Carrier Cancellations, Rate Deductions, and Embracing New Challenges | Final Mile #29

Freight 360

February 6, 2024

Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:

  • Carrier Cancels on a Load
  • Deducting Money from a Carrier
  • Verifying Carrier Identity
  • Getting Bored in Brokerage
  • Damages at Delivery

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

All right, welcome back for another edition of the final mile, where we answer all your questions that you guys Reach out to us about. Make sure to keep sending them our way. We've you know, we're gonna pull some from the YouTube comments on the YouTube channel Directly through our website through. We had an email sent with a contact form that was submitted. Yeah, reach out, let us know what your questions are. We'll hope to get to as many as we can. And please take a moment to check out the description box to support our Sponsors, including our newest sponsor, levity. You'll get to hear more about them in the in the near future. And take a moment to go to freight 360 net for all of our content, including the freight broker basics course, which will give you everything you need to know to get your broker to started and successful. All right, ben, first question here, and we've actually like we I picked this one for reason We've talked about this scenario before and it's frustrating.

Speaker 1: 1:12

We need to address it. So the guy asked said I've had three different drivers at three different locations Cancel on my loads. It's resulted in eighty six hundred dollars in lost revenue and Potentially losing two customers. What would you do in a situation like this. So here's what, here's the frustration as a freight broker when a if we cancel a carrier last minute, they're gonna want a truck order, not news. Right a tonu.

Speaker 2: 1:38

Yep only works one way street.

Speaker 1: 1:40

Yep, but when a carrier cancels on us, zero recourse, like there's literally nothing we can do. It's one of the frustrating things about this industry is, you know, contracts as much workers we might spend to perfect them and send them out, and red line and sign, they don't really hold a lot away. You know, some of the customer ones do. But, like between us and carriers, it's just unfortunate We've all had carriers fall out on us. It's frustrating. You want, you know, you want to try and get a tonu out of them essentially, but you can't and you might lose a customer over it.

Speaker 1: 2:15

The reality is, as far as the customer side goes, I'll just be transparent with your customer and tell them like hey was a bad carrier, apologize. But as far as the broker himself, this is a vetting Situation. Like there's plenty of tools out there, whether it's internal in your TMS, the DAT directory, google, any other load board Watchdog from TIA, which is now under highway you can get these reviews. You can see what kind of service they're having. You can join like different, like there's like lists that go around with bad or potentially bad MC numbers based off of different Issues. But I mean like DAT and Google reviews are like that's my go-to For anything that I can't find depending on a lot of subjective good and bad feedback.

Speaker 1: 3:05


Speaker 2: 3:06

Would add a few things. Right, like I always try to understand the scenario as much as you can so that you could understand what are the variables that contribute to a certain thing happening. Right, if it happens more often, usually it's because something is causing this. Right, like in sales, keep getting the same objection. The salesperson is usually saying something that elicits that response, that objection. Everyone goes oh, this is crazy. I keep getting the same things. Well, nobody ever wants to look at what they're doing.

Speaker 2: 3:33

Right, and for this one, like it's probably related to price, is my first time, is my first guess. My second guess is the type of the load that it is like, and a real common one is like floor-loaded tires, right, and anyone that's been, you know, hustling in the industry has moved a load or two like they're notorious one. So driver finds out that their driver assist or floor-loaded. It takes forever. They're usually arguing over detention because there's not a lot of profit shipping tires, so it's just a headache a lot of times, and usually that's where you get follow. It's one of the two, right, not paying enough, or the load is just a big headache to deal with.

Speaker 1: 4:13

It's the juice worth, you know, is the juice worth the squeeze? And that comes in. Hey me enough.

Speaker 2: 4:19

Right versus the headache that it's gonna cause me which comes full circle back to what are the expectations You're setting for your customers?

Speaker 2: 4:26

Right, if you're telling, if your customer, if the average rate on the lane is a thousand and your customer Wants to pay 800 and you are promising your customer a plus service and you're trying to pay a carrier $700, keep a hundred and still be below market, you're gonna deal with this all day long and deal with irritated customers all day long.

Speaker 2: 4:45

Right on the flip side, if you have a realistic conversation with your customer and you say look, I mean what you're looking to pay is Significantly below market, I will get you the best carrier for your budget. But, that being said, there's a high likelihood any of these guys, if they find a better paying load that has similar Details to yours in a similar location, they're gonna drop our load last minute to go make an extra 75 bucks, if they can in this market. And if you're upfront and honest with them now, at the very least you might be in the same scenario regardless. But you're not gonna lose the customer because you were upfront and you might actually get a better relationship, because now you're the one broker that's actually being honest with this customer, telling them the the hard truth that their actions are causing the problems they're complaining about. Right, and if you've been in the industry long enough and you can have that conversation, you might turn this into an actual customer by being honest about what's actually happening.

Speaker 1: 5:37

But assumptions. I have a hypothetical for you. This just popped in my head because we have a question about carrier rate deductions coming up here shortly. Have you ever heard of somebody trying to deduct on a carrier's rate because of a previous quote, unquote service failure like this, like if they had it built into their contract and write confirmation that, like you know, fault, failure to comply with this or fall off the load Could result in a future deduction, if we do business? Have you ever heard of something like that?

Speaker 2: 6:07

No, I haven't. I mean I. The problem is don't use like do right exactly if they're gonna fall off.

Speaker 1: 6:13

But I'm curious that that would hold weight.

Speaker 2: 6:15

You think I've asked this and here's what I've run into just in practice was I had to do you'd use a lot of repeat carriers and drage, and I've had this happen to me and I've needed to use that person again and they've owed me money or something went wrong, right, whatever it was in the past load. The problem was every time you try to enforce it the next time, you increase the likelihood of the first thing happening, meaning they just don't pick up your load. So you just keep ending up like kind of shooting yourself in the foot and you again. What I just ran into in practice was you just kind of had this be like okay, what is the, what is the worst or the better of the two worst options? Using the carrier that screwed me in the past and hey, let's just let bygones be bygones and move forward and do business, because it's in our both best interest, because I don't know how you.

Speaker 2: 7:02

I don't know how you make that work.

Speaker 1: 7:04

So I'm gonna I'm gonna hop right to that question next and then we'll get back in order because of the next. The next question We'll get to is about deductions. It says how it's specific, but I'm gonna broaden. The answer says how can brokers deduct pay from a carrier for not setting up GPS tracking? So I'm gonna talk about rate reductions in general. All right, if you're gonna reduce the rate on a on a carrier's pay.

Speaker 1: 7:30

In my personal opinion and in the ethics that I have always followed, this is not a An area that should be a profit center or a slush fund, as some brokerages will Essentially try and do. You know they'll try and you know either. Here's what. Here's the way I do it. Right, if the customer is gonna take a hundred bucks off, I'm gonna pass that through to the carrier. The customer is gonna pay me a hundred dollars extra. I'm gonna pay it to the carrier, whether it's an added fee for detention or a deduction for being late. Either way, it should be a pass through. Now, in addition to that, any rate deductions that I ever Mok with is if they're contractual. So you can't just make up a random rate deduction. Well, I wouldn't just make up a random rate reduction. People can do whatever they want, but, like we, you know, here's an example for tracking specifically. Right, we've had a customer that required they wanted us to have GPS tracking so that they could have emails sent to them periodically. And it's also in our rate confirmation at our carrier contract that we're gonna, we have the right to request GPS tracking.

Speaker 1: 8:38

So we had a carrier that I had. They were contracted. Their pay instead of like just a line haul pay, we itemized it. It was like line haul is I'm just making this up $500. Team service $500, continuous GPS tracking $500. So it basically was like you know, 1500 all in. But they had to meet all that criteria to meet that, meet those pay items. Carrier failed to track all the way. So we actually were able to deduct that right Because it was in our rate confirmation. They also I think I told you the story offline, ben, but then they sent a team but they weren't driving like a team where both drivers would each drive up to 11 hours a day. They drove. They had two guys splitting the amount of work that one guy could do on his own, which resulted in the shipment arriving late. We tried to deduct pay for team service not being provided and we couldn't Because if they were to file on our bond their argument was we provided you a team.

Speaker 1: 9:47

You didn't have an annotation that we had to drive 22 hours a day. You just said we had to have a team and we did, like kind of a loophole. I think we had a deduction too for being late and that was approved, but like it's very so again, you can deduct whatever you want, but if it goes to your bond company, you're going to have to have a very solid ground to stand out on a good argument to be able to verify why you're reducing this rate or withholding that pay. And if you don't have a means to defend yourself, good luck. Bond company's going to pay out and then you're going to have to repay the bond company.

Speaker 2: 10:23

It makes perfect sense to me. All the instances that I had asked when I used to work at a larger company with access to legal, readily available right, I used to ask this a lot because I was like, well, what penalties can we enforce? And, to your point, I always tried to frame it as the question excuse me, I'm not looking to generate income or revenue from this activity. I want a financial penalty to incentivize the behavior that our customers expect. Right To your point, like, hey, this customer is telling me full stop, they will only use me and our service as a company if we can provide tracking for these loads from A to B without exception. Right To your point, we are offering the service. How can I make sure that the carriers we're using and paying and also I'll pay them a premium to make sure that they're doing this, and I don't have any issue with that because I'm charging the customer premium but how do we make sure they adhere to it?

Speaker 2: 11:17

To your point, and the argument that I always got, and again years ago, was look, basically, freight law says you can't penalize them if they're a little bit late, necessarily on a shipment, unless, to your point, it's itemized because if they picked up that cargo from where it was and got it to where it needed to be. They are owed the money that is in the rate con, and it was really hard to argue to your point where and what was for what. But to me what you just said makes the most sense, right, because these are different services and companies are willing to pay for it. So I should be able and willing to either give you more or detract if you don't do the thing that my customer is paying before. It seems like that would uphold in any bond. I guess Is it a hearing or is it just like.

Speaker 1: 12:01

It's usually an email correspondence, like you know they found the bond bond company comes to you and says hey, abc trucking is following your bond. Here's their story, give me your response. You send your response. It's usually done. Bond companies don't want to waste time with he said. She said it back and forth. They take whatever this person says. Whatever this person says, usually whoever has the most detail and the most concrete argument wins. So and if you're a smart freight broker, you will not like, you will not try and not pay a carrier in an instance where you know the bond company is going to defend that carrier on it. It's not worth your time. The bond company is not going to like you. If they get a bunch of BS cases like that, just you know, and not to mention like the ethics behind it, don't like. I have seen people.

Speaker 2: 12:50

It's not even good business, yeah.

Speaker 1: 12:52

I've seen people that get a tonu for $200 and only pay the carrier a hundred or don't pay them at all. I'm like that's unethical. Like either the carrier is not asking for it, then don't ask your customer for it. Or if the customer is willing to pay it, like or the carrier only wants a hundred, don't charge them $200. You know, whatever the case might be Same with the productions.

Speaker 2: 13:12

Those are also the same people little bitch when they lose a customer and won't and throw their hands up Like I did everything right and I don't understand, while the other broker, to your point, is honest and gives them back when they're not due. And people realize this, whether anybody believes this or not, like for sure, we do business long enough. You know who's getting you for every instance, every single time, for the same dollar amounts, and you know the people that are like, hey look, we didn't have to pay it, we were good. The guy was still with his last pickup, so, or last delivery, no tonu, on this one we're good, right, yeah, those things add up.

Speaker 1: 13:44

They do, all right. Next question how do you use a driver's cab car to verify their identity, and are there any carrier monitoring programs out there that are truly vetting the identity of carriers that use their tool? So it's funny we don't hear the phrase cab car a lot. It's just the trucks it's. The registration is what it is the drivers Like.

Speaker 1: 14:05

So first time I was taught about a cab car was when it came to fuel advances. I didn't deal with fuel advances in the LTL world, but when I got into 3PL, full truckload carriers will take advances. So what we would do to prevent fuel advance fraud is hey, if somebody wants an advance, we need to verify that they are who they say they are and that they actually have the load. So we would always say I need a copy of a sign bill of lading, I need a copy of your driver's license and I need a copy of your cab card, ie, your registration, right? So what that tells me is I have a paper trail of who this person is and I have a paper trail of this registered truck and I can verify that the bill of lading has been signed. All right, that is one way of doing it.

Speaker 1: 14:51

Obviously, fraud's gotten more rampant. You can kind of like now we're asking for pictures and stuff like that so they can't skirt around it. But to verify somebody's identity I don't go the CAD card route anymore, I like. So we use highway and we just upgrade to the highway connect which, like it'll integrate with the carrier's ELD service to show you on a map where all their trucks are. So like that is a like foolproof way of being able to verify identity. It also puts them through other challenges. Or it's checking their FMCSA, registered email, phone number, the point of contact, all that stuff.

Speaker 1: 15:28

You know, there's a whole bunch of stuff. Check out our episode with Michael Keaney from highway. He kind of breaks it down in detail. But their services out there, the old school manual way yeah, pictures, registration sign, bill of lading, cad card. Call your customer verify that this person is in fact who they say they are. But yeah, I haven't. You know the CAD card thing, I haven't really touched it in a while. Did you ever go that route before? Ben Asked for registration?

Speaker 2: 15:56

I have not, but it all makes sense to me.

Speaker 1: 16:00

The good thing is, if you have trustworthy carriers, that you've got a relationship and rapport with, you don't normally need to worry about asking for this kind of stuff.

Speaker 2: 16:08

That's why I haven't had to do it recently. Like I mean, most of the business that I deal with the carrier side are carriers. I've had relationships to your point, for you know years and years and years and the team handles, my team handles some of the transactional stuff. That's all of it. So just don't deal with it as much on a. You know in the way you do this anymore, for sure.

Speaker 1: 16:29

Well, good question, all right. Next up, this one's interesting Guy says where do I go from here? My customers are consistent, my carriers are good. It feels like I'm doing the same thing every day and I want something new. I kind of like summarized his whole phrase there, but I'm curious.

Speaker 1: 16:48

I want your take on this too, because I have never had this problem, because I always have like a continuous improvement mentality where I always want to learn the next best thing. I'm always trying to stay like two steps ahead of where I should be. So I have like something way out that I'm like itching for and super curious to learn about, something kind of in front of me that I have like as a direct goal. And then you know my normal stuff that I'm constantly doing and being fairly proficient at. And then I'm trying to also, on the other side, train people that are less tenure than me on some of the more basic stuff like we do on the show and like I do it to my company. So I've never had that issue. I would encourage the guy to like dream and like have some big, long-term visions here.

Speaker 2: 18:40

I've had it. I mean, I'll tell you when I had it last like was when I was at TQL and it was at a place where, like it was almost impossible to get large enough leads to some degree on a regular basis to kind of work, the prospecting side, in a way that I probably was interested in. I would say right, still could have done it, still was effective, still absolutely could have grown. But for me, to your point, like my curiosity and what I wanted to do versus what I could do were two very different things which I mean the answer was to go find work in the same industry in a different way, so that, to your point, I get to do all of those things now, which is why that curiosity, to your point, like I think about that every day.

Speaker 2: 19:23

I was thinking about it this morning actually at the gym, like just where the next thing was, where my curiosity is what I'm doing as it relates to interest. So, like to me that's like that growth mindset. I mean maybe this person has and they're just looking for that answer to it. I mean, and I think that's really where you should work with somebody, whether it's a coach or a therapist or a close friend to start talking through. Like what are your objectives, right? Do you wanna make more money? Maybe that is. Maybe you're making enough, maybe you're saving enough, right? Maybe growth isn't your goal, but like, what is it that you're looking for, right? Cause to me you wanna answer that question before you start coming up with a plan to get to where most people come up with plans to go places. Other people think they should go and don't really think about whether or not they wanna go there.

Speaker 1: 20:11

I think is the I'll add too, there's other ways to kind of broaden your horizon than just growing your career and making more money doing the same thing, Like, think about you and I personally.

Speaker 1: 20:24

Look at our involvement with TIA. Right, we've gotten really big into the space of like kind of being a voice for the industry, right? So us, along with Chris Jolly, we are accredited professors or teachers that run the TIA's new broker course and their new broker coaching. I've attended TIA events to lobby for the legislation we want for the intermediaries and freight brokerage across the industry that kind of stuff that we do in addition to just running this running brokerage business. It gives you a super different perspective because you get to meet a lot of different people that have way different experiences and you'll we learn by teaching, which I think is really cool. A ton.

Speaker 2: 21:14

Yeah, and that's. I was thinking about this today. So in my two conclusions or few conclusions were. That was one I get a lot by teaching and giving back. That makes me one, happy and enjoy it to help other people. Right. Two, it makes me better at what I do, so that's also a positive right. But even I guess even to answer this question specifically within freight brokerage, right, if you keep prospecting different things to me, that's the thing I'm most excited about for this year. Right, we were talking about topics for the show and project freight and I was thinking about some of the projects I'd done Steel containers, steel pipe, different types of steel, aluminum and every project was different.

Speaker 2: 21:56

Everyone had different complexities and questions and, to me, like puzzles to solve at the beginning and the progress through it of solving those problems, issues, whatever, and providing the service and then having to figure out and problem solve the shit that just goes wrong in a day to day basis is what to me is like invigorating about being a freight broker, and it's like you can even have it where you feel like everything's running perfectly with the same group of carriers and shit's going to go wrong.

Speaker 2: 22:24

A pickup number, a guy gets stuck, you need another guy to move in. This person calls off Like there's just so many moving pieces that to me it's very much like playing sports, but kind of in a professional setting. To me it's the same mental thought process of playing golf, playing a game, playing baseball. You have the objective, you have things that get thrown at you, you've got a problem solve and to me that's the adrenaline and excitement. Plus you've got a scoreboard, which is money, which is coming in the door, which is a nice side benefit of the sport you're playing. So to me that's what I'm really excited about within answering this question related to freight brokerages Find other commodities, find other niches, look at project freight, look at just a whole different industry than what you've been in, or maybe just a different area of the country, because that also adds differences and different questions and things you've got to think through and challenges to overcome, and to me that's where you get the fulfillment and happiness.

Speaker 1: 23:18

If you're not a W2, so let's say you're an agent or you own your own brokerage you can expand your company, you can expand your agency, expand your brokerage. If you are a W2, maybe you can get more into a leadership role and help build and develop a sales team. There's all kinds of stuff you can do.

Speaker 2: 23:35

Well, for sure, if you're an agent, you can make the goal to grow to have people to literally mentor beneath you, and you can earn money while you're training them, which is a win, a win and a win. If you're a W2, you can look for other industries and different commodities. There's just so many different avenues you can go to keep this interesting, For sure.

Speaker 1: 23:53

So final question what do I do if a receiver damages a carrier's truck or if a truck damages a receiver's property? I've dealt with both of these. I'm just going to speak from experience as the broker. It didn't involve us, but we still did what we could to try and facilitate it.

Speaker 1: 24:16

But like we're not going to, so like we can file a claim on a carrier's insurance if there's cargo damage for our customer. But like we had a truck that like I've had trucks run into electrical lines on the facility They've ran into, like those big yellow poles in a parking lot, forklift through the side of the truck.

Speaker 1: 24:34

So yeah, that's the other side of it. So like first truck damaging property. I've seen it as small as like where the driver is just like all right, I'm going to write you a check, Right, and they're like all right, sounds good. But I've seen it bigger too, where there's actually a claim against the insurance policy for, you know, the car, the liability, their auto, I mean their auto liability policy. But then, like the receiver, like I forked times through the side of a truck, right.

Speaker 2: 25:05

Here's one. Here's one last, from August, from one of our clients. One guy in the shipping dock told the driver he was good to pull off and that he was clear. The didn't look to see that the other dock worker was in between the truck and the dock with the forklift and when the truck pulled away the forklift fell down in between, broke the fork. Lots of damage to the forklift, injury to the guy on the forklift.

Speaker 1: 25:28

Yeah, People oftentimes don't realize like you're talking like the average doctor. What is it it's got to be like four. It's like a four foot. I should know this because it's the height of the back of the trailer. I know, I think it's 40.

Speaker 2: 25:41

I was thinking the same thing.

Speaker 1: 25:43

Yeah, but yeah, I mean, so it's a big fall. You know, when I worked on a dock it was really easy to jump up and jump down from those. But like you're not driving a 10,000 pound heister forklift, so yeah it's. You know, if it is the carrier's fault and it's an excessive amount that's above the deductible, you could file a claim. Just, never had that happen. Personally, it's always been such a small amount that their deductible wouldn't cover it or it's a hassle, and they just like read them a check or like I don't worry about it, like all you, you scratch the, the yellow pole, like we'll just repaint it. So but yeah, interesting, interesting, good stuff. But again, communication is huge there. Right, you don't want to like leave either party hanging because then shipper slash, receiver could get upset, carrier could get upset with you and it tarnishes the relationship. So, but good questions, keep sending them in. You got anything else on that one?

Speaker 2: 26:41

I do not, I'm actually going the last question.

Speaker 1: 26:46

That, that it isn't, that, the isn't it 48 to 52 inches. Oh, the height, yeah, yeah, gotcha.

Speaker 2: 26:54

It was buggy.

Speaker 1: 26:54

It's like four, it's like four feet. Yeah Well, that makes sense because you you'll have a slightly different heights because those um bed heights are typically 46 to 52.

Speaker 1: 27:06

Yeah, and your dock plate can go up or down. So I used to hate the manual ones, man, the hydraulic ones are real nice, where you just press the button and it's like. Whereas like if you're I know you may have never worked on a dock, but like there's, they're super heavy as this big like almost like a hook, you got to like pull it up and then shove it on the back of a truck. But yeah, good stuff, all right, man. Final thoughts.

Speaker 2: 27:33

Whether you believe you can or believe you can't, you're right.

Speaker 1: 27:37

And until next time go bills.

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