The Truth About Freight Agents | Final Mile 120

SPEAKER_00: 0:19

Welcome back for another edition of the Final Mile. It's our QA session with you guys. So we've pulled um some good questions this week from a variety of our online community sources. And um make sure to send your question our way. A lot of times it's through a YouTube comment. Gotten a lot of uh mixed feedback on some recent uh content we've done, some lovers and some haters. Uh helps the algorithm. So feel free to shoot us some uh hate messages there. It just helps us even more. Um share us with your friends. Check out the Frey Broker basics course on our website if you're looking for an educational option. And uh make sure to check out our sponsors in the description box. That really helps support the channel and um send good potential uh customers to some trusted products and services that we we truly believe in. So, our first question today um how often are brokers calling out on posted trucks to cover your freight? Is it only when you're desperate how you decide when to post versus call out? This is actually a question that I've gotten a lot with people. And I hate to like say it depends, but like it depends, right? Like it and I think you've done a great job talking about like who has the upper hand in a negotiation based on a call coming inbound versus a call being placed outbound. You want to just kind of like paint that picture of what it's like to be a broker calling out versus a carrier calling a broker.

SPEAKER_01: 1:47

You will on average make less money and pay more for a truck if you call the truck versus the truck calling you. And again, like without going too far into negotiations, there's this old adage of like whoever speaks first loses. But what it really means is whoever talks first has a disadvantage because it tips uh it tips the scale of who needs it more. And if I'm calling you and asking, hey, can your truck take this load? I'm already setting the tone that I need you more than you need me, which again, as a percentage, will play out where I will pay a little bit more because the dispatcher has the leverage and can give me whatever number they want and walk, right? Now, that is on average, there are instances where it doesn't play out in both directions the opposite way. But I would say, like, if you can cover your loads with inbound calls, you will make more money. But there's a caveat to that because if I'm calling, it depends on where you're calling. Because if I'm calling a posted truck on a load board, I'll probably pay more. But if I make an outbound call to a carrier that has run that load for me last week or run the load for me at any point in time in the past, I'm actually likely to pay less money because I've already negotiated the rate for that lane. We've already done business together, they've I've already been to the facility, both pickup and delivery. So there's less unknown risk to the driver on sitting there for eight hours and not getting loaded. All of those things play into what you have to pay a driver on an individual transaction. The more information everyone has, the less risky it is. So if you're calling your own carrier base or trucks that have worked for your brokerage, or in the best case scenario, have run that specific lane for you recently, you actually probably pay less money. So what I would say is you should be doing both in most cases. First thing I'm doing is posting a load up to just hear where the market's at, whether I use that truck or not. But what I'm really doing is as soon as that loads posted, I'm going directly to my TMS and looking at when was the last time I ran it and who ran it, and I'm calling them while I'm getting calls inbound on my load posting.

SPEAKER_00: 3:57

And just about every TMS has that. I'm so glad you brought that up because that's what I wanted to hit on. And is just about every TMS out there has some sort of ability to do this. So like I'm we're in a TMS transition phase right now. So like we're active in one and kind of playing around in a new one, but both of them have this ability. Like I just I just looked looked it up right now. Like an available load, I can hit on the button that tells me like potential carriers that I might use. And it's gonna look at who's hauled it in the past, how recently, how many times. Um, has anybody listed this as a a lane that they prefer to run or they've called in interested in running this lane? Um, and that data is only as good as what you put in there, right? So if you are not storing all of your data, or your carriers are, if they tell you they they like a certain lane, if you're not saving that, you're doing yourself a disservice, right? And then your next best availability, like let's say you're brand new and you don't have lane history in that one yet, is well, there's tools out there that can help you see carriers that prefer that lane. Like you can, like highway is great. You can look at gen logs to see at their their lane history where they've literally been seen, right? You can do things like um lane makers. Yeah, let's say lane makers on DAT. That's what I was looking for. Um, how many times have they searched or posted in in that lane in the past? Like those are those are huge. But then it comes down to like, yeah, there's nothing wrong with posting a load. Um and if if like last ditch effort, like if you're making an outbound call, sometimes you have to, right? You you might be in a in a place where you just no one's gonna call you because they your MC is too new or you don't have a credit rating yet. And like that's just part of being new in this industry is you're gonna have to make outbound calls and build relationships the old school way. And with that comes a carrier wanting more money out of you because there's not a level of trust built yet, and that comes with time. So, but yeah, it's just kind of like order of operations, how would I do it? Who's who's hauled up for me in the past? Who do I know prefers this lane? Who wants to call me on this? And last effort is who can I call and ask about uh coverage for this?

SPEAKER_01: 6:02

So here's the old school way that I think works for newer brokers or newer brokerages, right? And I went through this with someone recently is okay, just take this example of I have a customer that is jump all freight, meaning like they give it to the cheapest person to give them a rate the quickest every Tuesday, right? But say the first three Tuesdays, I keep seeing this lane come up, right? Miami to Detroit, every Tuesday, my customer sends me an email in the morning and that lane shows up. And then everybody posts the load up, and then you get carriers that call in. Well, what I learned like doing this is I would write down the MCs of everybody I talked to, right? And I put the date on the top of my notepad, like, you know, Tuesday, this date. And like I would have a list of those MCs. And then every Tuesday, I was like too slow to get the load, right? But I started noticing patterns. I mean, like the same carriers were posting their trucks every Tuesday, some of them, right? Like there's like a handful. So every Tuesday I'd look, I'm like, that MC looks familiar. Yeah, they were there last Tuesday. Oh, they were there two Tuesdays ago. Then the next step is well, if my load keeps coming up every Tuesday and those carriers keep coming up every Tuesday, and I'm too slow to get the carrier on the load to get the load. Well, then guess what I'm gonna do next Monday? Yeah. I'm gonna call the five carriers that I saw the last three Tuesdays and go, hey, you guys know if you're gonna have a truck available tomorrow in Miami. You guys seem to have had one there recently. Yeah, we should. Okay. Now I'm gonna call my customer. Hey, I know you keep sending this load out every Tuesday. Uh, out of curiosity, I got a driver that's gonna be empty and available tomorrow morning. Um, if you guys are gonna have that, I can probably take it off your hands. Then that's one less thing for you to do tomorrow. Now I save my customer time and got them a decent rate. I got my carrier who I save time. They don't have to post their truck up the next day and work the load boards, and I got the load, right? So that's a scenario where you can make outbound calls to posted trucks and just use things you're seeing as patterns to your advantage. And it's like, okay, well, if you're too slow, just use time to your advantage and do it before everybody else does, right?

SPEAKER_00: 8:11

Yep. Absolutely. All right, next question. What are some red flags to look for in a carrier's DOT number or operations because of fraud or double brokering risk? So I'll say MC number is one that some folks bring up that just look at like, hey, if their number is higher than, you know, whatever, their numerical order when they're released, right? So it just is gonna give you um how old or young the MC is. But more so operations, what do you look out for you know, as far as like a fraud or double brokering risk? Um I would say some of the well, the clear and obvious ones are like, do they have reports against them? And regardless of what tool you're using, if it's highway or um if it's um carrier share, RMIS, carrier 411, um, my carrier portal, right? Like there's there's ways of carriers just being blatantly flagged for whatever, but the other stuff that you can can look at, like um look at the equipment that you can verify that they have, does it match or not match with the load that they're trying to book with you, right? If they don't have any reefers and they're trying to book a reefer, like red flag, if they never operate, like ja here's what I love about gen logs is like gen logs literally can observe images and locations of these trucks. So we know their equipment type, we know the size, we know their location, and the history and the and the patterns and trends, right? And I think Ryan did a great job with with you a couple weeks ago on this. Is if a carrier has like one or two trucks and they've been verified, you know, through inspection data, through um gen logs cameras or whatever source you're using, right? And they're always in the same like southeast area of the US. And now they want to pick up a load for you in California. Well, they don't have anything out there, they never had anything out there. And if you go a step further and you're doing like ELD tracking through a certain service, um, you can kind of put, you know, use these tools to supplement one another. And those are what I would say your your red flags are. And there's there's a ton of other subjective ones, and there's like, you know, you could set the rules in these different compliance um programs, but it's like, do their inspections to fleet size? Is the ratio, is it off? Like they're not getting inspected as much as a carrier that claims to have 50 trucks should be, right? Um things like that. Those are like the blatantly obvious ones to me. Um, what would you say are some of the other common ones or just like other red flags to look out for? Maybe the rates be true.

SPEAKER_01: 10:55

Are they running the same type of equipment as your load? That's like another red flag I've seen that's overlooked. I mean, it's hard for me to pick one because I kind of all of them now, and I look at them like comprehensively. I mean, and a lot of the software I use, I'm looking at like their IP tracking history. Are they logging in often or from the same places? Um, for sure looking at the email domain if it's an email, and like a lot of times I will literally copy everything after the at sign in the email and just put it into a browser to see if the website comes up correctly or if it doesn't. Um making a phone call say is probably the two lowest angles. Yeah, yeah. For visibility, I look at gen logs to see if they're currently running, are they running those lanes they're asking about with their trucks? And the second is I make a phone call to the FMCSA phone number, but I'm also looking at my software. Were there recent changes to the FMCSA phone number? And if there were, I call the older phone number. Like that is probably the lowest effort one that gives you the highest return for the effort, I guess.

SPEAKER_00: 12:50

Yep. Yeah, and this is all something that like you know, when you when you build out your tech stack, you've got to decide based on the amount of control and decision making or lack thereof that your your team has what level of uh software or what types of software and how much should you be spending on that? Because there's gonna be a balance. Like if you if it's just you and you are very confident in your abilities, um, you don't have to put a whole lot of guardrails in place because you're gonna manually check this stuff out. But if you've got like a bunch of new folks that are booking trucks, yeah, I'm definitely gonna want to have like rules in place and basically things that make it impossible for them to book a truck that could potentially be fraudulent. So like we've got agents at Pierce, right? So we literally have we've evolved this over the years, but like a carrier can't even get a rate confirmation sent unless they, you know, the the carrier passes our rules, right? And then further, they can't even ver they can't even view or accept the rate confirmation until they go through a multi-factor authentication authentication process to prove that they are the right person. So uh there's always gonna be like, you know, the scammers are always gonna evolve too and you know, make a take a step in a direction that makes us, you know, vulnerable. But like you just gotta keep your your processes and your tools and and the the education of this stuff like up to date. So yeah. It's crazy, man. I still like kind of miss the old days when like this this wasn't the number one issue.

SPEAKER_01: 14:29

I definitely miss those older days.

SPEAKER_00: 14:33

All right. Last question here. Um, it's like four questions in one, but this the woman asked, um, I'm curious to hear from other broker owners about your experience working with or hiring freight agents. A few quick questions. What documents or agreements do you give new agents when onboarding? How do you handle commissions and payout timing? Do you train new agents or stick with experienced ones? And any lessons learned that you wish you knew sooner. So I did give a brief response to her on, I think this was our Facebook group. But I basically said, like, um, I said, like, number one, like, so I I go through, I had this conversation yesterday with somebody who was actually considering bringing an agent into their company. And I said, like, I've got an entire like SOP that I've built out for Pierce when it comes to um agent vetting and onboarding. And I have talked with one of the things I love about like good, like good leadership is that they're not afraid to talk to their competition and kind of collaborate. Like, that's what I love about TIA. But I have talked with like folks at um Armstrong, Global Trans, LDI, like other larger agent-based companies, and just been like and and other companies too, and just been like, hey, we're getting we're getting hammered with the same fraud, agent fraud that you guys are. Like, um, you know, we if we don't if we don't share the the risks that are out there with each other, you're just kind of like letting that bad actor just continue to do what they're doing just under someone else's company. Um so but like I go through like yeah, we do it, we do a full-fledged in-depth contract, we do a background check, we thoroughly vet their experience and their book of business. Um I want to make sure What does that entail?

SPEAKER_01: 16:19

I want you to explain to people what vetting or verifying their book of business was.

SPEAKER_00: 16:24

Yeah, so I did this with somebody this week, with one of the we had a one of our recruiters was bringing a new guy in, and he's like, Yeah, he's like, I know I'm a little, I'm a little unsure. He's like, feel good about it, but like he's like, you know, what else do you want to do? And we went through like and you could use like Zoom Info or Apollo or like any of these like data um sites to like uh something besides LinkedIn or a resume, like to like to tie that person to a different company, right? I've even gone as far as like if someone's like, hey, I work at this other company and I just don't really, you know, we're having we're having like difference of opinions, and I'm just I want to look for a new home. Like, you can even say, like, all right, log into your DAT account, go to like your profile and screenshot showing me your account with your like your contact phone number and your name and your you know affiliation with that MC, and it's gotta have like the date date and time on your computer in the screenshot. Like, that proves to me that yeah, you have an account with DAT at this brokerage right now. Um pay stubs, commission reports that are are generated from the TMS. Um, and don't be afraid to run them through AI and tell ChatGPT like, does this look doctor? Does this look altered? Because I've caught people who like I didn't notice it, but chat GPT's like could see that there was different layering on the PDF that showed it was an original PDF that had then certain text added into it, right? Or it noticed that the dimensions of the phone, like the image of the logo of the company was slightly stretched and didn't match the official one on the website. Things like that. Um background check for sure. Um you could do reference checks, you could do, I mean, the more you do, the the better it is. And like most legitimate agents now, they understand that like, you know, they're gonna be asked to verify certain things and like they're not gonna balk at it if they're if they're legitimate. But if they're lying to you about their book of business or lying to you about where they're currently working, or lying to you about even having any experience in the industry, um, they're not gonna be able to get through those checks that you have. So that's those are some of like the vetting things that that I do. Um, and then like just what does your gut tell you when you talk to this person? If you're asking the right questions about you know their book of business and how they do things, are they answering them in a way that makes you feel comfortable or in a way that kind of like raises the hairs on the back of your neck? Like anyone should know their book of business in and out, like down to like, you know, the their their contacts name at a certain shipper and the lanes that they run and when they are and the commodities, and you could do an NDA, right, if they're not comfortable sharing that stuff with you. But I literally had a dude that was like, Yeah, we do like four million dollars a year, and he like refuses to tell me his customers' names. He's like, Why would I tell you that? I'm like, well, like if you know if there's any contracts we have to get to approve, or credit lines we need to have, or like if there's like you know, credit lines you need, like I would love to like pre-vet this for your sake so you don't make a decision, and then you find out we can't work with them. I'm not telling you my customers' names. And I was like, Okay, like we're not a good fit then. Like, I I don't know what to tell you, but we're just not a good fit.

SPEAKER_01: 19:37

So here's the two other big ones I've seen where somebody comes over and has a book of business, but they haven't been in the industry for six or eight months, and they think they're just gonna have all of those. Yeah, and they're like, Oh, well, they I know these people, I've known them for so long. Like, they they always told me if I went and got an agency, like that they'd give me loads, and it's like I'm not saying that like that's not true, and that person didn't tell you that, but like it's also not just up to that person to probably get you onboarded to be able to give you freight, there's someone else moving that freight, like that never, from what I've seen, ever works out.

SPEAKER_00: 20:14

Or the other one is I have I'll tell you this, I have like less than a 25% um success rate on that. And I usually, if I if I move forward with it, there's gonna be like send me an email, like forward me an email from your customer, or like let's do a three-way call with them, and I just want to introduce this brokerage and make sure like you because and if they can't do that, then they're overconfident in their book, you know, they're clearly overconfident in their book of business or that relationship.

SPEAKER_01: 20:40

Or the other one is somebody wants to come over and bring their book of business, but they worked in a pod model and they were the one booking the loads, weren't the one that had the relationship with the customer. And they're like, Oh, we did like three and a half million with them. They're like, Oh, like tell me a little bit about how you got onboarded with them. Like, how did you prospect them? And they're like, Oh, well, it was a house account that our brokerage had for 20 years. And it's like, okay, well, so you were covering their loads and scheduling appointments, and your belief is that like all of that business is gonna go with you when you had like a very small portion of the relationship. Well, I think we can. And it's like, okay, to your point, well, let's jump on a call and see if they're interested in being able to move it over. Because again, I don't want you to leave your job to come here and then it doesn't come with you, and now you're out both, right?

SPEAKER_00: 21:30

Yep. Um, so some of the other questions that she had is how do you handle commissions and payout timing? This just depends on, like, you know, some if you don't have a if you're just looking at like a couple agents, like it's probably gonna be like just a business decision. Um, most of the larger models are going to pay upon invoice. Um but you know, you could you could do like pay when you've received payment, you'd probably just look at their cus like if it's just your first agent and the customer pays slowly, um, but you want to be able to offer them a credit line. Well, I'm not paying commission out until we receive payment then. If I know they're gonna pay in 50 days, but if you know, so that's that's a consideration you can have. Um, the percentage amount that you're gonna pay out, you know, depends on what are you providing for them. What are they doing versus what are you doing? Are you giving them free access to software? Are they paying for their own software? Um, there's all there's like no like doctrinal way to do it. There's a lot of options. And then experience versus new. Uh I I wouldn't personally go down the new uh new agent route. I'd always go experience. Like I feel like someone that's like, oh, I'm just gonna hire like 20 people and see who works. Like, that's you just not wanting to do sales yourself. So um what I've always found is that like someone who's really who's got a good book of business, um, the reason that they'd be a good fit for your company is just usually it's like a cultural fit, like the business model makes sense. They they enjoy the way that you guys operate as a company. Um, and it just it makes their life and their their job uh easier than um wherever they're currently at. And then lessons learned, she asked about. Um, I tell this to a lot of people is that like running or like building out an agent program is is not as easy as you might think. It is very difficult. Um, so much to a point. I literally was talking to somebody yesterday who was looking at bringing on their first two agents, and I said, if you do this right, and again, they were like, Yeah, these are two guys that like they got a book of business, and I was like, Oh, cool, like, you know, what did what did they do last month? And he's like, Well, they actually haven't worked with them in like a year, and I'm like, So they don't have a book of business. I'm like, I'm like, you'll learn this stuff over time when you deal with more and more agents. But I'm like, I'm like, there is a lot. It it almost if it seems too good to be true, it probably is, right? It should be it should be very difficult, but not impossible, very difficult to bring on your first agent because you're having to sell that person on coming to work in within your organization, and to trust you that you're gonna pay them and that you're gonna treat their customers and your carriers the right way. Um, all of that. And it it gets to a point where like the companies that have the agent model, there are people whose sole job is to support the agent model, right? They're not brokering freight, they're not doing accounting, they're not doing claims, they're literally in a role that's like agent support, agent development, agent recruiting in some cases. Um, and that's you know, that it is a it's something you have to really build and scale slowly at the right pace. And kind of like we talked about on last the last podcast about like growing your business, like growing an agent model is like slow and steady. Slow and steady. Like I remember when we started our agent model at at Pierce, um, we had there was a couple agents that were already there over like, you know, from a decade or more ago, but like it was started as just me, and there's like four of us now that just solely support the agent model outside of any other back office. So yeah, a lot goes into it. It's not just a a quick um way to add a sales rep. These are people that are gonna represent your authority and your reputation that could like tank your business in like with one bad email or one bad phone call to the wrong person.

SPEAKER_01: 25:30

So I would say this. Like I've done both. So you've been an agent, you've had agents, I've been an agent, I've hired them, and I've been on W 2 and ownership. So like all the positions, right? I think it is easier, fastier, faster, and less risk to just prospect and get more business yourself than to do to build an agent model, right? Now, in the long term, I think it makes sense to build the agent model out in your point of view of like it's slow, it's steady, but once you have enough of them over enough time, the business becomes less risky because it's not dependent on one person. So in the long term, I think it's a good idea.

SPEAKER_00: 26:09

It becomes like a book of business in itself, the same way that you can diversify your years.

SPEAKER_01: 26:14

Even when you're good at it, even when you have name recognition, even when your brokerage has name recognition, even when you have tenure in the industry, it still takes years. But like it is very beneficial over a longer time frame to do that. But if you're really going to do it, I think you need to be selling yourself, growing your book every day, every week, and then little by little spending a little bit more time prospecting agents, just like you do shippers, and never stop prospecting shippers. Because now you're really growing, and little by little you'll find that one good agent that you add to the mix at first, maybe one a year, right? Maybe one every year and a half, and then maybe get two, two years later, right? Like it is a slow growth, but becomes more stable over a longer period of time. Yeah, it has never been the faster solution that I've ever seen in any situation that I've ever come across.

SPEAKER_00: 27:03

Here's what's interesting is like um the demand to build out an agent program is very high because I think a lot of companies see the value in it. And a buddy of mine I worked with years ago, he built an agent program out for a company. He basically had like a headhunter that like pulled him from a a very like a billion dollar plus company and was like, hey, these guys want to build out an agent model. Um you should talk to them. So like he he legitimately like takes like he had this great, great job, um leaves it to take a slight pay cut with the potential to earn more over time to build out an agent program for a company, a smaller brokerage. And like the dude, the owner just like five and a half months in was like, Yeah, we're gonna stop doing this, and like laid him off. And he's like, he's like, I he's like, I didn't even like want this job. Like they a headhunter brought it to me, and it seemed like a great opportunity. And I like thought about it for a long time before I decided to do it. And he called me and he's like, dude, he's like, this just happened. And I was like, you know what? I was like, I was like, talk to these two people. I said, I guarantee you you'll have like multiple offers to do this at other companies. And he literally did, like in a in 24 hours, had multiple like reputable companies offering him like well over six figures, starting as a salary plus commission to come in and build out a program. And it's like there's not, I think there's not there's not a lot of people that are out there that have done it successfully and can do it and can manage it uh compared to the amount of companies that would love to be able to lean into that model. So um that's why I always tell people like it is you know, it is a job in and of itself to build and manage that business model. Um it's kind of like the reason, like when you when you worked at TQL, you probably had a person or a you know, a team that did new hire training, right? Was it was there like someone whose main job was to put you through like your first week's like orientation, like this is what freight brokering is, and like dedicated to just training people on what you know, what the job is and all of that. Was there anything like that?

SPEAKER_01: 29:26

I have dedicated recruiters for sure in every office. They did have those people when I was hired. Two years in, they got rid of the program. Okay, if I remember the numbers, it was a lot of money that they saved when they got rid of it. It was like$30 million a year or something, if I remember, that like they saved by dropping the program. And what they found where they didn't see a drop in performance because the way they train people is they basically plug new hires directly into somebody that's experienced where they what we were talking about on the podcast, like physically sit next to somebody, plug in, listen to hearing and seeing and watching everything that is happening.

SPEAKER_00: 30:04

Yeah, that's a good point. But yeah, good questions. Um, keep them coming our way, and we'll continue to answer them.

SPEAKER_01: 30:10

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

SPEAKER_00: 30:15

And until next time, go bills.