The CTO Perspective with Mario Paluzzi
[Music]
welcome to the logistics of logistics a
podcast dedicated to exploring how
things get places and the people who get
them there we’ll talk with Logistics and
supply chain leaders about Innovation
industry Trends and the future of the
logistics business now here’s your host
Joe Lynch Hello friends welcome to the
logistics of logistics podcast my name
is Joe Lynch thank you so much for
joining us today today’s topic is the
CTO perspective with my friend Mario
palui how’s it going Mario good Joe how
you doing excellent please introduce
yourself and your company and where
you’re calling from today sure calling
from uh Sunny Michigan it is a sunny day
for both of us I think Joe being
Michigan boys yes currently CTO of a
commercial trucking insurance company
Reliance Partners fastest growing in the
space highly focused expertise on on our
bench and coming here today to talk
about CTO perspective excellent
excellent and Mario where you calling
from today calling from uh Detroit area
Joe excellent excellent so I know a lot
of people listening are going oh my God
Joe’s talking to an insurance guy but
you are not fully an insurance guy talk
a little bit about your background
before you uh became an insurance guy an
insurance guy oh now uh started actually
like most CTO in logistics focused
insurance companies went to Michigan
State graduated with an advertising
degree with a focus on Spanish found my
way out to ALC call it sort of the the
hot bed of of logistics Talent
Development over in Chicago had a little
company called Coyote Logistics back in
the day wow work there worked there for
quite a while actually started in in the
carrier relationship game uh worked my
way into technology left there is a SVP
of tech strategy and delivery found my
way over to a a company logistic
Dynamics based out of Buffalo CIO over
there and then met back with uh we’ll
say some old friends on a really fun
kind of roller coaster ride upward
trajectory over at this company Reliance
Partners so very you know it it is
insurance but uh I like to think we take
a very kind of logistics focused
experienced approach to to insurance so
do you guys insure trucks or Brokers or
who do you who do you all all of it Joe
if you if you if you uh can say you’re
related to Logistics we’re happy to talk
to you but yeah a lot of names I think
you would know in the in The Brokerage
in the in the large Fleet small Fleet
carrier space we offer Solutions you
know up and down as well as just General
commercial insurance but yeah our focus
is on no trucker left behind we say
we’re gonna we’re gonna find the perfect
the perfect solution for for anybody who
talks to us excellent excellent so Mario
before we get into all of this your
background you mentioned you you didn’t
come from the tech side you came from
advertising Logistics and how did you
get into the tech side it’s a great
question well anybody listening to this
that knows me knows uh I’m not great at
holding my opinions back we’ll say or
are keeping my ideas quiet but so
started in started in the carer sales
space at Coyote and you know at that
point a relatively small company far
smaller than it than it is today but the
you know we had a technology department
we were doing good things I was brought
up as of one of two kind of initial
product owners so in a role that was
very kind of the bridge between uh
business and technology and then from
there oh from there we you know the I
guess the story the story unfolds but I
think it’s a good Testament to a lot of
people out there technology is a
language you got to learn and that that
makes sense but at the end of the day
it’s a business department right it’s a
it’s a a function of the business
increasingly more so every day so Y and
what I like about when we were talking
is you don’t have just the the tech side
and you have the logistics side and the
broker side and now in the insurance
side but also the CTO and and what I
joke about on this podcast sometimes is
we have a lot of people who came purely
from Tech and they’re trying to
understand freight broker they trying to
understand 3pls carriers that the whole
business that you know you were kind of
born and raised in and there’s other
guys who were coming from a logistics
perspective maybe a warehousing
perspective and they don’t know Tech but
they are fantastic operators fantastic
sales teams and we have to get I think
and you’re one of them you’re that new
breed that has both and I think that’s
increasingly what we have to become and
that I think people listen to my podcast
I hear feedback from it is I need to
understand what’s going on out there
because I’m not a tech guy or I’m not a
logistics guy and I need to be and
there’s and there’s a quick way to power
through that if you’re going to deal
with a problem you should have folks
with that experience on the same sitting
around the same table as the folks with
the tech experience and and and you know
break down some of those walls where I
think a lot of this stuff goes around
right and I always say like I’m not I’m
not from theuh Tech side either and what
I always joke about is there’s a fear of
of not not seeming smart so you go into
a meeting sobody says hey an API for
that don’t worry about AI will do that
ml will do this and you’re like oh yeah
okay yeah the secret is most of them
don’t know what it means either so I
think the name of the game is keep it
simple and you have to be able to
explain simply what your technology is
being doing and I think you know you got
to involve the guys so I think where you
came from you guys obviously did that
very well at Coyote because that’s what
they’re known for sure anyway so we had
before we hit record we were talking for
a long time about a whole bunch of stuff
but we were talking a lot about the CTO
perspective and you put together some
talking points so we have four or five
points I want to talk about today I
think we could probably do 10 but let’s
just do five
so what is the CTO perspective looking
at the transportation Logistics 3pl
space give me that first point that a
CTO like yourself looks at yeah I think
I think first off it’s it should be said
that where we’re at today even you know
one of one of the earliest things that I
was doing you know in in the tech space
was working on a mobile app you know at
a logistics brokerage now you look
outside and just about everybody has one
you know there’s even companies like
Hall hero coming online that are saying
why don’t we create a mobile app that
anybody could use you know at various
different brokerages so to see where
it’s evolved to today where you know my
LinkedIn feed is filled up constantly
with we got real-time quoting and we
have a digital Marketplace and we have a
mobile app it’s it’s it’s pretty
astounding to be honest with you I think
I think what will be interesting to see
is now in this particular space Tech
technology is is a baseline to play the
game if you don’t have
technology can’t speak table Stakes
right so what what I think we’re moving
through very very quickly because this
is the tech Bas uh I think what we’re
moving to quickly is who’s going to take
that next lead you know now that
everybody used to be we have a mobile
app isn’t it great and now it’s you
knowy a driver now needs to have 35
mobile apps if they’re going to work
with 35 different you know different
Brokers providers so it’ll be
interesting to see how who who can move
Beyond sort of the standard this is the
thing that didn’t exist we now have it
what are we going to do to to extend
that to start creating uh you know more
impact across the whole value chain
right uh tracking is a great example now
you know 15minute tracking is the is the
new sort of uh this is just the standard
this is what people are looking for how
many people can provide it a ton there’s
a ton of providers that’ll that’ll link
you up to it and you know their names
but now what do you do with that
tracking I can follow a DOT on a map
great I can show you the dot on a map
great but what are we doing to actually
use that information to dynamically you
know improve the outcome of a particular
show shipment I think that still is is
has a ways to go yep yep and so we were
talking about
investments in Tech coming up short so
that was one of your points you had sent
me an email on so what do you mean what
do you means coming up short yeah so I
mean you and I actually we were having a
good conversation around that the the
you know PWC survey and there’s there’s
a pretty significant yeah I think I
think that was shared I think I say Mike
mqueen somebody was shared it on
LinkedIn I forwarded it to you and you
actually knew what it
meant knew enough I suppose but yeah I
think I think it’s interesting to see
right it was it was you know the amount
of of tech investment going into this
space and you’d assume that everybody
was just getting wins all over the place
and high-fiving one another but there is
a significant amount on that pie chart
right of of people saying we’re not
getting what we want and I think I think
a large portion of that goes to one of
our first points which is this is an
age-old industry this industry has been
going around since you know going on
since Carriage the difference is now
Tech is slamming into it full speed
right saying this is this is a the table
Stakes to even play the game what’s
happening is you have this kind of
interesting old old new Dynamic right
and I think I think what where people
are finding some of that displeasure is
they’re saying oh just like any other
operational thing it’s like a warehouse
we just got to optimize we got to get
the one thing and when this thing is
done we’re now better when in reality
this is a very interconnected system
here uh knowing you know having tracking
information without the ability to know
how that adjusts you know what your
actual scheduled appointment time is at
a particular dock or the ability to you
know to dynamically adjust what carriers
are performing better than others based
on information that it’s a much Wider
Circle and I think that’s what we’re
starting to see right is this this very
small maybe from a pickup to a delivery
we’re just slamming Tech into that
particular spot but it’s interesting you
know I think people are going to have to
start just thinking bigger the reality
is Joe not a lot of that stuff is online
and I think I think you’ll see more
people in this industry like myself
getting out into some of these other
parts of the greater sort of supply
chain even just sort of this Logistics
focused area of the supply chain but
putting some of those components online
and and allowing people to use that yeah
and I think what you see is when you
start when you when there’s this big
call it like almost the Gold Rush right
everybody needs Tech so everybody starts
spending and not every Tech dollar not
every dollar invested in Tech has the
same impact and and I think we get to
these local optimums right so when we
think about your technology spend you
need to make sure that you’re actually
getting an Roi on it and I think all you
ideally I want to say we spent $100,000
on this new tech whatever it might have
been and it saved us this much time or
added this much more value for our
customers it can’t just be we spend on
Tech and I think in in the push and
again I think everybody feels that push
right now spend spend spend and we had
some good years here then a lot of
companies spent a lot of on Tech we got
all the VCS saying spend on Tech yeah we
got to make sure those dollars actually
were well spent well that’s a
fundamental I mean some of this is
what’s happening in logistics but
technology in general right if you go
out and say you know and a lot of this
is very Project based and it goes back
to I think the the maybe the more
operational mindset that the industry’s
always had but if you come in and say
hey if we complete this project we will
be we will have succeeded on this thing
very rarely is that going to work out
for you now now what you can do is say
hey we’re going to reduce this by 10%
and we’re going to or we’re going to
shift time of 10% of this person’s time
should now be focused on this thing
that’s a better use of it now you guess
what there’s a thousand ways to do that
and and guess what nobody’s going to
know the right one so what you need to
do is you incrementally keep solving
things and if it’s moving that needle
whether you think it’s the best idea in
the world or not if it’s moving that
needle you’re doing what you need to be
doing and spending your dollars
correctly and I think a lot of you know
I think that’s a hard mindset for people
to get into because it’s you know this
thing is exactly right we’ll build it it
better be on time and it’s all going to
be perfect I’ve been on lot of projects
Joe that’s not how they work well I I
know you being the CTO you’ve probably
gotten in trouble for this kind of thing
in the past uh or been asked these
questions got in trouble for a lot of
stuff in the past but when somebody says
hey Mario we spent that money what is
the value and you go well we’re trying
to figure that out wrong answer right
yeah exactly no that the measurements
come first I think that’s the biggest
thing that’s happening is the all of
these systems are creating data we all
know that right and the data is becoming
robust people are thinking data first
I’m going to have this but where am I
going to store it and how can I report
on it to know before I start this 10% is
the number I’m looking at so I better
have a way of quantifying what I’m doing
against that 10% to see if the needle’s
moving but I I can tell you there’s a
you know any any well executed
technology initiative technology project
is going to involve complete buyin from
folks all around each side of the
company sitting around a table and all
believing that the outcomes will matters
because you’re never going to be able to
do it in isolation if you come up to me
and say why didn’t this project succeed
you know and well why did we do this
project you know you can go back and
forth it’s it’s we want to get to a
common number that we can all understand
we know that this strategically is what
matters is moving this number increasing
it or decreasing it now let’s sit around
and find the best way to do it and if
it’s working you know hell if we knew
how we got there but if it’s working
then we’re doing the right things let’s
keep doing them right so the first point
is and it’s really based off that price
waterhous Cooper’s yeah research and I
I’ll put a link to that in the show
notes is the first thing is some tech
Investments are coming up short not all
some and and it’s more it’s more than
anybody wants to think about and so we
really have to really be diligent
upfront before you before you rate that
check to the techies make sure you
understand what you’re trying to get
from it and and a good CTO will steer
you in this direction absolutely and
don’t get lost in the words it’s big
data it’s got AI it’s got you know
listen I once again this is not the
space I I thought thought I’d end up in
right but I find technology to be really
intriguing because it’s the single best
way I I I feel to solve a lot of these
really big highly impactful you know
business problems tell us what is the
second second thing that a CTO will be
looking at when it when you move into
like a new project yeah I mean one one I
will just reiterate on on the last topic
we can’t get lost in the words right the
words at the end of the day the these
are all you can explain them in very
simple terms how the how the you know
the sausage is being made is is another
thing but I the end of the day having a
Clear Vision from a business perspective
and making sure that that Tech Team buys
into that business perspective because
they have a lot of things that they can
make decisions on constantly that are
going to say oh that’s not as big of a
deal as we might think it is because we
know the business problem is X so I’ll
keep going back to the single thing
being if you can stare at that objective
number and you all know laser focus that
that’s the number that needs to move
you’re going to find success no matter
what most importantly because when it’s
not moving you’re going to cut bait and
you’re going to figure out something
else right you’re going to figure out
the right way to go don’t keep mining
because your name’s on it and you feel
like you got to get there right the
reality is we’re going after a number
and there’s a lot of different ways to
get there I think I think another thing
you know that can lead to stuff like the
you know dissatisfaction with some of
the technology initiatives it’s focusing
on constantly being Time Savings
technology is great for saving time you
can automate right you can you can
amplify what one person can do all of
that matters what are you going to do
then like we we’ve reduced the cost we
have less bodies doing this particular
task we think is is simple what how are
we upscaling people right how are we
making systems this is a big a big
Direction I think a lot of this goes
which says yeah we know that this is
trending to be late today that’s what a
system will tell you you don’t have to
track you know put the tracking notes in
there the system can tell you how
something now what do you what what is
the system doing to advise the best way
to to solve that particular problem
right and I think that’s what leads to
the best outcome specifically in kind of
the in the the broker space that’s what
leads to the best solutions for you know
the shippers and the carriers who are
going I don’t know what you want me to
say it’s raining I’m pulled over on the
side of the road you know I’m not going
to get there it’s how can we then
readjust everything dynamically across
these systems and and that’s where a lot
of this is going to require more systems
coming online being able to you know
play the game in more of a kind of a
platform ecosystem yeah I think we all
had these things that we did anodally
for a long time so I would say to one of
my shippers hey you know I could save
you I could get you a better rate on
that truck if you would just call me one
day sooner cuz you keep calling me on
Thursday night saying I need a truck
Friday morning and on and and you keep
screwing me up on Friday the on the 31st
of the month and asking why I can’t get
you a truck on well we all kind of
anodally knew that if you called me on
Wednesday and said I need a truck I’ll
get you a much better price right we
knew that so we said those things now
you mentioned the upskilling right so
now I’m now as a a freight broker a 3pl
now that I have maybe better data now I
can say show actually show a a customer
a shipper guys here’s here’s here’s the
average price for that lane when you
called me on Thursday when you called me
on Wednesday it goes down 20% if you
call me on Tuesday goes down 22% that’s
at so I think then we get to the point
where we’re becoming consultative
everyone loves to say they’re
consultative but actually with data so
now if I have really good data and I go
see my shippers and say yeah you want me
to save you 50 bucks on this let’s not
talk about 50 bucks in this load let’s
look across this year your annual spend
how would we save you 10% on that and
and it’s with data you know and take it
a step further than that Joe let’s not
even talk about saving money let’s say
spending the same amount of money but
reducing the amount of spend you’re
you’re you’re dealing with because
everything’s out of whack and it’s all
last minute and it’s all out of time so
if you could get a more consistent
reliable you know safe experience on
that particular shipment you might pay
the same amount because the disruption
upstream or Downstream is going to be
far different and I think that’s that
bigger picture how do you get there it’s
to me this is an industry interestingly
enough where as much as it is everybody
must be a part of it to function like
any big macro thing but it’s very Sol
it’s very walled off it’s uh if you
would just tell me you were running late
and this person knew that in advance
they would shift it around because they
don’t want to be staying over after
hours to unload it anyway right but what
happens is it’s very you move thing from
here to there it’s my job to tell you
you know to do the thing that moves it
to the next step and we need to be these
those walls here and I think I think
that’s where this whole thing this is a
very simple thing when you stare at it
and think if all these things were
talking to each other this all sounds
pretty straightforward right right but
there’s a lot of walls and I think
technology needs to help break them down
people need to be willing to to partner
on there’s a new Baseline let’s all
partner and just understand this is what
it is today now make your
differentiation what you could do beyond
that that’s that’s where it gets
interesting take those silos out of
there and by the way you mentioned it
doesn’t necessarily have to save money
there was a project I worked on years
ago not so many years ago right before
Co though and it was a company spent a
lot of money every year on freight and
they said we need a new potentially new
third party logistics company and we did
get that and what’s interesting is I was
working with one group of guys from
procurement who just said Joe just save
us money save us money save us money
save us money project shifted over to a
VP who was not from Logistics just and
he said well I’m looking at and talking
I’m looking at some data here I’m
talking to some of our customers and
they hate the way we deliver they hate
how there’s a lot of damage there’s a
lot of uncertainty and then he said and
you’re telling me we should save money
and and I and I was like well I’m not
that’s just how the project started and
to his um he came in with fresh eyes and
said let’s do this really well and and
he had a different perspective which I
loved and he said let’s win business
because we do this better than all of
our competitors let’s so so we always
have this you you mentioned earlier a
narrow perspective on I picked it up at
this at DC and I delivered it here that
is the whole world it’s not the whole
world right there’s a big world Beyond
us right not at all and so I think that
is that is part of that upskilling and I
think we we’re going to have a lot more
data to look at and I think we all have
to kind of plan on all right a lot more
of the work is automated a lot more of
the work is as easy rather than managing
10 loads maybe I’m managing hundreds
because the technolog is doing something
what value am I going to add so I think
that’s a great point I think that’s a
big question people are going to have to
answer inside of themselves right it’s
listen this doesn’t get any the jobs
don’t get easier just as technology
grows normally technology takes care of
the easy ones every day you move it it’s
this amount of money it goes from here
to there that’s a very predictable
problem right those things start to go
away what happens is now this is
difficult I have 100 shipments and I’m
only dealing with these complex problem
solving scenarios where I have to find
my way out of this this difficult kind
of corner that I’m in and help somebody
advise them on how they do that that’s a
different that’s a much different type
of job and it and it’s just where this
is going to evolv to right so we all
have to what what it really means is
from the CTO perspective which is what
you are is we need to prepare our teams
that as as the tech does the easy stuff
it’s going to throw you into a job that
is more difficult and I think what it’s
going to require us to do is
become rather than say I’m a freight
broker or I’m a 3pl and I only do this
to this you’re going to have to say I’m
a retail expert and I understand the
retail from ordered from the time it’s
sourced in China to the time it’s
delivered and I understand the reverse
Logistics in case there’s a return and
that’s what we’re going to have to
become become part of that supply chain
not just uh not just a little Cog and a
big machine absolutely I I love the
concept uh t-shape right doesn’t mean
you can’t be a little wider up top and
and be sort of dynamic right but it’s a
what do you what is your thing right
what is what can you say you’re an
expert at and to be honest with you why
don’t we how do you make systems so that
somebody who starts day one is is 10
times faster at getting to that point of
expertise than somebody else I believe
technology is a very important aspect in
doing that right yeah I’ve said it many
times is you want to be you don’t want
to be I should say a mile wide and an
inch deep you want be an inch wide and a
mile deep but you can be that t-shaped
as you said which is have knowledge of
the entire supply chain and be
potentially really good at the the the
the uh the freight part of it and I
think Joe a lot I mean we haven’t we
haven’t even touched on or seen really
the impacts of what sort of this big
broker kind of explosion is going to
lead to which is a lot of people that
are going to find their ways into a lot
of these Niche parts of the industry
right so there’s more I mean you know in
college there wasn’t a ton T of people
saying I’m going to go work at a freight
broker five years out of college a lot
of people that I knew were working at
you know at freight brokers it’s a it’s
a job that sort of was a perfect way
into the supply chain industry which is
is only growing from here so I think you
start to find what’s this next level I
mean I look back to people I’ve worked
with you know at Coyote and and it’s
funny to see where they’re all at you
know all the different companies where
they’re a lot of them are in these high
high leadership positions and it’s
because you know that’s how this is this
evolves I think you start to to have
more of that expertise because guess
what the baseline from technology means
that we’re all good enough okay we’ve
all reached that barrier once again now
what makes us what is the true
differentiator if we have we have a
mobile app we you know we have real-time
tracking and just speaking about the you
know the freight brokerage space if we
say that that’s not what everybody has
now what’s going to make you different
than the next person you know that just
has another person on a phone calling
and solving problems I think I think
it’ll be interesting to see who really
capitalizes on that and when I say
really not who’s got a shiny sexy look
at this brand new thingy maab and we the
first ever who’s made this magical thing
happen and and really kind of and and
kind of peel that back a bit and say
what are you actually able to do and and
if it’s through technology you know
what’s the convincing what’s the
convincing story you have that actually
shows Tech’s making a difference other
than just I have I have this thing isn’t
it shiny which happens a lot Joe yeah of
course yeah well this this is still an
industry that is consolidating it’s an
industry that is is still going to see a
lot of um big changes as the private
Equity guys come come in and the Venture
capitalists come in and you see huge
carriers are going to get bigger the
bigger the because they have some
advantages and we’re also going to see
some of these large Brokers are going to
get bigger I don’t think we’re going to
see 17,000 Brokers like we have right
now in 105 years I think it’ll be a lot
less sure and so I’m going to summarize
the first two points we talked about
then I want to talk about the third
point that the CTO well perspective is
so first off a lot of tech Investments
are coming up short uh they’re solving
as you wrote a uh isolated problems in
logistics with limited impact and so we
have to really be careful that when
we’re spending money that we’re actually
getting business value whether it’s
adding more value for the customer
giving us a competitive Advantage
reducing our cost something there has to
be there has to be a a return uh
secondly we talked about the industry
itself after we’ve had these Tech
Investments the people working in this
industry are going to have to change
what they do because if you want to
still be part of the equation you’re
going to have to add value in a
different way and there’s a lot of
people who’ve spent started their career
tracking Freight building carrier
networks after a while when that stuff
gets easier and easier because of
Technology you’re going to just have to
keep upskilling you’re going to have to
find a way to say I I’m the guy who can
look at the data and and make
recommendations that makes the process
better absolutely and faster better
cheaper and that’s and that’s what the
human brain should be doing right it’s
it’s using creativity it’s using it’s
using all the various different
experiences you have to go help solve
the increasingly more difficult problems
as the machines get better at saying
you’re just going to say one so I’ll say
one for you like what you know how do
how do we how do we put those brains to
good use which is going to lead to
better technology lead to better
services and experiences for everybody
in the industry so it’s a worthwhile
Evolution what’s that third point that
the CTO wants us to pay attention to
well now the I I go this kind of bleeds
into what we had talked about before but
it’s the partnership angle it’s the it’s
if all the silos were removed you know
the amount of streamlining efficiency
the amount of true visibility people
could have goes a long way and I think
those Partnerships are are sort of that
that how we get to that level too of
what Logistics technology is and that
means being willing to share data with
folks that you might consider a
competitor competitive you know
competitor enough I guess right because
together you know there’s there’s five
six seven brokers in this industry that
have combined a ton of data on the
shipments that are moving every day but
each of them independently have a you
know maybe a small boat floating in this
giant ocean the way you get to real
efficiency where you get to the real you
know kind of the smart the smart
machines that can do some of these
things you need those inputs you need
that information and I think you know
it’s going to take some people seeing
the proofs in the pudding but if you
could like paperwork I’ll go back to
paperwork as being one of my and maybe
it’s just me but one of my least
favorite parts of the entire industry
because even as Tech starts to
proliferate and get better we have we
have other companies companies coming
online that are making it easier they’ll
read the paperwork for you and tell you
if the paperwork says it’s we know we
physically have you know technology
especially with things like Els we know
who was where now we’re still missing
that Gap that says this was the shipment
that was now put onto this truck and
I’ll bring that over to an insurance
perspective which is if we know when
you’re loaded when you’re not loaded we
we have physical facts when those things
are being put on what Commodities
actually are being put onto your truck
you know when you’ve crossed that that
borderline from us to Mexico this is
where insurance heads to which is this
you know kind of behavior usage based
Insurance model where it’s hey this is
what you need right now to ensure your
risk and this is what you don’t need
instead of these kind of well I could be
moving something worth this so therefore
I’m going to have that there you know
there’s Federal minimums and things like
that today but we’ll see if that starts
to adjust which is you know you’re
moving on this risky path and you have
this risky commodity and therefore you
want to be you want to cover your risk
higher than that and I think that the
example with that if you don’t have an
insurance partner who willing to
evolve in that direction and partner in
that kind of way you’re going to be
still paying that single single policy
amount and just hoping hoping it you
know that you’re leveled out at what you
should be paying across the board which
we all know isn’t true that even look at
now today you can put a little dongle
for your own car and it’ll say you’re a
safer driver than the other person you
know we have elds we’re mandating it for
safety well let’s start using it and and
we’re working with a lot of Partners
today at at Reliance partners that are
moving into that space okay well if
you’re being safer and elds are meant to
make make sure you are why aren’t we
giving you something back or reward for
that before we hit record we were
talking about tomorrow IO and I’m going
to introduce you but tomorrow IO has
this weather app and what they were
saying and they were on my podcast is
25% of delays 25% of accidents are tied
to weather can we can we start looking
at the weather and saying I’m going to
I’m I’m I’m going to adjust some of my
loads so I don’t hit bad weather and the
reason I’m going to do that is because
I’ve done the math I’ve done I’ve worked
this out I’m more likely to be able to
be on time and again somebody said to me
breaking it down oh we’re going to delay
a load because it rained that’s that’s
breaking it down really overly simp
oversimplifying it a complex problem but
if I know if you knew as an insurance
guy hey these guys don’t they they Route
Around the weather and as a result they
have fewer accidents well we’re going to
get a we’re going to get a better race
and if we can prove hey most of the time
our trucks are carrying this load as
opposed to a more expensive load I can
do get better my rate this is to your
point collaborating with the data that
we’re now starting to have and I think
and we just need more visibility into it
so you know seeing this from an
insurance angle you know you can spend a
couple days looking at it going oh man
this is stuff that that a lot of people
would love to be able to to understand
and and honestly all the way down to
insurance is one angle but the more of
those components that come online which
I expect to be happening over the years
as people move into more of these Niche
spaces when you’re talking about weather
when you’re talking about Dynamic
routing when you’re talking about things
like uh dynamically adjusting kind of
your risk coverage it requires
Partnerships up and down the supply
chain right it requires you know a topic
that comes up we talked about early on
Joe is like the blockchain right we’re
gonna it’s all going to be a blockchain
which is another one of those big data
AI let’s just throw a word out there
right a blockchain is is nearly useless
if you say I have a blockchain from the
thing is picked up to the the thing is
delivered what thing you know and what
happened after that fact and just
because it was delivered did it actually
get moved from the dock into the into
you know where it’s going to go through
fulfillment whatever like the all of
this requires that collaboration up and
down and I think it’s it’s funny because
you put up these walls assuming that you
know that that’s going to produce some
sort of benefit to you or you wouldn’t
know what it is that I do but hey that
guy who got stuck on the side of the
road for weather he’s going to be late
you can yell you can scream you can
shout you can not unload him you can be
as mad as you want he’s going to be late
and and in doing so it’s going to be
disruptive to the operations you have
why why aren’t those systems able to
talk and say listen hey now here’s what
we’re trending to move this person in
front of that one because he’s going to
be early move this one instead of that
and a lot of this comes down to you just
say well you’re third in line I’m still
waiting on second in lines to sit there
until second in line comes right and I
think blockchain and again that’s a
whole another topic but it is blockchain
is so we can collaborate and I think
what it allows you to do is we I can
share the information let’s just say I’m
sharing my information with you and 20
other companies but I’m sharing only a
sliver of of the information and
blockchain will let me do that but we’re
doing it all in real time we all will
make better decisions because we shared
and again it doesn’t mean everybody can
see my business I can share what I need
to share but anyway I like the idea it’s
it’s collaboration it’s the connectivity
with all the systems and all of the
partners that we want to connect with
absolutely so I’m going to summarize
some of these and then I want to get you
on to the next point here but first off
Investments are coming up short the tech
Investments so from the CTO perspective
we need to do a better job of
understanding the business value of this
secondly we talked about logistics
should be more about not just about
savings find new ways to add value and
and people get used to the idea that
you’re going to have to solve
increasingly complex problems because
that’s what people do uh last we just
talked about this this idea of
collaboration and expanding the reach of
logistics Tech kind of beyond what we’re
doing right now and that’s really
knocking down all the damn silos and
even maybe collaborating with people you
never thought you’d collaborate with
before so what’s the next one I mean
these all kind of blend together so but
I think the the kind of you know I’ll
say one of the final points that we had
that we had talked about right
is how expertise shines brighter I can
tell you you know at the company that
I’m at right now our entire executive
board has been the client right has been
the people that we serve understands
their frustrations or has worked
directly alongside of them in this
insurance game directly to consult on
that and that is a huge reason why when
we walk into the room and we talked to
you know some of the big names you know
we we have something to offer that
others don’t I think you know outside
from aside from the little promotion
there of ourselves I think I think
that’s where this starts to become a
from the sea of same and it’s all we all
are the best at the thing you’ll never
hire like we do and you can never find
the thing what yeah we got it but the
reality it comes from how you serve up
that expertise and a lot of that’s going
to come from the systems that you do to
wash away the rest of it which like I
said sort of a bit of a redundant Point
here but I think how Okay so let’s talk
maybe we we’ll go a level deeper how do
you get to that right and what it comes
from is you can’t if you start at square
one with the Partnerships that you’re
working in and and hey this is uh you
know we really like this one partner
whether it’s insurance or it’s
development right or it’s whatever
technology platform if you’re starting
at square one with them and you’re
catching them up on all the expertise
that you have you’re just delaying
you’re delaying getting to even that
first stage then launch from there so we
very you know strategically pick the
partners we work with one that I know
you’ve you’ve you’ve known before which
is mtech these are these are people that
Logistics is simple at face value at
least you know in this brokerage and and
even in the insurance space I have
information I have you know I have
various different places I can I can go
to to get you a policy and let’s just
connect those two dots every level you
peel that onion back further and further
and further the harder it gets and I
think I think people as we start talking
about coming online and as we start
talking about Partnerships people are
going to fall to the Wayside it’s kind
of that innovator dilemma kind of thing
to some degree where it’s you know well
we’re the biggest and baddest and it’s
like cool but but what is your what is
that Network around you look like what
is your team look like not just how good
you are inside but what does your team
look like and and when the next guy is
getting uh prioritized on shipments
because his safety data is straight you
know coming from the horse’s mouth being
very visible in front of that TMS or
that that RP system that person’s going
to going to beat you out in those things
even if the prices are the same or the
prices are slightly higher so what are
you going to do are you going to start
then and say okay we got to ramp this up
and we got two years to get there I
think this you know it’s getting more
competitive because it’s getting harder
right and I think you mentioned partners
and and so I think for a long time when
you think about carriers and Brokers and
the shippers the you’d have brokers in
the middle saying I’m going to try and
get that carrier to take a look less
money more and more the data says Hey
the Lane is worth this much you know so
you might get him to knock down 25 50
bucks and then you try and convince that
shipper oh no you have to pay this much
this is the going rate and he looks and
says no it’s not I I I have the same
data you do right so how do we make more
money how do we do better is how we
partner so maybe maybe I say hey look
I’ve got a smarter Insurance partner
like Reliance and I get a better rate on
this because we did this this and this
what so it’s it’s expanding beyond the
old I knocked $50 off the carrier and
added an extra 50 bucks to the shipper
and that’s what makes me a good freight
broker nope what makes you a good
freight broker is this collaboration
potentially with an insurance company
but you mentioned mtech I think they
work
with dozens of lots logistics companies
and tms’s transportation management
system so I think what’s interesting
about that is that’s potentially an
advantage so when somebody says hey can
you do this this and this for us well
you might be a logistics company and you
don’t might not have a big Tech bench
it’s nice to say oh yeah we absolutely
can do that knowing you got a partner
who can do that for you absolutely and
that’s where we got to get to because if
by the way we’ve always known the
importance of carrier Partners sure I
said I’m see to do the air quotes
because not every carrier is treated
like a partner by every broker but but
the Smart Ones are doing that and talked
about you know your you in the insurance
biziness now
you want to have a car I mean an
insurance carrier that is your partner
same as I want a tech partner so I think
this is all comes back to this
collaboration because the way we’re
going to stay in business the way we’re
going to add more value is going to be
by more more collaboration opening up
your mind because it’s just not going to
come the the way it came years more
inputs Joe listen can I can I tell you
the the biggest downfall of uh kind of
marketplace pricing I move the shipment
it’s $500 my system now knows another
shipment that I had used I used the last
year of data that told me it was $500
well I just added another $500 well
guess what I’m going to price it for
next time $500 and then it gets in these
Loops so you start to be in that tiny
Circle right so now you say well what
can I get from the outside right looking
into the past to infer the future has
some Advantage right but there’s what do
you now put what can you do to tune
those knobs and I think the more you can
get inputs from these outside sources
and the more that people start to bring
those things online I I think you’re
going to have a huge advantage in how we
can actually moves from that pricing and
and to be honest that comes one of those
like to me that’s another one of those
right to play the games where listen
this is going to be this thing let’s
stop pretending that it’s anything
different move those out of the way now
let’s talk about this really difficult
hairy problem and see who’s the best at
solving that particular one and that’s
not just Brokers right that’s what
carriers can can provide the best
Services the most reliably right which
are the ones that are going to be the
safest on the road and and and are going
to be able to you know connect back to
these systems that then can kind of
drive more efficiency across the board
so there’s a
there’s a lot of data out there and I
think it’s it’s the beauty is we’re
creating more and more of it every day
the difficulty is you got to build
things on top of it to make it
consumable and you got to find you got
to get out of your sphere of data and
assume you know I don’t care how many
shipments you move in a day you’re still
moving a pin drop of the total shipments
that are moving around the country in
the world so how do you expand those
views and get more more creative you
know how do you get more inputs that you
can make your own proprietary sort of
decisions right and it really comes down
to how you’re doing it today is probably
going to be probably not going to do it
the same way next year things are
changing very rapidly and the cost is
coming out of this so we have to find
new ways to add value technolog is going
to do a lot of the simple stuff so I’m
going to summarize these couple points
here that and then I want to get your
final thoughts on this and before you go
I want to hear what’s going on over at
Reliance so first thing we talked about
was the PWC survey which I will will
will uh put a link to that research in
the show notes but it’s really the the
idea of tech investment coming up short
a lot of companies rushed in to spend
money on Tech and they didn’t all get
their money’s worth and boy oh boy that
that really screws you up because other
people are getting their money’s worth
and by the way next time you go back to
the boss and say hey we want to we want
to do this this and this they’re like oh
like last year when you wasted my money
yeah honestly so we got to make sure
that we’re really getting the value out
of our Tech investment secondly
Logistics Tech is going to do the easy
stuff the freight Tech stuff that we’re
all talking about all the time on my
podcast is going to do the simple work
so you have to we we as an industry are
going to have upgrade our skills and
we’re going to have to become uh you
know I use the term data scientist but
it’s being able to look at data and
infer some things and make
recommendations well beyond of what we
did an adly for so many years second
third point we talked about is this idea
of collaboration we need to collaborate
we need to be able to kind of if you’re
going to add more value that means
you’re probably going to get that value
from some Partners it might be your
Insurance Partners it might be your
Freight Tech Partners the guys who do
your your your new app or help you
connect to the Erp that you couldn’t
connect to that’s where we’re going to
we’re going to get more value by
collaborating and I think we all we all
have had this idea that I got to put my
arms around my business and not let
anyone know everybody’s doing it’s kind
of the same way I’ll tell you the best
example that Joe already there’s a lot
of a lot of people out there have their
own load boards today there’s two load
boards that both of us know that most
people listening to here know we’re
we’re both where most people still meet
that’s still the water cooler what is
that that’s a a pure example of
collaboration which is that people want
to go to where there’s where there’s all
sides of a different equation because
that’s how you fill in the gaps on this
stuff and I think you know that’s a very
telling example of if you can work
together it’s useful I want you to to be
able to get a shipment from someone else
because it’ll get you back to to my ship
or where we got to go move the thing
that’s collaboration right now that’s
got to be done by Grassroots and maybe
you talk to a guy and you figure it out
technology should be to solve a lot of
that stuff but it’s not going to if
people don’t work together on it right
so final thoughts from the CTO
perspective Mario final thoughts wow how
much time you got Joe now I I I think
what’s most I would say that this if
you’re not excited by where we’re at in
this industry at this time and the
things that I I’ve been very very
fortunate I’ve been in the Shark Tank
you know the think tank the dunk tank I
feel like I’ve gotten a lot i’ I’ve
gotten I’ve been through quite the
ringer over the last you know 12 13
years years and I I think what just
seeing what it was to what it’s become
right now and seeing how many people are
staring at the problem saying yeah
you’re right Tech does have an advantage
here Tech is not the answer to anything
by the end right it’s there always is
Tech should be removing all the stuff
that’s not what what we’re good at and
letting us shine is as you know as
humans and what we can do and I think I
I’m excited to see this is going to be
an interesting inflection point right
it’s a we can raise big money and we can
put out a shiny app and we you know and
all these other things a website and
we’re going to do Dynamic this and
dynamic that and we’re using models and
Ai and good great what we’re doing is
creating a bunch of data now who’s going
to be able to go to that next level and
and to me it’s it is the ones that are
going to partner we’ve said that I mean
we could just keep pounding in the same
points here but right I think I think
what what what is unique about seeing a
different perspective of this industry
very very closely tied same clients
right just a different conversation is
seeing how you know reminds you how wide
this thing is and how many different
components go into this from maintenance
right so who’s your supplier for the
very different parts all the way up to
you know to Tech vendors like you said
to insurance providers to to cleaning
crews I mean this is a massive industry
to weather right this is a massive
industry that works outside that is
actively moving I think sometimes we sit
in a in a room and we forget about that
this is an active active moving organism
it’s how do we get those things to play
together in a way that that make some of
the the what is perceived difficult
today makes that easier right that that
stuff let’s move it to the left and
let’s focus on the next big thing I’m
excited to see what what people can do
and you know excited to be from an
insurance perspective especially excited
to be a part of how we can help Drive
some of that so yep so before you go
tell us a little bit about what’s going
on over at Reliance partners and how we
can re well first off who do you serve
who’s your sweet spot yeah uh that’s
well you know I what do I say Joe and
it’s everybody in the logistics space
but primarily carriers I mean we’re we
are a a trucking Focus Commercial Auto
Insurance Agency we do we do have
different solutions for Brokers that we
work with some shippers interest
Solutions I mean we we we cons serve all
parts of the supply chain because that’s
where we come from the you know the
logistics and supply chain area mainly
what we’re doing is we’re providing
Insurance to to trucking companies and
when I say providing Insurance a lot of
people provide Insurance Joe there’s a
lot of people who wear a suit walk in
patch you on the back buy your stake and
buy your insurance what’s unique to what
Reliance Partners can do is we we
analyze who you are and we collect the
information we need and we work with 200
different Insurance markets right that
we can then find the exact match that’s
going to be the best for you pricing
obviously is going to come in a lot but
there’s a lot of things that are hey
this is dynamic to the operation you are
you’re very safe and you’re willing to
do these extra steps to prove your very
safe well then you should be this let’s
this seems more of your area right
there’s other ones where it matters how
many years in business right what the
safety there’s a there’s a lot of things
that that have been flowing this if you
go to a single website and try to get an
insurance quote and that’s and you think
that’s your best option I can tell you
having having been a part of this now
for about a year that there is a a lot
of solutions out there that can be very
tailored to providing you know something
that you really really need so I think
it’s it’s if you don’t think it’s
important just go over to Freight waves
follow Freight waves like you should
anyway and look how many articles pop
out that talk about carriers going out
of business and a lot of times it’s
Insurance stuff A lot of times it is
something related to their cost got too
high yeah and I always think God if you
if if you uh read enough of those
articles you go well the yeah for some
reason that something went wrong here
maybe and I’ve I’ve done podcasts on the
nuclear verdicts that trucking companies
have it’s driving it’s driving companies
out of business sure so we do need to
start thinking differently about how we
move those trucks across and how we Ure
them and take this risk out of it so I
love what you guys are doing with kind
of that Innovative approach and I’ll
call it the tech-based approach I think
I think where we head is Tech I think
right now we have a we are doing a very
good job with technology being a
backbone of it but doing a very good job
listen Joe we have 25 Lang anges we
speak you know we have 31 31 languages
25 nationalities or swap those two
numbers a lot over over 20 and 30 of
either and that’s because that’s what
the industry is right where when you’re
talking there are a lot of immigrant
drivers I noticed that well when you’re
talking about a company of of you know
less than 300 people to have that many
different nationalities and languages
represented you know that’s where
because we know that that’s what this
industry is right our our like I said
our executive team from large carrier
executive team management to to large
Brokers to you know top insurance
companies in this particular space the
what we focused on thus far is our
expertise and we will find you a
solution that is going to be best
catered to you do we win it every time
of course not but we’re we’re going to
try our damnest to say Hey listen here’s
what the options are for you and this is
what makes sense now I will tell you
where we’re going is we’re we are in the
process of rolling out new platforms as
we speak that are hey how quick can we
make that insurance process how do we
get it to where you know from weeks and
weeks to days right and making it so
that you know what’s happening and you
can make that done quickly how do we
provide that system expertise hey what
are you paying for insurance what are
people like you paying are you paying
the right amount of money for someone
who fits into your profile you know we
have that data and we’re going to start
using that to to provide it back to
customers and and clients of ours to
show them listen you’re kind of maybe
getting Bamboozled here you’re way
overpaying you never move shipments like
this why are you paying for the the one
shipment a year when you can just get
this you know this this excess cargo
Rider or something like that right um
and I think that’s where a lot of this
heads interestingly enough look at this
right I know I can tell you right now
based on endorsements being added to
Poli new drivers being added to policies
drivers being removed from policies we
have the first we have the first glimpse
into where where things happen in the
industry because of this unique
perspective and I will tell you that
that’s that that’s how everybody needs
to be thinking of what components can
they can they offer and you know
anonymized and in in safe ways that
paint a bigger picture and I think
that’s where this whole kind of
Partnerships thing where does Insurance
fit in not only behavior-based and and
being a a tech forward partner that can
that can solve your problems alongside
you and and integrate into your systems
and make it very seamless but also what
insights can we provide that allow you
to have a different perspective than the
next guy yeah I love that you you guys
are not uh your grandfather’s uh
insurance company and I think this is
what you need because again to be
competitive we’re all going to need the
tech we’ve talked a lot about that we’re
all going to need partners and again I
think it’s knocking down the silos and
if somebody says hey we became more
competitive cuz we got better insurance
we or you mentioned behavior-based I
know there’s a lot of things that go
into it becoming more knowledgeable
about what your insurance carriers want
if that saves you money makes you more
competitive then isn’t that worth a
conversation yeah and a lot of people
don’t know that I mean all the way down
do we have safety programs with people
that have come from the trucking that
have you know that are that are that are
judging whether your truck’s been
prepped correctly in in a trucking
competition like if they told you hey
just tuck your elbow left and you can
save a little bit more money you’re
you’re hurting yourself here or hey this
is what you look like in the Insurance
world do you even know that let’s let’s
help you get that profile into a place
that’s going to make you appear better
that’s the type of of services we’re
providing that to be honest with you I
think it’s an industry that’s generally
sat back and said well you need it so
guess what I’ll call you I’ll call you
the day before and say you still need it
I think we’re taking a much more
proactive approach and and I think that
that’s only going to grow as we get a
lot of these Technology Solutions out
excellent excellent Mario thank you so
much I really appreciate you taking the
time it’s nice to hear and from a guy
who’s been around in kind really I’ll
call a few different parts you are in
The Brokerage part but also now in the
insurance part and uh who knew who knew
the insurance business would going Tech
too yeah hey you know what we got to
talk about Joey didn’t is how how come
we don’t have any of these big Brokers
where’s the Michigan the Detroit area
Logistics scene we got two of the
biggest border crossings in America we
have you know there’s an office a
satellite office around every corner but
where’s who’s going to come here and uh
and and and start a big fish here in the
Detroit area
yeah it’s interesting because all the
yeah four four and a half hours away
over in Chicago land I think it’s 25% of
the Freight in the country goes through
there we’re we’re how yeah not far from
Chicago we’re sort of centrally located
like I said by border crossings we have
you know some of the biggest shippers
right here shippers right here it’s it’s
interesting that no one’s in a huge
metropolitan area full of some of the
town you know we have some of the most
talented colleges in America that these
kids oh yeah your school Michigan
State’s the number one supply chain
school every year so who’s going to come
out here and do it Joe I need let me
know exactly I I I know there’s some
guys listening going it’s us it’s us but
I’m not GNA their name all right well
tell them we’re waiting anyway thank you
so much for taking the time Mario I
really appreciate it yeah I appreciate
it Joe thanks for having me on yep and
thank all of you for listening to my
podcast your supports very much
appreciated until next time onward
upw you’ve been listening to the
logistics of logistics podcast where we
engage in conversation with experts in
the logistics field for more details
visit the logistics of logistics.com or
follow Joe Lynch on LinkedIn
[Music]
The CTO Perspective with Mario Paluzzi
Mario Paluzzi (https://www.linkedin.com/in/mario-paluzzi/) and Joe Lynch (https://www.linkedin.com/in/josephlynchjr/) discuss the CTO perspective. Mario is the Chief Technical Officer at Reliance Partners (https://reliancepartners.com/) , a commercial insurance agency specializing in risk management solutions for the transportation and logistics space.
About Mario Paluzzi
Mario Paluzzi (https://www.linkedin.com/in/mario-paluzzi/) is Chief Technology Officer of Reliance Partners (https://reliancepartners.com/) , a top ranked commercial insurance agency specializing in Logistics and Transportation. Prior to joining Reliance Partners, Paluzzi established, led, and deployed industry leading technology teams and transformative innovations across high-growth startup environments as well as multi-billion dollar enterprises. Paluzzi spent 10 years at Coyote Logistics overseeing technology product strategy and delivery before joining Logistics Dynamics as Chief Information Officer. He joined Reliance Partners in 2021 and has been leading efforts to drive big data and Insurtech initiatives across the enterprise to deliver a smarter insurance experience. Mario is a graduate of Michigan State University.
About Reliance Partners
Reliance Partners (https://reliancepartners.com/) is one of the nation’s fastest-growing commercial insurance agencies specializing in providing risk management solutions for the transportation and logistics space. Reliance Partners has been featured in Inc.com each year from 2016-2020 as one of the fastest growing privately-held companies in the US. The company is certified as a Great Place to Work®. In addition, Inc.com recognized Reliance Partners in 2018-2020 as one of the Top 50 Workplaces while Fortune also recognized Reliance Partners in 2017-2020 as a Top Workplace in America. In 2020, Reliance Partners was featured in Business Insurance as one of the ‘Best Places to Work in Insurance’ for the fifth year in a row. Reliance Partners Chattanooga location was recognized as Business of the Year in the large category by the Chattanooga Chamber of Commerce in 2018. The company faces an emphasis around technology and has been the only insurance agency recognized on the Freight-Tech 100 list each year since its inception. Freight-Tech 100 recognizes the most innovative and disciplined companies in freight.
Key Takeaways: The CTO Perspective
• Mario Paluzzi (https://www.linkedin.com/in/mario-paluzzi/) is the Chief Technical Officer at Reliance Partners, a commercial insurance agency specializing in risk management solutions for the transportation and logistics space.
• In the podcast interview, Mario provides the CTO’s perspective on the transportation and logistics space.
• Below are some of the insights that Mario shared:
• PwC’s recent report from titled “Digital Trends in Supply Chain Survey 2022 (https://www.scdigest.com/ontarget/22-04-26_PwC_Digital_Supply_Chain_Survey_2022.php?cid=19829) ” suggests that not every company is getting a good ROI on their technology investments.
• When making technology investments, companies need to avoid the hype of trendy tech (Blockchain, AI, ML, etc.) and fear of missing out (FOMO).
• Instead focus on the actual business improvements the tech investment will bring to the business.
• Before making a tech investment, have a clear vision of the project goals and fully understand which key performance indicators will improve.
• Technology tends to simplify and automate routine or rote functions, which usually frees up people to focus on more complex problems.
• Mario believes companies need to upskill their employees so they can add more value.
• There will be less clerk work and more data science work so employees must be trained for their new role.
• To add more value and become more competitive, knock down the silos and drive further collaboration with partners in technology, insurance, carriers, etc.
• New partnerships, new data, and new ways of adding value should be the focus of transportation and logistics companies.
• Mario also suggests partnering with a technology partner who has the expertise and experience required to support your company’s digital transformation.
• Mario works closely with Emtec (https://www.emtec.digital/) , a global technology services company providing digital software engineering and transformation solutions to clients in logistics, transportation, and warehousing.
Learn More About The CTO Perspective
Mario’s LinkedIn (https://www.linkedin.com/in/mario-paluzzi/)
Reliance Partners LinkedIn (https://www.linkedin.com/company/reliance-partners/)
Reliance Partners (https://reliancepartners.com/)
TED Talk: What if we could address the unaddressable? (https://www.ted.com/talks/mario_paluzzi_what_if_we_could_addr…