People think Amazon's the greatest marketplace in the world. They're not. They're the greatest logistics company in the world. There's a dirty secret in the automotive shipping world, and dealers are stuck footing the bill. This man is changing the decades-old system and saving dealers millions along the way.
Today, I'm speaking with Royce Newbauer, CEO of Autohuller Exchange, a digital marketplace that connects car shippers and automotive carriers. Don't forget to click subscribe so you never miss an episode. Before we get into the show, this episode is brought to you by Experian Automotive. Experian Automotive is one of the most trusted sources of data and insights in the automobile industry and are a one-stop shop. That's because Experian maintains massive databases from credit profiles to vehicle history data and millions of consumer data points.
Imagine the potential of Experian data insights to drive your marketing strategies. Dealers can use automotive, lifestyle, and predictive data to find in-market car shoppers faster and at lower costs. By leveraging targeted audiences, dealers can communicate with car shoppers based on make, model, off-lease, off-loan, inequity, fuel type, or vehicle servicing needs. All this allows dealers to communicate with the right car shopper with the right message at the right time.
They can increase their success rates and consumers are happy because they receive timely, relevant communication. You can learn more about the Experian marketing engine by clicking the link in the show notes below. Lastly, this episode is also brought to you by the Autohuller Exchange. I'd like to thank the Autohuller Exchange for coming on as a guest and also supporting this podcast.
Royce Newbauer on the CDG podcast. Royce, welcome. Thanks for having me. I'm excited to be here. It's good to finally have you on. How's Life in the Logistics world nowadays? Life in the logistics world has it's always been up and down crazy. I think that's why logistics either sucks you in or spits you out very quickly. I must be crazy because it sucked me in about 23 years ago, 24 years ago, and I've loved putting the puzzle pieces together ever since. I respect it. I had my very, very short and brief foray into logistics that my private company get a car with transporting cars all over the country, of course not in a commercial capacity, but that was never my cup of tea.
And you know what the funny part is? I remember doing the research into like Carvana's, those is Suzuz and whatnot. And man, that's a whole world in its own. It's insane. I mean, when you look at everything that goes into a store, into your office, that microphone was on a truck, your closure wearing was on a truck. The vehicles we drive, the parts, I mean, everything that is around supply chain is logistics based. And you can even look at marketplaces in general. People think Amazon's the greatest marketplace in the world. They're not. They're the greatest logistics company in the world. And that's why that thing runs as good as it does. So logistics holds a big part in everything we do. I don't know if a lot of people look at it or think about it that way, but it's one of the largest industries in the world, obviously. Yeah, I would tell you from my experience that to build a large automotive retailer, and I want to say large, I mean, like, you know, national scale or multi-state, you're just becoming a logistics company. It's, I think, you know, again, this isn't the hard lesson I had to learn.
No, but seriously, it was, it was constant logistics equation. And you know, how do we just, you're moving all these cars around. It was all logistics and ops. And that was sort of the core competency at scale in our industry. So. And I think if you look at a lot of businesses, they kind of cast logistics off as a necessary evil, right? They're not focused on it. They're not focused on how efficient it can be, how transparent it can be for their consumer. It's just a spend center for most businesses. The ones that are unbelievably successful and can grow and drive revenue from multiple verticals within their business, understand the logistics can be much more than a spend center. It can be a revenue generator for them as well.
Well, I think, and we'll get shortly into, I want to talk about how you got to disappointing your career and your entrepreneurial journey, which I think is fascinating. I did some reading on your story. But before we even get into that, our soon we'll get into the, you know, what you're doing today and what you've brought to the marketplace with auto-holic exchange. And I think what's interesting is, as I thought about this, our industry and this business, that you can, if I'm selling a widget through Shopify or on Amazon, right? Like I can have someone fulfill that for me. But in automotive, you know, automotive is different. I mean, we're moving these massive, you know, several ton pieces of metal. It's, you can't just outsource that, but you can outsource elements of that to make your life a lot easier. And obviously we'll get into that shortly. So before we even get kick off into what you do, can you walk us through your entrepreneurial journey? I mean, you mentioned you've been in logistics space for over two decades, right? So how did you take us up to the point of what you're working on today? Yeah, so, you know, like most college kids, I graduated, didn't really have a clue what I wanted to do, was gonna be a lawyer, then I was gonna be a football coach and teacher, and then somehow ended up at a logistics company in Cincinnati, Ohio called TQL. TQL was founded by two entrepreneurs that saw a need for freight brokerage in primarily food shipping. I was a 30th employee there, I was there for about 10 great years, and now they're the second largest freight brokerage firm in the country, going about 15 billion in sales. So I was able to learn from those leaders what logistics and supply chain really meant to our ecosystem, to our commerce, to our economy as a whole, and just fell in love with the space. But there was always, I don't know if it was, the good cop or bad cop in me, you just tapping me on the shoulder saying, hey, you need to go try this on your own, you can launch your own logistics company and do it a little bit differently.
One thing that kind of keeps me up at night or drives me crazy is inefficiencies in any process. Well, I'm glad you brought it up because I was gonna ask you that question anyways. Yeah, I mean, it's just something that's always spinning in my head. How do I make something easier, more user friendly, fewer touches, much more transparent, how do we drive efficiency in business? Because let's be honest, money is time, or time is money, right? So if I'm wasting half my day doing administrative tasks instead of buying and selling, I just lost half my day of selling opportunities or buying opportunities. So as I was developing my own freight brokerage, which I opened in 2011, we decided to drive out as much cost as possible. And we started looking at a different technology partners that could allow us to move more freight with fewer touches. For an example, in 2016, we had roughly 92 employees at our brokerage. But then I started looking at our bottom line and we were consuming ourselves. We were just not able to drive enough profits even though we were moving a ton of freight. And we were able to partner with a few technology companies out of California that allowed us to grow our revenue by about 400% the limit, my internal costs by over 300%. So we were driving out touches, we were driving out manual processes and we became, I would think, one of the most efficient freight brokerages in the country. But it still wasn't good enough for me in my head. I always felt that there isn't always a need for a middleman.
Now in some cases there is, but it should never be your first or second decision. It should never be your first or second choice. If I can connect a shipper directly with a carrier, that's where the link should stay as much as possible. And in the brokerage world, you are the middleman. You're constantly negotiating with the carrier and the shipper. And in most cases, it slows down the shipping process. I couldn't find a vertical in freight where I felt that you could truly digitize it, become a marketplace. I think Uber and Convoy are prime examples of trying to wrap their arms around that 3,000 pound gorilla and figuring out a way to digitize the freight world. Uber tried it for many years. Now they're the fourth largest brokerage in the country. And Convoy, yeah, Uber is the fourth largest brokerage in the country, Uber Freight.
I wouldn't necessarily call that a marketplace. Convoy was backed by Amazon of all people, tried it for years as well. But it was the problem with freight and trying to truly digitize every vertical is every vertical is different. Shipping food is very different than shipping produce, which is very different than shipping cars, right? Yes. And that's a part of what I was trying to say earlier, right? So to explain that deeper to us, right? Like, what is the state of automotive logistics compared to other industries today? Right? You, as someone that comes with a fresh perspective and you intimately understand this, right? I don't understand it like you. I just know how we used to ship cars and the transport is used all over the country and what worked and what didn't work, right? But like, where are we in this spectrum? Like, how are we doing?
Yeah, to your point, I came into the vehicle logistics world in 2021. We launched a vehicle logistics team within our brokerage. I came in with no blinders on, no preconceived notions, just like a sponge ready to soak up information. And I was very shocked at how inefficient the processes were by some of the largest shippers in this country, how untransparent the communication was. And I felt like the industry as a whole kind of had a, it ain't broke, don't fix it kind of mentality. This is just the way we've been doing it for the last 50 years. Why would we change it? That's just not how my mind works. So I started interviewing carriers around the country.
We're interviewing large scale shippers, whether it's OEM or remarketing to large dealer groups. And most of them had the same problems. And the bulk of the problems were around, well, I've got this broker or I've got this middleman. And they just tell me what I need to do. There's no data saying how much I'm spending or how much I'm saving. It's just, I know I'm getting my cars picked up and delivered. I'm not really sure when they're going to get picked up or delivered, but I have about a 10 to 14 day window. And that blew my mind away. I was just shocked because in the freight world, you have a one to two hour window to pick up and deliver in most cases. And if you miss that window with a large retailer and freight, you could be sitting two or three days before they'll receive you.
In the vehicle logistics space, it was, yeah, if my cars were picked up five days after I purchased them or five days after they were allocated to me and delivered within 10 days of purchase, I guess I'm OK with that because that's what I'm used to. So we started asking, you know, what if we could drive a better service model? Well, what if we could drive a better, you know, more efficient model for you that could a drive out some of your internal spend, which is your holding costs. You know, what are you paying the railhead to hold those vehicles per day? What are you paying the port to hold those vehicles per day? How much is it costing you in depreciation value?
If you buy 50 vehicles from auction and you don't receive those for 12 to 14 days, you know, what if we could get those vehicles to you in two to three days? And, you know, we just started really investigating that the industry as a whole, the vehicle logistics space. And another shocking element came out and really just popped out to me because in the freight world, where I originated from brokers, don't control a vast majority of the opportunity. Asset-based carriers do. Brokers control a very small portion. And now there are some very large brokers that have huge market share. But the overall trillions of dollars in spend, brokers control about 12 to 13%.
We found in vehicle logistics, it was more around 90%. And that just shocked me. Wait, what was 90% that brokers were controlling the opportunity on about 90% of the volume that we were seeing or we were discussing with our shippers in the car, in the car business, in the car shipping business. And one of the glaring things that really popped out was a lot of the large scale asset-based carriers were developing brokerage arms. When you say asset-based, what do you mean by that? They own their own trucks. They hire their own drivers. They have their own equipment. A broker is a third party. They don't own equipment. They don't own trucks. They're a middleman who negotiates for shipper and carrier, right?
Well, we found a large portion of the large fleets in vehicle logistics. We're all leveraging and building out brokerage arms around their asset business. To me, that's interesting. You don't see that nearly as much in the freight world. Why is it happening in the vehicle logistics space? Wait, and just so I understand this, before you explained it, so you're saying, right, I am an auto-hauler or I do transportation in the car industry. And maybe hypothetically speaking, right, I operate in five states, 10 states. But now I also launch a brokerage arm and maybe I'm able to work in every state. I see you nodding.
But one of the things we're seeing, though, also is not only can I operate in every state, if I'm an asset-based trucking company and I own a thousand power units, I own a thousand trucks, thousand trailers. Well, if I'm trying to get a large-scale opportunity with an OEM, they're going to look at my size and say, well, you can only manage a portion of that based on the amount of equipment you have. Well, now if I can go and say, hey, I'm also a broker and I can leverage my brokerage arm to contact 10,000 different carriers around the country, now I can take on more of your opportunity.
So these brokerages and these asset companies that have brokerages were consuming just vast shares of the market and it was leaving the mom and pops kind of on the outside looking in in a different way than we'd ever seen and free. When you say that, like, weren't the brokers working with the mom and pop? Brokers do work with mom and pops. No question about it. But when you look at a business model, what's the primary reason that a ship or hires a carrier? It's to pick up their vehicles and deliver them safely, right? Now, in the freight world, I'm told I need to pick up on Monday and it has to be their Thursday. And if it's not, there's going to be a problem. In the vehicle logistics world, when we first entered, was, yeah, you can pick up this week and deliver sometime next week because that was the expectation.
We basically said, what if the expectation's wrong? What if you should set parameters around your pickup windows or delivery windows? Because we're seeing these dwell times just get excessively out of control. And the concept with the auto-hauler exchange was, well, what's slowing down the process? Well, we felt that the brokerage model was the key figure that was slowing down the process. A broker, and I've done it for a long time. I know what brokers do. I'm negotiating against the shipper for a higher rate, and I'm negotiating against the carrier to drive down a lower rate. Because all I care about is making that middle profit. That's where brokers live. They're going to make a profit based off of what they're getting paid by the ship room with their pay in the carrier. So if you're going to give me 10 days to pick up a vehicle, I'm going to negotiate for as long as possible so I can find the cheapest truck. Yeah, I get it. Incentives are extremely misaligned. Yeah.
Yeah. I'm not driven by service. I'm not driven by getting that car picked up as quickly as possible and delivered to you as quickly as possible. Now, if you give me parameters and rails to live in, all right, now I've got something to work with, or I'm going to start up in the rates on the shippers because I still need to make my 20 to 25 profit. Now, that's where brokers want to live, right? So I basically said, okay, it doesn't work in freight because freight's too big, but vehicle logistics is very siloed. Everybody seems to have the same problems. Everybody seems to tell me that cars are getting picked up fast enough. They're not getting delivered fast enough. Carriers are telling me I don't have enough opportunity. I'm stuck working with brokers. I'm stuck sitting outside of auctions hoping I get a call that there's cars for me to pick up today. My dealer networks are working with brokers because they know that they can attach themselves to larger carrier bases than just being my five trucks. And we basically said, what if we could democratize the space? What if I could just open up every vehicle shipping opportunity direct to carriers? I don't care if you own 100 trucks. I don't care if you own one truck. As long as your authority is strong, as long as you've got good safety ratings, as long as your insurance matches the need of the shipper, you have an open market to go shop for opportunities on your own with nobody else in the middle.
And that was the creation of the AutoHauler Exchange. We consume the idea. Oh, gosh, back in 2021 and started having some serious conversations in 2022, early 2022 and received our VC backing the summer of 2022. And we launched in the back company. Yeah, where did VC come into play here? So you have any experience with the VC world? I'd never ever had experience in the VC world. And it's an interesting world. So we, I built a service based business. I built a brokerage, which is service based, right? So in a service based business, your goal is to show profits every single day, grow your business in a fiscally responsible way. So it was a slow, tread up the hill. Well, the AutoHauler Exchange is a B2B marketplace. It's a technology company. And the speed to market is much more volatile and you have to be fast and you have to be agile. And your trend is much higher. Your burn rate is going to be much higher when you're building tech. So we partnered with a technology marketplace construction company. They built our marketplace and they were showing their VCs one day in one of their board meetings, what products they were working on and what marketplaces they were building. And the AutoHauler Exchange came up in their board meeting. And within a week, we had three different VCs call us and reach out and say, hey, this is interesting. We'd like to talk to you about it. We partnered with a fund out of Toronto called Golden Ventures and they've been a great partner to this point.
And they've allowed us the financing to really build out a product that is starting to take hold in the vehicle logistics space. We launched in December of, gosh, 2022 in a beta program with about five shippers. And last month, we believe we had over 300 shippers nationwide, market wins in the exchange in close to 3,500 carriers who have signed up. Wow. And how many dealers are you working with? Roughly 300. Roughly 300. Yeah. So, all right. So just a back battle for one second, right? And it's funny because, you know what, if Chris, who I worked with him for years, he was handling all logistics, if he's listening to this right now, if I had a, if I had a freaking dollar for every time we had this conversation about like, you know, the cars came late or why are the cars not there yet? You know, recon, the reconditioning center. I mean, it's, it's a no-brainer challenge. So 100% agree with you there. And so it's funny to kind of, you know, I was smiling when you were explaining this.
Second thing is you are not asset based, meaning like you don't own your own shippers, but the way you've solved for this, like, conflict of interest with brokers is simply by being a transparent tech marketplace, where people can make their own decisions. And again, there's no human involvement. Human involvement is the key. We are connecting carrier with shippers. We're not involved in any aspect of the negotiation, of the shipping process. We're not managing the shipping process. A lot of this is handled by tech and companies that we've partnered with or tech that we've built in. So, you know, there are a couple of things that brokers do very well, and that's aggregate carriers, and track the carriers' information. Do they have insurance? Do they have the right authority? Are they a safe carrier? If you're a good broker, you're doing that daily. A lot of people don't know that that's handled by technology. That's a simple plug-in.
Alright, so the broker's not really doing anything. The second piece is the financing. Most trucking companies in the United States, whether you're in freight or vehicle logistics, they are surviving check to check. It is a tough industry. There's repairs, there's fuel, there's driver costs, there's insurance, there's damages. So, these guys need to get paid a lot quicker than most shippers are willing to pay them. So, I can take an OEM, for example. Most OEMs are going to pay in around 45 to 60 days. That's just how it works. 90% of the asset-based trucking companies in the United States cannot wait that long. The large fleet scan because they're backed by banks, right? The 2,000 assets, 1,500 assets, they've got financing behind them. So, they can survive that period of time for payment. The 45,000 independent trucking companies in the US that are surviving check to check, they need to get paid quickly. They need to get paid same day of delivery or within a week. Explain that to me for one second though.
Wait, where are we at right now in the supply chain? We're saying OEMs. Is this OEM shipping to where? OEM shipping to dealership. OEMs, if I'm contracted with an OEM, my payment terms are going to be typically at states 30 days, but I'm not receiving payment for usually upwards of 45, 50 days. So, my brokerage will wait 50 days to get paid, and we're paying our carriers, 50% of our carriers are getting paid same day of delivery. So, I have to float that capital for upwards of 49 days.
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What we see on OEM pricing, they're trying to get the cars shipped at the least costly all kinds. But there are analytics that we're trying to figure out for them that, yeah, you may want to move that car for $75 out of the port of Houston to whatever location per VIN, but it's going to take you 14 days to get that car picked up at $75. If you paid $95, you'd have it picked up in two days. What is actually costing you more money? Most OEM's don't know that. But if I'm even, forget, if I'm a dealer and I'm buying an auction and, you know, if it's taking, I'm making a summer now. It's taking, you know, let's say four days, five days for the vehicles to get to me.
So technically speaking, if I use your platform, I might be able to get those vehicles in two and a half days. 100%. Okay. Well, look, I think your timing is great. I, Royce, I think your timing is good because, you know, the word here, like the word that everyone is talking about, obviously in 2024 now is just efficiency. You mentioned it a couple of times, but this is not 2021 anymore. And everyone is looking for where they can, you know, trim a bit more margin and become more efficient in light of declining margins on the new side and the new side. And so I think that that is just the theme that everyone's back to and the timing makes a lot of sense.
I think the timing definitely makes sense. But I also think, you know, it's about looking at pat, you got to look past the actual freight rate. You got to look past the, what did it cost me to ship that then? And we loaded it fully loaded. And what did it cost? Because most of the shippers we were speaking to earlier, we're like, well, I'm already paying this broker, you know, X amount per VIN, but your market data is telling me I need to be paying 10% higher. And we said, well, that's what the market's showing. If in the reason it's taking you 10 days to receive that vehicle after purchase, it's because you're marketing under market value and it takes time to find that care, we're willing to pick it up.
So is it actually saving you money to pay 10% less prevent? And as we started diving deeper into the numbers, which not one single dealer was able to tell us yes or no, they said, well, we don't know. We're not sure. So we started diving into some of their holding costs and the depreciation value of some of the vehicles. And it was just like light bulb moment went off. Man, if you can get it here in two days and three days versus 10, holy cow, I just got a full extra week to sell that vehicle. Oh, yeah. I mean, it's no different than when you're buying a car, right?
Any you don't need to be a genius to think that as a dealer, if you're purchasing a car from, you know, it was in Bob way or whatever, right? You better you better pack in transportation costs because that rolls right down to the cost of the car, right? So that's 1000. I mean, even even, yeah, it's it's you got to look at a fully loaded, but I get your point, right? Like you need to you're basically saying that you're taking a more efficient view into that transportation and you're straight up looking at days and depreciation. And depends how much depreciation, you know, you as a dealer are associating per day with your vehicle could be $10 a day, could be $50 a day, could be, you know, $100 a day depends on the vehicle. But that that's just, you know, a cost that gets factored into the equation.
Yeah, so we are taking a holistic approach to looking at the total cost of the transaction, right? It's not just the pick up and delivery. You know, so what is the total cost of the transaction on the dealer's end? And it dives even a little bit deeper than that when you look at, and I know this is, you know, something I wanted to talk about, but if you look at most dealerships, who's actually setting up the transportation? 99% of them are not logistics professionals. They're used car buyers, they're group sales managers, you know, that some cases, 100% they're the GM, right? 100%.
So they're trusting that the person they're working with is giving them all the data points. That is a great, that is a great insight. Yeah. Yeah, I'm sorry. I'm just like, I love it because it hits home, right? Thinking about it. At a new Scorpio ship. Yeah. Yeah. And listen, we had a logistics coordinator at scale. But before that, who's handling it? Like the buyer, right? Or like the operations, like it just 100% agree with you. So our product gives them all the data and analytics that a logistics professional would typically just know, and it's all right in front of them.
So they can make wiser decisions on buying. They can make wiser decisions on how much they want to pay to ship it. Do they need the vehicle expedited? Has it been sold already? You know, they have the choice to market that vehicle with the price they want to sell it at or ship it at. And our system will kind of aggregate their expectation based off of our AI and our data. You know, bank to where we're constantly collecting data to make it smarter. So they can make smarter, more efficient decisions.
And it's proven to make their days more efficient. They're not worried about finding trucks. They're not worried about communicating with a broker on picking up the phone or sending emails. Everything's right in front of them on their desktop. Or the system will push notifications to them based off the notification they want. So now they can just focus on what you hired them to focus, which is buying and selling cars.
So Royce, what are you seeing? Right. What are you seeing across the industry in terms of like potential savings? And I'm talking about fully loaded savings, right? When dealers take advantage of, you know, when dealers are optimizing their shipping, is there like an average you're seeing like our dealer saving on average two and a half days at 350 bucks per car? Like what is it?
We've found with most of the dealers that we've signed up on average 15 to 17 percent on the shipment of the car they're saving because those brokerage fees don't exist anymore. And these are dealers that have worked with brokers. We're actually cutting the delivery time for them pretty much in half. So most of our dealer partners that we're working with, and I'm talking about large-scale, you know, enterprise dealers all the way down to a mom and pop that might own five dealerships. And their delivery window from purchase to delivery prior to auto-hauler exchange was right around seven to 10 days.
Our delivery window is right around three and a half to four days from purchase. And the reason for that, and I touched on it earlier, is there's no negotiation. Our system's going to give a dealer, hey, you're buying from this location and you're shipping to this location. This is what the market data tells you the rate should be. This is what the auto-hauler rate has been providing in the system. You should market around there and your car should get picked up relatively quick. Now we found if somebody markets it higher, carriers jumping on it, right?
Supply and demand, they say, high price, they're going to jump on it. If they're marketing it exceptionally low, just trying to get the cheapest truck, that car might sit on the exchange a little bit longer. But the system can trigger it to say, hey, every two hours or every day, raise a index amount. So we're trying to help give them tools to make their process more efficient, but also drive revenue back to the carrier and create a cost savings for the shipper.
So I have a challenge to post to you. I'm curious how you're going to respond to this, right? So I think as a dealer, like one of the challenges with shippers is integrating them into your process, right? When they drop off the vehicle, I see you smiling, what happens with the keys and where are they dropped off? And can you stop in the street or do you like blah, blah, blah, blah? I had Doug, you wrote a general manager and president of Longo Toyota on the podcast. And I love that he was saying that, you know, and our dealerships, shippers can only come drop off at night because they're just like, we're so busy. We're so busy.
We don't have time for them during day. It just disrupts traffic, blah, blah, blah. So how do you integrate this into your process? And how do you give me as the dealer that predictability? Right? Because like, what I try to think like we worked, you know, with mom and pops for years. And there's a reason why, right? You build that relationship, but they get to know your process and they get to know what you want. And so how do you build that predictability into the process? So we handle this on the front end when we're onboarding a shipper. We tell them that information is king. You know, the more information you can give that driver, the fewer mistakes you're going to have and the fewer calls you're going to get, fewer emails you're going to have to respond to.
So when we're setting up a shipping location, our team works with that shipper, our operations team will call that shipper and say, hey, what are your parameters? What are your windows? Work gate do we need to come into? Who does the driver need to speak to? So we're preloading all that shipping information before there's ever been moved out of a location or into a location. So when a driver receives their tender from the system, it'll have all that information, contact phone numbers, addresses, delivery parameters, and our system will grade the driver. If they're in fractions, our operations team will make a call and say, hey, let's strike one. We're giving you all the data you need. You want to work directly with Toyota, they need you to follow these instructions. And the carriers are coachable, right? They're not doing it on purpose. So at the end of the day, it's all about the information you're willing to share and how detailed do you want to be? We hold our dealers hands or shippers hands on, hey, we need details. The more details, fewer problems we're going to see, where you run into issues or around holidays or end of the month and end of the quarter, where people extend their hours because they've got to hit numbers. We ask them that, hey, if if anything's changing, change the system, you have access to it, or if you don't want to change it, center ops team and email will change it. But at the end of the day, it's like anything else. There is a little bit of a manual process in that in the beginning. But once it's preloaded and set, and that becomes a consistent shipping lane, then the right communication is there. And we're also seeing once we see consistent volume in a specific lane, we're seeing the same carriers run those lanes over and over again. So now you're really seeing a consistent service model because those drivers have been there 10 times, 20 times, 30 times, they know the process. They know what your expectation is. And that's what we're trying to do is really drive that relationship between shipper and carrier, let them communicate together, let them collaborate together, let them figure out what works for them. And at the end of the day, after the setup process, we're not really involved anymore.
I want to shift for a second to market, right? Like, you obviously are working with 300 dealers, you have tons of data here. What are you seeing in the market right now in terms of rates, right? We know inflation is kind of ramping up again. We know just prices across the board have gone up over the last couple of years. But today, as it stands, right? Where are we at with shipping rates, averages? Are you seeing a rise right now with spike? Where are we at? Yeah, I think we're seeing a slight rise, nothing extreme. I think a lot of it has to do with, you know, supply and demand. I mean, that's really what drives any trucking rate in the US. OEMs are pumping out more cars than they did a year ago, two years ago. So there's volume surges. We know where the market world is, but we're marketed prices have dropped dramatically. So we're starting to see an uptick in auction buying. So when there's more cars to ship, of course, it's going to cost a little bit more to ship them. It's simple math, supply and demand. And there are certain markets that are depressed around the country right now based off of seasonality changes. And then there are certain markets that are surging. Our system will track that and follow that. Snowbird season is a prime example. You see massive surges in December and January out of the Midwest and in East Coast going to Florida. There's just a lot of snowbirds heading south for the winter and we're shipping their cars down there. Other people are shipping their cars down there. So the cost to ship those vehicles that time of year out of the Midwest and Northeast are twice what they are right now. Right now, snowbirds are coming back home. So the cost to ship the vehicles out of Florida back to the Midwest and East Coast are a lot more expensive than they were two months ago, three months ago. So it's simply about following different trends, different seasonality trends to kind of stay ahead of some of that.
But then also, natural disasters can cause major fluctuations in rates. End of quarter and a month at a certain OEMs can get a little bit crazy in specific markers where manufacturers are located because they're going to pump and surge volume out of certain markets. So we're seeing a gradual uptick in the cost to ship vehicles right now and we feel that that will continue. Just as supply really comes back on to the market from the OEMs and we're seeing great deals at dealerships. There's incentives. Use car prices are dropping because of those incentives. So we feel that the market's starting to heat up a little bit.
If I'm a carrier, why do I want to work with you? Like why do carriers prefer to work with you in general? That's a great question. And the carrier response has been unbelievable. I think the main reason they choose to work with the all the holier exchanges because they feel they're getting control back. That was ultimately when we first started having these conversations a couple of years ago, the carriers were very frustrated. They didn't have direct access to the opportunity. They had to work through brokers most of the time. So we basically said, I give you direct access to say 50 ship rigors. Say I'm in Metro Detroit. I'm a carrier Metro Detroit owned five trucks and I move. I got five three car haulers and I've got to wait for a broker to call me for every opportunity or I can log into a marketplace and see thousands of opportunities sitting right outside my door from multiple vendors, multiple shippers. And I have the ability to work directly with them, communicate directly with them. I don't have to go through a third party anymore. I know I'm going to get paid just as quickly as I needed to because Auto Hall or handles the payment processing and then we build a vendor. So they don't have to worry about payments. They don't have to worry about who they're working for. They know that the VINs are legitimate because the person that owns the vehicle is marketing the vehicle, right? Whereas a broker, I might post on five different load wars, 10 different shipments when I only have one because I'm trying to find the cheapest truck. So that is a big difference between a load board and a marketplace. What's marketed on the marketplace, the Auto Hall or Exchange, is actual VINs being posted by the actual owner of the vehicle. Whether it's a consumer, an auction, a dealer, an OEM, those vehicles are coming directly from the source so that the carrier can trust it. They can trust that that shipment is legit. They get direct communication link to that shipper. They get a direct communication link to that receiver. They're managing the process. They're managing the relationship for there. So now they have the control back. It's up to them to grow that business with the opportunities that the exchange is providing them. So like I said just a second ago, we really haven't marketed the carriers directly and we have over 3,500 carriers that have signed up into the exchange.
如果我是一个承运人,为什么我想要和你们合作呢?一般来说为什么承运人更倾向于和你们合作呢?这是一个很好的问题。承运人的回应让人难以置信。我认为他们选择和所有更神圣的交易所合作的主要原因是因为他们感觉他们重新获得了控制权。当我们几年前首次开始进行这些对话时,承运人非常沮丧。他们不能直接获得这个机会。他们大多数时候不得不通过经纪人来工作。于是我们基本上说,我给你们直接访问50家船厂的机会。比如我在底特律市,我是一家拥有五辆卡车的底特律市的承运人,我运营着五辆三车运输车,我要等待经纪人为我提供每一个机会,或者我可以登录到一个市场,看到成千上万的机会就在我门外,来自多个供应商,多个托运商。而且我有能力直接与他们合作,直接与他们沟通。我不再需要通过第三方了。我知道我会得到和我需要的一样快的支付,因为Auto Hall or处理支付,然后我们向供应商收费。所以他们不必担心支付问题。他们不必担心他们为谁工作。他们知道这个VIN是合法的,因为拥有车辆的人正在销售车辆,对吧?而经纪人可能会在五个不同的装载板上发布,10个不同的货运,而我只有一个,因为我想找到最便宜的卡车。因此,市场与货运板之间存在很大的区别。在Auto Hall或者Exchange上进行市场营销的内容是真正的VIN,由车辆的真正所有者发布。无论是消费者、拍卖、经销商、还是汽车制造商,这些车辆都是直接来源,因此承运人可以信任。他们可以相信这个货运是合法的。他们可以直接和托运商沟通。他们可以直接和接收方沟通。他们管理这个过程。他们管理关系。因此,他们现在重新获得了控制权。他们可以利用交易所为他们提供的机会来发展业务。就像我刚才说的一样,我们实际上并没有直接营销承运人,但我们有超过3500家承运人已经注册进入交易所。
Well, yeah, you're providing more value, which doesn't surprise me. And well, I want to flip to the other side then, right? I have experience with obviously shipping to consumers. What do you think about that? Number one, are you shipping to consumers? Number two, do you think that's something that it's going to continue rising in our industry, right? Because it has retracted since COVID craze when cars were shipping everywhere. There was no supply. Now there's more supply. People can find cars in the local markets. So are you shipping to consumers? And do you see that as like a secular tailwind for the industry? I think it's an absolute tailwind. I think direct to consumers where it's headed. Yeah, I mean, if you look at the consumer today, they're used to shopping with their thumbs. They're used to shopping on multiple marketplaces, multiple websites. And they're not going to go pick that item up. I'm not driving to Amazon to pick up the boxes.
I'm not driving to wherever my wife's shopping to pick up the clothing she bought for my kids. It's being delivered to my house. So we've been pleasantly surprised that within the auto-holic exchange, we've had hundreds, several hundred consumers directly reach out to us to move their vehicles. We didn't initially build the product for direct to consumer, but we have the ability to do that. So we've been doing that for dealers in our network that have asked us to deliver directly to consumers. But also consumers are marketing their cars to ship, whether they're snowbird or they've been transferred, they're moving, things of that nature. And we're building in a platform to make that more efficient and easy for them so they can swipe their credit card and it's paid and it's done. But I absolutely see that market growing because our consumer demands it. That's the lifestyle we're used to. My kids, I don't know if you have kids, but my kids, they're used to boxes showing the other three. Are they used to boxes showing up at the house? And that's what we bought? They're too young for that, but they're used to mom buying stuff on the box. 15 year old daughter and she's used to seeing boxes show up at the house. It drives me a little breezy sometimes. But that's just the life they've lived in. It's a different consumer than it was 10 years ago, 20 years ago. I love it.
All right. So I want to talk about EVs. You mentioned a very interesting anecdote to me about EVs that I'll let you kind of tell the story here. But specifically, I want to talk about EVs because I know now that I tweeted about this a couple of times that use car dealers are spying and selling more EVs. And the reason that's happening is driven really by the tax credit, which is being applied sort of as a down payment, especially for a subprime consumers that maybe need to be at a lower loan to value ratio under loan or whatnot. They're getting $4,000 applied to their vehicle. It's remarkable. So with that said, I'm just hearing use cardiators are buying more EVs or dealers that are selling used cars are simply buying more because it's a more lucrative sale. So I'm curious to know from your end, right?
Well, if you could share the anecdote with us, which I found very interesting and I had never thought about shipping EVs or in the depth that you shared with me. But also, what it's how EV shipping is impacting the industry in any way. What are the biggest differences? I think the biggest difference that we have seen, I mean, obviously EVs aren't going anywhere. They may have slowed to some degree, but you're also seeing a pop in the remarketed space, which is interesting. And I think that tax credit has lots to do with it. Yeah, driven by price, really.
A hundred percent. But on the shipping side of it, something that I particularly didn't consider when we first started shipping EVs was the actual weight of the batteries. We have one particular manufacturer that I'm not going to mention any names, but they produce a very heavy vehicle. And we have to send in eight or 10 car haulers to pick up their vehicles because of the weight distribution. And they're only fitting four to five vehicles on the truck. And if I compare that to picking up large SUVs or pickup trucks, I'm going to load seven to eight of those on the same truck because of the weight distribution. The weight distribution on a combustible engine pickup truck versus a battery power truck or SUV is considerably different, almost double in some cases.
So that's going to drive up more shipments across the board. It's a less efficient process because you're not shipping as many cars at the time. But due to weight restrictions on the roads throughout the United States, a carrier has to max out at 80,000 pounds in most states. If you're interstate, that's what you have to max out on. So with the weight of some of these EVs, we just can't ship as many, which is going to drive up the need for more trucks in the marketplace. And again, not something that I ever considered. I never thought about it. Never crossed my mind until we were sent in and said, Hey, we're going to pick up eight of these. They're like, no, you can only get four in that truck. Like, hold on, what's going on here? Like, don't you know how much these weigh? Oh, yeah. It's like done. Yeah. Well, Royce, I mean, this has been very fascinating. I learned a lot. So thank you for that. I want to transition to just your outlook. I mean, what's next for AutoHauler Exchange, right? Like, what does the future look like for you? And then I also want to know, I want to get your take on what's next for our industry. So to kind of split that up for us, give us one by one. Yeah, I think, you know, for AutoHauler Exchange, it's to continue being problem solvers. You know, we came up with a concept to build a marketplace for logistics. That has proven market fit and need and it's growing. And we're going to continue to improve on the product. We're going to continue to listen to our shippers and carriers to make it a more efficient product, the smarter product. But we're also going to add new opportunities to become stickier with our shippers and our carriers to provide more opportunities to them, whether it be outside of logistics, just for the automotive space in general, or the dealership space in general. We have a few products that we're working on to complement what we're currently building. One of those actually just launched last week, it is having a very successful beta, but it's still wet cement. I can't really get into the details of that yet. Maybe in our next conversation, I'll have much more to share there. But AutoHauler is, you know, here to grow, we're here to stay. And we're here to solve problems in the automotive industry that to help drive revenue back to the dealers that they were losing through some of the decisions they were making that they didn't even know they were losing and to find a way to drive more opportunities direct to carriers because we have to start building up our carrier network, or we're going to have a real problem a decade from now. You know, drivers are walking away from the industry. You know, the baby boomers are retiring.
You know, Generation Z and millennials, they don't want to drive a truck. But if we find a way to make it efficient to help them make a lot of money in that truck, to help them have route optimization tools and AI tools to give them, you know, routes that they can get home to their kids on an evening or a weekend in a much more efficient way. And we can help them do it with their thumbs because that's how they're used to living. You know, that's the type of intuitive technology we're building and we want to continue to grow. But I think people need to really realize how many drivers have left the market in the past decade across freight together. You're talking hundreds of thousands. You know, there's a shortfall of hundreds of thousands when you combine freight with vehicle logistics, you're two or 300,000 drivers short. But when you say left the market, I mean, where are they going? Like, what are they doing? They're retiring like having an Amazon truck. Amazon delivery route, right? Or I'm doing daily movements for Amazon or bumping a dock at Walmart for their marketplace, right? Those drivers are getting paid just as much as a vehicle logistics driver who, by the way, has to load his truck in the rain, sleet or snow responsible for those damages. Right? I think they're the most professional driver in all of logistics that I've experienced. They're the only ones that I know that actually load their truck every day other than maybe a flatbed carrier. So we need to figure out a way to get more people in trucks. And I think if we can drive more revenue towards them, give them control of what they pick up each and every day and where they're delivering each of them every day, it's going to make it a more appealing career move. So that's the type of efficiency and product that we're trying to drive to the market. The industry as a whole, I think, is exciting right now. I really do. I think there's a lot of interesting conversations around technology, AI, and me just entering the space in 2021 to today has been light years of advancement in the conversation.
You're seeing a lot of good tech companies pop up. A lot of good products out there that I think make the driver experience better, make the shipper experience stronger. So we'll be a part of those conversations. We're going to try to drive solutions with those same people. And like I said in the beginning, we're here to solve problems and we're going to continue to build products that will. I love it. Royce. Thanks so much for coming on. This has been super interesting. If anyone wants to get in touch with you, is there an email that you can share where they can reach out? Yeah, they can reach out to me directly. Royce at auto-hollerx.com. Or if they want to just check out our business, our website is www.auto-holler-exchange.com. And we'll throw the link up in the show as below. Royce, new Bower. Thanks for coming on. I appreciate it. Thank you for having me. All right. Hope you enjoyed that episode. Please give the podcast a rating. Consider subscribing to the show and check the show notes for links to what we talked about. Thanks for tuning in. I'll see you guys next time.