Winning Customers, Avoiding Risks, & Managing Freight Effectively | Final Mile 54

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

• Freight Broker Follow Up
• Verifying a Leased-On Driver
• How Detention Works for Freight Brokers
• How Many Loads Can a Freight Broker Move?

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Transcript

Speaker 1: 0:19

All right, welcome back. It's another edition of the final mile. We're going to answer your listener questions. We got somewhat flooded with questions and comments and stuff the last week so we we're not going to be able to get to everybody's we very rarely do but we try to respond to everybody, at least briefly, via email or to your comments on YouTube. But thanks for you know, for continuing to send your questions our way. We appreciate it. Make sure to check out all of our content at Freight360.net, including the Freight Broker Basics course for an educational, in-depth training there on how to get your brokerage off the ground and successful. Please check out the sponsors in the description box to help support this channel.

Speaker 1: 1:02

And Ben, let's get right into it today. Man, this first question, I think, was emailed in to us. Someone said I'm having difficulty getting customers to give me an opportunity to quote their lanes. In the initial call they will say that they'll consider me or reach out for a quote and after some follow-ups they suddenly say they have it covered or completely ghost me. I feel like I'm following up too aggressively and turning them off. I watched your video turn prospects into profitable customers, but I'd like some more insight on this. Thanks.

Speaker 1: 1:33

So my first take here is and this is probably pretty common for someone that's new is if someone tells you like, oh yeah, we'll reach out to you for a quote, that is a huge, just blow off. Realistically, if a customer wants, or if a customer has a need to get pricing or capacity or options for capacity, they're usually getting hit up by brokers proactively and asset-based carriers on a regular basis. They're not just going to pick up the phone and call the random guy or gal that they've never worked with and say, hey, can you give me a quote on this? So that's most likely just a blow off. So what I would recommend and then I'll let you give your two cents on it is every prospect that you have, the way and the frequency of your follow-up is going to be very, very different.

Speaker 1: 2:27

So, like people always ask, well, when should I follow up? And it's like it really really depends on the context of the conversation you want to be pleasantly persistent, but you don't want to be annoying and you also don't want to miss out on an opportunity by not following up when you should have. And I think you did a really good episode with one of your agents a few weeks ago where you guys talked about the follow-up process, and it really does depend on the customer. So my initial answer to this question is I think you were just getting a blow off. I would pleasantly persistently follow up with them to find out the opportunities they have going on. It's going to help you build rapport and the more and more you talk with a customer, the more familiar they get with you. But what's your take on the follow-ups when, how often, how do you do them, et cetera?

Speaker 2: 3:16

The first thing I would say is, if you don't have any trust and here's how I gauge that don't have any trust, and here's how I gauge that If you don't feel like you can actually have just an open conversation that is free-flowing for a few minutes, there's probably not a lot of trust and they probably aren't very familiar with you yet. So this has been one conversation, or maybe two, with that prospect. I would expect. Even if they send me something to quote, they also send it to their other brokers, to your point. And if the other brokers came back at the same rate as me or faster, again, they're going to go with the companies and the people they've used before that they have a relationship with, that they have a track record with, as opposed to the new person, right? So some of this you can control. Some of this is just you can't do anything about it. You just keep following up until the opportunity comes, right. And that is usually the opportunity where the other brokers either can't get a truck or don't work on it fast enough and they want to use somebody that they don't know as well yet and they want to give them an opportunity, right. That's what needs to happen on the other side of the fence. You can't do much about that. You just got to kind of be patient for it Right Now, as it relates to how and when you follow up right to your point, like it really depends on the situation or the customer.

Speaker 2: 4:24

And I'll give you like two extremes. If I'm talking to a customer or prospect at this point, they're not a customer and they ship the same volumes pretty much every week. They don't change. And it's a very stable industry, meaning, like I don't know, think lumber, like they kind of ship the same amount lumber loads every week. They're not really in a hurry loads every week. They're not really in a hurry. There's not a lot of reason for them to change for no reason unless they either get a cheaper rate or can't get a truck.

Speaker 2: 4:51

If you're working with a prospect that gets new loads every day like new orders, like if you're working with a produce broker, those guys literally do what we do for trucks with produce. So they get customers and their world call them and go I need eight truckloads of watermelons to this, you know retailer in Chicago tomorrow or by the end of the week, those guys literally go and create that order, buy it from somewhere and sell it. So they are constantly coming to freight brokers and going I need a rate on this truck that I literally just created this morning with an order that didn't exist, and I need a rate now and if you can take it, I'll give it to you this afternoon. Those folks like you fall up more frequently. Why? Because they have more frequent needs. Things are changing quicker, they're changing daily.

Speaker 2: 5:35

Some shippers, these things change like weekly. They get their orders in Friday over the weekend and then they arrange the trucking Monday for the rest of the week, week or maybe the next week, right, that's somewhere in the middle. Some companies have their list of loads almost for like a whole month because they're international. They know what's coming in, they plan for it to come across the ocean, they know when it gets here. They've got a ton of time to do that. You follow up with them the least frequently, right? Because like their orders don't even change, like they pretty much go for the whole month and then they book the next month of freight, right? So if you've got a prospect that is booking and seeing new orders come in every day more frequent, if it's a longer period of time when they get new orders in, like it's less frequent. There is no perfect way to go about that and, to your point, the biggest thing is like getting to follow up, but don't sound frustrated when these things happen. Call that prospect and be happy for them.

Speaker 2: 6:26

Hey look, man, my team got to work on it. I'm glad you got it covered. Did you have any issues? Did it go well? Great, I'm glad that worked out for you.

Speaker 2: 6:33

Hey, we're here if you need me, right, pleasant? I'm not trying to be overbearing or frustrated. This is what I expect to happen. I expect you to use the people you've known and trusted if you could. If they're comparable rates, let me know when they might not be able to help you or you really are jammed up and you need a hand.

Speaker 2: 6:51

I'm here to help and in most of these scenarios like literally doing it this week, like I've got new prospects turning into customers we will sometimes try to cover spot loads for two or three weeks, sometimes a month, and not even get that actual load. But we're working at the same. We're covering, trying to cover it, we're sending over rates. We're literally almost booking trucks saying, hey, we got to confirm the load details and they're going hey look, I got it covered. That's part of the game, right? Like you got to spend in building any business with any customers, anything. Most of it, you're not making money when you start. You're developing the trust. The money and the profit comes later, so we spend more time working things that probably don't turn into anything before they ever do. Same thing with building our company Free360. A year and a half of just spending time and effort to build something before it ever creates any value for anybody at some point.

Speaker 1: 7:40

Right, so granted that in mind, agreed, agreed. I'm also a fan of like, uh, vocalizing, um, what you know, your followup intent. Like I talked to a guy the other day. I was like, hey, if it's, if it's cool with you, I'll check in with you on Tuesday or Wednesday next week. Like yeah, that sounds great, right, you know what I mean. Like, if they say like no, like check back in with us next month because we're not going to have any changes, you can get some feedback from the prospect in that case.

Speaker 2: 8:07

All right.

Speaker 1: 8:07

Next question One thing If they say next month, follow up a little before when they say you should, because they're probably making a little longer than it needs to be Fair point, all right. Next question how can you verify that a leased on owner operator is leased on properly? So this was a follow-up question to our discussion I think it was last week about you know, when a driver let's say you have a truck that shows up and they don't have the right MC on the side, and then they're like, oh yeah, well, he's leased on to me, that's why his MC is different it's like, well, no, if they're leased on to you and they're representing your MC number, they need to have the placards on the side of the truck. So here's, here's a couple of things that when these are like common best practices that I've used in the past and you know, if you talk to a driver, you're like, hey, what's the name and MC on the side of the truck that's going to show up, and they say, oh well, it's going to be one of my leased on drivers.

Speaker 1: 9:07

Okay, well, they need to have, um, they need to have the name and MC of the company that you're contracting on the side. So that could be usually, if they are leased on, usually like a magnet, um, big magnet that they slap on both sides of the cab of the truck, right the doors or wherever it is that shows you know. You know one, two, three trucking MC number whatever, dot number, whatever. Also, you can ask for a to see a copy of the leased on contract that shows that they are properly leased on. Here's how we handle insurance. You want to make sure that that vehicle is insured. If it's on their scheduled autos policy, that specific VIN number, yeah, so I mean really lease contract, visual proof that it's on the side of the truck and verify insurance. Those are like the three big ones for me. You ever run into an issue where I feel like we've had a lot of stories where someone says they have a lease on a driver but the truck wasn't insured properly. Didn't you have a situation or something like that?

Speaker 2: 10:08

Yeah and well, this is what is happening a lot. I know this happens because I have carriers One that's a client of mine out in California tells me like this is really common with California carriers because, one, they have more regulation and more costs. So to save money, to be competitive, they'll bring a leased on driver and not add them to their insurance because it's cheaper, right. Then they book certain loads with the leased on driver that aren't their riskier customers that they don't want to lose. And it's not that that truck doesn't have insurance, but it's not done the way it should have been done right.

Speaker 2: 10:42

And again, that is the big risk is that if you are working with a leased on carrier underneath an MC that you vetted, you need to make sure that the truck they're sending is listed on their insurance, right. So, like I usually ask those questions to make sure, like hey, if I see a flag on highway and says, like you know, not listed on scheduled auto, I'm like hey. When I asked him, like what's the truck number you're putting on this? And the driver, I'm like hey, can you give me the VIN? I want to make sure it's listed on your insurance. That alone usually makes them put the truck they should on it right? The fact that you're checking and you make a point to tell them you want to see that and also you can check that, you can literally look to see if that VIN is on their scheduled auto policy.

Speaker 1: 11:28

Yeah, exactly, and so the reason that we're having this conversation is there's the right way to do business, and then there's the shortcut. So the shortcut that some trucking companies have used in the past is they don't have a truck, but they've committed to a load. So what do they do? They give it to a friend and they say oh, they're leased on. And they may have all intention to lease this person on, but they never actually do it the right way, which would be having a contract done, making sure that they're insured properly and making sure that they're representing their vehicle properly. They're just like, eh, it's fine, just go pick it up, right. But now that we're all cognizant and verifying with pictures and whatnot at pickup, it's become more and more prevalent to talk about.

Speaker 2: 12:13

Well, to that end to the situation, right. Just a quick story on that right Was that is exactly what happened. Like somebody that we used to work with right Reached out to us after this happened, right and said book the carrier. That carrier booked his sister's trucking company. Like it was literally like a brother and sister. They own two separate trucking companies. One that they booked had the right insurance and reefer breakdown.

Speaker 2: 12:38

That guy sent the load to his sister because one of his trucks couldn't make it for like a normal reason, like you know, stock or broke down or whatever. She sends her truck and picks up the load. And then what made it more complicated was like it was like a multi-stop and there were no claims on stop one and two, but stop three there was a claim and stop four there wasn't. So it was probably actually the shipper that didn't pre-cool probably the product correctly that caused the claim in just one of the stops. However, once the broker's dealing with the shipper to get the claim, like when they looked at the carrier that actually moved it, they didn't have the right insurance and they weren't the truck booked, so their insurance didn't, wouldn't even be involved. Like they were like yeah, like we don't, and they didn't really want to help.

Speaker 2: 13:24

Really dangerous.

Speaker 2: 13:25

So, now you have the situation right when they owed. You know the claim was 30 or 40 grand and you know what happened on top of that. The shipper's like hey, you know what? We owe you about $100,000 in payables, and they're not legally allowed to do this. But they just stopped paying their bills until the claim gets fixed. So now they're owed a ton of money on top of the claim that they can't resolve and can't get their customer to give them freight or pay past due bills, all because they overlook this specific thing.

Speaker 1: 13:51

Yep, exactly. Next question Can you guys explain how detention works on the shipper slash broker side? Absolutely so. I'm assuming this is a motor carrier. That was asking how how it you know? What does it look like from our perspective when there's detention?

Speaker 1: 14:09

So detention in a nutshell you're paid money. We're going to pay the driver money for downtime while they're waiting at loading, unloading at one of their stops is after if you're at a pickup or delivery for more than two hours, we'll start paying you an hourly detention rate for your time. But every customer is different. It could be more or less time. The rate for that could vary. So here's how it works is typically the shipper is going to dictate what their detention rules are. So they might say detention kicks in after two hours. We're going to pay 50 bucks or 100 bucks an hour after that, first free two hours. That's how it works for us dealing with the shipper right, and we should be passing that straight through to the carrier.

Speaker 1: 15:03

That being said, some customers are a little bit more difficult to work with to get detention approved, and what a lot of brokers will do is they will create an internal policy that states that even if the customer doesn't approve this. We're still going to take care of our carriers and pay detention after a certain amount of time at this rate. That way, the carrier is guaranteed to get paid detention if there's an issue with the customer, because, at the end of the day too, as a broker, we can make the mistake on requesting it in a timely manner or make the mistake of not providing the customer what they need to get it approved. But we should still take care of our carriers in that case. So that's detention in a nutshell. Anything I missed.

Speaker 2: 15:49

Just making sure the drivers are writing the check-in and check-out time and that it's initialed by the facility, not just the driver's word. So the one thing I make sure when sending a truck in, especially if I know detention is possible or likely, is just saying that over and over again. Make sure as soon as you get there you go over and you have someone there initial your check-in time. Make sure you have someone initial your checkout time, because I can't tell you how many times I've had drivers forget and then call me while they're loading and rolling like, hey man, I know I was checked in at 6.15 and I was there two hours and I didn't get loaded till nine. Can you request detention? I'm like I can't now. I literally needed them to sign the document for me to process the request right. So like that step is really important for brokers to be able to request the detention from the carriers Exactly.

Speaker 1: 16:36

Good point, all right. Last question here how on earth does a broker move all of their loads themselves quickly and efficiently? I miss so many loads because I don't even get a chance to bid on them. Very, very good question here. So if I were to, I'm actually curious your take on this. The maximum amount of freight or loads, a what one man show can do in a single day, I feel like the most. I've seen someone and this is like talking with the customer dealing with the trucks yourself, like you don't have anyone else helping you. The most I have seen somebody do is like 15 a day before. They're like busting at the seams and can't get anything else done. What would you say? I even feel like 10 a day is a lot. But I've seen folks depending on how low touch they might be. I've seen 12 to 15 a day. But what do you think the average load volume that one person, cradle to grave, can handle is?

Speaker 2: 17:37

Like one person cradle to the grave. Like it's funny I was talking to someone about this the other day I'm like in my head and it depends on the freight and how you're covering it Right, like I can remember remember when I was managing flatbed projects where I had between five and eight loads to cover a day Again. But here's the thing If you've got that continuously, not only do you got to book five or eight a day, but you've got to check, call every one of your other trucks still over the road and communicate with your customer and cover and bring these in Right. And to me, like that number is probably around like 30 to 35 a week where I probably am close to that limit, yeah, and that's just like random loads coming through on different lanes.

Speaker 2: 18:18

Now, and another scenario like drayage. I've booked a few hundred loads a week in drayage by myself and can manage that. It takes a ton of time to do the invoicing and all of the price on the other end. But you do that more in buckets. I got a booking with 25 containers or 4 bookings with 25 containers. I can book that with one carrier, I can book the next one that day. So I've gotten into the hundreds by myself in drayage because you can give many loads to one carrier and they run much shorter. But like over the road stuff where you're running like longer miles, like I'd say probably like five to 10 is a lot. Like I would say your average broker is probably three to five a day Because again it depends on how much communication you need with your customer, how hard they are to cover and how much margin you have in it too, because like you can book them faster on lower margins to just move on. But you're also leaving opportunity on the table.

Speaker 1: 19:17

Yeah, I'd say like there's always exceptions. Example is like if you've got a project and it's like, let's say, it's 20 or 30 loads going into a job site and maybe it you can cover all of that with like five different carriers across their fleet. I can see my name, my neighbor's cutting his grass behind me. I love this, um, but yeah what's that?

Speaker 2: 19:39

is that your other neighbors?

Speaker 1: 19:40

you have a shirt on today not the same neighbor, um, but like project freight. If you get 30 loads covered across six or seven carriers, you're only dealing with six or seven points of contact versus 30 different check calls, and again, it might be all the same exact lane right 30 flatbeds going from Houston to Oklahoma. To advice to the listener that asked this question, though, about how do they do this all quickly and efficiently you should try to automate or simplify as many of your tasks as possible, so, for example, gps tracking is a great way to avoid having to do manual check calls. Having certain SOPs in place with customers and carriers on expectations, on communication, can save you a ton of like headache and issues on that side.

Speaker 1: 20:29

Um, I would also tell like so they said I missed loads because I don't get a chance to bid on them, probably referring to like jump ball freight or like load lists, um, someone else might just be responding to them faster. I mean, that's, that's possible there. But if you are at a point where you're not able to respond to a customer's quote requests in a timely manner, you probably have yourself in a position where you're just you have too much on your plate. You have to either find a way to automate some of your tasks, simplify them in some way, or maybe and I hope it's this way maybe it's time to hire because you're just you're growing and succeeding so well that you need to bring somebody on to take some of the administrative tasks off your plate so you can quote your customers and things of that nature. So that's two things.

Speaker 2: 21:15

You could use a tool like levity, one of our sponsors, that will help you get responses to your customers while you're doing other things, which will help with that for sure. Yeah, I think too, and it's like a short little story but it's always stuck with me. I remember really early when I first started in the industry, my manager, jason, was explaining this guy that used to work there and he said you know, in that world of TQL, like if you can't do 4k a week in gross profit, like you're probably not going to stay there because you're not making any real commission and that's like the benchmark really success or not. If you can't hit 4k a week, like you're probably just not going to make it in the long run. And he told me about this guy that had worked there, was really good at prospecting, really effective, but he was like you know he's moving about 2025 loads a week, you know himself, but it was only ever to book margin at about 2,500 to $3,000. And he had told him after about six months I wish I knew the guy's even first name to reference it. But he said to this guy he's like listen, do you want to stay in this industry long term? Like, do you enjoy it? Do you want a career here? Right? It's probably a year and a half, two years into it. The guy's like, yeah, I'd love to, and do you have? He goes, you're basically treading water. He's like you can keep moving freight for three grand a week, 25 loads and work 50 hours a week and you can keep doing that because to the company, they are doing fine with this guy.

Speaker 2: 22:36

This guy isn't benefiting from all of his work, right, because he's not getting any commission. He said but if you really want to make it in the industry, you don't have the right customers. These aren't the right fit of customers for, honestly, tql. And for sure, at that time TQL was priced we're going to be expensive, but we'll help you when no one else can help you. So you've got to pay for that. And he's like you know, the types of customers that you can make money on are not the customers you're working with and he was likely working with, like lumber customers and things, things.

Speaker 2: 23:05

You can get loads pretty easily that give you practice but take a long time to cover. You're going to make 50 bucks on it Very low margin even you're making a hundred bucks on these loads. So you know, covering 25 loads at a hundred bucks a piece, like you're never really getting out of that and you're just treading water and moving in the same place and spending a lot of energy place and spending a lot of energy. So, again, depending on where this person is, like, you want to constantly be looking at who your customers are, how they value you. Are you just the cheapest option they use? That's not a customer, you're just the cheapest guy. That day. There is no relationship. That is your value to them, you being cheap. Now, lots of relationships start that way, but if they stay that way for a long period of time, you need to be adding different types of customers that value the service you provide.

Speaker 1: 23:52

Agreed, agreed. Yeah, you got to take a hard look at your book of business every now and then and figure out where where these issues are. You know what customers are giving you, issues as a juice worth of squeeze, is the profit there for your time, et cetera. So good questions. Keep sending them our way and we will continue to answer them. Final thoughts.

Speaker 2: 24:13

Whether you believe you can or believe you can't you're right, and until next time, go Bills.