If We Had to Start All Over in Freight Brokering | Episode 265

Freight 360

October 11, 2024

We were recently asked what we would do differently in freight brokering if we had to start all over again. In this episode, we’re taking a ride down memory lane to the 2010’s and sharing our advice on what you can do as a freight broker to maximize your chances of success. From self-education to understanding the big picture of logistics, we’re sharing out best advice!

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

Welcome back. It's another episode of the Freight360 Podcast. Before we get started today, please make sure to leave that thumbs up, like the video on YouTube. Leave a five-star review, send us, you know, share this with your friends in the industry, your colleagues. Check out all of our other content at Freight360.net, including the Freight Broker Basics course for a full-length educational option. And yeah, we appreciate you guys listening. We keep seeing our stats go up every single week and we appreciate it. So, ben, how are we doing? You guys are in hurricane mode. I know it doesn't look like it's going to hit you directly, but what's going on in Florida?

Speaker 2: 0:58

Yeah, all pretty good. I mean it looks like, since we're on the underneath of it or whatever on the right side of it, depending on how you're looking at it we're supposed to just get a lot of rain today. It's been raining for the past couple of days, but then it's just like 24 hours of high winds is what it's supposed to be. So sometime here this afternoon, or maybe right after work, I got to bring in everything, all the potted plants. I'm going to probably throw up my hurricane shutters anyway. At the very least I might as well um, I think that's about it. To be honest put my car into the garage and just hope none of the trees or anything come down around here.

Speaker 1: 1:35

I mean that is what it is. Yeah, it's kind of like uh, I guess winter weather season for the Northeast comes every year. You hope, you hope you don't get the worst grip, but sometimes, sometimes it sucks. So anyone down in the Tampa area? We're thinking about recording this on a Wednesday, so it's supposed to hit, I think, tonight or tomorrow morning, but yeah, but yeah, all right. Sports bills suck. I'm not going to go on. Yeah, steelers lost too right.

Speaker 2: 2:17

Steelers lost damn. That's why I was texting you, and almost all three similar in a sense that they were basically two three-point games no-transcript.

Speaker 1: 2:26

It was really really late. Yeah, that was. It was in Pittsburgh and it was pouring. I remember seeing the video of like a dude drinking a beer under his poncho or something like that. But yeah, the Cowboys got the win there. But anyway, we're going to. We're going to move on from sad, hurting football fans News. Well, it's hurricane season, so I think it's worth noting the impact on our industry from stuff like this. We've included it in our newsletter the last week and this week as well. The amount of freight that gets delayed and then the demand for stuff getting shipped in afterward is very noticeable. Right, it's going to impact those markets.

Speaker 1: 3:17

This is something that we talk about every year. It's somewhat predictable. We don't know where it's going to happen, but we always know that there's going to happen. But we always know that there's going to be tropical storms that come through that area of the United States, and we typically know the time of year that it's going to happen right, september, october. But this is the time of year when, if you're dealing with FEMA, freight or building materials are huge after a storm in a certain area, because they've got to rebuild a lot of stuff, people don't think about some of their other stuff like generators, construction equipment to clear debris. All of that stuff gets moved in by trucks. So there is a big demand to get stuff out before a storm impacts and then a really big demand to get stuff in afterward. So just keep that stuff in mind as you're dealing with your carriers and your customers in the coming weeks here. What else we got going on in news or anything else to add on that? Not really.

Speaker 2: 4:20

Strike was over. I mean not much.

Speaker 1: 4:22

Oh yeah, we spent quite a bit of time on our recent podcast episodes talking about the strikes and by the time those episodes released, strike was over, but it's worth noting, right, that's the kind of? It's kind of like a hurricane, right, we talk about a hurricane and the hurricane already passes by the time our episodes out. This is the kind of stuff that is, you can have a general learning lesson from it, right? So strikes we had the Canadian Rail strikes earlier in the year, the East Coast and Gulfport strikes that only lasted three days. But this is the kind of stuff that if you're not paying attention to it, it happens. You're going to be sitting there scratching your head and wondering what's going on and why you didn't prepare for it. So yeah, it's all you know, valuable information one way or another, so yeah, so let's get into today's episode. Man, we're going to.

Speaker 1: 5:16

We had a I couldn't find the exact email but we had a guy that said if you guys could go back and do it all over again, what would you do differently? And I thought it would be a really good discussion to have on a podcast, because a lot of you guys are new and we hope that you can learn from the things that we did right, the things that we could have done differently, things that we utterly failed at in our journey, because if you can learn from someone else's mistake and not make the same mistake yourself, you know it's never not really a bad thing, it's always a good thing. So, yeah, we'll kind of keep a general discussion there. So is there anything that the top of mind that sticks out to you that you would do differently?

Speaker 2: 5:57

You know it's funny. I was just thinking about this and I'm like, ok, because I like the way you even framed that, like, what are the things that like were big mistakes or things that you know in hindsight? I'm like, cool, yeah, that one like hurt a little bit. The the one story and I use this story all of the time, still to this day, and this wasn't specifically me, but it was something I learned in the same instance, like my manager or mentor taught me this right and it was a lesson that somebody else had to learn the hard way and it just always resonated with me and this was. It was a broker that was there like a year or two before me, like somewhere somewhat recently, and he was trying to get to the point across of like efficiency or effectiveness. So, to kind of set the context, like I was at a big box brokerage, right, and commissions are 25% and it's cradle to the grave and that's important because, like, what you have to do in a given day is relevant to what you can get done, right, like how many things are on your plate. So in this scenario, right, like cradle to the grave. So, like we got to prospect customers, you got to cover your own freight. You got to check, call your own drivers, you got to make sure your customers are paying the bills, like you're responsible Very similar to what it is like for an agency, right? Except you've got resources behind you, you got branding a bit and you've got lots of carriers that already work with the organization. So you do have somewhat of an advantage and you're getting about 25 percent commission somewhat of an advantage and you're getting about 25% commission. So also, which is important, is like what are the benchmarks? At least with the company I was at and these are pretty similar was like okay, like you need to do $4,000 a week in gross profit, not revenue, not like total sales, like in margin, cause that's the line that you need to basically hit before you earn commission, because it's basically like staggered salary. So like you make four grand a month, so okay, four grand divided by four is $1,000 a week. Okay, well, you need four grand in commission because at 25% of four grand is $1,000. So as soon as you cover your salaries, when you start to qualify basically for your commission, it doesn't get stacked on your salary. You've got to basically pay your salary back and then you earn commission, right. So if you can't make four grand a week in gross profit, like you just never get out of your base salary, which is roughly four grand a month, we'll say Right.

Speaker 2: 8:21

And you know the question was posed like okay, like well, why did you take the job? Like you know, almost all of us took the job because we wanted to make six figures like at a minimum, right. Like you don't want to work this hard because we're working for sure at that time, like I was working 50, 60 hours a week at minimum, even just prospecting to try to get over this hump as quick as possible. Because, again, and also where I live, like four grand a month cost of living does not get you very far. You basically would need roommates, or like you can't have a car payment, like there's just not enough money to be able to actually live where I do on that number, right. So it's a race to get over it.

Speaker 2: 8:56

And the question or the context is like well, okay, if you've got to make four grand a week in GP, right. The other thing is like about I mean the average, like successful broker, just one person with no assistance, like you're going to be able to move maybe 30, 35 loads a week at max, like for me at about 27 or 28,. Like I kind of couldn't keep track of it in my head. And again, you still have a TMS. But like you still are thinking about these things, when you're moving that much freight, because your customer's talking to you all day, you kind of need to know where your guys are on any given day to be able to give updates, and that's kind of like the bandwidth, like you just really can't do much more. Now there are other you know for sure examples where, like you could run drayage at much higher volumes but there's much lower margins, so you got to do more loads to get to the same number.

Speaker 2: 9:45

And the person that he was explaining it was a guy that was successful and he had said you know, this guy had been there for about a year and a half and he was doing about that like 28, 29 loads a week, but he just couldn't get over the four grand mark, like 3,900, 3,500, somewhere around there, and was doing this for like the better part of a year. Now the interesting thing is, like, from a manager's point of view, like they're also supposed to have the company's best interest in mind. So from a company's perspective, like that's fantastic, that guy's basically just moving freight and paying for himself. I mean, like it's not that bad the money, yeah, correct. And at the end of the day, like OK, but like you know, they want people to be able to succeed. Otherwise, like you're not going to stay there indefinitely either.

Speaker 2: 10:26

And the conversation he had with this broker at the time was like listen, what do you think the issue was?

Speaker 2: 10:39

And you know the guy's, like you know, I just kind of need to be able to move more loads, just like get one more prospect to be able to get over that.

Speaker 2: 10:42

But the thing he wasn't really keeping in his mind the broker was like well, how many hours a day are you working right now? And this guy's working like 11 hours a day, right, and he's not even earning commission. So I mean, like it's almost kind of an example, like he's probably almost even making minimum wage at that point, when you factor in how many hours he's working, how hard he's working, and just really not benefiting from any of this, really not benefiting from any of this. And you know, the punchline at the end of the story was like it wasn't that he just needed another customer, what he actually needed to do was start over, and this was the hard conversation my manager said he had with them was like listen, if you really want to make, you know the money you say you do, which is a hundred grand a year, we'll say, like, you don't have the right customers.

Speaker 1: 11:23

Basically go back to the drawing board on your book right.

Speaker 2: 11:31

And you know that's super hard, mostly because, like, emotionally they call it a sunk cost bias. But all of us have it Like, the more time you put into something, even if it's losing, it's emotionally very difficult to give up on. Because, like you spent so many days and weeks and months building this thing that you realize just isn't working and human beings have a very hard time letting go of those things to do more of the things they need to. And ultimately that's what this guy did and then was successful. He literally stopped working with all of his customers because they weren't the right type of customers for that freight brokerage A brokerage that you need to charge higher margins for the broker to actually take home some money right After you cover all the costs. Like you need freight that needs high service and in this case you know the guy was basically moving lumber loads that were like jump off freight, $150 per load at the time and again, this is many years ago. But like you just can't cover that many loads in a given day to be able to add enough of those together to ever actually earn an income. And that was one of those lessons that just kind of always stuck with me is that, like, not all customers and not all freight is graded equal and you can't just add more of a bad thing to get a good result. Like sometimes you really got to look at who and what you're working with to determine, like, are these the right customers? And in other scenarios, like that might be pay terms with the customer. But for sure margin plays into it because, like again, as brokers, like we provide a value to shippers and I don't think people think about this much and I just think especially. I think a lot of trucking companies think, just because we have a brokerage license, we just add margin to things and shippers are just somehow willing to pay it and then we just give a load to a truck and just sit back and watch things happen.

Speaker 2: 13:10

But the reality is is like we have tools and software we have to pay for that allow us to vet carriers, negotiate with them much faster than a shipper can. That's what our advantage is. That's how we help the market is we do the things that it takes a company and a procurement department sometimes weeks to do Process contracts, vet a carrier, look at insurance, go through all of these check marks. We do that sometimes like 30, 45 seconds. Right, we've got to pay for those tools. That's the value we provide back to the shipper, and then the value to the carriers are we help bring these smaller carriers loads they would never be able to get.

Speaker 2: 13:46

Because a trucking company that's got two or three drivers and like a couple trailers is not going to be able to provide enough value to work with a very large company, whether it's Walmart or just as an example, because, again, walmart would have to work with hundreds of thousands of carriers on a daily basis just to be able to move their freight. So brokers are able to pull lots of smaller companies together, get them more freight that they wouldn't be able to get otherwise, and the shipper benefits because we can move faster. But that comes at a cost of time, resources and labor and tools. There has to be some way to be able to cover that and at least pay for the effort and time you're doing for that service. And it was just one of those lessons. I use that story constantly with clients to just point out that, like, sometimes more of the same thing isn't going to get you where you need to go.

Speaker 1: 15:46

It's interesting. That's a good, that's a good one right there. So I'm going to. I'll ask you a question here, cause this is the direction I was going to go in as, um, how were you when you were early on, how up to speed were you with like market news and like staying up to date with regulations and like were you in, were you in it at all or no?

Speaker 2: 16:10

So the interesting thing was and this is like 2015 or 16, right, like I came from banking and like an interest in finance and I was shocked at how our industry functioned, especially back then.

Speaker 2: 16:22

I'm like this industry operates like I still use it and I like kind of like Wall Street did 100 years ago where, like people are just negotiating back and forth for every transaction and the market is so opaque, meaning like nobody had visibility into what anybody else was doing. The best we could ever do is like look at our system, especially in a big company, like you could just look at what our company paid for other loads you could see that, but like we couldn't even see that's website. Most of us didn't have logins because big companies want you to just live in their TMS. So, like most brokers in these big companies, we didn't have logins because big companies want you to just live in their TMS. So, like most brokers in these big companies, like we didn't even know and I remember coworkers didn't even know that like DAT was a website. We just thought it was something attached to the TMS To your TMS yeah.

Speaker 2: 17:04

And I remember the first conversation I had with some of like. I met with our CTO back then and I was like, hey, you know, one of the things I would love to be able to do, because once I learned this information was out there, I was in truck stop dat in our TMS for every load, because it was just a little bit more information to give me a little bit of advantage for every situation. I was talking to a customer covering a load and I remember advocating that we should have some of that data incorporated into the TMS, which I think they ultimately eventually did, but it wasn't there. There were no podcasts, there was no market updates. You really didn't have any information.

Speaker 2: 17:40

And also, brokers are incredibly close to the vest with their information on what they pay, what carriers they use. They didn't even want other brokers in the same company to know which carriers they used, because that's what they worked to develop the relationships, the pricing with some of them. Because, for sure, in a big company, people would fight over carriers the same way they would fight over prospects. You got a great carrier that has given you a great rate. If I got a bunch of loads, I'm calling your carrier. And now, all of a sudden, you're going to start arguing with me and go dude, I got six more loads to cover. You just booked all my trucks. I need them for my customer. So there were legit disputes over capacity and these things. So, like there were legitimate reasons, people didn't share this either and it wasn't available anywhere. And I remember even back then thinking I'm like this is a great opportunity for some company to do the CNBC, if you will, of freight, because nobody was doing it at the time.

Speaker 1: 18:35

So FreightWaves 2016 is when they started.

Speaker 2: 18:41

Yeah, that's right around then I couldn't tell. I've taught my head so I didn't know about them back then. For sure.

Speaker 1: 18:48

Yeah. So the reason I asked you that question is, like when I first I started in trucking in like I think 2011 or 12, and then brokerage a couple years later, um, but I like legitimately couldn't put all the pieces together, like when I, when I was on the trucking side, like I I heard of the heard the phrase 3pl but I didn't like ever really understand what 3PLs were, what brokerages were. And I think the same goes if someone starts in brokerage and doesn't put the effort in to learn what does a shipper do, what does a trucking company do and how do they operate. If you don't take time to truly put yourself in their shoes and understand how they operate, what's important to them, I don't think you can do a great job as a broker in the middle to connect those two parties. So what I would say is that what I would do differently is I would have because I eventually did get like make it a very big, important effort of mine to educate myself on the industry to a very serious extent, but also to understand macro level events.

Speaker 1: 19:58

What did the economy mean for the freight market? What did interest rates mean for the freight market? What does a hurricane mean for the freight market. What does government regulation mean for the freight market? What is the freight market cycle? How does it work?

Speaker 1: 20:14

Because it, like I, there was years when I look at my team going back like 10 years and there was like years that we killed it and it felt like it was super easy.

Speaker 1: 20:23

And then the next year like it sucked and we tried really hard and it's like nobody understood it was the freight market, like it had nothing to do with effort.

Speaker 1: 20:31

It was just like. Sometimes you know, when you have a like ELDs, for example, right, elds led to a capacity crunch, and then you have COVID, basically the same thing, right, you have a ton of demand for shipping and you can't just bring trucks into the market overnight by snapping your fingers. But at least by the time COVID came around, I think I understood the freight market a lot better and continue to learn. But going back, I would say, if you're new and you want to do something, that likely you and I probably didn't do would be to stay super up to speed, up to date on the news and what's going on, what's impacting our industry overall. Basically, don't just have your short-term glasses on right, short-term vision glasses, you want to have that mid and long range, to know what's three, five years out from now, what's a year out from now, even, or even four, six months into the next season.

Speaker 1: 21:36

And I think it was 2016 when Freightwaves came out and I was a couple years into the 3PL world at that point. But there was other I mean, there was other stuff that I was you know other sources of getting news, like, I remember setting up Google alerts to get news about the freight brokerage and logistics industry and that was like my first way of getting like news every day or every week was to do google alerts, and then freight waves made it super easy. They're like hey, we have basically a news website and a show and all these podcasts started coming out and like literally, they hit, they give you more, more news than you you could possibly consume now in a day. Um, and then you start getting you know there's transport topics and and all kinds of other media outlets out there, various newsletters. But yeah, I think my biggest take, or my biggest thing that I would say that I would do differently, is like educate yourself, like extremely educate yourself from day one, and I have a mentality that you're never going to. There's always something more you need to learn, and I have a mentality that you're never going to. There's always something more you need to learn, whether it's an existing topic that you just haven't learned yet, or it's something new that's going to happen that you'll have to learn and understand and comprehend, like a market cycle or something like that, because those, those things impact how your customers operate. They impact how carriers think and operate.

Speaker 1: 22:57

Like, I think back to like 20, like and again I by this by COVID, I understood market cycles, but I remember 2020 talking to a it was 2021, early 21, talking to one of the brokers in our company and he's like he's like man I can't wait to. I can't wait till these, these, this market shifts, because these carriers have been screwing me the last couple of years on rates. I can't wait till these market shifts because these carriers have been screwing me the last couple of years on rates. I can't wait till they get screwed. And I was like well, I probably wouldn't think that way, because it's going to also impact your paycheck, because if rates go down, we're a margin-based business here. So be careful what you wish for. And two years straight of down market, he's not so happy anymore, so it's funny.

Speaker 2: 23:42

Right To those two points, like one, I just I learned most of that just doing it right and through pain right. Like that's how I feel. Like everything's learned right. A little kid learns not to touch something hot because they touch something hot, not because their parents told them not to right. Like, most of what we learn is through experience and making mistakes. That's why they're so valuable.

Speaker 2: 24:04

And like the one two that, like you, were talking to ELDs, that was one of the biggest regulatory things that I saw and how much of an impact it had. Because at the time and also to your news point, the reason I went after Maersk as a customer back then was because, like they were having large issues in that side of the industry. The ships were super expensive, there was reorganization and I'm like, well, if they're all shifting around, now might be a good opportunity to be able to have a conversation, because so many things are up in the air. This might be a window. Like I kind of looked for change. Took me like 14 months to actually get that deal done. Look for change. It took me like 14 months to actually get that deal done, but at the end of it and the important piece was it was right in the fall heading into the ELDs, which happened in like December. So we just get onboarded with them.

Speaker 2: 24:47

And I'll never forget like I got phone calls because I was flying to Pittsburgh that year to see family and I was getting phone calls from India's dispatch team but Maris going like hey, you're now on our approved list. And they were like I've got a list of like 200 containers, can you help with them? And I'm like like excuse me, like like I'd never spoke to these people, like we just got approved, I hadn't even moved a load yet. I'm like, well, what do you mean? They're like we're desperate, we can't get these moved quick enough. And I'll never forget this. I remember where I was sitting. He's like open checkbook, all of them Don't care what it costs If you can get these moved, just send over the rate. And we've got blank checks to approve all of it. And I remember like literally, like Christmas, figuratively and literally, and I'm like oh, this is like a regulation can impact the industry that much in pricing and things, which is important.

Speaker 2: 25:40

But the other one was this was like four or five months because it lasted until like May, maybe even June of that year, working through the backlog of containers because of the ELDs right, and this is like literally spreadsheets with just POs on them. Just if you can get any of these moved, send over the rate and we'll approve it. So I mean like it was like an entire season of moving as many loads as you can as quickly as you could with resources. Like we were able to work with carriers to give them rates that were helpful enough that they can move an extra container here or there. Working through schedules to figure out how you get one more load moved with each driver every day to be able to just increase the throughput.

Speaker 2: 26:22

Learned a ton, but the one lesson I think that impacted me the most was that I'll never forget this. Like Bruce was on this show many, many years ago. It was a guy I used to work with right and I'll never forget calling him he was in the corporate office and I'm going, bruce, I don't think I'm going to have to prospect ever again.

Speaker 2: 26:44

There's just so much freight to move that I don't think they'll ever get through this and I think this is just going to be the rest of my career. I not only believe this right, and this is months of it, and the numbers just never shrunk and the amount of containers that need moved, like it seemed like it was literally never ending, and I believe that right. Well, fast forward three months july, august of that year that dried up to literally nothing, like literally no containers moved by the end of that summer. So all of it was gone.

Speaker 1: 27:20

Yeah, I've got a. I remember so two things, because this is, this is really good and this is goes back to my point of like understanding what the market will do and the cycling of it. It's so important. So I remember I don't know, it was like 20, 21, right, when everyone, everyone's making money. I was like this is great. I was like I was like everything's gonna be good forever's making money. I was like this is great. I was like everything's going to be good forever now. And then I'm like no, no, no, no, no, you can't think like that. Like everything, there's always a cyclical part. And it did come.

Speaker 1: 27:50

And I think literally yesterday I was listening to like a talk radio show and this guy calls in and he's like asking for advice on his business and he's like, yeah, all my expenses have gone up and I'm not making as much money lately. And they're like what kind of job are you working in? He goes, oh, I'm a transportation broker for automobiles. So he's an auto hauler freight broker, right, and he's like the an auto hauler freight broker, right, so he's like my lead the cost of his leads went up. So, like in the auto shipping business, you pay you typically pay for your leads, right like people will set up websites hey, looking to ship your car, fill out this for a free quote, and they sell those leads to auto brokers. And they said the the cost like tripled um in the last like year. So, um, instead of this guy adjusting his business, um, he just continued to do business the same way and pay more in his expenses to generate leads and ends up making less money and he's in trouble.

Speaker 1: 28:51

But the point of that is like, if you see the market shifting whether it's um in federal interest rates going up or whatever commodity you're shipping, if there's a change to it, you need to forecast that. The other part I didn't mention with this guy is auto shipping. It's less common when people have less. Is it called disposable income? Right? You got less free money sitting around, while you're probably not shipping your car to Florida as a snowbird as much as when everyone's got Buku extra money sitting around. So, like that industry heavily relies on how the economy is doing and if you're in that business, you should understand what's going to impact your specific market. The same thing would go with I'm trying to think like here's another one.

Speaker 2: 29:43

Go ahead. Jason Miller just posted this yesterday and this is for the whole market. Right now there's a very high level of containers coming in through the West Coast. It's almost even comparable to kind of where COVID was probably still a little lower, but like it's very high. However, we haven't seen that reflect into the spot market for truckload volumes and Jason broke down this in a chart. You could see it on LinkedIn.

Speaker 2: 30:10

He talked about the commodities and he said listen, like back then, there was lots of consumer goods, to your point, lots of extra cash in the system. People weren't out so they bought lots of things, even like toys, stuff for your house, computers. Lots of consumer goods were purchased, right, and that's what was primarily in those containers. Those types of goods typically don't sit at the ports long and they don't sit in the warehouses by the ports very long. Their first leg of transit is almost directly into the United States on a van, because they're bringing them in and they ship them directly to warehouses into the middle of the country somewhere and even shows the states in which percentage of those commodities go directly to these states, Right. So there's a big correlation between those commodities and the van market and the number of loads to move and the van market and the number of loads to move.

Speaker 2: 32:20

Right now the containers are mostly full a set of like solar related things, lots of solar sales and things related to that industry, and he said those types of things sit in warehouses near the ports much longer, do eventually get moved by trucks but go to very different states, very different areas of the country and very different volumes. And if you look at the percentages it really looks pretty obvious how, even though we've got larger volumes of goods coming in through the ports, we don't see that same impact into the vans that you do for other types of commodities. Right, and that's where I don't like what's just happening in the United States. Who's buying what right? Like which things are we purchasing more of?

Speaker 1: 33:00

Yeah. So I think a lot of what we just talked about is related to understanding the market of freight brokerage at scale. And I because I want to move on to the next part here, which is I'm going to talk about more of the sales and operations part of this. But if you're day one, or even if you're not even at day one, let's say you're just considering getting a brokerage right, or you're day one, or you're five, 10 years into the business, this is the stuff that's important, no matter what right. You need to understand at some level what impacts our industry and how does it, you know, how does it impact your customers, carriers, et cetera, and always just keep learning. I'm a big fan of like subscribe to every newsletter that's relevant to our industry. You don't have to read every single one of them, but at least have them, you know, conveniently delivered to your inbox each week. Right, we do two, we do two a week Tuesdays and Thursdays. Sign up at our website, freight360.net. We get you market updates on rates, we get you commodity updates, we get you news updates, all that stuff and some good educational training. All right, I wanted to move on to the sales and operations side. I'm trying to think what, what I would, um if I could do something differently. Um, so I, and I think this just depends on where you're, where you learn brokerage, whether it's a big box or a smaller company, or who you learn from, um, I didn't realize how important carriers were at first. I always thought, like the and I feel like we talk about this a lot Is it like, yeah, the customer is the one that pays the bill, but, like, you can't make the transaction happen without the carrier? And I think the importance of a carrier network a strong carrier network is is really important. And this goes back to the market cycles right, like when, when the market is like when it's very, very loose and it's easy to get a truck, like, yeah, trucks are a dime a dozen, but when the market gets tight and it's hard to get a truck, that's when you really need your carriers, and the ones that you screwed over in the past are going to remember that and they're not going to want to haul for you when you know when push comes to shove and you're in a pinch, um. But I think the importance of the carrier being just as important to, just as important as the customer is in the transaction is something that it took me quite a while to grasp and it probably correlated with, like, the market shifting.

Speaker 1: 35:29

I remember looking at our carrier utilization in a report the one day and it was like we didn't have a single carrier. It was like a year to date report it might've been like a monthly report and it was like the director was like this is bad and I'm like what's bad? He goes we don't have a single carrier that we've used, like on more than 1% of our loads. Like that's a, that's a problem. Um, we're going through a new almost a new carrier on every single load because we don't have a carrier development program in place where we can easily identify.

Speaker 1: 36:03

And it ended up leading to us building some tech around it where when you have, when you have a load in the system, it would before you even look at load boards. The goal of the tech was like let's look at who's hauled this before. I think they called it like the carrier, smart source or search or something like that, where it would literally say who did we run this for or who ran this for us in the past? Right, and you know how recently was it. And then it would also weigh in things like where do we have low? What trucks do we have delivering near this pickup in our network right now? And then it would also weigh in like load board postings and stuff like that, but a capacity engine basically that was like hey, let's not just post on Dat and TruckStop and find the next available truck, let's look at who's already in our network, who's literally delivering a load for us today that's going to be available to pick up tonight or tomorrow for this next load, or who do we use in the past.

Speaker 1: 37:00

So that was, I think, for me one of the things early on is you, because you think like hey, customer pays a bill and the carrier, like you know we're there, uh, you know we're there, uh, we're the one paying them, right, so they should think of us as like the uh, the customer, right.

Speaker 1: 37:16

But the reality is no like no, it is one big partnership along the chain there, so long-winded. But yeah, the importance of the carrier was something that I didn't realize as early on, which is ironic because I came from a trucking background. But in the trucking side we didn't use brokers. I worked for a big LTL carrier. We solicited business directly from shippers and that was really where I learned freight sales was from an asset side, direct. I would go sit down with a shipper in person. Yeah, so the brokerage part of it very different and understanding too. I came from a large trucking side. I didn't understand the owner-operator and the small fleet and how important they are, especially when you can't just call mega fleets all the time and get their trucks. You have to really really build relationships with some of these smaller carriers.

Speaker 2: 38:10

Hold on one second Pause. That for one second.

Speaker 1: 38:14

All right, we're back. We're back from Ben's. We're going to call it a bathroom break, even though that's not what it was. Yeah, the importance of the carrier man, that was my whole, you know, kind of eye opening thing there.

Speaker 2: 38:24

It's huge. Right Like because, from a broker's perspective, like it's really obvious to your point about like when the market shifts, I mean I could like because of all that stuff right I was talking about earlier, like moving all those containers, I had a huge network of drainage carriers that I talked to every day that we trusted, that I helped make a lot of money. Right Like everybody benefited the carriers benefited, the shippers were able to work through this right, so we ended up with really strong relationships. And also because I helped them work through issues and things. So for the rest of my time and career in brokerage, right Like I could make a phone call and get a container moved almost anywhere in the country with somebody I knew, trusted, was familiar with the rate, knew their service. That made my life so much easier to cover freight right One quoting being able to get it done, the amount of time. But also like I could speak to that when I'm talking to a shipper. So like the confidence I have when I'm talking about helping them with something it was true and it was there. Right Like it wasn't fake it till you make it Like I could very much speak to the fact that like, oh, you need this done here. Yeah, I've got four people there that I've worked with that I know can handle this. Here's the price range, here's what timeframe looks like and I know we could do it. Oh, hey, you need to all motor this or you got some really weird requests.

Speaker 2: 39:41

Did six of those last month with another customer. I've got the perfect drivers. We know that there'd be a fit for this. Here's where it's going to be. It's just so much faster and the service is better. The trust is better. It works out better for the carriers and to me, like that's the value again that we should be able to provide. Those are the things that, like shippers want to be able to understand. Like, can you do this? Do you have people you trust, or are you just going to the boards to grab a random guy that's cheaper so that you can make an extra 75 bucks on it? Like they don't want that either? Right, so it makes your job faster, it makes you more efficient and makes it more effective. It's better for the carriers, it's better for the customers. Have run your loads in the past.

Speaker 2: 40:43

Before you go to the market to go get another carrier, look in your system. Did you move the load? Who moved it? How was the service? What did your notes look like? Reach out to them first. You already have some proven track record with them. So there's less risk and less risk of fraud. So huge point there them. So there's less risk and less risk of fraud. So huge point there.

Speaker 2: 41:02

Yeah, the thing that I wanted to also segue into, which is like one of, I think, the most important lessons I learned as a broker and I think absolutely has impacted all of the rest of my life as well. Like I had this huge issue when I started and this was related to prospecting and moving freight was paralysis by analysis, right, which somebody I'm sure most people are familiar with, like overthinking things. I thought that like I could find the perfect prospect through research, right, that had that right commodity at that right time, so that I could minimize the amount of work or effort or discomfort in making cold calls Nobody likes that. Like I was trying to literally kind of outthink the act of making lots of calls every day, right, I'm like no, I know if I like research this enough. Like find these perfect companies like this will get this done, right, and my manager sat down with me and that's probably like a month into just they call it like they called it the pit at the time. Basically, you go and sit with all of the new people. All you do is prospect If you can't bring in customers under a certain timeframe. Like you don't make it to the floor, like it's basically the proving ground, or bootcamp, if you will, of the logistics of these companies. And he sat down next to me and he goes, ben, like cause I was putting in a lot of hours. Like I'm showing up at 630, 615. When most people are showing up at 730, I'm not leaving until 630. Like I am going to make this work.

Speaker 2: 42:27

So it wasn't that the effort wasn't there, it was where I was applying my effort. Right, and I wasn't making and I was still probably making a hundred calls or 80 calls, but I spent so much time trying to research them before and after work and my boss got in early every day so he would be the only one there seeing me doing this every morning. And he sat with me the one day. And he goes, ben, like I really think you are overthinking this. And I go that's. I remember saying I was like that's silly. How can I overthink it? How is more information going to make this harder for me. Like that's ridiculous, right, like I had this like overconfidence in this approach to it and I remember how he said it to me because he goes, ben, do you trust me? And he like looked me square in the face like very seriously, right, and I'm like okay, like yeah, I do. I mean, like I took the job with you. I believe that what you're telling me is going to get me where I want to go. He'd been there like 16 years at the time and I'm like, yeah, and I also trusted him as a friend and a person. So, like I was like yeah, I do trust you.

Speaker 2: 43:25

He goes. Will you follow my directions? And I think it was for like a month. He goes. Can you do this for a month and I go? I can do anything for a month. It's a reasonable timeframe. What do I need to do? Right, he goes. I want you to just pick a direction, any direction. He's like, in fact, I'll let you pick two, and it was like two or three different commodities he goes. I only want you to pick two or three, but the only thing I want you to focus on is just making the calls. Don't think about what's going on, don't necessarily try to find the perfect lead, just move. Repetition yeah, keep moving in that direction. He goes. If you do this, you will make it. And I'm like okay, like I'll trust you. I'm like what do I have to lose at this point? And I remember the timeframe, because it took me about six weeks of doing this and it ended up. I looked up the numbers the one time. I think it was something like around 2000 calls or 2200 calls I made in those six weeks Right, and sure as shit.

Speaker 2: 44:25

I found the needle in the haystack was the one company right that had a ton of freight that had good, that were had good margins and what they needed to move because of what the type of commodities were, and they needed help, like desperately. There was one logistics person at this company and he was like had access to like 70 loads a day and was only able to move like 25 of them because he just couldn't move them fast enough. And he's like, yeah, I have access to all this freight and like I just can't move them quick enough. And I was like, oh, I went out as like the co-brokerage. I'm like, well, you know, we can definitely put an agreement in place where we can help you move the loads you're not getting to. We can split the margins. Your customer ends up getting more freight moved, you benefit by looking better to them and we all work together.

Speaker 2: 45:07

Right Took like two or three weeks to get us onboarded but once we did like I literally went from like moving a couple loads a week here and there to I was hitting like 10K a week in gross profit inside of like three months out of like proving ground. Like I jumped from maybe not having a job to being like top 10 in the office out of like 150 people, just following the simple direction of do more, think less. Right, just keep doing this and the practice and the repetition gets you better at the conversations, the objections and hearing and listening for the opportunities and the conversations that you're actually having.

Speaker 1: 45:47

Yeah, I kind of I want to piggyback on that and they are because I thought about this earlier and this was never really me, but I've just experienced it with other people around me is the importance of that repetition, because your book of business isn't going to last forever and it's and it's, it's all current state right, like I've I've seen too many times where, um, someone in my company or someone that I know has that one mammoth customer and they're just like banking the retirement on it and they lose it Like there's a dude.

Speaker 1: 46:20

I know now that, um, it hasn't happened, luckily, and he's been able to diversify his book. But like, numerous times I was like, yeah, you might be doing 10 million a year with this customer, but what happens when you know when you're not? And you got this whole team that you've hired in this office space and you're, uh, maserati or whatever you're driving um, but I had, I have actually seen people that have lost. Like I just saw a dude that, like, bought a house, bought a new house, new truck, a boat probably um I don't think about, and then, like that you lose a customer.

Speaker 1: 46:58

It's like man, like, and it was the only one. So yeah, the the paralysis analysis people, you know it kind of relates like you got the one customer and you're like, oh, I'm just, I'm going to wait for the right, you know referral to come from this customer.

Speaker 2: 47:13

Like, no, you gotta always be, always be prospecting, always be calling, you know making new introductions and connections To that point, right, that customer, the reason we stopped doing business with them and like I am still friends, actually that guy passed away but like I literally am still friends with his son on Facebook and this is like a decade later right, but why we stopped doing business was nothing happened that was wrong. They were making a lot more money with working with us because we were helping them move more freight and they were benefiting from it. But why we stopped working together was because the company was getting acquired and eventually did it got bought by a bigger company and they wanted to pare down the number of volumes and loads they were moving for valuations and things and how they were being moved and loads they were moving for valuations and things and how they were being moved, and they moved more of it to their assets. And anyway, at the end of the day, like literally no fault of any of ours, it's just something that happens.

Speaker 2: 48:05

Companies get bought all the time. They change their departments, they hire different people, they get, you know, merged with another company and again, everything is temporary, like the other thing. I think that is the example of this. It's really evident. It is temporary, like even if you like the other thing. I think that is the example of this. It's really evident. It's like, if you look Google, like the stats of, like how many companies in the fortune 500 were there like 10 years ago? Like even the largest companies, the literally fortune 500 or the S and P right, like those companies turn over all of the time. It's not like when we grew up in the seventies and or even the eighties right, where companies existed like GE and things that were around for 100 years. Like companies are constantly being acquired, going out of business, being merged. Things change so much faster now, like it is certainly true in our industry.

Speaker 1: 48:50

Yeah, here's. So I want because I heard you mention the Fortune 500 a few times Like here and I pulled up some stats here 500 a few times Like here and I pulled up some stats here the 1970s the entire fortune 500 turned over within that decade the entire like. Not a single one of them was on it and you've got like annual turnover now. No, this is this is going back 10 years. About 14, 15 per year are turning over. A third of the fortune 500 um can turn over in five years on average. Um, yeah, like this stuff happens.

Speaker 2: 49:29

And again, it's not companies going out of business, yeah, they get bought by somebody else, right, that's what you have to think about is, uh, stuff like that, but yeah, here's the last one too, and I want to kind of wrap with this one because this is the other one that I think is incredibly beneficial in other aspects of life, but for sure in freight. The same paralysis by analysis I was applying to moving freight, meaning like I was trying to predict everything that could go wrong somehow, plan for it, and I was spending so many hours before work and after work just overthinking how to prevent any issue from occurring. And same manager, same mentor, sat down with me and he goes hey, remember when we were talking about you prospecting and, you know, overthinking things? He's like I think you're doing that moving freight too. And I went what do you mean? Like how is it not beneficial to try to figure out what's going to happen and try to prevent it before it does? Like, isn't that like just good planning and just I don't know, good business sense or common sense?

Speaker 2: 50:29

And he said and I remember how he even phrased it he goes, ben, like the thing about our industry is something is going to go wrong all of the time. Like at least once a week, sometimes once a day, sometimes many times in a day. You're never going to be able to predict what's going to go wrong in the future. He's like if you want to survive in this industry, you're going to drive yourself nuts trying to guess what will happen. He's like if you want to have a career doing this, you need to develop the confidence in your ability to solve whatever comes up, not to predict what comes up.

Speaker 2: 51:05

Right and that is one of those lessons that is applied in everything I do is that like I don't really worry about the market anymore. I mean, I'm aware and I read about it, but I don't worry about it because I can't do anything about it. I don't worry about what happens with any of my businesses anymore because I'm like I know shit's going to change. The only thing I know that is going to be true next year is it isn't going to look like this year, that the beginning of next year won't look like the fall this year in freight and shipping and coaching and any of our businesses, right?

Speaker 2: 51:33

So like I don't worry about it anymore, because at this point things have changed so many times and have scared me and I thought weren't going to work out. But at the end of the day, like if you just adapt and if you are focused and have a keen interest in the outcome and you're patient, you find different ways to do it and you'll succeed in whatever it looks like. So for me, like whether it's moving a load and trying to predict what could or couldn't happen, or just starting a new venture or anything in life Like I spent almost none of my life worrying about the uncertainty of the future anymore and I really just try to work on improving myself and my own abilities to solve whatever the hell is going to come up. Right, yep.

Speaker 1: 52:12

No, that's good man, that's good. The it's like the old phrase. The it's like the old phrase don't worry about what you can't control or what, or yeah, basically, you can only control the controllables.

Speaker 2: 52:28

Right, and a lot of that is your reaction to certain things, and the other one is like man plans and God laughs, right, like yeah, for sure.

Speaker 1: 52:35

Well, hey, man, good episode. Hopefully, by the time this comes out Friday, our folks and fans and listeners down in Florida are doing all right, so we're thinking about you guys. Final thoughts.

Speaker 2: 52:51

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

Speaker 1: 52:55

And until next time go Bills.

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Freight 360
Freight 360

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