Offshore Hiring, Quoting, & Freight Agents | Final Mile 57

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

• Offshore freight brokers
• Quoting customers
• Freight broker vs freight agent

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Transcript

Speaker 1: 0:19

Welcome back for another edition of the Final Mile. This is where we answer all of your questions, so continue to send them our way, where we pull all these from our email submissions, facebook group, youtube comments, etc. So send us your question. We try to get to as many as we can and please check out all of our other content at Freight360.net, including the Freight Broker Basics course, all of our other content at Freight360.net, including the Freight Broker Basics course, and take a moment to check out all of the sponsors in the description box to help support this channel. We've got Quickscope, that's your load level verification software to help verify the identity of the driver and location of the driver. We've got Levity for your AI automation to help you with email responses and quoting and load building. Blue Book Services for the fresh produce and lumber industry for credit vetting and lead generation and, obviously, dat for your load board option there, as well as a lot of other really cool tech tools. So, ben, let's get right into our questions, as well as a lot of other really cool tech tools. So, ben, let's get right into our questions.

Speaker 1: 1:26

Our first one someone said I just want to know why employers in the US are so against hiring offshore brokers. There are many who are working from India or the Philippines. Is there something that keeps us from doing a good job? So I picked this one because you might hear the phrase nearshoring, which has been more and more common lately, where brokerages will hire outside help or contract work from outside the US to assist with some of their brokerage work. So there's companies in Mexico, in South America, in Central America, and they obviously mentioned the Philippines, india. I've seen Serbia, armenia. So the reason that this can be an attractive option for a lot of brokers is, I mean, the number one reason is it's more cost effective labor, right, cheaper labor. The same job in the US versus outside of the US is often drastically differently. So that's where this business model came from.

Speaker 1: 2:31

Now the person specifically is asking why are some employers against the offshore, the nearshoring option? And there's a couple of reasons, right, and these are in no particular order, and this is not to say that every brokerage has this thought, but at Pierce for a while we've looked at the option for Do we hire in-house, do we get someone, do we nearshor or outsource some labor? And it depends on everyone's specific company in your situation, but there's pros and cons to both. If you have somebody in-house, the benefit there is that you have realistically way more control of that person, whether or not somebody tries to sell you on the near-showing like no, you've got control of them. They're literally in your office. You can see them every single day.

Speaker 2: 3:25

You, when they show up, you know when they leave and you don't have to stop what you're doing to be aware of what they are or aren't doing exactly um now, um that they usually they're.

Speaker 2: 3:38

They're going to cost you not only that, too, but like the speed at which you can usually get someone up to speed is far faster when they are physically next to your other team members, because they can integrate with each other, the culture they can learn from each other very quickly. They can pick up things, ask questions that don't need to be literally set up a Zoom to do. Right, like I've been working on Zoom for five years now. Right, it definitely has its disadvantages. Right, like you don't have what you would call like the water cooler, talk in between things. Like you get on it, you've got a purpose. This meeting is over. You go on to do what you're doing. It's efficient, it's effective, but you miss out on all of the other things you learn about each other that create the culture of a company.

Speaker 1: 4:20

Yeah, I mean, that's why I like so. Culture of a company yeah, I mean, that's why I like so. The company I work for is in Tennessee and I live in New York and there's a reason that I make it a point once a quarter to to go spend a week there, right, cause you make up for that, um, that lost time in between. So now, other reasons why companies wouldn't want to um offshore or nearshore employees. So they specifically as brokers, so especially having your sales team offshore. Back to what you just said about that control and then picking up and learning and all that. That's your revenue producing role, right, your account managers, your brokers, et cetera. So that's a main reason. Another reason too, and this isn't always true, but there's the culture.

Speaker 1: 5:03

The proficiency to speak English varies depending on the, the place in the world, and it's not just, you know, it's not a ding on anybody, it's just it's English is typically a second language, not the primary language, if you're in a place like the Philippines or India or Mexico or South America or Central America and and some role, I mean the phone, things like that. And again, that's not to ding anybody, that's just the reality here, right, the same way that a like, if you're. I'm trying to think like someone wouldn't want to use someone who speaks English as their first language if they're going to be, you know, performing a job in India or in the Philippines. Right, because their local folks are going to speak that the local language and dialect much more proficiently most of the time. So those are like the main ones.

Speaker 1: 6:26

I think some people just have a weird uh fear or like a distrust if somebody is outsourced versus they're actually employed in-house and that you know that depends on the, the brokerage owner or the manager, whoever it is. Um, but even like, I'm a huge fan of outsourcing what you can when it makes financial sense, like at our company. Uh, even, look at freight 360, right, like we, we don't like have an it person that builds our website and maintains stuff. We have it contracted through blithe who, um, everything is logistics podcast right, we've had her on the show. We've been on hers. Um, we've used, um, our video editors from india. Yeah, like, exactly, right, our video editor. He is from India. We've used outsourced staffing for social media in the past before we brought Stephen the intern on.

Speaker 1: 7:19

There's ways to scale your business properly. Even at Pierce Worldwide, we don't have the demand or need for a full-time IT person, so we have an outsourced IT firm. The same thing we don't have the need for an in-house counsel, so we have outsourced legal help. You know all that stuff. So I think it's good to contract it or outsource it when you can, but keep as much of it in-house as you can as well for your own control. So there's sort of a balance, in my opinion, to it. Any other thoughts on that one?

Speaker 2: 7:54

Yeah, to be honest, like've seen both. I've seen good and bad from outsource. I coach a lot of folks in other countries. I was responding to some emails now. We've had clients in Venezuela, philippines, a lot in India, a lot in Europe, colombia, mexico. I've outsourced to all those different countries for different roles and again, it's still like anything else. You still got to find the right person, even in another country. But I think you outlined a lot of things that are a little different than having somebody there and I think, honestly, oversight is probably the biggest reason.

Speaker 2: 8:21

Lots of people that have teams in an office. They're used to it and again, there's a lot of benefits to being around the people you work with. You learn from each other faster, you enjoy the work more, it's easier to help. You don't got to jump into Zoom meetings. You know if you need a hand you could just be like hey, jimmy, when you get a second right, like I mean that's overlooked.

Speaker 2: 8:43

But when you're sending text messages, especially in our business, there's so many emails and messages and now you got to Skype to talk to this person and then it's just communication doesn't move, even though it moves quickly through those medians. Like we don't understand each other. When we can't see somebody either, or the tone of their voice, right, like you know, when you're in a room of somebody, just the tone of the voice, hey, ben, or if it's hey, when you get a sec, like those little things that you don't notice really do help you get things done faster. When you realize, like they can see you, they can hear you, you can help them if you see them struggling, even if they haven't reached out, like there are definite for sure benefits to human beings cooperating physically together. Yeah, yeah, a hundred percent, it's a nice thing. Yep, all right. Next question A hundred percent, it's a night thing?

Speaker 1: 9:29

Yep, all right. Next question we are a small brokerage and how we quote by posting around in DAT. When a customer gives their list of common lanes, it takes me multiple days to return. I feel like it shows lack on my part. We don't have a TMS. Is there anything else I can do? Okay, so if I'm reading this correctly, they're manually going lane by lane to quote through dat and they feel like, am I reading that correct?

Speaker 2: 9:55

I think that's what they're saying my guess is they're posting loads up to get quotes from trucks to send the video okay so I'll give you a couple of um, a couple of ideas here.

Speaker 1: 10:07

So they also said we don't have a tms. Well, you should. You should get a tms. There's free tmss out there that you can start with. Check out Rose Rockrat sorry, rose Rocket and Ascend TMS has a couple of free and well-priced paid versions. So DAT has a tool called RateView and in RateView you don't have to post the load, you can just run that individual lane and you can see what the rate is. They also have a premium version of that which allows you uploading multiple lanes.

Speaker 1: 10:45

It's a bit pricey, so it may not be something that you're ready for just yet.

Speaker 1: 10:48

So it may not be something that you're ready for just yet, but the reality is, if you know, when you're new, you're going to have to go through the manual process of quoting and that's going to come down to some rating tool. But you know, at the same time, talking to actual carriers is a really great way to figure out a current rate, because that's an actual market rate for right now with a truck in hand. So it shouldn't take you multiple days to return a quote, though the data that's out there is pretty easily accessible, and perhaps you're just not utilizing the tool the right way, and I would encourage you to go through some of the videos that DAT has that shows you how to use their stuff. We've even got some stuff on our YouTube channel that walks you through DAT and posting and searching for trucks and all that stuff. So take a look at the education that's out there. But I mean anything else that you would add as far as how someone can quickly get back to their customer or the quote.

Speaker 2: 11:48

Yeah, I'd say from a strategic standpoint, or how this works. I look at it two ways. You can either quote things with truck in hand that's what we commonly refer to as you talk to a truck. That truck is either empty and gives you a rate, and then you go back to your customer with an option, right. The other is to quote, and it's a bit of a gamble because again you're taking risk. You are getting speed to get them the number quicker, but you don't know if that's exactly what you'll pay Right. Those are the tradeoffs, so one isn't better than the other. You just need to apply which to which situation.

Speaker 2: 12:20

So, mostly for bids, I'm going to use rate view and I'm going to use the multi lane tool and I'm going to get a benchmark for a lot of lanes to see where I think DAT shows me, think DAT shows me. But then I usually work. If it's a larger bid, I'm going to pick like a dozen or so, maybe two dozen of those. If there's a hundred lanes, I'm actually going to go and maybe post some of those up all at the same time and I'm going to call some trucks that day. Maybe I'm going to look at what other brokers are posting. Those loads are for that day and I'm going to get a feel for what I think it might be to cover and I might adjust those rates accordingly. I'm not going to do it for everyone, for this exact reason. It's too time consuming. Also, the likelihood that you'll be awarded all of those lanes is very small. So you're spending a lot of effort, knowing that, even if you do well on this, you wasted a lot of time. So there is no perfect strategy and, like my manager told me this a long time ago when I was doing this and spent more time probably than I needed to, he's like it's not a perfect science. You're never going to get a perfect and also it changes every day. So, like, even the perfect rate today might not be the perfect rate Friday. It might be the perfect rate again Tuesday. Like the market is always changing. There is no perfect science to this. This is the risk of being a freight broker. So what I look at it is more of like. I look at it more like if you're gambling, I'm like if you're quoting lanes, you should be able to make money on eight or nine out of 10, like one or two 10 to 20%, like, depending on the day, a week that might be a winter Monday and Tuesday and you might lose 250 to 300 to cover it. Wednesday and Thursday and maybe do well on Friday. Like, the market is shifting more again the way it used to and that just means more volatility. Rates are changing a lot in a given day.

Speaker 2: 14:05

You might pay two grand for a truck on a lane if you cover that between eight and nine in the morning. You might pay $2,600 if you cover it between 930 and 1030 in the morning and you might pay four grand in the afternoon and you might get lucky. And if all the loads are gone and there's one truck at 5.30, you might've covered it for 2,500 again. Like I've literally seen this in the past few days. So there is no perfect number. And also, what you're going to pay is not just dependent on what that tells you. It's how good are you at calling trucks, how good are you at negotiating rate, how fast are you at calling through trucks to get the right truck for the right load at that right time of day? And also, how much time is your customer going to give you to move this load? They're giving it to you days in advance. They're giving it to the same day, right? All those things are going to determine what you ultimately pay, not just the rating tool regardless.

Speaker 1: 14:50

Yep, great explanation there, all right. Lastly, what are the pros and cons of being your own authority broker or becoming a broker agent? So, basically, starting your own brokerage versus being an agent for a broker. Check out our episode 257 of the podcast that came out. It would have last Friday If you're watching this. When it comes out on Tuesday, we break it down in detail. We'll give you like the real quick list here. So let's go. The pros of being your own broker versus being an agent, right. You have full control. You don't have to answer to anybody but yourself. You retain a hundred percent of all your net profits. You make all your own decisions.

Speaker 2: 15:33

You're also responsible for 100% of the losses.

Speaker 1: 15:36

I was going to say the cons of, yeah, the cons. You are responsible for 100% of the losses. If there's losses, you take on an extreme amount of risk, financially and liability wise Liability wise you have added costs of paying for insurance, bond software, load boards, et cetera. And you take on the responsibility for administrative back office tasks like billing carrier, pay carrier, vetting, credit checks, claims. The list goes on and on and on. It's a long list. It is a very, very long list and we don't have enough time to answer it in just a few minutes here. Check out our episode 257. That breaks it down.

Speaker 1: 16:24

Depending on where you are in your life and in your career in brokerage, one of these might be better than the other for you. I am a huge fan of the agent model. I've lived and breathed the agent world for about 10 years now and I've seen people that have decided to go the agent route instead of starting their own brokerage, and they've succeeded. And they're running their own agency just like they're running a business, the difference being they're not worried about cashflow, not worried about claims, they're not worried about all the other things I just mentioned there. They're focused on what they're good at, and that is selling and moving freight and they're really good at that and they give solutions to customers without having to worry about all the little administrative things that come with running a business. Any other takeaways on that one Just.

Speaker 2: 17:15

I think the one of the most underestimated time consuming things of owning your own brokerage is doing billing. I mean, I do spend so much time on accounting and, again, like, how much time you spend is determined by how accurate your TMS is and how quickly you get BOLs back from your drivers right, and if it's not done, perfect. And I mean, if you don't have every detail in your TMS the pickup date, the pickup time, the delivery time, the delivery checkout is there detention in this? Do we have the BOL? Like, if these things aren't all done literally at 100% accuracy, it takes hours and hours sometimes to just work through a few loads, to get an invoice to your customer, to send the payable to the carrier.

Speaker 2: 18:00

If you're a new broker, you need to be paying your carriers quickly, so it's very, very important. However, you also need to be calling customers. You also need to be covering loads and most people I see that actually start their own brokerages. They do this on Saturdays. They're working Saturday and Sunday because during the week they've got a prospect and cover freight. So if you are going to start your own brokerage, it's definitely not a nine to five. If you're going on as an agent, you can probably get off the ground, get prospects, be able to build a book of business and then, if you still want to grow further and you want to own your own company, you can always transition out of an agent model into owning your own brokerage. So definitely pros and cons, but I mean, I think we outlined it pretty well yeah that's good, good insight, good questions.

Speaker 1: 18:46

Keep sending them our way. We appreciate it. Final thoughts Ben.

Speaker 2: 18:50

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