In the past five years, the increasing complexity of supply chains, changing customer expectations, and constraints on trucking capacity have created an opportunity for high-growth freight brokerages and third-party logistics providers. In this environment, it’s not uncommon to come across completely boot-strapped brokerages with no venture capital funding that have been able to double their revenue every year, year after year.
One of the hottest brokerages in Chicago is MoLo Solutions, founded by Matthew Vogrich in July 2017. Vogrich now serves as MoLo’s President, while Andrew Silver joined in April of this year to take on the CEO role. FreightWaves first reported on MoLo in September. We caught up with Silver on Friday to talk about MoLo’s first full calendar year of operations.
MoLo’s growth accelerated in the last six months of 2018, and the company will end the year on a $78M run rate. Silver said the brokerage added 50 people this year and that MoLo’s headcount currently sits at 73. That number will increase in the first week of January when MoLo adds another 15 brokers.
“It’s a ton of fun, first and foremost,” Silver said. “We’ve experienced incredible growth in the second half of the year. We were able to break down that initial mistrust that tends to exist and develop quite a few strong customer relationships.”
Silver said that MoLo has been able to grow so fast by investing in its people, covering the difficult freight that other carriers and brokers don’t want, building out regional networks to keep its carriers engaged, and taking risks to support its customers. Silver said that one of the hardest parts of his job was caused by his desire to “make everyone happy,” and that it’s difficult to make decisions by consensus in a fast-growth brokerage, but that he loved promoting people.
“Because of the growth, one of the best parts is giving people new opportunities—someone who worked really hard in operations for nine months might be given an opportunity in management,” Silver said.
A viral video by marketing guru Gary Vaynerchuk resonated with Silver. In the video, Vaynerchuk attacks the idea that trust is earned. “People are like ‘trust is earned’. I’m like ‘cool, that seems f—-king slow and egotistical… To me, trust is given, and you lose it if… you’re incapable,” Vaynerchuk says in the video.
“It’s so much easier if you’re willing to trust people up front,” Silver said. “The concept that ‘trust is earned’ is kind of outdated; it’s almost more work than it needs to be. If you can’t trust your people, you find a low ceiling for yourself and your business.”
With regard to growing MoLo’s carrier network, Silver said that he wanted carriers to have such a good experience hauling MoLo loads that they didn’t want to work with any other brokers. MoLo achieved this by building lane density based on drivers’ needs, routing them in consistent regional loops that helped them operate efficiently and get predictable hometime.
“We’ve tried to do a really good job balancing our network and focusing on building out regional business, like out West: between markets like L.A., northern California, Portland, Seattle, and Phoenix. We’re trying to get as much regional business going back and forth as we can to keep drivers in our network. It’s easier to do that if we can keep our guys kind of running on a loop,” Silver said.
Our conversation inevitably turned to freight markets.
“It was a crazy year, right?” Silver marveled. “In general the market was hot—it was a carrier-friendly market. We were sitting here wondering when it’s gonna turn soft and saw signs the last three or four months, but we still caught these blips where rates would surge as high as we saw all year.”
The last two weeks were painful for MoLo: its brokers were making aggressive moves to help their shippers out of bad situations, only to find that capacity had evaporated. Cross-country reefer trucks were especially difficult to source. Silver said that his team was absolutely committed to its customers, and it made him almost afraid to look at today’s numbers.
“Today was a perfect example of how crazy 2018 has been,” Silver explained. “The first two and a half weeks of December were very soft—capacity was plentiful. Now today, it’s been both extremely difficult and expensive to secure a truck. One of our Fortune 100 shippers said ‘Today was the worst day of the year. Every broker gave us loads back.’ Just hearing that gives us confidence that we’re doing things the right way; executing on every committed load, regardless of profitability, is a recipe for growth and success for us. Today’s margins were awful, but our customers were thankful we came through for them.”
MoLo is bullish on 2019: the brokerage signed a lease for an additional 7,500 square feet of space, which will give it enough room to hire 90 to 100 brokers next year. Silver said MoLo recently brought in an experienced broker to head up a new flatbed division.
“I fully expect we should be able to do over $100M,” Silver said. “Even if the market slows down, we’re not scared to hire people because we’re thinking long term anyway.”