Get Your Freight Brokerage Ready for Next Year | Episode 323

SPEAKER_00: 0:38

Welcome back to the Freight 360 podcast. Ben, we're going to go over some uh some good year-end stuff today. I'm excited for we kind of do one of these each year. We'll take a slightly different approach this year. But for everyone listening, make sure you check out all of our other content. Our website and YouTube is filled to the brim, full of full-length podcasts. A lot of them have great subject matter experts on various topics. And we've got some great one-on-one stuff for prospecting and operations and um how to grow your team, all kinds of good stuff there. And there's blogs, you got the Freight Broker Basics course. If you're looking for a full training package for your yourself or your team, and do the old share, like, comment, all the things that help the uh the algorithms and the YouTubes get us to more people just like you. Um, what's going on in Florida today, Ben?

SPEAKER_01: 1:29

Not much, man. Just enjoying the nice winter weather. You wearing socks?

SPEAKER_00: 1:34

Is that that time of year?

SPEAKER_01: 1:36

I do have socks on, but mostly just around my house because my floor's cold.

SPEAKER_00: 1:41

Fair enough. It's funny. I was talking about uh with my siblings earlier this morning. We're trying to figure out like a good joint uh Christmas gift for my parents. They live in Fort Pierce, and I started like rattling off all the restaurants they love to go to, and I was like, man, and I look outside and it's just like snow on the ground and snowplow, and it's literally snowing right now. So just makes me uh makes me wish I was in some warmer weather. But I will say this.

SPEAKER_01: 2:10

My daughter wasn't feeling well, and my wife a little bit last week, Ava had strep throat. So we watched a lot of movies and didn't get to go do some of the normal activities. But we got our Christmas tree up and I was sitting there, we were watching, I can't remember what it was, some movie. We're just hanging out, eating, and I'm like looking at my fireplace, and I'm like, it really I do kind of wish it would have dropped to like 40 or 50 degrees so I could have built a fire while you're sitting next to the Christmas tree, because there's just something about the you know, ambiance around the what weather this time of year that just sit next to a fire. Problem is every time I build a fire, my my air conditioning basically kicks off because it's so hot in here.

SPEAKER_00: 2:47

That's true. Didn't think about that. Uh I have like the my office here is in the like front corner of my house, and it I basically it's weird. Like in the summertime, the AC doesn't kick enough to this part of the house. So I have a um fan that runs. And then in the wintertime, like now, the heat doesn't kick enough over here for like the rest of the house. So I have this this gas fireplace back here that I run, and then I have to turn the fan on to like help it circulate. So it's always just trying to make sled adjustments to make it more comfortable in here.

SPEAKER_01: 3:22

Same thing. My office is in like the farthest corner of my house. So when the air kicks on, the air conditioning in my office is connected to the top floor of my house, but the rest of the first floor is a different air conditioning unit. So basically, to keep my office cold in the summer, I've got to cool the whole top of my house to keep my office cold. Oh, geez. And the air conditioner downstairs, to your point, like doesn't make it into this room. So I put in like I have like a huge fan I put into my office to try to do exactly what you're saying. It's like one of those like five or six foot fans to just keep the air circulating. Because otherwise, it's just so hot in here in the summer and it's freezing, even when it goes on to like 60 in my office.

SPEAKER_00: 4:00

Yep. All right. Um Pittsburgh over Baltimore. Yeah. Hey, dude, net division, man. It's like lit, and you guys play them again in a couple weeks, right?

SPEAKER_01: 4:12

So I believe so.

SPEAKER_00: 4:14

Yeah, right now I think like it's what's crazy is you look at the AFC this year in the NFL, like, just looks very no one, no one just sticks out as like truly dominant. Like, obviously, the Patriots have a really good record. Um, Denver has a good record, but like your you look at like your historically really dominant teams, like your lost over the weekend.

SPEAKER_01: 4:37

I think the Colts also lost their quarterback, I think.

SPEAKER_00: 4:40

Yeah, Danny Jones um went out injured. Um, but like the Chiefs, like they've got a I think they're are they six and seven right now? Um same thing with Baltimore. The Bills are nine and four. Um, so yeah, just like you know, either wild card or in the hunt for like the teams that were like historically like always always going to uh um to win their division and whatnot. So but yeah, Bills had a good win over Cincinnati. Uh Joe Burl and the Bengals, like another one, like a dominant quarterback, but like they always I feel like it's like an injury thing, and Burrow just has to play like a god because um they you know just I feel like their defense is is has let up a lot of points historically. So but yeah, man, it should be good. This is like the the race to the the finish line. I love December football, so many good games. Um yeah, Bills, Patriots this weekend, that'll be a good one. Um I saw Philly lost Monday night this week to LA. Jalen Hurts, a lot of turnovers, through a pick at the end of the game. When they could have they could have like kicked a field goal to tie it up and go to overtime, but they were going for the win, and he throws a pick. So that's a tough one for all the Philly fans out there. But uh yeah, looking forward to uh let's see what we got this week. Um Chargers KC. That one could pretty much lock Kansas City out of the playoffs, but I think can I think Kansas City's gonna pull that one off. Bills, Patriots, that'll be a good one. Um LA and Detroit. And then ooh, Monday night football. Pittsburgh hosting the Miami Dolphins.

SPEAKER_01: 6:24

Okay. Yeah. That'll be an interesting game.

SPEAKER_00: 6:27

There you go. Miami's won like four straight. So yeah. Interesting. But uh anything else going on in sports? We're just talking about a two F F1s over for the year. If anyone's an F1 fan, Lando Norris got the championship. It's always weird to me like an F1 when you don't win a race, but you won the championship. Like, so you know, it's the last race of the year. He needed X amount of points. He beat Verstappen by two points, but finished third place in the race when Max finished in first. So yeah. That's uh that's racing for you. It's kind of like golf, right? Like point system. So very much so. All right. What's going on in the news? More uh more shutdowns. I saw a couple of couple more trucking companies, um, bit the dust. I saw a funny a funny thing on Reddit this week where so like this whole non-domiciled CDL thing, and carrier a lot of brokers are wanting carriers to send pictures of the drivers at the pickup holding their driver's license, and it was like these two dudes, they just looked like they were about to go to a party, headband on and whatnot, just smiling, holding up their their CDLs as a set of team drivers. Um yeah, seems to be uh kind of the hot topic. I also did you see any of the outlooks for 2026 for freight?

SPEAKER_01: 7:52

Some. I mean, I read them as they come across.

SPEAKER_00: 7:54

Like nothing terribly noteworthy. Like it didn't seem like I was gonna get any worse. Um, but I think today it's Wednesday, right? We should get the Fed should release their decision on like if we're gonna drop another 25 basis points or maybe even 50. Yeah. Um so I think you know, I think really the the whole demand is gonna be the biggest uh driver of any real for sure push.

SPEAKER_01: 9:07

Yeah, I think you you need the demand side. We need to be making more things and buying them more. Like we just need growth in the economy, and it slowed to very, very low levels.

SPEAKER_00: 9:20

I also stock market's doing great, but you we feel it in trucking. It's like, man, like rates are compressed, margins are compressed.

SPEAKER_01: 9:27

And so this has also never occurred, is that like the stock market is doing great, except that all of the gains are concentrated within seven stocks. And if they I've seen more articles evaluating instead of the S P 500, the S P 493. Because what you see in the other 493 companies is the exact opposite of what you see with the top seven companies, and all that money is all going into AI, data center, and power, and all the rest of the companies in the SP are basically looking abysmal. So that's interesting. So what are the set what are the seven uh you have well Facebook, Meta, um, AI. Yeah, they're all the AI companies. And then here's the other interesting thing is the other interesting thing with that is historically the stock market performance was always correlated or tracked in line with the overall economy. So as all the companies do better, stock market goes up, and everybody's making more money and doing well. But the opposite is happening because the bulk of the companies in the SP are not making money. So they're doing worse. The overall economy is doing worse, everything is getting more expensive, and the seven companies that are just raising a ton of money for AI are doing very well.

SPEAKER_00: 10:55

But everything else is just so you got Alphabet, which is Google, Amazon, Apple, Meta, which is Facebook, Microsoft, Nvidia, and Tesla. Those are your magnificent seven, as they're being called.

SPEAKER_01: 11:09

And even if you go back a handful of years, I think it was some crazy amount of time I read like yesterday, but like those seven companies have their growth percentage was like in four digits, and the whole rest of the stock market was in like double digits. Like it's massively spread between those seven companies and the rest of the entire country, stock market, and I would even argue global economy. But also, we're waiting. I I'm very anxious to hear the Supreme Court rule on the tariffs, because if they toss those out, you might actually see business pick up again.

SPEAKER_00: 11:43

Yeah. Yeah. I remember uh my boss had so like last December when I was in Nashville for a Christmas party, we were kind of talking, and he's like, you know, he's like, I gotta warn a lot of you guys. He's like, there seems to be a lot of um, you know, enthusiasm and you know excitement for the Trump administration coming in because people think it's gonna boost the economy. He's like, I'm gonna warn you. Like, if he comes in and and starts to to do a lot with um tariffs and whatnot, he goes, that could actually brutally hurt our industry. And he was right. So yeah, didn't really think about that a year ago, but here we are. So all right, anything else in the news? No. All right. Well, it's that time of year, it's December, coming up on Christmas, and um, it's that time when it's a good idea to take a look at everything from your book of business overall, your company, if you're the owner or leadership in it, if you're just a uh a solo broker or on a team, looking at your customers, looking at specific lanes. Um, I wanted to talk through today a lot of that and also from a higher level, some of the things that are good tactical moves when you're in a leadership position, or um maybe you're running a division or a team, or maybe you own a company, right? There's uh there's all different levels of how to analyze where you're at and what needs to be true for you to get to where you want to be at this time next year, right? And that for just about everybody is uh to grow and be more profitable, unless your goal is just to get out of the business or retire or you know, sell your company. So um we'll talk through you know some of the basic things kind of first with with you know your book of business. And you know, we talk about this every year as far as like doing an annual review, and we've talked about doing like periodic the hot wash or like the AAR, um, you know, either monthly, quarterly, biannually. Um, end of the year is is a great time to look at um metrics, and right, and if you're not tracking your metrics, I'm talking about phone calls, emails, in-person meetings, if you do any of those, follow-ups, how many new prospects got added to your pipeline, how many new customers you converted, and then obviously the objective things like revenue, gross profit, all that stuff is uh really important. So I wanted to I'm gonna pull up on my other screen and I won't I won't share it, but some of the metrics that I started tracking this year specifically that were new, and I'm curious, Ben, what your thought is on how granular I've started to get here. So um for years, I've tracked for our brokers on our team. Um, I have looked at the load count month over month. I've looked at revenue, uh, gross profit, and margin percentage. Those were kind of like the big ones that I've always had, and I put them up on a graph to show trends over time. Is somebody growing? Is somebody shrinking? Is somebody stagnant? Okay. I recently added in, I've got like a dozen metrics that I tracked now. So I'm looking at for the month, I look at load count, total miles, revenue, carrier pay, gross profit, margin percentage, and then the reason I added in some of those other metrics is now I'm calculating revenue per load, gross profit per load, revenue per mile, carrier pay per mile, and gross profit per mile, just to kind of see how things have tracked over time. And to give you context, if I go back, let's see here, throughout this year, I can see that we are we're kind of starting and ending the year in about the same spot as far as like the um pay per mile, AR per mile, profit per mile. Where I saw change was the spring and then the tail end is summer, but it's kind of like flattening out towards the end of the year. And I'm curious, do you see any value in getting that granular on like you know well let me let me preface with this the reason I'm I'm starting to track that is when I hear people telling me that like you know, carrier pay I I I can obviously see what DAT says for rates, right? And the you know nationwide and whatnot, but when I can see that what is my company paying per mile, and I gave you my like, yeah, we we started and ended around the same and had a you know a couple peaks throughout the year, we're still way higher than what DAT is showing. So like we have, you know, what I would say is better paying freight for carriers, which is I don't know. I there's probably I have to get dig deeper on why that is. Maybe it's some specialty stuff that's kind of weighing in there, but um, we're not a company that's full of people moving cheap freight, you know, jump ball, lumber loads, steel loads. We've got a lot of different niches and things like that. And I think those are the types of um diversified niches in your company that'll help you sustain like these elongated, like rough freight markets, right? Like I think you don't get weeded out as easily if you're more of a um reliable and like you're kind of in that specialty or you've got some diversification. So those are some of the metrics that I've started to implement this year. What are what's some of the stuff that you've historically looked at, whether it's like you know, a rep that's underneath you or your own um book of business or even in prospecting with activity?

SPEAKER_01: 17:34

If we're just talking like account specific, like I always try to look at like where they're trending and where they were. Um it depends on how much data you have. So for example, right, like I always try to keep it as simple as possible, right? Is like, okay, what determines how much money you make working with a customer? All right. There's a few things. One, how much business that company actually does, whether you get any of it, none of it, or all of it, right? There's that first variable is like how much business this company does. If they're if they ship basketballs, do they sell more or less basketballs this year than last year, right? This is really important, I think, to at least think about. I don't go super deep in it, but I try to at least understand where is that industry trending. Because if you compare this, say, this month versus this month last year, an account you've had for a few years, you want to know like, are you doing better? But also is the company doing better? Because maybe the company is just doing less business, right? And we were talking a little bit about this related to the economy. But like if you did a lot of shipping related to like home building and you did a lot of flatbed stuff and you did even like high service stuff where you had decent margins and really good relationships, they're just building less homes, is the first thing, right? Yeah. So like you could be doing everything you're should be doing and then some. And you might actually even have a bigger percentage of that company's shipping business. And you could be doing everything right, but like they just sell less of what they sell because there's just less people buying it, right? And that's true in literally everything, which is why brokers exist, because no company knows exactly how much products they're gonna sell and to who. That's all an RFP is. It's just a guess from any shipper of this is what we think we're gonna sell, because this is what we sold last year, with a few little tweaks, right? So, like I always try to keep that kind of in the back of my mind as I'm evaluating like, are they going up or down? And then the next thing, or the two things you said, is like I kind of look at our margin as a starting point and go, is the margin going up or down? Is like the first indicator. Okay, if last year for the fourth quarter for this company, we were doing 14% margins and this year we're doing 9%. Okay, so our profit went down. Then the next thing I kind of look at is like, what is the load volume? Did we do less loads or more loads? Right. Because that's gonna tell me how much business that company's either willing to give us or how good we are at getting it, right? And I'm like, okay, well, if the volume's gone up, that means we're getting a little more of their business. And then I look at the number you said, which is like, is the bill rate going up or down since last year? And is the carrier pay rate going up or down? Right. Because in some scenarios, like you could be making less money because the carriers got more expensive on those lanes, or you lost capacity for whatever reason because these carriers aren't in business, right? And then the other side is, is your customer paying you about the same? Or are they ratcheting their rates down, right? Because to me, that's really telling me like the profitability of each account. And then I kind of look at like, okay, well, how are we staffing it? And what are their pay terms, right? Just keeping it very simple. How many people does it take to run this account for this customer? And then I try to look at, okay, what are their pay terms? Are they paying 30 days or are they a 60-day payment company where we got to fight with them to get money and it's a big headache, right? Because those are the things that I think I just try to look at and go like account by account. And what the other thing I'll do is like, I'll just take every customer and every sum for the whole year for each company, load volume, total sales, total cost on carriers, what is my margin percentage, right? And I divide it out by like the GP. So, like we ran 300 loads with this company, we made this amount of money, you divide those two numbers, that's your average profit for each shipment you moved with them, right? Yep. Because the percentage is important as a ballpark, but I also care about the dollars, right? So like if my average GP on a customer is like$45 and another one is 200, the next thing I do, and we talk about this a lot.

SPEAKER_00: 21:48

Yeah, like what actually hits your paycheck and your commission check, right? It's going to be off of the dollar amount.

SPEAKER_01: 21:52

100%. And then and then when I go back and I look at it, I always, again, this is like back of napkin math. Like it's very simple, but I think it's very useful. I take what are all of the monthly expenses for the brokerage, and then I look at what is the average load volume they did every month, all year, to just get an average, right? Okay, this company moves 800 loads a month on average, 200 loads a week. There's a little bit up and down, but I take literally the total of 12 months, divide it by 12, and go, this is a ballpark number. Okay, the company spends$40,000 a month for everything: payroll, software, insurance, tech, real estate, phone systems, everything, every single bill, divide it by the number of loads they average move every month. And then that gives me a good idea of like, what does it cost the business to move one of those loads this year? Okay, if that number is$85, and I've got accounts where my average GP is half of that, we didn't make any money there. Yeah. Like that is not profitable. Now it doesn't mean you get rid of that customer, but it really gives you a different way to look at it because we're very much in the day-to-day of a business. We're very much in looking at things weekly. And to be honest, like I've gone in businesses where like that profitability number, that$50 margin for like one customer, they're weeks where their other customers didn't move anything. And if they didn't move that freight, they wouldn't have been able to make payroll. So it doesn't necessarily mean you get rid of them, but you got to understand what is valuable to your company, what is giving you the most value, and where are you like really just grabbing pennies right in front of a steamroller, hoping something bad doesn't happen. So, like those are like, I guess, the very simple things that I kind of just will literally do in a spreadsheet. And I can do most of those in like a half an hour for like a whole brokerage. You just, hey, what are the total loads? Divide those by month. What is your average monthly expense? Divide those two numbers. That's my cost per load. Yep. Then I look at each account and I'm like, okay, are they getting better? Are they getting worse? And they this is a thing we talk about all the time, but like it always pretty much holds true. It's like Pareto's principle is the fancy way to say it, but it's just the 80-20 rule. Most businesses, brokerages, trucking companies, pharmaceutical companies, literally any company in any industry typically makes 80% of their profit from 20% of their customers, right? So when you look at that and you just see all the customers lined up, like I always take what is the total profit for the whole brokerage all year, and then I divide out as a percentage what each account contributed to it, right? So, like on this account, maybe it was just in the spring we made a bunch of money and they're seasonal, but we made 300 grand. This account we made a million. This account we made 50,000. I divide out the total profit for the whole year by each account. And I'm like, this is the each one of these accounts percentage of the total profit, right? And you get to see this real quick, and you're just like, wait a minute, you got 160 clients, and 90% of your profit came from 10 of them. So there's 110 other accounts that made up 10% of the total money you made. Because now you start to really understand like, where's our time going? Who do we have supporting what? And the other thing that's really helpful to understand is okay, what do the most profitable companies have in common? And how do you go get more of them? Because that's the information you want to get to your sales folks and go, listen, these are the accounts that we do the best on. What do these things have in common? How do we get more of this? And then you show them these are the least profitable ones. What do they have in common? And because ultimately once you do that, I can now work with a sales. I'm literally doing this with one of our clients right now. And we I work with the sales guys and I go, okay, what did you how long did it take you to learn that these accounts that made you no money weren't going to make you money? Oh, 45 days. Well, what did you learn about them? Well, they said this or the way they do business, I just realized they're always going to go with the cheapest company and they don't care. Okay, because if you can figure that out after they're a customer, then I ask, what questions might you ask a prospect that you're not doing business with that can tell you, are they more like the companies at the bottom of the list or at the top of the list? Because ultimately, that's that information helps you have better sales calls. It's just identifying what you really want to do more of and what you want to do less of. And what would you want to ask a company as you're talking to them to you're it's never going to be perfect, but like what questions would help you understand that you're spending a lot of time trying to get a new customer that is very much like your terrible shitty customers that don't pay you? And what questions could you ask to find out that this company you're calling is very much like these top 10 customers where you make the bulk of your profit?

SPEAKER_00: 26:43

Yeah, you can even get more granular too. Like I've done it, and I usually do this in like a one-on-one format if somebody wants it. But if like I had a team earlier this year, one of our groups, that you know, we we saw some like stagnant numbers, even a little decline. And we just did a meeting to talk about, you know, the the girl that runs the team, her whole thing was, hey, can we do like a sales training with my team? And I said, sure. Um, you know, she just thought, hey, I let's, you know, let's look at different ways to techniques to improve our sales skills and whatnot. But what we started to do is not just customers, but like even specific lanes. Like we could, we could pull a certain customer that has like an eyesore low margin, and we look at it and we're like, hey, this lane right here is actually really good. It's this lane over here that you guys are consistently losing money on. And as you get to the end of the year and it's time to start doing bids again, right? I mean, we're in that season right now. A lot of the stuff is already due. Um, but if you're gonna do like a quarterly or a monthly, these things you got to look at them, you know, periodically as did I bid too low, or is my is my carrier network in that area um is it not reliable? Um, or or maybe do I have to revisit what my carrier qualification rules are? Because maybe the carriers that might be a better fit for this, I've excluded from being able to use because of some rule that I set, you know, a year ago that maybe I don't want to have there anymore. So like I had a guy yesterday that was like, you know, we have um, you know, a rule that we have is how long has the carrier had their authority for, right? And we'll override for it. But we had a discussion about like just because a carrier, let's say, has only had their authority for three months, doesn't mean you should never use that carrier because there might be a situation where they drove for 20 years as a company driver and decided to go be an owner operator, right? And they're a reliable, you know, multi-million mile safe driver. Um, or maybe it's gonna be something related to um safety, or it's gonna be related to fraud. And because you've identified ways to mitigate risk, um, you can then open up those rules as long as you're following certain procedures and protocols. So, you know, it could be the carrier base that you're dealing with, it could be negotiation skills, it could just be a certain lane that you're not strong in because your existing carrier network just isn't developed there, and you're dealing with um just posting on the load boards and you know, trying to get any any guy or gal out there to to hop on your load. Or I've seen one where in a certain lane they had a high percentage of fall-offs late in the week that were um and required them to then recover a new carrier at a higher rate on a Friday, and they almost always lost money on it. And it's like, okay, well, if that's the case, maybe you you should be having a conversation with your customer about, you know, the way that this is being um, you know, the either the pricing on it or the time, the time frame in which this is happening, or you got to get to the to the bottom of why a certain thing is happening. Um, another thing I've done, go ahead. What do you got?

SPEAKER_01: 30:08

I want to just I'm gonna kind of like, I guess, reiterate what you said, but there's another way I also kind of look for those things, right? The other thing I'll do, and I usually do this pretty frequently, like monthly. I pull out every single load that was run and I throw it into a spreadsheet, and I just sort them by GP from lowest to highest. Because you're gonna lose money on some loads. Like that's just part of brokerage, right? Which I don't think all their one-offs for somebody understands. Correct. But what I'll do is I'll just go and I just take every single load and very simple info, right? What did you bill? What did you pay? How much did you make? Right. And then every load it gets sorted. So it's your biggest loss to your biggest win. And then what I'll do is like, I'll start to look and I first try to figure out what is the percentage of loads where we lost money versus made money. Not in dollars, but like just number of loads, right? And I look to see like where does that get split, right? If you moved 100 loads, 20 of them were either breakeven or you lost money, and 80 of them were profitable. So 20% of those loads, you kind of wouldn't have wanted to move in hindsight, right? The next thing I do is I look at that number based on the number I was saying earlier, is like, what is our actual break-even to move freight? Oh, it's$50 for this brokerage. So then I look at how many of those loads of that hundred all month did we make$50 or lose money in down? And I'm like, oh, that number's like$40. So you're like, okay, we really only made money on 60% of the freight we moved. 40% of them, if you could go back in time, you wouldn't have taken. You would have said, like, I don't want to move this, it's not the right rate, or you would have bid higher to get that load. Now that's really helpful because then what I look for in the losses is are there any things that are like patterns? Are they all with one customer? Are they all the same lane? I I'll look at, are they all the same days of the week? Like you said, because how I get to where you just said is this is where I start. And every month I go through this and look for this and go like, okay, why are we losing this much on all these loads? Oh, look, they're all coming out of the southeast. Oh, and then I'll put an Excel, like the day of the week, not the date. So you can reformat. I'm like, oh, look, everything out of the Southeast on a Tuesday, we lost money on all month. Okay, now we can get that information to the sales guys and be like, hey, when you're talking to your customer, I know you don't always know when the load's gonna go, but you can now have a better conversation with your customer and say, hey, look, if you can get this load to pick up on Monday or Wednesday, I can do this rate. But if you got to move in on a Tuesday, it looks like the market is absolutely way tighter on Tuesday out of Georgia. I'm gonna need a little more because now you can work back and forth with your shipper to make money on that without actually just charging your customer more, right? Hey, can we just load this on a Monday or Friday? And then you really start to see like it's hard to remember this in the midst of doing it all day. But when you put all this in one place and you just look at on a spreadsheet, like these patterns like jump out at you, right? So then, like, I'll just color code them like, hey, every one of these customers is in yellow, every one of these is in green. And you just see, like, oh wow, all of my losses are all green. They're clearly all related to this customer. And then you can go talk to the sales room, like, hey, what's going on here? So this is how you can kind of go from high level down to drill down into things that are like executable and actionable to see like what are sometimes there's nothing you can do about why that occurred. But sometimes you can see something that is like literally jumps out at you, like you said, like we are always losing money on this customer every Thursday and every Friday, every week. What's going on here? What is your customer telling you? How are we working with our customer in the scenario related to this type of business?

SPEAKER_00: 33:58

Yeah, and it brings up like two other areas that um, you know, we a lot of times at the end of the year we talk about like your you know, numbers and planning for the next year like on the you know, money coming in side. Two other points to look at is where's money going out and what are some of the processes that we may want to tweak moving forward. So, like the money going out piece, right? This could be because you kind of talked about like what's your your average cost per load for overhead and whatnot, like 85 bucks or whatever. Um, so things like do you have duplication of technology in an area that you don't need anymore? So, for example, are you um, and this is more like at my level, right? Like looking at managing teams, um, we do an audit on like the user level license for certain things that we pay per head. So, like, is this is you know, this team of six, right? Um is every person on that team truly using the things that we're paying for, or is there a way to um, you know, sharpen the pencil a little bit and clean it up? So like classic example is load boards. So, you know, this team is six, I'll just make this up, right? Let's let's say this team is six, um, every person has a TMS license, an email license, a uh DAT account, a uh truck stop account, and you know, fill in the blank on everything else, right? Like, you know, tracking, compliance, things like that. And then you you kind of you dig into it and you're like, well, really, there's only two of them that are using the load boards, and they're really not even using truck stop. They're just they're primarily on DAT. That's that's their preference, that's what they're used to using. And um, and then you realize, like, we just wasted thousands of dollars this year for something that we didn't even need, right? Or it could be that maybe you're leaving business and opportunity on the table because you're not using certain technology. Um, like, for example, there are so many good sourcing tools out there, like gen logs is a great example, right? We were talking with somebody yesterday about um gen logs and all that it can do. And um, it's one of those things where, like, if you don't have the data in the market intelligence to know what's out there and what's available for certain um carrier capacity, you might be overpaying for certain trucks, right? In certain lanes and certain times of the week or year or whatnot. Um, so having some level of uh review on your tech stack can be whether it's, hey, we need to shift gears on this tool that we're using, or we need to cut some of this tool, or we need to add, we want to add this tool because it's gonna help our productivity. These are all things that you should be looking at. Because if you just, you know, like if you just add a tool and then you add another tool and then you add another tool, and you never like really go back and review it, you're gonna have these expenses that are not necessary. So, like, great example. So, bulk loads is a great example, and we love Jared, we've had him on the show, but let's I'll just use him for or his product, for example, since it's a it's a very uh good niche load board if you're in the bulk space. Let's say um, let's say you have a broker or had a broker that used bulk loads and is no longer with your company or doesn't do that business anymore, right? And you're paying for a subscription to a service that you don't need. Or let's say on the other side, you have somebody that is doing bulk freight, but they aren't using a product like bulk loads to help them get access to that capacity. These are the the changes you could look at in um you know certain tech things. And another one, a great example, like tracking. I remember going through a transition from one tracking tool to another. And um, we went from macro point to trucker tools, and then we realized like we're paying for two. And then another one right now is like we've spent a lot of money with with trucker tools trying to track every load, but we're also spending money on highways load lock plus for their um ELD tracking. It's like, is there a duplication of efforts here? Is there a way to make some fine-tuned adjustments to have what we need access to, but only to the level that we need access to it, right? Are we overspending on a product or service that we truly don't need and don't get the usage out of? So those are just some of the little things right there that you can make tweaks on. Because um, tech can get very expensive, but if you don't pay attention to what you're spending on, it just starts to snowball.

SPEAKER_01: 39:15

Two things, right? One is I think it's really important to review this like way more than annually. What you're spending every month, I think you should be looking at it for sure every month.

SPEAKER_00: 39:27

And I think you should use income statements, profit and loss statements, all of that. General ledger, even.

SPEAKER_01: 39:32

Yeah. But I even just want to keep it real simple on just like paying for stuff, meaning like software is mostly in our industry, right? And I think you need to look at that every month. And what's really helpful for me is I have a note tab with all of those for every client I work with. And what I have is not just what they're paying, but why they bought it and what they intended to use it for. Because that's what you kind of lose track with over time and you just get used to paying it and you just kind of don't even remember why you bought it in some instances, right? And your business changes and the customers you work with change, right? So, like I've done this and I've gone through and I'm like, well, hey, we bought this for this reason in this customer in January. We haven't worked with that customer since February. Is anybody using this tool? And then you'll realize like, nobody realized they still had it and nobody's using it. Like, okay, well, that's$700 a month. We can probably cancel that, right? Yep. Another one is even just insurance, right? Yeah, insurance is a big one. Yeah. What you don't realize, and this is something that kind of surprised me, I guess, is every time you add like a customer-specific rider to your insurance, where like one customer says, Hey, I need 250 grand in contingent cargo and I need a million in auto contingent liability for you to work with us. So you'll go to your insurance company, they will add customer specific, meaning like that insurance is applicable to that customer and that customer only. Those are like riders, right? But when you're doing this throughout the year, you add them and you keep adding them. And then what happens is at renewal, they just renew all of them. And then I've gone through those and audited them with an insurance company. I did this recently. I was like, well, hey, how many of the how many riders do we have with how many customers? And they were like, Well, we don't really know. Like, we didn't track, we don't keep track of it. I was like, You don't know how many we've added? And they're like, No, because I wanted to compare it to how many of those companies are still active customers because the business added some and lost some. And I'm like, I know one or two of these needed a rider because I know what they move. So, like, there's for sure at least two in there we can get rid of. So, what I ended up doing with this one client is I'm like, okay, get rid of all of them. Drop all the insurance back down with none of these riders. And then as our insurance gets renewed, our customers are going to email us and say, Hey, we got your new insurance cert. It looks like the coverage isn't correct. Can you add it? So I literally got rid of all of them. I dropped one company's insurance from like$24,000 a year to$12,000. And then we had to add like two or three riders that week, and it ended up being like three grand. So instead of us paying$24,000 just by auditing which customers were even active and inactive, I cut their insurance bill in half, right? And the same thing is like what you said is tech is like a lot of Tech has a lot of promises that are fulfilled or aren't. And I think we don't spend enough time going through that at the very least monthly or quarterly, going, hey, we bought this because everybody wanted to use this. Is anyone still using it? And you will find out in so many cases that like people, one, have forgotten you've bought it and just aren't using it because they don't remember. And they're like, oh shit, like I forgot we had that. And then they start using it. And some you'll hear people like, yeah, it doesn't work at all. And you're like, okay, well, guys, why don't you tell me that? Like we've been paying for it for three months. You guys asked for it. Nobody likes it. And nobody thought to say, hey, we don't need to use this thing anymore. Because they're not paying the bill. So they just kind of don't log in. And you realize, like, we just spent$2,100 in the past two months on something nobody is using and doesn't work at all. Right. Or at least doesn't work the way you needed to.

SPEAKER_00: 43:02

Yeah, I think about prospecting tools too. Like those can really add up, right?

SPEAKER_01: 43:06

So you're talking like your Zoom infos, your LinkedIn sales navigators, info, LinkedIn sales navigator, and even just features in HubSpot, for example. Like I've seen HubSpot bills as low as like 40 bucks a seat and as high as I think like 150 bucks a seat. And I've seen it.

SPEAKER_00: 43:24

I found in a previous company where I think we were spending, we were spending it was like four or five grand a month because we had every bell and whistle for like marketing and like correct. And it was like crap that we didn't like, we don't use it.

SPEAKER_01: 43:40

Yeah. And like that's the other thing is like you might have had the best intentions and lent, like, hey, we'll get more business. This is worth it. But then what you realize, if you don't review this and talk to your salespeople and go, hey, how's that tool going? How are you guys using it? Where is it beneficial? Where did it work out? Where isn't it? Or where is it falling short? I've seen so many of them where people are like, dude, you are paying, like you said,$400 a month per seat per person for a tool. And you're like, once I talk to everybody, I'm like, they're all only using basic features. Like we could literally drop that number to$50 per person from$500 just by finding out, like, what are people actually using this for? I did this with a client once. They they had all the email automation with all the email sequences to do all of this fancy stuff. But when I sat with all of them to see how they were doing this, they were manually going into HubSpot, writing an email, and then pressing send. I was like, Well, you guys aren't using the sequence. They're like, no. And what we found out was they were like, it takes longer to write the sequence than it was to do it manually. Like, oh, okay, well, like that makes sense. Do it however you want, but we certainly don't need to pay for all this automation because nobody wants to use it. They would rather do it this other way. And like, again, there's always going to be something or some fire you got to put out. So, like, you've got to, as a manager or a business owner, like literally, I would suggest put something on your calendar for like the first Friday of every month, because the month end usually gets a little busy with customers. And just so it literally reminds you every whatever day of the week, you tend to be free every single month and just put notes in your calendar, like, hey, I need to review my PL. I got to review, you know, what we're doing and spending on which tech stack. Because the last thing I think we need to cover on here is like the other big bucket on review from like an ownership standpoint is what does everybody look like in two very simple categories? Are they showing up to work on time? Are they staying until the day's over? And are they doing what volume of work while they're there? Not even qualitative, right? Just like if you got a whole bunch of dispatchers, okay, can you pull a report to see that everybody's showing up on time and leaving at the same time or staying late? And then what is the call numbers? Like, not even just outbound versus inbound, just like total number of phone calls each person is handling on average per day over a month, right? I've gone into companies where like they have, from my opinion, twice what they need. And then I'm like, hey, pull all the call reports for the past month, and I just want to divide it by the number of work days. And you're like, you've got 25% of your people making the equivalent of eight phone calls a day. Yeah. What are they doing all day? And then the owners will be like, I don't know. I didn't ask.

SPEAKER_00: 46:24

You can even do this on a back office uh or administrative level too. Like we had we had somebody um in the past that um we realized and they were in an administrative role and they were in a different office, and we we realized like from somebody making a comment that like they just kind of played on their phone all day long. And we we very quickly like did some digging and realized we did like, all right, well, how many how many instances of XYZ is this person doing in a day compared to the other the other people in that same role? Like it could be um someone in carrier compliance doing a carrier approval, it could be someone in credit doing a credit check, it could be someone in billing doing an invoice, or somebody, you know, any one of those roles, right? And then I I would be willing to bet you'll uncover that you probably have people in seats that you will want to either shuffle around and make it more efficient, or you can reallocate to revenue producing, or it could be uh you know, layoffs are never a great thing, but like that's the reality of the market we're in right now.

SPEAKER_01: 47:29

If you're shrinking or you have some kind of turnover and you said something I want you to go back to before you go past that, because it was really important, and I think this is one of the easiest, simplest ways to do this for any company is you take everybody's activity, and it doesn't matter what the role is, just think about whatever the task is. If it's dispatch, just start with total calls and call time. If it's sales, same thing. Total calls. How many calls are you answering and making outbound and average talk time, right? Do that for the whole group. And then, like you said, because the thing you said that I wanted to repeat for everybody is just look at the bottom and the top. And then just ask yourself, is there a reason somebody is doing four times the amount of work in the same job as this person? Because then the next question is, do they need training? Do they not know what they're doing? Do they not have enough work to do? Like there's a lot of reasons why that could be true. But what you said, I think is so important because I do this with everyone. I don't say and come in and say, this is what you should be doing. I just look at their whole group and I ask the people at the bottom, well, what are the people at the top doing differently than you? And then they'll be like, Well, what do you mean? I'm like, well, here, just looking at activity. This person averages 120 phone calls in and out. You averaged 15 over a month, like not over two days, not over a week, over an entire month. So, like, are people not giving you the things you need to do? Are you not like just help me understand the difference between this person in the same job and you? Because now it's not subjective. It is not my opinion. This is your coworker sitting right next to you doing the same job. How is this person doing five times the amount of work you are over a month? Like, that is not like a small instance.

SPEAKER_00: 50:25

Yeah, my old boss used to do every day on our team the talk time, and like it was literally like the whole call report would get sent out every morning. I love that. And it was like it kind of felt weird at first, but I was like, it holds everyone accountable and it kind of like gives you perspective to where you sit compared to everybody else, right? So, like every call, how long it was. So then you have a total of like this person made 43 calls for a total talk time of two hours and 52 minutes, right? And then this person made four calls and had talk time of three minutes, right? Because they just got four voicemails. Or you but I like having the the volume and like the call, the number of calls and the talk time because there was days when like I only had eight calls, but I had like three really cool report on there, right? And you maybe on the phone for three hours.

SPEAKER_01: 51:14

So and here's the other thing too, right? Like the thing that's really important about this is like I can go into almost any sales business, any business that has sales role, right? And I can go, how do we do business? And if it is over the phone, I can take that report over a quarter, and I can usually see it in a week, but definitely in a month. And then I can look at if if I didn't see the names and I can look at who's making how much money and how much loads they're moving, every single time the person with the least amount of activity and the least call time is on the least amount making money and has the least commission. The person who's making the most always has the most activity. And like I've seen this like in huge companies. Like you literally could do the same thing with 5,000 employees, and you will see that the guys at the top and girls at the top always they're just doing more. And everyone, like, yeah, there's lots of things that can help you close customers faster, quote better. Like, there's lots of things we talk about on the show for years that can help you improve. But like, there's only so much you're gonna improve if you're not showing up to work or you're showing up to work and not doing anything. Like you could be a genius and the best sales guy in the world, but if you make two phone calls a day, you are not gonna get any sales. And you could be the worst. And if you do a hundred a day or 150, you will outpace that guy that is better just because you showed up and you just did more things.

SPEAKER_00: 52:38

Yeah, there's a uh one of the things that we implemented, which has been very helpful, is we we built out a help desk in the last like year and a half for all of our requests that come through from our broker. So it doesn't matter if you're a W-2 sitting at the office or you're a 1099 agent that's remote, if you have a let's say a credit request or a COI for a customer request or a carrier override request or whatever, right? And they go in and they basically fill out a quick little form and it emails the right person, but it's tracking the volume of, you know, I can see every single request that goes through. So if I, you know, for example, if we're trying to evaluate if we need to hire another back office rep or if we need to reallocate somebody because their plate's not full, we have the data. And if you don't have that data and you're in leadership, all you all you can do is like ask somebody like, hey, like how busy have you been? And like very unlikely is someone gonna tell you, like, oh yeah, I just don't really have much work to do. They're gonna, they're gonna justify why they should have their job, right? Um, so those things are are really important. It's not just the sales reps, it's the it's the other people in your office. So it's everything.

SPEAKER_01: 53:47

And the the reason that I even explained it kind of the way in my head, and I think the way this conversation went is how we do this, right? Is like, I don't start by going, how much do you have to do and how busy are you? Because like most people for sure, like they don't necessarily know if they need help in some things because they don't know how someone else is doing it. Like, there's just so much subjectiveness. So I start with the numbers and then I fill in the things that I don't understand with those questions. Just like in that example. Okay, this person has the same job over a quarter, they're averaging 90 calls a day and an hour and a half of talk time. You're averaging 25 and five to 10 minutes of talk time. Then the questions are help me bridge this gap. Just like help me understand what you need help with. Do you not have access to leads? Are the tools not working? Help me understand what is different between the two of you and your two jobs. Are you doing different things? Are you going at different customers? Maybe you're literally leaving the office and driving around to go meet people in person while this person's making phone calls. Like, I don't know why they're different, but help me understand why they're different because those are the answers and the questions you ask that help you actually understand what is actually happening there, right? Yeah. Because I've seen this, and especially in remote work, like it's really hard to know what's happening when everybody's working from home. And like I've gone so far with some clients as like, we've gotten software where you could literally see what people are doing all day. You could set up alerts. Most big corporations all have this, where they're showing when someone checks in, when they check out, when they leave for lunch break, and what is the share of the pie of what they're doing all day? It'll be like, hey, 80% of this person's day is sending emails. They answered this many phone calls. They were in this software most of the time. And like when I've done this, I'm like, I have been always shocked at what I thought was happening talking to people and in the numbers, and then saw what was actually there as if I was sitting next to them all day. I'm like, oh, there's giant gaps in here. And some of them were just training things. Like we found out that like somebody was building loads in your example. So you have a load builder. So you have three of them, right? One person's building 80 loads a day, and one person is building 20. Now, the assumption is one's working harder or more, but like I've gone in and asked those open-ended questions, and I found the person building 20 loads a day wasn't using like the template feature where it builds 90% of the load the same way over and over again, and they just add a couple details. And as soon as I was like, Well, hey, did you know this feature existed? They were like, I didn't know that. And then the next day they're building as many loads as the other person. So it's not always they're working, but it's just like, are you doing the job the same way as the guy who's getting more done? And is there anything he can tell both of us that would help you get more done? And sometimes they get more work done with less effort, which is ultimately the goal with all of it, right? Like it's not always just because these numbers are different, this person is lazy or not doing what they're supposed to. Sometimes like there just might have been a gap in their trading or like they just didn't catch something, or they just got a habit of doing it one way and then they just continue doing it that way without understanding or anyone being able to sit next to them and go, Oh, hey, let me just show you how you can do what you're doing in like 10% of the time, just using the tool differently, which is our job when we come in, or for a manager.

SPEAKER_00: 57:05

Yeah, the organization piece is like uh is a big thing for me when I, you know, when I see somebody who feels is like visibly and audibly like stressed and overwhelmed. And then we just kind of analyze like, how are you doing this? And then you realize like their email unboxes a disaster. They're they're not using a calendar or a to-do list, or like it's like just having some tweaks to processes can drastically um improve stuff. So yeah, recapping here. Um take a look at, you know, not just the numbers and the activity that goes into growing it, but also like procedural changes, where are you, you know, where are you um spending money or what tools maybe do you need or not need anymore. This stuff will all go into helping you have a a better future year than where you're at now, hopefully, if you if you do it properly. So I can't stress enough that like if you don't, if you don't analyze where you're at and where you're trying to go, you're just kind of like a tumbleweed blown in the wind. And it's just, you know, the the market's just gonna move you wherever it wants to move you if you're not being intentional about it. So you win at what you focus on, and if you're not being intentional and focusing on this stuff, um you really, you know, you're not setting yourself up for success. So anything else we missed? And we can go we can go on for hours on this stuff because there's a lot, but it just kind of the big big ticket items.

SPEAKER_01: 58:31

I would just say like the biggest piece of advice or the biggest takeaway is most owners and managers don't do this frequently enough and wait until something bad happens to look at it. And a lot of these things and a lot of money can be saved. And every one of the things we talked about, just by doing this more frequently throughout the year, at the very least quarterly, if not monthly. Because in every one of those scenarios where I've come in, I've found some cases tens of thousands of dollars in software, tools, or people that needed and then be in another role or didn't have a training. And it's like, wait, when was the last time you guys did this? And they're like, oh, two years ago. It's like, well, that's 10 grand a month for 24 months. You spent$240,000 in the past two years that you didn't need to and you got nothing in return for. Yeah. What would you do with an extra quarter of a million dollars? Right. Like, and that's just not even a huge example. Like, there are so many of these things, and also like the more frequently you do it, the better you get at it, and the faster you can do it, right? Like if you do this every month or every quarter, it's not as much work. If you do it once a year, you gotta remember all these things, you're figuring out again. It is gonna take you forever. It actually gets faster and you get better at it the more frequently you do it, and the more these things you catch much sooner before you end up spending a whole bunch of money on things you didn't need to. It's like when people look at the end of the year and they go, Oh, I didn't realize I have 15 different subscriptions for streaming TVs, and I use two of them. And oh, by the way, I've paid for them all year. And you add up all that number, you're like, I just threw all that money in the trash, right? Yep. Because guess what? All those streaming systems and all those things, they're all designed to keep charging you without you noticing. So, like their business is I hope they don't notice if they stop using the tool and will keep charging them. And then, like, the last thing is a lot of these softwares require a 60-day before your contract's up notification to actually cancel it. So if you're on a January 1 to January 1, a lot of these, you need to literally notify them in like November or actually in October to actually cancel the contract. And I can't tell you how many I've gone into. I'm like, you guys aren't using this at all. Can you cancel it? And then I look at the contract, it's like requires a 180-day notice. I'm like, you needed to tell them in June you were gonna cancel this in in January. So, like, a lot of these things are not that difficult. They're pretty simple. It's just they tend to be out of sight, out of mind until someone has to look at them and then they find all these things, and everybody's super frustrated. And it's like there's the best time to always do this is just now. Like, if you haven't done this, like just do it this week or do it next week. Because putting it off is just you're wasting more money in one way or another, likely, or you're not getting the growth you need.

SPEAKER_00: 1:01:25

Can't agree with you more. Um, good stuff, good discussion today. Final thoughts, Ben.

SPEAKER_01: 1:01:31

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

SPEAKER_00: 1:01:35

And until next time, go bills.