Software, LTL, & Low Rates | Final Mile 99

Speaker 1: 0:19

Welcome back for another edition of the Final Mile. It's our Q&A session, where we answer all of your questions, whether they come from YouTube comments or directly sent to us through our website or via email, and sometimes from our Facebook group and other sources. These today all happen to come from YouTube comments. Hopefully, I didn't repeat any of the ones that you and Stephen did the last two weeks. So if we did, we'll just we'll play an audible.

Speaker 1: 0:44

But, also check out all of our other content at Freight360.net, including the Freight Broker Basics course for your educational option, and check out the sponsors down below to help support us All. Right, ben, here's our first question, and this probably ties into your episode that you guys did on technology last week, but this one is can you recommend any software for freight brokers that helps manage documents like rate confirmations, bols, pods and invoices, which my blatant answer to this is gonna be? That's a TMS? So that's like my main answer, but you can go a lot deeper on this. Depending on what TMS you have, does it allow you to handle all those things?

Speaker 1: 1:22

We've talked a lot about software in the past and we teach this with the TIA's coaching for their new broker program, but a TMS is like you got to have it. You can't get away without it. It's going to make your life very difficult and, at a minimum, try out a free trial of something or one of the free versions of some of the platforms that are out there, like Rose Rocket, for example. We've got a link on our website. They offer a freemium version and a paid version as well, but your basic things like being able to send a rate confirmation, which is a legal document, right Like you need to be able to have that generated properly with the correct terms and conditions on it. Now here's a caveat I'll add in is like bill of ladings and invoices depending on the TMS, you may or may not have this ability. So, like some TMS, have you ever worked with a TMS that doesn't do invoicing itself but you have used a third party? I haven't.

Speaker 2: 2:17

I'm aware of it. Most of the ones I've used for the past few years have this, mostly because I make sure it has it. The other thing, too, is the big differentiator I've seen with managing this is splitting them.

Speaker 1: 2:33

Meaning. Your carriers will frequently send them to you as one PDF.

Speaker 2: 2:35

Yeah With like five pages, yeah, one attachment with everything in it. And then usually you've got to take that step in the middle and use, like Adobe or some, some document splitting software to go nope, this is the carrier invoice, this is the BOL, this is the POD, this is the rate con right Now. A lot of TMSs have that built in now where it's automated and it'll just separate them for you. Some have like a medium step where basically it has document splitting software in the TMS. You just drag it to the left and the right, you just go. This is the BOL, this is the POD. That's much faster. I would say the best one is the ones that split them for you. The worst one is the one I have now, which is tie, which doesn't do it. We'll create the invoices but it doesn't have the document splitting and here's the crazy part.

Speaker 1: 3:25

Come out with that, though, because they're still fairly new.

Speaker 2: 3:28

You know what I mean maybe but I've been super frustrated with them of late because a lot of the things that they say are out of the box they're working on, which means we're paying for things that aren't there, don't exist yeah, whole other conversation. But, like, the thing that I'm really frustrated with is yeah, it creates invoicing. Oh yeah, it's integrated with your factoring. Here's what it's not and here's where the devil's in the details. One, it's a one-way integration with my factoring company, so when my customers pay my factoring company, that information doesn't come back into my TMS. So we have to manually update customer balances in our TMS, which is a lot of work.

Speaker 1: 4:06

It allows for human error too.

Speaker 2: 4:08

Human error opportunity. Here's the other one. You have to split the documents in the TMS for to send it to Triumph, for example. So like you have to manually split them somewhere else and then you need to upload them by their name in the TMS in order for it to send it to the factoring company. The irony is our factoring company doesn't require that. So our factoring company is like you could just send it all to us in one PDF. We have the automated splitting software anyway. You don't have to do that for us, but our TMS requires it. So we're paying accounting people to go somewhere else to classify, but our TMS requires it. So we're paying accounting people to go somewhere else to classify it for our TMS to automate it to the factoring company. That doesn't need it.

Speaker 1: 4:50

So the other things that were mentioned here PODs, bols. So oftentimes your BOL, your bill of lading and your POD proof of delivery, they're oftentimes the same thing. I will tell you this. So we use McLeod right now at my company and McLeod, out of the box, does not have a BOL.

Speaker 1: 5:08

We had to use like a document generator tool and McLeod and build a bill of lading which I was like blew my mind and I like I remember we upgraded a couple of years ago and I asked I was like hey, does this, does this new version have a BOL template? And they're like no, and I was like how do you guys not have a BOL template? They're like, well, we can import your old one. And I'm like, dude, this is like the most common document news. They're like, yeah, but usually like the shipper creates it. And we're like usually, but not always, yeah, probably like a quarter of our brokers at some point or time, if not more, have to create a BOL for their customers. So like we, even for Freight360, we have a template on our website that you can go access, so feel free and use that Well last one Levity.

Speaker 2: 5:55

You can definitely use a company like Levity that can build this in and connect it to your TMS via a web hook usually not an API where it can just chop these documents up, automatically, split them and send it into, where it can just chop these documents up, automatically, split them and send it into where it should be, which is what I'm doing. Everything RTMS can't do, I use a third party tech company and we're leveraging.

Speaker 1: 6:11

Which brings me to my next point, with AI. I think you're going to see a lot of really cool tools that are out there. Levity is a great example. We've been a partner with them for over a year now. Levity is a great example. We've been a partner with them for over a year now. I think you're going to see a lot more automation options that are out there and a lot of the those little like ankle biter tasks, that kind of like. I know you'd have to do, but you have to do them. I think you're going to see a lot of that be able to be done or replaced using automation and AI. So keep your eye out for that stuff, but at a minimum, have some sort of TMS to track your stuff. If you don't, I literally I think I've told this story a few times I talked to a guy years ago that never used a TMS. He tracked everything on pencil and paper and literally would send checks to people in the mail. He would write a check and pay a truck. Just absolutely insane. Type up an invoice in Microsoft Word, all right.

Speaker 1: 7:09

Next question how do you price and move LTL shipments? I will recommend, because we can't get super detailed in just a few minutes here, but we have. If you just go to our library on our website and search LTL, we've got a whole. We got some full length stuff on LTL. But when it comes to LTL, the biggest difference between LTL and full truckload is that the pricing is not dynamic, it's more static, and what I mean by that is, like in the full truckload market, dynamic pricing meaning it's going to change based on available trucks at a certain time, on a certain day, at a certain time of the year. That stuff changes like supply and demand. Ltl is more static, right, if I, and the rates can change from day to day or throughout the week, but if I request a rate now and an hour from now, it's going to be the exact same, most likely.

Speaker 1: 8:00

So what happens is these LTL carriers they're large, which is the opposite of full truck load. Full truck load, the average trucking company is small. They might have like six trucks or something like that LTL carriers hundreds, if not thousands of power units. They might have like six trucks or something like that LTL carriers hundreds, if not thousands of power units All right. And they have to be that large because they have an entire structure set up with different distribution centers per se, or reship facilities or service centers, whatever you want to call them throughout the country. Moving from, in your case, boca Raton, up to me in Buffalo, an LTL carrier might have a local driver pick up from Boca Raton. Take it to.

Speaker 2: 8:40

Orlando.

Speaker 1: 8:40

Fort Lauderdale or the Miami Service Center, probably Fort Lauderdale and then from there have it sent up to like Charlotte overnight and then from Charlotte it's hauled up to middle of Pennsylvania where it then ends up in Buffalo Service Center and delivered by a local guy. So, like they had because of like this, like what's that term, like the hub and spoke type deal where, like, these guys are like service centers all over the place and they can service within like a radius of that, and then they have this like big web throughout the country where, like they'll move from here to here to here to here and eventually delivered. Because of that, they can project well in advance where they're going to have empty equipment, based on what's already flowing through their pipeline. You know, you figure, if it's going all the way across the country, you've got some of these transit times are like five, six days, if not more, so they can project ahead of time. You know, hey, we're going to have some empty capacity in this area, rates are going to be discounted, right. Or, hey, we're heavy in this area, we'll have to add capacity and extra trailers in there and extra trucks in there, the price is going to be high. So it's more static but in predictable days in advance.

Speaker 1: 9:44

Now how do you price it? Typically, if you're a freight broker, two options would be either to go directly to an LTL carrier and ask them for a quote. That's going gonna be your more expensive way because LTL carriers they want volume and they'll give you cheaper rates if you give them volume. So co-brokerage agreements tend to be another option. Where this one broker has a lot of volume, that goes LTL. They have really good rates. They'll co-broker with you and do a cost plus on their rates to you. So that's in a nutshell. How you would price and move them is either directly through the carrier if you have enough volume, you may be able to get some decent rates, but if you don't look into a co-brokerage agreement I have used global trans, I have used x freight, I've used worldwide express, I have used glt.

Speaker 1: 10:30

Who else? There's a whole bunch of you know brokerage companies out there that have good LTL programs in there, so worth checking out. But it's very different. There's a lot of nuances with LTL versus full truck, so check out our full length episode on it if you want the deep dive. It's definitely one of those things where at first they can feel like the juice isn't worth the squeeze, because smaller dollar amounts for smaller shipments mean smaller margins. But once you can start to automate it you're kind of just getting paid without even touching anything once you get your customers tied right in. So any other thoughts or pointers on LTF?

Speaker 2: 11:07

Really just that like one. It's a good opportunity to get in with new customers, so providing that service is worthwhile, even if it's not a lot of money, because usually that's a good gateway. Get your foot in the door to get access to full truckload. And I mean, once you get the code brokered set up, usually they're going to set you up with a portal, or you just put in the details and it gives you a bunch of pricing options you send your customer to one step above that, you can integrate it with your TMS and also most of them will allow you to create a portal for your customer. Meaning like step one is Nate's my customer. He emails me the detail, I put it in, give him the rate, but if he does a lot with me, I can give him a unique portal for my company where he just puts his orders in and then it just gives him the pricing. The orders come through, they get picked up and I just basically handle the invoicing. It's like mailbox money.

Speaker 1: 11:55

Yep, exactly All right. Our last question. This one was very specific so we'll try and answer it on a more of a generic level. But this listener asked If a potato shipper in Colorado isn't paying enough for loads going to Florida and carriers are refusing the freight, can a broker ask the shipper for more money? Would doing so make the broker look bad? So to generic this one or make it generic, we'll ignore the actual lane of Colorado to Florida and the shipper being potatoes.

Speaker 1: 12:24

So, ben, what are your thoughts here? A shipper the general thing here is shipper is not paying enough money for a load. You can't book it. So you get a lot of these customers that have load lists that go out every day. They might say like lumber companies, are like a. They're a like very common example of this here's 20 shipments going out today. Here's what it's paying First come, first serve. It's jump ball freight, basically Right. And you, you find out like there's not enough money in these, like I can't cover them, like what's your take on this? Do you go back to the customer? Does it make you look bad? What?

Speaker 2: 13:01

are your thoughts. So I'm going to set the stage with what it looks like for that shipper. We talked about this in the episode, the full length one. We just did.

Speaker 2: 13:08

So if you have a shipper that is sending out a list to 20 brokers five, 10 loads a day, right, and they're just picking the cheapest one you can be almost certain some portion of those 10 loads a day aren't picking up that day because brokers know they don't get awarded unless they're the cheapest. So everybody tries to thread the needle with quoting the cheapest rate to actually cover it. Well, on a percentage basis like some of them just aren't going to get picked up Maybe not every day but every other day, but a good portion throughout that week need to get rescheduled. So the person that's doing this their boss is probably telling them we just need to save more money, save more money on shipping. But then the person goes well, I need you to hire somebody else because I got to reschedule all these loads and I don't have enough time every day. So they end up paying that cost.

Speaker 1: 13:54

no, matter what right yeah.

Speaker 2: 13:56

Like. So what I try to do is one have the conversations and try to talk about understanding, like hey, like how many loads looks like you guys sent about 10 loads a day. How many loads in total do you guys load out of your warehouses and some of them are probably dedicated with carriers, so the number's probably higher. I don't know. 20 loads a day is what we load, 10 go to the spot market. I'm just like hey, out of curiosity, like kind of seems like price is a pretty important thing for your organization. They're going to say yes, like you know. I'm just curious, like, out of the 10 loads a day you book, like ballpark, how many do you have a hassle with needing to reschedule or your doc calling you and needing to get the truck in that was supposed to be there yesterday, today or today, versus tomorrow or today's, two days from now. Is that become like a hassle for you guys? Do you do a lot of admin work around that? If I get them to be honest with me, like I kind of already know that answer is yes, right, then I'm going to kind of go back and be like well, are there any of your lanes that tend to need rescheduled more than others. And in this scenario, pretty likely they're going to tell me yeah, colorado to Florida has been a huge pain, we are constantly rescheduling those, and then they'll blame the brokers. I am so frustrated with all these brokers that say they'll cover this load and then every day they only pick up one of their three or four loads. Now I got seven loads over the past three days that need picked up today and everybody's still telling me they can't get a truck. Well, this is that scenario where, like that shipper's creating the scenario for themselves, right, when you're only focusing on the extreme, cheapest available options, you are going to end up with service failures.

Speaker 2: 15:28

So then, where I try to take that conversation to is like this is the second part of the conversation. The second question right, can you ask for more money? Yes, would doing so make you look bad? It depends on how you explain it, right? So now that I've got them talking about the thing I can clearly see happening, right, like, okay, we can hopefully now segue into me, helping them understand why they should maybe do something a little different, just for this instance. They're never just going to pay more money on all their loads Like that's not even worth me going to die on that hill, but if I can go. Well, listen, it probably seems.

Speaker 2: 16:04

And sometimes I'll be like this, like, hey, I'm guessing you're probably having more of your service reschedules related to the loads from Colorado heading down to Florida, and they're going to think you're like a mind reader, yeah, like you'll hear it in their voice, yeah, and it's like, well, hey, the reason I can. Or they'll say like, yeah, how did you know? Right, I'll be like well, I noticed that, like Colorado has not a lot of capacity this season this time of year, that, like Colorado has not a lot of capacity this season this time of year, there's just not a lot of trucks delivering there. And I also know Florida's pretty dead coming out of there because there's not a lot of loads and freight leaving Florida. So not only do you have less carriers to choose from by your facility, but all of them want to go to Texas these few weeks of the year because that's where all the freight's coming out of. None of them are going to want to go into Florida because they're going to have a hard time getting a load to get back out.

Speaker 2: 16:51

So some food for thought. If you really want to improve your service. Maybe it's just a couple of days of the week or for a few of your urgent loads that keep getting rescheduled. Let me know. I'll let you know what the lowest we can move it for without you giving up service. Right, like I'm not going to gouge you but like I'll give you a reasonable, fair rate for what it costs to get a truck into, because maybe it's Miami. I'll be like, look, there's some loads coming out of central Florida or even northern Florida, but like I'm going to get to give this guy deadhead money, like 250 miles worth to go empty from Miami to Tallahassee or maybe to Georgia to get the next load. So it's not like I'm charging you more. This is just what the carrier needs to perform the work you guys want done.

Speaker 2: 17:32

And if I can get them to understand why they need to spend more there, they're not blaming me for the rate increase. I'm arming them with what they need to go to their boss. When their boss slaps them on the wrist and goes why are you paying so much for the Florida loads? Now they can go. Well, hey, florida's pretty dead right now and we were rescheduling four loads a day for the past week and our customers are yelling at us. You told me to make sure they're still happy. This is what I had to do temporarily to fix that. Okay, sounds good, right, like that's. What you're trying to do is educate them as to why and what's causing this, so that you're not just throwing a number at them and they're going to. They're always going to blame you for a number higher than what they want, but if you give them the context, they're not mad at you, they're mad at the situation, and we're a team.

Speaker 1: 18:18

A huge takeaway here is like you ever like have somebody give you? You ask a question, they give you an answer, but they don't explain why that's the answer and you're like well, I want to know why. Right.

Speaker 1: 18:27

And a lot of times it's good to have those conversations with your customer and whoever's you know in that department over there, because they just might not know. They might think like, oh, our benchmark is to pay two bucks a mile on average for transportation. Well, you might pay two bucks a mile on average but it might be 350 a mile in certain lanes. Certain times of the year it might be $1 a mile in some of that California freight that we were seeing earlier this year. It's all contextual. It all depends the boss there, the traffic manager, might be new and might not understand how the different lanes operate and the different metro areas of our country and work capacity, but literally might not know.

Speaker 2: 19:09

So many of the people giving you these loads might have been in that job six months. Their boss trained them all of a week and says we pay two bucks a mile, don't pay any more than that. Well, to your point, like, yeah, well, that's an average over the week, some you'll pay less, some you'll pay more. And in their mind they don't see what we see. They're not on load boards, they don't see dynamic pricing, they're not talking to carriers going, I'm not near you, I need some deadhead money. I'll pick it up. Like they don't understand to your point the why. Because nobody told them right.

Speaker 2: 19:39

People that tender loads and arrange transportation at a shipper do not live in the same side of the market we do, so they don't have the same information. They're looking at this going. Well, why would one truck charge me more than another truck? Isn't it the same thing? What they don't understand is that truck's coming from somewhere different needs to go somewhere different after, and the details of the load really do matter. Where in their mind they're like first come, first serve or by appointment, what does it matter? Just be on time. Well, yeah, that means they had to leave their last place on time and get there early, which costs money, like they. Just. There's a lot of these variables that affect pricing Shippers rarely deal with, so like they're not going to be top of mind when they're talking to you, they're just going to blame you for the changes in rates.

Speaker 1: 20:23

Yep. So all that to say, I would encourage you to have a conversation with the customer about this and just give them context. So, yes, good questions, keep sending them our way. Final thoughts, ben.

Speaker 2: 20:35

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

Speaker 1: 20:40

And until next time go Bills.