Protecting Your Customer’s Shipments | Episode 303

Speaker 1: 0:19

All right, welcome back Episode 303 of the Freight 360 podcast. It's a lot of threes 303 from.

Speaker 1: 0:28

Freight 360. Well, if you are brand new here, you've got hundreds of other episodes to check out when you've got some time, whether you're at the gym or driving or whatever the case might be. A lot of folks tell us they'd like to listen to it on the way to work, on the way back from work. All that good stuff. Check it out, share us with your friends in the industry, sign up for the newsletter on our website.

Speaker 1: 0:50

And, while you're at the website, you could check out the Freight Broker Basics course if you're looking for an educational option that goes really, really deep, in depth on everything from starting a brokerage, training your team, how the back office operations work, a lot on sales, a lot on carry development fun stuff. So check it out and leave us that review. And, ben, we kind of wanted to kick off today with just a little teaser, if you want to call it that, but we've got an idea and a concept and wanted to know what you guys think. So if you want to just kind of lay that out and can have a short discussion about it, then we're going to talk about some ways to protect yourself and some of the dangers that are out there today.

Speaker 2: 1:32

Yeah, so what we've been kicking around. The idea is there's clearly places to report theft. I would say one of them is probably a Freik, a freight guard report. But the issue with freight guard reports is one I think they've become too commonplace and they're certainly abused by brokers in some instances where, like you'll see freight guard reports because a carrier missed a pickup, like this is part of the industry, like that's not a freight guard situation, right. And I think they've become the source where, if you're really trying to understand cargo theft risk and bad actors, the reports have become so common that, like it's really hard to find, I think, what it was intended for at this point. And you know there's the watchdog report that is managed through highway that you can report things through, which is a very effective way to do that right now. But the other thing that you know, you and I have learned you, particularly because you're at the TIA what do they call it when you're meeting with Congress every fall.

Speaker 1: 2:34

That's the policy forum, yep.

Speaker 2: 2:36

Yeah. So when you're meeting with literally Congress and legislators on what's going on in the industry, I remember last year you were telling us is like the advice right from the regulatory authorities, the government, whatnot right now is like, hey, if something gets stolen, you should have a good relationship with local authorities and that's where you report it. Well, you and I also have learned and we've done some interviews with Veririsk and some of the companies that work with insurance companies to report this to law enforcement. That doesn't always get to the place it needs to as quick as it does. I mean, we're doing a lot of work with Genlogs on, you know, trying to do deterrence, cargo theft prevention and things. Time in this, the more we kind of realized it would be really helpful if we could get people to report cargo theft instances with detail in one place that we could theoretically share it with everyone else in the industry. We're working on this problem with, because every time we can see one of these instances, you and I have access to, I think, some of the tools that really aren't even available yet to the greater public, where we can go and actually find out what occurred, what signals were able to be there in the first place, so that we can get better at building the tools that are going to prevent this, to stay one step ahead of the criminals. And also like, if anyone hasn't seen it yet, it's on our LinkedIn page and we put it out on our network.

Speaker 2: 4:03

But Genlogs did a great video on. It was called the anatomy of a theft ring. Well, that first load started with an instance just like this. Like somebody I work with, that cargo was stolen. I was able to get lots of data and over the next couple of weeks we were able to find those drivers and those specific trucks showing up under different motor carriers, continuing to go and perpetrate thefts. So we know we've been able to find them. In hindsight, we've been able to see patterns and where they're going.

Speaker 2: 4:34

So what we want your thoughts on out there is, if we put something on our website that was an easy to fill out form where you could get that information over to us, we could distribute that to the folks we know in the back end to dig into more of these. Try to help when we can help and a lot of instances we'll be honest with you. Like once it's gone, it is really hard to recover still at this point. But the more of this we can get to the people that we're working with on the problem, the better our whole industry gets at protecting itself. So any of your thoughts out there, please feel free to email us, comment on YouTube or wherever.

Speaker 2: 5:10

If we put something on our website that allowed anyone out there to report cargo thefts right, specifically thefts instances that you've seen, would that be useful to you guys if we could help facilitate connecting folks with the right people? And again, at at first it's not going to be like we're going to be able to help you recover this immediately, but we are working with the people, so we can you know, that's always step one you need the data.

Speaker 1: 5:37

Yeah, um, and then you know we plug in with the right folks to to create processes. So let us know what you think. Any ideas, suggestions, feedback? We'd love to hear it. Yep, um, sports all-star break for the uh, for baseball. This week, the uh the all-star game was tuesday night, which is last night for us because we're recording on a wednesday. I don't know if you saw it, but it was, uh, I think it was the first time ever so it's tied six, six at the end of the game and they did like a home run it, but it was. I think it was the first time ever. So it's tied 6-6 at the end of the game and they did like a home run, derby, like tiebreaker, I think it was like the first ever.

Speaker 1: 6:11

So yeah, I think National League took it by one, took the tiebreaker. Yeah, midseason here.

Speaker 2: 6:17

Oh, did you see? I don't know if you streak.

Speaker 1: 6:19

What's that?

Speaker 2: 6:20

I don't know if you saw, but like this was on Pittsburgh radio, o'neal Cruz from the pirates hit, I think, the longest home run in home run Derby 513 feet, left the park and went through a window, I think like across the street or something.

Speaker 1: 6:35

Nice, just crazy.

Speaker 2: 6:37

Good times, man Um anything else in yeah, wimbledon wrapped up Sunday, and I'm not a tennis guy, but I know we talked about it like a couple weeks ago.

Speaker 2: 6:48

Yeah, number one and number two. French Open. Yannick Sinner played Alcarez and Sinner's the world number one from Italy. Alcarez is world number two from Spain, but what's cool is like the top three for the past almost 20 years. Right, we're Federer, nadal and Djokovic. And Djokovic is still playing. He's 38. He made it to the semifinals and almost made it to the finals at 38. He's got the most grand slams.

Speaker 2: 7:15

But Sinner and Alcaraz are, honestly, they just look so much better than the rest of the field that I think between both of them they've won the last six Grand Slam titles. One of them has won, and the interesting thing is going into this one, sinner, who's number one, has never beaten Alcarez in a Grand Slam final, so he was 0-5 the last time the two faced each other in the title matches of all the Grand Slams, and this is the first one Sinner won. Alcaraz beat him in the French Open about a month ago, which was like one of the best tennis matches I've literally ever seen. By a long shot. It literally went down to the wire as long as you could go into a tiebreaker.

Speaker 2: 7:59

This one, alcaraz, he won the first set and I think, like 70% of the people that won the first set in Wimbledon finals ended up going on to win. No one had ever three-peated. It Won three in a row. Alcaraz won the last two. If he would have won he would have been the youngest guy to do it and maybe the only guy to win three in a row Won the first set and you could just see like it looked like kind of nerves got to him. He didn't look like he was having fun, he didn't smile, he lost the next three sets and it went to center. It was still a really good match to watch.

Speaker 1: 9:21

Is Wimbledon every year. Yeah, okay.

Speaker 2: 9:24

Got it. I think all four are every year. I don't know what order they're in. I think the US Open is next. I think it was Australian Open, French Open, which is in Roland Garros, then Wimbledon, then the US Open.

Speaker 1: 9:34

I just looked it up it's the. It's the third of the four Grand Slam tennis events held after the Australian Open and the French Open and before the US Open. So oldest tournament in the world, Interesting, Cool man, Some news. I feel like every week when our newsletter goes out, there's just like the word tariff. I'm getting sick of like typing it but just ever changing things on tariffs. The one thing I thought was cool recently is that Dooner had Sean Duffy on what the Truck and I haven't heard the whole discussion, but I kind of got like the breakdown of like implementation of AI to try and help tighten up security for the FMCSA and DOT. So I thought that was just really cool that he was able to get the secretary of transportation on his show too.

Speaker 2: 10:24

So it was a good interview. I was higher man. Lofty goals For sure. I listened to the whole and I thought it was pretty good. Definitely some cool stuff in there. I mean I that is the one for sure thing I think I'm optimistic about with just government currently is they are more open to, I think, using like this generation or this time frames technology to solve some of these things. It's been so long since any of these government systems have upgraded their technology.

Speaker 2: 10:55

I've heard interviews where, like I think it was Howard Lutnick this was a couple of months ago talking about he's like, like some of these systems, like they're literally held over from like the eighties in some cases, like he's like they're using mainframes and things that are literally 40 years old. They've never updated the software because no one ever wants to spend the money, no one ever wants to allocate the budget to that, so they just never get upgraded.

Speaker 1: 11:18

It's such a big beast Like, even if you look at a section of it, like the Department of Defense.

Speaker 1: 11:22

So, like myself, in transportation, for example, Right. So I remember I've been in the military for 20 years now and I remember when I first joined 20 years ago, the system that's used to track transportation, air transportation, specifically the movement of cargo in the air. It is the same system that's being used today, 20 years later. It was outdated and antiquated then and it is even worse now. You have to go to a school for two weeks to learn how to use it. That is how bad and outdated it is. That is how bad and outdated it is.

Speaker 1: 11:54

Further, if you want to get more specific to freight brokering policy form, I'm excited it's coming up in just under two months. I'll be going again this year. Two years ago we left there and they're like, yeah, we're going to implement this new, you know, multi-factor authentication and blah, blah, blah, for you know, getting motor carrier authorities and all this, and it's like nothing's really changed, like seriously, like it is, and they always just say like we don't have enough money and we don't have the manpower, and you know it's like, what are we doing here? So it is, I just hope there's some improvement, because you think about, like how businesses operate and businesses like if they don't stay ahead with their technology, they fall behind. Right, I think that the differences with the federal government competition we are.

Speaker 1: 12:47

It's the one and only US government. You know what I mean. So it's kind of like that yeah, they don't have competition and at least you know internally We'll see what happens. Also, like other news unrelated to that yeah, they don't have competition and, um, at least you know internally we'll see what happens. Also, like other news unrelated to that, I had someone actually asked me over 4th of July, you know, you get like a lot of family comes in town and whatnot, and they're like how's a how's tariffs impacting you guys in freight?

Speaker 1: 13:06

And I was like, honestly, it's been like, depending on what you do, some people it's had zero impact, some people it's had a ton of impact, like the, the, the peaks and valleys of freight coming in from imports. Right, because people are like get it all in before tariffs go in. All right, now pause. Now tariffs are frozen for three months. Bring more in. All right, pause.

Speaker 1: 13:28

Like it's just it's all over the place. Like we got a guy in our company right now that he does bananas and like bananas grow one. You know they don't. You can't grow them year round in the United States. Right, like they're going to get imported from South America and and Central America. And it's like with tariffs. You think about the low price of bananas and whenever you have a low price commodity, like transportation costs becomes a larger slice of the overall cost of the product. Then you slap a tariff on it and it's like it gets wild. So we saw, we saw literally like boom, and then just bust, like a month of like tons of imports and then just nothing for a month and then another boom, and then you know a week of like we don't know. So it it really is like trickling down and um, it was actually funny like there.

Speaker 1: 14:22

But I don't know if you saw the clip. It was about bananas actually on on uh, and I think it was like a senate hearing or something like that. And they were, they were trying to defend, like you know, you got to do, american made, american made options for everything. And the woman's like so banana is like. And the guy's like, yeah, you just grow them in america. And she's like you can't grow them in america, like you need the climate, like yes, it was almost. Yeah, there are certain things that, like, you can produce in the United States, but they're like when it comes to produce Right, or if it comes to things that we consume like food products in general, whether it's livestock, vegetables, things like that. There are areas of the world where the cultivating and the agriculture and the growing and all that allows for that to happen, and it's not the same.

Speaker 2: 15:18

Two really good rabbit holes for if anyone is interested to go down related to supply chain is if you look up and research the history of bananas and shipping, it had a huge impact on how our supply chain functioned. I haven't done this in a few years, but Dole Banana was my customer when I was at TQL.

Speaker 1: 15:37

They were in the same building and, if I remember, yeah, dole's the customer I was just referring to as well.

Speaker 2: 15:43

Yeah, If you look into the company that became, I think, dole, but I can't, I don't remember the exact specifics, but like we used to ship bananas right around the world but like they didn't have containers and they would spoil and, to your point, they only come from a certain place, so they were like instrumental, if I remember, in like how containers were actually developed in the first place because they couldn't get them around the country or around the world fast enough. And two, I think they were like one of the first fruits where they were figuring out how to pick them so much sooner and treat them with something so they didn't ripen that quickly so you could get them far away, because they used to be a huge luxury item back before this. Like you didn't eat bananas unless you were super wealthy because they were just too hard to get anywhere other than where they were grown.

Speaker 1: 16:31

There's a really good video that I saw recently. There's a YouTube channel called Wendover Productions. I don't know if you've ever heard of it. This guy does like 20 to 30 minute longer form videos on a lot of it's on the logistics of whatever right, and he has one called the Logistics of Fruit that came out earlier this summer and it was all about it talks through dull bananas, the advent of the, the, the reefer uh container unit and, legitimately, how our supply chain imports and routes and containers and a lot of that stuff was was created because of the demand and the logistics behind getting fruit imported.

Speaker 2: 17:12

so and here's the other crazy thing I think bananas too. They started breeding them and now there's like one type of banana that basically everyone eats, even though there's lots of different types of bananas, mostly for the shipping reason. They were more stable, they could transit better, they were more durable. But now that almost all the bananas are of one genome or breed or whatever that means, and like that industry I don't know that the definitions are the exact words, but now they're super susceptible to disease because there's no biodiversity in bananas and that's causing issues in the supply of bananas as well, because when, like, a disease hits a field or whatever, when there's not diversity, it tends to go very quickly through it and I have a really hard time stopping it.

Speaker 2: 17:55

Another crazy tangent on the same thing that I was reading recently is if you look into the supply of opium, it's the same thing, because opium only really grows in Afghanistan. At the supply you need to feed the whole pharmaceutical industry and there's really interesting ties to back to the military into the 80s as to why possibly Reagan and them had troops guarding opium fields. Because lots of the large corporations that supplied legitimate medications and hospitals paying medications where opium is used, it only comes from one place. You can't just, to your point, grow that in the United States or just start growing it somewhere else.

Speaker 2: 18:34

And there's lots of really interesting supply chain aspects. The quantity that has grown only comes from one place. They literally couldn't get it from anywhere else. And how? That's all intertwined with both government intervention, military intervention, where it's supplied, and how and what. Because everyone just thinks illicit drugs like heroin. What? Because everyone just thinks illicit drugs like heroin. But really that's also the same raw material that goes into pain medications that are used all over the world legitimately every day yep, wow, does it the poppy plant?

Speaker 1: 19:03

does that sound?

Speaker 1: 19:04

right yeah, um, all right. So today we're going to talk about uh, I mean, we kind of talked about stolen cargo earlier with our our concept that we're talking about. So I want to, I want to talk through a scenario that we dealt with somewhat recently and how it's playing out. I'll try to keep it is. I'll keep names and companies out, just for for protective reasons. But in a nutshell, we had a load, we contracted a carrier on and we vetted the carrier properly through highway and everything checked out. We create the BOL with the carrier's name on it and truck shows up, gets loaded and the freight goes missing. And then we contact the carrier and the carrier's like that wasn't us. We had our email hacked. We don't know who that was. So basically, someone hacked a carrier's email account, had access to their highway portal, everything right, because multi-factor authentication Once you're in someone's email, yeah, they can get that six-digit code, verify that. It's now when they log in, blah, blah, blah and load gets stolen.

Speaker 1: 20:20

So everyone's doing the finger pointing like who's at fault. Who's at fault? The shipper is basically telling us and the shipper's a freight forwarder, right, so they have a customer right, who they're like you know. They like you know they've got to answer to now. So freight forwarder says to us, like it's your fault, um, it's you guys, didn't you know you guys didn't properly do your due diligence and buy this carrier. We're like, yes, we did.

Speaker 1: 20:42

Like we ran them through all the screening processes, we created the bol for you with the name of the carrier on there.

Speaker 1: 20:49

They show up to your facility, someone else shows up to your facility and you guys load the wrong truck and send them on their way.

Speaker 1: 20:55

So like we're trying to find a way to like meet in the middle with them because we value their relationship with the customer, but like they're taking zero responsibility for loading a truck that we didn't send in there and that we, we literally said here's the vol, here's the trucking company that's going to show up and should get loaded, and if they don't, if a different truck shows up, you don't load them. So, not to get too in the weeds on it, but it came down to like you know, then we're trying to, we're like requesting, you know, the footage from the CCTV at the facility, photos, whatever, to go to law enforcement about it as soon as possible to try and track down who got loaded. We can try to run it through gen logs, all this stuff, and then like the shippers like delayed in getting us the footage and the pictures and stuff like that documentation. So then we asked them, like you know, could it be someone an inside job, maybe somebody at your company that you know?

Speaker 2: 21:43

What was the commodity? Can you share what the commodity was?

Speaker 1: 21:47

I don't even remember what the commodity was Freight forwarder picture like retail goods or something like I I don't know 100, but um, it's not like it was a load of like tonic water. You know what I mean. Yeah, we're talking like something that got imported that they can clearly uh resell, resell, black market or whatever. So, yeah, just uh wild. So we're trying, we're trying to go through all that like the carrier's insurance has zero play in this because they didn't haul the load. You know what I mean. So it gets all messy, but yeah, anyway, the big concept here is that, like, one system itself is not going to solve all of your problems. Right, and this is a conversation you and I had a little bit off air beforehand. Like, carrier vetting software is great. I think it's a must have.

Speaker 1: 22:39

It's a necessary, but without processes on top of all this and ways that you use these systems. It really doesn't matter, right? Like you and I had a discussion recently about. You know, yeah, we can vet a carrier all we want, through highway or whatever, but if your system and your processes within your TMS don't hold your brokers to that level of vetting and they just end up, you know, you go on highway, carrier meets your criteria, that the email address is verified, et cetera but then your system and processes on the TMS side don't tie in 100% and then they could just send the rate con to some Gmail account. Well then, you vetted for no reason, right?

Speaker 1: 23:22

The whole point here is that processes need to augment the software and the tools that you have in place. You can't just have just a tool and expect it to do the tools that you have in place. You can't just have, um, just a tool and expect it to do the job for you. There still is a process driven. You know portion of this that without both of them, you're never gonna you're never gonna be able to protect yourself. 100, like we said, people's emails get hacked. Um, you know you get bad actors out there.

Speaker 2: 23:49

I mean this, this is this is the stuff that we deal with and these are big ticket item problems to have. We're talking like loss of always. Kind of think of these things in like analogies in my head of like even a business that you're trying to secure, like a physical business, from somebody physically trying to steal something, right, like there was always a cat and mouse game between thieves and security. Right Like a bank started just by having a safe in there. Well then robbers came in with guns and then went to the guy with the combination and were able to get into the safe, right. So then they're like okay, well, now we're going to lock down the building, we're going to put codes on the safe so they can only be opened at certain times. Well then criminals figured out to go in that time window and find a way to get through that. Then you layer on security cameras, then you layer on security guards. Then banks ultimately just started having less cash to reduce that risk.

Speaker 1: 24:54

They put the button under the desk, right yeah.

Speaker 2: 24:57

I mean, and I used to work in a bank and it's funny because, like in my head, that's why I picture it the bank I started in I happened to work in the original bank branch that was starting like 1851 in Pittsburgh at Dollar Bank. So we could go down into the basement and the original safe was still there with, like you could see the lock boxes for, like, andrew Carnegie's name was still on it, like they look like it looks like a tomb, like you see it in a mausoleum, but that's how big these vaults were for individual like money is, bring bags of cash in there, right, and you can see, like literally walking around, how this building has changed over 150 years to what they do now and how they avert this risk. So it's like this isn't anything new. Anytime there's something valuable, people try to take it. People try to come up with new ways to prevent that thing from being taken right.

Speaker 2: 25:44

One solution has almost never been sufficient to protect yourself from theft and even if you look at your bank accounts and how you log into online banking I remember when that came out, banks didn't even want to release it because they knew there were going to be vulnerabilities.

Speaker 2: 25:57

Then you have multi-factor authentication, then those get hacked, like there's always the cat and mouse game, and that's really no different in our industry, especially as we're moving into more technology. The more technology, the more automation, the more vulnerability there is. It's not just it makes everyone's life easier, it also does create little holes and windows that can be exploited for theft. Right and like email is a really big one that I think most people are aware of. So what we're going to do is talk through what are some best practices and things, and then I think later we're going to start doing some more content on what and how we're able to like go through individual instances and show what happened after the fact, so you can see exactly where these flags are when you're looking for them. But I guess my first question to you is like, in hindsight right, what are things that you did do and what are things that you wish could have been done better?

Speaker 1: 26:53

so it's. It's interesting because you had mike fullman last week talking quick scope and we even one of the things we talked about internally we're like, you know, would quick scope have done anything? And it's like yes, but only if the shipper, you know, would have. There's a process in place on the shipper side that still, like we could have said like, hey, carrier, we're going to send you this link and you need to execute the quick scope on this load which will you'll take a picture of your truck, it'll verify your MC number, blah, blah, blah. That could have prevented the carrier from wanting to do it. That could have prevented the carrier from wanting to do it. But if this carrier or this fraudster clearly had a vulnerability in mind and they probably knew that this shipper doesn't verify who's getting loaded, they didn't say, yeah, oh, you got the load going to wherever, or I go to, you know, dock three.

Speaker 1: 27:49

A lot of it's a process thing. So, like we you know we created the BOL, gave it to the shipper and basically said like, hey, here's the truck that I contracted here, so you need to load, we've already vetted and verified them, could have asked the driver to take pictures. You know, even without quick scope, but it still doesn't matter if the shipper is not going to do their part. So I think the hindsight is processes in place with a customer and, like Mike who he had on last week, like he is so big on the relationship piece with the customer and the shipper, yes, and I think that when a customer gets dinged once with a double brokered load that they end up paying twice on, or stolen cargo or whatever the case might be right, they will remember that like a scar.

Speaker 1: 28:36

And if you can go into a conversation and build a solution that involves protection of their freight and essentially their customer relationships, for that matter, because they want to get their product delivered to their end user or customer, and if you can create that relationship where, hey, I am not just going to sling trucks for you, I will become an extension of your transportation department, of your supply chain, and I will help you guys procedurally to make sure that between what I'm doing and how that's tying in with what you guys are doing at your shipping department, we can make sure we've got the right person in the right place at the right time with the right equipment. And so that's like I think I want to pause there for a second. Yeah, go ahead.

Speaker 2: 29:17

So, and Mike and I talked about this and I don't even know if this was on the episode because I spent like an hour and a half after our episode just talking through things with him on solutions and this right, and it's exactly what you said, right? So it's like as brokers or 3PLs feel, or have the call it false belief that one tool will protect them just by using that right. I think shippers have a false belief that by using a broker, they're not responsible for doing anything or protecting their freight at all. And I've had shippers that have told me this like, hey, we use brokers so that if it gets stolen, like that's just your issue. And I've explained to them. I'm like, well, if you actually kind of read and understand how regulations in our industry works, like we're actually not responsible, you're responsible for making sure you load the truck that we send. And if you're not going to work with your loading staff to put in some procedures to make sure they're verifying which truck they're putting your cargo in, at the end of the day, like we can't be sure that they're not going to load somebody that isn't who we sent, right? Because even if you go to like an extreme scenario where it's like hey say, I book a legitimate truck and this is like 70 years ago and somebody literally sticks the driver up with a gun, takes his truck, shows up at your shipper with his truck to steal the cargo. Like there are always ed cases that no matter what you do, you can't be sure that the truck you sent is the one getting loaded unless the people loading it are also verifying.

Speaker 2: 30:54

That information, so like it needs to be a partnership, and you and I have talked to some very large shippers that have said this is one of their biggest issues is like it's really hard to hire and train people to do that job for long periods of time and for that money to care enough to make sure this is being done right 100% of the time.

Speaker 2: 31:12

It's a really hard thing for a company to do and I think, rather than trying to solve that or work on that more, they just feel like they can throw their hands up and blame someone else and like that's not true.

Speaker 2: 31:24

But this is a huge opportunity for anyone out there wondering how to get new business, just like you said, if you're approaching, calling a prospect and talking to a shipper about doing business and you're just talking about sending trucks and rates in, you sound just like everybody else. But if you ask them some very direct questions like hey, have you guys ever run into instance of cargo theft, anything been stolen in the past year or past few weeks? Hey, what are your procedures at loading? How do you coordinate and work with your brokers to make sure you're protected? And if all the answers to those are just uncomfortable silence, you hit a pain point and you found an opportunity for you to work with that shipper that all the rest of their providers aren't addressing. It is a major vulnerability and now you're a logistics consultant or, to your point, becoming an extension of their operations, and it is a true partnership that will tend to last much longer than getting a customer because you got a cheap truck today and they happen to need a load moved.

Speaker 1: 33:36

Yeah, this is one of the things, looking back at this situation, that we ran into the Carmack Amendment. This is part of the 1906. What was the Interstate Commerce Act? Liability falls on the motor carrier right, not the broker, as long as the broker is not acting as a carrier. That's why we, you know not to go on a tangent, but that's why you don't want to sign an agreement that lists you as a carrier. You don't want to direct the carrier that you're contracting, you know. You don't want to force them to do things which could give you you don't want to create.

Speaker 2: 34:11

You don't want to create the impression or view at any point in time that you are operating like a carrier or are a carrier, because there's different liabilities for a motor carrier than there are a freight broker?

Speaker 1: 34:22

Yep, for sure, so yeah, the whole big point here, though, is that and it it kind of relates to what you just said is like things have evolved over time, Like we would not those questions that you just used, like, for example, when you're prospecting we probably would have never used those questions five years ago.

Speaker 1: 34:42

Right, like it goes back to your whole thing with the bank Right, like first it was just you know, all right, we'll have, you know, a code on the safe and then we'll only have certain times and then we'll add guards and cameras and it's like this stuff is evolving and these questions for prospecting will continue to be evolving, but go ahead.

Speaker 2: 34:59

I was going to say. The thing, too, is like, not only were they not there, but like the crime rings are, they operate like companies and I want everybody to kind of understand this. Like, I've talked to a few thieves. Actually, when you and I were together up North, when you were in town and there was a load stolen I was working on, I was on the phone with the driver and the dispatcher that legitimately told me yeah, we are holding your cargo hostage, this is what we do. And they were telling me how their company that I guess you would it's a crime ring, but like they operate like a legitimate company and they're like I have a boss and my boss has a boss and this guy works for me. There's only certain things we can do before we get in trouble. So, like, this is not just a couple.

Speaker 2: 35:45

People Like these are very coordinated, they are very tech savvy and they are operating at the limits of what technology can do and they are very good at this. This is their job is to steal cargo all day. So they're not unsophisticated thieves like they were to your point five and ten years ago where, like, somebody steals a truck because, like they're watching a shipper and they notice they don't check PO so they just send a guy in to grab a load like that got solved, and then they got better at it. And then there was so much money in shipping during COVID that, like these companies, these thieves are making tens of millions of dollars a week stealing cargo. Now, when you've got that much money incentivizing people to steal things, like they get better at it to make sure they can keep making that money Like these aren't, you know, the average person just trying to steal a truckload here and there.

Speaker 1: 36:37

Yeah, I think this whole thing makes me think about hiring and a lot of times people are so, so quick to hire and just throw someone out to the wolves and like I'm just going to get a bunch of sales guys. The importance of, like, just training and, you know, making sure that before you hand the reins off to somebody to fully be autonomous with what they do, you've got to make sure that you're 100 percent control them. So, like we've got we've got a very small handful of folks within our company that we just pretty much give free reign to because they've earned that trust over years, right, whereas anybody that's new or like our average user, we've got processes in place that prevent them from making mistakes, right, and there's there's pros and cons to however you look at it. Like, if, uh, if we hand the reins to somebody, the pros are it just makes the process quick, right, and it's less work for us.

Speaker 2: 37:32

And cheaper.

Speaker 1: 37:33

And cheaper. The risk is well, now we're leaving the door open for potential human error. The other side is you put restrictions in place, you use tools, you limit permissions and require someone at corporate to approve something. The pro is much added protection, right. The con is it can slow your process down potentially and it adds you know it adds more work. So there's a, there's a balance and a happy medium to it that you constantly have to try and seek where that is.

Speaker 1: 38:05

And uh, I'm all about like if people be like, oh, you know, we'll get to. You know, like if we're dealing with like carrier vetting, for example, like trying to figure out our rules. I remember when we first implemented highway and people like we'll get there, I'm like I don't think you're ever there. I think you're always refining, like you'll get to a good place. But you always have to have a mentality of refining, improving, refining, improving.

Speaker 1: 38:31

Uh, like one of the uh in the in the army we have uh troop leading procedures, which is like, you know, leadership, um steps of leadership and how you execute a plan and the final step is supervise and refine. Like always, always refine it, because as variables change, as the environment around you changes your plan and how you execute that plan should be changing as well, otherwise your plan is outdated. So as we look at the way that these organized crime rings are adapting to you know it's it's like a game of uh like chess, right, like we do this and then they do this, and then we do this and then they do this. You have to keep doing that, otherwise checkmate and you're done and they're gonna. You're gonna steal your customers cargo. You're gonna steal your customer's cargo. You're going to lose your customer, you're going to lose your business. It's wild man.

Speaker 1: 39:14

It's a wild, wild industry out there right now.

Speaker 2: 39:17

One is, I would say, for anybody running a brokerage to look into cargo theft policies. I don't think they always make sense. They're definitely not super cheap. However, if you have a customer that ships some higher value stuff, has had enough thefts and you've already talked with them about locking down POs and they're doing everything they can right, but they're still seeing this occasionally Like, then, I think if that customer is valuable enough to you, you would want to look into a cargo theft policy. Because if you're shipping $200,000 loads and that customer owes you 200 grand at any given time and one stolen, that creates a massive financial issue to paying the carriers, the risk filing on your bond, them not paying you and again, all of these things. The details matter. What does your contract say with that shipper. But there are for sure, I think, legitimate reasons to use a policy like this, like a tlx. We have one of these policies. We've had to use it once or twice. It has been able to be a huge saver and actually was cheaper having it than not having it.

Speaker 1: 40:24

Um, do you know who the carrier is? That does your policy.

Speaker 2: 40:27

Yeah, I think it's Pacific. I can send you their contact.

Speaker 1: 40:35

Like cargo theft insurance policies got really big with like maritime shipping when piracy became big. Yes, so this is nothing new, but the application to it's called dishonest acts policy, if I recall. Dishonest acts of third parties.

Speaker 2: 40:49

Yeah, and Pacific Financial.

Speaker 1: 40:53

We use Avalon risk and we've got like a I don't know I don't even know the name of the policy but like we've got this like ridiculous policy that can cover a lot of stuff like that. But here's what I will caution you on is that you know they've told us if you're going to ever file a claim on this, you know, and this is like again, like this is if we're not really at fault but our policy will still cover because we've decided to purchase that policy. It's kind of like your your get out of jail free car, like the. It's like that. You know one. You want to use it the one time you need to, not every time that you could, because your uh premium rates will go through the roof so we had actually was.

Speaker 1: 41:37

I was, uh in nashville last week visiting our corporate office and sitting down with my boss, who's the owner of the company, and we're talking about insurance and he had a conversation with our one of our insurance reps and there's a discussion going around now amongst insurance companies where, like you think about a policy that covers, you know, a hundred thousand dollars per incident, right, yep, um, there's discussion now as of you know, premiums, because insurance companies, with all the stuff happening and the claims on things, now like they're starting to get like antsy and nervous. Like there's discussions about premiums going up and coverages instead of a hundred thousand dollars per incident, they might cap you at a hundred thousand dollars per year.

Speaker 2: 42:20

Like that's what ours was. Yeah, our theft is a hundred grand on the year. On the year, okay, yeah, so like it's not a hundred thousand, per instance. No-transcript.

Speaker 1: 42:37

Yeah, per the term of the policy.

Speaker 2: 42:39

And it makes sense. But again, these are just things for, I think, people to look into. Again, you really want to understand what the risk is. Think about like, first, you should be doing everything else that you can. That is free, right, and use the term free loosely, but like we'll call it easily or more easily accessible. The other are like procedures, because I still do believe that, like, one of the best ways to not be in a situation is deterrence. Right, if you can give a criminal all the reason in the world to find an easier target, that's a pretty good deterrent.

Speaker 2: 43:13

And one of the things that even working backwards through things that have already been stolen I have not seen where doing this has not gotten me to the right answer almost immediately. If you go to the FMCSA name change and that's in carrier 411, you can find when and where those numbers and emails were changed and you just call the oldest phone number. Like that immediately gets me the answer almost every time. Like I'll call the older phone number and they're like yeah, I sold my company six weeks ago. Or like, in one instance, the guy's like yeah, don't book a truck with them. They stole all my logins. I'm trying to report it, but it hasn't gotten out yet, right? You call the older number first, you usually will, and if it's legit they'll be like oh yeah, I'm not the dispatcher. Call Cindy, and then they'll give you the other phone number. So, like to me, that is one of the easiest free steps to making sure you're talking to the right company and going hey, I just want to make sure we book the load with the right company.

Speaker 1: 44:16

Is that you? Because if it was changed, calling the older one still gets you to the previous owner. Does the FMCSA's website tell?

Speaker 2: 44:18

you the changes on it or is that only if you couldn't find it on the FMCSA's website? But I had heard from somebody that I think maybe Freight Validate or a few other companies are now trying to portal, highway, you'll get.

Speaker 1: 44:28

You'll get, like I've seen it on my carrier portal, where literally it'll say right in their system, like it was changed, here's what happened, here's the old, here's the new. And it'll like tell you the field, like the name, first name, last name, phone number, email address, like old, new, you know date and timestamp of when it happened. So so that is a really good one, I think it's gotta be on the FMCSA website somewhere in there, but it's just never making it easy to access. Yeah.

Speaker 2: 44:58

So I know it's available through their APIs, but like I couldn't find exactly where to find that. But, like again, even if you have like care for one or any of those, there is a section that says FMCSA contact info change. I always look at when it was changed and try to reach out the old one and look for things that look weird there, because that's usually like one of the first things. I think literally doing this over the phone is to me, one of the things that people have done less as people have gotten more used to email and I just think honestly, like more younger people are used to being on their phones and texting and talking via typing instead of getting on the phone. They avoid being on the phone. But, like, human beings are the best lie detector your intuition, your gut this doesn't feel right is probably your best first red flag. And then I always look at it like this is like one red flag does not mean no, it just means dig a little deeper.

Speaker 2: 45:51

Did you find more red flags? Dig a little deeper. Did you find more red flags? Dig a little deeper. Did you find three or four red flags? Okay, maybe now you want to consider just moving to another option, right and again, like that could be the contact info. That could be the person you spoke to. That could be oh, their trucks listed and either gen logs or whatever your system is shows oh, I'm booking a reefer, but they've only seen dry vans and they only have dry vans listed on the FMCSA. Like why is this not adding up? It doesn't mean it can't be true, but it makes you want to ask a few more questions, like you just keep digging to see if you keep finding more red flags, as I feel like the way you conceptualize this process.

Speaker 1: 46:31

And the whole thing thing too, is like there's a I think there's a mentality around it, like, like you, like you said, one red flag doesn't mean no, like I always liked the concept of like when we're when we're verifying we're verifying to try and approve, not verifying to try and you know, deny somebody right.

Speaker 1: 46:48

Yes, that's really cause you. You get people there's a there's a really good like opinion piece, I think, on freight waves about like, if everything's fraud, nothing is fraud. I don't know if you saw that recently, last week or whenever it was, but basically, like, if we have the mentality that everything out there is fraud and we just normalize it, then we then really like nothing, nothing's fraud. Then if we're just normal everything, this is just what we live in now, it like no.

Speaker 1: 47:10

You get people who have a mentality of like every carrier is bad, right, and it's like no, like that's not the case, like that's where you know this happened. If this first and I don't mean to go on a tangent, but this first started like in 2022 and we started cracking down on double brokers and we'd say like, oh, if you just got, if you have no inspections, we're never going to load you. And it's like, well, now you got the actual good owner operator who you can just kind of coach through and make sure that we're verifying them right, like he's probably a great option for you Probably a better option.

Speaker 1: 47:43

These guys got like screwed over because everyone's like no inspection history, no load, and you know, unfortunately, like they kind of are collateral damage to like the knee jerk reaction that a lot of folks had. So I think it's vigilance, you know, was it trust, but verify right, like, come on, who's the president that said that?

Speaker 2: 48:03

Theodore Roosevelt, I think, and he was also the one, and I think he's also the one, that said walk softly and carry a big stick.

Speaker 1: 48:11

I think both those quotes say yeah. I think he's also in said walk softly and carry a big stick. I think both those quotes same.

Speaker 2: 48:14

Yeah, trust, but verify is let's see. All right, maybe really yeah, ronald Reagan.

Speaker 1: 48:19

In the context of arms control negotiations with the Soviets during the Cold War. Yeah, he didn't make that up, but he kind of like made it famous, so it's actually a Russian proverb, that's ironic it's probably why he used it right.

Speaker 1: 48:34

So, yeah, um, but yeah it's anyway. Um, I think vigilance will go a long way and, um, you know, I don't want to like bash on any individual, like fraud tool out there, because they're all very useful and they've gotten us very far. The whole thing is like their job is to be excellent at what their product does, not at the rest of the process. They're there to be an enabler of you for safe practices and best practices as a freight broker. But it's still up to you, with that human intuition, like you said, like we're the best lie detectors. Like if you get on the phone and call a sound or vibe right or the the name doesn't match the accent right, like um, or like the person you know, you, just you get that intuition where, like, they won't talk to you I've seen this one where I've seen like red flags on cares where I vetted them and I'm like I've called, they won't answer the phone and then they emailing going we can't speak to you over the phone.

Speaker 2: 49:34

I'm like that is a red flag, right, like if you are running a dispatch business or working for a trucking company and you are unable to speak on the phone. Like to me that's probably a red flag, right, like if you're not willing to talk to me.

Speaker 1: 49:49

Like this happened last week. So a guy claims to be a dispatcher. He's you know, says he's in whatever location in the States. Go to call the phone number and you know he keeps emailing, like hey, what's going on? And then go to call him and like dude, the number's disconnected. And he's like he's like oh yeah, sorry, my VPN's down. Are you on WhatsApp? And it's like dude, you're not even in the States.

Speaker 2: 50:18

Like what are we doing here? Not even exactly.

Speaker 1: 50:21

So yeah, like if someone's first, if their first communication with me is a lie, that's usually like we're just going to, we're going to end right there, like so yeah.

Speaker 2: 50:30

Because, to your point and we've talked about this for years like I think one of the best things you could do when you're on the phone is to tell them like hey, you know, we worked with a shipper for a long time. They're going to verify the pickup number. We're going to send your driver a link for quick scope. That pickup number is going to be verified but won't be released until his truck and his image shows up there. Shippers notified exactly which MC. Hey, you know, mr Dispatcher, what colors his truck. I always let them know what the make and model is, cause it just makes it a little easier for the driver. Nine times out of 10, if they want to steal something, they're probably not going to go through the effort because they don't want to get caught either. And like that was the other thing that I picked up when that instance I was telling you about where I was talking to the thieves. And he's like we were trying to negotiate to pay him cash, like a lesser number, to get him to deliver load. He's like, dude, I'm not going to deliver this load. Like you're just going to call the authorities and my driver arrested. Like they're like they don't want to get caught. So, like when they think there's a high likelihood on their point of view, they're probably just going to move on to another target. Likelihood on their point of view, they're probably just going to move on to another target. So again, I know that slows down a little bit. I know people like to book loads via email. It seems more efficient and like to me.

Speaker 2: 51:39

The thing that always gets me is when somebody says, like well, I've moved four or 500 loads without a problem. Why can't I keep doing this? And it's like well, just because you didn't get robbed yet doesn't mean what you're doing doesn't mean you won't get robbed today or tomorrow. Yeah, right. And it's like I always think about that again from like a physical analogy, like okay, you can walk through a shady neighborhood at the wrong time of night, right, with something that makes you look like you should be getting robbed, whatever it is, like a gold chain or something I'm thinking back to like when you're like a kid. It's like, ok, yeah, maybe you did that three or four times and nothing happened. But if you do that every day, eventually the odds are not in your favor. You're probably going to get mugged and something bad is going to happen.

Speaker 1: 52:22

Yeah, that's a great conversation too. Like going back to earlier on asking questions to your, to the shipper um, there could, like there is fear-based selling and I'm not suggesting that, but this is like the reality, right, if you get a shipper, maybe they're a smaller shipper and they haven't had an incident yet, but you can tell the stories like, hey, it's great that you guys haven't run into this yet, but let me just real quickly tell you what's been going on lately and what these guys are doing and, um, you know, hopefully that'll give you some insight on how to best protect your guys. You know operation so you don't have something stolen, right. And then you know, depending on the commodity, there's different level of risk. So if someone's doing retail goods or electronics or something that can easily be flipped on the black market, like those are huge, like vulnerable commodities Like I always commodities, I always jokingly, I love the Fast and Furious franchise. Rip Paul Walker.

Speaker 1: 53:15

But the opening scene of the first movie is 300 civics hijacking a bunch of electronics, right, those are the types of commodities. The stolen one that I dealt with I think it was last year was like $400 worth of Adidas pants or something like that. Like, yeah, you can sell those Right. So, yeah, you know, you think about these corner stores in a city that like sells clothes and electronics and whatever, like that's a very easy way for people to, you know, launder stolen goods and make money for it. So, yeah, just, you know goods and make money for it. So, yeah, just, uh, you know, be cautious. And I think you know the whole, the whole process thing we've broken down in quite detail in other episodes, so I don't want to like beat the dead horse on that. But cautionary tale, did you have anything recently like, uh, I know you had the one back in april, I think it was but anything recently where you guys have either had near misses or anything like bad actors like that?

Speaker 2: 54:14

I've seen a few where we've had loads delivered but before we have paid the carrier or invoiced, the carriers have reported that their emails were hacked or their systems were hacked right, that their emails were hacked or their systems were hacked right. And in a few of those I dug into them because I'm like, okay, I trained our accounting personnel to go hey, if these alerts come in and the load's delivered, the operation team is not going to look into this, they're on to their next load. You guys on the accounting side, before we release payment to the carrier, need to verify that that is the trucking company that actually ran this, that we actually did the work with the company we're about to pay, because I've seen things happen from months ago where we get notified and say, hey, this carrier didn't run your load and they're coming after us for money, right. So I was training the accounting people to make sure that this isn't just to book the load. Make sure the load is picked up and delivered. This is also before you pay the carrier if you see an alert after.

Speaker 2: 55:16

So, like this is really important, I think, to layer into your invoicing and accounts payable. You know processes in your company and I, you and I've talked about it. We're not going to get into this, but like there are, for sure, more vulnerabilities that I have found in lots of places, cause I'm like, oh my God, like this wouldn't have caught it, this didn't catch it, this wouldn't have caught it. And also like this didn't even get alerted until after this happened. But when I spoke to the carrier, they're like, yeah, this happened three days ago. I'm like, oh, my load got picked up and delivered between two days ago and yesterday. So like they are alerting folks and sometimes these aren't even coming out until like a couple of days. So like there are, for sure, things you want to make sure you're doing, from load pickup, verifying the carrier before you book them, all the way until you're going to release payment for whoever performed the work for you.

Speaker 1: 56:02

Yeah, we've gone as far as, like, if we've asked the carrier to do something and they failed, like you know, know, quick scope or tracking or what pictures or whatever right we will, we'll go as far as saying, like, we need to see your, your eld report, like a download of your eld, to show this came from your equipment and we'll see where it was and when it was there, and all that so, and oftentimes, like a double broker, will push back on you like, well, I don't know how to, I don't know how to get, I don't have the login for it, and it's like you didn't haul the load man, yep, clearly, so, yeah, and then eventually they go away. So, and then you sit there and then you got to figure out, like, who actually hauled this thing, right? Yep, so, and it could take, you know, month, two months. Eventually that poor owner, operator, whoever it was like, ends up getting to your customer and then comes to you and is like what's going on with this? And yeah, so anyway, we touched on a lot there today.

Speaker 1: 57:04

What do we have upcoming? We're going to do? We're going to do speaking of like software and tools, like we'll we'll do some TMS discussion in the near future too. I'm in that vetting process right now for our next, what's our next move at Pierce Worldwide Logistics for the latest and greatest and there's some really cool ones out there now and there's some ones out there that really aren't that great. I've come to come to find in this exploratory event. Here We'll do some more like real world, like fraud, like how things were caught, what all happened and things like that. If you guys have stories for us, you want our opinion on what we would have done differently or how you can handle them moving forward, always leave a comment, shoot us a message, info at Freight360.net or just go to our website and fill out a contact form. We always try to answer your guys' questions on our final mile segment, which comes out on Tuesday. Anything else noteworthy or you want to add in for today's episode?

Speaker 2: 58:05

A lot more stuff we'll share, but I don't want to share yet, as we kind of get them together Stuff we were kind of talking about off air that I think I'm pretty excited about. I think the more we're spending time in this, the closer I think we're going to be able to contribute and help prevent this at a much larger scale. So I'm pretty excited about that.

Speaker 1: 58:23

Yep for sure.

Speaker 2: 58:25

All right. Final thoughts Whether you believe you can or believe you can't, you're right.

Speaker 1: 58:29

And until next time go Bills.