Surety Bonds, Teams, Claims, and Building a Professional Image | Final Mile #35

Freight 360

March 19, 2024

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

  • Team Settings in Freight Brokering
  • General Freight Claims
  • How Freight Broker Surety Bond Works
  • Freight Broker Websites
  • Blind Shipments

Support Our Sponsors:
Levity: Click Here
Bluebook Services: Click Here
DAT Freight & Analytics – Get 10% off your first year!
DAT Power – Brokers & Carriers: Click Here
DAT Express – Brokers: Click Here
Truckers Edge – Carriers: Click Here

Recommended Products: Click Here
Freight Broker Basics Course: Click Here
Join Our Facebook Group: Click Here
Check out all of our content online: Click Here

Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

Welcome back for another edition of the final mile, where we answer your questions from emails, from YouTube comments, facebook group, etc. Don't be deceived by the title of the video if you're watching on YouTube or the title of the episode on podcast. We're going to be answering five questions today, so the title might not reflect all of them, but we're going to be talking about team settings in freight brokerage, usda inspections versus non-produce or fresh food claims, filing on a bond, that process, having a website as a freight brokerage and also blind shipment. So make sure you stay tuned for all five of those. They're also listed in the description or episode show notes, so please be patient as we will get to all of the questions. Make sure to check out all of our other content at, including the freight broker basics course, for everything you need to know, from how to start your brokerage and launch it successfully and go the distance, and please, to support this channel, check out the sponsors in the description box or show notes. All right, ben. Our first question, as I alluded to before, is about team settings. So that listener asked could a team setting in freight brokering work? Why or why not? For example, I would have my wife work with clients who are bilingual or prefer to speak in another language. So basically you don't have to be a solo freight broker with your own company, to answer the question up front.

Speaker 1: 1:57

And most freight brokerages that succeed are not just one person. It can be, but they'll oftentimes grow out. It could be a small group, maybe there's five to 10 people, but a lot of the big brokers out there have hundreds, if not thousands or more people all in the same organization and there's different ways to go about doing this. So for this guy's question, he said my wife would work with some clients and I'd work with others. That's absolutely legitimate and reasonable.

Speaker 1: 2:26

A lot of the successful brokerages will break out different, maybe regions or different commodities, equipment types. You might have someone that's special, like team that specializes in refrigerated or in produce, while someone else handles open deck, like steel, lumber, brick, stone etc. You could even break out your brokerage in teams where you might have a pod where you've got a team lead and then you've got some account managers and then you've got some operations folks that assist and they keep all their business in one little pod. There's a whole lot of ways to do it. There's no prescribed right or wrong way to do it. So by all means, the team setting can work. It's a preference thing If you want to go that route. Some people break up sales and operations, like we mentioned, and others say no, we just have a bunch of brokers and they're all credit to grave meaning. They all get their own customers, they manage those customers and they book trucks for those customers. What else would you add in here?

Speaker 2: 3:22

I would add. I mean you pretty much covered most of it. The only thing I would add is when you're sharing or splitting responsibilities. I would say meaning let's just say in the traditional example is one person is covering loads, the other person is dealing with the customers. Most of them will split kind of the responsibilities that way, but what I would recommend anybody that is currently set up that way or thinking about it is to take time learning the other person's role.

Speaker 2: 3:52

Meaning if you are going to be dealing with the customer side, you absolutely should be spending time every week booking trucks, dispatching them, doing check calls and learning that side of the business, because that's the part that's going to make you far more effective at talking to customers. And that's the thing that I think lots of companies overlook when they separate them and then they don't really talk to each other, because then you only have sales reps that only know what about the market? They hear from that person as opposed to the actual market. And I think anytime you can spend on the other side it makes you better at your job and vice versa, right If you're on the carrier side, understanding the sales side and what the customers are expecting, why and what's important to them makes you far more better to deal with carriers and to be bringing the right relationships for the right customers.

Speaker 1: 4:40

And I'll add in one last thing If you're a W2 at a company where you're in sales or operations, learn some of the other back office administrative functions, even just a baseline understanding, because the accounting and credit side, for example, understand what goes into approving a credit line or what goes into the claims process, so you can help explain this to your customer. What goes into the carrier compliance. If you have to tell a carrier no, understand why that is, and so you can better prepare yourself to find better quality carriers. So, but good question Next up if USDA inspections are used with produce claims, what happens if industrial goods or auto parts? Or if it's industrial goods or auto parts involved and the receiver refuses to accept it, to do an accident and rejects everything? So I'll generalize this.

Speaker 1: 5:31

We had a recent discussion about produce and USDA inspections, but this question seemed to ask what about every other commodity where the USDA wouldn't be involved? What does that look like? If there's a claim or an auto will answer afterward. What if the receiver rejects it? So if there's just a claim on it, if the receiver accepts it and it's not a clean bill of lading there's damage or there's a shortage or something like that the claims process still carries out. You just don't have a USDA inspection involved, which, again, that's not even a requirement to have a USDA inspection. It just helps out with identifying a third party to give the condition of that fresh food or produce to assist in the claim. But you'd have annotations on the bill of lading that here's what's damaged, here's what's missing. Do you take pictures? That all goes into that claims presentation to the insurance company. So the adjuster has all the information and it makes it avoids that back and forth, he said.

Speaker 1: 6:32

She said Now what if the customer, the receiver, refuses or rejects everything? What do you do? Well, there's no like law here and, ben, I'm curious what your experience in this is. But it's oftentimes very hectic because brokers, like receiver, won't take it. They got to call their shipper and be like hey, they're not accepted as what do you want me to do?

Speaker 1: 6:53

And the shipper might be like what's wrong with it? I don't want, can't come back here, right, so it comes down to like you have to figure out the best possible solution because nobody wants to take fault for it. The driver's going to say it wasn't my fault, shipper's going to say it wasn't my fault and the receiver is going to say it's definitely not my fault because I just got it, so you have to. There's oftentimes a lot of back and forth and communication is key here, because your driver is like you guys are wasting my time, because I'm on duty right now and I have another load I have to pick up tomorrow morning, so you want to go into it. I guess empathetic might be the best way, but put yourself on every party's shoes and Do your best job as an intermediary, which we are, as fray brokers, to try and work out a solution and then ensure that everybody knows we're going to make everybody whole here through this claims process. What's your take? Have you ever had that happen where the receiver is like I ain't taking it?

Speaker 2: 7:52

Yeah, here's. Here's what you don't want to do. You don't want to take the frustration from the party maybe the receiver in this instance and then you get frustrated and then you start yelling at your shipper, right?

Speaker 2: 8:03

or the carry yeah, or whoever right First is you listen and then just try to get the information is the first step. What actually occurred right, and again, what happened, is likely going to determine what you do next. Right? I mean, was it likely there was an accident right Loading it and the driver was like, hey, seem like the forklift or the guy putting it in there had some issues? Was it something that happened in transit? Because again, that's going to determine what your likely next course of action is. If it's at the receiver and it might have been damaged at Loading, well, you're gonna have a conversation with the shipper as to what you think happened. They're likely gonna go talk to their dock worker to verify it and maybe you can take it back right Now. If it happened over the road, right, you're gonna file a traditional claim and again, you might have to figure out what salvage value is and where that's gonna go from there and that, however that plays out, it's gonna play out and they're just kind of no way to know until you start working through the details.

Speaker 2: 9:01

But I've had scenarios where, like this was a, and a really odd one I've talked about this on air, where I was shipping a bunch of steel from Overseas, from the port of New Orleans to the steel mills up around the Great Lakes and they passed that tariff in like 17 or 18 on steel, 25% on imported steel. But it wasn't outlined as to at which point in time that tariff and who paid it. So the receivers refused to pay it, the shipper and Brazil refused to pay it and then the receivers Refused to take it because they thought maybe they would be accepting responsibility for the tariff. So they just said, like the next 15 trucks, like we just can't deliver them. So we had to find individual warehousing for every single one of these loads, transload them into a warehouse until they work through who was gonna pay the tariff and then had to pay the transportation cost to get it Delivered there. This took months to be able to resolve.

Speaker 1: 9:56

I imagine the receiver ended up having to absorb at least a Chunk, if not all of that, based on it was an import tariff right, or do you remember by chance?

Speaker 2: 10:05

now I don't recall how it actually played out.

Speaker 1: 10:08

I do remember you taking.

Speaker 2: 10:10

I remember it taking months and again, like we were, we were having to deal with loads like long. I mean literally like three and four months later they were still in storage because they were still working through like the semantics of how it's gonna go. So again, I only use it because as an example. It really depends on what happens and then you really just want to go to the next party and try to work towards an amicable solution for everybody, right, hey, sometimes their salvage value, sometimes maybe the receiver is like well, hey, look, I've got some room in my warehouse, we can leave it here until you resolve it. And then and again.

Speaker 2: 10:44

You're probably gonna have to work out some type of creative solution in some of these scenarios. And again, you just got to talk to everybody.

Speaker 1: 10:50

Listen more than you direct and try to work to find a happy medium for everybody, definitely good, good example there Next up what happens if a claim is filed on your bond and you can't pay the amount of money that is owed? So freight brokers carry a, either a freight broker surety bond or they've got a freight broker trust. And while the so here we'll answer the question. First, if a, if a carrier files on a freight brokers bond, the bond company doesn't just automatically pay out the claim. They're going to do a little bit of a Gathering of information. Right, because it could be, he said, she said, which it usually is. But if it's something like Carrier was promised x amount of money for this, the broker deducts money Because they had verbiage that stated you know, if you're late, you lose 200 bucks and the carrier says I'm gonna file on your bond for the, the short payment. The bond company, if they collect all the information and find out that the Carrier doesn't deserve that money, they're gonna, they're gonna reject the claim. If they, if the bond company does their due diligence, they does the research and finds out freight broker does all this money, the money will get issued out. I've even seen the times with the bond companies like, hey, you, you're going to lose this, just pay it. But if you can't pay it because you don't have the money, then in this scenario the bond would pay that money out.

Speaker 1: 12:20

Now, a bond, it is an insurance product, but it's not an insurance policy that just states, oh, we'll pay out up to the 75K and there's no recourse. No, if you lose and a bond pays out, you're responsible to pay that money back. Which is why, at all costs, you should avoid the bond company being involved. If you know you owe that money to the motor carrier, where we tend to see bonds get filed on. More so is if a broker is going out of business and they don't have the cash to pay their carriers their line-haul payments, the bond company will get chewed up pretty quick, pay it all that money and the brokerage will close their doors. But yeah, if that bond company pays out, it is the broker's responsibility to reimburse that bond. It's the same thing with a bail bondsman or what's the pawn shop right? Same thing. I see that.

Speaker 2: 13:25


Speaker 1: 13:26

Yep, all right, good stuff. Next question Do you need to have a website developed in order to start a freight brokerage? No, and I know we had a web. We had a, not a website. We had a video about how to market your freight brokerage and one of the things we talked about was an online presence.

Speaker 1: 13:45

You don't need a website to get started. You know the whole analysis, paralysis idea where people will Overthink and over complicate what they have to do, which then results in them not doing anything. Yeah, don't be thinking I need to have this website all shiny and ready to roll, you know, and until that's ready I can't make phone calls. No, but as you grow and you're gonna be prospecting people, some sort of professional image is going to help you Beyond just regular relationship skills. So, having something like a Good LinkedIn page, a professional LinkedIn page for yourself or for your, your freight brokerage company and, sure, down the road, a website If you want to go that route but it's not really necessary I feel like a website is more of just a. It's an online image of yourself. You're not gonna get leads coming through there typically. What do you think? I?

Speaker 2: 14:36

Think I'm gonna start with the last point. Building a website is not going to get you business, but I do think it's important to your point for image, because here's where I think it matters right. And again, if you're new, I wouldn't spend the money on it yet. But a LinkedIn business profile I would absolutely do and you should have it as you, as the employee of the brokerage, because when you're prospecting and you're calling companies and emailing them, the first thing they're gonna do Before they're ever gonna give you a load or work with you is to look to see if you are who you are. So they're likely to gonna go to LinkedIn. And the second place they're usually gonna look is to see if you have a website right, and again, you can now get a website. You could build one on WordPress. They the um, like my mind's blanking, like the website.

Speaker 2: 15:29

Yeah, the templates to build them are super easy now, like you could basically drag and drop it. Add some text. Look at a couple other examples. You should be able to get one up for less than a hundred bucks and probably 20 bucks a month to service it. Look at some other examples of other smaller brokerages and, to be honest, most of them look the same. For this very reason, right, yeah, stock templates. There's a couple pictures of a truck, but the important piece is that you're relevant infos on there, right, like your company name, your address, your contact info, so that when a shipper that you've reached out to looks to verify you, they can see oh, like this is a legitimate business. I'm at least know that I'm talking to the person that works at the company I'm talking to, right.

Speaker 1: 16:10

Yeah, that's what I think the value is.

Speaker 1: 16:11

I want to add this in too as you grow your company and you're looking to hire people, that's one also. A website will become a good Tool because, if you think about, if you ever applied for a job, you probably checked them out on their website to see if it looks legit, and I do want to throw this in here We've had trade grigs on what like almost ten times, if not ten times, told like exactly. That's one of the things that his company is doing now with beta consulting group is helping companies Find whatever their, their message and their vision is and put it to words and help share that on their website and throw other Testimonial type things, and I think it's. It's definitely helpful as your brokerage goes, what grows as far as long-term you know relationships with big customers that might vet you out but also for hiring and getting the right talent and they can see that, oh, this is a legitimate company, not some guy with a Gmail account and you know a Facebook profile of him hitting a beer bong and his college years.

Speaker 2: 17:08

So Well, speaking of speaking of just funny things like this blue balloon just bounced in to the office right behind you.

Speaker 1: 17:18

It's probably from my kids. They like to play quote-unquote volleyball with. I got a fan in the corner because it's kind of warm in here today, for so it's like in the 60s Buffalo, but anyway, that's funny, all right. Last up our blind shipments, double brokered loads and I know this one came in through through YouTube. Just wanted to kind of clarify no, they're not.

Speaker 1: 17:43

A blind shipment is simply when the Consony or, I'm sorry, we'll just call it the shipper. We'll make this easy. The shipper is blind, aka it's not disclosed for the receiver to see. So let's say, for example, you're a company and you're buying goods from a supplier and you're gonna drop ship them, meaning send them directly from the shipper to your customer as the receiver, but you don't want your receiver or your customer to know who you bought the goods from or where it's shipped from. You just arranged the transportation and you were the middle person there. It helps prevent back solicitation. So that's essentially what blind shipments are. You'll see it a lot in drop shipping. You have anything you wanna add on that one? Did you ever do anything in the blind shipping world? Yeah, you did a lot in the LTL side, for sure.

Speaker 2: 18:37

Yeah, I mean it's done. I did it a lot last year in the tanker side of things, so like customers would ship to their customers and they didn't want their customers to know where the product was picked up from. So sometimes we'd pick up from, like, the source, sometimes we'd pick up from their warehouse, but everything we did was blind, so that they didn't know what was coming from where right they wanted to be able to hide.

Speaker 2: 18:57

Yeah, exactly so. Yeah, very common and see them more in some niches than in others, but they're all kind of usually for that same reason, for sure.

Speaker 1: 19:08

Well, good stuff. We appreciate the YouTube comments, even the haters out there that are telling us that we don't answer the question or that our video isn't about the title. Your engagement, nevertheless, is helping YouTube's algorithm, so continue to complain and consume our free content. We do appreciate the opportunity to educate you and we get laughs by your comments, so continue to do all that. We appreciate it, and that's a wrap on the final mile Ben. Any final thoughts today?

Speaker 2: 19:39

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

Speaker 1: 19:43

And until next time go bills.

About the Author

Freight 360
Freight 360

Freight 360 was born from a vision to share knowledge about transportation with everyone.

To read more about Freight 360, check out full bio here.