Their earnings compounded at about 55% CAGR during that period while we were public and we outperformed – our stock price outperformed S&P by 5.6x. I started United Rentals in 1997 and ran it for 10 years and became the largest rental company in the world and we outperformed the S&P by 2.2x during the time that I ran it.
The reason that I’ve picked transportation logistics and specifically this truck brokerage model to be my next venture is it’s large, it’s growing and it’s fragmented. So if we’re going to create a $5 billion company we have to find an industry that is 10 times the size of that or more. Transportation logistics is clearly that. Logistics worldwide is about $3 trillion. US logistics is about $1 trillion. US trucking is about $350 billion and only about $50 billion of that or about 15% currently goes through brokers. The other $350 billion goes direct between a shipper and a carrier. So we’re positioning the company not just to compete for the $50 billion that’s going to brokers right now, but for the $300 billion that’s not yet going through brokers, but we think will.
We have reason to support our belief that that 15% brokerage penetration is going to increase. If you look at the trucking business which goes up and down straight with GDP, you compare that to truck brokerage which has been growing at two to three times GDP over the last decade. So that tells us that there’s an outsourcing trend already happening that’s just going to continue and that makes sense because from an economic point of view it is profitable for a shipper and it is profitable for a carrier to use a broker rather than go to direct many times. If you’re a shipper, instead of making two or three calls to some trucking companies thinking you’ve checked out the market, you’re better off calling a C.H Robinson and Echo and hopefully an XPO and indirectly through the brokerage market, check out tens of thousands of carriers availability. You’re more likely to get a better deal by going through a broker.