Transportation and logistics company Ryder is awarding $30 million in bonuses to its front-line workers. Ryder System CEO Robert Sanchez joins Yahoo Finance Live to discuss why the company is giving out millions in bonuses and break down how the company is faring amid the pandemic.
Video Transcript
JULIE HYMAN: Well, we want to go back now to Robert Sanchez. He is the Ryder Systems CEO, of course, the trucking and logistics company. And we want to talk with him once again about that $30 million bonus pool that his company announced for their frontline workers. Robert is joining us now on the phone. And Robert, we were starting to talk about what this does, not just to reward employees, but worker retention and attraction. So if you could talk to us about that to start, that would be great.
ROBERT SANCHEZ: Sure, Julie. Thank you. Thanks for having me. You mentioned our truck rental business, and people recognize Ryder because of the truck rental. But that's only about 10% to 15% of our business. We really are much broader supplier of logistics and transportation services to big companies. We do business with about 50,000 companies, primarily in North America. And we provide not only the rental trucks, that we provide full fleets of trucks. We have over 250,000 trucks that we maintain. So we have about 5,000 diesel technicians who maintain those trucks. We also provide trucks and drivers. We have about 10,000 professional drivers who work for Ryder. And we run large distribution centers for big food companies and automotive companies. We have about 12,000 warehouse workers who run those distribution centers and work inside of them.
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So as you might imagine, when the pandemic hit, these folks were asked to do Herculean things as different industries shut down, as people started to shelter in place, as critical supplies needed to get into the communities. We asked them to go to work and keep doing what they were doing, and we gave them the PPE they needed to stay safe, but it was tough. And we're really proud that we're able to recognize those efforts now at the end of the year with a bonus for our employees. So that's number one. We just can't say thank you enough to the work that they've done.
Number two is you're right, the retention of both specifically professional drivers, truck drivers, and diesel technicians is an important, important issue for the industry. There are not enough people to fill those roles today, as many professional drivers begin to retire. And the same thing with our technicians. So retention is important, and the ability to attract those employees is important. So that's one of the things that Ryder, I think is a core competency of ours, our ability to find these folks an industry or an employer of choice, and be able to bring them on and make sure that they know that they are certainly appreciated, and they have great opportunities within our company.
BRIAN SOZZI: Robert, Brian here. You also operate, we do have business in the UK. What actions have you had to take over the past few days, given essentially, the country's on lockdown right now because of a new spike in COVID.
ROBERT SANCHEZ: Correct. We have a truck leasing and rental business in the UK, also do some transportation. And yet, we've had to follow all of the guidelines in the UK as it relates to shutdown. So some of our operations have continued to run where they're essential and critical, but some of them have had to shut down as a result of the lockdowns. It is a small piece of our business, but yes, an important one, too.
BRIAN SOZZI: And then Robert, just going back to the US, perhaps a little bit of a better story this holiday season. What types of demand spikes are you seeing in the last few days ahead of Christmas? And then, would you characterize the pricing as rational in the market?
ROBERT SANCHEZ: Yeah. As you might imagine, e-commerce is really driving a lot of this holiday season. So you look at it, our rental business has really benefited from the pickup after the shutdowns in the second quarter. We've seen that pick up, and the e-commerce business in general is really spiking during this time. So that's really, as we see it, in terms of supply and demand for freight, it is very tight. It has gone from in the second quarter, there were certainly a lot of idle trucks out there and not a lot of freight moving. And all of a sudden, it's now done a complete flip, where there's a lot more freight to move than there are trucks available. So that's a good environment for trucking companies and transports. But it certainly keeps us on our toes and makes sure that we're operating well.
MYLES UDLAND: Robert, it's Myles here. You guys made a really interesting announcement at the end of October with a new corporate venture arm, basically Ryder Ventures, you guys are calling it. What are the trends that you're seeing from your end on where investors want to be, tech-oriented investors want to be as it relates to the logistics space and the shipping space? We hear a lot of buzz on our end about self-driving trucks, ways to better get packages, partial loads onto trucks can be done more efficiently, things like that. What are you interested in with this new investment vehicle?
ROBERT SANCHEZ: Yeah, we started looking at a lot of this technology several years ago. As we see our industry really changing over the next 5 years, 10 years. And there's really three areas, primarily. One is around the technology, the vehicle that you mentioned. So electric trucks, autonomous trucks. We think there's a change coming. The timing of it is still unknown. But it's important for us to be on the cutting edge of that and understand where things are going. So we've looked at that area.
The second area is really around e-commerce. And you know this pandemic has done nothing but accelerate that drive towards e-commerce. So the movement of all types of products, not just parcel, but the big and bulky products, we're seeing an increase in that. Ryder is a significant player in the final mile delivery of big and bulky products. So you think about furniture and appliances and fitness equipment, anything that won't move by a parcel carrier, Ryder will move. So we're seeing a big increase there. But that's an important area.
And last but not least is asset sharing. So whether it's freight sharing, you hear a lot about that, but also truck sharing. We have an app that we were first to market with, which is sort of an Airbnb for trucks. It's called COOP. And it allows people who have a truck that's sitting and maybe idle for a few days of the week or the month to be able to share that with somebody who was looking for that vehicle during that time. So we've ruled that out now to, we're in three different states. And we're looking to expand that to other states. We're seeing nice acceptance by customers as they get comfortable with this idea. And we think that's got a future.
So as we work through all that, we've been working with startups, with companies that are coming up to really, if you will, disrupt the industry. And we want to make sure that we're part of that in helping them get that done, and again, that we benefit from that longer term. So Ryder Ventures was set up as we met with a lot of these companies to realize there's an opportunity for us to not only partner with them, but also in many cases, invest with them. And we're looking to do that over the next several years.
MYLES UDLAND: All right, the sleepy truck industry getting shaken up by Silicon Valley. Really interesting stuff there. Robert Sanchez is the CEO of Ryder System. Robert, have a great holiday. Thanks so much for joining us this morning and we'll talk next year.