Ep. #1140 - The Future of Freight
Together in this episode of Startup Hustle, Andrew Morgans and Daniel Sokolovsky, CEO and Co-Founder of Warp, discuss the future of freight. They also share their thoughts about the problems in the current freight industry here in the US. Listen to them as Daniel explains how Warp provides freight solutions through their technology.
Covered In This Episode
The freight industry is often referred to as the lifeblood of business, and for a good reason. It is responsible for moving goods and products across the country, from raw materials to finished products, and plays a vital role in supporting economic growth and development. But the industry is also grappling with various issues. In addition, the rise of e-commerce has put pressure on the industry to innovate and adopt new technologies. So what does the future of freight look like?
To address these challenges, Warp is digitizing the trucking model. Listen to Andrew and Daniel talk about how Warp creates efficient routes for middle-mile freight. They also explain why it is the right time for retailers to become omnichannel commerce.
Listen to this Startup Hustle episode to learn more about Warp and the future of freight.
- Where it all started for Daniel (1:42)
- Bootstrapping a food delivery marketplace in Berkeley (5:04)
- From the Bay Area and expanding to the West Coast (8:50)
- How COVID boosted the delivery industry (11:03)
- How Warp came to be (13:06)
- The nightmare of freight and supply chain in the US (18:23)
- Building a competent network (20:29)
- What does Warp do? (25:16)
- Brick-and-mortar stores are a huge opportunity for brands and manufacturers (29:03)
- The time is right for omnichannel commerce for retailers (30:13)
- What’s in store for Warp in 2023? (35:59)
- What’s Daniel excited about in 2023? (39:26)
- Where to find Warp and Daniel (41:54)
All these little differences matter, like, the speed and check-in times. And you know, if you’re running a small lean team and trying to be efficient, those, like, arrival windows, you know, like, I can’t have, if I have a three-person team, I can’t have one of my guys just sitting there, you know, waiting on a truck to show up all day long. You know, not going to lunch or not doing this or not doing that, you know, just waiting on these windows. So, efficiency is one of those things that almost seems like a dream.Andrew Morgans
If you want to guarantee delivery from an LTL company, good luck with your budget. You know, same thing with parcel, right? Like, you can’t ship everything via parcel. And we’ve even seen shippers nowadays that, like, because they want to avoid an LTL company so much, they’re paying an arm and a leg for a parcel company to deliver it just because the experience is so bad in LTL. And so, you know, as we’re talking, we’re, like, okay, really what needs to be done is, like, a network, which is similar to an LTL company but dynamic and flexible, right? Is able to deal with narrow appointment times, pick up appointments, drop off appointments. Is able to go out and deal with, like, different capacities.Daniel Sokolovsky
We’re taking a lot of the technology that we’ve actually built, and we’re putting it out there to the market and letting them use it for their own business, right? Even if work is not involved in their day-to-day operation. Even if we’re not currently transporting freight for them, we’re putting these pieces into their hands. So we can have a better ecosystem in general. Our big goal right now is, like, to change the way that freight works in general.Daniel Sokolovsky
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 0:00
Hey, what’s up, Hustlers? Welcome back. This is Andrew Morgans, founder Marknology. Here’s today’s host of Startup Hustle, covering all things E-Com, startups, and Amazon. Today we’re gonna be talking about the future of freight. So we’re getting into all of it. And before I introduce today’s guests, today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Visit fullscale.io to learn more. Today’s guest Daniels Sokolovsky, I think, I got that right. Out of LA but family from Ukraine, so forgive me for butchering that up with a company called We Are Warp, hailing out of LA. Welcome to the show.
Daniel Sokolovsky 0:42
Thanks, man. Thank you. And I’ll just clarify, it’s called a Warp. We’re just the Warp, our domain is wearewarp.com.
Andrew Morgans 0:48
Okay, I got the wrong notes. I got the wrong notes here. So forgive me. So We Are Warp is the domain where to find him. But more importantly, Warp is the name of the company. So before we jump into, before we jump into like exactly what you do, and talking freight and talking business, I like to get to know the founders a little bit and share a little bit of that founder story. How did you get here? How did you get to a point where you’re, you know, you’re launching this company as far back as you want to go. So I’d like to take a little time here, if you don’t mind. And everybody has kind of a unique story and how they became an entrepreneur or founder. Where did you just get started? Did you? You know, did you go to college and do the college thing? Did you know you want to be a business owner before that was, you know, have you always been in and around freight? What’s your story begin?
Daniel Sokolovsky 1:33
Yeah, man. So it can be a long, you know, so brace yourself a little bit. For the length?
Andrew Morgans 1:40
No, we got to time. We got time. Perfect.
Daniel Sokolovsky 1:42
Yeah, so basically, look, I, my parents moved here, like, one year, a year and a half before I was born, they moved to the US. So basically, I was born, you know, they’re, they got here started hustling around wherever they could, my dad was working a lot in taxes. A few years after I was born, you know, he kind of was able to like, hustle around a little bit, make himself you know, make his own way up. And they opened up a courier company in the late 90s. And so basically, like, you know, ever since I can remember, I was somehow involved in courier, and, you know, my parents, like watching my parents launch their business, see, kind of like, you know, the, the trials and tribulations of that, you know, as a kid. And honestly, man, like, when I when I was a kid, like, during the summertime, you know, if I wanted to make money, if I wanted to go out and like get something I couldn’t afford, you know, my dad would just, you know, drop me off Smart and Final, what that was like a little mini Costco basically. And, you know, I buy out, buy some candies, buy some drinks, I’d walk around with a little cooler with some ice in it, and just walk around the park in the summertime, you know, so I kind of learned really early on how to interact with people, how to sell things to people, and dude, I was selling like water is Gatorade, you know, whatever, at the basketball court, basically. And, you know, after that I kind of, you know, I knew that I really always liked to just interact with people and provide a solution for him, you know, it’s not really so much for me about like, selling a product, right? Like, I’m not trying to give you a bottle of water I want I’m trying to get you hydrated, you know, and, you know, kind of similar, you know, regardless if you’re from selling water or freight services, right, I don’t, I don’t want you to buy the truck, you know, I’m really trying to solve the logistics problems of your particular business. And so, you know, kind of grew up around that. And then, you know, Neopets was actually the way that I got online, you know, started building websites and stuff like that around that. And, you know, eventually just kind of when I was in high school, just little tiny businesses, you know, Google AdWords stuff, stuff online, you know, with some ad clicks, eBay, you know, stuff like that. And then I ended up going to college to study math. My mom was like, I got into Berkeley, she’s like, Alright, you got to study math, you know, so, gotta go out and get yourself a PhD in math. And basically, I got there and again, like that entrepreneurial instinct came out, and I’m taking alright, what can we get going on here on campus. And for me, I was like, really attached, like with the whole concept of like food and you know, serving people kind of what they want to eat, it’s a really easy business to start to. So basically started a food delivery marketplace in the Berkeley campus. I bootstrapped that business, you ran it for about a year and a half. And it was just basically you DoorDash, right, like a lighter version of DoorDash. around the campus, they actually started right around the same time that we did, so friendly competition between us, and obviously, they had venture money, you know, they were able to execute a lot more than I was able to, but still, it was a friendly, friendly competition.
Andrew Morgans 4:26
And in some ways, I do think that in some ways, like if you’re new and you’re doing something new, it helps to have other people doing it. It’s like as someone that was kind of like trying to create services around building brands on Amazon and working with Amazon sellers and I wasn’t I was early so it was like it was really head against the wall trying to get people to understand what I was doing and the concept it wasn’t just like straightforward. So but like whenever some other agencies started coming out, or aggregators or competition, basically in my space definitely helped propel me forward and have helped sharpen the offer you so to speak, so I get that. So when was that, like, give me a timeframe like
Daniel Sokolovsky 5:04
so open up Berkeley delivers basically 2020 13 to 2013 open up Berkeley delivers Rana kind of like fucked around a little bit for a year and a half, shut it down December 2014. And basically at that time, you know, DoorDash was coming in, they were marketing already and Berkeley was just like impossible to make any money at the time. Yeah. Also Bank of America went crazy with overdraft fees and stuff. So the bootstrap business man, it was hard, you know, like, definitely, definitely was a grind. And then in 2015, opened up a company called AXELA. And that was kind of like, in my eyes, like an automated dispatch, right? So we didn’t have to deal with consumers didn’t have to deal with restaurants and like order food and figure out how to make a website behind it. But you know, kind of like the vision behind axle hire was, we would basically do all that back end, right? Like everything from once a shipment is already confirmed the customer, he places an order, we basically be able to route it automatically assign a driver or send the driver the information, they show up and pick it up. And we were all about same day delivery, right, like hyperfast, hyperlocal, same day delivery.
Andrew Morgans 6:06
With at that time, like what what were you delivering?
Daniel Sokolovsky 6:10
We were basically, in the very, very beginning, we were delivering local diet plans. So it was like we started up in the bay area. So there’s a lot of you know, people basically who are getting like a meal services and diet plans that get delivered to them, you know, every few days and stuff like that everything from like, a vegan, vegetarian, Paleo to people who have like some kind of like medical conditions and things like that. And we were basically delivering to those customers.
Andrew Morgans 6:32
So you just partner with like a kitchen, or like a group that was doing that maybe like that you had to pick up and you’re like, well, delay will be your delivery service for
Daniel Sokolovsky 6:40
that. Exactly. So like our time we work with teeny tiny customers, one of them was local, you know, so local, had their customers in Marion County, they basically delivered meals to them, you know, three or four times a week. And you know, we’d approach local and say, Hey, guys, we can deliver for you, here’s our cost per delivery, we can make sure that it’s a certain quality of service. And you know, we’re in business. And you know, I mean, with SMB, it’s a little bit easier to deal with, right? You, you sit down with the owner, you know, you do a small test, you make sure that you can build trust with each other, you actually deliver on your promise. And then, you know, from there, it’s kind of, you know, just continuing getting more and more business problem. Toto basically did that from 2015 to 2017. And in 2017, like end of 2016, basically, we were lucky enough, we got an opportunity from a big meal kit company, right, we were delivering all these diet plans, we started crawling up into like different produce deliveries, things like that. And in 2017, we were able to start working with meal kit companies. And so this one changed the game for us entirely, because we were now allowed, instead of doing a same day delivery, we did a next day delivery. So we opened up a facility, we pick up on a big 53 foot truck from their fulfillment center, bring it back to our facility, sort them and go and deliver from there. So effectively, like we’re making like an early ups or early FedEx, right, like super simple, take everything to one building, sort all the packages, deliver them from there. And over time, we basically, you know, we succeeded well with them, we got another one on and we got another one when we started getting e commerce brands that were looking for faster delivery, lower cost, higher quality, things like that. And eventually the actual hiring model became so successful that by 2019, we started scaling it across the country, right, we opened up a facility there, basically get different customers to go in, we sort those boxes go and deliver. And then like on time delivery was up, we really changed the experience for a lot of these recipients, right, we provided the Amazon like tracking forum, we provided like ETS for when the driver would get there, we made it easier for them to see photo proof of deliveries, figure out where their boxes were at and stuff like that. So we really did like provide an Amazon like delivery experience for for like smaller, medium sized businesses, enterprise also eventually, you know, but people who really weren’t able to get that full Amazon advantage. Yeah,
Andrew Morgans 8:50
there’s a lot, there’s a lot there that maybe like some of our listeners aren’t thinking about, for example, like when you’re dealing with FedEx or UPS, you know, to file a claim or to get a hold of a driver is impossible. You can’t just call UPS driver and say where are you You know, things like that. It’s not, it’s not possible. You know, you’re a cog in the wheel returns and you know, at least at least around food, you know, simply if something’s sitting on the steps too long or it’s like not delivered on time, right, let’s say they were waiting for it and they had to leave because it came late and then now their foods out there and it’s ruined if you’ve got like returns returns kill ecommerce, just the margins. So if you have like, you know, you have to keep your return rate or your cancellation, your refund rate below a certain point to be profitable as a business. You know, for me in the warehousing, I have a smaller warehouse here and I started it simply because working for 10 plus years with bigger brands and the warehouses and fulfillment centers they had to work with at large scale. There was no one there I could call then just get like, you know, get bill on the phone and be like Bill, what’s going on and create a relationship with it, you know, it’s fill out a ticket, it’s join the forum. It’s, you know, if you weren’t a big brand or big business, you weren’t really getting that type of customer care. So there’s a lot of Are you in being able to say, hey, you know, this is a small, local, local business, they care about our work and relationship and be able to get people on the phone as a business and be able to get that that customer service maybe that Amazon was the first one to do at scale, right? Where if it wasn’t two days, you’re getting paid. We didn’t refund it, or discounts or things like that. So I can see why you guys were exploding. Because what people don’t see is behind all these small businesses behind all these businesses these big, you know, courier services, like USPS and FedEx and UPS is a nightmare. At times, it’s not all the time, but can be a nightmare that, you know, ultimately, I’ve seen businesses just change fulfillment centers over and over and over trying to find good solutions. So I can see why you guys are exploding. That was cool. So you started in the Bay Area. Where was the next couple cities you went?
Daniel Sokolovsky 10:47
So it was we did west coast, it was like LA, we opened up la then about a few months later, we opened up Portland and Seattle at the same time. And then from there, it started becoming like Phoenix, Vegas, you know, kind of going across the country
Andrew Morgans 11:01
exploding really explode.
Daniel Sokolovsky 11:03
I mean to COVID definitely helped you know what I mean? Like COVID came by and you know, everyone started ordering online shopping online. The good thing for us was our technology was in a good place. So like literally COVID hits and 2020 like we take a couple of weeks to just like figure what the fuck is going on, you know, like SF shutdown offices, we all start working from home, we’re like, okay, let’s Brace for impact. And then basically once we started kind of getting ourselves together, you know, it like literally the company became a problem with just like opening up more and more and more markets, right? Like, customers were getting satisfied. Drivers were there because a lot of jobs
Andrew Morgans 11:37
were when they get to be remote. They don’t have to be around other people to deliver. Yeah, I was on the E commerce side of it. So you know, shipping packages out getting you know, we were running a warehouse like definitely like, where some people were getting more time alone than they’ve ever had in their lives. We were like busting ass to keep up. Which is, you know, good prom in a bad prom. But when everyone around you is like chillin in the hammock. It was it was hard. We were busting ass, you know. So I’m also thinking about like getting into a fulfillment center during the pandemic was next to near impossible, like if you were a brand not using, so Amazon FBA, cut down anything that was non essential. So if you had non essential products, you couldn’t use Amazon FBA, they were only using it for like foods and toothpaste and toilet paper, things like that. So you had to have a fulfillment center, like you had to be able to ship from from your own fulfillment center or from a third party. And if you weren’t already set up in that way, your shipping look like you, you couldn’t get into one for maybe 18 months or something like that. So you guys are new servers popping up giving these people options. Freaking awesome. But you’re kind of blowing over like when the technology stack had to be pretty robust to be able to expand and continue to grow that way and be efficient and not create lots of problems. And then to maybe, like, I was thinking about, like the leases of getting these warehouse locations to be able to like, you know, take the trucks there, and then sort them and then decide where they’re going with drivers. That would have been a big undertaking.
Daniel Sokolovsky 13:06
Yeah, I mean, it was big news, like the facilities team was going out there, touring buildings meeting, trying to negotiate with landlords negotiating with agents, it was It was wild man, it was like, like, you know, that will be anything everywhere, all at once. That was literally, you know, exactly what was happening for us at that point, it was just like, volume was coming from everywhere. There’s drivers, you know, open up facilities, you just got it, you know, we’re moving as quickly as we possibly could. And, you know, and then basically 2021 comes along, and by that point, everyone in their mother basically opened up a last mile delivery company, right, and all of a sudden, you have all these different options available for shippers, all these different ways discounts, you have, like existing providers that grew big, small providers that grew medium, you know, so the market just became like, super, super, like, I mean, it didn’t become really saturated to like, 2022, you know, but like, I think like, 2021, it was like writing was on the wall that like everybody was going into last month, right? And everybody was trying to figure out whether it’s a drone or, or delivery robot or, you know, person in a delivery van, electric van, you know, gas powered van, it didn’t matter, right. And so really, you know, we, you know, I was able to pass the torch off to new leadership at x, Ohio back in 2021. And so I spent a lot of time just basically thinking about like, Okay, now that there’s a bunch of these, like, last mile options available out there, you know, like, what’s going on with the middle mile, because you still have people whose fulfillment centers or like you, right, like in Missouri, or, or in New Jersey, or in Chicago, or, you know, Tennessee or whatever state that they may possibly be in? How can they actually use one of these last mile providers, if that person can pick it up from their fulfillment center, right, so they’re stuck using FedEx, they’re stuck using ups, they’re stuck using the Postal Service, because it’s basically impossible and it’s too expensive for them to go out and get it to a different provider within the region. It’s supposed to get delivered. And so you know, kind of going through this and I realize it’s not just expensive, you Even if they were willing to pay the price for it, they would still lose tracking, right? Because they, you know, you basically have multiple legs made up with multiple different carriers, and you can’t get all that visibility. So basically at first, you know what I teamed up with my co founder, Troy, who’s my co founder, I had Aqua hire or like acquired his company, basically, during my time at axillary, so he was doing micro fulfillment, he brought a lot of like, pick and pack experience understanding like what EECOM shippers are looking for what they what they exactly want, his company was called the covered shipping at the time. And he left axle high a little bit before me, we started talking about just like, kind of like throwing shit on the wall, right? And like figuring out like, what does shippers want, like what’s actually like a thing that shippers need right now. And I realized that like everyone, like I mentioned, like, everyone was having problems with middle mile, right, whether it was a last mile carrier having problems with their middle mile, whether it was a shipper that had problems getting things into their fulfillment centers, or inventory transfers between, they’d lose the visibility, it was costing them an arm and a leg. And the existing options that were on the table, were basically not enough you don’t like you can use an LTL Company, but you good luck getting tracking from an LTL company. And if you want a guaranteed delivery from an LTL company, good luck with your budget. Same thing with parcel, right? Like you can’t ship everything via parcel. And we’ve even seen shippers nowadays, that like because they want to avoid an LTL company so much, they’re paying an arm and a leg for a parcel company to deliver it. Just because the experience is so bad and LTL. And so you know, as we’re talking we’re like, okay, really what needs to be done is like a network, which is similar to an LTL company, but dynamic, flexible, right, is able to deal with narrow appointment times, pick up appointments, drop off appointments, is able to go out and deal with like different capacities. Because shippers, right? How can a shipper say what their, what their consumer demand is going to be, they can run a marketing, right, they can go out and maybe get listed on a podcast and you know, hope and pray that their volume gets to a certain amount, but there’s no way for them to guarantee that to their vendor. Meanwhile, vendors don’t want to buy cars, or were buying cars, you know, for 2030 40% over their price to be able to handle this volume. And they’re not trying to miss allocate their own resources to specifically serve as that kind of like, you know, uneven demand. And so basically what we realize is like if you put good enough algorithms in place, similar to what we did on the previous company, but basically, if you put good enough algorithms in place, you create a system that’s super flexible, and keeps everything visible, you can actually help shippers deal with inconsistent like shipping needs, you can help on the capacity side deal with kind of like unpredictable capacities and unpredictable needs there. And in the meantime, provide everything that the tracking the transparency that they want, at an affordable price point, you know, so literally, that’s work, you know, like, What work does is we utilize our network of cross docks, straight trucks, cargo vans, 53 footers, both refrigerated and dry, to basically create like a dynamic hub and spoke model that allows us to pick up freight in Texas and deliver it to New Jersey, either at a better price than an LTL company or at at parity with an LTL company, but at the exact same time have much higher visibility and have much higher kind of like SLAs than you currently get with an LTL company. And we’re actually applying this model not just to less than load but to full truckloads air freight to rail freight. So whatever really, that a shipper needs in order to go out and get their freight where it needs to go.
Andrew Morgans 18:23
I love that. That’s amazing. Almost sounds too good to be true. If I’m being honest. Like, you know, like, we’ve been living in a nightmare freight and supply chain for the last three years as you know, as a as an agency running brands, you know, every everything you can imagine has been a scenario over the last couple of years in regards to supply chain, whether it’s getting stuck out in the dock or getting stuck out in the ports, you know, truckers lying about where they are waiting for full loads, you know should be running
Daniel Sokolovsky 18:57
just don’t even lie about where they are anymore. Now they lie about who they are. You know the newest thing is like the trucker identity fraud that’s a crazy stuff to
Andrew Morgans 19:06
know I haven’t even heard of that. But it’s you know, it’s chaos, and you’re trying to you know, this can be the difference in you know, at least being in the Midwest like one of the advantages is like speed to the Amazon warehouses. So if you’re in LA, for example, you’re dealing with like every every boat coming into the port there, you know, a ton of volume going into those amp those closest Amazon locations. The check in times are long, and all of that is supply chain, right? You’re in the Midwest, at least there’s like it takes a little bit longer to get freight here to the middle of the country. But once you’re in the middle of the country, everything moves a lot faster. Because it’s just not congested. Like it is in you know a lot of the port towns so you know all these things like it’s anyone listening like all these little differences matter like the speed and check in times and you know if you’re running a small lean team and trying to be efficient, those those like rival windows, you know, like I Can’t have if I have a three person team, I can’t have one of my guys just sitting there, you know, waiting on a truck to show up all day long, you know, not going to lunch or not doing this or not doing that, you know, just waiting on these windows. So, efficiency being one of those things that almost seems like a dream, or you know, if it was if it was working like it has, how are you going about, like, you know, I guess building the network in such a short amount of time to be so incompetent so widely.
Daniel Sokolovsky 20:29
Right now, we’re focusing on like middle market and enterprise shipper in order to be able to do that, because unfortunately, that’s the problem with SMB, you know what I mean? Like SMB, like, everybody wants to serve as them, but everyone is afraid to bear the cost of actually servicing SMBs. Right. And the thing is, is that our model works very well, for medium sized businesses, large businesses, even some, like small shippers who have some good volume in particular areas, right. Like, there’s coffee roasting companies that we work with right now that are basically like, they’re, they just like fucking own LA, you know, like, they have like 50, stores, at stores, whatever that are delivering their product in LA, they may not be so heavy in New Mexico, they may not even be that heavy in central California, but they’re dominating in one particular market, that’s also enough for us to be really working with. But right now, we basically target should prescribe at least some kind of density, so that we’re able to grow out on national network as quickly as possible. And we really recently also opened up in Canada. So currently, we serve as UX, US, Canada, and Mexico is coming up this year as well. So we’d be able to kind of pick it up from a fulfillment center in Mexico and drop it off to the last mile provider in Toronto, or Ontario, or something else like that. And there’s tracking the entire way, tracking the entire way, even if we change carriers, so we made it like it might be a Mexican carrier that picks it up in Mexico, you switch hands with a US carrier, can you switch hands to Canadian care, all of the tracking is visible via one tracking link.
Andrew Morgans 21:53
Okay, cool. So it might, the tracking number might change multiple times, but you’re still able to track it. Exactly. Just thinking of it from an Amazon perspective, you know, in a lot of my listeners, they’re not all Amazon sellers, or Amazon brands by any means. But on the Amazon side, a lot of times, you’re not able to use, like, sell fulfilled shipping, simply because if you’re shipping to Canada or you’re shipping to Mexico, you have to be able to track the item the entire way. And being able to upload that into the system is obviously something that is a requirement from Amazon in order to hit your measures. So if you understand North America in regards to the Amazon network, they have something called NARF in a RF in North America, you know, something freight, I’m sure. But essentially takes your inventory that’s in Amazon FBA and allows you to test the Canada and Mexico markets with that inventory already. So they’re taking it, maybe the handling time goes from two days to six or seven or six to eight days, that’s a difference. But you’re able to use your inventory here and ship there. Basically, sellers start testing that market, Canada or Mexico, which have been proven to be very, you know, great opportunities, and then they move their products into, Okay, now let’s set up actual fulfillment and shipping in Canada and Mexico now that we’ve kind of tested the market, but then being able to stay efficient, like we’ve tried so many things through the years where, you know, just shipping through USPS to Canada, or shipping. You know, there are different services that have come out that we’ve tried. And you know, just shipping from here to Canada, especially during pandemic times and things like that. It’s just been an absolutely brutal experience. So that’s really cool to see you guys expanding. Yeah, thank you. Yeah. And will it be like, you know, Canada native and Mexico native or shipping from the US to Canada, US, and Mexico, etc.?
Daniel Sokolovsky 23:46
All the way through, so basically, like, what we’re trying to do is open up these markets and then connect them all with each other. So you can basically you can ship a pallet from Guadalajara, make a stop in, I don’t know, Texas and Laredo, Laredo, Texas, then go up to Chicago and then boom, end up somehow, you know, in Vancouver, or whatever else it may be.
Andrew Morgans 24:06
That’s amazing. Yeah.
Daniel Sokolovsky 24:08
We’re literally trying to do what Amazon is doing with its own shipments and for its own programs, and kind of like give other shippers the capability to use that right, and then I hate to say like, oh, be like Amazon or like Amazon, but like, unfortunately, right now Amazon is the number one logistics company out there. You know, and I’m like, I’m not even talking about the retail side of it. Like they are the number one logistics company, they can pick up a package and deliver it in so many different ways on the other side of the country or the other side of the world. And they’re able to do that, born not right now. You know, and, and UPS and FedEx. Yeah, they can increase pricing, and yeah, they can make some updates, and they can do some stuff here and there, but it’s not enough, you know, and so, a lot of the a lot of shippers, a lot of retailers a lot of merchants are now going out their own ways, right they’re figuring out this last mile option, this middle mile option, this first-mile option, this way to to move freight by Oh should enter by air or whatever. And all of those options are available to them. But there’s just so fragmented, you know what I mean? So like somebody, like you mentioned, who’s running a three-person team or a five-person team, they don’t have enough time in their day for that one ship to cross reference
Andrew Morgans 25:13
Daniel Sokolovsky 25:16
That’s what warp is able to do is we’re connecting, it’s almost like a network of networks. If you think about it that way, right? We look at everything that’s out there, we look at how goods are moving. And we try to figure out the most efficient, and not just the most efficient, but the most effective way to really get it to where it needs to go.
Andrew Morgans 25:31
It’s so important. I mean, this is where profitability is found, at least in E commerce is like, how tight is your supply chain? How tight is your freight? You know, every single part of the process, my always then the end, the end mile isn’t paid media, like your advertising or your marketing dollars. And people forget that there’s all this getting your conversion rate and spending right on content to you know, having the package arrive not damaged, having arrive on time, having arrived in an efficient package, instead of you know, oversize or or because everything is measured by, you know, weight and or dimensional weight, all the way down to who’s using it, how long did it take you there? Were you out of stock 10 days, we didn’t need to be out of stock. That’s how much money? You know, it comes all the way down to that. And I think one thing about Amazon that I’ve learned, like, I have been obsessing about Amazon, like I’m 25,000 hours on the platform or more, right? So I mean, I have obsessed about everything that they’ve built everything right, and you just like you’re spending that much time on something you’re analyzing it you’re thinking and like to watch them be able to scale out their last mile delivery services by having people build their own business by saying, hey, you know, get a van. And, you know, they have this service here, at least in Kansas City where you can work four hours a night, or whatever, you pick up these four hour shifts and deliver packages as a part time job. And Amazon’s not hiring all these trucks. They’re not overstaffing, they’re not, they have a flexible workforce, because they’re able to try to Oh, Kansas City is blowing up, let’s go test there. Oh, St. Louis is blowing up, let’s go test there. Let’s test what’s happening in Chicago, okay, Chicago is going through a boom, or this warehouses down lesson services over there. So you’re right, you’re just talking about it. But they also are the massive giant. And one thing that we’ve learned is that like, creating a relationship with let’s say, a freight forwarder out of Jersey, for example, is like an actually like if I could get a straight trucks from the Jersey port to Kansas City, and work with that, that trucking company regularly and get a relationship, it is worth more to pay more for that relationship and to get dedicated shipping, where our trucks not going to sit there for a week somewhere in a parking lot waiting on another load or it is worth so much more in profit to be able to pay those higher prices than Amazon’s dedicated trucks to ensure that your stuff gets there and gets checked in on time. And it’s done right. So what I know is that there’s a big move in E commerce in there in the Amazon industry to move away from the cheapest, the move to better. And they’re willing to do that because it comes down to it. And then also a second thing, part two, is a massive shift to start sourcing products from Latin America and Mexico. So a lot more products getting made in brought out of Mexico Guadalajara, wherever, up into the US. So people are paying more than then going to China. But it’s about that speed, it’s about the supply chain, things like that. And they’re looking to counter for like things that happened in the pandemic. So these big manufacturing comm conferences, all these kinds of things are starting to happen in Mexico City. You know, colleagues that I have are running these types of things, as there’s a massive I’m not exodus from China, but more so a need to just find, you know, alternate solutions. And so being able to being able to get the same freight company, like let’s say, I’ve been using warped and I’m a US company and then now I can go get it to get my LTL freight from Mexico as well and use the same system and network I think that’s I mean it’s gonna be absolutely huge for growth and econ
Daniel Sokolovsky 29:03
entrepreneurs I’m 100% and I also met I think that like you know, we spend a lot of time talking about econ because that’s like you know, all everybody is interested in clicking you know, but brick and mortar is huge to you know what I mean? Like a lot of brands like a, you know, I encourage a lot of people to go to brick and mortar also like people are backing stores, people are back shopping in the stores, and like there’s a huge massive opportunity to disrupt what’s currently happening in the stores like I don’t want to see like 50 Different yogurt brands on the shelves anymore. Do you know what I mean? On top of that, like there’s the small retailers, especially here in LA that you think about like Venice Beach, Melrose Avenue, like even Hollywood is even like on Cahuenga is having its own like little you know, final come up right where you have like really small for fabric and small format, small form factor brick and mortar stores that are now looking at the high end products to get out there looking at the right yogurt, the right butter, even the right you know chips or the right like paper towels are some stuff like that. And I think there’s a huge opportunity for brands and manufacturers and, you know, both small and big alike, to really start rethinking the way they’re getting products into physical stores. That’s a lot of fun. Also,
Andrew Morgans 30:13
I have some food for thought there. Because you know, ecom is my world, that’s been my obsession. So obviously, I’m coming even with questions and feedback around EECOM. But retail is, is a very big part of that the best companies are doing, you know, they’re in a hybrid model, right, where their retail and their online are all in sync and all that kind of thing. The problem has been for retail, at least the last couple of years is that whenever I am in the mood to go into a sort of shop, let’s say I’m leisurely shopping for fashion, or something like that, at least here in Kansas City. You know, we have the plaza, we have a few of these locations, for like boutique shopping or things like that Nordstrom or wherever you’re going right here in the Midwest, and you know, you’re there to shop. And they don’t have the basic sizes, right, they don’t have a size 10 or 11 shoe or medium or large. And what I’m looking for the what used to be like I need something by this weekend, I’m going to a retail shop to buy it versus versus purchasing online, that might be the reason I’m going in or else I have leisure time. And then I’m going there and they haven’t been stocked, they have no products, right? There’s nothing more infuriating than like, actually going in person spending your time if you value your time, you’re like, this isn’t the most efficient use of my time, I’m doing it because I want to be leisurely or because I need something quickly. And then they don’t have basic common sizes. And a lot of that comes down to the supply chain. I was in a I took a client to dinner on Tuesday night, and was talking to the server and I was just making a joke about, you know, like, is there anything on the menu that you guys don’t have. So I don’t get my hopes up. Because this seems to be my look, I just always pick the item that no one has. And, you know, it’s just like the one you come there for the chicken fingers or whatever, they don’t have chicken fingers that day. And you’re like, what’s going on. And I was just talking to her. And she’s like, it was something to do with like black pepper corn for one of their main items. And she’s like, you know, we don’t have any black pepper corn. And she’s like, the thing is, is that we could go to the store and get black pepper corn, for example, go down to Whole Foods. But she’s like our distributor who’s who we buy everything from, doesn’t have like peppercorn and they’re out and they can’t get it. And so you know, there’s these that was just like a little insight on what’s actually happening in those brick and mortar locations where if they’re tied in, they only have one distributor or one shipper or one, you know, one way to get access, let’s say and that is behind are not working, or they don’t have access to it. They’re Sol. So what are the other opportunities and ways for people to get access to stuff, you know, in brick and mortar and get stuff from different parts of of, you know, one thing about Amazon that I love is I’ve kind of removed the distributor model. In a lot of ways, I’m going direct with the brands, direct with local people think of Amazon as this giant, but they forget that there’s all these little brands selling on there, all these small medium sized businesses selling on there, and I’m taking them direct. So I’m that middleman that used to take a huge cut of the revenue is now gone, because we’ve helped them be self sufficient themselves and be able to reach you know, Kansas, local Kansas City company is now selling to customers in LA as if they’re in Kansas City, you know, through Amazon. So these types of things and being able to not have to rely on whether distributors have the best model or maybe they’ve made a contract with this freight company. And they’re stuck into it. And so you’re having to like abide by their rules or their partners, whatever they’ve gotten really opening that up. So I know that was a little bit. But um, you know, even from my side, some of the things I’ve experienced on the retail side that very much are in tune is like I think there will be this come back to retail when retail decides, hey, we have to be better to compete, you know, put the better yogurt on the shelf. You know, make sure we have like what we say we’re going to have in store, you know, you know those kinds of things.
Daniel Sokolovsky 33:47
Yeah, and I think that time is right now and I think the retailers are you have especially with like short store shutdowns happening across the board. You have labor shortages across the board. Retailers are trying to figure out ways to make money to retain the money that they’re making. And then like I don’t know, I love commerce, like I don’t care. I love omni channel commerce right like that. Just like I think that like the right retailers, the right brands, the right manufacturers can have such a good strategy now. And like 2023 is the year that you have to be on the channel in my eyes, but like you have to diversify ecom brick and mortar, get regional figure out you know, what are the ghost kitchens? Or what are the ghosts or retail that can actually sell your product for you. There’s so many options now, with an omni channel retail kind of like experience that like if as a small as a small business as a medium sized business, you need to be there and you need to be hitting the consumer in every single one of those fronts.
Andrew Morgans 34:42
I agree. I have a couple more questions for you before before we get there. Finding expert software developers doesn’t have to be difficult, especially when you visit full scale.io We can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and then see what available developers, testers and leaders are ready to join your team. even visit full scale.io. To learn more Full Scale that IO to all our listeners is our main sponsor for the show, they help us put all of this out, help us, you know get promoted on all the on all the areas where we can get more more views and be able to do the show for free as well. FullScale.io Simply browsing the site, seeing like how they’ve built that site to be able to find people to join your team, like the interactive characters, being able to see the employees what they do is really freaking cool and worth even just checking out to see how they built that whether you’re looking for software developers or not. So totally check it out. Daniel, a couple of questions as we like round out the last 10 minutes here. So I like to I like to end with a couple of questions that just kind of like open it up, I guess to take it where you want. But the first question being around warp, what is something you’re working on, it’s not you know, out yet, I guess so to speak or is not already part of the service, but something you’re working on, that you are excited about, or you or the team are excited about, and 2023.
Daniel Sokolovsky 35:59
So this year, we’re trying to go out and give a lot of our tools out to the different parties that are involved. So we’re putting our scanning technologies free of charge into facilities that want to adopted, we’re giving carriers, a carrier management system, again, free of charge. So they’re able to go out and make their business use easier, we’re giving capabilities to shippers free of charge again, so they can scan things out balance, they get a lot more visibility at the facility level to see what’s going on. So we’re taking a lot of the technology that we’ve actually built, and we’re putting it out there to the market and letting them use it for their own business, right. Even if work is not involved in their day to day operation. Even if we’re not currently transporting freight for them, we’re putting these pieces into their hands. So we can have a better ecosystem in general, like our big goal right now is like to change the way that freight works in general, right? We we think of ourselves, in some cases of free as a new operating system for free and for transportation. And we want to put this operating system out there in as many hands as possible. So you know, that’s definitely one of our one of our biggest priorities this year.
Andrew Morgans 37:01
I love that let’s get into that just a little bit more. So anyone listening that owns, maybe there maybe they’re one of those those services that you mentioned, maybe they’re the shipper themselves, maybe they’re the brand, maybe they’re the business owner, they’re the retail store, like who who is a good fit for, you know, to contact you guys or to learn about war, or maybe to try to get some of that stuff in their hands to test it like, you know, what’s what qualifies, I guess as being a good partner in that regard. So the first
Daniel Sokolovsky 37:27
one that’s coming out is anything for the facilities. So it’s our crosstalk management capabilities. So basically, what that allows facilities to do is to it’s like an it’s like a inventory management system, like an IMS meets warehouse scanning technology, right. So basically, that’s the first one that’s getting released, it should enable different facilities, whether it’s a brand owned facility or a third party facility, like a three PL or four PL or whatever it may be, to really be able to have better inventories ation of what’s inside of their building, to have better receiving capabilities, especially as far as like labeling different pallets, labeling different cartons, whatever they need to do when they’re inbounding freight into their facility. And then being able to outbound that freight, by automatically building routes are easily just building which inventory list they need to remove, and then automatically knowing which shells or which section sections in that facility to go to. So it should be available free of charge at the beginning of q3 for us. And that’s kind of like first and foremost, the one that’s happening afterwards is on the carrier side. So that’s any trucking company, courier company, company with three trucks that wants to put them into a marketplace and start getting work for them. That’s what’s coming up next for
Andrew Morgans 38:36
them. Awesome, sounds exciting, I’m gonna definitely have to stay connected we are, we’re in our third year as a fulfillment center, you know, continuing to grow. And we’re using a variety of tools, right, we’re having to not hodgepodge but you know, definitely be you have a warehouse management system and an IMS and you know, shipping aggregator software and, you know, all these different tools essentially, like, you know, give our customers the best options, like we, you know, we, we do have five, six different ways to ship that we’re, you know, every so often being like, what is the best way to send out this package, you know, and making sure that we’re giving them the best options is something you have to stay on all the time. So that’s really cool. And I’m making a mental note, you know, to just check us out here in the Midwest, maybe we can be a case study for you guys out here or something but alright, two, Part Two, Question two, something that you Daniel in 2023 non business related you guys it could be business related, but just something that you’re working on or that you’re excited about, you know, this year in your personal life.
Daniel Sokolovsky 39:36
Oh, I looked around my personal life it’s you know, has a lot of stuff happening. I would say something I’m really excited about. So basically, outside of war, I’ve been spending a lot of time around like space and space logistics, and I’ve been like, overall like preparing for, you can say preparing for launch, but basically, I want to start getting involved in Space logistics very soon. I think that’s an industry that’s coming up here in the next with it by 2025. By the time they were setting up the moon landers and things like that up in space, but that’s something we’re super excited about, I think that SpaceX has been doing like, it’s like a launch every single week, if not more, this whole year. There are a lot of other companies right now that are coming out there. And so far, space logistics has meant sending satellites up to space, and deploying satellites and making sure that they’re properly positioning themselves and stuff like that. I think in the next year, two or three years, we’re about to be seeing about sending inventory to space, right? So like all raw materials to the moon, raw materials up to the space station, so we can actually start building things up there. So I’m really excited to see what happens out there I think, I think that like, like logistics and transportation is getting a new frontier for itself. And that you know, in space is, in this case, the new frontier.
Andrew Morgans 40:50
I love that answer. It was not what I expected. It’s not something I’ve heard either on the show, super original and unique. So super cool. I honestly was like gonna have to ask what space Logistics was on like his face a, you know, a term for something in the industry that I don’t know about, you know, is it about like allocating space in a warehouse or something? No, but you’re talking about actual space. I think that that’s freaking out. I think that’s freaking awesome. You know, if they asked for volunteers to go to a inhabitable planet, I don’t want to go to Mars, I don’t want to go the moon. But you know, you find something with like some green and blue. And I’m probably signing up like, I’ll go there never to return. But that’s about where my love is for. I’ll be honest, like I just I barely can get through winter. So I don’t think I could live in a place that doesn’t have like, green and blue. I’m an African boy, I grew up in Africa. So just being out in nature is like a must for me to survive. But the super incredible. And then like, lastly, Daniel, people are wanting to follow your story, warped story. Get in contact with you to learn more about what you guys are doing. What’s the best place on social or web for them to find you?
Daniel Sokolovsky 41:54
Yeah, so online, it’s wearewarp.com. That’s W-E-A-R-E-W-A-R-P.com. They can go visit us anytime and fill out any of the forms, our sales team gets back within one business day. So that should be quick. Outside of that. We’re pretty active on LinkedIn. So the Warp LinkedIn channel is where we post all of our news. Sorry, where we post all of our news, updates, photos of new team members, and things like that. And then we’re also pretty engaging on Twitter. So follow us on Twitter as well. So I would say across all of those channels, or you know, if somehow you find my number and want to call me to talk about your logistics problems, I’m more than happy to answer and via and your freight therapist for you.
Andrew Morgans 42:35
I love it. I love the freight therapist. That’s funny, me and my, my buddy. We’re talking about just having a business therapist and what that looks like. It’s a little bit different than personal. But, you know, it’s been a lot of fun learning about something new today for sure. For me, I think probably a lot of new for our listeners as well. Thank you for all the value in the time you brought. Awesome. Thank you for yours. You’re welcome. And thanks again to our sponsors made all this possible. FullScale.io they have the people in the platform to help you build and manage a team of experts. When you visit fullscale.io, all you need to do is answer a few questions. Then let the platform match you up with a fully vetted, highly experienced team of software engineers, testers, and leaders at Full Scale. They specialize in building long-term teams that work only for you. Learn more when you visit FullScale.io. Thank you, Hustlers, for tuning in, and we’ll see you next time.