New Carriers, Canadian Freight, and Load Board Tactics | Final Mile #36

Freight 360

March 26, 2024

Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:

  • Working with New Carriers
  • Brokering Freight in Canada
  • Duplicate Load Board Posts
  • Fees on Carrier Advances
  • Sylectus Load Board

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

Welcome back everybody for another edition of the final mile where we answer your questions. As a precautionary mention here, I will let you know that, if you found this video from the title, we answer five different questions in this video, so the title will be one of the questions. So we're going to answer questions about age of a carers authority, brokering in Canada, loadboard postings, handling advances and select this as a loadboard. So we'll get right into it and please, if you haven't done so, subscribe, check out the freight broker basics course on our website and check out the sponsors in the description box to help support the freight 360 channel here. Our first question does it matter how long a carrier has had their authority? The answer is maybe, and we'll kind of dig into it and, ben, I want your opinion too.

Speaker 1: 1:15

So one of the vetting criteria for a lot of freight brokers is to look at the age of the motor carers authority for multiple reasons. It could be for their level of experience. It could be to prevent fraud in the case of fraudulent double brokering that we've seen in the last couple of years. But the age of the authority all it objectively states is how long has this authority been active with the FMCSA. It has nothing to do with how long the if it's an owner operator, it's got their own, just them and their truck. It has nothing to do with how long they've been driving, because they might have had an authority before or been a company driver for somebody. It just means how aged or how old is that specific authority that was granted.

Speaker 1: 1:59

So you might come into a situation where you see a young authority and all I would do there is maybe take a couple of extra steps. Find out, have they driven previous to that at another company? Maybe you want to do some additional fraud prevention measures, such as requiring them to verify their location or identity, things of that nature. Ben, what's your take on the authority age? Because a lot of companies will say six months, if you haven't been in business that long, we're not going to work with you, or any other example.

Speaker 2: 2:31

Yeah, I mean, lots of companies will have an internal benchmark a year or six months right as a preference to the age of MCs. And again, I think that speaks to a few things. It maybe speaks to the company's history and business experience but, to Nate's point, it doesn't really speak to the driver's experience. Here are the criteria. I think that matter the most as it relates to the age of an MC is within your first year you're typically going to have not much credit, just like when you turn 18 and you're allowed to get a credit card, like that first year. You just don't have a lot of credit history. So the same thing with a new MC in that first year.

Speaker 1: 3:10

the big downside is that, again, if you're, you just have I just you don't have a lot of visibility really on anything, right, Correct Like factor in companies. Well, so I mean, we've talked about the brokerage side of it, but it's on a carrier side. More importantly, brokers won't necessarily be super. They might be hesitant to work with you until they feel more comfortable. Right, yes, Load history reviews. There's no inspection history. There's nothing.

Speaker 2: 3:36

Yes, all of the data that is reviewed about a carrier right happens over time their inspections, even if you get one when you start your MC right, like it helps from everyone wanting to work with you to see some history of that and all of those things there's just nothing really to report within your first year. So again it becomes a little riskier for a shipper or a broker to work with a carrier that has a very new MC. So as they age, again that's important. Now this doesn't cover the fraud aspect of it at all, which is a completely other topic, which, again, lots of companies don't want to work with MCs that are less than six months, primarily because fraudulent companies will start new MCs to perpetuate fraud.

Speaker 1: 4:17

Yeah, they'll get 150 MCs.

Speaker 2: 4:19

Yeah, yeah, and that used to be one of the ways to catch fraud but, to be honest, criminals have gotten wise of that and they are not typically doing that.

Speaker 1: 4:29

I'll wrap this question up with this If you're a carrier that has a new authority, or if you're a broker and you've done with a carrier that has a new authority, you got to go with the old school relationship building to make everybody feel comfortable instead of just looking at the objective data. That's my take on it Build some relationships, find out their past, take extra measures to make sure everyone feels comfortable. Good deal. Next question what are the requirements to broker freight in Canada? I might have to do a little. We've talked about this before, so here's what I will tell you, and this is as of my last research, which was earlier this year. There are, I think there are, so I'm not going to try to make it up.

Speaker 1: 5:20

There are some provinces and I can't give the exact number. Some have regulations that require you to register, some don't, kind of like Mexico. There's really no regulation, they just kind of do it. It's based on the province. Now, if you are a US freight broker and you want to broker loads into Canada, all that's required is or throughout Canada, you need to make sure that the carrier is licensed to do so. So if it's within Canada, they need to have the proper national, whatever Canada's licensing is, if it's a carrier that's going to deliver into Canada, that's a US carrier. They can't hang out in Canada and keep moving freight. They've got to come back. That's the capitage law. Do you have anything else you'd add in on this or any experience on it? I might try to look up the province.

Speaker 2: 6:14

I've moved a lot of freight into Canada. I just it was long enough ago that I can't remember. If I did enter Canada, and I'm pretty sure we can with our license, it matters more about the carriers we can use, if I'm remembering this correctly.

Speaker 1: 6:29

If there's a province that's not regulated, it doesn't matter, right? So as a US broker, you can just do it. Here's the answer. Ontario and Quebec are the provinces in Canada that license freight brokers. Ontario has deregulated brokers, so that's kind of contradictory. Well, either way, there's a, you can Google it and see everything in there, but there are only certain areas that are going to require it to be licensed. So it's kind of like how every state has kind of different requirements for things. In the United States they don't have a federal licensing process.

Speaker 1: 7:11

In Canada, from what we know, from what we've researched and found out Makes sense. It's wild. It tends to me Wild west man, crazy, literally had a guy this is going back like almost 10 years that he moved freight in Canada and they lived in Canada. So they moved freight in Canada but wanted to get into the US market so had to get the US authority to do so, which that's on the other side of this question would be if you're in Canada and you want to broker freight in the United States, you do need to go through the proper licensing.

Speaker 1: 7:50

Because there's a lot of border areas. Right that you're going to have business on both sides, like your Detroit, your Buffalo, A lot of the auto industry operates cross-border. Washington State yeah.

Speaker 2: 8:03

The whole supply chain almost In lumber in the Pacific Northwest there's a ton that moves back and forth For sure.

Speaker 1: 8:11

All right, next up, why is the same load posted on the load boards multiple times? So I've had people ask this question before. There's a one-on-one level answer to it and then there's a strategic answer to it, depending on what they're specifically asking. So the one-on-one level is if you're a carrier and you see the same load posted like four times, there's probably four different brokers that all are trying to bid on that customer freight and they're all trying to cover it. It's that simple right.

Speaker 2: 8:41

A lot of times it's the same load, right. This is? Nate pointed out that shippers got four or five brokers and they send the load all and they go hey, whoever gets me the best rate first wins the load. So what you'll hear is that's why it's a very common question for carriers when calling on a load post is to ask what the commodity is. Because if it's got the same commodity the same requirement, same pickup and delivery, and it's the same weight, it's probably the same load.

Speaker 2: 9:09

That's why one of the most common questions from the carrier side is that is that's what they're trying to determine. And, to be honest, I think the good carriers, in regards to negotiation, will play the brokers off of each other because we're it's the same side of it, right? Like if they get one rate, they're going to try to get a little more, and they're also trying to determine who actually has the load. So they will often just ask you directly hey, are you quoting this or do you actually have this load right now? Because it takes them a lot of time to call all five of them to figure out what they're actually doing.

Speaker 1: 9:39

Yeah, now the strategy side here is a little different, so you might see the same, you might see similar locations that might be the same load. So, like, what some people will do is they will post a load. Let's say, let's say the load is we'll use you Boca Raton, right, they might post it out of Fort Lauderdale or I mean name like Fort surrounding areas of Boca. What do you got?

Speaker 2: 10:08

I mean it could be posted out of Miami. It would probably be posted out of Fort Lauderdale, probably be posted out of, like, miramar and maybe Palm Beach, right, your two or three larger areas, right, because again it's a peninsula. So if you can't find a truck in Boca, the next best thing is a truck coming from Miami that needs to go northbound, that can pick the load up on the way.

Speaker 1: 10:26

The reason for that is if I'm a carrier, and I'm, let's say, I'm in Miami and I just search Miami, a lot of the load boards will have your exact matches up top and then it'll have similar matches down below. So to catch a driver's eye, what some people will do is post, you know, Miami, Lauderdale, Hollywood, Boca, Palm Beach, like everywhere up 95, right, so you know. That's the reason for it. I have seen people and I'm going to just say I think this is deceiving, but it happens where they will post in a more desirable pickup location and then tell the driver oh, actually it got changed over here.

Speaker 1: 11:12

And it's kind of it's not a. It's not a really good practice, but All right. Next question how should I handle fees for Comchex or advances? This is a great question because I scratch my head on this often and let me explain it. So if you use, like an EFS service or Comdata for Comchex or any sort of service that allows you to send the money to a driver, like for a lump or a fuel advance or a quick pay, there are fees that come along with those services. It's usually like a percent, maybe like 3% or like a $15 or something like that.

Speaker 1: 11:47

Now, if a carrier is elected for a fuel advance or a quick pay, it is, in my opinion, fully reasonable for them to eat that processing fee, because it's a service that you're offering to them that costs you money outside of your standard 30 day pay.

Speaker 1: 12:04

Sending a check. Now lumpers here's where I scratch my head. The customer requires the lumper. So now as freight brokers, we have to either ask the driver to pay out a pocket and get reimbursed or to get an advance sent to them and they have to eat the fees on it. And I hate seeing that because it's like we're requiring the driver, it's the customer requiring the service but we're making the driver pay for the fee either pay for the fee to get the advance sent to them or for them to put their money on the line and get reimbursed a month later. So what I have like at Pierce, my company that I work with, what some of the folks will do and it's optional they'll just they will eat out of their own commission the cost of that advance to give the driver the lumper advance and not discount them, not penalize them for the customer's requirement. Does that make sense?

Speaker 1: 13:04

Like if they're gonna get a $100 lumper and it's only gonna be $97, they'll add an extra $3 to that driver's pay and they'll eat it out of their margin. It's a small amount, even if it's a $300 lumper. It's nine bucks right, but out of principle I don't think that the carrier should have to be eating those fees because the customer requires it. What do you think?

Speaker 2: 13:27

For sure. That's where I draw the line. If it is a service provided and requested by the carrier, they're paying the fee. You need a fuel advance because you're not managing your cash, or you just need it hey, you need this you're gonna pay that fee. If my shipper is asking my driver to pay the lumper in cash because it's easier for my shipper to do their invoicing, accounting or whatever it is, that's a convenience requested from my customer, I'm not making my driver pay that fee. Right, I'm gonna eat that or I'm gonna roll it in somewhere in there. I am not gonna pass that cost onto them to your point, yep.

Speaker 1: 14:01

Exactly. A lot of people don't think about that, but it's a real thing. I mean, those fees are small, like we said, but they add up and it's more of a principle thing to me. I think that we need to have a mindset of everybody's on the same team here. We're just serving a different role and it's not like the driver. We're not above any carrier and no customer is above us. Everyone's gotta be on the same team and you'll find brokers that they'll make the driver eat the fee and they won't even address it with their customer. If you can go to your customer and say, hey, you're requiring a lumper, it's gonna cost us money to issue it out. They might work with you and say, hey, the price I'm paying you it built into that, is the expected cost. So make sure you pass that on to your driver, or however that works out. So, being transparent, have a conversation about it. It's a win-win.

Speaker 1: 14:58

Okay, next up final question is about Selectus. Someone asked this Selectus worth it for full truck load and also, is it good for box trucks? If you're not familiar with Selectus, it is a load board you have to have. You can be a broker and use it, but you have to also have an asset authority to qualify. Their whole concept is it's a network where people share capacity between their trucks and also can involve their brokerage operation. So they wanna try to keep it somewhat exclusive, so they have that requirement.

Speaker 1: 15:37

But if you're trying to find capacity for full truck load, I have not found Selectus to be the optimal place to find that capacity because of the types of carriers that hang out in Selectus are your smaller equipment sizes, your Sprinter Vans, your box trucks, your hot shots. That's kind of the niche load board that I mean you can literally go and post a full truckload on there. I haven't personally found success. Dat tends to be the market winner and for full truckload, obviously truck stop as well is another big one. But yeah, I wouldn't see anything on the Selecta side. Ben, do you use Selecta's at all or no?

Speaker 2: 16:21

I don't. I've never really dug into the white glove, or I. From time to time. I know my team uses it. I just don't personally do it because I have them such one off that I just let my carrier side, yeah, quote it and then source it out of Selecta. So I mean just technically I do and I do use it for freight forwarders. I'm just not personally in it, searching there, but in the past and I mean what I know about it is it's the marketplace for your less than truckload, I mean not LTL but like less than your smaller shipments.

Speaker 2: 16:55

Yeah, anything less than a 53 or 48 of any kind it's gonna be basically a dedicated LTL is what you're gonna what you'd call that.

Speaker 1: 17:03

And, I'll add, I recently got set up with a Co-Brokerage for a company that has a network. They're just a dedicated expedite brokerage and they've got like a really awesome network of thousands of drivers in their network that specialize in all that smaller stuff. Naturally in the Co-Brokerage you're gonna have extra margin added in there, but these are like trusted, vetted carriers and one of the things that they've done a good job at is solving the reefer LTL question that everyone always has pop up Like how do I find a reefer?

Speaker 1: 17:40

LTL. The answer tends to be a refrigerated or a temperature controlled Sprinter, van or straight truck or something like that, where it's gonna be a dedicated reefer LTL essentially Not cheap. But we get that question a lot and I've gotten it a lot and we found a solution there. But yeah, select this overall. Good for box trucks, good for Sprinters, good for straight trucks, good for hot shot. Wouldn't recommend it for full truckload.

Speaker 2: 18:06

You also need an asset MC to access it. Correct? That's still the case, yep yeah, you do why do you not open that up?

Speaker 1: 18:15

And again, this is not like your. If you go on there as a brokerage and you use your asset authority to sign up, it's totally okay. They just it's a requirement of theirs to check the box so they wanna have an exclusive network. They call it like the Selectus Alliance, so they try to make it like this alliance of brokers and carriers that are sharing loads and capacity internally so everyone in that niche kind of hangs out in their network. It's very email based. So you post a load and it has like an automatic expiration that you might put in an expires in one hour, so it'll stay posted for that time and you'll usually get like responses via email really quick, like within minutes. So it's pretty cool. That's all we got. We'll see you guys in the next episode of the final mile. Final thoughts, ben.

Speaker 2: 19:09

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

Speaker 1: 19:13

And until next time go bills.

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