Lessons Learned from Project Freight | Episode 230

Freight 360

February 9, 2024

Project freight can be a complex niche in the freight brokering industry. In this episode, we’re sharing our stories and advise when it comes to quoting and managing projects for your customers.

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

Welcome back for another episode of the Frey360 podcast. We got a good one today talking about project freight. But if you're brand new, make sure to hit the subscribe button. Follow us, whether it's your podcasting site on YouTube. Leave a review, leave a comment. Leave us five stars Helps us rank good and get in front of other people. Plus, we take those comments and we answer them on the every the weekly Tuesday Q&A session, the final mile which we've got, some that you guys will hear on Tuesday and share with your friends. And if you'd like to learn more about us, definitely go to the website freight360.net. Tons of content. You got blogs, videos, full length podcast episodes, some downloadable content as well that you can use whether it's a sample contract or a dispatching checklist and check out the Freight Boker Basics course. That's our self-paced online course that will teach you everything you need to know if you're looking to start a brokerage or just grow your existing brokerage.

Speaker 1: 1:18

All right, Ben, coming up on Super Bowl weekend. Man, we'll talk a little sports first. We kind of like teased it last week with Trey. But if you haven't followed us, I still since the bills lost a couple of weeks ago, I still have not watched ESPN or NFL Network. I haven't. I refuse to. I'll probably will, like Sunday, or at least by Monday, after the Super Bowl is done.

Speaker 1: 1:42

I'm already focusing on baseball, Like we're in February now. Pictures and catchers will report soon. Spring training starts at the end of this month. We'll see what happens. And actually, on the topic of baseball, I'm a big Red Sox fan. I think it's. Netflix just announced a two part documentary style thing that they're going to do for the 2024 Boston Red Sox. They're going to do well, one for the 2024. They're going to follow the Red Sox all season long and kind of like how they've done other Netflix sports specials, and they're going to follow them, have, like you know, special access to the players, the coaching staff and all that. And they're also going to do another project on the 2004 Red Sox which broke the 80 plus year World Series.

Speaker 2: 2:25

Curse, yeah, the curse, the Bambino curse, yeah, a Bruce baby, but Super Bowl.

Speaker 1: 2:33

Last week we were talking with Trey about you know the line and Chiefs for a start off as $3.00. That made it to two and a half. It's at one and a half Now. It's an even like if you, if you're putting money on one team to win, the Chiefs are to even pay out right now. And it wasn't that way when the line. I should have bet it last week.

Speaker 2: 2:52

It was two and a half or three, I think, last week. Yeah, I think I think they. So what would cause that right?

Speaker 1: 2:59

It would be. A lot of people have money on the Niners.

Speaker 2: 3:01

Therefore it's going to move, it's going to try to make the Chiefs a more opposite Everyone was better. So the lines that the objective of Vegas most people think is to oh, no, you're right, yeah, you're right, yes, the reality is?

Speaker 1: 3:15

is they just want equal bets on?

Speaker 2: 3:15

both sides because they make the juice on the middle Right. So, like, the objective for Vegas is to have, if they can, the exact amount of money on either side. So you could have one team that absolutely could and is expected to demolish it, but if a ton of people bet the other side, the lines will go shift. Yeah, so yeah, people will be like oh, I'm going to get the money.

Speaker 1: 3:36

So yeah, people that I'm betting on the Chiefs. That obviously is so they're making it a less favorable for the plus money line, which means you could put a hundred bucks down and win more than a hundred dollars. And now it's an even, so it's making it more desirable to bet on the Niners in this case.

Speaker 2: 3:52

So I was shocked. It was that where it was at the beginning and I was like this is definitely going to move. I'm like because, again, I think the sentiment in the country is that my homes is, I don't know more of, like the favorite again.

Speaker 1: 4:06

Not looking at the sport. He's like a new modern goat. Basically, he's like the new Brady yeah.

Speaker 2: 4:10

Or the Peyton or for sure, and it's just like I definitely could have guessed that they would have had a lot of money moving in that direction, especially with Travis Kelsey and just everything that you're reading and hearing about, with what's her face?

Speaker 1: 4:23

Taylor Swift.

Speaker 2: 4:23

Taylor Swift and just I mean, you know like literally tens of millions of people like following the Chiefs just because of her, and I'm just like there's no way that they're not going to be the betting favorite into this game, for sure.

Speaker 1: 4:36

So that would be my pick. I don't I wouldn't call a spread on it. It's so close anyway, it's only one and a half right now, but I think the Chiefs come away with it in a one score game. I think it's going to be a really good Super Bowl to watch and honestly, no matter which way the game goes, as a Bill's fan I'm going to be happy. You know what I mean. Like to if the, if the Chiefs lose, it's kind of like there you go, stick it to them. But if the Chiefs win, it's like all right, so we lost in a close game to the Super Bowl.

Speaker 2: 5:04

It's like getting second, you know what I mean. Right, hunt, the good stuff man, I got a consolation prize, yeah.

Speaker 1: 5:10

And other sports news. I got a question for you, Ben. Golf season is getting back into um. Back into season, I guess you would say, Back into swing, Back into swing, right, Full swing. So live, PGA joining forces was announced last summer. Why am I hearing like, have you heard anything about? Because I'm like still hearing that like there's animosity in the two, they're not merging, they're consolidating their funding or something I have no idea.

Speaker 2: 5:42

I haven't seen anything recently, but the things I see in like newsletters and I get you know, like updates and whatever I see and like Facebook or whatever, it definitely appears exactly the same to your point. Like live versus PGA, the last I heard about it was I think they needed to get approval from the FTC to merge and I think that's why it is remaining the same, because I don't think there's a lot of faith that they the United States government, wants them to merge, I guess. Basically, as long as sort of it Federal treatment.

Speaker 1: 6:14

What I saw, because I looked it up right before this, because I saw something about earlier today, and it said it was last summer. Live PGA and PGA European tour all announced that they would pool commercial rights, and then it went on to say that the merger was intended to unify the game of golf on a global basis. But it also says all now. It says all three tours will maintain administrative oversight and sanctioning of their own events. This agreement ends all existing litigation and there are plans for a quote fair and objective process for any players who desire to reapply for membership.

Speaker 2: 6:49

So and that was as of I guess that was last year- I also saw I think they built a facility like by me, like literally just north of me, to do those like other events with the PGA Tiger and Rory. They were talking about Like I and again I didn't read anything recently but I was pretty sure like they were trying to do their own like condensed event right where it wasn't like a full event but it was like a small group of people kind of play in a different format kind of thing. Again, I don't, I haven't seen anything recently but yeah Well, we'll see how it pans out.

Speaker 1: 7:30

Man, some of the exciting tournaments will start to pop up in the next couple of months here I did want to give a shout out to our new sponsor, Levity. You'll probably hear their ad read in here. We're going to have Tilo, who's the chief Technical officer I don't know, he's smart tech guy. We'll have him on an episode to talk about Levity in the coming weeks or months. Really cool tool. We take every partnership or sponsorship seriously and we don't just take on anybody. And Ben, you and I checked it out. It's a really, really cool automation tool that's not designed to be, like you know, full AI to replace humans. It's really meant to help.

Speaker 2: 8:12

Yeah, help augment or help basically get things done more efficiently and require less time. I think it's really cool because I have.

Speaker 1: 8:21

I won't name drop any companies, but I have talked with companies that have developed their own proprietary stuff like this. But it's exclusive to them, where you know it'll look at your inbox and do a lot of this manual process work for you when it comes to customers sending a quote request over or a load tender or a carrier sending a quote to you or an offer or bid to you. But now Levity makes it available to the open market, so we'll get T-Lo on. But check them out. Levityai L-E-V-I-T-Yai there's a link in the show notes. Really cool stuff. I think it's an awesome tool personally.

Speaker 1: 8:59

But let's talk about some project freight today, man. So just to give, we're going to count this conversation. Go whichever way it goes. But when it comes to project based freight, there's different kinds and we're going to talk about a few different examples of it. So this could be a one time hey, I got 20 loads to move. This could be hey, we've got a construction project going on that's going to require ongoing support for a certain period of time. This could be oversized over dimensional heavy haul permits escorts required, things like that or not. So we'll kind of peel back the layers on this stuff.

Speaker 1: 9:41

Ben, I'm going to have you take point here. You've got a lot more experience on the project side than I do. I've got a decent amount, but this was kind of your bread and butter for a while. So I'm going to pick your brain on a lot of stuff. So we'll kind of you know. In addition we just outline, we'll talk about considerations to think about when you're dealing with project freight things to do, things not to do, and kind of how it compares to your general you know, one off spot loads. So how would you like to set the stage here? Well, first of all, I'm for a. I didn't even ask you and we're 10 minutes in.

Speaker 2: 10:15

Not bad, it's a little cold.

Speaker 1: 10:17

It was cold last week, a little cold this week, but I don't warm up by the end of March when I'm down there with you.

Speaker 2: 10:23

So it's in the low fifties, like I mean that's not like me just bitching about the high sixties. I mean, like 52, waking up, walking the dog's a little bit chilly when you're in your 70s.

Speaker 1: 10:34

We're we're in the mid 40s in Buffalo today. It's supposed to get in. The fifties is the next couple of days to finish out the week and the snow's gone, so I will point this out right.

Speaker 2: 10:44

As a side note, I've noticed like it's been cold in January, like, I would say, two or three weeks since Christmas. We had like two or three cold weeks around Christmas. So it seems like the past month or four to six weeks it's just stayed colder, right, and I've noticed that I've gotten used to it, like in a way that I don't normally do. I think, just like you just keep going out and then you're like, oh, this isn't so bad, right, like super cold at first, and then I'm like, huh, by like a couple weeks later you get used to it, right, and it's just like just like everything else in life, right, it's all relative, I mean, that's true.

Speaker 1: 11:18

That's very true. Well, cool let's. Let's set the stage project free. Give us a high level overview and we'll pick your brain on it.

Speaker 2: 11:26

Yeah, so here's the first thing. So like, let's define what project freight is right, and probably would have been helpful to maybe break this up prior, but like, I'll just give it a shot. Right, so it is anytime you're moving multiple shipments over one day or many days down the same lane over usually a shorter period of time, but as a defined time. So multiple loads over a defined timeframe right Over it's usually like a month or two months. Right, they can be longer, they can be shorter, but on average I would say you're either going to have it's usually a number of loads, right, Like for the military. We'll go through some of these examples that I've done. It's, hey, we're doing a troop movement from a base in South Carolina to California and they get a breakdown 125 vans over seven days, 45 flatbeds over seven days, 35 step decks, and it literally outlines exactly what equipment they need over what time and then what is getting moved right.

Speaker 2: 12:27

Another example that I've done I did a lot of steel pipe that was coming in off of a boat into New Orleans and we coordinated all of the loads coming out of one place over a little more than a month period that went to five or six different steel mills all up by, like the Michigan and the Rust Belt up there, right? So we were in charge of not only booking and securing the trucks but coordinating all of the loads and making sure all of the PO's were tracked per truck, per delivery, and making sure that each one of them went where they were supposed to, as well as reconciling the whole project as if it's just one thing, right? So I think the takeaways for anyone else that's out there is like what is project freight? It's you're moving a bunch of things over some timeframe, right, and it's usually down the same lane or similar lanes.

Speaker 2: 13:15

You can have more than one customer like more than one delivery, and it'd still be project freight, but most of it's usually one pick to one drop, multiple loads or one pick to a few drops, right?

Speaker 1: 13:25

Yeah, I want to hop in because you just made me think of and I'm glad that you started with the military project stuff, because I was on the quote, unquote customer side of that when I deployed with the Army about 10 years ago and I was the unit movement officer for the company that I went overseas with and then eventually their company commander. But we had a four month period before we went to our premium or our mobilization site in Texas, which is like you train up before you go overseas, and we had to get all of our stuff there. So we spent a lot of time getting it all prepared, getting it all boxed up into containers, whether they were, you know, you could have a 40 foot container, you could have a 20 foot, you could have 45.

Speaker 1: 14:12

I mean there's different sized containers but either way, so here's them. What's cool, what happened, which relates to freight brokerage, is we had our battalion, had a unit. There's probably four I'm not going to name the locations because they're small. Some of them are small towns, but there's like four locations across New York state and each unit had a set number of containers that had to get loaded up and they all needed to arrive at Fort Hood, texas, near Colleen, by the time that we all showed up there. And so basically there was like the we had like a one week window to get everything picked up, transited down there and then delivered and they're coming from. In our case, we had three flatbeds worth. The other locations had more. We just happened to take less equipment as our unit, but I'm just going to ballpark there's probably 20 flatbeds total that were going from New York to Fort Hood, texas and we had to coordinate with a freight broker.

Speaker 1: 15:04

We were we were SDDC essentially. I mean, they went up through the channels but as boots on the ground when the driver showed up there, we had to make sure that they had all of our our paperwork, that the driver showed up on time. It was a very tight window, because if they didn't pick it up on time we weren't gonna be there the next two days for the comeback and get loaded. It would have been on the following Monday and then it wouldn't have made it to Texas on time and then we would have had our equipment to train, which would have held up our mobilization. So you bring up a lot of really good points there. This is attention to detail. This is it could be extremely time sensitive, with Reprocussions if that's not met perfect segue.

Speaker 2: 15:42

So I just started with what is different from a one-pick, one drop or one pick, multiple drop or a one-off Spotload and what is typically called project freight. Right Now, what is similar? And you picked out almost all of them, right? The similar questions. You ask whether I'm moving a 150 loads over a month or I'm moving one load today. I'm gonna ask the same questions what are the repercussions if this doesn't get to where you need it to by when you need it? Right, just that simple. This is supposed.

Speaker 2: 16:11

And they'll tell you hey, this is a project you're quoting, just like you said, we're just gonna use an example of a hundred trucks in ten days, ten trucks a day, okay, first question is what is the deadline? And they're like well, it's in ten days. And then the next question is no, explain to me what the deadline means, right, like, what happens if five trucks deliver on the 11th right? What if five trucks deliver on the 12th right? And I remembered because I said this to a to and I'll never forget it because he was in South Carolina and this was.

Speaker 1: 16:41

I don't know to is your transportation? Office, usually there's one on each base or in the National Guard.

Speaker 2: 16:46

In my case, we have one at the state level and this whole episode isn't gonna be on how the SEDC functions and their bid process, because we could literally spend 15 minutes to explain this but the point of the story was the way the bids went out. They ended up bidding them way lower and accepting lots of brokers that underbid everyone else and they were falling out, not able to get trucks, and Nobody was able to get trucks for the rates that they offered. Because of just the way it played out and I'll never forget, because this to goes, I asked him that question. I go well, what happens if we don't get it there on, you know, february 10th, whatever it was? And he goes Ben, failure isn't an option. And I went Tony, if you don't change something, it's not only the only option, it's the most likely option. There is zero chances You're gonna get four more trucks to pick up and deliver by that deadline unless you can move your budget, because no one will Pick up that load for that number, right.

Speaker 2: 17:37

And it was like one of those things where, like you need to understand to your point and what you just outlined was a great example it's like what happens if it doesn't, because if you're gonna try to ship five or ten loads a day, right, things are gonna go wrong. Things happen, trucks breakdown, things happen at loading what you can load within a window, changes based on the hours, all of these things if they don't go exactly as planned and anybody that's in the industry knows that never happens it doesn't matter how good you are at organizing it, things are gonna be. Things are gonna happen traffic, accidents, weather. You know what do they call it in the insurance world. No, no, god, right, yeah, whatever those are, shit's not gonna go the way you want and there's gonna be some issues you got to work through, right. So when you ask that question, you might talk to a company. They might be like well, hey, we got a crane on site, so if it doesn't load all out by the tenth, on the eleventh, we get a spend extra five thousand bucks per hour to have that crane there. Okay, we know what that number is, right, like in some cases, like there isn't really that much of an issue. But you want to know that.

Speaker 2: 18:37

Because now to the second thing how do you actually price these? Right, you price project freight and quote it very differently than a spot load, and we can get into it in a minute. But you need to know what is your ability right, because again you're gonna compete with other quotes for sure, so it's not like you could just throw any margin on here. But what we'll talk about in a minute is how the market actually works. When you have to book multiple trucks a day for multiple days, for Sometimes multiple weeks, it the whole market functions very differently than when you book one truck and you can look at an average rate on DAT, throw 10 or 15% on it and be fairly close. If you're trying to book five or ten trucks a day on that same lane, those rates are not gonna fall into their average Right, and you need to understand that to be able to quote it, because otherwise you absolutely will end up in a scenario where Failure is your only option because you didn't bid it well enough.

Speaker 1: 20:43

Yeah, so I'll give you another example. A few years ago, I helped a guy put together pricing on. I was somewhere between 20 and 30 flatbeds going from Houston up to Oklahoma to literally like a grid location, like latitude, longitude was the destination it was. It was for a drilling site, and what we found was that, when we're starting to line all these trucks up, at the beginning you get one rate, and then, as we start to go further down the pecking order, there's less and less available trucks there, and we got I want to say we got all of them booked within like a two-day period after the pricing was set and agreed to, but we would notice that our margin was high on the first Wave of trucks, and our margin would thin out towards the end, and the good thing, though, is that that was all factored into the Quoting process to make sure that our margin overall would cover, and there I don't remember, but there might have been a couple of trucks at the end where we either broke even or took a loss on them. But to give you a little more insight into like the quoting part of it, it involved you had line hall for the Truck, and then we had to figure in state permits and escorts, if there were some, some of the stuff that exceeded, like the you know, highway guidelines for each Pacific State when it came to weight or how much overhang there was on each side, because some of this stuff was big, like generator sets or Piping, like equipment used in the in the oil pipeline industry. So had we not and again this is, I didn't put this whole thing together myself, I helped a guy out with it as a second look, but he had been doing it for years and years and years and he knew that I've got to have my margin at a very strategic Level.

Speaker 1: 22:34

It's gonna seem high at the beginning, but the reality is we're sucking up capacity. We're talking 30 trucks out of one city or one, you know, do you got a market? And it's going. That's going to cause Trucks to get more expensive as time goes on, because they're gonna see if a truck truck company is smart, which a lot of them are, they're gonna know what the analytics are and they're gonna know what the Load to truck ratio is outbound from their, their, their origin right. And the other thing I look at in those unique instances, whether it's drilling project or a construction site, if where they're going to doesn't have anything close by outbound. That's like any other Regular load. Look at where you're putting that truck and like if they're going out to build a drawing site, they're, they're probably gonna dead, had at least 50 miles to get somewhere. So you're gonna have to figure some sort of compensation. That could be an extra hundred bucks or whatever, depending on the changes.

Speaker 1: 23:29

Yeah, it's a big difference changes day-to-day, week-to-week, right.

Speaker 2: 23:33

So again, I pulled up the lane of that steel shipping to go through an example. Right, that was New Orleans and I picked Detroit, right. So an example, and you did a really good job explaining this, but okay. So if I have to book one truck, right, and I look at the rate right now For New Orleans to Detroit, for a flatbed right that shows the past 30 days, the median is 25 75. We're gonna call it 2,500 bucks, for example. So $2,500 is what I kind of expect the average cost to be to ship that lane right now. Okay, the next thing I look at right, and this is New Orleans to Detroit, michigan. Right, think about where New Orleans is in the country. Right, can anybody start south of New Orleans and drive past it for?

Speaker 2: 24:18

anybody out there Now, it's not a hovercraft now, without a boat right or a ship right, it's literally a port. There's nothing below it. And also you'll have some trucks come in from Texas and then from the west. Some will come in from the east, right, but for the most part, like like New Orleans, this is not like Chicago or like Memphis, where you have trucks coming in from lots of different directions throughout the day, right, the port loads and again, it's a port. So, yeah, you have dry edge loads that go in there for things that leave, but not lots of things get delivered by flatbed into New Orleans or by the port because it's mostly outbound right.

Speaker 2: 24:53

So, for this example and why all that's important, these are the things that you look for right now. If I want to pay $2,500 and I got a book, five trucks a day, right. If I put in DAT right now, new Orleans to Detroit flatbed within you know, 150 miles, there are eight Results of trucks right now posted at least close enough within 150 miles of New Orleans that they could pick up within a few hours and are willing or want to go either anywhere or Detroit. Okay, eight, I need five a day, right.

Speaker 1: 25:28

If you were to also change that search to how many people have outbound loads posted, it would probably be drastically higher.

Speaker 2: 25:36

Right, and then I'll look at that next to right. The second thing right is like there are a lot. There's another 50 that are similar, but all of these trucks are not within 150 miles and may or may not get unloaded early enough today to make my pickup by the end of the day at 330 or 4 right. So I need five out of it, at least eight, which is more than half right. So the first thing is, to your point, if I post up my rate of 2,500 bucks to pay this, I will probably get one truck. I might get two, right.

Speaker 2: 26:08

Okay, now the third truck. To your point, now that I've booked two or three, that number goes from eight to six. Right now I'm offering a rate and there's less trucks but similar freight that is still there. So what they want to run, this goes up. Usually they'll want 26, 27, like your earliest trucks usually book are the ones that want to get moving, so they'll take a lower rate to keep their wheels turning. The guys that want a higher rate are usually sitting there and they're willing to sit until you pay them. So you got to pay them a little more. So those guys I might be paying $2,700 and by my fifth truck, I might have to pay 2900. And why do I have to pay that much more for my last truck? Because I don't have a choice, like in this scenario. If I don't get five loaded out, that means I have six tomorrow, which means I'll pay even more for my fifth and sixth truck to move six in one day than five. So it's not only am I gonna pay a little more, but I don't want to compete against myself even more tomorrow. So that gets worse, right? So again, what am I saying here? I'm saying lots of numbers. The average is 25, but to your point, you're probably gonna get one or two or three for close to that by your third truck. You pay a little more on a lane like New Orleans. Again, fourth and fifth, I might be 300 bucks above where I was. And now here's the next thing tomorrow, right, everybody saw everything that was posted yesterday and remembers it by the day after.

Speaker 2: 28:49

Every time I keep moving this, I start to move more freight down this shipping lane than anybody else. I am literally creating my own market, right? So that's twofold. Sometimes more flatbed companies will come in because they know you got freight and they want to run it for you. That's good news.

Speaker 2: 29:05

The downside is, when the drivers talk to each other at the delivery or when they come back down four days from now, the guy I paid 2900 tells the guy I paid 2500. And now everybody wants 2900 or they're not gonna run the same load, right. And now I've got an even bigger problem three, four, five, six days from now, because the same drivers are coming back around. So you need to be able to one talk to these drivers, you need to figure out what you're gonna pay, which is never gonna be the same number, and now you got to manage the risk of making sure you're paying these guys enough that you get good service, but they're not extorting you because you need them more than they need you. Right, and that's this balance. That is much different than just a one off load.

Speaker 1: 29:48

Yeah, one of the one of the things to that we found success with is, when you can, to pre-plan with a trucking fleet that's got enough assets and get them to like it, and you're typically gonna have to pay a little more for these, but they're gonna guarantee you, hey, no matter what, I will have seven guys available for you, and if you can go to your customer and explain that that, like, your pricing doesn't just include you trying to go out there and scrape up the market, it's hey, I've got dedicated people that, no matter what else happens whether they have to sit empty there for a day until this happens or they got to rush a team to get them back down there they are going to be on this For sure, part of this project for me.

Speaker 2: 30:33

So strategies prior to it, right? So if I'm working a quote for a project like this, if it's 100 loads, what I'm doing to work on that quote is I'm going to post that lane up every day and repost it up all day and every carry that calls in I'm going to have a conversation with. I got a project coming up. Are you in New Orleans often? Do you have an interest in going to Detroit? If I can reload you every, whatever the transit time is there and back, right, whatever that ends up, to come back and down, hey, every four days, if I can keep reloading you, do you want to keep moving this throughout this project? Oftentimes, if you're paying a decent rate, like the carries like, hey, that's great, I would love to stay on this project until you're done.

Speaker 2: 31:10

So a portion of your trucks to your point, you can kind of negotiate before the project starts. So you get some idea. It'll never be all of it, but you want to at least get some idea. And then you're going to go to the spot market to get what you can't, and sometimes even your reliable guy doesn't get turned around fast enough. So you got to go to the spot market before this guy gets back for his load, maybe Friday if he loaded up Monday, right, just for an example. So like there are different strategies to your point that you can do ahead of time so you can get an idea.

Speaker 2: 31:39

And one last one is post the other side of it. Like you want to know the carriers that have customers in Detroit that deliver close to New Orleans, because they've got the front hall, and if you can find a couple of trucks or carriers that run the other side of your project, they're going to give you the best rates if you can figure out the timing of the loading and unloading and they're going to want to keep running it for you and not, you know, try to leverage you to get an extra couple hundred bucks after they've moved a few for you and your example was.

Speaker 1: 32:07

So the example that I was using it was a one time outbound. You use the repeat and with the repeat that we're going to keep loading them up, you're going to get a pricing discount there potentially. So that's something to really keep in mind as well. So, yeah, that's. Those are some interesting considerations there. I want to hit on one that, unless you got anything else in that sector, I want to talk a little about.

Speaker 2: 32:33

So the next we could talk about, like the organization of it, the billing of them. We can talk about running it, whatever you want to.

Speaker 1: 32:39

Well, I want to give a consideration real, just real quick. This is kind of a one off ran into this with a construction project in the Northwest years ago where the when the contract was being issued out, there was legal contract paperwork that we had to agree to, and that red line process was a pain in the butt for a construction project, specifically because the amount of insurance and the coverage that they wanted us, as a freight brokerage, to carry was ridiculous. They wanted us to have coverage that would would covered like injury to workers on the ground, and it's like we don't. We're not going to have anybody on the ground there Like you're.

Speaker 1: 33:14

What you're referring to is the carriers right, it's going to be the drivers that are going to be on site and there's going to be other equipment around them. There's going to be cranes, there's going to be heavy construction equipment all kinds of hazardous situations. So you want to make sure that you're not signing or agreeing to something that is putting you way at risk, because when we talked about this in other discussions before and we don't need to beat a dead horse but you don't want to over expose yourself or agree to something that you can't legally agree to because you can't get the coverage for it. So I just wanted to put that out there as a caveat, because I have seen that with construction sites when they're building a new building or highway projects, things of that nature.

Speaker 2: 33:59

Now, I love Project Freight for a lot of reasons, right, because service is usually very important. They're usually higher profile and anytime service is more important to a customer, they're willing to pay more. Of course it's more work for me, but again, that's the whole point. Like, if you're willing to pay for something I could do, I'd rather work harder and I'd rather matter more to you, right? So Project Freight, for those reasons, tends to be profitable, tends to be really valuable right to the customer and to you doing it as well as the carriers. There's lots of reasons to want to go after it and to move it right. But one of the other considerations that we need to talk about, right, is how is the invoicing done and what does the organization look like, right? So, like for one example, the customer I had was Gerdahl Steel and they were bringing in literally boatloads of steel from Brazil into New Orleans, and that was the example I took you through right. Now here was the specifics that made this a headache. We'll call it right. The first thing was every single piece of bar that was loaded on that ship that was bulk loaded had a specific tag with a specific like nine-digit number. They were all mixed together but all needed loaded on specific flatbeds to go to specific places. So we had to manage not only the POs and the spreadsheets, because it's at a port, but we had stevedores that were helping us organize and telling which trucks loaded where. But we were the ones that were overseeing the process because we sent the trucks in. So what we really did was, yes, you'll use your TMS for this, but your TMS looks at it as load by load. It does not look at it as a group. So where your TMS will tell you which truck loaded which PO, you will almost always need a separate spreadsheet on Excel, as an example, or Google Sheets, right, and that's where you see the whole project, like all 120 loads each PO. And you got to also track in another place which truck picked up one. Because I will tell you that we had issues that weren't a fault of ours. We organized them correctly. A stevedore accidentally loaded one bundle under the wrong flatbed, right. Well, that went to the wrong steel mill. Well, that steel mill rejected that load and they said that it was this bundle. So now we've got to find another truck to move that bundle to that place at our expense and go back and hold the stevedore accountable for misloading it. And that stuff costs money. Right, it costs money, it eats into your profits. But this is what you're also responsible for when you are running that project. You are running point.

Speaker 2: 36:29

As the broker, You're not just coordinating with the trucks, you also have to make sure the shipper is doing the things that they're telling you to do, and you've got to confirm with your drivers. In my opinion, almost more so than a one offload, because there's just more opportunity for mistakes to happen. So, like, the oversight is just far I don't want to say more complicated redundant. Maybe You're basically doing the same thing twice in a spreadsheet, but it matters because when these things go wrong and they inevitably will you can't find them in your TMS and you're not going to be able to go and see exactly which PO.

Speaker 2: 37:01

And also, the last thing is like billing is also done differently. They're usually billed all at once once the project's done, aside from your spot freight, you might do with that. Custom run other lanes, though usually, at least in my experience, go hey, these 120 loads, once they're delivered, will invoice our customer and then we'll pay you. And that creates some other problems that you at least need to think through from a credit standpoint, because some of them could pay for two, three months and that's not typical for that customer. But they're not going to cut a check for $600,000 until sometimes they have that money and that's what those projects rain.

Speaker 1: 37:34

They were small numbers. You've got a couple of good points and we've talked about what it takes to be a good you know a standout freight broker in the past, and I've often used the phrase you should be an extension of your customer supply chain when it comes to project freight. Think about it like you're a project manager. You're not managing their whole project, but their transportation leg. You absolutely should be thinking of yourself as wearing that project manager hat and that's gonna be everything from ensuring that you've got the right equipment in the right place at the right time with the right PPE, and you've got a good one billing as well. I've seen too many times, whether it's a small multi load project or a large, like you know, 50 or more truckload project, where you're right, they might invoice everything altogether and if one there's one little discrepancy on a serial number or a PO number or whatever it is, they're not paying anything until it's all figured out. So it isn't your best interest to do things like getting your billing team involved, having a conversation with their billing or their AP department before this project kicks off and, like you said, if your TMS doesn't support the level of detail that you want, make your own spreadsheet, which I think is an absolutely great idea or find some way to take all these loads and all the detail for them and have them segregated by themselves, apart from anything else you're doing in general with your customers, or that specific shipper as well, because one little hiccup on you know, an invoice.

Speaker 1: 39:06

This could be hundreds of thousands of dollars that are waiting to get paid out, like I saw it happen with. It wasn't as large of a project, but it was a lot of heavy haul stuff, so the price tag on it was very large. So we're talking over $100,000. The customer is not like in financial stress, they're not refusing to pay, they're just like we'll pay you but we need you to follow our instructions. And then you got to figure out well, who's the one that caused this hiccup here? Is it the freight broker? Is it someone in our accounting department? Is it on the customer side? And if it's on the customer side, that's a very difficult conversation to handle when they screwed up internally, but they don't want to always admit it. But the reality is when that truck invoices you, their clock is ticking. Your customer's clock doesn't start ticking for their net 30 or whatever you have them set on until you follow all their instructions to invoice them.

Speaker 2: 39:59

And you made a really good point, right, you might not have been responsible for why the issue was created, but you're sure as shit responsible for fixing it. If you ever want to get paid, right, it's like, hey, that might not have caused this, but I sure as shit better fix it, because no one's paying anybody. And I'll give you another example From that same project. I did like a handful of boats with that customer, like four or five, and they loved working with us. Right, this is in 2017, right, or 18,? But does anybody out there remembers when they put a huge tariff on steel? Oh yeah, 25% on foreign steel.

Speaker 2: 40:35

It was the Trump administration, so it was like 2017, I want to say so they imposed that tariff in the middle of one of my projects and what happened was the steel mills that were buying the product said this is on you, the shipper, to pay that 25%. And what do you think? The shipper said this is on you to pay the 25%.

Speaker 2: 40:57

And what do you think happened? They literally started refusing shipments. In the middle of the project. The steel mills went. We're not accepting any of them. We got to get it out of the port because we were paying storage there. So I still got to ship them. They're on their way to Detroit and they're like we're not taking them unless they agree to pay the tariff.

Speaker 2: 41:16

And both of them argued. So we ended up diverting all of these loads into warehouses in storage that was cheaper than the port until they hashed that out. And until they hashed it out they paid nobody. So we didn't get paid for that project for like three months and it was something. It was in the hundreds of thousands of dollars because to something nobody was responsible for, at least than anybody we were talking to. But again, it's one of these things that if you don't still find some way to solve it and figure out what is where, if we didn't have that spreadsheet, there was no way we were gonna be able to keep track of what freight ended up where. Some of it was in Baltimore, some of it got stored in Tennessee, and again these things happen. So if you don't plan for them like they absolutely could cost you a shoulder and remember bad news gets worse with time, so don't sit on until it just magically gets fixed.

Speaker 1: 42:07

I do wanna put the lid on this conversation by talking about how do you get into project free Cause this is all great, we've shared a lot of stories and lessons learned in best practices, but the reality is you're not just gonna call somebody up and get project business right away. If all they do is project-based stuff, then that's possible once you build some rapport and have a relation with them. But the other side of this is and this is the same thing goes with contracted business year round through a bid it doesn't always happen as the first step. A lot of times you're dealing with the headache falloff load that somebody screwed up and you get a chance to work on one shipment that fell off. And then it could be you've got some consistent spot business that you're invited to bid on on a regular basis, and then maybe you get a couple of go-to lanes here and there and then, when you've proven yourself as a reliable and trustworthy transportation broker for them, then you'll oftentimes, if you're lucky and done things well, have the ability to get involved in some of their project-based shipments.

Speaker 1: 43:13

And what we mentioned before is at the beginning is there's some serious consequences to late deliveries or the wrong equipment showing up, especially if you're dealing with over-dimensional heavy haul stuff. The difference between a step deck, a double drop, an RGN, their vertical clearances and how tall the freight can be can drastically vary. So if a customer says I need you to send me this equipment type in, you wanna double check and ask what is the size and the weight and what are the dimensions for this shipment, because it may be that you can use an alternative piece of equipment that'll get you out of a pinch. Or it could be that what if the customer made a mistake and you send in what they asked for but it doesn't fit? And now it might have been their fault, but you still are kinda holding the bag there to pick up the pieces.

Speaker 2: 44:07

Same thing. You gotta always ask that question, right and again, if you are running project freight and this is true for a spot load you should always ask the question of what else can we load on this? If it's a dry van, hey, can I also load a reefer? Yeah. Or a step deck for a flatbed, flatbed for a step deck. You wanna be able to use whatever options you can if you need to, and it also helps you get sometimes a better fit right, maybe a better carrier, better safety rating at a lower rate, because they got a reefer there that they can load empty right or turn the unit off right. It's just an example that you reminded me of something else that I think is really important, right, it's if I am working a project, the first question I always ask if you've learned this through experiences Are you bidding this to many people and are you looking for one brokerage to handle the whole project? Why do you think? I asked that question? Because I don't want to be involved in a project unless I am moving all of the freight. It's for one very simple reason I learned this doing it with the military is, if all three of us are working on a project say it's a 90-load project 30 loads to Stephen, 30 loads to Nate, 30 loads to me. Ben quoted 2700,. Nate quoted 2600,. Ben quoted 2450. They go, I'm going to give all three of you loads.

Speaker 2: 45:24

What happens is that Stephen has the most money, even though he doesn't want to just spend money for no reason.

Speaker 2: 45:30

He'll usually spend a little more than Nate can, and Nate can spend more than me.

Speaker 2: 45:34

If at any point in time, I need a truck for my 30 on any day and Stephen starts posting 2600 because he wants to get his last truck booked because he's cutting it close as soon as everyone else sees Stephen's post for 26, I now have to lose $200 on every load I book because I got to pay Stephen's rate.

Speaker 2: 45:55

Stephen will set the market and you and you have a huge advantage that I'm unaware of because my customer never tells me what you two quoted, but I see it very quickly in the market when I watch the load board, I see what you're paying and you're paying because what I learned when this happened to me the first time? I would call the other brokers and be like dude, I don't care what money you have in this, but we've got to work together, otherwise their project doesn't get done by any of us. Sometimes the brokers will work with you and sometimes they basically give you the old FU and there's nothing you can do about it. If that happens, you're not just going to take $300 losses on every load because one other guy got more money in his project than you do and it causes huge issues.

Speaker 1: 46:37

Another thing too when you're working with other entities in this and this could be other freight brokers, other asset-based companies, other vendors that are just involved in it think about the scheduling piece. If one of them screws up or changes something without your knowledge, you're being set up for failure, because then now, let's say, they only have I'll just make this up let's say it's going to a facility that has receiving docks and doors and they only have a finite number of them, and all of a sudden somebody changes their delivery date and now you've got people backlogged at the delivery. The same thing could be if it's going somewhere outside. There's no dock doors but there's only one crane available, or there's only one. Whatever special equipment is needed to your MHE, your material hand equipment that's needed to offload or translow, whatever the product might be, you're limited. That's one of your limiting factors is what kind of throughput can that handle? If it's all internal to you, you can shuffle things around and say, all right, I got to bump this guy by four hours, but that's fine, because this other guy's available At this time. We'll swap these two out.

Speaker 1: 47:49

If you're dealing with other parties, you're kind of in the dark on that one. I do want to put a lid on this. I want to ask you if you can elaborate, because I had mentioned ways to get involved in project freight. That's the first thing you got to do. From your experience was this hey, I'm going to build a relationship over time with some smaller business and then try to get the opportunity to work on projects of theirs. What did that look like?

Speaker 2: 48:16

just as a takeaway for any listeners or viewers out there, For anyone out there that wants to do more project freight, the first tip I would give you is anytime you're talking to a prospect, ask them last year if they did any projects and how many, to be surprised that even companies and industries you don't think projects happen, they still do. There are definitely examples of things that you wouldn't think is a project, but one of their customers, just once a year, buys a bunch of truckloads and that's their project. Again, that could literally be anything. It could be retail. I've done projects for L-brands in Ohio, for Victoria's Secret around Christmas, where they would literally bring entire new stores to do a completely different thing for a short period of time get it in real quick by the sale date and get it out.

Speaker 2: 49:02

You can see them in retail. They're very common in construction. They're very common for ports and places that bring lots of cargo in at one time, any type of bulk things that ship literally like they drop them on the top of a ship and then crane them off. There's lots of projects related to that. Lots of projects related to pipe, to oil fields.

Speaker 2: 49:21

Those are some good categories but to be honest, asking any customer you've ever worked with if they're ever doing projects. You will be shocked at how many of them do and how many of these opportunities are, because, again, especially if it's a one-off project for a customer, this is a huge stress point in their year. It's a lot more work in a shorter period of time. Any way that you can alleviate that and make them feel a little more confident about it is also a good way to build some rapport, even if you don't get the project. Just conversationally hey, if you guys do this, I've done this, or hey, I'd love to be able to give you a hand and just talking through it is a great way to show that you also know what you're doing.

Speaker 1: 49:58

For those of you who are even pointed out too. Lastly, some of the projects I've seen in the last couple of years. They were one-offs. What it would be is the customer of ours. Whatever product that they produced and sold, they might have landed a huge deal, and they typically know it ahead of time. It's not like they landed today and they're shipping stuff out the door. There's a lot of lead time that goes into creating one Before the deal they're quoting it.

Speaker 2: 50:26

If you're a broker, they're usually like hey, we're looking at this project, can you give us some freight rates on it so we can close this out, if you never ask, you will never know.

Speaker 1: 50:34

This is why and we've talked about it before is if you have that long-term vision with your customer and you have these conversations about what's coming down their pipeline, you can predict both the timing and the volume of what your involvement could be in some of that stuff. If you're not really asked the question, the worst answer you'll get is a no or something along those lines, but you'll never get a yes if you don't ask.

Speaker 2: 50:58

For sure. If you don't ask, the answer is always no. Here was you also reminded this other quote I saw this morning. It just said all self-help and personal development and you can add prospecting conversations to this boils down to just choosing long-term over short-term. Don't have conversations about a longer time frame. Did you do any last year? Do you think you'll do any this year? What do you think the time frame looks like? Just asking those simple questions, you'll find lots more opportunities than just hey, what do you ship in next week?

Speaker 1: 51:29

Yep, exactly, well, good discussion. That's a really good in-depth look at project freight. If you guys got questions on it specifically or any good stories, definitely share them. Leave us a review, leave us a comment on YouTube or just email us, but Ben, any final thoughts.

Speaker 2: 51:48

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

Speaker 1: 51:52

And until next time go bills.

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Freight 360
Freight 360

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