Freight 360

Lumpers, Dispatchers, & More Q&A | Final Mile 82

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Ben & Stephen  answer your freight brokering questions and discuss:


  • Handling extra costs like lumper fees and detention fees – when to charge the shipper
  • Calculating fuel surcharges – is it built into the rate or added later?
  • Working with airlines and MRO repair facilities – thoughts on dedicated aviation freight
  • Why do some brokers refuse to work with dispatch services?
  • Dispatch services vs. family members – what’s the difference when representing a carrier?

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Speaker 1:

Welcome to this week's episode of Freight 360, the Final Mile, where we answer the questions you guys submit to us, either directly. But for anyone out there that has any question if we haven't covered it, we try to cover as many as we can every week. So if you put it in a YouTube comment, we read all of those, try to get back to them as fast as we can. And the ones that we think are most commonly asked we try to share on the show. And the ones that we think are most commonly asked we try to share on the show. So if you are watching us on YouTube and you do have any questions, comments, anything, please share it on YouTube. That is one of the best ways for us to be able to stay up to date with what you guys really need us to cover and talk about on the show. Also, you can email us. You can submit them through our Facebook group. We monitor all those things to pull together this week's questions. Again, share us with any of your colleagues, make sure you like us. Comment on YouTube. If you haven't given us a rating on any of your podcasting apps, we appreciate that. Appreciate all the support on this week's episode.

Speaker 1:

We are going to cover looks like four questions. We're going to be covering lumper fees. We're going to cover what it's like to ship or work with airlines or the aviation industry. We're going to talk about dispatch services and we're going to talk about ways to get your brokerage off the ground on a budget as cheap as possible, but still being able to have the tools and software you need to actually do the job. Let's kick off number one. What do we got?

Speaker 2:

number one here, Stephen. First question this week how do you handle extra costs like lumber fees and detention fees? Are these charges requested from the shipper up front or only after they've been incurred?

Speaker 1:

Also, how do you calculate the fuel surcharge and is it built into the rate from the start? Well, why don't you take this one first? How do you handle extra costs like lumper fees? Let's do them one and we'll do them separately. How do you handle extra costs like lumper fees? Are they requested from the shipper up front or only after they've happened? Then we'll do detention so traditionally lumper fees?

Speaker 2:

um, they're going to be something that happens after they occur. Uh, so lumper fees are most people might know in the industry are a cost to unload the product. The shipper is typically not aware of what the total cost will be because sometimes they'll base it off pallets. You know you can have pinwheel pallets. Companies like Capstone that do a lot of these lumpers services on the docks. They have figured out ways to kind of itemize and charge for a bunch of little things. Um, you know, one truck load right from a shipper may not be meant for just a customer if it's going to a distribution center. So sometimes I'll have to break down pallets and restack or reorganize, so you'll see fees associated with that. Um, one thing to note, though, is, as a carrier, your lum, lump or fee it is and someone will have to double check me, but I'm pretty certain that a lump or fee is uh, it is mandated that it has to be reimbursed. The carrier cannot be responsible for the cost of the lump or fee.

Speaker 2:

Uh, so whoever is responsible for the payment of the freight usually the shipper in these cases, sometimes it's the customer receiving it they will have to reimburse you for the charge. Or you know, if you're getting it through a broker, the broker will request that from the shipper, et cetera. And then, yeah, let's just stop there.

Speaker 1:

So, like on lumper fees, right, just to reiterate right One, the reason it's not usually included in the rate when you're negotiating one load in the spot market is because they just don't know what the lumper fee is going to cost right Now. There's different ways of loading trucks so that can vary the time and how much it costs to unload a truck. There's floor loaded versus pallet, like you said, versus pinwheel, and how and what it actually takes time-wise to get it unloaded. And the other thing that makes it a little more complicated sometimes and why the shipper doesn't include it in the rate to a broker or directly to a carrier is also, like you said, some of the work that happens with unloading the truck might be also in restacking pallets that go to different customers at a distribution center. Like maybe you got a full truckload of 28 pallets but four for one customer, seven or for another 10 or for this one. So what it takes and what money and expense gets associated with each one of those individual orders, even though to the truck it's one shipment to the shipper and the warehouse, there might be 12 orders, 10 orders, 28 orders, it could be any number of orders.

Speaker 1:

So being able to break down who has to pay for what needs to be itemized. That's why that lumper receipt goes back to the broker or directly to the shipper. The broker's gonna send it to the shipper. The shipper's gonna increase the rate paid to the broker, or directly to the shipper. The broker is going to send it to the shipper. The shipper is going to increase the rate paid to the broker by that receipt amount. And in most cases we either comm, check the carrier or just increase the rate on the rate con to be able to compensate dollar for dollar exactly what that is. The truck should not be paying that lumper charge and I'm not sure if what you said I don't know the answer to it. If the truck has the, the driver has the ability to just unload themselves if they choose to. My guess is in some cases, like they're probably not going to let a driver just take a forklift if that is needed for liability reasons, but case by case basis. Anything else you want to add on, like the lumper side.

Speaker 2:

Yeah, and just to kind of to expand on that, that I believe the FMC I don't know which regulation it is, but the point of it is the driver cannot be charged, cannot take on the cost of the lumper fee if they're not afforded the right to unload their truck. That's kind of how the FMC is. So, yes, there are going to be warehouses that will not allow Question.

Speaker 1:

Yeah, If you negotiate a load, that is driver assist, meaning the driver is negotiating extra money to unload the truck, either portion of or all of it. In that case, if they use a lumper, does it get reimbursed, if you've already negotiated that up front?

Speaker 2:

uh, no, so in my experience, no, if, if I know it's going to be a driver assist um, that rate's normally negotiated ahead of time. Uh, if, for whatever reason, there's an issue where, like maybe the shipper didn't put enough plastic wrap on the product and it got tipped and the lumpers are saying they're not going to touch it so the driver will restack in the back of the trailer, we'll negotiate some sort of fair compensation to get them to do that beforehand, if they're willing to do it, you know before everything is unloaded, and sometimes they won't.

Speaker 2:

Sometimes you got to send them to go get the stuff restacked and there's additional costs there. Um, but you know, going on to like the additional fees when it comes to like detention and uh, fuel surcharge and layovers and stuff like that, most of your I would say mid to large size shippers that are moving a lot of freight We'll have a standardized list of access aerials that will include, like what is your detention pay? What is this what? So advice I've given to like carriers and owner operators If you're going to negotiate a rate, why not negotiate asset cereals before signing the rate confirmation? Um, because you're leaving it open-ended? Uh, you're not saying that you can do that all the time, but you know, if you're like, for example, food line is an awful place to go deliver because they take forever, if you know you're going to go there, then maybe get something in writing before you go, because there's a good likelihood that that broker already has the detention like what that shipper is going to pay in writing already, correct.

Speaker 2:

It's just a point of requesting it or it's happened.

Speaker 1:

And I think the important thing right is for detention. The thing that I always stress is like, if you run into it as a driver, make sure you are getting your check-in and check-out times initialed and signed by both the shipper and the receiver, because I've never seen a company reimbursed for detention without that documentation Not just the driver's time and initials, but also the person at the facility that verifies it. So that is a great practice that you should be doing every time. Again, we don't know ahead of time, but we get these receipts, we send them to the customer for approval, then we get paid later. So we'll usually increase that attention rate as soon as we get that approved. As long as the documentation's there, there shouldn't be an issue. Where the discrepancies come into play is when a truck or a driver feels they should be owed more than what a company has as a policy Right. And again, I think another area too that is often overlooked is like when does detention become a layover? What is, what is the layover charge and and what is the detention rate? Usually up to hours. So I think again, just for any drivers out there and brokers one, if you're a trucking company and you're negotiating with a broker. When you're negotiating that spot rate, you should always be asking okay, hey, great, what is the detention policy? And this is important at the shipper and the receiver, because they could be different. Secondly, ask what are they going to pay per hour? How many hours free do they expect? Standard is like two hours free and I would say 75 bucks an hour is pretty common. Some are more, some are less. Somewhat four hours free, some are different.

Speaker 1:

And then the other thing that is really important to ask too is like what is the max on detention and what becomes a layover? Because you might be there at 10 11 in the morning and you could literally be waiting until nine o'clock at night, and then the next day you laid over and they only want to pay you a certain amount of detention and a flat rate for layover. But you might have been there nine hours where, if you got there at four, they pay you no detention and want to just give you a layover. But you might have waited three or four hours before they told you they're going to unload you the next day, which is time you spent and should be compensated for. But the best way to prevent a headache of waiting later is asking for this upfront and saying hey, when you shoot the rate, call it over. Do me a favor, just shoot a quick email where you can just put in the detention policy for this load hey, what are the hours free, what is the rate and what is the layover?

Speaker 1:

And again, the one that is a little bit gray is where and what does detention become in layover? What is layover charge? What is the max in detention? Because some shippers are like we'll pay four hours detention, then it becomes a layover, but the flat layover fee is $250. And the driver's like, well, wait a minute, like I basically waited all day yesterday. They're not going to unload me till tomorrow at noon that is like a day and a half and you're only going to pay me a few hundred bucks. Like that isn't fair. So if you can get this in writing when you negotiate the load, it makes it a lot easier and a lot less headaches to get reimbursed after the fact.

Speaker 1:

The other part of this question pretty straightforward how do you calculate fuel surcharge?

Speaker 1:

Is it built into the rate from the start? If it is a spot load and you're just negotiating one shipment, it's an all-in rate, meaning it is fuel and line haul. If you are negotiating a dedicated load or you're working directly with a shipper, there's usually a line haul and a fuel table and then I think it's like the US Department of Energy puts out a table across the industry for what the fuel should be per mile. It's usually also broken down in regions or states, because fuel is different price in California versus Virginia. So that information is readily available. But you really only run into those situations, usually in a bid or when you're working directly with a shipper. I do know brokers that will negotiate fuel. If you're going to run a load every week, all year, they're willing to break out line haul and fuel so that you get the variance. When fuel goes up you get paid more. But again, the other side of that is if fuel goes down you are going to get paid less. So it is not without risk Anything to add on the fuel side.

Speaker 2:

No, I mean. That pretty much sums it up. The only thing I'd point out is, uh, I don't know if you've ran into it much, but I've got a few shippers that use uh breakthrough fuel, which is an interesting um way to calculate fuel. But basically how the system works is it knows uh the origin and the delivery and it kind of averages. It pulls the diesel costs along the route and then it averages that cost. So for brokers out there that are doing RFPs and you see that your shipper uses a breakthrough fuel, one of my rules at the home is you can assume 10 to 15 cents less on that fuel than you would on a diesel, based on where you're going.

Speaker 2:

Now, if it's a route through california, you can expect more because diesel is gonna, yeah, cost significantly more. So that's just something to keep in mind. If it's like a breakthrough fuel versus like a standard fuel surcharge chart that's going off the department of energy, yeah, um, averages, uh. The only other thing I wanted to point out was in the event of detention. Right, you need to ask, like, what triggers detention? Also Because, like, some of them require a phone call because they want an opportunity to fix it ahead of time, and that could be the customer requiring that. And if you don't that's a really good point. Yeah, you're not going to qualify for detention until you make that phone call.

Speaker 1:

It's relevant for the drivers too or the dispatchers, right? Like a lot of the customers I see that say like hey, to qualify for detention we need notified before the free time's over. So, for instance, you pull up to a shipper at nine in the morning, you got two hours free If that driver doesn't tell the broker or the shipper directly hey, it has been an hour, nobody's checked me in. Then they won't or they don't want to approve detention. Why? Because the customer wants the opportunity to call the facility and go hey, you guys are about to incur detention, get this guy unloaded. So there are things that both the broker and the shipper will do in a lot of instances to try to help you avoid detention and the wait time. But you've got to communicate both when you checked in and when you're about to run into detention, so that either the broker or the shipper directly can help get you moving faster.

Speaker 1:

We're not going to prove this. Nobody emailed us, nobody let us know this guy was waiting. We could have helped. You didn't tell us this guy sat there for five hours. You want to charge us for three hours? Attention, but nobody told us he was waiting. They didn't know the communication wasn't great there. That's what we need. So, again, really important to remember communication really does help resolve most of the headaches that you're going to run into later.

Speaker 2:

Number two we're going to add on the end also is the how long it takes accessorials to be approved, because 90% of the time it'll probably be within 24 hours. However, I do have some customers they are larger enterprise shippers that it's clearly states in their requirements that it's five days for every asset, so something that can go. If the broker's not sending you detention that day or the next day, it's probably not their fault.

Speaker 1:

It's not because they're trying to screw you over in every sense. Yeah, yeah. Number two have you guys worked with any airlines or MR? I don't know what MRO is, but MRO repair facilities. What are your thoughts on dedicated aviation freight? Have you ever worked in that space at all?

Speaker 2:

I have not.

Speaker 1:

I'm five minutes from CBG but I mean I see all the Amazon containers and DHL containers going back and forth. But I've what we moved right Cause I moved a lot of this stuff with them was we moved parts for repairing airplanes, right. And then there are really two different kinds of shipments. Column A, or the first type of shipments, are airports have inventory on hand in case they need it but might not need it right now, right? So just like if you go into a garage or to get your car fixed, there's a warehouse behind that garage at a big dealership that has lots of parts that they think they'll need. But they need enough on hand just in case someone stops and needs something fixed, whether it's whatever an air filter, a sensor, a light for the dashboard there's lots of little light bulbs in there. So they have a lot of inventory. So they don't order that just when they need it, because if you pull it in you need to be able to fix your car. It's the same with an airplane. So there were types of loads we would move that were just general van loads, that were inventory going to the mechanics at different airports. Those were not that service centric. I mean you still needed to have on time percentage, but they weren't large margins to get things there immediately, urgently, or they weren't willing to pay that much more because, like they usually had enough inventory on hand. This is just, you know, the next quarter's inventory. They want to get there a little earlier.

Speaker 1:

The second type of loads were very high margin, very high service priority, and what we would do is say an airplane landed in O'Hare in Chicago and when they landed, they check the plane, they run through the mechanics and they go wait a minute, this landing gear has an issue. We need to replace this landing gear before this plane can take off again. Right, those are the types of shipments where we would spend honestly. It was like almost open checkbook. You'd get a phone call hey, I got a landing gear, it's in Miami in our warehouse. I need it to, I need it up in Chicago and I need a team on it. I need this truck running 24 hours a day to get it there as fast as you can. I need this load picked up in the next hour, two hours at the latest. And those scenarios they would give us the budget to be able to find a truck with a good maintenance record, because you can't have them break down. You needed a team and you needed it picked up within two hours. So that driver had to be empty, close to Miami, with two drivers and had a good service record that can run it up there without basically turning the thing off to get it to that airport as fast as possible. Those shipments would be higher margin because there's higher risk. There is more tracking involved. We needed to update them literally every half an hour sometimes and let them know how close the truck was when the delivery was going to be there, because now we're affecting that airplane schedule. How long is it going to be on the ground? How long hour by hour? That it was later was costing them money Every hour. That plane was still sitting there and couldn't fly, cost lots of money. So they're willing to pay more to get the plane part there that needed immediately, faster, right Again, it's a very niche industry.

Speaker 1:

It can go very well if you have the right trust, the right relationships, but that's really what it comes down to. They're not going to work with somebody just with the cheapest truck that doesn't really understand where and what needs to happen. On different types of shipments, most shippers have different criteria for different loads, even though they're picking up and going to the same place. So I mean there's an interesting niche to kind of jump into. What do we got for number three? I'm going to grab my door real quick, but I can hear you All right.

Speaker 2:

Question number three I see a lot of brokers who refuse to work or speak to a dispatch service. Why is that? If an owner op hired someone to help them while they are on the road, what's the difference? If it's a service or a family member for the driver, they still represent the carrier driver. Um, not an uncommon question.

Speaker 2:

I've seen it quite a bit, but the some of the red flags of the dispatch service, especially with the new vetting softwares, um, is that they're going to be representing multiple MCs, and a lot of the vetting software out there has kind of identified that as a red flag for fraud and it could be fraud or, you know, it could just be someone doing a dispatch service and I can't remember there was an update to the regulation on dispatch services but I believe there was something in there about fraud. They were either considering, or it is, that a dispatch service can only represent one MC. I don't know if that actually went through and it had something to do with, like you could represent a reefer carrier and a van carrier and a flatbed carrier. They had to be different, you could work.

Speaker 1:

You could have a carrier that was like a reefer in a specific niche, and then a van carrier that only ran van, and like a third that maybe did flatbed, and a fourth that was intermodal. What they said, and again I'm going to paraphrase if you want to look this up, you can look up the FMCSA dispatch update, and I think it says like it defines it as like a bona fide agent. So if you are making a decision on which trucking company takes a load, they deem that you're now operating like a freight broker and you need a license. What you can do, though, is if you worked with multiple trucking companies, like you said, that had different abilities and were distinctly different. You are not the one choosing which trucking company, you are only choosing the one you work with that could provide that service. Then you could operate that, because a lot of the issues that the industry ran into were dispatchers operating like freight brokers, calling shippers and going hey, I got a bunch of capacity and then literally taking that load just like a freight broker and choosing one of 10 or 20 carriers they worked with. That's what they're saying can no longer operate as a dispatch service. You need to have a freight broker license in order to do that. I will add, the caveat is like I've worked with lots of dispatch services specifically in drayage and they've provided a lot of value and I do think they have an important part in this industry because they help smaller companies work with more providers, whether it's more brokers, and they can absolutely have a deeper call it pool of carriers that when one can't because they're tied up or stuck somewhere that they had someone else that they could use. So if you find one you trust, I do think there is value in working with them for sure.

Speaker 1:

But again, that doesn't mean there's not risk to the freight broker because the freight broker doesn't have visibility into the carrier that was chosen and where they ran it. We're the industry ran it issues is hey, I work with steven, he's a dispatcher. He told me mc one, two, three, four, five, six was on it. I vetted them, they had the right insurance, but steven didn't tell me he put on mc two, three, four, five, six, seven, eight, nine. They don't have the right insurance, have completely different safety record and like I'm not okay with that. And that's where the FMCSA came in and said like you can't have an unlicensed company making decisions on which trucking company moves these things without either the broker or the shipper being aware that those decisions were being made without a license anyway.

Speaker 1:

Number four I'm about to. Hey guys, I'm about to launch my own brokerage in a couple of months. What are some software tools or services that are worth the money, and what type of software can I cheap out on or get away with, for example, rmis, kr411, or TMS, since I don't have the income yet and won't for a few months? What do you think, steven?

Speaker 2:

So you can find a free TMS. So I would go that route to start. In terms for carrier betting, I mean, quite honestly, you would want to get a load board like that and, and I would highly suggest that, mainly because of the DAT directory, just for our carrier side, like I've met brokers through the DAT directory a lot the dat directory and in combination with safer, you can do a lot of the manual vetting um, that these automated systems like highway will be able to do. It's not as detailed. You'll have to have some uh kind of gut instinct and you know uh cyber security awareness to make sure you're you're dealing with the appropriate person. Um, but for getting started, I think you can do well with you know, go to hubspot, get a free crm, go to dat, use the link in the description, get your load board. Once you have customers, you know um, but yeah, I wouldn't get too involved in too much software until you start actually getting freight and shippers and then, you know, go from there.

Speaker 1:

Agreed. I would say again like the things you definitely want. Again, you want some vetting. I think care for one. One is probably on the lower price that is still effective.

Speaker 1:

I don't think you necessarily need an onboarding for carriers software like RMIS or MyCarrier packets that early on. I think when you're starting, the two things you're going to need the soonest. First is CRM. Second is a load board, dat. If you don't have one, check out a link in the show notes for 10% off that year. And then, once you've got some customers and some loads moving, you'll be able to move them through the load boards and that. And then, once you've got some customers and some loads moving, you'll be able to move them through the load boards and that. And then, once you have that, that's really when you need carrier 411. So you can kind of even stagger those. At first you're going to be spending most of your time calling shippers, prospecting and trying to find where you're actually going to have customers. That's the thing that I think is the most effective or cost effective way to kind of go about this. Yeah, I would agree. Cool. Any final thoughts on this one, stephen.

Speaker 2:

No, I think these are all really great questions. Keep sending us your questions in the comments. Go check us out over at the freight brokers, freight broker and carrier network group on Facebook. You can shoot us an email at info at freight360.net and you know, share, like, subscribe all the good stuff and we'll we'll catch you on the next episode.

Speaker 1:

Whether you believe you can or believe you can't, you're right.

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Benjamin Kowalski

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Nate Cross

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Stephen Ruhe

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