The Final Mile #15 How to Become a Freight Broker with no Experience
October 31, 2023
Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:
- Winning freight as a veteran-owned business
- Starting as a freight broker with no experience
- What to do if a shipper and freight broker tell a motor carrier different instructions
- How to identify a freight broker’s surety bond company
- Dispatcher acts as a freight broker but never pays the trucking company
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See full episode transcriptTranscript is autogenerated by AI
All right. Welcome back for another edition of The Final Mile, where we answer your questions. Please continue to send them in to us through our website or through YouTube comments, whatever the case might be. And please make sure to support this channel by checking out our sponsors down in the description box of the show notes. We would greatly appreciate that.
And if you'd like more information on freight risks and our training, please check out the Freight Broker Basics course for a full length self-paced course that shows you everything from how to start a brokerage, grow it, and even hire employees when you get to that point. So first, Ben, we got a couple of reviews and comments I wanted to give a shout out to give us, share us at YouTube one or whatever one came in from Ian here.
Yeah. Hey guys, the free content is great stuff. Not at all The blatant marketing funnels I've gotten tricked by by many other brokerage channels. So I fear not having watched before questioning your hourly rate. That feels very silly. Now, in hindsight, you guys should be proud of what you've built. Continue to build. Thanks for sending me it rather than trying to sign me up after our first phone call.
So yeah. Ian reached out, chatted with him a bit, kind of said, Hey, before we dive into coaching or anything else, we've got a lot of free stuff out there that are probably worth taking a look at before you consider working with us directly.
And yeah, we got one on Twitter too. Sean says, Find your content a few weeks ago. Time to soak it all in. Thanks for being real and not a scam. Yeah, we've got a lot of the the short sweet comments and messages like that. People just really appreciating the content we put out. And that's what we're here to here to do.
We love it. We enjoy it. We have a good time with it. So keep sharing the good word and spreading us with all your colleagues and friends in the industry. So we got five questions today for this five mile episode here. First of all comes from Billy. And Billy reached out and asked, said, My company is a New York State service disabled veteran owned business.
Any ideas as to how that certification could be beneficial or applied to a state or federal RFP? Specifically how an open book bid for a contract for a contract may look? So I want to expand the answer on this, not just services table veteran or veteran owned businesses, but any business entity that has a certain certification or has a certain qualifications that you could have, like a women owned, minority owned, veteran owned, there's all different categories of these certifications that you can apply for for your company.
And if you are eligible for any of them, like some of them are just a small business, right? If you're under a certain amount of revenue per year, you qualify for the small business certification and there is preference given in certain public. Typically at your federal or state level contracts where they have to give a certain percentage of their business to companies that have those certification.
So a great example I think we touched on this recently is we know that Crowley handles the largest defense transportation contract, right. Used to belong to XPO, and then it went to Crowley. Crowley is required to give a portion of all of that business to specifically, I know veteran owned companies, but other other some occasions as well, both on the trucking side and brokerage side, if it's a brokerage agreement.
So what I would recommend is to answer Billy's question. It's absolutely beneficial. What you want to do is if you're going if you're providing a company that is in that public sector, ask, Right, hey, do you guys do you guys give any preference to service disabled veteran businesses? And being that it's New York State, I'd probably look at New York State options as well, not just federal, because you might get some sort of preference or favorite or favored preference from New York State being that you're a New York State company as well.
So even if it's not a federal or a military or anything like that kind of customer ask, Right. I could be a conversation starter. Right. Well, let's say you're in a company and the traffic manager that you're talking to finds out that you're a service veteran and maybe he or she is as well. Boom, you've got rapport. Or maybe they use their military as well, something like that.
So that's my take on it. Have you had any experience dealing with any well, band, you're actually helping somebody apply for certification?
00:04:59:12 - 00:05:25:15
Yes. So for Crowley, one I'm working on with a client is woman owned minority business that typically goes I don't want to say all of them. Everyone I've seen in that certification process goes through your state's SBA. So and this is directly from Crawley, right? Client wanted to work with Crowley. It said, hey, you know, we are owned by a woman and a minority in this instance.
And they said, you know, we're aware that there are these classifications available. How do we get the certification and what does this mean? Right? And they had responded with the local rep in their state, the Small Business Administration, and they helped walk through that process. Again, from what I've understood and the one we're working through now, it was like four or five months to get the process probably completed from beginning to end, maybe a little bit longer, depending, I guess maybe on the state or what you're doing.
But once you have them now again, through Crowley. Crowley since they distribute military contracts, has like the way they've explained it, it's like a pie with little slices that shows how many how much percentage needs to go to each category. So they have to distribute freight and still meet the government's criteria that it gets distributed equally and fairly amongst all of them.
And I'll tell you, the one that you mentioned, that was always a thorn in my side was when I worked at TCU. Crowley was my one of my larger customers. And we clearly weren't a small business. And it was very frustrating because we were constantly competing with that because the smaller companies would get more freight than we had, even though we had better pricing and a better network that we literally built like, like us as people, like the brokers on it, like made the phone calls to get the carriers.
And there was really nothing you could do to kind of overcome that. So that's pros and cons depending where you're at. But yeah, is absolutely if you can qualify, there are opportunities that absolutely are available.
That goes you mean in a broader sense anything that you can do that gives you a leg up? You should. Yeah, you should absolutely.
Absolutely do good stuff. All right. Next question. Keehan says, How do I get started with no contacts or experience? Well, I will tell you, since we can't dig into all of it on this, we have one got a few. Might ask your question. Check out our website and all of our content. The two main things that you've got to do is generate leads and prospects, right?
Well, and you've got to learn. You got get some education. So go to our website, check out all of our free content. But really the main thing is you've got to you've got to first understand our business and our industry. So maybe the Free Broker Basics course is a great starting place for you, or if you just get, you know, work for somebody in the industry and learn that way.
But then you've got to find leads and prospect them to convert them through your sales funnel from prospect to customer. What I do highly recommend is you got to learn from somebody else in some way, shape or form, and that could be working for a company has to drive you to it could be contracting on as an agent or a sub agent for a certain brokerage.
It could be just shadowing somebody for a couple of hours. Right? It could be taking some kind of training with coaching, consuming all the free 360 content on YouTube in our podcast. But you've got to have some sort of reputable baseline knowledge and education. So you have some sort of anchor or starting point. And then from there it's a very methodical process of prospecting business.
It's a very difficult time right now to to do it compared to about a year or two years ago. But we're seeing people do it left and right. So then any specific advice you give to somebody that's got no contacts or no experience just going into it?
I think if I was going to do everything over again and I was in a similar position, I would probably reach out and try to network with some agents, right, that have a book of business. And I would try to apply for probably a carrier sales role and work with somebody to learn that business because it's going to teach you the carrier side first, which I think is probably very it's to me you should learn that before you learn prospecting.
I think if you can do that in that order, you're so much more effective at having a conversation with a shipper about their needs when you understand the carrier side, because that's what creates the needs for your customer. So when you are making check calls and doing the carrier side of the business, you learn it much faster. You got lots more reps of moving freight.
You can see the process from cradle to grave, where the load comes from all the way through to the carrier. You're talking to them at pickup and delivery. You hear the issues you convey them back to maybe the brokerage or the agent that works with the customer. You will learn a ton there and you could probably get those positions probably remote if you find the right agent that has a need.
And you can probably do them without a very stringent non-compete, meaning if you wanted to grow into prospecting, maybe there's a home at that same place where you can just literally grow into it. And if there isn't, you could then maybe try your hand at trying to do it yourself. But that's probably what I would do if I had to do it all over again.
Yeah, I agree. Learning the carrier side is extremely important and I think that companies that either assign you to sales or carrier procurement and they don't train you on the other one. I think there's a think there's a lot of downside to that versus yes, upside. So good stuff, though. All right. Next up and this is a this is a little bit if you listen to our podcast that came out on Friday, you heard a little bit about this.
But here's the whole question and we'll dig into it. So Melissa asked, what can a carrier do if a broker sends a rate con for a loan to be picked up one day and delivered the next? But the shipper requests a straight through delivery pickup and the driver doesn't have enough hours left to comply. So basically, Ben, you want to break down the details of what happened here and we'll unpack it.
Yes. So what it seems like right, is that the broker rate of the carrier on the load and when they book to the carrier on the load, they had said it can pick up today both just say for this example. Right. And deliver tomorrow, on Friday. Right now and that scenario the drivers hours don't matter as much. Right.
Because you can.
Assume the power reset at night.
Right. You could load this morning, right. Call it, you know, and then you can take your 10 hours and then as long as the mileage you can get to their tomorrow by the time they close, like you're good. So the carrier, with all the information conveyed to them, said, hey, this load works for me. We can pick it up today and we can deliver it tomorrow.
No problem. Right. Here's where communication and specificity and details matter, because when the carrier arrives to load, the shipper said, We're going to load you and you're going to drive straight through to deliver this. Right. And the carrier went, No, I can't. Like I'm out of hours, I can load, but I'm going to run into my reset in about an hour or 2 hours.
I'm going to take my 10 hours because I can't legally drive and then I'm going to take it. Well, now the shipper is upset with the carrier. The carrier can't do anything about it because the carrier can't change the regulations. So they've got to take the reset when they've got to take the reset. And now you got a problem.
Right. And they didn't say whether or not they found this out before they loaded the truck or after they loaded the truck, which I think also matters. But if it's after they've loaded the truck, I mean, your options really are now, I guess, unload the truck, call the broker, have them get you another truck, pay that truck for their time.
Yeah. I was going to say that the options that came to my mind were kind of what you just alluded to. You could do a tonu, right? Like, hey, we're I'm not able to do this right, whether I'm loaded or unloaded. Regardless, you could you could do the tone it option. Second option is, is there does this trucking company have another another truck that they can send in or another driver.
Right. And just the trailer out in which case the driver just care has to be compensated in one way, shape or form. Right. If it's the customer who changed their mind, the customer should be funding Antonio or the extra money to pay this carrier. If it's the broker that screwed up that's coming out of your profits. Right? That's not the customer's fault.
That's you having an issue there. This is why it's extremely important to have like repeated communication on certain things like this, like, you know, the whole phrase trust but verify. Right? Yes. I trust that what I saw in this email is correct. But let me just verify on the phone. Hey, just to be clear, this is delivering tomorrow, correct?
no. It's got to get delivered today straight through. because the email said this. Right. Just verify all that stuff.
Well, here's the point, right? They could technically both be true because. Technically. Right. You could have a load that is driving straight through. It needs to deliver it like four in the morning. True. And it's technically the next day. Right. And here's why. Specificity matters. Right? So again, we went through the list of the questions you should ask for every load, write value, commodity equipment type, any special requirements should be asked on every load.
Right. But the ones we didn't talk about in the last episode was pickup window and delivery window and asking specifically like, is there a delivery appointment time or is there a window? When I always ask it this way, I always ask, when does this need to be there and do we have any flexibility? What is our delivery window look like?
That's the way I phrase it, because I want to understand situations like this because sometimes you might have a new person working at your customer that says, no, my system, just as it delivers tomorrow, but somebody else in the and the company, right to your point might know know like this needs to be there as soon as it can get there.
It's delivering to a 24 hour facility. They are waiting for this product. They can literally not do the thing they need to do at my customer until they get it. Well, in that scenario, right, even though it delivers tomorrow, that needs to be explained to you because straight through and pick up one day, deliver the next day with an open window are very different.
Yeah, by appointment. All three of them are actually different scenarios. Right. And if you don't get clarification, it could just be an honest mistake. But this is our job as a broker. Like we get paid to talk, we really get paid to do is to clearly communicate information from one party to the next. And if you aren't clearly communicating it, you did not do your job and it is not your customers job to make sure it's your job to ask the right questions, to make sure you get what you need, to make sure your truck has what they need.
And those are different things.
I've even seen the multi multi drop where you have a window of time at each location. Yep. When you like. Can't use the fall window on some of them because if you waited till the end of the window, you wouldn't have enough time to transit the next appointment. So like there's, Yeah, there's all that stuff you got to look at.
All right well that's interesting scenario and hope it all works out. Melissa next.
Well, what the carrier could do, let's answer it all. The carrier needs to call back to the broker. Right. And clarify like what is actually happening. Right. Did the shipper change it or did the broker make an error? But either way, the carrier needs to be compensated because it was not their fault. They did exactly what they were supposed to do and were able to provide the service that was disclosed to them.
There was nothing else this carrier could have done. It is definitely not their issue. They should be paid.
Yep. Next up is Lisa, who asks How do I find the surety bond company for a broker? If you go to the FMCSA website and you just go to the company snapshot, you can search any broker by their name, their M.S. or their DOT number. And that's where you can pull up a lot of information on them. You can see my dog is going crazy right now.
Hang on. All right. Now that I got my dog under control, FMC has his website. When you go to the company snapshot, there is a licensing insurance history, all of those options in there. And you can see, like, for example, if you pull a broker and you click on insurance history, you will see there surety, bond company, the dates, all that stuff.
The FMCSA data also feeds into a lot of other third party pieces of software, right? So like your data directory and various other carrier and broker vetting platforms out there, you might be able to find them. And that place is all about the evidence. CSA houses all that information so you can check them out at FMCSA, CSA, dot, dot, dot gov is the website.
Good question. And assuming she wants to file on someone's bond. So. All right. Lastly is Angel. If a dispatcher doesn't pay, how can I get my money? Yikes. This is from what can dispatchers.
Shouldn't handle money, right? As a dispatcher, they should have never had funds in their possession. They should be paid by the carrier a percentage on each load.
Yeah. Or a flat rate, whatever. But like, so this one came through our website and I are on our website. I came through the Facebook group and I'm pretty sure it had like 100 comments that people like just going absolutely nuts. So obviously what happened here is a dispatcher essentially acted as a broker, which is not legal. It's not allowed.
They're not licensed. And this is the rescue take. If you work with a dispatcher and you're you're not if you were with anybody, you're not probably vetting them. Right. They could have said, yeah, I'm a broker when they're not actually a broker or like I said, they're a dispatcher and convince you that they're going to collect the money and then pay you.
It doesn't work that way and it can't legally work that way. And this is a huge risk you run into is you don't have any recourse. Sorry, Angel, but you don't there's they don't have like we go back to the bond that Lisa asked about in the last question. This dispatcher doesn't have a bond. They're not required to because they're not regulated or licensed.
I disagree. Here's why I disagree. Okay. So if Angel is a trucking company, an angel picked up freight from a customer, which is clearly what happened. Like they picked up and ran a load. The way the legal framework says that shipper owes angel money, regardless if that shipper has already paid the dispatcher. True. Whatever. They were acting like an angel.
What you should do is go right to that bowl. Call the place that you load it at and say, I have been withheld payment, I move this load for you, and that company will then either work it out with whoever they gave that load to. But it's not your job now. Have to chase down who didn't pay you.
That company owes you. And if that company never wants to work with that dispatcher.
Or there's a broker involved there to.
Correct, they will. That's on them. Like you moved freight the way the law states is whoever moved it, somebody benefited. It's either the company usually that shipped it or the one that received it, either which right it has to pay the trucking company that physically moved the goods on behalf. That's a benefit of service.
That's true. That is very, very true. And there's legal there's legislation that was to clarify that last decade. But so I will throw a caveat in here it is load is paying $650 and now you've got to go through and waste your time battling with a dispatcher who is not paying you. It's not license a shipper who doesn't want to return your calls because they already paid this freight bill or a broker or doesn't want to return your calls.
Now you're going to for the same reason, right? Are you going to go through the headache and try to hire a lawyer and sue somebody for the money? Because if it's a small freight invoice, yes, legally you're due that money. But I think oftentimes people just are asshole and they don't get paid.
Here's my advice. And again, I am not an attorney, but here's where I what I've done in those situations and it's worked out pretty well, is legal Shield is like a company that basically just connect you with attorneys based on your need. And it has a pretty low monthly fee. And actually a lot of my friends, we all use it for lots of different things because one of the hardest things is finding attorneys.
You got to find someone with transportation experience to take a case. And to your point, for 600 bucks, there's not a lot of reason to do it. They're hourly fees usually exceed that. But for like a low monthly fee, you can use legal shield and you could literally, I think at two or three consults per month for like 50 or 60 bucks.
And you literally just call them. You explain the situation, they connect you with a local attorney in their network and they'll like write a letter, I think, for that same fee. Like they're not going to like, take them to court or sue, because your point that costs money, but you what you can get is usually pretty effectively and for a pretty low dollar amount, a letter from a law firm that goes to demanding.
And to that dispatcher is pretty good to me, holds a hell of a lot of weight. Like I'll use that for a little dispute on like leases and like cable bills and things like that. Because again, you don't want to go through the headache of finding an attorney. You're not going to file suit, but you do want to at least make it a little harder to be stolen from or to be ripped off.
And to me, it's been a good option. Again, not saying that would work in this scenario, but I've used that a lot for smaller amounts and that letter itself has resolved lots of things that probably wouldn't have otherwise been resolved because a letter from attorneys got a little more weight than me.
Trucking company calling someone. Yeah, Yeah, for sure. Fair enough. Well, that's good advice, man. I like the back and forth on that one. Good questions. Keep sending us keep sending them our way and we'll be happy to answer on the next the next final mile. Any final thoughts here, Mr. Kowalski?
Whether you believe you can or believe you can't, you're right.
And until next time, go Bills.