Level Up Your Freight Brokerage in 2025 | Episode 276

Speaker 1: 0:19

All right, Happy New Year and welcome back to another episode of Freight 360. Ben, it's 2025. We took a little holiday. What do you? Call it a little break for a couple of weeks there.

Speaker 2: 0:32

A little, hiatus A little hiatus.

Speaker 1: 0:34

There it is. Yeah, it was good though, man, it's funny because we record on Wednesdays typically, and it just happened to be that Christmas and New Year's Day were both on a Wednesday this past holiday season. So, yeah, instead of putting out some like best ofs or throwback episodes, we just decided like hey, no one wants to hear us talk when they're enjoying the holidays. So you know, Merry Christmas and Happy New Year.

Speaker 3: 1:01

So we did have an interview with CEO DAT and I think and Happy New Year you did have a good interview with CEO of DAT and Trucker Tools. I think it got released New Year's week. I can't even remember which week it got released.

Speaker 1: 1:09

I think it was right before Christmas actually I think the Monday before Christmas and we included it in our newsletter this week that came out yesterday or Tuesday. So check that out. That was really, really good. That was with the CEO of D dat and the um, the former ceo of trucker tools. Now that they've been um purchased. So I listened to it. I wasn't on, I was in uh tennessee when you guys did that episode, but, um, dude, I listened to it and it just amazing, like really cool um, when you put two like powerhouses like that together. Now you're you're taking a massive marketplace and um trucker tools, which is that, you know, I I consider them more of like a data source with all the data that they get from their customers, and you put those together and it's like man that's going to give a ton of efficiency opportunities to carriers and brokers and shippers alike. So really excited. I know it takes time whenever you implement new technology and you know stuff like that, but I'm pretty stoked.

Speaker 3: 2:16

So that was a good conversation too.

Speaker 1: 2:17

Speaking of tech, quickscope is actually going to be having some new stuff coming out this year. They just brought on a new chief tech officer. Is that CTO?

Speaker 3: 2:29

right yeah, chief technical officer.

Speaker 1: 2:32

And the dude's a stud. So they're going to be releasing some new stuff. To give you an idea, right now Quickscope is doing MC and location verification of a truck, um at each stop. So you have you know, we're making sure we're not getting double brokered or anything like that. They're implementing vin verification and some other real-time tracking options um this year. So stay tuned if you're, if you haven't used quick scope yet, check them out. If you have um it's coming down the pipeline, I'll be. I think I'll be beta testing it um, if you want to call it beta, I'll be taking a look at it in the next couple of months here. So pretty stoked um anyway, ben, how was?

Speaker 3: 3:10

the holidays man my holidays were nice um son was in town, cooked a lot of food, hung out, spent time with family. That was really nice. And I'm really interested in talking about today too is just the difference in habits between pre-holiday, holiday and after holiday, and just like I was maybe it's because I spent more time on it in the last year or over the past couple of years like just habits around eating, habits around exercising, sleeping, when I do what, what days of the week, right, and just well-being, energy, what I'm able to get done, my patience, and when that kind of all goes out the window with the schedule and things are all kind of random. I mean I love the holidays, really enjoy being able to go to the Christmas lights, see Santa, take my daughter around, all that. By no means do I have like a negative I don't know perception of the holidays. I really look forward to them, especially living in Florida.

Speaker 1: 4:08

It is draining though, physically, mentally, all of it. So if you've seen on YouTube, the bags under my eyes, it's a lot, a little drained from whatever bug is going around. How was yours? Yeah, dude, good man, you're right though the the habits, because today we're going to talk about, um, you know, kickstarting your 2025, uh, and freight brokerage, um, but it is for me I was talking about it with somebody yesterday like it, it creeps in at thanksgiving, honestly, you get like a little bit of a lull between thanksgiving and new year's, but like or in christmas.

Speaker 1: 4:44

But dude, I swear like at that point like um, if you follow nfl right, football's in full force at that point. So you get like watch parties, maybe you're going to games, but like thanksgiving you get um, you know that's your first big family or friends get together of like the holiday season. And then I feel like everyone starts throwing together like work, office parties, happy hours, family get togethers, whatever. And then come Christmas to New Year's, it's like dude, for like two weeks this year I have no idea, I'd never know what day it was.

Speaker 2: 5:22

I didn't know if it was a Wednesday or a Saturday.

Speaker 1: 5:23

I had no idea. I'd never know what day it was. I didn't know if it was a Wednesday or a Saturday. I had no idea. Like I would wake up and be like, oh, I don't have to work today Although people still have issues and they text or call you but like it's, it's crazy, but it feels good Like post holiday, like Monday this week felt great.

Speaker 1: 5:41

I was like all right, right back to my gym routine, uh, back, you know, I'm gonna uh try to eat clean instead of all the shit I've been eating the last like month. Um, so you're a little more cognizant of it, you know what I mean. But uh, yeah, overall it was good. It was busy. Though. Cool thing my wife's uh cousin, uh Mike Kane, who ran for district attorney in Erie County, which is Buffalo's County, in November. He had a swearing in last week, so that was kind of like the big finale of like the holiday season in our family is like his big swearing in downtown and Buffalo's Convention Center. Not a bad guy to know. You know the district attorney in case shit ever goes south. Nice to have in your Rolodex, yeah. So if anyone wants to come after us on broker transparency, make sure it's done in Erie County. It's a court system, so yeah.

Speaker 3: 6:34

We should file all of our corporate documents into Erie County moving forward.

Speaker 1: 6:40

This podcast will get referenced in some fucking lawsuit, I'm sure. Anyway, good deal, man. Well, happy new year everybody. We're glad we're all back here and back in the swing Of things. Let's see here some Real oh Gotta give the old spiel. Subscribe Like. Share with friends. You know, check out the Freiburger basics Course all that good stuff Sports Playoff pictures in place. Share with friends. You know, check out the freight broker basics course all that good stuff. Um, sports playoff pictures in place from football.

Speaker 2: 7:09

Yeah.

Speaker 1: 7:10

And man, uh, steven, why don't you just unmute yourself for a second here, cause I want to talk to you about the Bengals? Um so I was watching. I was watching football. It was like right before new year 's, like the 29th or whatever the Bengals were playing a nighttime game and I was like dude. I was like if the Bengals win out and Miami loses one and Indy loses one.

Speaker 1: 7:35

I was like the Bills are going to be hosting the Bengals, I was like I don't want to play the Bengals. No one wants to play the Bengals right now. Joe Burrow is like he's like MVP caliber. He makes Josh Allen look like you know elementary school. But anyway, stephen, I know the percentage chance was like 9% or whatever, but were you guys you were still hanging on, or what were your thoughts on the Bengals there?

Speaker 2: 7:59

I mean, I didn't really get to follow football as much as I wanted to this year. Just having a daughter that's three months old it's pretty much been football season is watching her, yeah. But I mean, in true Cincinnati Bengals fashion, they turned it on the back half of the year, like always, but it was a game too short. Always, but it was a game too short. And again, you know who? Joe burrow might be the first person to get mvp and not play a single playoff game. I mean the stats that this guy put up are insane. But I mean, whatever it's, I know we I think we fired our defensive coordinator yesterday, um, which I don't, we'll see, I hope so. I mean that was the big issue for you guys.

Speaker 1: 8:46

I mean burrow had a like lights out season, dude like no, literally no one wants to play that.

Speaker 3: 8:52

You also had the league leader in sacks too? Was it hendrix or whatever? Like? Doesn't he have the? Yeah, it's not like yeah, nobody there and he had nobody on the other side and he still led. That's the league in sacks yeah.

Speaker 2: 9:08

Yeah, we had one guy on defense and then, uh, you know some villain people, yeah that's some jv's ben.

Speaker 1: 9:14

You got the steelers uh going to baltimore this weekend. Man, how do you feel? Hey, I'll tell you what. You, what man. I love that matchup. I don't agree with the spread. They got it at nine and a half. Yeah, I want to see Pittsburgh win for one reason because I don't want.

Speaker 3: 9:39

I don't want the Bills to have a chance of playing Baltimore in the divisional round. But yeah, if they win, I mean I think this season looks completely different. They haven't won a playoff game since 2016. They played very well against Lamar Jackson and Baltimore over the years.

Speaker 1: 9:50

I mean honestly it's one of the games Lamar's just hot right now, man he's like Joe Burrow dude he is.

Speaker 3: 9:56

But I'm debating on whether taking the money line or taking the Steelers with the points, because I do think the line is lopsided.

Speaker 1: 10:03

We'll see that. Oh, it's totally lopsided, 100%. But the Baltimore Ravens have also had some blowout games, you know what I mean Like. But so have a lot of teams right. Denver beat the backups from KC like 38 to 0 or something crazy.

Speaker 1: 10:23

The other day Baltimore beat the Bills like 40 to 10. I forget what the score was. There's been blowout games, but I don't think you're going to see that, especially when it's Russell Wilson in the playoffs. I don't either, but we'll see. Time will tell. Bills hosting the Broncos here's what sucks. I don't either, so but we'll see. We'll see. Bill's hosting the Broncos here's what sucks. I got Army this weekend. I won't even be able to friggin' watch the game. I'm sure I'll figure out a way to stream it or something, but I will not be. Tentatively, I won't be at the game, which sucks. I have tickets to the divisional round assuming the Bills will make it there and the AFC Championship, if the stars align and the Bills end up hosting it. But first playoff game I'm not even going to be able to be there or watch it in full force, which sucks, oh well.

Speaker 2: 11:17

Go Bills.

Speaker 1: 11:18

All right news. We got fires, we got snow storms. We talk about this every year, ben is. You know you get the seasonality and when stuff goes wrong and um freight when it comes to um disruptions. No one expected fires in la, but uh, winter weather I think we all know it comes every year. So that's kind of the big outside of that I mean I don't have anything else big, but like that's kind of the big thing that I've been hearing all the last week is like dude trucks falling off left and right because they can't make it to pickups. It's all in that region of Kentucky, southern, ohio, tennessee, midwest, yeah, but it goes further. I don't know.

Speaker 2: 12:14

Yeah, sure, wherever the snow is hitting that whole area.

Speaker 1: 12:17

Steven, what do you call your area?

Speaker 2: 12:20

My specific area is the tri-state area, but we do call it the Midwest Ohio a tri-state area, but we do. We call it the midwest okay, all right.

Speaker 1: 12:26

Well, I have kentucky indiana michigan iowa, so yeah, snow storms, delay, you know delay and stuff.

Speaker 1: 12:34

Um, outside of that, we have any other news, really, yeah, but anyway, happy new year, let's get into it. We're talking about 2025, so, ben, um, we typically do like every year, we do like a uh uh either either at year end or like the beginning of the year. We talk about like planning for your year. We kind of keep it generic. I wanted to make this one like we'll include the generic stuff, but I wanted to keep it um more specific on 2025, which I got my new year's hat here I'll wear for just a minute here.

Speaker 1: 13:08

But, uh, there's a lot specifically going on in 2025. That's out of the norm, um, presidential election, possible regulatory changes with the fmcsa all right enough with the hat and freight market like a lot of stuff. Right, we've had like two and a half years of like a freight recession that's coming to an end. We have possible tariffs coming in place, presidential change, relations with our North and South border countries could be impacted A lot of stuff. So I want to keep those considerations in mind. But, in general, like, I think it's always a good idea to look at how did your year end for 2024? And oh yeah, stephen added in the Greenland, if Trump wants to buy Greenland and rename the Gulf of Mexico the Gulf of America, but anyway, yeah.

Speaker 1: 14:07

So, like you know possible changes and whatnot, but I want to keep you know this look at 2024. How did it end? And plan ahead. And I think the big takeaway here is talk to your customers. How does this impact them? How did last year go compared to what they expected? What are they predicting for 2025? What do they have control over, what don't they? But I'm curious, ben have you had any of those kinds of conversations with your customers? I'll tell a story here in a minute about some unforeseen things that I dealt with, but have you had any conversations of what your customers are saying or you know folks in your circle about?

Speaker 3: 14:49

I would say yeah but it's mostly been through Thanksgiving, because right around Thanksgiving I started, like the companies I'm mostly involved in, saw way more volatility on a day-to-day base on some just the same lane right, like much wilder swings than what we've seen over the past few years, where you might see, you know, pay truck or whatever, the market being two grand on Monday, 2,600 on Tuesday, 1,800 on Wednesday, 2,500 on Thursday, back to two grand on Friday. Again, it depends on the market and where you're looking. But there was a lot more volatility within a week on different lanes. On margins, there was where nobody had issues finding trucks every day of the week on that lane all year. All of a sudden, tuesday customers are reaching out going. I got eight more of these. Can you take any of them? And the market is just way up because you got a deadhead carriers. They're just warm as many carriers in some markets on daily basis, which is far more like the market that I started in and the way it used to exist.

Speaker 3: 15:52

So to me we were starting to have these conversations or our account managers talking to our customers were from Thanksgiving on because I mean, the situation was occurring and they're going well. Hey, you didn't cover four of these and we're going back like, hey, we lost 600 on this one, lost 300 on this one. We can't take the other three. Can you help us out with either some more loads or move the margins on this? Because we just like there's not a truck here. We got a deadhead, a guy in from two 300 miles away, like we got to pay to do that.

Speaker 3: 16:20

So those conversations were starting to happen, I think out of necessity, and then on the back of them, I was talking with our account managers to go like hey, like you need to start letting your customers know like this is what the market is going to look like, moving forward Like it always used to. We've been so used to this flat market that even our pricing teams were going well, hey, once the market goes back to normal, we'll be able to price these markets kind of the same way. I'm like yeah, no, like this is the way the market is functioning. When you're closer to equilibrium like freight versus the amount of trucks as opposed to a ton of trucks Everybody's fighting to get loads.

Speaker 1: 18:07

Yeah, side note what you just made me think about and I'll get back to what I was going to say With the market shifting. So we've talked about fraud quite a bit In the last Two and a half years. Honestly, as the market softened up, fraud got exposed, I think as a big part of it. So when I look at carrier Vetting now Historically and it's like Alright, there's a lot of junk carriers out there with a lot of like red flags, uninsured vehicles, you know, double brokers, et cetera. It's easy to skip over them and go to the next best option. When the market's soft, when the market gets tight, I'm curious how the community will react. Like are we going to be looser on who we on how we select carriers? I feel like you almost have to like you won't or or like I feel like that's the end, like you might correct individually, not be looser and you're going to pay more money and that just is what it is. But someone's going to be looser and take that truck. That's higher risk that you'll pass over today.

Speaker 3: 19:20

This is the big thing that I talk about too and I think it's worth talking about for planning going into 2025 is that most of the people that are in the industry that have come in here in the past three years I mean think about like the average employee does not really stay in our industry more than three to four years. It's probably less than that. I'd love to see what that stat is, but my guess is it's probably around there. So I would guess that, like the majority of people probably working in our industry, probably started around the end of the pandemic or maybe the market was high and it was easy to get customers and hard trucks, but most are used to this market right.

Speaker 1: 19:52

Same with a lot of the tech companies looking at the market, I can't wait to get the hell out of this market.

Speaker 3: 19:57

Exactly. And the two things that I think a lot about is when I'm talking with vetting companies, right, like whether it's, you know, rmis or Highway or any of the ones that are vetting carriers to get it in right, and they're like, well, hey, like we've got ELD integrations with all these carriers for fraud prevention. I'm like that's great, how many do you have? And they're like oh, they're all roughly like 100, 150,000, 90,000, somewhere around 100K, right. And the thing I always ask is one do you have a lot of issues with variances, meaning brokers saying, hey, I need this truck, but I can't get them through the system? And everyone I talked to last year and even the year before is like no, if you can't get them through, you shouldn't use them. And I'm like great, that's fine if you can find another truck in your system to move the load.

Speaker 3: 20:49

But what happens when the market is so tight and your customer's like I need this moved or this very bad thing happens with our relationship or whatever it is.

Speaker 3: 20:58

That's really when push comes to the shove and you start seeing people going, hey, that's great, you have all of this. But like there's hundreds of thousands of carriers and if there's three trucks in that market and you can't get that one through that system because of the gates you set up in your vetting software. Now, all of a sudden, what do you do? Because everyone's been building and using the market we've been in as if it's going to stay that way, and to me that is a thing that I think about a lot going into 2025, because it gets far harder to cover loads. All of the bots that are like, hey, I can cover a load most of them are functioning on inbound calls. Well, in a tight market, nobody's calling you. You got to find other markets to call carriers, to have conversations, to get them into the market to pick up the load. This is not the same landscape we've existed in that we are likely to see for the next year or two.

Speaker 1: 21:50

Yeah, that's a really good point. I'll give you the little situations that I've dealt with. I'm curious how they'll pan out this year. So had a bid that was done in like April of 24 and the start date kept getting pushed back and back and back and back. It didn't kick off until late 2024. Um, that pricing that was locked in. Like you, do you skip six or whatever months of it? Like it's not very nervous about how that's gonna look, you know, with the market in 2025.

Speaker 1: 22:28

Luckily, like, we have the ability to go to the customer and say, hey, we need to revisit this. When this was originally quoted, it went based off of the 12 months back to last spring, not the delayed six-month start or whatever Another one we did. And luckily, the customer is open to changes at any point. It's a three-year commitment and it's like nobody can commit for three years. Like even if you're just like, oh, we'll just use fuel as like, as a variance, it's like, no, like that you can see three freight market cycles in three years. We have no idea. But they're like we just want to commit to. You know, we want, we want one partner for this chunk of business as the primary partner for three years. We can revisit quarterly or whatever we need to on the rate. We just want to have continuity and I'm like that's actually a pretty healthy relationship if you get that is by definition, a relationship.

Speaker 3: 23:24

Hey, we want to work with you, you want to work with us. We'll revisit as the situation and the market shifts right, like, like that is, by definition, I feel, like a real customer relationship, for sure, for sure. To the other point, I wanted to, and I think we should elaborate on two sides of this what does the carrier side look like on the coverage side for brokerage, and what does the market look like for acquisition and the customer right? And we touched on both a little bit. But I want us to expand on what you just said.

Speaker 3: 23:52

Right there, shippers have had pricing leverage for the past call it three years, meaning they could extend bids, they could do whatever they needed because, no matter what decisions they were making, they could get their loads picked up because there were more need for freight than there were need for carriers. There was just more carriers and there were loads to move. Right. When that shifts right, so many things happen. Right One, you can be a shipper and say this is our annual bid. But the thing I always find comical because, like, we consult with some shippers, some large ones, and I'm like you guys can do this but what I want to make sure everyone is aware of is there is a risk to that and everyone on the shipper side goes well, what do you mean? We got locked in pricing for a year. We've got better budgeting, we know what our numbers are, we have less work on being able to tender loads.

Speaker 3: 25:57

I'm like all those things are true, I said, but there's one risk that we're not talking about and they're like what do you mean? On any one lane, all of those carriers that bid on that lane, they're just going to hand you the loads back. They're just going to send them right back and then all of a sudden, the next day or the day of you have a some percentage of your freight that is now completely uncovered, that you've got to go to the market, pay brokers to go and find you trucks, negotiate deadhead rates, get guys into the market, pay market rates plus that margin, and I'm like that is the way the market used to function. And when I'm talking to some folks that have only been in this position two to three years, I'm like this is the thing we're taking out of context. You can say you want this to happen, but everybody is beholden to what the free market does. Nobody has the ability to move it, change it or shape it independent of what's happening outside of their own company.

Speaker 1: 26:58

Yeah, dude, I mean, as you were saying, that I just pulled up like this. Actually it's from the Bureau of Transportation Statistics, btsgov. It looks oddly similar to the DOT's website. They had, like, I looked at the spot rates for the last. This goes back to January 2015. And you see, every market cycle and you and I I've worked, I've worked in this industry that that entire period since before 2015.

Speaker 1: 27:26

And what happens is when you get to a tighter capacity market um, dude, we saw it in the beginning of the pandemic Like carriers are just like sorry, like this one's paying four bucks a mile, I want to take it. Yeah, the same. The same way that some brokers will cancel a truck and a soft market Cause they found a cheaper truck, right? Um, not saying it's the morally right thing to do. It's not illegal by any means and a lot of folks do it. So, yeah, that's.

Speaker 1: 28:00

You know, no one has the magic ball to know how or when or what's going to happen. It's going to cause a flip, and I don't think it's going to happen overnight. I think it's going to happen. That's going to cause a flip, and I don't think it's going to happen overnight. I think it's going to be gradual. I pulled up RateView to see spot rates in general from their reporting. So if you go back, I mean even September of 24, this is without fuel. This is with fuel for van per mile. This is month over month $1.97, $2.02, $2.03, $2.11, $2.18. Those are your last five months, including the current month. That's a 10% increase in four months on dry van. It's pretty significant. It's very significant.

Speaker 1: 28:48

It's very significant it didn't spike like it did with, you know, covid, but it's taken upward, yeah, so it's a lot of variance and I think there's two things right.

Speaker 3: 28:57

One, that makes the time usually call it the sales cycle the time from when you call a shipper and you've never spoke to them and their prospects to when you're doing business with them. Right, and everyone you call is not going to turn into a customer, but the ones that do. If you look back at how long you talk to them, like that, extended to probably four and a half to five months over the past few years, because shippers, right, don't have as urgent or immediate needs, because loads aren't being given back, because the market isn't shifting as much, it's not as volatile, right, but when it gets more volatile it becomes a shorter timeframe to acquire customers. So for brokers on the sales side, like bringing new customers, it doesn't get easier, it's just the time and the duration gets shorter because their problems are more frequent. On the shipper side, of which we, honestly, we get paid to service and to solve. When they're less frequent, it takes longer for those problems to arise, for you to get an opportunity to help that company, right? So the positive is that should benefit our market tremendously. Now on the other side and I'm curious which one you want to dig into first. Now on the other side is we have been staffing freight brokerages and laying off employees.

Speaker 3: 30:07

Large companies have to be able to have more money hit their bottom line, whether it's to report to shareholders or what have you. They're used to covering the same amount of loads with the same people because it's the same amount of work. That also changes, right? So, like some companies I'm looking at and you and I were talking about one of the companies I work with a lot, and we're like, hey, look, looking at, and you and I were talking about one of the companies I work with a lot, and we're like, hey, look, you know, we've got reps that we're closing. One rep, 120, 150 loads a week. Like one guy, right, like that is crazy. Like, well, yeah, those are wild numbers. Five, six years, like I would. That would be unheard of when I started brokers for one person to cover that many loads, right, I would say on average, we're seeing, like one rep that is good, right, like above proficient, right I would say, you know, a seven or eight out of 10, like they're covering 25, 30 loads a day, right?

Speaker 1: 30:55

That's even high to me, man, I mean if you're cradle to grave, I would say like 10 to 15.

Speaker 3: 30:59

These aren't cradle to grave these are specific carrier, sales reps, so these are not cradle to grave numbers, right.

Speaker 3: 31:05

And then the thing that we're doing with the company I work with like the most, is like we're staffing not for what is but for what is likely to come, which is starting to make sure, because the thing we keep talking about is, I'm like these are great numbers and we're driving down our cost per load to move by becoming more efficient, using tech and some other things we can talk about, but I'm like we need to be prepared because if that market shifts, even for like one account or one area of the country, like and that person is not fielding inbound calls to negotiate and they're doing outbound, that number is probably going to drop from 25 loads a day to like maybe five or six, right, like you're going to see a massive drop in what somebody is able to cover and load volume when they've got to go find the trucks, talk to the carriers, bring them into network, whether it's deadheading or into their system, and that is going to shift.

Speaker 3: 31:52

I think a need for companies to hire more into the coming market as well as, honestly, in some ways reconfigure the structure of the organizations, because what did work is not going to work at the same efficiency moving forward, I think efficiency moving forward.

Speaker 1: 32:07

I think, yeah, I agree. So to expand on that, because you can't we can't take this concept and say it's going to apply to every individual's book of business, because everyone's going to be a little bit different. But you know, it's kind of like two sides of it, like number one talk to your customers about what are they projecting, because a lot of it comes down. It's not just like oh yeah, the economy is going to do this, so our customer is going to have more business. It's like, well, no, what is your customer's role specifically, and how does that get impacted by all the external factors If your customer produces I'm trying to think of a good example here oil field stuff, yeah, that's a good one.

Speaker 1: 32:55

And we're here in drill, baby drill they might have some more business in 2025. If your company, if your customer, produces like green energy initiative I'm trying to think exact like green energy initiative, I'm trying to think exact if they produce something that's going to get impacted negatively by a potential change in how we operate our economy, it's going to be different, obviously. So talk to your customer, use some common sense, obviously beforehand, but talk to your customer and see you know what are they expecting to have happen as far as volume and where do you fall in that? How are they going to handle their? Are we going to be going back to mini bids? Are we going to be handling a lot of spot freight? Is there a contractual business? You know what are they projecting from their customers and their suppliers, et cetera.

Speaker 1: 33:41

And the other side of it is let's talk about staffing. What we were talking about like you need more bodies If rates go up. Right, brokers are a margin-based business or industry. So when rates go up, just like with truckers, brokers and truckers end up having a higher profit If we get the same margin percentage.

Speaker 1: 34:03

You end up making a little bit more money. You can afford more personnel.

Speaker 3: 34:07

Here's the thing I want to get to right. And this is the thing that bugs me about the economics and the argument between carriers, brokers and shippers on margin. Right, let's just take the same example. If I have one employee that can cover 25 loads and say the average margin is, I don't know, 175 bucks a load, okay, but in a tight market, right to your point, rates go up, margins will go up, but so does the workload. So that same person that covers 25 loads at 175 might cover eight and they might be at $300 a load, right. But when you do the math, that doesn't necessarily mean more money. Hits the bottom line, it means more money per transaction. And the other part of this is and this is the thing that gets me like I watched couple of videos that I saw of like truckers going let's just cut out brokers. Shippers work directly with carriers. I'm like that is a great thought.

Speaker 3: 34:57

But then, you have to pay somebody to go build relationships with shippers and also you can only work with the shippers and where you have trucks. So you would need hundreds of customers to fulfill a carrier that might only have 20 trucks, because your trucks are only in certain places. You would need so many customers that you're talking to. And then the other problem is those customers are like dude, I send you emails all the time and you never have trucks there. So it creates another burden on the shipper and they're like look, man, like I can't keep talking to a company that just doesn't happen to have what I need every time I need it. So it's a problem for the shipper. The carrier has to hire more people. Now on the brokerage side it shifts both ways right, like, yeah, there's going to be higher rates and higher margins, but there's more work because that driver that might be 270 miles away from some rural town in the middle of the country where there aren't any trucks today, but my load's got to pick up. I've got to have two or three people making phone calls to every carrier within 350 miles of that place to have a conversation with that dispatcher to go hey, my load is going to wherever Laredo, texas Do. You got a guy that would need to go there. Would that work for him? And they go, yeah, but he's 300 miles away, that won't work. Then you got to have a skilled enough carrier sales rep to go.

Speaker 3: 36:10

Okay, well, if I pay you loaded miles from where your guy is now to the my pickup to the delivery, would that work? Because to the carrier that makes more sense. Right, they're driving empty, less gas, but they're getting paid loaded miles. They load and they go to the same place. Right, the carrier gets a load they never would have found from a shipper they wouldn't have known about.

Speaker 3: 36:31

The carrier benefits because they made more money. The broker does make a little more on that margin, but at the end of the day there's so much more work that goes into it. And that's this bullshit argument of every load is created equal and every margin should be the same. Because, like they're vastly different amounts of labor that go into different situations that actually take the freight from the person that needs it moved to the company that could benefit from moving it. And to me it's just asinine that everybody just loses this context of the way the market functions and thinks that every load is just sitting there waiting to be picked up at the same time every day, to go to the same damn place every day.

Speaker 1: 37:07

Do you remember like 20, it was probably like 2021. You and I, we do some work with TIA and we've coached and worked with folks from all over from TIA. You know privately, we've done webinars through DAT et cetera. Right, talking to people in like 2021 and they're like yeah, like just started, I got like three customers and it's like what do you mean? You got three Like define that.

Speaker 1: 37:35

And a lot of times it was like, well, yeah, I called a shipper and they agreed to give me freight to work on. That's how easy it was to get a customer to like agree to give you freight. It doesn't mean you're covering it, cause that wasn't, that wasn't right. The hard part was getting the truck right. It's wildly different, whereas, like the last two years, if you go back one year from now right To the middle of all of this, um, like literally you can't, it's so hard to get a new customer. I would talk with folks that like they're like yeah, I waited out, I'm not going to pee, they want to come work for me. And like I have this long conversation like hey, man, I know you think your relationship with that customer is really solid.

Speaker 3: 38:16

I said but it's been seven months and someone else is moving their freight and now you got to convince them to give it back to you.

Speaker 1: 38:22

People about to fight. I'm like we'll give it a shot. It never works out. I had a guy here's what sucks. I had a guy at the end of 2024 that we hired on and he ended up not, he didn't even do a full week, right, he started on. And I talked to this guy for like Eight or nine months. I was like super excited when finally he's like you know what? Let's just we'll start it off for the new year.

Speaker 1: 38:50

So we got everything up and running in December and he like I get this email right around New Year's. He's like man, my customer, like my main customer, they're doing that whole. We're not adding new brokers right now thing. He goes I literally can't move, I gotta stay where I am. I can't leave my company because they just too much red tape, there's no workarounds, I can't get them set up. He's like maybe in six months I'll let you know. And I was like that's the stuff that we've been dealing with the last couple years that we didn't have that issue in 2020 and 2021. It was like literally bring everyone in, that you can let them all go hunt for trucks and whoever can get a truck first wins.

Speaker 3: 39:29

You know that's, that's a skill, right like that's the thing we were talking about. Like in that market, like you had to get good at your job in order to be able to succeed, right. And I'm not saying you don't have to be good now, it's just it's always one side or the other. I remember my first mentor, jason, when I was learning the business. I remember he was 15 or 16. It was very much a flat market, meaning like it was loose, like you could pretty much cover loads when you needed to for this period, right. And I meant, man, I can't wait for the market to tighten up because, like it's so hard to get customers that have issues to resolve, right. And I remember he just said, like I can picture him saying to this day he's like, care for what you wish for.

Speaker 3: 40:09

Because I can tell you that is a very different type of pain you're talking about. It does not get easier, it just gets different. And it's not that it's one is better than the other, it's just it's either hard to get customers or it's harder to get carriers Like you are working one way or the other to succeed in this industry. We're in the middle. Like we don't create the markets. We solve whichever issue needs solved on either side, and to me that's what keeps it interesting.

Speaker 1: 40:39

So, speaking of customer issues, I'll shift gears just a little bit here. One of the things I really think is important when you and you can do this quarterly, monthly, whatever.

Speaker 1: 40:45

I do it just about every month within our company when looking at different brokerage like brokers or agency offices is to do a review of, look at profitability, look at issues, look at how those two compare to one another. And I think it's important and I've done that with individual agencies on a customer level and I think it's important that each broker does that with their book of businesses. Look at how did you know, run your numbers for the whole year on a, you know, a summarized version of you know by each customer what was the load count? What was the load count? What was the revenue? What was the profit days to pay margin percentage? And the things you want to look at is what was your average um profit per load? What was your average revenue per load? Um, what was their days like? Kind of like weigh them all together.

Speaker 1: 41:44

Right, and if you find a customer that is sloping high dollars per load with low profit per load, which obviously means low margin and high headaches, that's a customer you should probably spend less time focusing on. And yes, um, you don't necessarily have to fire them or get rid of them, but maybe hand them off to a new rep for some experience or training and you can focus on getting business from other customers or getting more business out of your other existing customers, et cetera, on the flip-flop. Maybe some of your developing customers that are high profit per load, good margin, low headache, predictable, fun to work with, right Lean into those ones, get referrals, ask for referrals from those ones. They're not going to refer you to someone that they don't like. It's likely going to be someone more in their realm.

Speaker 1: 42:42

So just wanted to hit on that, I want to piggyback on that, and then I'm going to segue into something before we wrap.

Speaker 3: 42:47

One is the thing that we were doing that I think is really helpful is exactly what you said going through and evaluate each of your customers, right, looking at the loads per moved, your average margin, everything you talked about, right. The next thing that I think is really good and it's subjective, right. This is not something you can put a number to. You kind of need to understand the situation to determine what this is. But we look at buckets, right, and like we kind of pick two buckets. We've got high service, high need, but the way we define that is more of there's a person that really has you need to talk to to understand their supply chain. They value your experience and understanding to help them solve problems and they're willing to pay to have that problem solved. So again, like maybe it's, and again I'll just throw an example out. Like an easy one is like okay, you've got a customer that does over-dimensional, over-length, where you need carriers that know how to do routes, permits and things. So it's a longer conversation. You've got to understand the situation. It's not something that is price sensitive. It's got to be done right. Price still matters, but you need somebody that is good at their job, where you put them in that account. Now, on the very other end, you've got price sensitive customers. You might be moving more loads. With a price sensitive customer, you might be moving 10 times the amount of loads, but you know that they send out 20 loads a day for quote and you get four of them because they're always going with the cheapest. Service doesn't really matter right Now, when you look at them. You might be making a lot more money right now because you're moving more freight with a price sensitive one than the higher service one.

Speaker 3: 44:18

But what we're trying to do is go okay, well, we have the most experienced account managers that really have been in the industry long enough, that can have these conversations, that can build rapport very well, understand that company's supply chain and service it very well. That is time consuming, but there's a skill required those we want with those staffed folks. Now, the accounts that are price sensitive yeah, at first you look at it and go well, these are the most valuable companies to the company, to the brokerage. We want our most experienced person, but all they're doing is throwing over rates and then getting the cheapest truck and moving it Like we want the. I don't want to say lower skilled person, but we want the person that you can train people to learn the market pretty quickly if they get the feedback. That is where we want not the lower end account manager, but somebody that understands rates and the market but doesn't need to have a 45 minute conversation about a load situation.

Speaker 3: 45:11

Right, and to me, that's how you get more value, because the person that can have the better conversation, they're also going to learn more, not just about that load. When they're talking to that shipper, they're going to find out about the loads that aren't being sent out to bid. Hey, what else do you have we're working on next week? Oh, we didn't know, you moved that lane. Well, we've got some carriers there. Do you mind if we take a look at it Now? You're pulling business to you. You're not just taking orders and throwing a rate and getting whatever they offer you. And that is a very different type of freight brokerage operations, I guess, or like sales functions, and they really involve different skill sets and usually different experience to be able to excel at each of those.

Speaker 1: 45:50

I mean, I'll generalize this Like how do you develop any relationship, whether it's a friend, spouse, right, and the same thing goes with a customer is like you don't just hang out and talk about the same thing every time, like learn new things, right. It's like literally like you don't just hang out and talk about the same thing every time, like learn new things, right, novelty. Like literally like you and I are married, right. You didn't just hang out with your wife every time when you guys first met and like how was your day? How was your day?

Speaker 1: 46:18

how was your day talk about you learn more things about them, right, you learn about their family and their background, their interests and everything else in their life, all the peripherals. The same thing goes with the customer. It's like you don't just take orders and oh, I just, I always move this buffalo to uh knoxville lane every tuesday and friday. It's like, well, what else are you guys doing? What's coming inbound? What's going outbound? What are some changes coming up this year? Um, you know from your suppliers, from your customers, except, like, what else is going on around you?

Speaker 1: 46:47

not that you're trying to steal all that from anyone else, but you want to learn about it because you might be a better. Be a better fit some of that based on carrier relationships yes so um, it's all.

Speaker 3: 46:58

It is just talk and and it's a great point because a lot of companies we've had to compete on price predominantly for the past few years in this market. But when you become like you're only getting freight because you got the cheapest option for those loads, that customer starts to see you that way. They are always going to see you that way until you decide to change it, meaning the customer is not just going to start deciding oh, maybe this guy is good at other things. They've seen you being the cheap option. They're going to treat you as that option because that's the option you've been and you sold yourself to get in the door. Being that way, you need to be able to shift that conversation from hey, I love doing this type of business with you, we want to keep doing it. We wanted to talk to you about some of the other things you're doing and how we might be a fit to be able to help you more. You want to be able to push that conversation to your point and that narrative from what are you doing today, what loads did you move today, to what is going on in the future, what else are you guys working on? We might be able to have some things, because Stephen pointed out something that I wanted to loop into this, which is the carrier utilization, that is, the broker side or the customer facing role. But we have been using transactional carriers because you need to find the cheapest guy on any given day sometimes to make a load work for your shipper.

Speaker 3: 48:08

But as you shift to the new type of business, meaning price to service, you should be talking to your carriers more. You need your carrier sales reps, if you're not cratered to the grave, to start having conversations, not just negotiating a load and moving on. They got to get on the phone and talk to that dispatcher. Where else do you have trucks? Where else might you have a load? Oh, hey, I saw you move this load for the past two weeks for us. Do you have a truck there every Tuesday?

Speaker 3: 48:34

Well, now, if that guy tells me he's there every Tuesday, my customer sales rep should be on the phone with that customer long before Tuesday of next week going, hey, how did that load work out for the past couple of weeks? Great. Did that price work? Great, my guy's going to be there Tuesday. Do you think we can get that load from you now, like it's Wednesday, I might be able to get that load from Tuesday today. Get it to that carrier, the carrier wins, the shipper wins and I got less work come Tuesday having to cover that load, and then the carrier's running more of the same freight. That helps them, it's more predictable for them. These are the win-win-wins when you bring all of these things together, when the carrier sales reps are building better relationships with your carriers and your customer-facing people even if it's the same person is doing more of this with the shippers.

Speaker 1: 49:19

Yeah, I mean that's the thing I wanted to kind of wrap up with is like lean into those carrier relationships now. I wanted to kind of wrap up with is like lean into those carrier relationships now because if you remember going back a few years, um, that w, like we just said, it's one of the hardest things to do was to to find a truck. I had, um, we had a situation for it worked out for at least a little bit until the carrier, you know, until it didn't but, basically had a carrier that for years ran the same couple lanes hauling some produce and never gave it to anybody else.

Speaker 1: 49:53

The market got tight. Carriers stayed loyal, kept hauling the load for us until rates got too good to be like, hey, it's paying double to go do this Again. It was kind of an anomaly what we went through in the pandemic. But lean into those relationships now because if you can get that repeat predictable business and offer it to a carrier, price isn't always the most important thing to them.

Speaker 1: 50:23

No, it isn't, it's like, hey, the same way that you're like if you work at a bank Monday to Friday, nine to five, and you're off every holiday, that's predictable. That's not our job in brokerage. But carriers are the same thing. If they know, like, hey, I'm hauling the same load to the same place every week and I'm home the same days every week, that's great, Exactly Great.

Speaker 3: 50:41

Exactly, and this is the thing I want to point out to the carriers that listen to. This is that you can do the same thing with brokers. So many carriers we've worked with as clients where I'm like, hey, who do you make your freight with? Oh, these four brokers. How do you work with them? Oh, they sent us load lists. We take what works. No-transcript. Nobody knows these things if you don't pick up the phone and have conversations. If carriers did more of this with brokers, they end up with better relationships, better routes for their drivers and sometimes better paying loads. Right, regardless of the margin. But when nobody wants to have the conversation and they just want to do it the same way every day, you're going to get the same results, and that's the last thing I wanted to segue into, unless you had anything else on.

Speaker 3: 51:39

No, that's good, which is we talk about goals a lot in planning, but we talk very little about habits. Right, we talk about goals a lot in planning, but we talk very little about habits. Right? And there's a quote that really struck me and it said if you're going to do the same things next year, you're going to have the same year. If you're going to change your habits, you'll have a new year. Right, and to me, that is really what differentiates all of success in life. We're human beings. Our brains are wired to do habits to make it easier and to use less cognitive load and less energy when we do things.

Speaker 3: 52:13

To the next thing. If you really want a different outcome in your life or your business, you have to look at and I always think about this in my head, I don't remember where I heard it what are you doing on a random Tuesday? It's not the big wins, it's not the big wins, it's not the big losses, it's what do you do on a Thursday? What does your Tuesday or Thursday or Wednesday look like? Because that's really what's going to define your year. If you're just taking orders from carriers that are sending in and not having conversations, you'll have the same results all year. If you are just waiting for your customer to send you loads, you will have the same results this year and probably worse.

Speaker 3: 52:44

You've got to look at what your habits are and what you're doing and be willing to change them. And that takes energy and it takes time and it takes patience to do it, but that's what pays the dividends in any progress in life, whether it's working out your diet, your sleep habits or the profit in the bottom line of your company, and I think people overlook that far more than they pick. Oh, I got a big goal this year, great. But if you're gonna do the same shit you did last year, I don't care if your goal is 25 million, 10 million or 50 million. That's a dream, right. Without a plan to execute what you'll do differently to get a different result, you are going to end up in the exact same place, or likely worse, because the market won't stay the same. But you do. You're not going to perform the same way.

Speaker 1: 53:29

Amen, brother. Yeah, that's, that's so true, so true.

Speaker 1: 53:35

I think it applies to anywhere in life. You know, whether you kind of hit on a lot of them, like it's your, if it's your sleep goals, or your fitness goals, or your your any of your health goals, your relational goals, um, your career goals, though? Um keep in mind, like, if you here's the difference between like a personal goal and a career goal. Like if, if, if you want to go, if you want to lose weight, like you can go to the gym more and eat less, right? Um? You control literally 100% of that In brokerage. You don't, like. You can't control the market. You can't control what your customer decides to do. You can't control what carriers decide to do. What you can control, though, is how you act and how you react. So you've got to. I almost think you have to put a lot more focus and thought into planning out your year in freight brokerage, because you don't control 100% of what causes the change.

Speaker 3: 54:30

I think it's 100% true, and I think in freight brokerage or in your day-to-day life, I think there are some things that are similar. Right, our lives, for the most part, change, right, especially as freight brokers. You have busy days, you have slow days, but guess what? You don't know which one will be which in the future. You don't know if it'll be tomorrow or the next day that'll be busy or slow, right? So, like, even when I look at like diet, sleep or exercise one of the biggest things I did when we moved in this house I'm like I want a gym in my house because I have no idea what my day is going to look like. And I know, at the very least, if I do that when I start my day, it eliminates the excuse of I don't know what's going to happen in my day. Right, I don't know if I'm going to eat healthy, but if I try to plan every day and today's a 12-hour day I'm going to eat like shit, I'm going to eat garbage. So guess what? Make sure you have broccoli or whatever it is you want healthy ahead of time.

Speaker 3: 55:21

Now you don't have to think about those things. You can pre-plan to avoid so many of these things Like in freight brokerage. It's like not just trying to plan this year as it looked like last year. Look at the extremes, what if it does this and what is the worst case and the best case, or what are the most volatile things, and plan and say, okay, well, if this happens and our staffing looks like this, what are our results? If this happens and our staffing and the way we do business and our habits look like this, what happens? Because it's going to be somewhere in the middle and if you haven't thought about both extremes and thought about how you get ahead of those things, life and business in the market is just going to punch you in the face and you're going to feel like the tail is wagging the dog every single day and that's exhausting in and of itself.

Speaker 1: 56:07

Yep for sure. Hey, good discussion, great episode, first one of the new year. Two hundred and seventy six, Six, yeah, man Killing it All right. Well, that's all I got. I think it was great. Great start to the year. Hope people take that, take the advice away. I honestly think your rant at the end there was like probably the nail in the coffin. We should have started with that. It was really good. So, final thoughts Whether you believe you can or believe you can't, you're right and go. Steelers beat the Ravens. One of those right.

Speaker 2: 56:45

Exactly.

Speaker 1: 56:46

And until next time go Bills.