How to Find and Call Shippers | Final Mile #45

Speaker 1: 0:20

All right, it's another edition of the Final Mile. We're going to answer four questions from you guys today. Don't let the thumbnail or the title of this video confuse you. We answer four questions and we're likely relating to one of the major questions that somebody sent in. But if you have a question that you want answered, leave a comment in the YouTube comments, send us a message at info at freight360.net or go to freight360.net and hit the contact button. If you're new, check out all of our other content. Go to the website and you can even see the Freight Broker Basics course for a full educational option on how to get a brokerage started. Grow your customer base for a full educational option on how to get a brokerage started. Grow your customer base. Hire some team members and share us with all your friends and check out the sponsors in the description box to help support the Freight360 channel so we can keep giving you guys some free content. All right, ben, let's get right into it today. Our first question. These mostly came from YouTube comments. I think we got one from Facebook, if I remember All right. First question these mostly came from YouTube comments. I think we got one from Facebook, if I remember All right.

Speaker 1: 1:27

First question as a new freight broker, can I file a BMC-84 so I don't have to show collateral? So, short answer yes. But I want to break down what this is and what it all means. So one of the requirements when you launch a freight broker, when you go through the registration process with the FMCSA, you're going to need to have a. There's the BMC 84, it's a form. There's also a form, bmc 85.

Speaker 1: 1:55

So BMC 84 is your freight broker bond, your surety bond. So what you're required to have is a bond with a face value of $75,000. And the purpose of that bond is to pay your financial obligations to motor carriers. In the event that you don't pay them out, that could be that you go out of business or file bankruptcy, or you just decide you don't want to pay a carrier for some reason. That bond acts almost like an insurance want to pay a carrier for some reason. That bond acts as almost like an insurance policy to pay out your financial obligations.

Speaker 1: 2:29

Now, when you have a bond, you typically pay an annual premium and the cost of that premium is going to vary depending on your ability and history of paying your financial obligations accurately and on time and in full right Basically your credit. So the alternative to having a bond is actually putting up $75,000 of your own assets in a trust and that would be filed using BMC Form 85. So the question here said hey, if I don't have the 75K in assets to put up in a trust, can I then do the bond instead? And the answer is yes, most people do a bond anyway. I think the reality is, as a business owner and Ben I mean I'd be curious on your opinion here bond versus sucking up 75 or freezing 75K in assets most business owners would say that 75K can go to work for me a lot better than you know. You know worth it for you know more than the two grand I'm going to pay a year for an insurance policy or a bond policy.

Speaker 2: 3:34

Right, yeah, my question, I guess and I don't know the answer to this, but the where my brain goes to next is that trust. What are the requirements? Like if it can sit as like marketable securities or if it probably not marketable but if it could sit in an interest bearing account? I think that's different, which it probably can, but I doubt you can secure it with like marketables. And the only reason I'm saying that is like, typically in businesses, this is done very often If people have like a high net worth, right, and they have it all invested in, just say, different stock portfolios, right, Whatever they are, they usually don't take the cash out and let it sit because even if it's just sitting there, you're losing money because you're not earning interest on it.

Speaker 2: 4:20

So in a lot of scenarios like, you can secure something against it. So in a lot of scenarios you can secure something against it. It's basically a lien against your portfolio of securities and it doesn't require you to actually take 75 grand and let it sit in a savings account or a checking account. So I don't know the requirements around the trust and whether or not or how that actually functions Well well, I'm going to read um, you, you got me curious too.

Speaker 1: 4:46

Um, I just pulled up the FMCSA's form. Um, it looks like it's just cash. So it's, you know, when you're filling out this form, and it's acknowledging that the trustee has received a sum of $75,000 for a broker or a freight forwarder who also has the same requirement to be held in trust under the terms and conditions of the agreement. And then it goes on to say that you know, if the trust draws upon that amount, the broker has 30 days to replenish that drawn money. So it's not because you think about it, you couldn't put it in like a risky investment. It's probably like an escrow account, yeah, Like an interest bearing.

Speaker 2: 5:23

think about it, you couldn't put it in a risky investment and then it would lose money. It's probably an escrow account. Yeah, like an interest-bearing escrow account where you put money in and draw it.

Speaker 1: 5:29

I don't see anything about. That's interesting. That's a good question. I don't know If anybody out there listening does use the trust instead of the surety bond. Let us know how yours is set up. I've never used one. I have never worked with a single broker who has opted to use the trust, but I know that it is an option, right.

Speaker 2: 5:53

Like there's checking accounts, definitely that are paying 5%, right. So if you got $75,000, right, that's 0.05. $37.50 a year right. $37.50 a year. You're earning an interest that you don't get if you moved into a trust. It would make more sense to collect your interest on your $75,000 and pay a portion of that for a bond. If I get a bond for $ grand, I'm making 1750 on my money and buying the bond, as opposed to just parking 75 grand over there and earning no interest.

Speaker 1: 6:24

So yeah, that's an interesting, interesting discussion on that. I'm curious, like we said, if you guys, if anyone listening, does use the trust. Let us know how yours is set up and what the requirements are. All right, next question Is Zoom Info worth it for lead generation? I would say it depends, ben, do you use Zoom Info?

Speaker 2: 6:48

I use it every day.

Speaker 1: 6:49

Yes, Okay, so talk to us about we'll get to the cost in a second, but tell me about your experience using it for lead gen. Is it, is it available, you know? Is it a good product?

Speaker 2: 7:01

for its use. It's a fantastic product. In my opinion, it's the best product out there for finding like individual people's names, their job titles and their contact info Sometimes a mobile, sometimes it's a direct phone line, sometimes you don't have any of them, but it is better than anything else I've ever used to be able to pinpoint who I want to call and find a way to reach them. But even more than that and here's where I use it a lot Like we tell people that they should use LinkedIn for the same thing, cause LinkedIn is a really good. If you don't have anything meaning like, let's just say I take a look at a company like Heinz Ketchup and I want to prospect them because I want to work with them as a company, and I picked a big one intentionally, right.

Speaker 2: 7:45

The thing that is very difficult to do is like you can find lots of phone numbers for Heinz Ketchup, but to get to the traffic department or the shipping department or the person responsible, right, is very difficult. And again, years ago in sales, like you would literally call around switchboards and try to get somebody to transfer. You maybe talk to a gatekeeper, maybe you get lucky and you get a good, like you know, admin assistant to an executive that can literally tell you which numbers you need to call. But beyond that, like it is very hard to see one which number to call. But secondly, like even what the makeup is of that department. So, again, like what I'll do. So let's say I'm going to look at Heinz ketchup. The first thing I do is I'm going to put in like 15 keywords that I know make up most people's titles logistics, transportation, shipping, whatever that list is Right and then every person in that company that has any one of those words. I sort alphabetically because now I can see the number of people with each title. So, guess what? The people that are the most with the same title, that's the bottom of the pyramid. Those are your people that are usually your lowest level in that department. And then your director or your SVP like there's usually one, maybe two or three in a larger company, but you can literally see the hierarchy of the shipping department.

Speaker 2: 9:04

Well, that to me makes prospecting so much more effective, because I've got to talk to many people. I want to talk to the people that are at the lowest level because they're the ones I'm probably going to be working with every day if they become my customer. But I also want to know, like who they report to and kind of what the red tape looks like to get onboarded. So if I see like four people in procurement for logistics like that's a lot of people approving vendors, so like there's probably quite a bit of red tape, I know I'm going to have to talk with one of them, I'm going to have to talk with somebody lower level and probably somebody in between. So like I'm not just randomly throwing darts at a prospect to hope I talk to the decision makers. I am trying to understand the landscape of the way the company's set up and then I'm going to go try to meet the people in the right positions to actually get me onboarded.

Speaker 2: 9:54

So I use this a ton and that's the first thing. I look at every prospect. I throw up their website, I throw them in Zoom info and I look at their shipping department If they've got one person there in their big company, and then I call them and they go hey, we're all FOB. Well, that makes sense. That adds up right. You've got one person in logistics and you're a hundred or a $50 million company. Yeah, you're probably not arranging your own transportation If you've got one staff member.

Speaker 2: 10:19

If you've got 50 and you tell me your FOB, I know you're probably full of it and you're just trying to get me off the phone. So like I use it more than just, I guess, as the traditional phone book or what phone books used to be Right, but also to help me understand really what this company looks like and see whether or not it would be a fit to work together. But the cost does not necessarily make it worthwhile, is the thing I want to point out, because that's the way this is phrased is is it worth it? So most people are paying I've heard in the past year somewhere between 15 grand and 30 grand a year for Zoom Info.

Speaker 1: 10:53

Yeah, so it depends on your licenses and how big your team is. I mean, I've even heard for one person we're talking like 12 grand a year, so I will tell you, okay. Well, so for anyone curious on how it works, zoom Info, one of their main data capturing points is they offer a free version and it has an email plugin, and so, like, if I'm a free user, it'll say, hey, you can get I don't know, I'll make this up Like, you can get 50 contacts a month for free, but in order to do that, we're going to require you to install this email plugin. What does that email plugin do? It's scraping every single email you send and receive and it's looking at those email signatures to get name, contact or title, contact number, email address, right. So when you're in Zoom Info, it'll typically tell you how recently that data has been verified. So that's one of the but it's one of the ways they do it. But that's why it's so valuable and good is because you're getting, like, actual, relevant, recent verified data.

Speaker 1: 12:00

Um, if you are not sure about taking the leap for zoom info, just like a lot of companies, they've got, you know, competitors out there who offer similar products seamlessai, apollo, um, I think. Um, there's a whole bunch. So if you just Google, they're business intelligence tools is what they are. They're going to give you business to business contact data. So take a look, test them out, like any software. We always say take demos, give them your specific use case. I'm a freight broker. Demos, right, give them your specific use case. I'm a freight broker. My perspective person that I'm trying to reach out to is a company that ships freight and is either a decision maker to onboard new transportation providers or is someone that's working day to day in that role. We got a question coming up later at the end of the episode today on specific job titles to go after. But yeah, these are great tools.

Speaker 1: 12:59

It's a great way to take what's out there in the internet and in the digital world and make it easy for you to refine and sift through.

Speaker 2: 13:07

For sure, and I want to point out too right, like, especially for smaller companies or newer companies like this can be replaced with time, hard work and focus. Right, like you can still get to the number, you can still get to that person and you can still find it without paying for a tool like Zoom Info. Right, and the thing this tool will not do is and this sounds silly, but like it won't make the phone calls for you, it won't do the follow-ups and it's not going to close more business if you aren't doing the things you need to do. And I just see so many people that spend lots of money on tools thinking like it will bring them money quicker. Like this isn't really going to bring you money faster or customers quicker. It's really going to save you the hours it takes to get some of these things.

Speaker 2: 13:54

Lead gen, yeah, yeah. And again, like so for somebody out there that's, you know, a one or two person company, that's new. If you've got the time, meaning like if you can just work an extra two hours a day, I'd rather work the two hours a day and then spend the 15 grand at first. And it also teaches you how to make the, how to do the legwork to get to these answers anyway. Right, it's going to help you build that muscle in your brain to know where to look, how to use things like LinkedIn or use your questions in your prospecting calls to navigate the situation, which is going to make you far better at actually closing more business. Right, sometimes making things easier and faster actually makes you less good at the thing you need to get better at, which is talking to people. That's going to help you close more customers. So, if you're new, I would rather have somebody new asking lots of questions to find that person than using the software, because that's what they need to practice on.

Speaker 1: 14:45

Precisely. All right, ben. This next one is a softball underhand softball pitch to you. What are some of the pros and cons of moving drayage loads? I've never personally done drayage, so what do you got?

Speaker 2: 14:58

So pros biggest benefits you can do lots of volume with one customer and sometimes one carrier. More volume than you're ever going to do in full truckload. You can do with like literally one carrier and one customer. The other is they tend to be in the same geographical regions. Like these loads don't tend to go more than 300 miles outside of wherever you pick up or deliver to Right, so they're in very concentrated areas. You can move higher volume rail yards right.

Speaker 2: 15:26

Your ports, your rail yards, your terminals. My AirPod just died. I mean, let me throw this in here so you can do much more volume. You can do it more effectively. You can do it more efficiently right Now. The cons. The cons are they're way lower margin freight than full truckloads, so like-.

Speaker 2: 15:46

Margin percentage or dollar amount or both, both, usually both and for lots of reasons. Meaning, like your average Dre move is probably like 50,. It's less than a hundred miles, it's probably less than 50 or 75, like the average across the country. So like your average bill rate on those are like four to $700, depending on the situation, right? So even if you're at 15% or even 10%, right Like it's just not a lot of juice to be able to cover other expenses. That's where the volume comes in. So like if you've got a customer that's going to give you 40 containers a week.

Speaker 2: 16:21

Now me making 12% on 500 bucks isn't that big of a deal Because I don't have as much legwork in between, meaning I just keep sending the loads of the carriers and keep refilling them and they literally just keep sending drivers and moving them. Right. That's the easy part. Now the downside comes right Is in there's lots of accessorials or charges that happen sometimes after the fact, right, meaning like I can negotiate a carrier and this rate could be great, but now all of a sudden there's not enough empty containers and it's exports, or there's not enough chassis, and now this carrier is starting to charge me for chassis splits where they didn't before. They're charging me because they've got deadhead runs to go grab something that isn't there and I'm paying for all that. And the other problem is if that's happening after the fact and you don't have good communication with your customer or your carrier, your customer doesn't know that either. Now, all of a sudden you got bills coming in and you got a small margin, like 75 bucks on a load, and you just paid $150 in fees on that one load. Now I'm already negative and I need to move four loads just to break even right. So you've got a higher sensitivity to your profit because they're skinnier and any one expense can push you right into literally a loss for that whole load, where you're literally not just your time, you're spending money to move your customers freight right.

Speaker 2: 17:41

And then beyond that, the other big con and risk is like you can actually lose money taking drayage loads, and here's what I mean. Like in a full truck load situation you give me a load, it goes from point A to point B. If I don't have a truck to pick that up, I just wasted my time. Like I don't pay you for me not being able to find a truck as my customer. Like it just doesn't happen. Five containers that all needed picked up by tomorrow. Tomorrow is the last free day. Literally, if I don't get all five of those out by the end of the day tomorrow, I am paying at least $150 to $200 per container in storage the next day.

Speaker 2: 18:26

And if I told my customer I would get them out by LFD and then I didn't. Most of the time I've got to come out of pocket to pay for that storage to make my customer whole, because they're never going to want to use me again and they're certainly going to be upset because I said I could and then didn't, and then they're going to get that bill right. So you actually like take on liability when you are accepting the responsibility to move and import. The same thing happens on the other end. So let's say I moved all of your containers and my carrier picked them all up by LFD. But my carrier didn't return the empty containers. He took them back to his yard and forgot about them. And then life went on. I didn't know he did that. He forgot for whatever reason and nobody knew they were there.

Speaker 2: 19:12

Well, after about 10 days then my customer starts getting billed for the fees on all of the containers and they're the same as storage.

Speaker 2: 19:23

So it's like $200 a day for an empty container that isn't returned by its last day that it needs to be returned.

Speaker 2: 19:29

So you can also end up losing money again when your carrier hasn't completed what they might have told you they did, and it's really hard to keep your arms around. Did they do this or didn't they? Because there's no way to see if they actually return the containers and lots of TMSs have no ability to put these fields in there. So basically, once you mark your load delivered in your TMS and you send it to accounting like that load's not really done and you still actually have liability until that empty container is returned. And if you didn't follow up on that, not only is your system not going to tell you, but you're not going to know and your customer is just going to start getting invoices from MSC Maersk and the thousands of dollars and then everybody has to figure out where it went and nobody can. And then now you got to do all that legwork. So there's a lot of accounting work as well that comes on the back end when you do more volumes.

Speaker 1: 20:18

That also make it Sounds like a niche that requires a lot of attention to detail and organization, that it does for sure.

Speaker 1: 20:26

All right. Our last question this kind of relates back to our second question what are the specific job titles that I should be targeting for a cold call or the first contact in general? So you laid it out really good, right that pyramid that you explained. Right on the bottom of that pyramid you might have and I'll just start giving some job titles right, logistics coordinators. Or you could have logistics planners, freight coordinators, traffic managers these are a lot of your people that are like boots on ground. Right, they might be literally on the dock in a little shack where they're trying to manage all of their dock doors, who's getting loaded, who's getting unloaded, what time someone's scheduled to come in, et cetera. Right, they're a planner. Whereas on the opposite end of that, for a larger company, at the top, you could have a senior vice president of procurement or a director of transportation or supply chain manager, right? Just various titles.

Speaker 1: 21:31

But the day-to-day task of that person is going to vary, especially in a larger company. One is more big picture, trying to manage costs, trying to manage efficiencies, where at the bottom of that pyramid they're like hey, I'm thinking right now, what's right in front of me, what truck is going to go in which door, et cetera. But the reality is you're going to want to have rapport with all levels of that pyramid up and down. And don't forget people if they do well in a job can get promoted over time and move up that ladder and get backfilled by somebody else. So where would you say the first target, first call, first cold call, cold outreach? Are you hitting up the traffic manager? Who's going to actually tender the loads you work with day to day? You're going to try to get with procurement higher up to try and see onboarding requirements, what their red tape looks like, contracts et cetera. What's your approach?

Speaker 2: 22:28

I think you should start with the boots on the ground. Lowest level people first. And here's why, like, fundamentally, what do freight brokers do? Like, yeah, people think we move things, but we really solve problems and we can solve them usually faster than if this shipper just worked directly with carriers. That's what we do, right? Well, who benefits from us solving these problems?

Speaker 2: 22:50

It's usually literally the lowest person in the logistics department, because they're the ones that are literally dealing with the trucks all day Missed pickups, missed deliveries, they're late, they got to reschedule appointments All of that chaos and issues that happen at that level of employee, which is the lowest level of logistics usually in a company, that's who we help the most. We make them look very good at their job. So, to your point, nate, they get promoted to be the manager, meaning we help their on-time percentage. We help them find trucks last minute when they can't find one because they didn't know a carrier wasn't going to show up, for instance. Right, like they, not only do we help them, but like they are going to care so much more about how we help them in a way that the people above them, to be honest, in most cases sometimes don't give a shit at all, like the manager or the person above that department cares about two things Are our freight picking up and delivering on time and are we spending less money. Beyond those two things, they don't care much.

Speaker 1: 23:49

We don't want to spend too much money and we don't want to lose customers, right.

Speaker 2: 23:51

Exactly in too much money and we don't want to lose customers, right? Exactly. So you know, when a lower level person wants to work with a new broker, sometimes like their manager just might be like no, there's no reason why you need a broker to help you with your job. You should be able to find trucks as fast as that guy and they'll literally tell them that like they shouldn't need help. And then you need to wait until a scenario that is either so big or so catastrophic that then that person goes to their manager and goes look, if I don't get this broker to get me a truck, our customer is going to be screaming at us and we might lose them. Then the manager goes okay, well, you can use Nate's company now, or you can use Nate the broker because you've done everything you could and you still can't. So the incentives of the people in the shipper side of things is very different depending on where you are in that hierarchy, and at procurement it's even different. Right At procurement they want the lowest number of vendors in their company.

Speaker 1: 24:44

Simplicity.

Speaker 2: 24:45

Yeah, they don't want to have to cut checks to 50 different brokers and 3,000 carriers. They want to work with the smallest number of vendors to maintain the absolute service that they expect and price Beyond that. It just costs more money and more people to manage larger lists of vendors that they work with. So your procurement guy versus your manager versus the girl who's maybe dealing with the trucks have all different metrics, different incentives, different responsibilities and usually different bonuses that they get paid on how they perform. For every one of those things.

Speaker 1: 25:16

Yep, exactly All right Good questions. Keep sending them our way and we'll continue to answer them. Any final thoughts, Ben?

Speaker 2: 25:25

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

Speaker 1: 25:30

And until next time go Bills.