxes that may not be fair and will impact my operation. There are about 70,000 individual owner-operators in California who are shut down now. It’s potentially catastrophic because California ports have almost caught up with the backlog of 150 container ships. They’ve gotten down to 30 or 40. Shutting ports down for two or three days could put them back underwater quickly. This law is being considered in other states as well.
What priorities are top of mind for you and your team in Jacksonville?
Growth. Our reputation and the integrity of the way we do business are paramount. We value the relationships with the carriers and clients that want to work with us. We’re constantly hiring and growing, adding the warehousing component and more agents and trucks. It’s not growth for growth’s sake, it’s growth based on new opportunities to service the market and our clients. Clients trust us with more business because we have that human factor and do a great job for them. We understand how important the freight is that we’re hauling. It’s not just a payday. People are trusting us with their livelihoods.
What are your expectations for the industry in Jacksonville going forward?
We’re bullish. Many truckers are exiting the market. We had a record number of trucking companies enter the market nationally in the last two years. Everybody was chasing the gold rush. Rates appeared to be ever increasing and it was easy to get great freight. Many companies had to overpay for their equipment and labor. They had to build their business models on unrealistic and unsustainable numbers. We’re now seeing many quickly exiting the market as rates and freight volumes have slowed. That shrinkage in capacity is going to be challenging but for providers that carriers want to work with like AGX Freight, it will be a strategic advantage. Drivers are paying unreasonable amounts for fuel. The spot market has come down 50% since January. That’s just not sustainable for most of these carriers.
What will it take for all of this to balance out?
We have recessionary factors at play. Time will work this out because the underpinnings of the economy are strong. We have some demand capacity and there’s going to be continued supply shortages and both need to be flushed out of the system.
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