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Doug Waggoner, CEO of Echo Global Logistics, said he believes the freight market has bottomed out, shed excess trucking capacity and could stabilize by the end of the year.
Founded in 2005 by Bradley Keywell and Eric Lefkofsky, Echo Global Logistics is a global provider of technology-enabled supply chain management services. Waggoner has served as CEO of the Chicago-based company since December 2006.
“The number of trucks is declining, so not only the number of carriers, but the number of trucks in the market,” Waggoner said during the keynote address at FreightWaves’ virtual 3PL Summit on Wednesday. “I think those are all good indicators for us to see that the excess supply of capacity is coming back in line with demand. In January, Echo had about 10% sequential volume growth. I think that’s a pretty good number.”
Barring unforeseen weather events or global disruptions, the freight market could begin to see an uptick in rates by the fourth quarter Waggoner said.
“As supply keeps coming out, we could be into a balanced market, which would stabilize the pricing,” he said. “Potentially, in the second half of 2024, we think we could see tighter market conditions. That would start to put pressure on prices and create some spot freight, which we haven’t had for a long time.”
Waggoner has been working in the commercial transportation industry for over 40 years, including stints at Yellow Corp.
“I’ve been doing transportation for a long time,” he said. “I started right out of college. I went into a management training program with an LTL carrier. I really spent the first half of my career in LTL trucking and worked in a variety of capacities, like sales, operations, marketing, IT, engineering. I actually spent a lot of time at Yellow Freight in their corporate office.”
When Waggoner started at Echo, the company had about 70 employees and $30 million in revenue. Today, Echo Global Logistics has over 2,000 employees and a network of more than 40,000 carriers. The company has about 30 offices around the country, offering freight brokerage and managed transportation solutions for truckload, partial truckload, less-than-truckload, intermodal and expedited.
Waggoner said Echo Global Logistics could be seen as one of the first disruptive tech-focused brokerage companies to enter the commercial transportation space.
“When I met the two founders of Echo, who are tech startup guys … they didn’t know much about transportation, but they thought it was a space where technology could make a difference,” he said. “In a sense, when we talk about disruptive technology brokerage businesses, Echo is really the original gangster brokerage that started back in 2005.”
Waggoner said one big development in the current freight market is the growth of manufacturing in Mexico, with firms either returning or expanding existing operations in the country.
“We’re actually expanding our Mexican operations,” he said. “I know others are as well. There’s been a move to pull manufacturing out of the Pacific Rim and put it into Mexico. I think that’s sort of an exciting opportunity. It doesn’t necessarily create more freight; it just creates freight moving in different lanes.”
Waggoner also touched on the freight and logistics’ industry’s sensitivity to issues such as severe weather.
“For those that have been in the industry for a little bit, we’ll think back to the fourth quarter of 2017 and we had a hurricane in Houston, and then we had a second hurricane in Florida,” Waggoner said. “The hurricane in Houston completely disrupted the national transportation network. Trucks could not get into South Texas, trucks could not get out of South Texas. It disrupted the balance of asset-based carriers and it literally took months for that to right itself.”
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