The Chris Voss Show - The Chris Voss Show Podcast – Rick Burnett Founder & CEO of LaneAxis, Inc.

Episode Date: June 30, 2021

Rick Burnett Founder & CEO of LaneAxis, Inc. Laneaxis.com

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain now here's your host chris voss hi folks is voss here from the chris voss show.com the chris voss show.com hey we're coming here with another great podcast we certainly appreciate you guys tuning in be sure to go to youtube.com for just chris voss hit the bell notification button.

You can see all the wonderful videos we have over there. There's 4,000 videos or something like that going on. It's just an endless amount of video watching that you can take a do. You can go to, of course, refer the show to your family, friends, and relatives at iTunes, Google Play, all the different places you can consume podcasts as well. You can also go to Goodreads.com, Fortress Chris Voss, see everything we're reading and reviewing over there. And also all of our groups.

We have Facebook, LinkedIn, Twitter, Instagram. They're all over the place. Today we have a most amazing guest on the show. I think you're going to love him and some of his brilliance that he has in his experience and career that he's going to be sharing with us from his company. His name is Rick Burnett, and he is the founder and CEO at Lane Access down there in the Costa Mesa, California, beautiful area of California. Of course, what California, part of California isn't. There might be a couple parts. Anyway, Rick has devoted his career to solving the pain points and excessive

costs that have crippled the supply chain industry for decades, particularly in the freight trucking sector. As a veteran of both trucking logistics and software development, Rick has a clear view of both the massive inefficiencies baked into freight hauling as well as the massive benefits mobile technology can bring to trucking. As early as the mid-2000s, Rick knew GPS technology could lead to a direct model where manufacturers could connect directly to drivers, cutting out expensive intermediaries such as freight brokers and third-party logistic companies. And they charge up to a 50% commission for often opaque and inefficient services. And Rick set out to develop

such a better system. Rick, welcome to the show. How are you? Great, Chris. Thank you for having me. I appreciate your time and the opportunity to speak with you. I appreciate to have you on as well. This sounds like quite the industry you're talking about disrupting,

but give us your plugs so that people can find out more about you and where to look you up on the interwebs. Yeah, laneaccess.com would be a great place to start. And then access token.io is our digital asset that we're building and deploying on the blockchain and implemented focused on the US here first. But then obviously, this is a global problem issue and need. So we're going to expand over the years to come. So Rick, tell us a little bit about yourself and what got you into this business, how you grew up, what motivated you want to start a company, et cetera, et cetera. Yeah, I've always had that pretty much entrepreneurial spirit. I was in

trucking for another year and the transportation brokerage logistics side really got into this over a decade ago. Started about eight years ago when I moved out of a partnership with a trucking company and started into filing patents around what I felt was the future of transportation. Today, we have patents around shipper carry interaction optimization platform. That's the legal description. Basically, what we are is we're the industry first brokerless direct freight network. Awesome sauce. And so what motivated you to want to get into that business?

Was it just something that worked for you, appealed to you, or what was the founding behind that? Yeah, just from, I guess it's doing a football analogy, right? Things that you're in training camp and you learn and you trial by trial and error and in the trenches that is difficult. And then you implement plays to solve it. And these work. I know in 2012, we ran number trucks for peak season for UPS, just the colossal failure in the operational side that happens during peak season, which is a week before Thanksgiving all the way up to Christmas. And just spending 20 hours in a 24-hour day in a conference room, managing those and just

how inefficient it actually was in the time when technology was advancing. I'm like, this is an opportunity to fix this problem. And a lot of those problems are still going on today, but technology is advancing to the point where there can be a direct network deployed now. Wow. And so your company helps to deploy that, helps work with setting up direct networks or has a direct network. How does that work? Yeah. So we built a technology system that's like on the front end, LinkedIn or Facebook, if you will, that allow a direct connection and a marriage between a shipper and a carrier in the form of a relationship. So we're layering the contractual side on the blockchain. So if a shipper says, okay, I want to build my direct relationship

with carriers, that's all my freight today, and I want to go contractually direct, you have that capability through lane access. So the front end side, you can query and say, okay, show me the owner in a 60 mile radius of Chicago. What a lot of people don't realize is there's 1.8 million plus trucking companies in the United States. There's 930,000 owner operators, and there's 1.4 million trucking companies that have five trucks or less. So there's just an inability for a Walmart and Amazon and UPS or the rest of them to contractually deal with 500,000, 600,000, 700,000 different trucking companies. If you are manually processing the load level management, the contractual, make sure they're under insurance and all this other stuff. So we digitalize the entire network so that you can now go direct and you can negotiate direct and you can pay direct. And then the token side of

it, access token validates all these various different touching points of the data and builds that in the quantifiable network perspective that has value as the network grows. There you go. So this is really interesting. So do you guys also help trucks? Because I know one thing that truckers are always trying to do is if they're owner operators, they're always trying to go drop a load, but then pick one up to pay for the way back. Is that one of the things you guys help facilitate? Yeah. When you come to Lane Access, it's really about building direct contractual relationship

with who you want to do business with. And we're going to give you that option. And so there's a million trucks that move empty every day in the US. And a lot of this was really highlighted a year ago when the pandemic happened. And there was the shelves in, why are they empty? The trucks are there, the products are there, there's just no visibility into the network. So we're providing that visibility in the network so that these trucks now can build them direct relationships. So when they're coming on an hour's reset or they're ending on a load, they can now directly connect with that shipper,

find a load and get back out instead of going empty. Wow. So one of my first companies that was really successful was a courier company and we did shipments, but it was all like paper and stuff. So we weren't taking big stuff like FedEx and UPS or trucks per se, but we had vehicles running around doing pickups and stuff for mostly mortgage documents and transactions to sign papers, legal documents, things of that nature. Yeah. We had, we lived in that world where like, where's the driver at the thing? He's not answering the phone. We can't find him. And then I remember when GPS started coming in and they were starting putting GPS on trucks.

And I guess now most all the trucks have GPS built in. That's interesting because from a network perspective, you're talking five plus million truck drivers. You're talking about the CDL. And there's classifications in transportation, truck load, less than truck load, last mile move. But then you have box truck. A lot of those are still regulated and it's still trucking. But in the GPS track, you have proprietary systems that a Walmart or FedEx or UPS or J.B. Hunt or the rest of these have GPS tracking, yes.

But when you go to the 97% of the industry, which is the 1.4 million trucking companies or less, they don't have trucking. They don't have tracking because they have an owner operator. Or if they have it, who's sharing that from a network perspective? What are you tracking if you're not on a load itself? Why are you tracking an owner-operator? Right? Or how do you tap into a 930,000 owner-operator network that has GPS tracking on where you're on that load. Because you're really interested in your load. You're not interested in where he's going and what he's doing. You're interested in your product when it's on that shelf. So that's what we're doing,

Chris. We're building that GPS tracking element of load level management, tracking, messaging, in-app communication, electronic documentation on that 97% on that 1.4 plus million trucking company industry. Wow. That's wild, man. Trying to get this all organized is really important. And I guess is your target audience mostly small owner operators or is it larger networks or mostly smaller operators? Yeah. Yes. Smaller independent owner operatorsators. In essence, what our grand goal is in one element from Homeland Security and to the U.S., we're in the process of trying to communicate and work with them to build an aviation system for trucking. When the towers got hit, they fell, and within two hours, they were able to ground all planes. How did they do that?

They did that by having visibility in the network and ability to communicate. Okay. In trucking, if you had a single network that had, from a visibility standpoint and a communication standpoint, then five plus million trucks in a single network, well, how do you do it? Because now there is electronic logging devices federally mandated as the end of December 2019. And we built the APIs from our network portal that we can communicate with the 400 plus ELD companies. So we could point that positioning to a single network. And now if something happened, we could communicate and dispatch and locate trucks in order to

move product or various different, whatever you needed. And so as that technology realization comes to the forefront, I think there's a real possibility that in the next three to five years, the U.S. will have a single transportation network for information, where to run roads, emissions, efficiency, dispatch, communication, various different things. And quite frankly, we have the technology today that could do that. Would that be like a FAA sort of thing? Or would it be called something else?

But it would be like- Yeah, I would call it the Federal Tracking Network. That has a lot of value for a lot of different reasons. And they're tracking all of this stuff now because that was one of the things, Chris, your seven-year-old software company and three or four short years ago, less than 10% of them had a phone and less than 10% of them had electronic logging devices because they didn't want to be tracked. They had paper hours of service. Now that it's federally mandated

and now these guys are quite frankly, pretty tech savvy because one thing they have is they have time on their hands. So now that they have a device in their hand, they're farting around with it and learning how to use it. And they're going to different stuff. And now they're communicating. And now they're actually creating podcasts and TikToks and various different community things that they're finding out that they have downtime. They're trying to monitor. And it's shifting.

There's a paradigm shift into this industry in a lot of different areas. But from the capability of building a direct network, it's there now. Yeah. I spoke years ago at a trucking convention thing, I think in Missouri. And yeah, they were asking me, how can we make money on the road? And how can we deal with a lot of the issues that you guys are focusing on helping them with? And I was like, yeah, you can make YouTube videos and podcasts and do all sorts of different things. And they were trying to, I think back then, I don't know, they were trying to get their head around it

because they're truckers. They're not really used to being Instagram stars or something. Yeah. As funny as that is, it's true though, right? It's changing because these guys now they're owner operators and they used to be owner operators trucking, and now they're owner operators of a business. And I think they're looking at that now in the ways that, hey, can I monetize other things of value that I'm bringing? And that's what the U.S. is, right? It's the greatest playground to create an opportunity if you're willing to work. Yeah.

And I guess what's good about you guys, one of the things that's good about you guys as a service is that you guys beat these freight broker margins of 20 to 50%. So a lot of truckers are having to pay these brokers to get them a ride, get them a haul back. Yeah. You can go to Google and you can Google, okay, DAT, which is the largest load, trucks.dat, and there's 850 to 900,000 loads a day. And what is that? That's brokered loads or a shipper that's looking for capacity. So that's, let's just call it a million loads a day. And that's our first target is to efficiently start to, through a network, bring more efficient from that inefficient process of calling a phone number to find out information on that load. And then the guy has to call you back or he doesn't answer or it's not a load that you're interested in because of a rate. And it's all margin driven.

So there's from a network perspective, and we don't mark up the freight, it's a direct connection and a relationship with the shipper. They negotiate directly on the load. So if it's $1,000, that's what he's getting. And for us, this is a full transparency. And it's not about eliminating brokers, they do a great job, or 3PLs, or it's not about a full transparency. And it's not about eliminating brokers. They do a great job or 3PLs, or it's not about a particular class. It's just technology advancing into improvement of the inefficiencies that are out there through technology. It's like Blockbuster, right? It's not that you save money on renting a Netflix movie, but it's more convenient, right? You don't have to, you can scroll through on your TV and not move and order a movie and watch it and be done. You don't have to go to the store and pick up the

thing. And if it's not in, you reserve it and come back and take back to, right? It's what it is. And it's the same thing in other direct models that's happened from airline tickets to stock trading, to banking, to basically everything is moving to ability to where the two parties that's involved in this is a shipper and a carrier. And in that, we're giving them the most cost-effective direct connection ability. And once that relationship is confirmed, then we give them with our mobile app called Freight Vision, real-time information, ability to communicate directly with that driver as a load. You don't have to make phone calls. You don't have to write down paperwork.

And you have that direct connection in real time. And then everything is timestamped to where the token is validating all of these important data points, like we're going to be scoring driver performance. So you're going to be able to look at the network. Like we both have a FICA score, right? What is that? That's a risk assessment. Okay. So from a network in five years, you're going to be able to look at it and say, okay, this guy's on time 99.7% of the time.

This guy's on time 86%. You can negotiate better rates if you want, because the guy's performance is less, or you can get paid more because your performance is good. If it's a just in time or various different sensitive cargo that you deserve because you have data to back, there's nothing that you can say, I need an increased rate for this reason because you can't prove because there's no data in transportation. You can look at a location, you can say, oh, this address picks up here and this address takes four hours to load. I'm a trucking company. I'd say, hey, I need $250 more on this load because I'm going to miss my hours of reset and I can't deliver that

based on the parameters that you're saying. So through data in a network perspective, and I'm not talking singular, there's proprietary systems that bring value. But what I'm talking about from a network is the 97% of the industry, and it's just math. So if 97% of this industry is smaller independent, then that's who's hauling the freight. What we're talking about is how are they efficiently doing that? And that's the point that we're focused on. Awesome. Awesome. This sounds like quite an interesting business to be in.

I didn't realize that markups are 50% for these brokers and stuff. But it's unregulated. So what happens is that if you look at the facts from data in the last 15 years, the margins, profit margins of freight brokers and 3PLs have rised at a time

when technology has rised, which is in a lot of businesses has decreased in the cost and margin for the entity that's doing it. Well, so they've increased their profit margins. And what they've done is 15 years ago, a Ford Chrysler GM and all the rest of these, they wanted to get rid of legacy costs.

So they didn't want to pay a guy 30 years after retired. So they started outsourcing to 3PLs to manage all their transportation costs because it was less money. And then they've used the Internet to build network of lane information of where these smaller independent guys run. And they know he's got to be back tomorrow from Atlanta to Chicago. And they're going to fill it with a backhaul rate because they have visibility into where they built this network of information. They know where these guys run and they know that, okay, he's going to take a lot

better rate because he's got to get back. And so from that, the shipper doesn't realize any of those benefits and the trucking company doesn't realize any of those benefits because the only guy that's got that information is the broker at 3PL. And he's not being transparent. The shipper doesn't know what the carrier is getting. The carrier doesn't know what the shipper's paying. He gets paid directly from the broker and the shipper pays directly the broker. So what we're doing is we're just dropping the veil of this middle and saying, come direct and contract, negotiate and pay direct. Wow. So you just take out the middleman, very simple and easy. This is pretty disruptive. And so let's talk about what's going on. So you just take out the middleman. Very simple and easy. This is pretty disruptive. And so let's talk about what's going on. Now you have this available so that truckers can download it off the app store for both Google and iTunes as well.

Yeah. So it's really, you come to lanexcess.com. That's the portal entry. What the mobile app does today is it has full functionality of the network portal, but it's real. You come to the network and you build your contract, your connections, you negotiate directly. The mobile app is really designed for the driver aspect of tracking, communicating in real time. So we have a web portal application side, you come to lanex.com and then Freight Vision is our mobile app that connects to the portal. So arbitrarily, there's no value for you to download Freight Vision is our mobile app that connects to the portal. So arbitrarily, there's no value for you to download Freight Vision because it's not going to do anything to you because it's going to ask you what your DOT number is. In the U.S., every trucking company has a DOT number, Department of Transportation number, and it's regulated by the Department of Transportation. You, the driver, you have a CDL, commercial driver's license, and you are connected to that DOT, that trucking company that you work for. So it's different than an Uber model to where you can drive for Uber, Lyft,

and then DoorDash and everybody else because you have a driver's license to drive and deliver. In Class A, which is commercial driver's license, CDL, you can't do that. You can only drive for one trucking company at a time. Because whatever you do, you affect that trucking company. It's called safe or assist. They're rating within the DOT. So if you get in an accident, that affects their rating.

Eventually, you could get your DOT restricted or removed because you're a risk, right? So it's a different model than a standard business, right? In the form that it's a regulated, federal regulated business. And so the app isn't just an app that people go around. It's a business app and it's connected to the trucking company that you work for that points to the portal and whatever you do, we collect data on. Awesome. This is pretty cool. So let's talk about the other thing you're doing, the crypto thing or the blockchain thing. Tell us about that and how that works. Yeah, about four years ago, three and a half years ago, we filed, formed Access Token International, which is a Cayman Island company. We did that in the form

of to make sure that we're legally compliant within the US security laws. And so that was formed in November of 2017. We executed a smart contract in January of 2019 and deployed Access Token on the EtherScan. So that's been sitting there. And we partnered with a company called Pixelflex, which is our blockchain engineers about six, seven months ago. They started building the blockchain and the components of the way blockchain is going to work inside the transportation, what will end up being the global direct transportation network and layering in smart executed contract for the relationship validating insurance information validating the pickup and delivery location so the token is validating all the key components of the blockchain that's verifying it but it's validating all uh the data points and so as we move forward we have a regular monetary shipper to carrier direct we We charge 1% to the shipper and 1% deduction to the carrier on the direct payment. So on a thousand dollar load, it's $10 to the shipper,

$5 load tracking. So it's $15 that he would pay compared to a 20%, right? So it's one and a half percent. And then we deduct $10 or 1% to the carrier. And the payment is pulled upon the rate confirmation from the shipper and held in escrow. And then once the load is delivered through the freight vision and the sign proof of delivery, both sides have a 24-hour window. Nothing happens and flags. If they flag it, it's held. If it's not, the system automatically releases directly to the payment, to the carrier. The blockchain component of this is deployed inside our network and deploying into, as we grow it into hundreds of thousands of millions of drivers moving freight, and we're focused on the million loads that are inefficiently being moved, it'll start to quantify. And then as anything, data is the king.

That's the new goal, they say. I didn't make that up. Somebody said it, and is the king. That's the new gold, they say. I didn't make that up. Somebody said it, and it sounded good. But the point is, it has very valuable information because from insurance or government or fuel, getting the best fuel prices whenever you're en route, various different things that affect. A lot of people don't know that 95% of a dollar of trucking goes out the window in cost. Fuel, maintenance payment, driver pay, blah, blah, blah. And so the margin, and so every dollar matters to them. And that's why we're building this network. It's for the smaller independent truckers and the drivers to improve their lives, quite frankly,

because at every angle, they're getting beat down. If there's a late charge that can be assessed, the broker's going to blame you for saying you wasn't there. I was there. I was waiting in line. They had a line out. There was a truck broke down. I had to go around, but I was there. They said, you're late and I'm deducting $150. What's he going to do? He can't prove it. So these are things that are going to matter as the industry moves forward with real data. And it'll stop a lot of major shippers paying 30 to 45 days. There's too much value into the direct network that removing that 3PL is more costly than going direct and paying immediately.

And there's because there's way too much value. So I remember I'm old enough to 20 years ago, a guy goes, there's no way anybody will ever pay online. They won't put their credit card banking information. They won't do that. Everybody does it now. The guy goes, oh, you'll never go without a house phone. You're always going to have nobody's got a house. It's the movement of technology and advancement. And people tell,

they'll never pay within 24 hours. They won't use a network then because that's the business rule, because we have to guarantee payment to the carrier. And the only way we can guarantee payment is to secure that payment at the time the rate confirmation comes. So it's just, and there's volume, right? There's literally way too much savings when a Walmart and Amazon or FedEx or the rest of these guys, when they really understand the model and the amount of savings per load that they can save on a day-to-day basis from a network, there's no way they won't come. They have to, because it's going to affect their bottom line. It's going to affect their stock price. And so if I'm upper management, I'm going to say, bottom line. It's going to affect their stock price. And so if I'm upper management, I'm going to say, hey, at least take a look at this and start running some of them so we can evaluate.

Because a lot of contractual things, too, like large shippers will get into an annual contract with a large trucking company. Why do they do that? Because they want to buy capacity. They don't want to have to worry about these 5,000 loads I have every day and if I can find a carrier all the time because I'm dealing with headaches with dealing with 10,000 owner operators, phone call they don't answer and all the other things. If you have a system that's automating all that and you can go direct and you have real time and then if you don't perform, well, you know what? I got 500,000 other relationships I have direct. I'll just block you and you won't get free from us anymore from a system standpoint, right?

If you don't have your credit card information is valid and you have a subscription and they go bang it and it's rejected, that cable shut off. Yeah, that's true. Or your phone shut off. That's one bill you're going to, oh, hey, I can't call to pay my bill. Mom, can you call and pay my bill?

Because I can't call you, right? You're hooked to your cell phone now. And that's what Lane Access is going to be because there's way too much value in the direct model in A to Z of what it has in the form of cost savings that you're going to be forced to come. This is going to be pretty interesting then. So how can people get involved with it and take advantage of it? Yeah, go to laneaccess.com. We got a lot of videos. We got a lot of information. We've been

doing this for over a decade. We're just at the point to where technology's here, the market's here. We're coming off a pandemic where more and more people now know what supply chain or quote-unquote trucking is because it impacted their life. And 92% of all products move on a truck. So it's something that really impacts everybody. So we have a campaign that's going on right now in Start Engines. We're REG CF, which is a crowdfunding. We've raised, I think, 3.5 million or 3.4 million or whatever on there now. We have 5 million max that we're going to raise. We're going to close that. And we're going to focus on building. We've got some industry. We're building our industry advisory board that gives us from user perspective, things that we can improve. That's our main focus over the next six months

is making it easier for them to transition to increased volume and things like that. But from the individual owner operators and trucking part of it, they love this because this is exactly what they want. Yeah, yeah. Pretty cool. So anything more we need to know about what you guys are doing and how you guys are doing it? No, I think there's a lot of information out there, Chris.

And if somebody's got a question, my email's rick at laneaccess.com. Email me. I'd be more than happy to answer, get it to you the right person. We have system demos. I think it's time for this industry to advance in technologies here. And I hope that they look at Lane Access and the value that it's bringing to the industry. All right. Sounds good.

Give us the plugs where people can find you and look you guys up on the interwebs. Yeah. So come to laneaccess.com. Look at our digital asset, which is accesstoken.io. We're actually listing the token next June 30th on ProBits, which is our first public exchange, which is a Korean exchange, our top 25 exchange. Access Token will be on ProBits starting then. And then we're going to be adding, I think, about a dozen exchanges over the next two months after that. And there's a lot of different because the market is volatile. It's really not about that. It's really about the value of the digital assets in the future. I think all of us probably realize in 10 years, it won't be paper money. It'll be a digital movement of that.

And ours is just monetizing the digital movement of information that's going to grow in transportation network. There you go. There you go, guys. It's been wonderful to have you on and sharing all the technology with us, Rick, and all the wonderful things that are happening are pretty cool. Thank you very much for spending the time. Thank you, Chris. Appreciate your time. Thank you. And thanks to my audience. Be sure to check Rick and his companies out and what he's doing. It sounds amazing. Technology, the future in blockchain.

There you go. Go to youtube.com for just Chris Voss. Hit the bell notification button. Go to goodreads.com for just Chris Voss. Go to all our groups on Facebook, LinkedIn, Twitter, and all those different places. Anyway, guys, thank you for tuning in and we'll see you guys next time.