Handling Heated Conversations and Q&A | Final Mile 68

Speaker 1: 0:19

Welcome back. It's another edition of the Final Mile. We're going to answer your listener questions. We've got a mix today from YouTube comments and our Facebook group, so thanks for all of you who participate. I know we got asked a bunch of questions via email. I haven't been out for about a week. I haven't gotten caught up on those yet, but we will get to as many of your questions as we can. Please make sure to check out the sponsors in the description to support this channel and check out our website for eight, three, sixty dot net for all of our downloadable content, including the freight broker basics course, if you are looking for a full length educational option and share us with all your friends.

Speaker 1: 0:57

All right, ben, let's get into it. Our first question is about LTL. Our first question is about LTL. So one of the listeners asked can I negotiate pricing for LTL directly for a specific shipper? So the short answer is yes, but I wanted to break this down in a little more detail.

Speaker 1: 1:18

So if you guys have listened to any of our other content on LTL, you often hear a common theme that LTL is very volume based when it comes to the pricing. So the more business you can provide an LTL carrier, usually the better rates that they'll give you, which is why oftentimes, a smaller brokerage won't have direct rates with an LTL carrier. They'll often go to an LTL brokerage and they'll co-broker. That's what my brokerage does with Global Trans and I've done it in the past with FreightQuote. I want to say I've done it with GLT Logistics, I've tried it out with. Basically, they've got more volume of LTL business. They can get deeper discounts from the actual carriers, like the Estes, the old Dominions of the world, and then pass that on to you at a slight markup. So the good thing, though, is, if you have anything unique a lot of times you can you can get specific pricing for that shipment or for a certain customer. So, for example, if you have a large shipment that would be considered like a volume LTL versus a traditional LTL, you can usually get a specific shipment pricing based on the availability in that lane for a specific carrier, but customer specific as well, and I have been able to do this directly as a brokerage in the past. Where I may not have enough business as a brokerage to get discounts across the board for my brokerage but specific customer.

Speaker 1: 2:51

We had a bunch of repetitive business and the LTL carriers. They obviously like they want that business because if they don't get it, one of their competitors gets it right. So like, for example, if Old Dominion doesn't get it, maybe maybe xpo or sds or t-force is going to get that business. So they're going to try and get their hands on it themselves. So I was able to sit down.

Speaker 1: 3:11

Um, you know, we just called our local rep for what I forget which carrier it was at the time, but they came. I think it was like fedex freight at the time. This is like seven, eight years ago. The local rep in Buffalo came in. We sat down. We're like here's the customer, here's how they're moving, here's the requirements on transit time, et cetera, and they were able to work out specific pricing for that customer individually. It wasn't for us as a brokerage across the board for anybody, for the onesies, twosies, but hey, if it's this specific customer, this specific lane will give you customer specific pricing for your LTL shipments for them with us. That way we're going to be more competitive than the co brokerage, than any other carrier that's out there.

Speaker 1: 3:55

So I always recommend, when in doubt, if you've got a unique situation, don't think that the rules are black and white across the board for every situation. A lot of times there is specific one offs because you might have an LTL carrier that maybe they're a little bit weak or I shouldn't say weak, they're a little bit light in a certain lane and if they can take extra freight and fill up their trucks, it's either they're moving and they're you know they're hauling empty space or they can fill it up and make a little bit of money on it. So specific LTL pricing I've seen it on the truckload side too Obviously if you have contract business and you could talk to a carrier ahead of time, that way you're not covering everything in the spot market a couple of days before it's moving. You can get ahead of it and say, hey, for the next two months I've got this project and you can work out specific pricing with a carrier on that customer's freight. You have any experience in that one, ben, even with full truckload.

Speaker 2: 4:50

With full truckload. Yes, I've done it in other areas. I've done customer-specific pricing, definitely in full truckload. I'm working on something on LTL for two companies right now. One is CSP, customer specific pricing. It's a tremendous amount of volume that the company does and I'm trying to get better pricing because of the volume and that's exactly what they're asking for. They're like, hey, we've got enough freight. I mean it's, it's, it's a consolidator. So I mean, like they're moving thousands per week LTL and they're like, hey, if you can get a CSP, like we'll, you know, consider moving all of our business to you.

Speaker 2: 5:29

So I've got one company working on that one and then in the other one I'm doing something that you said like I don't think their volume is enough to do CSP because, like even in my quotes and I have a meeting with him next week, I went through it Like there's a lot of different LTL providers based on the different lanes that they move, they kind of all add up to what the whole thing looks like.

Speaker 2: 5:49

But again, like it just takes time to be honest, like that's my opinion of LTL, like you need to make sure all the details are correct. You need to get a very good understanding of what the volumes are, the classes, the codes for everything and, to be honest, if you lean on any of these LTO providers, like the ones I've worked with, have been incredibly informative and helpful. Like my last meeting, I'm doing work with Worldwide Express on this and, like the guy literally walked me through every aspect of this, helped me come up with the questions I needed to ask. The prospect, showed me areas where they can probably save them money or increased efficiency. Like it's been a really good learning experience to kind of work through this.

Speaker 1: 6:29

Yeah, I have done some work with worldwide express as well in the past and X freight. I don't know if they're still around. They were another like co-brokerage that I did business with back in the day. But yeah, when in doubt, pick up the phone, talk to a human being and see what you can work out. That's it All right. Our next question what is it? What do I do when a phone call between me, as the broker and a carrier gets heated? We kind of alluded to this one on the podcast that came out Friday. But what do you got Ben?

Speaker 2: 7:00

The first thing I always think of in any of these scenarios is right. It's like there is some like old adage I wish I could remember exactly how it is but it's like if you're I think the analogy is like a tug of war or something they use. But it's like if you're fighting with somebody, just like drop the rope. Like it takes two people to argue. One person yelling is not a heated discussion, it's just one person upset until you get heated. Now it's something you have to deescalate and it's far harder and like. The first point I want to make is if you find yourself your tone of voice raising and your blood pressure going up, the first thing you need to do is take a deep breath to bring yourself down. Not try to calm the other person down, because you're escalating it by throwing fuel on that fire.

Speaker 1: 7:46

I, I agree. Um, I will add in here, and then we could kind of talk about the norm. Um, I've I have had situations where and this is both with the customer and the carrier where if they're like furious, if you can be furious as well, but on their team, you oftentimes can align. So, like I've had it where, like the customer is pissed off about a driver doing something and I'm like you know, this is, this is ridiculous, and I'm like it is ridiculous, I'm pissed off too. Or with the carrier carries like they canceled on me, I need tonu. I'm like, yeah, that absolutely we need to get a tonu here. This is bs, you can't, they can't be doing us dirty like that. So, if you can get on the same team, that's my favorite yeah.

Speaker 2: 8:26

And I like the mental analogy I always have for that one is like we're in the middle, there's two people at the side of the table. You're at the head of the table because you're the intermediary, but like when that person's upset, just picture yourself swinging over to their side of the table, like you said, and you should be on their team and angry about the situation.

Speaker 1: 8:43

Right like it also helps build rapport but I think back to what you originally said de-escalating is typically the primary recommendation on how to handle these situations. So if someone is like, aggressively upset, and then you're bad, like because let's say that you disagree with them, like they the two examples I gave before you usually are, you're in agreeance, right. But if you're disagreeing with them, if they're demanding something and you don't think it's rightfully due you know whether it's a tonu or detention, layover, whatever yeah, you've got to put yourself in their shoes and try to de-escalate, because eventually, if you just argue and argue and argue, eventually you're going to end up in those situations where they're not answering the phone you don't want to answer their phone call and ultimately the customer your customer, who provides you with business and revenue and profits that's who's going to be feeling the pain and they're going to be the ones that's like hey, when I work with Nate or Ben, like I've got some bad situations that have have happened because of how they've dealt with it. You don't want that to happen. So a lot of times you know and we've used the example of like can't get a hold of the driver, right, you don't want to call the dispatcher and start bitching at them.

Speaker 1: 10:00

You kind of want to like go at it from a point of empathy, bitching at them. You kind of want to like go at it from a point of empathy, right, like you're more so concerned about their well-being than why the hell aren't they where they're supposed to be, when they're supposed to be there, it's you know. You can go at it with a different point of view or perspective and try to get information versus, you know, having it be hostile, but the reality is this stuff is going to happen. In the first handful of times that you deal with it. You're probably going to like default, like your body will go into like autopilot, to how you normally handle conflict, and for some of us it's different. You know it's well. It's definitely different than others, but some of us is better than others, those who are very combative or aggressive in their normal day to day communications. You're going to have to very likely work on that skill set of being more of a negotiator or the amicable middleman versus being the head butting person. That's just not going to get any closer to a solution.

Speaker 1: 11:03

So de-escalation tends to be a good option, even if that means if you're in a heated debate with a carrier, you could say, like you know what, hey, I got it. Let me just make sure I'm understanding. So you're asking for X, y and Z because of A, b and C? Give me a few minutes, let me talk to the customer and see what we can do to get this worked out. And you know, like I said, always try to put yourself in the shoes of that carrier. Try to, you know, find a way to be on the same, aligned, on the same team as them, even if you don't agree with them. If you can get off the phone, let that naturally deescalate. Turn the temperature down just a little bit. You can likely get into another conversation with them 20 minutes down the road, an hour down the road or whatever, and it's going to be a lot more productive than just two people yelling at each other.

Speaker 2: 11:57

Yes, there's a great book I read on this and I'm trying to find the name of who it was. There's a technique they talk about in there. It's called looping for understanding and this book. It takes people through very contentious situations and they use this technique and they're actually able to have productive conversations. And one of the examples were like groups literally on Facebook that were arguing over, like guns rights, something that is very heated and contentious and almost neither side ever listens or agrees that the other side and like the step-by-step process I did a video on this a while back.

Speaker 2: 12:22

Right, and it. The first one is like you present the information, share the information clearly, try to be concisely or break down complex points into simple, clear language right. Then it says, after sharing that part of the information, asking a question right, hey, does that make sense? Or, hey, how would you describe the situation in your own words? You're asking them to engage to see if they understood what you're saying. Hey, this is what I think happened. Does that make sense? What are your thoughts?

Speaker 2: 12:53

Right, and then the important piece is like once they tell you their side of it, right, this is that looping piece is you repeat back to them what you heard, because most people aren't really listening when they're arguing. It's just they're trying to get their point across and neither is listening to the other, so they're not really communicating, they're just yelling at each other. Right, and it's like, if you explain the situation and go hey, I had the pickup number, they told me it wasn't good. Now they tell me they can't load me for five hours, when this is the number you gave me and it's repeating back what you heard, it's like okay, so, if I understand you, you gave them the pickup number I gave you. They said it wasn't good and they're telling you now they won't load you for three or four hours.

Speaker 2: 13:36

Yeah, that's what I'm telling you, and this is the piece that everyone else miss. Is you ask them if you got it right? You go hey, is that correct? Did I? Am I understanding this correctly? Because that's the loop that's missing when people argue. Is they?

Speaker 1: 13:51

don't know, you actually heard them.

Speaker 2: 13:53

So when you repeat it back in your own words, you show them you understand the situation they're upset about and then you ask them hey, did I get that right? Yeah, that's exactly what happened. Most of the time, like that brings somebody back down because now you're having a conversation. Okay, well, if this is, if we're on the same page and this is what's happening, let me and then you tell them how you can maybe go work to resolve this. Let me go jump on the phone, let me see what I can do to resolve this and let me get right back to you, right? Yeah, if you look this, there's a ton of videos on it and there's a bunch of stuff. If you just Google looping for understanding, I did a YouTube video where I really break down, even with an example on how to work through something like this, but it's super helpful and you can use it.

Speaker 1: 14:33

The book you recommended to me was Super Communicators. If that's the one you're referring to, the author is Charles Duhigg Duhigg. Yeah, great book they talked through, yeah, the Facebook. I remember that was like the Facebook group where they had open discussion about Second Amendment gun rights, and then there was also like jury situations.

Speaker 2: 14:57

That's a great story, too, on how the one guy in there they clarify, they classify them as super communicators, but they're really just doing this and it's the guy going through the room and he actually gets to the place where the point that everyone's trying to make, that no one else that disagrees with him is listening to. Now you're actually having a conversation where you're understanding each other, not yelling at each other, trying to get your point across For sure.

Speaker 1: 15:20

All right. Our last question is how do I get funding to start a freight brokerage? And specifically they asked about getting a grant. I would tell you that getting a grant is probably not the best way to fund your brokerage. I would recommend we recently did a video on factoring with Hall Pay and was it Steve Spurl, right, spurl? We're going to have him on again sometime later this year or earlier next year. But factoring is a very realistic way to fund your brokerage from day one without having a massive bankroll to be able to cash flow all your receivables and all your payables. What I would say is, if you have zero dollars to your name, I wouldn't recommend starting a brokerage, because factoring is only good for the actual expenses of paying your trucks.

Speaker 1: 16:18

When it comes to getting your bond and getting your software and getting your authority and setting up your tech side, like your phone systems and all that, there is some startup cost. We've broken it down in detail in previous content. On the cost to start a brokerage, you can do it for, you know, a couple thousand dollars, right, I mean you could even start with a lot of free stuff to mitigate a lot of those startup of expenses, like your TMS and things like that. But ultimately you're going to need some kind of an email, you're going to need some kind of a TMS at some point. You're going to have to pay to get your authority. It's 300 bucks right there. Your bond might cost you a couple grand a year, so you can start up a brokerage for fairly low cost expenses versus having $100,000 liquid cash in the bank to go out there. Now I will also say as a caveat just because you have a lot of money, maybe you're backed by an equity firm or something like that.

Speaker 1: 17:14

Throwing money at a problem isn't always the way to fix it. So if your problem is, hey, we don't have shippers, we don't have business yet, so let's throw a bunch of money at it and try to do all these crazy campaigns, that's not always the answer either, and having the best TMS and the best website on day one is not the right answer. There's a, there's a progressive way to go about getting things off the ground and doing things in the right order, and getting customers and getting business is one of those things. At the early, at the early phases, before, it makes sense to spend 10 grand for an API integration for a Fortune 500 customer or paying $200,000 for a fancy TMS that does a bunch of stuff that you don't need yet. But yeah, factoring is a great way to do it.

Speaker 1: 18:02

Don't want to go on a whole bunch of detail on it, but check out our recent episode on factoring with Hall Pay and we break down how factoring receivables works, how to manage that cash flow, recourse versus non-recourse, etc. Any other tips? Ben, you've been literally in this position of starting a brokerage and helping others start their brokerage multiple times. I'm curious what your tips would be on the funding side of it multiple times.

Speaker 2: 18:27

I'm curious what your tips would be on the funding side of it. Usually when somebody's asking me this question, it's how do I fund my living expenses while I get a startup off the ground until I can pay my bills? That's the most difficult and the most often overlooked, and from my personal experience, it was the hardest thing to do to switch from W-2 to owning my own businesses, because I spent the first 10 years of my career working for a company, getting paychecks. Putting a little aside and to be able to save enough money right to basically cover six months to a year of your own expenses is usually the hardest piece, right? It's like, well, even if you just take somebody that was making a hundred grand a year, like you literally need a hundred thousand dollars in capital to be able to go do this thing and that's your burn rate. Like now you've got literally one year before you run out of cash. And how do you do that Right? And I think there are lots of ways you can go. One you can save money right For sure, the thing that I think I see most people do that works the best is learn in the industry by working with somebody, maybe going to work as a sub-agent of an agent, getting some small salary to be able to cover just your minimal expenses and use your savings to cover the rest, and then honestly, like this is how I've done it Like bust your ass like 12, 13 hours a day, making more phone calls than anyone else around you trying to get that first couple customers and then, once you can get into the commission piece and you can actually grow this, now you're in a position to save a little more cash and now you can make steps forward, right, right.

Speaker 2: 20:06

The thing I think most people do that makes it harder is everybody wants to own their own business and they want every dollar of every profit and they want to own the brokerage and they want all of it and they don't want to work for less than that. Well, okay, well, if that's the objective, you don't start at the objective, like, you can take steps to work towards it until you get there. You don't start there, right, and I think that's where a lot of people go wrong. In a sense that, like, I think it makes far more sense, and this is what human beings aren't good at being patient, me, working for me, working for nate, who can teach me what I need to. I'm gonna earn a lot less money for a year, but my knowledge base goes up significantly and if I can get some really good customers inside of a year now maybe I can spend off and be my own agent. Now I'm getting 70% instead of maybe 25% Now, once I've got my agency and I've got enough customers, now I hire my first one or two people in the second year.

Speaker 2: 21:03

Okay, now, maybe by my third year. Now I've got cashflow, I've got customers, I've got some employees. Now maybe I start my own brokerage. Now maybe I spin off because, for whatever reason, I don't want to work as an agent and I want to own everything.

Speaker 2: 21:18

I think it makes far more sense to take it step by step, and I've done this in to your point, with people that have a ton of capital that they have access to through like private equity or whatever. I've done this. And, to your point, with people that have a ton of capital that they have access to through like private equity or whatever. I've done it with people that have tried to do it with two other jobs on the side. I've tried to do it with people that have jumped from W-2 and only had three months of savings and tried to outrun that clock right, and the thing I think I've learned the most is patience is the most valuable part of that. It's the most overlooked. And wanting where you want to go and expecting to be able to do that as the first step is, I think, the other big one.

Speaker 1: 21:51

Yeah, yep, I always say it's like the, the short-term sacrifice for the long-term success, and that's like, like you said, making a hundred calls a day, right, so that down the road you'll have that prosperous business, right? You make a good point, too, about people trying to keep up with their, their standard of living. Some of the most successful people that I've seen that have started their own companies have done it one of two ways. Either one and this is not even just brokerage, right. Number one they have their stable career and income and then on the side they start this side thing, whether it's a brokerage or some other kind of business and then, as they're starting to make more and more money on the side, they know that, hey, I can live maybe not at the same level, but I can live off of what I'm making here. And if I can then go all in on this, I'll eventually get myself up to a place where it's way better than it was before.

Speaker 1: 22:48

And the other one is folks that if they're married or they have a second source of income from a spouse or whatnot, if they can just live off of the spouse's income, they know that they've got time right. That burn rate doesn't really matter if it takes three months or a year, because they're able. Even if they fail worst case scenario their life's not over, right? They're not in shambles over it. Um, they've got the time to be able to um put in the hard work, put in the 12, 15 hour days and eventually, when things um turn out for them and they start to turn and turn over profits, now all is good.

Speaker 2: 23:23

So agreed and the thing I don't need to drive a fancy sports car day one, just because you're a freight broker no and like the other thing.

Speaker 2: 23:30

Like is like making those sacrifices in the short run are what's necessary in a lot of cases. I remember when I was, when I first got out of college, I was a lender at a bank and we lent to small businesses, people that wanted to open a restaurant, people that wanted to open whatever business, and the one thing I learned super early, which was like one of the most important things, was everybody asked for the same thing I work. They'd be like hey, you know, like I'm a nurse or whatever job it is right. Like hey, I work at this corporation, I'm an accountant. I've always wanted to start a bakery. And they'd come to the bank and go like I want to borrow 75 grand to start a bakery.

Speaker 2: 24:05

And the first thing out of their mouth I remember sitting at these meetings was they'd be like okay, like I'm going to quit my job and go open this bakery.

Speaker 2: 24:11

And I remember the senior guy who I was at these meetings with at first, the first thing out of his mouth was absolutely not, If you quit your job, I can't loan you money. I cannot loan you a hundred grand on the hopes that your bakery wins and is successful, but I can lend you 75 grand. If you keep your job, because at least I know you have income to pay some of the loan back, and then if you work at the bakery as your second job, that can work Right and that's the thing that nobody ever wanted to do. But is really how I saw all of those people succeed is, yeah, you got to ratchet your job back, Maybe work four days a week there, take a little pay cut and then you work your second shift at this company to your point until you get it stable and it makes enough money. Then you transition and leave your job because at least you know it pays for your food, your shelter and your minimal expenses that you need to cover your shelter and your minimal expenses that you need to cover.

Speaker 1: 25:06

Lastly, I've had a good buddy of mine runs a pretty large agency and one of the things that he's had success with is he worked at he worked at TQL, and this is like a long time ago, and then he took time off, waited out his non-compete, built up an agency and, you know, years and years later he's got a lot of his friends that he used to work with at TQL and they're like you know, I want to get into it.

Speaker 1: 25:29

So what they'll do and they don't all work out, but a bunch of them do is they keep their job, their regular day job, and then they start to make phone calls in their free time and basically they they have a full time job and then like a part time job and as they start to get traction, they can do more and more work on the brokerage side within his agency and eventually quit their job and do it full-time and now they're taking over cradle to grave all their business. So if you can find yourself in a situation where you can just focus on, you know, making cold calls and all of that, and you've got a team that can support operationally when you're busy doing your regular day job. That's not a bad way to to put in, you know, put in the extra time, put in the extra effort and then, once you start to smell that success, lean in on it all the way.

Speaker 2: 26:16

So, short-term sacrifice for the long-term gain, and also even when you do raise capital and even if you have access to it. The other thing people overlook is if that company or individual lends you money to start your business, you no longer own a hundred percent of it. You own a very small portion of it in a lot of cases. So, yeah, you got to raise money and you got to give a company to give you a salary while you get the company off the ground. But you went from owning a hundred percent. You might end up owning 25% of the business that you are risking everything to get off the ground Like there's. There are no free lunches, nobody's just going to come and give you money and lend it to you at no risk, no interest, and let you keep the whole company Watch any episode of shark tank right.

Speaker 1: 27:00

There you go.

Speaker 2: 27:01

Exactly, bootstrapping is difficult, but you end up with far more by being patient and working through it step by step. For sure.

Speaker 1: 27:08

Well, good questions, keep sending them our way and we will answer them when we get a chance to Any final thoughts, ben.

Speaker 2: 27:14

Whether you believe you can or believe you can't.

Speaker 1: 27:17

You're right, and until next time, go Bills.