Getting Hired & Paying Carriers as a Startup | Final Mile 58

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

• Freight Agent Positions Outside of the US
• Getting Hired as a Freight Broker With No Experience
• How to Pay Carriers as a Startup Freight Brokerage

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

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

Transcript

Speaker 1: 0:19

Welcome back. It's another edition of the Final Mile where we answer your questions. Keep sending them to us via email. Info at Freight360.net. Leave a comment on the YouTube channel. We answer some of those questions and there's a link in the show notes for our Facebook group. We take some questions out of there as well. We've got three today. Make sure to check out all of our other content as well at freight360.net. You'll find the Freight Broker Basics course there and check out our sponsors in the description box to help support the channel. You've got Quickscope, levity, bluebook and DAT.

Speaker 1: 0:54

All right, our first question today I want to get hired as a freight agent. I'm from outside of the United States. Can you suggest any brokerages that hire from outside the US? So I picked this question because I wanted to have a more broad discussion on if you want to get hired let's say you just want to be an agent, right, and you don't have. You know you don't have the experience or if you want to get just hired by a brokerage, how do you go about doing this? And you've got to put yourself in. You got to be in the place that brokerages are so you can connect with them, network with them, etc.

Speaker 1: 1:35

I think our Facebook group has done a really good job at connecting people that are trying to get into the industry, those who are looking to hire and find candidates for various jobs, things of that nature. So you, just you, got to find those right people. Now, as far as being from outside of the US we talked about this, I think, on last, the last Q&A session that we did, on why some people are, you know, for using outsourced contracted employees versus not. I will tell you that you know that my company Pierce for a while we have some agents that are not in the US. I've got some in Colombia, I've got one in Ukraine, I've got one in Mexico, and what it comes down to is you have to find an organization that is you know their technology, for example, is compatible with wherever you're located, because there are some, some TMSs or some services that are you know you can't use unless you've got a VPN or something of that nature.

Speaker 1: 2:36

Once you get past that hurdle, you've got to find an organization that is is willing to take somebody on, regardless, right, do you meet their qualifications, et cetera. A lot of the big companies that are out there have you know. Hey, you've got to have X amount of business per year. You got to have you know customers, x amount of experience, and if you don't have that you don't qualify.

Speaker 2: 2:56

So I think Hold on one sec, I want to pause on that right there. Here's the reason for that Cause. We get this asked us a lot, right, like, well, I don't have a book of business, like, how do I start? Right, the reason some of the more, I would say, the older companies that offer agencies and the more reputable ones or, however you want to look at that, the longstanding ones that you know are, you know, been in the market, right, the reason they don't want somebody without a book of business is they are not structured to train somebody, to mentor them or help them. And the reason they aren't in a lot of cases is because that's why you're getting a higher commission split. They're not going to pay trainers and pay people to teach you how to do it and give you this very high commission split, right, so there are some that will take you on and, you know, take a shot.

Speaker 2: 3:44

But the other thing to consider is, like that company, if they bring you on as an agent, right, like, you are an independent contractor, not an employee, which means you get paid for the work you perform. If you don't get freight, they don't get paid, but they're paying you day one for the tools. They're giving you emails, they're giving you a TMS and they're most oftentimes giving you load boards. So there's usually a cost, whether it's a couple hundred or a thousand dollars a month, for an agent, as soon as they start. And if it's four months to get business and you need a lot of help and you don't know what you're doing, they don't have the people there to do it because that costs money and then they couldn't pay them and give you the commission split and they're not structured that way.

Speaker 2: 4:24

And the third is they're literally losing money on a gamble that you can succeed where you believe you can, and it's not that they don't trust or believe that anybody can. It's that there's such a high failure rate in sales in our industry that these companies aren't in the business of making bets on a bunch of maybes. A W2 model brokerage might hire 10 people and eight of them are gone by the end of the year. One of them's gone by the end of year, two. One stays beyond that right. So like there's a very high failure rate in sales in general, for sure, in our industry. That's why you don't see agencies taking long shots or making bets on people that don't have experience or don't have any customers.

Speaker 1: 5:07

Yeah and we'll. Our next question is about not having experience, and we'll get to that in a second here. But you made a good point because, like I, with an agent model right, I run an agent division for for Pierce Worldwide. I don't take someone that's brand new and train them on how to be a freight broker. I spend a lot of my time developing and coaching existing agents to get to the next level. I could be introducing them to a certain niche that they're not familiar with yet, or helping them navigate a bid or some sort of project that they're unfamiliar with, and just kind of sharing knowledge with them on that aspect, but not teaching them one-on-one freight brokerage stuff. We'll come back to hey if you're brand new, that's going to be our next question. But anyway, how do you? So? Let's say you know.

Speaker 1: 5:51

Back to our question here. You're outside the US, even if you're not right, how do you find someone to hire you? And maybe you don't meet the qualifications that the popular agent companies out there want, right? Do some traditional networking Like I've talked to folks on the phone who they don't necessarily meet what I'm looking for? We're just not a good fit, for whatever reason. But I tell them, I said hey, if you can get in a place where there's a lot of brokerages that are maybe a smaller size, that will take a one-off chance on you, that's your best bet. So get into some networking spaces and our freight broker and motor carriers networking page on Facebook it's got like 80 or 90,000 people in there. That's a great place. We see all the time people are posting like, hey, I'm looking to become an agent. Or someone might say, hey, I'm looking to hire somebody. You don't have to have experience. Those are great places to network and get in front of people or just hop on a job board.

Speaker 1: 6:52

There are companies who don't care if you're in the US or if you're not in the US. One of the big hurdles that I've heard brokerage owners talk about with foreign agents is that you know, they wonder what you know. There's more risk, like what kind of recourse do I have if this person is not actually in the US? They don't have a US entity. So let's say they, you know they defrauded them or they, you know, you know hurt their brand image or whatever. There's really no recourse. So it's not like a huge deal, but it is a level of risk that some people think about. So get on the job boards, get in the networking groups, use our Facebook group, introduce yourself, and that's probably a great way to go about it, because we do have a lot of labor that's outside of the US, right? You?

Speaker 1: 7:41

get call centers that are used overseas for track and trace. We've got staffing companies down in Mexico and South America and the Philippines. There's tons of opportunity out there.

Speaker 2: 7:52

I would say that too Our Facebook group. I've seen lots of people get positions. Lots of people respond and say give me a call, I'll take a look at working with you. And the other option you have if you can't find an agency is look for some of the staffing companies that work in logistics, where maybe you could start, get trained, maybe do a certain task where you're working with a company in the US for a few months, learn more, get some experience on your belt, then maybe be able to branch off on your own right. Yep, your ultimate goal is to be an agent or to own your own brokerage right. You don't have to start at the finish line. You can start and work your way towards it over time and build your resume and your connections to make it a little easier on you to make that leap.

Speaker 1: 8:34

And that leads us right to question number two how do I get hired if most companies require prior brokerage experience? Well, if a company requires experience and you don't have experience, it's not the right company that you should pursue because you don't meet the minimum qualifications. Right and like we just talked about. The agent model is a great example. It is specifically designed for a certain uh type of freight broker who's at a specific or they're past a specific part in their career. Right, so we can get rid of all the training, the one-on-one level training, and just focus on um bringing you over. Whether you're required to have customers or not is dependent on the company, but they don't have to focus on that high turnover of brand new salespeople and train them on freight Now if you don't have prior experience.

Speaker 1: 9:23

There's a couple different ways to go about doing this. Probably the most common one Ben you came from this background is the big2 model, where they you know, they pump through a lot of new young candidates, train them up and some make it and the majority don't. You were one of the, the one of the ones that did make it. You were, you know, you were at a big box for a number of years and did very, very well there. That's one option of years and did very, very well there. That's one option. Another option and I recommend this to people all the time because it doesn't come with the non-solicit, non-compete things that your CH Robinsons and TQLs will have is kind of like what I mentioned in the last question is to network directly with folks Facebook group, linkedin groups right, talk to that smaller to medium-sized broker maybe that just one guy or gal who's running a brokerage and say, hey, I really like to get into this business. Can I take you to grab a cup of coffee and sit down and just learn about what you do for 30 minutes one day and you get a little bit of feedback and understanding of what they do. And then internship right, maybe a little part-time gig with a company where you're just doing some basic answering phone calls or sending customers updates.

Speaker 1: 10:37

Right, if you have no experience, your first goal should be to get that baseline experience and that's not going to be hopping right in to the deep end as an agent with. You know where you've just got to go out there with very limited support. You want those guardrails in place. You want those left and right limits to keep you in balance so you can slowly learn in bite-sized chunks. All right, I'm going to understand the industry and then I'm going to learn track and trace, and then I'm going to learn how to talk to carriers on the phone, and then I'm going to learn how to negotiate with carriers, and then I'm going to learn how to deal with customers, and then I'm going to learn how to prospect customers Right, and then I can do the entire thing. But you have to do it in steps. There's no shortcut. It is a process.

Speaker 1: 11:17

But I would say the vast majority of brokerages don't require you to have experience because they want to bring you in and train you their way. If you're seeing experience required, those are typically more of your agent roles, I would say. I think job boards like Indeed, ziprecruiter there are a ton of freight brokering related jobs that are out there in those places. They're not always called freight broker and I think that might be why people have this question. Oftentimes it's called like logistics coordinator or carrier, sales or account manager at a logistics company, things of that nature. So you've just got to do a little bit of homework on there. Anything else you would say if someone has zero experience and wants to get started.

Speaker 2: 12:02

Yeah, I want to add and I'll give you the perspective on the other side of this that I personally went through right? Is it like everything is sales to some degree? Right, like it's selling yourself. It's selling somebody on an idea you have. It's trying to, and it's not manipulation, right, it's trying to get the other person to understand why you're a fit for the thing that you're going out for, like a job in a freight brokerage, right?

Speaker 2: 12:24

So here are the things they're looking for in an interview. They want people that are competitive, so they look for people that have sports in their background. They look for collegiate athletes is a big thing that they look at, because those are people that tend to be extroverts that end up doing well in sales. Because it's like you get your energy from talking to people. Right? They're looking for people that are self-starters. They're looking for people that take initiative, that can think on their own and take direction, but then still go and be like self starters in some ways. Right, these are the things that companies are interviewing for. It's not intelligence and it's not a degree or a specific type of degree. It's really the personality type that determines the likelihood of success in the industry and in my particular example, like I literally went through this because I was on the other end, I got recruited at like 34, 35.

Speaker 2: 13:17

And I'd been in sales for I don't know 12 years at that time and it came from finance and banking, which was still sales and BD. But I remember going through the interview and I really liked the industry, I liked how it functioned, I liked the compensation, how interesting it was and I liked the economics of it. I'm like this really seems like a very good fit for me and I won't. I don't forget this because, like I, they didn't give me the position and I'm like I've got the qualifications. I know I can do this, I know I have a proven track record of making the phone calls, the activity, the output, the initiative and I'm like, but they aren't seeing it right. But I really wanted to work at this position and I really wanted to be in this industry rather than going into banking and doing what I'd done previously.

Speaker 2: 14:04

So I called them back and said hey, I know you guys decided that maybe I wasn't a good fit for this time or maybe this hiring class, but I'd really like to schedule. If we could get 15 minutes, I will come back down. Can I get 15 more minutes of the man? His name is Jason? I'm like let me get 15 more minutes of his time, cause I really want to speak with him and hopefully maybe understand why he feel like I'm not a good fit and at the end of the day and I do this in sales this day and at the end of the day I said, if they still decide I'm not a fit, like that's fine, but I really feel it's important for me to be able to make sure that he understands why I believe this is a fit for me, right, and I really just need a small amount of time to try to impress this, not my opinion, like why I think this is true. And maybe this didn't come across well, maybe I was nervous, whatever it was. Can I get one small opportunity to basically make my case again, right, and again literally drove like an hour, whatever it was, to go back down for this 15 minute meeting and I asked the question, like you know, why did you think I wasn't a fit or what was it that concerned you at? And that's exactly what he said he's.

Speaker 2: 15:07

Like you know, most of the folks we hire are newer, right out of college. Folks that have been in other industries and have been in sales tend to be harder to train, tend to not necessarily fit in with the culture. Maybe it was the ego or they tend not to have the growth mindset where they're willing and open to learning from people younger than them. Like that was the concern he had with me and I addressed it and was like listen, I can come off that way. I do have confidence in my ability to do these things.

Speaker 2: 15:36

Sometimes that can come across as either ego or that I'm not willing to learn. And I said I want to be very clear and very direct that I know I know nothing about this industry and I'm more excited than anything to learn from the folks here. I don't care if they're 19 or 40 or 50. Anybody that's been doing this knows more than I have and I want to be a sponge to learn from all of them because I think I could be very effective at this position and ultimately, by me literally going back and selling myself and doing that again is how I ended up in the industry, because otherwise I'd probably still be in banking or in commercial real estate and it's like this is true in all sales, right, like, whether it's you selling yourself for a job or you trying to, you know, make one extra phone call to that customer that has told you no, seven times, one more sometimes is the difference between getting the thing that you desire and just quitting and moving on.

Speaker 2: 16:25

And to me, like it's just a very good lesson, no matter where you are and what you're trying to achieve, that push a step further. If you think you've pushed as much as you can, do one more, do maybe two more. Then at the very least, if you don't get it, you can sleep well at night and you don't have this regret hanging over your head of I wonder, what if? What if I would have made one more call? What if I would have shown up? What if I would have asked this one more question? Right? What if I would have shown up? What if I would have asked this one more question? Right? Do the extra effort At least. Then you know for sure you did everything you could have and no more, and you can move to the next thing without that hanging over your head. It's a great story man.

Speaker 1: 16:58

I love it, love it. I guess, to wrap both of those questions up, if you're going to be good as a freight broker and good in sales, you got to be able to sell yourself, to get yourself in the door with that company to do the job all right. Last question what are some options to pay carriers as a new startup brokerage? So there's really two ways to go about this. The first option could be how am I actually going to physically pay carriers because I don't have money? And the other option is um, how should I be paying, like what should my terms of payment be to carriers Because I don't have credit? Those are kind of two different ways to approach this. There's a third two. What's the third one?

Speaker 2: 17:39

The third is going to be I've got no credit under my MC, and what can I do to be able to get carriers to approve either my factoring company or my direct?

Speaker 1: 17:48

Yeah, that was the second option I was going with. I might have just worded it different. I might have just worded it different, so I'll take the first one first. All right, if you don't have money to pay carriers, the answer is easy. You're typically going to use a factoring company, and what a factoring company will do is they are essentially buying your invoices off of you at a discount. So let's say you have a thousand dollar invoice to a shipper and you want to factor it to pay your carrier. The factoring company might front you, let's say $900, and then you can pay your carrier and then, when the factoring company collects the money from your shipper, they'll give you the other $100 minus their fee, which could be 3% or something like that. But that gives you money next day typically, or within a couple of days after the load is delivered, so you can then pay that carrier. So that is the common way. You can use lines of credit and other things. Ideally just have the cash to do it. It takes a long time to get to that process, but factoring is the common answer for how you can cashflow your business as a new startup.

Speaker 1: 18:58

Now to the question that you and I brought up as the secondary is hey, carriers don't want to take loads from me because I'm a brand new startup, I have no credit history, my days to pay on DAT doesn't exist. I had a called me like two months ago and was like hey, um, how do I get my credit rating on dat to, to you know, improve because I'm brand new and I was like there's no magic pill to take here to make that happen. But what are some things you can do to get your credit rating and your days to pay to be more visible and reported on? It's going to be some old school, you know, talking with carriers and factoring companies and gaining trust with them.

Speaker 1: 19:40

And some things you can do to show sign a good faith is quick pay at no, you know, no cost or no fee to that carrier. You could pay, you could advance that money, maybe advance half of it up front upon pickup with no fee. A lot of times if a broker wants to offer a fuel advance or a quick pay, they're going to charge 3% or something like that because of the cost of capital or whatever service they use. If you do that at no cost and you absorb the cost yourself and you can get the carriers or factory companies to report those payments. That's a great way to build up trust and relationship with carriers and once that stuff starts to get reported, I think it usually takes like two or three payments cycles and you'll start to see that resonate or reflected on credit reporting databases, dat and other places that will show a broker's days to pay. What would you add in there?

Speaker 2: 20:37

Cause this is a question I did this a ton from new brokers.

Speaker 2: 20:40

I've done a lot of this this year and I just sat in a meeting last week with the CEO of a com freight to go through this too, on what and how you could do what right and agree with everything you say, right? The first thing I want to say is, like, the first question you can ask the carrier is hey, and I found that it's more effective to just be up front and be like hey, I'm curious who you guys use for factoring. We've got a newer MC, so we've got limited credit history. However, we do factor and we haven't had any issues with payment and wouldn't. But you know, I know we've run into some things where factoring companies might not approve companies that are newer for lack of credit history. Right, then the next step is they'll usually tell you and say, hey, like, do you have a point of contact? I can reach out to there, because oftentimes the carriers are like yeah, you're not approved, we can't work with you. But again, if you just take that as the answer to what I was saying earlier, right, like, you're not going to get a lot of them and you need to get everyone you can sometimes to cover load. So, getting a factoring name and the point of contact.

Speaker 2: 21:40

Oftentimes, if you call them and explain the situation, the factoring company will make an exception and allow you to at least run a load and then, if you pay it fine, then they'll allow you to run another one, like limit it. The second thing some of these smaller factoring companies will allow you to prepay them. If you've got cash and it's just credit, then you can literally deposit, sometimes five grand with this small factoring company. Once you run a load or two, they don't it's like a retainer type deal yeah.

Speaker 2: 22:05

It's like a prepayer retainer, but then they report it right. The next thing is this is like a fork in the road. So typically carriers have one of two agreements with their factoring companies exclusive or non-exclusive. Exclusive, when they sign those agreement, means that carrier cannot take payments from anybody except through the factoring company, because the factoring company says, hey, we'll give you these terms, but you got to factor every load you run so we can make a percentage on every one of them. Non-exclusive means you can run some with some customers factored and some you could have them pay you directly right Now.

Speaker 2: 22:39

Most of the time, if you get a hard no from a trucking company and their factoring company and they're exclusive and this I just learned this like three days ago. As from Steve we were talking about this I go what are the other options? He says there's a regulation and basically US law that says no company can have I think it's like I can't remember how the legal wording is Basically they can't have complete control or direction over their client's business, meaning they literally can't say to this carrier you can't do business with Nate's brokerage, but you can with Steven's and Ben's, even if they're exclusive. So what happens is is that carrier actually has a legal ability and right to still work with Nate's company, even with limited company, even if they're not on their factorings approved company. Because the factoring company then will give that Nate's company with no credit, will give you a release and say listen, you can work with Nate's company because we won't allow you to factor with him, but legally you can still work with them. Most carriers don't know this and, if you understand this, this is like a loophole where it allows you to pay that carrier directly outside of the factoring company that won't approve you, which opens up the ability to do what you said. And in that scenario you could be like, hey, I will pay you half upfront and I'll pay you half upon delivery.

Speaker 2: 24:00

You can do that through some factoring companies. You can do it through Zelle. However, if you do it through Zelle it doesn't get reported. If you do it through the factoring company, it does. And then the last thing I want to say is how this gets reported. You do not get reported to Ansonia as a new brokerage. They will not establish your credit history until the fourth month of two debtors reporting you. So it has to be three months and then you don't count the fourth month, and that is when Sonia will establish your credit history and then report it to DAT. So you have at least really four months from when you start running loads and working with multiple companies before that credit history is established and then reported to that, to where then the motor carriers can see your days to pay and your score on there.

Speaker 1: 24:40

Interesting. It's good knowledge. All right, we're going to wrap things up here. Final thoughts Ben.

Speaker 2: 24:45

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