Nov 29, 2023

Logistics Management: Q&A – Chris Jamroz, CEO, Roadrunner

This article was first published in the Logistics Management ( here:

Logistics Management Group News Editor Jeff Berman recently spoke with Chris Jamroz, CEO of Downers Grove, Ill.-based Roadrunner, a national less-than-truckload (LTL) services provider, with a focus on long-haul metro-to-metro shipping. Jamroz provided his insights on the state of the freight economy, the current less-than-truckload landscape, and Roadrunner’s future plans, among other topics. Their conversation follows below. 

LM: How do you view current state of the freight economy? Do you think we are still in a freight recession?

Jamroz: I think that there is no doubt we are operating in a freight recession. The word “recession” is used very precisely….and is obviously a headline-grabber. Freight has been in a downcycle for the last 70 weeks or so, beginning with ocean carriers, then intermodal and the railroads, and then truckload. LTL, though, has largely been insulated from those recessionary trends, as it is a very secular and protected niche of the market that is governed, or driven by, a very different set of competitive dynamics. Those [dynamics] include nearshoring, e-commerce, fulfilment and also a flight to economy.

LM: In what ways?

Jamroz: If you don’t need a full trailer, it does not matter that it is at the lowest rate in a number of years. It is still more expensive than a pallet or an LTL shipment. Having more shipments and more densely packed cubic trailers is something that provides a tailwind to the LTL sector. In a downcycle, it helps, and in an upcycle, it helps, because it is obviously more expensive than a full trailer and helps to seek economies of scale and other things. It is a neat kind of sub-segment of the broader trucking and freight economy. That is why you have so many players interested in LTL.

LM: Despite how difficult it is to establish a new LTL network?

Jamroz: Yes, exactly. There have been no new entrants in the LTL space in more than 35 years now. The only way to get in is to buy someone, or very rarely, there is an event like what happened with Yellow. It’s a very interesting thing. Overall, it is a rather uninspiring picture for the broader freight economy with LTL being the bright spot.

LM: Speaking of Yellow, what has the LTL market been like, in your opinion, since its exodus from the market, as it was handling around 8%-to-10% of industry volumes?

Jamroz: I don’t think the sense of certainty about the demise of Yellow was there just because that topic had been popping in and out since 2008, followed by lots of subsequent speculation about its imminent demise. And in an economy which is obviously in a down cycle, but when you look at the comparisons and results posted by the public LTL giants, it is obviously not the same as 2022 but also is a far cry from any kind of trouble, even with a little bit lower tonnage and lower volume, but yields were up. When you think about a company like Yellow, even now as it [starts to] get sold for pieces and assets, given the valuations of the real estate and the valuations of rolling stock, there is still close to $500 million of extra assets to cover all the liabilities. So, from even from a financial perspective—and that’s my background is—how do you see a company with half a billion dollars of excess coverage of assets over liabilities going out of business? It’s just bizarre. It is a much more complex picture than most can appreciate. There will be academic papers eventually published on it, to be sure. What has happened is tonnage has been down annually for most of the sector, and when you look at the largest LTL players, they are all sort of double-digits down. From a shippers’ perspective, the Yellow situation was probably not smooth or risk-free or worry-free. But from a carriers’ perspective, it was more of a blip, in a sense. For the shippers that depended on Yellow—and Yellow operated a very fast network of terminals—what they wanted to do, or were looking for, was to swap a national player with density and a popular regional network for a specific or specialty player like Roadrunner, XPO, Saia, or FedEx, among others. Those carriers definitely reported volume spikes over the summer. Regional players have not seen much of that volume.

I think that volume is still to be recycled through the system as the larger carriers say, “OK, listen, we took it but I don’t think this is our forte, this may be a better service by a regional carrier or is better served by someone like RoadRunner because this looks like a point-to-point direct. Or this team needs drivers and is not what we do.” I think we will see that probably in the first half of next year when the normal RFP cycles will come into play. I think the Yellow event definitely provided some great stability in the market, not that LTL was suffering because every LTL player has put through rate increases on the contract increases over the last year. Some carriers probably had an opportunity to address the prices, due to the supply/demand dynamics in the short-term, and, sadly, a 99-year-old company is gone, which is quite sad, leaving a kind of wake behind it, while being good for the dynamics of the market.

LM: Shifting to Roadrunner, it spun off Ascent Logistics in 2020. How are things going since Ascent was bought by H.I.G. Capital in 2023? In what ways has it helped Roadrunner grow?

Jamroz: The companies had been separated for quite some time. We wanted to make sure that their respective stories were not too obscure or convoluted, as Roadrunner became a straight, pure LTL play, and Ascent became a pure specialized 3PL play, expediting ground and air charters and brokerage and freight forwarding. The fact that we completed that spin-off in 2020 helped to position Ascent to accomplish highs of epic proportions and success. Ascent is such a big player in expedited logistics and really kind of an absolute go-to, and for a lot of manufacturers depending on time-critical shipments, even in a recessionary freight environment because Ascent’s business model is kind of recession proof and counter-cyclical. It benefits from disruption. So, there’s disruptions on the border with Mexico or an ice storm in Texas or Alabama, where a lot of multimodal suppliers are. Anything that impacts the North-South trade, so everything behind the nearshoring, friend shoring, onshoring trends, it’s obviously there to serve with trucks and airplanes and so forth. So, that business has been contained beautifully throughout the down cycle and sort of providing the test proof to its agility of the business model. The sale of Ascent enables the management team to completely focus on Roadrunner and be 100% dedicated to it, to finishing the multiyear effort that went into kind of strengthening that operation and obviously all the successes and all the awards and all the technology investments on the Roadrunner side and it’s what we have everybody focused on and that probably helps the performance quite a bit.

LM: Do you see any evidence or signs of a peak season at all, or do you think is just a bit more muted?

Jamroz: We were hoping for the Chinese New Year early in the year, but the kind of pre-Chinese New Year peak didn’t materialize. It caught people by such a surprise that I think people were shocked that absolutely nothing happened. Then we thought about traditional back-to-school. That did not happen. It just kept getting moved. I think there’s still people talking about a potential kind of pre-Christmas, pre-holidays peak. We don’t have any evidence of that at this point, it’s just a little bit late. If you don’t have that loaded up on the boat and if you don’t have that today, its chances of getting that toy on the shelves decreases. I just don’t see that happening. Yeah, that’s been a disappointment to us overall.

LM: What about things from an inventory perspective?

Jamroz: I’m one of those logistics guys that on weekends goes to Walmart and Target and others just to see how we are doing. And it’s not been crowded and there are not a lot of shoppers, but what’s more depressing is there’s no inventory on the shelf. There’s just simply no inventory. I went to BestBuy, and they’ve introduced a coding mechanism system, where a checkmark means there is that one item at the back of the store. An item with a circle means that you can get it online and one with [a mark] means it’s in inventory but on backorder between six to 12 weeks. Who would wait 12 weeks for a toaster? I think the retailers are super nervous about restocking and not getting caught with excess inventory. That’s kind of what’s driving the behavior, but I don’t think we can run for much longer with what we have. We’ve got some major restocking to do. The retailers’ business is to sell but there’s nothing to buy. So, I think the people are going to wait through with significantly lower inventories to go into the prime retail season. And I think they’re going to evaluate these things.  I would imagine that if not in the next few weeks, I think Q1 will be unusually stronger on the restocking.