LTL Basics | Episode 229

Freight 360

February 2, 2024

Nate lost a bet and wears a Chiefs jersey, we talk about the UPS and Coyote problems, and most importantly we crack open the nut of LTL as it pertains to freight brokers. In this episode, you’ll learn the basics of LTL, how it compares to full truckload, how it’s priced, and how those pallets actually get from origin to destination.

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

All right, welcome back for another episode of the Freight 360 podcast. You guys can see what I'm wearing today in this episode. That is because we've got special guest Trey Griggs, who I lost to Bet 2, on the show today to talk sports. We'll get to him in just a second. If you are brand new, welcome to episode 229. And make sure to hit that subscribe button, hit the like button and share this with all your friends. Leave us comments. We answer all your questions on every Tuesday's edition of the final mile, which you can check out next Tuesday. We just did some good questions earlier today and share this with your friends. Check out the sponsors in the description box and check out You got a whole library searchable of all of our content blogs, videos, full-length podcasts and our Freight Broker Basics course, which is everything you need to get started in Freight Brokerage and succeed. Trey Griggs, welcome back to the show.

Speaker 2: 1:15

Man, how are you? This is my favorite show of the year, right here. This episode is my favorite one. I love seeing you in that red and yellow and white jersey and with my homes on there with the Super Bowl patch Just brings joy to my day. I can't imagine doing better than I'm doing right now.

Speaker 1: 1:33

Well, I have to thank you for sending me an adult jersey, because it's a large one.

Speaker 2: 1:43

It is a kids one and those who are cost efficient with their budget. This is a Coles jersey 40 bucks for a kid's extra large. I'm a small guy, so it fits, so that's what I went with. But I did feel bad sending this one to you last time and you kind of feel like you were a piece of sausage just smashed in there. And now you got something a little more comfortable and if the keep is going like this, I'm just going to have to buy you one. Could you just keep wearing the?

Speaker 1: 2:08

thing as soon as I hit stop on this episode I'm running right to the post office and out of the 14127 Orchard Park. But anyway, Ben, how are you doing today?

Speaker 3: 2:21

Doing well. I'm curious what are your? Well, I know Trace thoughts are on the Super Bowl. What do you think, nate? You think KC is going to cover their underdogs right now?

Speaker 2: 2:31

I know they're doing this on purpose, man, they're just so yeah, I'll give you my take.

Speaker 1: 2:37

So Tray and I have had pretty regular text conversations since the bills chiefs game was announced and I'll be honest and I said this on his show last week is that I said whoever won the bills chiefs game, my thought was going to go all the way, and when the bills lost, I think that the chiefs will go all the way. And obviously we didn't get. We didn't have Tray on the show last week after the game, but since then obviously the chiefs dominated in the AFC championship over Baltimore. I saw some pretty funny memes of whoever the guy that fumbled in the end zone. They showed him holding the Lombardi trophy and fumbling the Lombardi trophy.

Speaker 2: 3:17

That was a great one.

Speaker 1: 3:19

But I think the chiefs, the more dominant team, I think they're clicking right now. They're on all cylinders and I don't know. I think the T-swift effect is in the whole course in two weeks from now.

Speaker 2: 3:31

He's only lost to Brady right and Joe Burrow once in the playoff and the AFC championship game two years ago. He lost to Joe Burrow.

Speaker 1: 3:39

Yeah, you guys are going for the third ring in the.

Speaker 2: 3:42

Mahomes era right and that was his and that was really his doing. I mean, he actually had a. That was one of his bad games and you know it's interesting, I saw some analysis on that. Since that game, he's changed the way that he's played the game. He's no longer going for the showtime type of plays. He's become more conservative no interceptions since that game in the playoffs, which is pretty impressive when you think about that. You know almost two full playoff runs, no interceptions. He's not throwing for as many yards. He's definitely managing those games like Brady did, like you know, playing good enough to win but not being like spectacular great.

Speaker 3: 4:16

I mean they marched down the field against the Ravens.

Speaker 2: 4:19

Yeah, they marched down the field against the Ravens the first two possessions and it looked like they couldn't stop them and I think that had they kept playing that way, that probably would have been the case. But they throttled back to run the clock and, just you know, win the game. All they care about he. He doesn't care about the score, he doesn't care about yards, he doesn't care about touchdowns, he cares about winning. There have been too many games where he's taking a knee, he's running into the end zone, he takes a knee to keep the clock running because he doesn't care about the score, he just wants to win the game. Like you see these things happen, you realize he's starting to think next level. He's starting to think, tom Brady like of how do I win this game? I don't care what it looks like. There were times when Tom Brady threw the ball 60 times. There were times when he threw it 15. He didn't care, he just wanted to win the game. I see that type of activity coming from my homes and it's pretty exciting.

Speaker 1: 4:59

Let me ask you this, trey, do you think so? Jason Kelsey retired or is expected to. I don't know if he officially announced it. What do you think Travis is? What do you think he's got left? He's 34. He'll be 35 next year.

Speaker 2: 5:10

Well, he's not playing like a 34 year old in the playoffs. He's playing pretty young right now and these moments, I think, help him feel younger. What I think will happen is I think he'll keep playing, because who wants to stop playing when you're playing with my homes? It's like like Jason Kelsey didn't have that attachment like Travis does. I think Travis continues to play.

Speaker 2: 5:31

I think he works a little harder on developing the other tight end so that his workload comes down a little bit more during the regular season. He doesn't care about stats either. We saw that this year. He sat out the last game when he could have easily gotten another 1,000 yard season and had seven in a row. He didn't care. He set out that game because he was more concerned about the playoffs. So I think this mentality is starting to work its way through the locker room. I see him continuing to play, maybe one or two more years, maybe three more years if he stays really healthy, but I see his workload coming down, giving more attention to the other tight ends during the regular season, and then I see him playing well in the postseason with my homes. I could see that happening for the next three or four years.

Speaker 1: 6:06

So I want to shift gears to the chief's bills. So 2024 season. I'm not going to skip past the game that was played, but I want to remind you that, once again, the bills and the chiefs will play next year as division champions. It'll be an Orchard Park. It will be an Orchard Park. It's coming to the 2024 season. I'm calling it already.

Speaker 1: 6:31

So, looking forward to that game. Well, I mean, there's a thing you don't know what you want to look like. We have draft free agents, I mean the bills. People just get injured all the time. So we have no idea what it's going to be. But we'll have another, we'll have to do a Levion and we'll do a midseason little challenge in the 24 season. But going back to the game, the bills chief's game. I was there, man, I'll tell you. I thought the game, I thought the bills had a clinch on that game in the first half and then came down to who fought harder in the second half and I kept telling myself, like whoever has this ball last is going to win the game. And even if the bills had made the field goal, that would have tied it up. There was like a couple of minutes left. All you need is 13,. Clearly, like I didn't feel comfortable, it sucked and it was heartbreaking, but you know, everyone got back to everyone, took a couple of emotional days and got back to work.

Speaker 2: 7:31

So you know it's interesting. I think that my homes has that effect. I think people are we talked about this are people are afraid to give them ball back, like they're more concerned about that sometimes than they are scoring, which I think is the wrong way to think about it. You could tell on that last drive the Buffalo was trying to milk the clock as much as they could so they didn't give the ball back to my homes and that's not how they play. Josh is aggressive. They go down the field to take shots. That's just that wasn't them. I think he has that impact. He doesn't make people comfortable, you know.

Speaker 1: 8:00

For sure, and I think on that last drive for the bills there were like two it was the second and a third down that led to the fourth down missed field goal, that two previous plays, there was miss Q's misdirection and there was plays that could have been played. Just not normal.

Speaker 2: 8:22

So yeah, I'll say this the throw that Josh made on second and nine into the end zone it looked kind of like the throw to Gabe Davis and that crazy divisional game a couple years ago, but it didn't seem like it had the conviction. I know he got hit as well, yeah, when he threw it, but it didn't have the conviction that it had back then. Back then he was playing more fearless and I think he got burnt so bad in that game by losing that game after being up with 13 seconds to go. I think it's impacted the way he subconsciously plays the game against the Chiefs and I can't prove that. It just looks that way.

Speaker 1: 10:00

Well, we're going to have a long term rivalry. I hope. I think it's going to be the new Brady and drawn a blank here. Well, Peyton, for a bit Peyton will be kind of the big guy yeah, that's kind of the biggest one but that says something that he couldn't remember.

Speaker 2: 10:16

Manning, yeah, yeah that's right. Yeah, we'll see.

Speaker 1: 10:21

So tell us a little bit about beta consulting. I know so we've known you for a few years and you kind of launched your own thing. We'll give you a minute just to kind of talk about what you got going on with beta consulting. And then I got one fun stat for you to a tray after that.

Speaker 2: 10:36

Well, I do officially have to say that I am picking the Chiefs in the Super Bowl.

Speaker 1: 10:39

Probably goes without saying that We'll come back to our Super Bowl predictions.

Speaker 2: 10:42

I do think that well, okay, we'll talk about that in a minute. But beta consulting group we just celebrated two years this month in January, I guess last month, whenever this airs so we celebrated two years in January. It's been a long, fun journey of learning what the market wants and what it'll pay for and what we're good at, and trying to find the convergence of those three points, that true product market fit. And we found it, which we're really excited about. What I knew for a long time, and what companies have told us, is that they really struggle with communicating to the marketplace. They're really good at their business, they're really good at building technology or brokering freight, but they're not so good at talking about it. And so we're helping companies with their messaging. We're helping them create testimonial content. There's no better content out there, besides a word of mouth referral than hearing from your customers testimonial contents. We're helping companies with that. We're helping them get a better virtual storefront with their website and their social media presence to truly transform their brand, to becoming well known and trusted. It's been a lot of fun, so it's a great journey. We love helping companies to grow their brand and understand the value of their brand.

Speaker 2: 11:44

I often use this analogy a polo that is just any polo off the shelf. It costs eight bucks to make. You put a Nike Swish on that same polo, and now it's worth 40 bucks. You put the master's logo on it, and now it's worth 120. The only thing that changed on that shirt are the brands. That's where value really comes from. So having a great brand, having a great reputation, allows you to win customers faster, charge premiums because your service is actually worth it. Every day we go to the grocery store and we buy name brands that are no different than the generic brands because of what we believe, the trust that's there, knowing what we're gonna get. We like that and so brands carry value.

Speaker 1: 12:22

So you're kinda saying like I'm wearing a plain white jersey, but then you add the swoosh, then you add the arrowhead or the chiefs, then you add 15, right, 15? That's right. And then you put Super.

Speaker 2: 12:32

Bowl champs right here and now. That jersey's worth 150 bucks. That's right, that's exactly it. That thing probably costs 10 bucks to make, but we'll pay 150 because of the brand.

Speaker 1: 12:41

Well, if anyone's looking for help in that arena with getting your message out there at Testimonos, definitely get in touch with Trey and Beta Consulting. Where can they find you, Trey?

Speaker 2: 12:50

So LinkedIn, obviously, is a great way to connect with me, or go to our website betaconsultinggroupcom. We've got buttons everywhere on the website for them to click to schedule a call with me. We'd love to hear their story and help them tell it to the marketplace, so schedule a quick call with us on our website.

Speaker 1: 13:04

Awesome, I got two quick stats. Then we'll go back to Super Bowl predictions. Then we'll let you go. So this is our 229th episode, when we had our one hundredth episode you were on our 100th episode and I announced it as kind of like a little surprise and you were like, yeah, that's awesome, 100th episode. Well, I can officially announce now that, as of January 2024, freight 360 has received one million lifetime downloads.

Speaker 2: 13:31

So congratulations, man.

Speaker 1: 13:33

That's thanks to everybody out there that listens and watches. That's. I never would have thought that our content would get a million views. And we started out getting like Ben, remember we were getting like a 20 a week.

Speaker 3: 13:48

Couple dozen 20, 30.

Speaker 2: 13:50

It's blown up, and half of them were family, half of them were people I knew.

Speaker 3: 13:54

Everybody I talked to I'm like dude. Subscribe to our channel.

Speaker 2: 13:57

I'm like you have no idea what.

Speaker 1: 13:59

I'm talking about.

Speaker 3: 13:59

Just like it and comment yeah exactly.

Speaker 1: 14:02

All right. So Super Bowl 58, right In Vegas and Chiefs Niners what is the live? What are they given the? How many points are they putting you guys as underdogs, like three or four?

Speaker 2: 14:16

Way too many. I think they have no idea what they're doing?

Speaker 1: 14:20

They are giving bulletin board material.

Speaker 2: 14:23

They're betting on it, right. Yeah, I mean a lot of it has to do with bets, but you know it's like you can guarantee the patch of my homes and then they know what that spread is. They know what Vegas thinks it's in. Vegas they want I mean they're gonna. It's like Jordan he's gonna put a chip on his shoulder no matter what. So I actually like the fact that they have, they've made it in the underdog, because they've been the underdog in every game except Miami and they, I think they relish that. You know, they're really enjoying that position and that's the narrative of this Super Bowl. Now I will say this I don't know if you guys have seen this on social media or not. I saw this a couple of times. I shared this with my daughter, so they thought it was pretty impressive.

Speaker 2: 14:57

There's a lot of correlation to the Super Bowl with Taylor Swift. It's Super Bowl 58,. Five plus eight is 13,. Her favorite number. They're playing the 49ers. Four plus nine is 13,. Her favorite number. The game is held on February 11th. Two plus 11 is 13, her favorite number. If she attends the game, it will be her 13th game chief's game this season that she's attended.

Speaker 1: 15:16

Get out of here, Trey. What is this conspiracy theory?

Speaker 2: 15:19

I'm just saying there's a lot. I've even heard this the flight from Tokyo to Vegas roughly 13 hours if she takes it. I mean I'm just throwing that out there, it's all I'm saying.

Speaker 1: 15:28

Is that where? So she's flying, so her tour is in where in Tokyo?

Speaker 2: 15:33

She'll be in Japan, in Tokyo. Wow, that's right. I also heard that I think it's Kelsey's 22nd playoff game and she has a song I'm feeling 22.

Speaker 3: 15:42

There's just too much.

Speaker 2: 15:42

There's just too much here. But I do think the chiefs are gonna play better. I think we talked about this. I think they're the better team overall. Hopefully they have a better game. I think their defense is so underrated still. Still, I mean, if you look at the last seven games, including the playoffs and the regular season, they've held every opponent to under seven points in the second half. I mean it's been incredible their defense in the second half. So I mean, if Mahomes is able to win games with 17 points, 21 points, 24 points if that holds true, that's gonna be a pretty tough thing for the 49ers to overcome. So we'll see.

Speaker 1: 16:14

Either way, it's gonna be a really awesome game to watch. I had to look at it. Rematch, oh it rematches.

Speaker 2: 16:19

It was great.

Speaker 1: 16:19

Two point dogs is what you guys are sitting at right now over under reserve, I think. 47 and a half, yeah, so minus. There are plus two, yeah, yeah, plus. You guys are two point underdogs. So I think it's gonna be a close game. I think it'll come down on the fourth quarter and taking the chiefs in it, I mean I would, if the chiefs win, it goes to tell me that at least the bills lost in a narrow margin to the Super Bowl champions, right?

Speaker 2: 16:47

And you always wanna lose to the eventual champ. Gotta make you feel like something like that. Yeah, you kind of feel like you get second place honors if you lose to the champ at some point in the season.

Speaker 2: 16:55

Right Like you could have potentially beat all the other teams. You just didn't get that far. So I hope it's not a close game. I'd love to have a stress-free you know 14 point lead with six minutes to go in the ball, like that would be a pretty nice way to end it. And just know that. I mean, the close games are fun, but you just never know how they're gonna go. So it's like coming down 18 with a four shot lead. I prefer that over a one shot lead, you know.

Speaker 1: 17:16

Yeah, that's true, that's true, fair enough, all right, ben, do you have any predictions on the Super Bowl?

Speaker 3: 17:22

I like the Chiefs for sure.

Speaker 1: 17:25

I just gotta figure out what I'm gonna make as a side dish for my Super Bowl party this year. I was trying to like make something that like Spaghetti. Well, I've been to like one of the Spaghetti kinda looks like the Chiefs.

Speaker 2: 17:34

you know, I just get some spaghetti meatballs, that's a you know the red and yellow kind of you know put together. There you go. Fair enough.

Speaker 1: 17:41

Well, awesome, trey Greggs, great to have you on, as always, my friend. Thank you for fulfilling the bet.

Speaker 2: 17:47

Thank you for following through. Always love it, man. Appreciate you on that. One of these days, I know I'm gonna wear it, but I'm not looking forward to it, you know. For now I'm just gonna relish in this. So there we go, All right brother, we'll take care.

Speaker 1: 19:14

Thanks for coming on here. No, trey, all right, so today's episode. Well, we got some news. First, we're gonna get to Now that I told Trey before he hopped in that I was gonna remove the jersey and the stickers. But I'm a man of my word. He reminded me of that, so I will. This will remain donned on my body today, but yeah, so anyway. News the biggest one we'll just sit on it briefly is UPS and Coyote, and Ben, I don't know how much you've gotten to look into this. So UPS announced it's planned to lay off 12,000 workers coming up this year. And then, for those who don't know, they own Coyote, they bought Coyote, I think, in 2017 or 18, something like that.

Speaker 3: 20:02

I'll read it right here. We'll read it on our break. Just to give the recap In 2022, coyote did 5.2 billion. They were bought in 2015 for looks like 1.8 billion. The move was this is from a free Caviar. The move was strategized to expand UPS's portfolio, particularly granting them significant access to the truckload market, which was a gap in their service offering. Coyote was perceived as a successful entity, having risen from a startup freight broker to a major acquisition target within a decade.

Speaker 1: 20:38

So the biggest thing that I've seen in the news is they don't know what they're going to do with Coyote, they're trying to figure out. And here's what surprised me is there was a report I saw, and I think it was on like I don't know CNBC or one of the major news outlets. That was like they didn't understand the cyclical nature of freight brokerage. I love that and I'm like you're a trucking company.

Speaker 3: 21:01

Hold on. Dooner has a quote in freight Caviar On I guess it was on X or Twitter and he goes wouldn't UPS itself be aware of the cyclical nature of freight? Just by being UPS?

Speaker 1: 21:14

So what I will say is that UPS has so many different legs, right Like they've had yeah, for sure.

Speaker 1: 21:22

Well, they used to have UPS freight, which was then sold off as their T-Force, I think now because we're going to talk about it the other day. But they have your standard UPS, your brown trucks that deliver packages. Right, they have. I mean, they have like an expedite division. But when it comes to full truckload and brokerage, they were never really involved there. But they should still feel and recognize cyclical nature and if you're buying a company for billions of dollars, you should probably do some homework on it, right?

Speaker 3: 21:55

It's like yes, and all that screams to me is like recency, bias, right, and every human being falls victim to it at some point, whether we admit it to ourselves or not. When the times are good, everybody feels like they'll last forever, and when they aren't, it feels like they'll last forever. Right, and it's just like. No matter how many people you put in front of an organization, how many billions of dollars, how many analysts and reports to all the people at the top, everybody somehow just loses sight of the fact that it's a big merry-go-round and there will be downs if they're UPS and there will be UPS if there are downs. Right, it just is the nature of it. Did you see the four points that they outlined? I love these. I want to read these too.

Speaker 1: 22:34

Yeah, give us a rundown.

Speaker 3: 22:36

So, despite the optimistic start, coyote faced several challenges post acquisition, and all four of these to me seem super obvious Integration complexities, difficulty in integrating into UPS's larger infrastructure, more complicated than initially anticipated. Second, profitability issues struggles in maintaining profitability, especially due to a mismatch between the types of freight booked. And there it is. Profitability expectations Okay. Employee turnover. Significant brain drain as key employees left Coyote for rival freight brokerage firms. Intensified competition, increased competition by other companies Like we could go eat line by line and do a whole podcast on each of those four and why. I think those should have been fairly obvious to anybody trying to integrate them.

Speaker 3: 23:27

Freight brokerage is nothing like those businesses. Those businesses have predictable variable expenses, predictable fixed expenses, predictable labor costs. The only thing they don't predict is the amount of demand for their product which, to everyone's point, is cyclical. It follows the economy. You'll never know when it's gonna be there, but it always trails it and it's always gonna do so right. So if you have a retractionary economy, you can't ship as many packages as when people buy twice as many things. Like it's not calculus, it's kind of apples to apples, it's not even apples to oranges, it's like direct correlation.

Speaker 1: 24:03

Well, I mean we've seen the I mean the last 12 months we have seen a what feels like a record number of 3PLs and asset-based carriers, whether it's merger acquisition, whether it's going out of business bankruptcy, et cetera. We've seen it happening. So layoffs, obviously you hate to see 12,000. Ups has like 500,000 employees, so I mean it's a drop in the bucket overall, but it's still 12,000 people who are going to lose their job.

Speaker 3: 24:34

Here's what kills me, right, is that people like a quite fat two, I think, maybe other industries, in a way that I know the narrative is meant to make an impact and to make it seem huge, right, but the reality is is right, like, when people buy more things, you need more people to move those things. When people buy less things, you need less people to move those things, right, so you're always going to see that number go up and down with the economy. It's just that everyone is so used to the economy only growing for 11 or 12 years that they never thought we were ever going to see not even necessarily a recession, but a retractionary period. Yeah, that, like it doesn't make any sense at all that anybody would be upset or even surprised by it. Like you would expect to see that. So like, to me that seems fairly obvious.

Speaker 3: 25:21

And the second point of the freight brokerage not integrating, like I love all these companies and you read articles about how they're going to take a freight brokerage, that is, people and relationships and all the things we talk about in the show. But you know what they're going to do they're going to come up with a piece of software that just efficiently manages all of this so much easier. We won't need the people and will be 10 times more profitable. All we need to do is borrow some money and get there in the next year or two, right, and the money never gets there because everybody wants to overlook the human aspect of the industry. That's why it functions.

Speaker 3: 25:53

That's the glue we talked about in the final mile, like if a truck doesn't pick up a load. There's no contractual obligation, there's no glue that holds anything other than people's trust with each other. When you eliminate the people, the business doesn't stand up and they go. Oh shit, we bought this for $2 billion and we couldn't increase the value because we eliminated all the value by firing all the people Like I don't know. It just to me frustrates the hell out of me when I see any of them.

Speaker 1: 26:18

Play stupid games, win stupid prizes right. Play fire, get burned, have fun, find out. All right, well, let's talk LTL, unless you got any more news, I do not. All right, so we have not had an LTL discussion in probably at least a year. So it's about time that we revisit this topic, and it's kind of fitting because UPS offloaded their LTL division as well. I'm trying to think when it was maybe three years ago, t-force, I think, went to TEFI. You can correct me if I'm wrong, I will look it up though. So let's talk LTL. That's where I got my. That's really where I cut my teeth in transportation and the private sector. I my intro to transportation was through the military, but then I worked civilian side for a distribution company and then Conway Freight was the first trucking company that I started with. So was with them for a handful of years. Great experience, learning how the operation side goes, the sales side, management, all that a lot of fun. But LTL is very, very different from full truckload and it's very different from 3PL.

Speaker 1: 27:40

So what I want to explain first is for anybody out there who is a full truckload broker and gets those periodic LTL requests they don't even know how to talk that talk. The goal here is to give you a little bit of understanding of what some of the terminology is, how LTL works, where the pricing comes from because there's a lot of algorithm that goes into it and just how this can be implemented into your business, either directly or through co brokerage agreements with LTL carriers. So LTL stands for less than truckload, whereas FTL is full truckload. So with an LTL shipment you would have it could be a crate or a pallet or a few pallets and they get consolidated with other customer shipments, put onto a truck and moved somewhere else. And the way that this works is these LTL carriers have a network of service centers or warehouses, either in the region that they operate or nationwide if they're a national carrier.

Speaker 1: 28:41

So Conway was acquired by XPO after I had left there and at the time when I was there, when we're going back like over 10 years ago, we had like 300 service centers, like 12,000 trucks, so very, very massive footprint. Meaning if a shipment needed to go from Buffalo to Boca, where you live, then it's not going to go direct from Buffalo to Boca. It's probably going to go from Buffalo to the middle of Pennsylvania and get a bunch of freight from Albany and Rochester and Syracuse and Buffalo gets consolidated and whatever's going towards Boca goes south and it might go to Haggurstown, maryland, then to Richmond, virginia, and then to Atlanta, georgia, and then to Jacksonville and then to, you know, probably Fort Lauderdale would be the closest, or Miami. I don't know if the closest service center was there, but it consolidates shipments and kind of moves them around as they are heading in a certain direction.

Speaker 3: 29:38

What I wanted to just throw out for anybody that's listening to this right. Anytime you follow even a package now you can almost see it move through what is close to an LTL network, like. If you look on Amazon or I forget the other app for lots of goods that like shows you their tracking. Whatever it is, the point is it shows exactly what it is.

Speaker 1: 29:57

What's that next? We'll do it UPS, dhl. You can see it on all of them.

Speaker 3: 30:00

It shows what Nate's saying. Like, you'll see it. It'll be like oh, at facility right In transit, and then it'll be like because it's always the same places, like for me, to your point, like the regional facility is Atlanta or Jacksonville and almost always it goes to Deerfield, right next to me, and then it goes out on a local delivery truck. So what I buy kind of stops in Atlanta, stops in Jacksonville and then ultimately goes in Deerfield and then goes on a local delivery. To your point, like a regional center where they pull lots of packages from everywhere and then load up a full truck to go to local places to drop them off individually.

Speaker 1: 30:35

Yep. So the way that they operate all of this is and I'll explain it in kind of a Barney style, but there's two different kinds of like drivers or transportation moves. In LTL you have your local pick up and delivery, so they call that your P&D. That's going to be a guy or girl that all they do every day is they're going to go pick up all the local shipments that are going outbound, as well as deliver all the goods that came in to get delivered locally. So they're going to just they're going to drive out, drop off all the stuff that came in last night and they're going to pick up all the stuff that's got to go out tonight. Right, and that's their job.

Speaker 1: 31:15

Then you've got your line haul drivers, and line haul is the ones who are going to move it from your service center or terminal towards the next one. And it could be that they you know they're limited to the same hours of service that everybody else is. So they're like, for example, what we often would see is we would see Milton, pennsylvania, going to Hagerstown, maryland, so we'd have someone in Maryland drive to Pennsylvania, someone from Pennsylvania drive to Maryland. They would basically drop off a trailer, or a trailer is worth of stuff, get it loaded back up with stuff going back their way, and they drive back home All right. So those are your line haul drivers, the line haul. Oftentimes. Though, if we had enough freight, let's say, going from the Northeast to Florida, what would we do is we would consolidate and we would use a freight broker to hire a third party carrier for us, or we'd hire them directly and we would start that out.

Speaker 1: 32:11

We'll say hey, we have a full truckloads worth of goods, let's go into Jacksonville. We need you to take it from Milton, pennsylvania, to Jacksonville because that way it's much cheaper, there's less touch, it's not hitting the dock as much, but it's a very so you could tell it. This is way more complicated than full truckload, because this is these are large carriers. They have a very big footprint, a lot of trucks, a lot of pull when it comes to their ability to sway business towards one carrier for one customer, because they're big. So if I go to hire a owner operator, it's full truckload. I can talk to that driver and negotiate a rate. I can't do that. I can't go to an LTL carrier and try to swindle them for a good rate. They're going to tell me here's our price because they're that big, they have that much volume, that big of a footprint. That's just how they operate. So that's LTL versus full truckload in a nutshell. True, ltl is usually considered five pallets or less, carrier dependent it could change.

Speaker 3: 33:16

But 6,000 pounds or less total With the bottom line where do you tend to see it go between parcel and LTL?

Speaker 1: 33:24

So if it's over that, whether it's five pallets or 6,000 pounds, we'll just say if it's that or it can even be 10,000 pounds, Every carrier is different. If it's that or less, they can usually quote you as a true LTL. If it's over that amount, they would consider that a volume shipment, which we call partials in the full truckload world. Which means you're taking up enough of my trailer that I can probably put a couple of these large shipments together, but you're not taking up enough that we're going to use a whole truckload, but you're taking up too much for me to quote you like it's just a couple of pallets. So every carrier is different, but that tends to be where it is. If you've got more than five pallets or if you're over a certain weight limit or a certain length, if you have floor loaded steel, that's where they'll draw the line.

Speaker 3: 34:13

So how do you find opportunities? So let's say you're prospecting me and I'm like, yeah, Nate, I do some LTL. What questions do you ask and how do you try to uncover whether or not it makes sense to work with me? How do you approach?

Speaker 1: 34:26

it. Well, it's kind of the same way that you would prospect in full truckload as you have to figure out what's the most important to them. So a lot of customers, what'll be most important to them is I want this to go LTL because there's a price efficiency to it versus a dedicated truck load. But they'll tell you don't use that carrier, they're cheap and my stuff gets damaged. Don't use that carrier, they're too expensive and not worth it to me. Here's the carriers. So they might have some sort of price sensitivity or service sensitivity. Whatever the case might be, it just totally depends. We had a customer that did oil piping for some stuff in Texas and it got damaged in our network. At the time Connelly was never known to be a cheap carrier. We were always one of the more expensive carriers but we always provided great service and low damage and claims percentage. We lost that reputation with this customer because of how the shipment was being handled as a cross through some of these big reshift facilities. So for that customer's perspective, for them it was like hey, if my stuff doesn't get delivered? We've talked about the same scenario in full truck load it doesn't get delivered. The amount of money being lost is nowhere near the cost of transportation. So it's really the same thing.

Speaker 1: 35:46

A lot of times it's simplicity. So with LTL being, the pricing is very predictable based on the carrier you select. You can oftentimes set up your customer to log directly into an LTL rating system. Type in the zip code, origin, the destination zip code, all the information about the shipment and it'll spend them on rates. They don't have to call you, you don't have to go out there and help them. They can just effortlessly go in. Boom, I'm going to get these two pallets and here's my price. All right, I want this carrier. It's that simple.

Speaker 1: 36:18

So there's a ton of different ways that a customer might have. This is important to me and this is what my preference is. Just like full truck load. The only difference is LTL is very, very price driven when it comes to who can win business and who can't. So if me and you went to let's just say we went to Old Dominion LTL they're one of the most more well-known national LTL carriers If we were for a different brokerage, or even if we're just for a shipper and we go there, we're not going to get the same price. They're going to quote us based off of they call it like a discount. So the more volume you push through their network, they give you a discount off their rate. If you do nothing at your first shipment, you're paying full sticker price. It's kind of like wholesale versus not wholesale. So what works?

Speaker 3: 37:15

out more cheaper price.

Speaker 1: 37:17

Yeah, large shippers often tend to work directly with a preferred LTL carrier because they get great rates directly. Small to medium sized shippers don't always get good pricing, so they'll work with a freight broker who has that leverage, because they consolidated all of their customer's business and push it through a certain carrier, so now they have that. Does that make sense? They?

Speaker 1: 37:42

have all of that massive volume buying power to get those deep discounts that they can pass on to their customer. So if customer goes directly to T-Force they might say all right, it's $300. They come through a broker that does a lot of LTL who goes to T-Force. Now it's $100 cheaper.

Speaker 3: 37:59

So question right the bigger companies have advantages because they have pricing power. And again an example if you are working with an LTL, at your first shipment you're paying retail. If Steven has 12 customers and he can pull all of their business together, he has more buying power than any one of those customers. So the LTL provider gives him a better discount. Even when he adds his margin, he might be saving his customer's money. Makes perfect sense. Question I have now is for everyone out there that wants to get into LTL how do you start to get into it, knowing that the bigger companies have an advantage? How do you position yourself in a way that adds value, in a way that larger companies can't?

Speaker 1: 38:39

So there's a couple of different ways to go about doing this. You can go directly to an LTL carrier and I have seen I've sat down with a local LTL sales rep and having come from that business previously, I understand how it works for them. They, depending on the company, they tend to have flexibility on what kind of discount they can offer to a certain customer. So if you have a good rep who you explain, like, look, I understand that discounts come with volume, but I can't get volume if I don't have competitive pricing which comes first. So you can kind of talk to that rep and try to build a relationship, but they'll give you some discounted rates ahead of time to help you grow your LTL program. But that's not always the easiest way to go about doing it. So what a lot of times happen and I've done this with various different companies and I've tried different ones out is when I've done a majority full truckload in brokerage. But we wanted to get into LTL to offer that to our customers as well.

Speaker 1: 39:37

We've gotten into a cobrokerage relationship with some LTL freight brokerage companies. There's a bunch of them out there that are big into LTL. I'm not going to name drop any of them, but there's plenty out there and they have a massive amount of LTL business. So they have great discounts with the LTL carriers. They'll mark it up to us and then we can mark it up and resell it to our customers and our customer still gets a cheaper rate than if they went direct or if I went direct on their behalf, because the amount of we're talking billion dollar brokerages that have that much volume of LTL, they have that much pull. So that's what I'm going to do. It's a cobrokerage agreement. Your customer needs to be aware that the pricing is coming through a third party. You should have a contract in place. You're not dealing with the LTL carrier directly. You're dealing with that brokerage. Who's dealing with that LTL carrier directly? So there's a very clear, cut and dry way to do it, the correct and illegal way. So that's my recommendation on it.

Speaker 3: 40:40

I will say that You've done that a bunch, though, also for anyone out there. If you do need help with that, feel free to reach out to Nate or I at infoat-free-360. Nate set up at least four or five in the past year that I can think of.

Speaker 1: 40:51

Yeah, yeah, I worked with five or six different cobrokerage agreements for different companies in the last like 10 years, so there's pros and cons of all of them. Outside of those different ways I just explained, there's other options too, with other vendors that can help you get into the LTL space that we haven't mentioned. Those are kind of the common ones, though. What I do want to say, though, as well, is, when it comes to LTL, there's a lot that goes into it as far as how does this price? What makes up the price? So full truckload supply and demand.

Speaker 3: 41:30

One market might be more saturated or more tighter capacity than another market, and that's going to dictate how the- Well, to your point, it's simple, right, in full truckload it's how much freight is there and how many trucks are there. It's just the correlation between those two numbers, right. Like, if there's more trucks than freight, the rates go down. If there's more freight than trucks, the rates go up. Right, it's pretty direct.

Speaker 1: 41:54

Yes, Now, if you run a LTL network that's got hundreds of service centers and tens of thousands of trucks, you can offset costs, you can kind of balance out pricing nationwide because you might, you know, if you were to be out in the open market you might make, you know, might take a loss on this lane.

Speaker 1: 42:14

But you're making money on this lane over here. But since they're not having to deal with back calls and all that because they are so massive and they run all their business internally, ltl carriers don't have to operate that way. So what they do is they're looking at zip code to zip code. So you're, you're, you're laying, you're running back under the price, the weight of the shipment, because obviously every single truck has weight limits per axle and total. They're looking at the cubic volume of the shipment because we have constrained space inside of a trailer. They're looking at the freight class, which relates to its density, and so all those together are going to give you, it's going to spend out, a price, right. Obviously, if I filled up a trailer full of ping pong balls, I'm not effectively or efficiently maximizing weight. If I floor load steel, I'm not efficiently using volume.

Speaker 3: 43:10

Right, that's what I wanted to. I wanted to explain for the audience out there, right? Like, when I think of the variables to price LTL, I think about it like like a third grader, right? Okay, well, a box of feathers and a box of, to your point, lead fishing weights might be the same size box, but I can only load 42,000 pounds of either one, right? So, yeah, a box of feathers could fill up the whole truck and you still don't meet your weight. A box of lead, that is even a small box, right To your point, only load half the truck and you're still at your weight. So like, there needs to be a way to determine the size of what you're shipping, how much, whatever that size weighs, right, the density or the class, and then I mean that's pretty much it. Then you pick up and you're delivering your zips right?

Speaker 1: 43:56

Yep, exactly. So what the goal is and you know this is kind of a side note, but the utilization of that trailer is extremely important. It's a metric that has been tracked in LTL for a decade or so and when I, when I was there in operation, specifically, we had a goal to have a 90% utilization of that trailer. So if I was trying to take customers, I would try to reroute customer shipments through other service centers. That might actually put more mileage on a certain shipment. It wouldn't delay the delivery, but it might be an extra hundred miles, but I'm able to able to more effectively fill out a trailer space.

Speaker 1: 44:39

What's that?

Speaker 3: 44:40

Put more on each truck. Yeah, is that what it measures?

Speaker 1: 44:43

Which then relates to me having I got to push less trucks down that lane because I'm maximizing the space and the weight using each one of those. Obviously, you know when there's not a lot of demand in a certain area, you're going to have empty trailers going down the road because you have to reposition your trucks to do that and that's all part of the big picture. Now a caution here is rebills and re-ways. So if you're if the weight like, say you know you go to quote your customer and they give you a weight or they give you a freight class, right, and freight class is different. You know whole different discussion. We got content on the website about it, but it deals with density. If you have those wrong and an inspector weighs the shipment or measures the shipment or goes in and opens up the shipment to inspect the commodity to make sure it's what's reported and it's not right, they are going to rebuild you and possibly add on an inspection fee to that. So what I always recommend is don't ever use like round numbers.

Speaker 3: 45:39

Like round like, for example don't put about a hundred pounds, give them, take 15 exactly a thousand pounds, right?

Speaker 1: 45:48

Well, one in a thousand is going to have a full thousand, right so? But if it says one thousand and 13 pounds, very less likely to get re-weight. A lot of the forklifts now have Bluetooth scales built in so they're automatically re-weight. But the same thing with if there's an obvious like so when it comes to freight class, the lower the number, the more dense. So, like you have like like 50 versus 500, right, so 500 would be like your ping pong balls. If you have your commodity listed as steel plates and it's class 500, no, it's clearly clear and obvious that it's not. You know, it doesn't line up. Or if the weight and the dimensions don't correlate with the freight class. So this is the kind of stuff and customers will do this intentionally because they might get away with like 20% of the times that they do that.

Speaker 3: 46:40

Especially with a new broker or a new provider. You know what? What I got to lose right? Maybe I'll save 50 bucks.

Speaker 1: 46:46

My boss will be happy, you know some basic stuff to be considered of there. So always ask when you're booking a low with a carrier, ask him what those you know, what do you guys? What's the policy on re-weight as re-class? How do you invoice it? Do you just automatically assign us a bill If it's over a certain amount? Does that have to come back for dispute first? How does that? You know? So understand that process, because if you can charge an extra bucks, you got to go back to your customer and get that 200 bucks. Now, right, you got to let them know that this could happen too. Now, the other thing I'll add in, which is kind of cool, is that if a I mentioned how the pricing happens, there are some low density lanes where they will heavily discount shipments just to fill up trailer space, and that'll happen on the when you get volume pricing Like airplane tickets.

Speaker 3: 47:34

right, you got an empty plane flying. You might as well give it as many discounts as you can, because your opportunity cost is zero.

Speaker 1: 47:41

So that's why I'll tell you like LTL normally is more expensive than partialing. But if you have a partial shipment, don't be afraid to call an LTL carrier and ask for a volume rate, because the volume rate is totally different. They don't care about the class, the demand, they care about dimensions and weight, but they don't care about, like, freight class, the. You know all that. They just want to know what do you have, how much space, because they'll give you a very good rate to be able to get some kind of money and fill up a trailer that's otherwise either empty or half of it, yeah, reposition.

Speaker 1: 48:15

Yeah, cause they have to move the trailers anyway, like you said, to reposition them. So don't be afraid of it's over that, like six pallets or over, like you know, eight, 10,000 pounds. By all means, I always recommend call up, ask for a volume rate. So we already kind of talked through different carrier selection. You know some carriers are known for their low prices, like central transport was always notorious I think they went out of business, but I think they were. They were always notorious for being the cheapest but one of the highest claims percentages, whereas your old dominions they're very well known. I mean they sponsor Major League Baseball. You see them everywhere. These are companies that are going to charge more but they have a very good reputation.

Speaker 1: 48:58

Talked about cobro, grand Organ, direct Track and Trace Delays paperwork. So in full truck load you're going to ask GPS tracking etc or whatever app you're using or method you're using for check calls. Tracking is very different. Remember this LTL carrier is part of a massive network. So every time a shipment gets picked up or moved from one server center to the next or delivered, there's a guy or girl in the dock scanning it. Just like you mentioned, ben, you can check your DHL or FedEx, whatever your shipment's online, they're getting scanned. Barcodes are getting scanned somewhere, so Track and Trace is done by the carrier. You usually will be able to have access on their website. They use what's called a pro number. That's kind of like their barcode number or their I don't know what you'd call it to relate to. It's essentially like their tracking number and you can relay that to your customer. A lot of times, if you're able to get your customer login to book that stuff, the customer's portal will have tracking access as well. Ltl carriers oftentimes will have their own BOLs. As a freight broker, you can create BOLs and packing, shipment labels and packing lists for your customers if they need that. There's a lot of value add there that the carriers will work with you on.

Speaker 1: 50:18

The last thing I want to hand out is delays. So this is something that is very notorious in the LTL world is that if they only have so much trawler space, if they picked up just a little too much freight today and there's not enough trailers to go out or enough drivers that day, they might have said it's a three-day transit time, but unless you pay it extra for the guaranteed service, that pallet's going to sit on the dock till the next day and it's just the way it is Like. When I worked at Conway, if we ever saw someone paid for guaranteed, that was probably number one. Everything else, who cares? Unless there was a customer that had issues. We're going to drink them up, guaranteed, we're going to white glove that service.

Speaker 1: 51:07

But we would boot pallets all the time just say it's going to have to sit till tomorrow, unfortunately. But you have to explain to your customer if it's got to get there by a certain day. You're going to have to explain to them that, just like in full truck load, there's a cost that comes with that experience and some carriers offer guaranteed service and some don't. So you got to make sure that you know what you're getting, what you're paying for. That's my LTL basics. Anything you think we want to add in there.

Speaker 3: 51:39

No, I mean it's pretty comprehensive. You covered everything that I was thinking are most of the questions we get asked about it. The other one Go ahead, I got something to add in. The one. Go ahead, I won't forget.

Speaker 1: 51:51

So I want to. We talked about the sale side of it. So you know people want to know how do you get started in LTL. If you're in full truck load and we talk about this with other full truck load, brokerage, sale stuff, you don't necessarily know everything your customer is moving and all the lanes and you definitely might not know if they're moving LTL as well. So if you're dealing with you know Jim or Sally at your shipper and all you know is, yeah, I'm running Phoenix to Laredo every Tuesday on a full truck load, will ask the question hey, do you guys do any LTL shipments? Right, or do you guys have any partials, any other, any other type of transit, right? That's how you get in. Or if they ask you like hey, do you guys offer LTL? Maybe you don't right now, but get set up through somebody and go revisit that customer, follow up, that's how you get from full truck load into LTL is.

Speaker 1: 52:46

You've got to ask the question, identify that that need exists there and then you know.

Speaker 3: 52:52

I think the more business you're doing with your customer, the likely, the more likely they are to continue doing business with you, right? So the more types and avenues that you can help service them, the better it is for longevity account, right? So, for sure, ask lots of questions. I want to understand as much as humanly possible about the other person on the side of the phone, what they care about, what they don't care about, what they get yelled at about, what they don't get yelled about, what they get bonus for, what their bosses are pissed about, and every single load and every single dollar they pay for every load.

Speaker 3: 53:23

If I could ask everyone of those questions to get them on answered, right, like that's everything you want to try to find out. Because, to your point, I don't care if you want full truckload or LTL, I care about what you need. I'll find a way to get you what you need better than the other guy, right, and I'll hustle them, I'll work them, I'll available him. I don't care what it is. I'll find something he's not doing well enough and I'll do that thing better to make you want to do more business with me. And it's like you don't have to overthink this stuff. Like to your point, like, ask lots of questions, find out where the need is and find a way to do it better than whoever they're using right and, over time, build trust with it.

Speaker 1: 53:58

Exactly, we barely had time to scratch the surface deeply on LTL, so this is by no means a deep dive on it.

Speaker 3: 54:07

Hold on Steven's question. You have to answer because that is probably the one we get the most.

Speaker 1: 54:15

And our chat here. He said my customer always asked me for reefer LTL. Not sure that's a thing, it's a thing. Whenever someone says reefer LTL to me, I tell them to avoid it and run, you know, like run for your life. Avoid like the plague.

Speaker 1: 54:30

The claims are so prevalent, as is, as it is in LTL by itself, because the pallets get transloaded multiple times. Typically, or as well, truckload is one pick, one drop, or, you know, one once loaded, once unloaded reefer LTL. You're adding another complex layer, which is all right. I've got to try and put different commodities that might have different temp ranges and put them in a, a trailer that might have compartmentalized areas with different temperatures, or they might just try and smush them all together. Dude, it's a mess I so what I have found is at our company, pierceville Wild Logistics, we've identified a, a co brokerage agreement with a company that has a very good network of reefer small regional carriers like box truck size in a specific market, a certain area of the US, and they are essentially like a reefer consolidation company.

Speaker 1: 55:33

And that's the best we've been able to do, because if you're dealing with one shipment's got to be, you know, between 30 to 34 and 38 degrees. One's got to be between, it's got to be at 36. Whenever that door is opened you're going to be adjusting the temperature of the entire of that trailer and if somebody screws up and there's damage or, you know, thawing or freeze, now you're dealing with maybe eight different customers shipments. I mean it gets extremely messy. The way that I most often saw reefer LTL, as if the pallet we hauled was its own little temperature controlled pallet. It was like a big, like cool, with a little reef for you on the side. Yeah.

Speaker 1: 56:21

And it had, or yeah, where they're filled with dry ice and they're like self control dry ice too, yeah, but yeah, great question, other than try to find someone who's good at it and co-worker with them. I don't have an answer. Like it is a pain, it is a nightmare to try to do a reefer LTL and that's why constantly people have questions about it. So hey, if you can go figure it out, great niche.

Speaker 3: 56:45

Sounds like an opportunity to me. A lot of opportunity there.

Speaker 1: 56:49

But yeah, but I would say your probably your best part to do it directly is there's, like you know, your box truck companies or straight truck companies that have their reefers, like it might be a 28 foot reefer box truck or something like that. But hey, you can find two different customers that have similar lanes and you know they have temperature requirements that are the same or that overlap enough that it'll work. You're kind of doing your own LT, your own reefer consolidation program there. So not my cup of tea, no interest in it, I'll stay away. But there's my answer Reef for LTL.

Speaker 1: 57:30

What I was going to say before is this is we're barely scratching the surface on LTL here. There's a lot that goes into it. You really really, really want to, you know, do your homework and have some really in depth understanding of the stuff and understand that if you don't know the answer to a question, it's okay to say, hey, that's a great question, let me just make sure I get the right answer for you. I'll get back to you If a customer asks you like oh yeah, so like I didn't even talk about assasorials, like extra charge for inside delivery, lift gates, driver assist, military base, all that stuff, right?

Speaker 1: 58:09

If your customer asks a question about an assasorial charge or rebuild, re-win. You don't know. Don't lie to them. Go find out, get back to them.

Speaker 3: 58:16

So easy response. I'm fairly sure I got the answer to that, but I don't want to mislead you, don't want to give you any incorrect information. Let me make sure I'm 100% correct. Verify this. I'll get right back to you. Everybody appreciates that, doesn't matter what the question is.

Speaker 1: 58:30

Exactly Cool. Well, good stuff, man. Hey, we got to announce too. We got a new sponsor, levity. We'll talk a little bit more about them in the near future here, but you'll be here in some ad reads and seeing in our newsletter. Really really cool automation company that's goal is to make your job easier. They're not claiming to be AI that's going to do your job for you, but it's to take a heavy lift off your plate when it comes to a lot of your email work and your TMS load building and things of that nature. So stay tuned. We're going to definitely have Tilo from Levity on an episode to talk about them in detail and about some of those processes. But super excited to have another partner sponsor. We take our sponsorship opportunities very seriously. We don't just bring on anybody. So we have thoroughly vetted them and we're putting our stamp of approval on Levity. So make sure to check them out. There's a link in the show notes levityai. But yeah, excited to share them with the audience as well.

Speaker 3: 59:30

And thank you guys for getting us to 1 million downloads For sure, and hey, anyone out there, remember we put all this out to you for free. All that we ask is that you like comment, share us with your colleagues, that's it. So it helps us be able to keep providing all this stuff and answer all the questions for you guys at no cost. So you haven't take your time, sit, spend a moment, even one or two minutes. All of your views are greatly appreciated.

Speaker 1: 59:59

Excellent. Well, I can't wait to end this episode and take off these stickers on this jersey.

Speaker 3: 1:00:04

But final thoughts Ben, Whether you believe you can or believe you can't, you're right.

Speaker 1: 1:00:10

Until next time, I'm not saying chiefs, go bells.

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Freight 360
Freight 360

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