The Freight Broker Wake-Up Call: AI, Fraud & New Regulations | Episode 357

Teaser: Policy, AI, And Risk

SPEAKER_00 0:00

All right, we're unpacking a lot on today's episode. We've got the TIA policy forum coming up next week. So we're gonna talk through some of the the big topics that will be presented on Capitol Hill and some of the the policies that we're looking to get pushed through. We share some stories on AI and then the crazy things that you're able to do to save time and we wrap up with um getting ahead of bad situations uh because bad news gets worse with time. What do you got as uh thoughts on this recently wrapped up episode here?

SPEAKER_02 0:31

Yeah, I had a ton of fun. This was like a super interesting conversation on the sense that like so much has even changed from when you and I caught up last week, which was like I was super excited to just talk through some of that stuff, which is basically like how AI now can make you just so much more productive and efficient, but also could possibly bankrupt you and make massive mistakes at the same time. Like, yep. And going through a lot of just things that you and I have worked on in the past week recently with claims, fraud, theft, and how a lot of the stuff we've been talking about on the show are just like super important to be on top of. So that was a really good one.

SPEAKER_00 1:05

Hopefully, you guys can listen to our stories and prevent issues that um could cause big headaches and you know learn from other people's mistakes. So that said, let's hop

Welcome, Training, And Sponsor Offer

SPEAKER_00 1:16

into this one. Welcome back for another episode of the Freight 360 podcast. We're up to uh 357. Hey, in just a few weeks it'll be episode 360 of Freight 360. That'll be fun. Um but if you are brand new, make sure to check out all the other content, share us with your friends in the industry. If you've got a new colleague who's going through training, um, just push them our way. You know, send them to the website or the YouTube channel. There's a lot of great content that's helped folks out out, helped, helped folks out over the years. Um, and we've got the course. If you're looking for a training option for your team or for yourself, freight broker basics. We did that in conjunction with some of the um some of the top vendors in the industry. So check it out. Um, this episode is brought to you by Send TMS. So one of the partners we we did a lot of the TMS section on is Ascend. It's a great option for small to medium-sized brokerages. You get all the the top tools and uh the power of a good TMS without the sticker shock of a large price tick. So give them a uh a visit at their website, and there's a link in the description box to get three months absolutely free of their full pro version. No card needed, but you need a referral code. We have one. Just use the link

Weather, School, And NFL Streaming Madness

SPEAKER_00 2:29

down below. Then what's going on down in Florida? Everyone's back to school now. Fall hurricane season, Hawaii just got smacked, it sounds like huge storms every day.

SPEAKER_02 2:41

But I like that time of year. It's nice. Cools off, and I don't know, growing in Pittsburgh. I didn't know this when I lived there, but I think Pittsburgh on average has more overcast days or rainy days than Seattle. Really? And yeah, I looked it up the one time. It was only like a day or two because of the basically the Great Lakes, why you guys get snow, right? Where the it basically hits the mountains and sits there. Does the same thing with Pittsburgh related to rain, but its south? It's basically so when it rains, I'm like, oh, it's like super nostalgic. I'm like, oh, it reminds me of being at home.

SPEAKER_00 3:14

Yeah, it was a little rainy here this morning. Um, first day of school for the uh the kids in western New York. It's funny, the bus came early, and like a bunch of the kids, so they like changed up the bus route this year. So like I live on a call to stack and all the kids like stand outside, and usually like first day of school, like you know, parents are out there with them taking pictures and all the things. The but like so we were out there early, bus rolls up, and we're like, like, shit, we gotta go. Um, but like then other kids came out and we're like telling them, like, yeah, the bus already left. And like the parents thought we were kidding. We're like, no, like bus legitimately came 10 minutes early. So as a noobsie there. But it's that time of year, football's back.

SPEAKER_02 3:54

The same thing happened to Alex this morning, uh, with partner of her white shark. He uh they were taking the kids with the golf cart to go take pictures, his daughter's first day of kindergarten, so they got music playing. Oh, nice. The same, literally the same thing. He texts me right after. He's like, Well, I'll be a little bit late because we missed the bus.

SPEAKER_00 4:12

So good times. So, well, hey, he's he's probably he's from the New England area. They've got it's Wednesday as we record today, and the NFL has decided to start their season on Wednesday this year instead of Thursday. But it's always the Super Bowl champ who gets the opening game, and they're paired up. It's the uh it's a rematch of the Super Bowl. So you got Seattle Seahawks um hosting the New England Patriots. So a lot of good matchups this weekend. Um Bills will be on the road in Houston. Steelers, I think you guys have Atlanta. Um but it's beginning of the NFL season, one of my favorite times of the year. Looking forward to it.

SPEAKER_02 4:53

Um two funny things I heard. One was this morning, but the other one I heard that made me laugh so hard. They were um, this was on the radio, they were playing like the funniest um thing in their algorithm from the week, right? And there was this bit this comedian did where he was basically like going through football and what days of the week and where you can watch it, right? And he's like talking to himself but in two different voices, right? And he's like, Okay, so Sunday night games I can watch on cable. And he's like, Well, no, you need whatever Paramount for that one. He's like, Okay, so if I buy Paramount, then the next day, the Monday night game, I can watch on Paramount. And he's like, No, then you need uh cable. And he's like, Okay, so for the Wednesday night games, I watch on cable or paramount. And he's like, no, then you need I think Amazon Prime. He's like, okay, so now I have Amazon Prime and Paramount. The Thursday night games I watch on Paramount or Prime or Cable. No, that one you need Peacock or you need Amazon. He's like, okay, so now I have Amazon, Paramount, Cable, and Prime. And then there was one other day, too, I think he did in the city.

SPEAKER_00 6:03

Netflix gets some of the games too. Yeah. It's just so funny. Yeah, so like literally everything. So the one like this will this will release on Friday. So the if you're listening on Friday, last night's game uh was is a Netflix broadcast. So yeah, it's wild, man. And then like, yeah, you have what is it, Sunday ticket. You need to have YouTube TV. So like if you're gonna watch an out-of-market game that's not on cable, then you need uh the NFL Plus, which you can't just buy anymore. You have to be a YouTube TV subscriber and then add that on. So it's like a whole it's wild, man.

SPEAKER_02 6:46

There was a funny workaround that I did when I first moved here. I don't even know if this one still exists, but basically, I think it was a VPN that basically bounced my internet signal to Pittsburgh to log into like my local cable account as like I was in Pittsburgh so that I could watch the Steeler games because I could never, they were never on. And back then, like they didn't even have a lot of streaming services. Like you just literally couldn't watch it. So I had like this workaround where basically I was able to mask myself and make it look like I was in Pittsburgh, and I think I logged into like my parents' whatever Comcast account in Pittsburgh to be able to watch it.

SPEAKER_00 7:21

It's funny. My uh so I I have like most of the streaming services, so we will never miss a game. But if I'm ever like geographically not in a place where I need to be to watch a local game, my brother like cracked my fire stick, so I have like I mean I'll I have the same thing. Yeah, like you can't. So if I had to crack it to later, you can you can watch like anything anytime.

SPEAKER_02 7:44

So yeah. Here was the other funny thing too I wanted to tell you, I wanted to get your thoughts on. So the uh the one guy on the radio was super excited. He's like, I'm taking my kids to their first Steeler game this Sunday. And he's like, My wife and I are like trying to plan this out to reduce as many headaches as possible, right? So he's like, step one is his kids are nine and eleven boys, and he's like, and they're huge football fans. So he's like, we're super excited. He's like, first thing is we figured out where we can park. So I gotta park on the other side of the city. Second problem is we got to make sure we eat before we get in the stadium because if their blood sugar is low, we'll just spend an hour and a half buying every single thing to eat they have before we get to our seats. He's like, So we have that mapped out. And then the other guy in the radio goes, okay, well, they both said it at the same time. They're like, you definitely have to bookend your children. He's like, What do you mean? They're like, Well, he's like, My kids are well behaved. I'm not really that worried. They're like, Oh no, it's not your kids. They were like, You need your kids in between you and your wife so that all of the drunk people around you realize that those are your kids and you are at least one seat away from them and everyone around them. He's like, didn't really think about that. And then this is the part that I was laughing so hard about is he goes, Um, here's where my wife and I have a point of contention. I think they're old enough to go to the bathroom themselves. And everybody on the radio goes, whoa, whoa, whoa. They're like, you should not send a nine-year-old and an 11-year-old into a steeler bathroom for their first time. And he's like, Well, what do you think? They're like, even he's like, What am I gonna do in there? They're like, Guide them. Like, don't touch that, don't go in there, use that stall. And he's like, Okay, well, they were like, What about the trough? Do they have a trough at the Buffalo Stadium?

SPEAKER_00 9:25

Our old Gerald one up on like the upper deck. They had the trough.

SPEAKER_02 9:29

He goes, He goes, I think my kids would be super excited to pee in a trough. And they're all like, Yeah, your kids would until there's a 300-pound drunk guy that is six foot five using your kid's head as an armrest while he's taking a leak in the trough. And I'm like, I was laughing so hard because I'm like, I literally remember going to so many games, and I'm just like, the disgusting things you would see in an NFL game bathroom of like people throwing up in the sink, like just disgusting debauchery.

SPEAKER_00 9:57

Oh, yeah. Yeah, it's I guess the uh the at least the new Bills stadium, it's much more civil in their uh modernized. I guess it's you know, it's brand new, so everything's clean and nothing's broken yet.

SPEAKER_02 10:11

But but that's why I laugh because my first Steeler game wasn't even at Accreshire Hines, it was at Three Rivers, which was built in the 70s. So like it's like three generations removed from like what you're seeing at your new stadium. Like, yeah, very, very old. Yep.

SPEAKER_00 11:28

Um, and the news, the big uh big upcoming event here is next week will

Stadium Survival And Parenting Lessons

SPEAKER_00 11:35

be what uh TIA calls like their Super Bowl. It's the uh the policy forum. So there'll be like 150 of us on Capitol Hill meeting with um I think there's gonna be over a hundred meetings with congressional representation. Um so if you haven't if you haven't ever gone to one or like understand what it is, there's a really good podcast episode that TIA put out. So they've got a new podcast called Um, I think it's Freight Beat, but they had one that came out this week that they it was basically a three miniature interviews that kind of highlighted the three big topics that were officially going to be lobbying. I know we kind of teased this a couple weeks back, um, but they had so Chris Burroughs, who's the president and CEO of TIA, he was formerly the head of government affairs, but um, he talked through basically the Montgomery Supreme Court case and how we're looking for a federal um selection standard or criteria for brokers to use. And that so that's a really good conversation. And then um the second one was on uh rate transparency, or as the guy on the episode, his name's Daniel Hoff, as he calls it, rate intrusion. Um, you know, as brokers having to disclose rates with carriers of what we're paying, you know, or what our agreed upon contractual rates and um situation is with the shipping customer. And then so basically we want to either repeal that or revise it to a more modernized uh realistic policy. And the last one is um Mitchell Hart was on Corca, which is the cargo, I forget what it stands for, but this is basically legislation that gives the ability to penalize, fine the bad actors, right? And it's very there's a a lot of situations that you can can roll up under this, but cargo theft, um, double brokering, things like that. So they're talking about having um policy in place that basically you can't just go out and get a hundred MCs and just you know, recycle them and just throw one out and go on to the next one. It's gonna have things like if there's a commonality in an address or a phone number or a person or a relative, things like that, um it will basically make it much harder. And I think the whole intent there is it will discourage the activities more so than to penalize those who are are doing anything. So big uh big week coming up there. Um looking forward to it. I'll definitely come back in a couple weeks on a well, probably an episode in a couple weeks and give a full debrief on how everything went. Um but yeah, check that out. That's that's their most recent podcast episode. It's called Three Fights Over the Future of Brokerage. And uh if you're not a um if you're not familiar with TIA or not a member of TIA, I would definitely encourage check them out. Ben, you and I do a lot with coaching their new brokers and a lot in conjunction with them on their education and training and whatnot. So great organization. They're the voice of our industry. So and they're you know, they're located in Alexandria, Virginia. So basically, you know, outskirts of DC, they're they're lobbying year round. And then we just do a big blitz every fall with a lot of the the member uh brokerages. So good stuff.

SPEAKER_02 15:10

What else you got? I feel like I feel like that's an easy one too. Like we've been saying that for years, is like literally 20 some 25 years ago at this point, I think, is when the federal government rolled out a similar thing for the banking industry to fight terrorism, which is basically like know your customer. Um, there's a list that goes to banks on people that cannot open a bank account and it runs through a system for those same, literally the exact same reasons, right? Like defending terrorism and money laundering, I feel like is very similar to verifying identities for cargo theft. And also, like, it's not just theft, it's also like human trafficking. Like, it's not just somebody got a truckload of something stolen. Like, there are incredible amounts of crime that funnel through those same vulnerabilities where I feel like should be a bipartisan issue where it should be able to be passed. You have a model, you can apply it in a similar way to this industry, and you've got every reason in the world to do that. I don't see who would oppose that.

SPEAKER_00 16:12

So there and there's so there's two big um bills that so if you're not familiar with how lawmaking and policy works, it's great, you know. So yeah, you know, it has to pass the House and then it has to pass the Senate. But usually the the hardest thing is to find a vehicle for a bill to actually get placed. So a bill on its own is very, very hard for it to be.

SPEAKER_02 16:38

Well you attach it to the huge one, right? The one now, which is the massive transportation bill.

SPEAKER_00 16:43

So they've got the the two big bills. There's the Household Goods Shipping Consumer Protection Act, which we talked about last year, um, bipartisan. That's what allows you know civil penalties. Then you've got CORCA. I had to look it up. It's the Combating Organized Retail Crime Act. Um so and again, bipartisan. So what they're doing is I forget which one is which, but I think I think the Household Goods Act is gonna, the vehicle for that's gonna be the transportation, the Surface Transportation Reauthorization Act. And I believe Corca, the Combating Organized Retail Crime Act, is gonna go through the National Defense Authorization Act, which is the annual uh defense, um basically the defense budget. Uh, and then they just so though those two big authorizations that get will get voted on um will include they'll basically like they're already have their initial pass, and then they do basically like they call it like a I don't want it's not a manager's review. It's it's like a some sort of like they make alterations to it before it's officially voted on and then signed off, where they they might make slight modifications to certain things and then they tack on these other smaller bills that um you know will not hold it, hold it up, usually something that's bipartisan. So like these two, hopefully we'll see those. So one of the things we'll lobby on is hey, you know, we want to remind you guys on this. We know it's it's passed through um the process. We want to ask for your support in voting yes for it when these are you know brought up on the floor.

SPEAKER_02 18:17

So I have like a segue that's related to both of these things for decades, probably centuries, right? Well, maybe not that far back,

TIA Policy Forum And Key Legislation

SPEAKER_02 18:24

but these bills are so large and so long. And you've mentioned this when you've met with senators and congressmen every year that you go. Is it like like I don't have time to read a 15,000-page bill? Basically, my aides read sections, give me summaries, and I have to trust that my team is giving me good information because like it just literally would take me like months to read through this entire thing, right? Now, to me, this is like a perfect use case for AI. And what I would be really curious is if you, when you're there, to ask them if they are using any AI models to read through massive documents to find pork and to be able to find things that are hidden in there that have otherwise been getting through as a way to just be able to like make a process better, but also less likely that you had somebody slip something in on the other side of the aisle, basically, that you're unaware of and somebody just missed, right? Because it's all written in legalese and intentionally written in a way that is either misleading or hidden. And to me, like that's a perfect use case where I'd be curious if they are using that these days to do this. I would imagine they are.

SPEAKER_00 19:29

I'll have to ask though, yeah.

SPEAKER_02 19:30

Yeah. The thing I was excited to tell you is like now that I am like really, I would say like invested, but utilizing AI to an extent that is uh changing daily and like leapfrogging from where I was like a week ago. I mean, literally from Monday to yesterday, the stuff that I've learned and been able to do is absolutely mind-blowing. It's the speed at which I can get it done, and what I'm able to not have to do anymore. Like I am getting, I spent Monday doing financial modeling for basically five entities, four that exist, one that will exist, and doing both historic and pro formas, and being able to tie them into a parent company that makes sense that doesn't exist all the way back down to do projections and do a pitch deck and review all the potential operating agreements to make sure they don't overlap or create conflict amongst each other, and was able to not only design the pitch deck, but update it and create images that I paid a designer to do a month ago that I didn't like and was able to get them better, more accurate, and realistic. And I did it in six hours. And I used to do that for a living 20-some years ago at a bank. It literally would have taken me a month to do that. I did that in like six hours, where basically I have now anything that I use, I look to see if it has an MCP, which is just the way you connect it into your models. And now most of these things do. So once they're talking to each other, I'm not redoing anything. And like that was just like an extreme example where like my mind was kind of blown because I thought that was literally going to take me a week. And since I had the day off, I literally was able to do all of that. But in addition to that, like the things that it's able to do even this week that it couldn't do last week. Here's the one that I just found this week. I don't know if it just released, but the engineers I work with that are building our other software for like the warehouse and things, I'm on calls with them like once a week where they live in this world and they didn't see this one. And yesterday, there is a way for my app on my phone to control my desktop. So I had to go run to the store. I had like nine models running, doing nine different things at the same time. And some things, from a safety perspective, like you want to approve individually, you look at what it's doing, you make sure like it doesn't do something you don't want it to do. And I was at like Costco. I had to go run and pick something up. I'm on my app walking through Costco, literally controlling my agents on my desktop so it never slowed down. I came back, what, 45 minutes later? I got all of that work done, which would have taken me at least two or three days. On top of that, like I was running so many at the same time that I'd burned through my daily usage in like an hour and a half, driving from here to the store and back. In fact, when I got on the call in the afternoon with the engineer I've been working with, he was like, I was showing him this. He's like, dude, I didn't even know this one did this yet. And I was like, I looked and ChatGPT has it now. So Claude and GPT, if you have, I don't know if it's a plus or a Teams account, because I have like corporate accounts, you can connect to your phone. So all of my information is all sitting in one place where it doesn't even run back and forth. And I can control both of them from my phone without having to be here. Or like a week from now, like I don't even think I'm gonna need to look at my computer. Like, I think I'm just literally gonna be able to talk to it and just have it doing things where I can basically Have like a team of very highly skilled, incredibly fast assistants doing literally 15, 20 things at the same time.

SPEAKER_00 23:10

You give a use case of some like some of the types of tasks that you're using for.

SPEAKER_02 23:15

Yeah, here was one. So like I have a client that's a trucking company and a brokerage. They do a lot of business together. And the human side is they're building loads in one TMS and the other. They send loads to the other. Um, some of that automation works, some of it doesn't. So what I needed to figure out was like, how many loads did the trucking company run that the brokerage should have put in their TMS, and vice versa, that didn't match. So basically audit two systems against each other, right? So basically, I was able to open a browser, log into both, and prompt um Claude to just literally manually go through every load that was built, check the POs, and then see if it was in the other one. Created a list. These are here, missing from here, and vice versa. Then I said, you know what else I'd like to know? How many of them have paperwork that should be in that system that isn't in that one? Go check and run an audit log on both, and now go see which loads have paperwork in them that should have been sent to the other one. Gave me that list. And I was like, wow. I was like, that used to take me like a couple hours to do for them. Then I went, oh, this other client I have does all this LTL work. And there's like seven different portals you have to log into. They don't send the paperwork to the accounting department at that company. So I was like, they just upload it and then you have to literally just keep looking at it all day, then download it, then upload it, and then email it. I was like, okay, log. I literally said, log into all of these portals. And then I'd approve with all my passwords. So it can't go in there without me, right? Then I said, do the same thing across every LTL provider across all these companies. Tell me where they've given us paperwork and we didn't get it out, and where it should be marked delivered and isn't marked delivered in RTMS, and which updates were missed by the track and trace team or the people doing this. Ran all the audit logs across all of them, gave me a list. And I just took the list, and now that it's connected to Teams and my email, I said, draft an email that summarizes which employee should have updated those based on their customer job and the carrier that they booked on it. Go into the TMS and create a list of every carrier that was booked by this person. They should have got the paperwork and the customer where they should have updated the customer and the TMS. Created the list and I went, okay, draft an email to each one of those people, take this massive list of what should have been done and email it to all of them individually. It created all the drafts in my outbooks. I went and just checked all the work and then went, send, send, send, send, send. And then it emailed everybody. And then I went, okay, I want to schedule this task every day at the end of the day to run this audit. I want you to do the same thing to email everybody on what should have been done that day that didn't get done. And since it's connected to teams, do this at the end of the day and then midday, send them all an individual Teams message that sounds like me that says, Oh, hey, how are you doing on the to-do list? Any updates? Do you need any help? So now instead of me going around and doing all this, it's literally checking everybody's work, emailing them what needs caught up. And then I have it go into Teams and send them individual messages to remind them throughout the day. And then all I do is check teams and look for the questions that come back to me instead of manually doing any of that. Which I figured out between like yesterday morning and by the end of the day. I'm like, that was like a three-hour job. Yeah.

SPEAKER_00 26:15

Nice. Yeah, that's pretty cool. I haven't gotten that deep into it. I I definitely have been using say my kind of my two favorite. Well, yeah, I would say my I started off a lot with Chat GPT for writing purposes, and then Claude's been really good for a lot of like data analysis and things like that. I did start using the Google or the Gemini notebook that you were telling me about. So like if I'm dealing with a like I'm dealing with a project right now, and I've taken um basically like all my notes from a Google Doc is linked in there. And then anytime we have a meeting, it's recorded. I'll take the audio file and upload it in there, and it basically like it can produce a transcript and it becomes kind of like I can just ask the questions about like, hey, you know, what's going on here and how do I do this based on what we know and what we talked about, and it like it's really, really good for projects.

SPEAKER_02 27:10

So two things that were game changers on that for me that I've been doing. One is there's lots of software, like say I have a client with a TMS, right? And it's one that I just don't use that often. And they have a bunch of meetings where they found different ways to do things, and those meetings were recorded where they go, oh, that's not in our, you know, FAQ on our website. You can't find it. Then they emailed and explain it, right? I took every meeting with that client and that TMS, and I took all the recordings and the link to their FAQ for all your answers for the TMS, put it all into Gemini, and then exactly what you just do is I'm like, somebody emails me a question, how do I do this? I just go to Gemini. I'm like, hey, search all of the meetings and all the FAQ and tell me why that isn't working in the TMS. And it just gives me the answer. Then I gave their whole team access to the same folder, and now I get no questions on how to do this with the software anymore. The other one is the podcast feature, which is wild because like when I need to learn something where I don't have time to read all of it, say it's a contract, I'll put the contract in Gemini and I pick the debate and critique one where two people argue over the points in it, and I'm like, give me a 20-minute podcast. So when I have to drive somewhere, I literally listen to two people argue different points of view on the contract and then give me a summary of where to go look at it and verify it instead of reading it and having to spend an hour trying to think through it.

SPEAKER_00 29:38

That's pretty cool. Yeah, I've done the audio like the I did like a short podcast type thing where I was like, hey, just you know, give me like a two to three minute discussion about everything that we've you know sourced in here. So pretty cool stuff, man. Love to see, you know, if you're using it right, what it can do for you. I saw a funny um news piece this morning that was like students who students who are using AI instead of studying are actually

AI Automation Wins And Real Dangers

SPEAKER_00 30:12

scoring lower on tests. Yep. And it's because they're using it wrong. Instead of basically learning and then using the AI to become efficient, they're just relying on AI by itself and not actually learning the uh the information.

SPEAKER_02 30:25

So uh to me, the good analogy with that is GPS. Like if you use GPS a lot, even for traffic, people will report like they kind of don't remember how to drive places like pretty quickly. Because when you don't actually use that part of your brain, it's just atrophies. Yep. I do want to add this as a disclaimer, because we'll we can do an episode on this later, but like also going that fast and having something that can move that quick, I see huge potentials for errors, right? Um, because if it makes a mistake one percent of the time and it's doing a thousand things in an hour, that one percent is a hundred mistakes, right? Like, so while I do think it is an incredible tool to increase efficiency, I think everybody should be incredibly cautious on how you use this because the same thing that you were talking about with people's brains is happening with vibe-coded software, where there are vulnerabilities, where people are making mistakes and they're making mistakes at scale. So, like, fraud is a huge issue when you're connecting it to these things, that information load details could be public. So, while I know everyone's super excited to do this with everything in a certain way, like I think you should be incredibly cautious what and how you use the model and which privacy settings you have. Because if you are using the privacy setting that is training the model, your data is literally could end up on the web. There are so many articles recently where people didn't switch that off and bank account details, social security numbers. People were doing medical stuff in there, putting in like their blood work and all of this HIPAA stuff, like healthcare related, and they didn't realize the safety switch wasn't on, and then people found them at Google searches later. So, like you absolutely want to spend some time to really understand what you put in and where it could be going.

SPEAKER_00 32:17

Yeah. Yep. Um, the fraud piece you brought up. I I wanna I wanna pivot a little bit here because we this kind of goes in line with the legislation that we were hinting at earlier with Corca and the Household Goods Shipping Consumer Protection Act. So

Claims, Cargo Theft, And Fast Intervention

SPEAKER_00 32:33

um I know we kind of went a little bit down the AI hole here, but we wanted to talk a little bit about you know what dealing with situations when something goes wrong. Um, and actually to your point, if you're using your your AI agents to help do work, they should help you identify things that look off earlier on. Um, but basically we we've used the phrase before that bad news gets worse with time, right? And the sooner you can identify an issue, and whether it's manual identifying it or if it's triggered by if you're having some sort of AI implementation that's gonna give you a heads up, um, the sooner you can get ahead of it, the more likely you are to be able to intervene and prevent something catastrophic. And on the opposite end of that spectrum is people that are just passive and they find out after the case, like, oh crap, this load is stolen, or oh crap, um, you know, the truck that they loaded wasn't the the name or MC that I actually booked and scheduled to be sent in there. Um, so I wanted to talk a little bit about that because I've got a couple use cases where things went good, and then the opposite where um things were ignored and they went terribly wrong. Did you have any any situations you wanted to bring up first?

SPEAKER_02 33:54

Yeah, I have like three. I'll go through one that just happened between the 5 30 yesterday and this morning. Uh client reached out and said, I think there's an issue with a claim, right? And the client goes, and I also think this happened around April with somebody I'd already let go because they weren't super detailed and following up on things. So the employees gone, the customer's saying there's a claim, there's no documentation, and there's really nothing related to this, right? That basically is like my accounting team is saying like they're just not paying this invoice. And the weird thing was the accounting department sends the customer, hey, like when are we going to get paid on all these bills? Right. The customer emails their accountant an invoice for 75 grand. And they went, I think this is a mistake. And I was like, I don't think that's a mistake. Nobody unintentionally sends an invoice to a vendor unless something happened. And I'm like, my guess is there's a claim that nobody told you about, and this broker probably just swept it under the rug and thought nobody was going to find it. Then you let them go, probably for related or unrelated reasons, and now you got to figure it out, right? And this was a scenario where it was actually on both sides. Like it wasn't just the brokerage, it was also the customer. So the customer, they ran a load, the load was delivered, the paperwork was clean. 30 days later, the customer emails and says, Hey, that entire load was rejected. You owe us all the money for the shipment. Okay. So step one, which is like, is you start from the beginning and try to put together what actually occurred, right? And I look into it and I'm like, okay, well, because then they ask me, well, how long do you have to legally report a claim? I'm like, I think it's nine months. Let me check. To your point for AI, I'm like, you use it to verify or to go find things to save time. Yes. It says you have under CarMac nine months to report a claim. However, there are commodities that are excluded from the CarMac. And this one happened to be one of those commodities. And then it says, you know, typically these things are worked out in court or through an insurance process. So there's not a call it a black or white way to say this is good or not good. You have to defer to the contracts. So then I'm into their broker carrier agreement and their broker shipper agreement, of which it does not identify how or when this needs to be notified. So when we were talking about this in other episodes of like why contracts and paperwork matters in some cases, and in some cases, practically speaking, it kind of helps, but not always. This was like a huge one where like kind of both of them are responsible, and kind of both of them should have done things differently. The shipper should have notified them a little earlier, or in some way with any documentation, which we found did not occur. The broker who's not there never followed up to ask, and both just assumed the other one was going to take care of it. And it's like pop fly rule. Where then I'm sure when the paperwork or they were reconciling their, you know, bank accounts and everything at the end of the quarter, their CFO or somebody at the shipper went, guys, we didn't get paid for whatever, $80,000 in product. What happened? Then it comes back down the chain and nobody has any idea what happened. So now it's a giant mess with no paperwork, no idea who was responsible for what, what happened. And I don't even know that you could get a reefer download three months later. Like I don't even know that a trucking company literally has the ability to go back that far because I've never actually had to do that. And that's kind of where it got left off as of this morning, where we just got to kind of get more details together. But it was just like a perfect example of like things are so much worse when you wait to take care of them because there are some things like you literally might not be able to do, like to verify. Like, I'm I don't know. Like, I genuinely don't know how it'll play out, but it was just like a perfect example when we were texting about topics for today. I'm like, I'm literally doing this right now.

SPEAKER_00 37:55

We talked a little bit about CarMac recently. So I just pulled up the list. So here's a generalization of what's not covered. So the CarMac, um, it says it removes the jurisdiction for motor vehicles carrying ordinary livestock, fish, and unmanufactured agricultural commodities. So you could have um let's see here cooked or uncooked fish and frozen or frozen, fresh or frozen shellfish, breaded or not, but not products treated for preserving like canned, smoked, pickled, spice, corned, or kippered. So yeah, interesting. Um we had but I have a question though.

SPEAKER_02 38:37

Yeah, go ahead. Like if it's excluded from the Carmac and there's nothing in the contracts, I guess there's just like no standard. Like, do you defer to anything if that's not actually spelled out in any agreement?

SPEAKER_01 38:52

It's a great question. I don't know. I I don't know.

SPEAKER_00 39:00

I don't know. I I honestly have no idea. Um we're dealing with one right now that we don't know how it's gonna shake out, but it's uh produce. So um had another one that it was not produce or fish or anything like that. This was, and I probably told this story a couple years back where a uh a load of um apparel, it was like Adidas pants. We caught it early. Um, you know, we're talking to this this driver, and he's like, something doesn't seem right here. Like, you know, the the the dispatcher uh or the uh the guy I'm talking with is you know, everything kind of seems weird, and then we're talking and we're like, well, where do they have you going? And he's like, Oh, they have me going to a uh, you know, this warehouse in Southern California, and we're like, no, no, no, no, no. We're like, that's supposed to go to I think it was Maryland or Virginia, and then we get a hold of the documents and we could see that like there was doctored rate confirmations. It was basically a double brokered load, and the um the guy that was do committing the fraud created false documents to try and get the freight delivered to a um, we hire a carrier, right? And then they rebroker that load, they probably stole someone's authority, um, and then like create a new rate confirmation and looks like it's supposed to go somewhere else. They're trying to steal it. So we identify it and we start making phone calls. No one cared, right? So like we did everything, we could have stopped all of this, and because nobody wanted to take us seriously, or like they're like, I don't know what you're talking about. Like, no, like it's not due to deliver yet. And I'm like, it's not going to deliver because it's currently going somewhere else. And then I'm calling, you know, law enforcement and um the uh DA's office in LA County, and they're just like, Yeah, it's not like that's not a big enough fish for us to fry. Like, we're we're focused based on limited resources, we're focused on higher ticket items. And I'm like, and then six months go by, and then all of a sudden that's when someone's auditing their books and like, you know, whatever happened with this shipment that we never got, and they end up coming back to us and like, hey, what happened here? And we're like, we told you guys, and you didn't like you didn't want to take any action, you could have legitimately like filed a police report, you know, reported your stuff as stolen, and you could have likely had police on scene at that delivery where that driver told us he was going to.

SPEAKER_02 41:35

So he was going, knew where he was going.

SPEAKER_00 41:38

Yep. So and then we had another one that we actually were able to intercept where we the driver, similar situation, but it was it was uh a very short run. It was supposed to go to like a warehouse in New York City or New Jersey area, and they changed the location to like another warehouse where they were gonna basically um they were going to just sell the goods on the black market. I forget the commodity, but we ended up catching it. We talked to the driver and said, stop. Like, we got to find out who this load actually belongs to. Because they ended up like reaching out to us because I think someone had tried to impersonate our company to create the documentation. Then I found the actual broker whose load it was, and I was like, dude, I was like, like, we caught this. This is your load for your customer, and this driver is agreeing to like not deliver it and have it be stolen because he's he doesn't want to get in trouble, he's not part of it, he just thinks he's hauling a legit load. I said, but he's gonna want money to like take it back to the shipper. So and the guy's like, well, I I don't have enough margin. And I was like, Well, you're gonna lose your customer. Like, if you don't and it wasn't much, the guy wanted like a thousand bucks to like basically for a day's extra day's worth of work to turn around and go deliver it and get at least get paid for something because he knew he wasn't gonna get paid for the the line haul. But yeah, though, but we ended up getting that one stopped. But like, you have to take swift action and get ahead of this.

SPEAKER_02 43:06

Two more, two more that that like one was a year or two ago, one was super recent. So this is a a shipper that ships incredibly high value stuff, like millions of dollars, and it's very high target theft. And they have been having lots of them stolen. So very well aware of this. They have relationships with law enforcement basically all over the comp country at this point now, because for the past few years, it's just happened so many places, and it's a huge company. So, like they literally know and have resources to call law enforcement because they've been trying to recover these things for so long, right? They have a theft deterrent system that will alert the broker when a theft is likely occurring. And I'm not gonna go into how it functions because if anybody listens to this and searches it, like it gives you a workaround. But basically, just think of it like this the broker that they used that moved that load, okay, gets an alert on their computer that this is likely a theft situation. Call carrier, verify, like take action basically, because that's all it can do, right? The shipper gets the same alert when these things happen, okay? But the person that got the alert happened to be like in a meeting because it goes to like an executive level, like for recovery or theft or something. So they come back to their desk and they see this alert from like 40 minutes ago. They reach out to the broker and they go, Did you get the alert? And the broker goes, Oh, I don't know, hold on, let me check. Oh, yeah, it looks like I got that about 45 minutes ago. And they said, Well, did you notify anybody? Did you talk to the driver? What have we done in the past 45 minutes? And the broker goes, Well, I'll jump on that now. Now, mind you, huge shipper, this broker is moving incredibly expensive high theft items that everyone is aware keep getting stolen. So you know it's high margin freight, right? Like you're not doing all these things and charging the cheapest carrier to move it, right? Yep. So like I'm talking with a shipper, like, I don't even know who the broker was involved. And they're like, um, yeah. And the shipper's like, Do you know how furious I am that they just like didn't pay attention? Because they're like, literally, we had a load stolen in that part of the country three months ago. And they're like, I literally in my cell phone, in my contacts, have like whatever it was, the sheriff or the deputy for that county because it happened there three months ago. And they're like, if this person would have texted me while I'm in that meeting and says, This is the location, the alert, she's like, I literally could have texted the sheriff to be there in probably 10 minutes and been able to basically prevent this stuff from occurring. That 45 minutes was like a three million dollar load that got stolen. And by then it was gone, and nobody had any idea and you couldn't do anything about it. That's crazy. Do you have another one? I do have one more. This is one where company was this was probably two years ago or something, but this is the second load that was stolen related to the same customer, okay, that year. And I came in and did like training on stuff that we talk about on the show all the time. Like, what how do you verify? The truck, how do you verify that that carrier is the carrier you hired, whether it's through ELD, VIN level, a number of ways, and then verify with the shipper, right? Hey, just want to confirm this is who's gonna pick up your load, make sure the handoff is good. And I get called in the middle of it because the owner of the company goes, This load is like, I think it was being held hostage. So it it was technically stolen, but the owner of the company was able to call the dispatcher who picked it up. And the owner was like, Hey, I think I have the like literally the guy who stole the load talking to me. Can you help me with this? So he three ways me into the call. And it's a guy in definitely not in the United States, somewhere in Europe. And the dispatcher goes, Yeah, like we we stole your load. And the owner of the company's like, Well, like, what can we do about it? And he's like, I'm not just gonna give it back to you. He's like, like, I stole it, it's in our warehouse. Like, I'm not gonna tell you where it is, but like, yeah, that's that's what happened. And this was the first time I was like live in the middle of it talking to somebody admitting that it occurred. And he's like, Well, what can we do about it? And the guy who stole the load is like, well, listen, like, I'll tell you what, it's worth a hundred grand. I typically get 25 grand for these, 25 cents on the dollar when I resell it. He's like, he's like, I'll tell you what, I don't want to go through the headache of trying to resell it. If you give me 10 grand right now, I'll tell you where it is. And then the owner of the company's like, well, if I give you 10 grand and you're literally a thief and you just told me that, well, how do I know you're actually going to give me the freight back, right? So basically, I think I negotiated this through PayPal and I did it in a way that basically the the thief got half the money, like five grand immediately. And the other half was contingent on our other truck verifying that they had the order, right? And the thief's like, listen, it's not worth my time to do this for five grand. Like, I really will do this for 10. I'll give you the general location to send a truck to. When I get the five, I'll tell you where it is, and then you release the second five. And I said back to the owner, I'm like, I still don't think you're likely to get it. I think that seems super shady. So he goes to the broker, just like in your scenario that did this, because when we found out how it happened, the broker ended around the system to give the load to an MC that never should have got it. So it was definitely this broker's fault. And it was the broker's largest customer. And the broker was like, listen, that is on me. I definitely shouldn't have done it. I will pay the 10 grand. So if I lose the five, it's on me, but I'll at least try to get this so I don't lose the customer and the company doesn't lose it. So the broker was like, listen, I will literally do this out of my bank account. So that's who was actually paying for this. Because if it was the company, I would have like, dude, like we just got to cut the loss and move on because I don't think you're gonna get it, right? And I'm on the phone with the criminal, right? With the owner. And the interesting thing was the threat the the the thief made. And he said, Listen, if you try to basically get my people arrested, like the police show up where this load is, right? He's like, Because he was worried that was gonna happen, right? Because he's basically sending a truck to where stolen goods are. And somehow I'm sure they could have worked back through a lease or figured out who or had that to get to this guy or his people in the United States. And he goes, I'm worried you're gonna do that to me. So the owner's worried he's gonna pay him and get nothing. The thief's worried about giving them the location because then his team gets somehow arrested or whatever, right? And then the thief goes, Listen, I'll make a deal with you. He goes, I've got at least a dozen other MCs that are absolutely active, valid, and definitely will get through any of your systems because I know they're running loads right now for other brokerages. And he's like, they haven't done anything wrong. But he's like, in a heartbeat, I can get one of my other drivers into one of those trucks and steal another load from you. So if you send the police to where this load is, I will take another load from you some point in the next three months. You'll have no idea that it's me, and I will steal another one, and you'll absolutely lose that customer. So basically, it was kind of like, what is it? Um, they say it's like a code of conduct amongst thieves or the what is it?

SPEAKER_00 50:32

I I don't I know what you're talking about.

SPEAKER_02 50:33

I don't know the Yeah, it's like the um honor amongst thieves, basically. Where, but like obviously one person wasn't a thief, but the thief was basically like, listen, like I will steal more from you and you won't know it's coming. So you in good faith give me the 10 and don't call the police. I'll in good faith give you the load back. I make 10 grand, you learn from the mistake, and we just go on with life. And it actually played out that way. Like the broker paid the 10 grand. In fact, do you know when that happened? It was when I was with you and we were up when you were in Florida.

SPEAKER_00 51:01

It was that oh yeah, I do remember that. We were at the pool when I was on the phone talking with him about it. Yeah, that's that's wild. The last thing I'll add in here, too, is and you kind of hit on claims already, but um these are the situations where you like you kind of mentioned like this, you know, dude doesn't even work there anymore, right? And the this applies across all claims because think about if a product gets to a receiver and the receiver's like, well, I you know, it's we're not accepting it. And then you like if the driver doesn't know what to do, then the driver's like, Well, I have another load I gotta go pick up. So like I'll just go toss it somewhere. Like, I I've literally seen situations where there was no inspection done, there was no guidance given from the the shipper. Four months ago had that one. Yeah, like no communication with the the broker up about it, and then you've got a disaster where we have different parties trying to say that it's not my fault, it's someone else's fault. We don't know the actual value. There could have been salvage value for the goods, um, it could have been just one small box was damaged and the entire load gets tossed or whatever. Um, if you can get like claims are gonna happen, right? Stuff's gonna get damaged, reefers are gonna break down, you know, forklifts are gonna put a hole in something like it's that stuff's going to happen. But if you don't clearly document it or get all the parties involved and get all the evidence and take pictures and document and inspections and all the things, um then you get down to this like this whole blame game and you know, the whole it's like the Spider-Man meme where everyone's like pointing. Like I was just gonna say that.

SPEAKER_02 52:45

I used it this morning. I was like, that scenario is the Spider-Man meme. I'm like, everybody's just pointing at everyone else.

SPEAKER_00 52:51

And I'll like I'll add in too, and we've said this before, but like knowing that things will go wrong, the way that you can step up and handle them and deliver that news to your customer promptly and accurately can, you know, in the moment they'll they can be frustrated, but the way in which you handle the situation can make you stand out as like, hey, you know, we know stuff's gonna go wrong, but like as long as Ben is at the helm, we know that it's gonna get taken care of and we're gonna get made whole, and this whole thing will be as little of a headache as possible. Versus like I was reading, um, I was reading something on Reddit recently, and it was actually like a shipper that was saying, like, like just giving stories about like, hey, we're basically, you know, we're cutting a couple of our transportation vendors, and here's why. Like, we have a situation, we need, you know, we need information, and like we'll go two days without getting an email response. Or we'll get we'll go five hours before we get some sort of update on tracking or whatever. And like that's a that's a real thing. So like the if you think about how low the barrier to entry is for brokerage and how many brokerages are out there, um, you just have to be like the better half, right? To be able to get opportunities and in you know, shops.

SPEAKER_02 54:08

Exactly it, right? The bar to entry is super low, but the bar to succeed is super high. And that gap is incredibly wide between people doing the bare minimum and people doing what is expected by their customers, right? Because the other thing you said, it's like, I mean, 101 level freight brokerage, what you learn, like you should learn like the first month or two of the job is basically like the only thing you can be certain of is something will go wrong this week or today. Yep. The other thing is you will never predict where that is. So guessing where it will won't help you is a waste of energy. Same with worrying. The only thing you develop if you want to have a career in the industry is the confidence in the ability to problem solve as they arise. Because, like you said, shippers know that, right? Like this was literally what I was saying this morning. I'm like, we're using this as a learning opportunity. I'm like, I've never been on a call with a shipper where they don't know things go wrong. Because anybody that's been in the job for six months to a year knows that happens. Yeah. What absolutely is never acceptable is not knowing before your customer finds out, or letting your customer know that there's an issue and you come with a solution, not a story about why it's not your fault. That's the other thing that's just never acceptable, right? And it's the same, like sports is the same thing. That was the analogy I used this morning. I go, Did you play any sports? Yeah, football and basketball. I'm like, how long does somebody stay on a team if they keep missing a block and your quarterback is just hammered and they go, that wasn't my fault? I'm like, maybe once? Maybe. I'm like, maybe not even once, and that person is second string. I'm like, it's the same thing at this job. Like, you never have an excuse. It might be someone else's fault, but you always have to take responsibility and find a way to fix it.

SPEAKER_00 55:54

Yeah, something as simple as like, hey, Mr. Customer, like, here's what's going on, here's our options, right? To simplify it as basic as possible. But instead of just, oh my gosh, this is what's going on right now. And they're like, what? That's what I'm paying you for. Right.

SPEAKER_02 56:09

That's like literally what they pay a broker for. Is like, we know we'll have problems. We're literally giving you more money so that you go solve them for us and let us know as they happen. Like that's really what our job is.

SPEAKER_00 56:21

Good uh, good episode. We covered a lot there. We I mean we went down you know, everything from what's going on in in the political world regarding our industry, AI implementation, and you know, getting ahead of bad situations. So anything else

Customer Trust, Ownership, And Closing

SPEAKER_00 56:36

you want to add in on this one? Any other good stories?

SPEAKER_02 56:40

I don't think we covered a lot. All right. Well, final thoughts. Whether you believe you can or believe you can't, you're right.

SPEAKER_00 56:49

And until next time, beginning of the NFL season, go bells.