Freight 360

We Met FreightBrokerGuy! | Episode 282

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You may have heard of him or even seen his wild Tweets on X - we finally got to sit down with FreightBrokerGuy and his story is a wild one. Talk about finding a niche in the freight broker industry. This one is a fun one, and we've been waiting a long time to do it!

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Speaker 1:

Hey, welcome to this week's episode of Freight 360, episode 281. Do us a favor if you're a fan of the show, please like, share, comment on YouTube, share us with any of your colleagues. Nate is out today because the National Guard got called in for a strike. I'm actually reading his text. I know he said it last night National Guard updated in New York for prison chaos apparently and a bunch of CEOs apparently went on strike. So he got activated late last night and is not going to be with us today.

Speaker 1:

With us the infamous Freight Broker Guy, and I know Nate was really looking forward to this episode, so I'm sure he is absolutely upset that he couldn't make this one, but this should be a really good, interesting show. I'm excited to dig in Again. If you're a fan of the show, share us with your friends. Like, comment, all that. If you got any questions, shoot those over. We'll answer those on the final mile, but I say we jump right into it and catch up a little bit. So you want to introduce yourself for a broker guy? In regards to how you want to introduce yourself, cause I know we're going to basically, I guess, disguise or you're still going to remain anonymous, but how do you want us to address you and how do you want to be introduced?

Speaker 2:

Yeah, and Nate in absentia. Thanks for having me, man. This is pretty cool. Yeah, steven and Nate in absentia. Thanks for having me, man. This is pretty cool. You can call me whatever you like, just don't call me late for dinner. But I've been a fan of the show, the podcast. I usually check out the podcast while I'm driving to and from and you guys put out great content and I think you do a great service for the industry on kind of both sides of the ball, and provide a lot of great content and educational products for people who are curious so they can figure out for themselves if it's something they want to try out or to improve their skills they already have.

Speaker 1:

Appreciate it. Thanks for the feedback and I'm going to let Steven give some context to who you are for people that aren't familiar. When he sent your stuff over to me I am not on social very often, I also have a little kid, so there's just not that much time but I literally was laughing for like a good 45 minutes. It's just a string of posts that he sent over and my wife, wife, came. She's like what are you laughing at? And I was just showing her some of the responses and comments that you had on there which I thought were absolutely hysterical. But I know steven's probably a better fit to be able to add some context to some of the conversations and some of the things.

Speaker 3:

so some of our listeners can check you out if they haven't already yeah yeah, so we found great brother x, formerly known as twitter, and uh, he's very active in that space talking to the uh mike.

Speaker 1:

Perfect um, very nice to meet you getting into that conversation, hold on one second, I would say specifically to related to a lot of the call it contentious conversations between brokers and carriers. Related to like margin transparency or definitely a few hot button issues that I saw some comments on. What were some of the others steven a transparency.

Speaker 3:

You know any of the stuff. It's uh, the, the, the account that you run on X. It's just, it's a goldmine. Um, yeah and uh, it's very entertaining and I know, um, it might've been a year ago now uh Dooner had reached out to you and you were going to go on his show, um, to talk about, uh, your niche, which is horses uh, which is kind of how we got the conversation started in the beginning.

Speaker 3:

Um, so it's glad, glad to see that you made it on here and, uh, I think you had some technical issues with dooner and we're going to make it so so, yeah, it'll be nice to finally put a dragon face to a freight broker guy.

Speaker 2:

For all the dragon to a handle there yeah, I mean uh, as you can see, I uh, I'm a stalwart supporter of transparency for my uh, my get it, my get up, uh, here today we couldn't, I couldn't figure out the audio. I'm sure is absolutely my fault, but, um, you know, uh, appreciate the uh, the, the feedback. Likewise been uh, if I can, I'm not always being uh, I'm a pretty sarcastic person, you know. You gotta have some levity somewhere.

Speaker 2:

Um, I feel like I'm going to throw my monitor out the window. Maybe I just get on my phone and, you know, yell at the TNOA and then get back to it.

Speaker 1:

I mean, you got to have some outlet right to be able to let some of the stress go For sure. A stressful industry and really going to be excited, because I think a lot of people are going to be shocked, and I'm going to let you share what you want to. Regarding your background, I think there are some really interesting things about your career trajectory that are worth sharing if you feel like doing so. I found it incredibly fascinating how you ended up in the industry and the niche we're going to dig into today, which, again, as Stephen pointed out, is horses. Before we dig in, just a little bit on news we covered the Super Bowl last week.

Speaker 1:

There was an XBO non-compete lawsuit and I'm going to just read the highlights because I know you mentioned, you saw the headlines, but this was out of Freight Caviar. That apparently XBO's latest lawsuit is putting them back in the spotlight. The LTL giant is suing two former employees that allegedly broke their contracts by jumping ship to a competitor, and the two people cited were Tess Farnan and Mark Shatman I guess that's how you pronounce it. They had left the company in 2024, joined Central Transport. Xpo is now suing them, claiming they violated their 11-page confidential information protection agreement which bars them from competing against XPO or soliciting its customers for six months. Now here's what I thought was interesting XPO is suing them in North Carolina, even though both worked in Kansas City area. And why? Possibly because North Carolina's non-compete laws favor enforcement. The lawsuit defines the restricted area as basically the entire United States. Why is that? Because their network covers XPO's network covers 99% of US zip codes, including a 100-mile radius from Kansas City, 50 miles from any other XPO office and every state or province where XPO has customers. Now, if an employee is terminated without cause, xpo will pay them for six months to stay out of the industry, but if they leave or quit, no pay, just a non-compete ban.

Speaker 1:

Now here's the thing I found fascinating how much did XPO lose? According to XPO, the impact was immediate. But here's the numbers A $9,000 account in June 2024 shrank to $900 by November and a $19,000 account dropped to $1,000 over that same period. Right, so Farnan allegedly took one account from $11,000 to $1,000 in two months and another disappeared. Xpo sent letters demanding compliance, but neither former employee responded, which to me doesn't seem like a huge dollar amount. It seems more like the principal.

Speaker 1:

And the other thing I wanted to add was that the FTC the Federal Trade Commission has moved to ban non-competes nationwide. However, they've been facing a lot of lawsuits and states are getting involved in their own way. But one of the largest challenges and this is interesting because this is where a lot of freight brokers are headquartered is in Ohio, and a bill was introduced earlier this month, sb number 11, which would ban non-competes entirely and even allow employees to sue their employers to void them. If passed the law would one prohibit employers from enforcing non-compete clauses. Two, allow workers to sue for damages, attorney fees and even punitive damages up to five grand, and give the Ohio attorney general the authority to take legal action against companies that try to enforce them. That would make Ohio the fifth state to ban non-competes, following California, minnesota, north Dakota and Oklahoma, and I would really like to hear your thoughts on this. I would really like to hear your thoughts on this.

Speaker 2:

Yeah, so my blanket response to non-competes is that, generally speaking, they're for cowards, written by attorneys who are not involved in the business. So with limited exceptions. So if your employment is contingent upon and requires some sort of advanced degree, a law degree, medical degree, or your employment status is contingent on some sort of visa from USCIS, from USCIS, but other than that, if you're not a managerial level or VP level decision maker on the actual business that affects the day-to-day operations, I think it is something that that you know. It's good to hear that the state of Ohio and those other seven you listed have taken, you know, real steps to at least maybe tamp down the fervor.

Speaker 2:

You know the litigiousness from not just freight brokers, but you know Jimmy John's yeah, jimmy John's took a couple of guys. You know sandwich artists the fuck is that going to? You know opening up their own deli. It's like I can make a sandwich in my house, I can book a load from my car. There is nothing unique about and you know there's often a proprietary element. You know there's some sort of element of proprietary defense or support to their suit. But I mean, you know one of the great sponsors of this show offers a free TMS for well, at least access to TMS tools for a period of time, if any. You know Tom, dick and Harry can access essentially, at least the bare-bones tools that I can use as a full-blown broker, and you, ben and Stephen and Nate, I'm not sure what the non-compete does, except for, of course, protectionist posturing that keeps talent out of the industry. So which is bad for the industry?

Speaker 1:

Agreed.

Speaker 1:

Now the argument that I've seen made in the counter suits against this, that and I'll steel man that side which is you have some type, you have industries and different types of companies that work in industries, right, where intellectual property and proprietary methods of doing business are a competitive advantage, right?

Speaker 1:

So I mean just to point out one that I think probably is applicable, like if you are in like research and development, maybe in like pharmaceuticals, or you've come up with a chemistry process to develop some type of product, coding, medicine, whatever, that is very proprietary, that took you know tens or hundreds of millions of dollars to develop, and that person leaves and takes that information and then passes that information to another company.

Speaker 1:

That to me seems like justifiable. The part on the other side of that that I don't understand is like why can't that agreement narrow the scope to the information without the ability to work in another company? Right? Because if you protect the information and you're legally not allowed to share it, then you would be in breach of it. I feel like where it's too broad is saying that you can't work in a field because you worked at a company that was somehow utilizing some proprietary information, right? Have you ever seen any cases where agreements are written narrowly scoped in that way that allow somebody to keep working, even in a field where the information is highly guarded and protected.

Speaker 2:

No, not in the context of what we're talking about, and really I think just you know, not in the context of what we're talking about, and really I think, just you know, in 2025, the idea that you're non-compete could be enforceable, because simply because the internet exists is silly. However, I, you know, I agree, you know, if you're using company resources to develop a tool, a product or unique, you know, first to market service, you know, maybe not so much on the service side, but if you're, if you are utilizing company property and resources to develop something that you can take with you, yeah, it's fair enough, but but, uh, I don't think that's what's happening here.

Speaker 1:

So here's the question right and and I'll I'll give both points of view right. The point of view I've heard from large freight brokerage companies right is they will train thousands of people a year, of which the success rate is a low percentage. So they're training employees on their dime at which then leave and then go work at other companies. Now the reason they say they need to protect against that is like hey, we're training all these people on our dime and they're going to go compete with us.

Speaker 1:

The counter argument that I always believed was well then, don't let them go If they're that valuable. And you chose to let them go. You made that decision first, right. And then the other argument I've heard is that you know we're in somewhat of a commodity space, like you said. Like if you have the same tools as a large company and you can access the market through DAT, through a free, you know TMS and you can get your bond, there's not really a barrier to entry. I think the real motivation behind it is more because I think these companies realize, when you have a customer as a freight broker, that shipper has loyalty to that human being that understands their supply chain, their needs, their nuances in a way that they become an extension of that shipper, as opposed to the value being provided by the larger organizations. And the companies need to protect that because they know if that person leaves, the customer is going to be loyal to that individual broker, not the larger entity, which I think is more likely the real reason. What are your thoughts?

Speaker 2:

Yeah, I entirely agree. So while you were laying that out, three things specifically came to mind. So I do know there has been a court case I think it was in the late thousands where some sort of sports training school sued a former instructor because they took their you know what they, what they claim to be the proprietary athletic training program, and the courts ruled in favor of the respondents. So the guy who left the coach that got sued saying you, you know, you cannot patent and protect methods that could have been independently developed by anyone else with this specific professional experience. So that's significant.

Speaker 1:

Oh, that was the thing I wanted to ask you. I wanted to ask you specifically because, like that's the case that is made in some of these is that the companies are like well, we've trained them to be able to go and source carriers, have conversations differently, negotiate more effectively, and that seems like that precedent was set some 20, some years ago.

Speaker 2:

Right, yeah, and and, and. To stay in that vein, just to kind of hammer this nail down. Just to kind of hammer this nail down yeah, you know, the company has a responsibility to train new people and it's in their best interest, of course. And the success rate in an individual has less to do, in my opinion well, maybe I'm wrong here but it has less to do with the quality of training. Fuck off, there we go. It has less to do with the training provided by an individual company and more to do with the trainee's ability to apply the training. So, that is to say, someone who, like I, didn't know anything about the freight. I started listening to the Fre freight 360 a long time ago and I was like, damn, that's exactly what we did over here, or that's pretty If that wasn't.

Speaker 1:

if that was not the case, if the training was so proprietary and so much different or such a competitive advantage that you needed to protect it, then why is the success rate basically the same across the entire industry? It's not like one company hires a hundred people, 90 of which are successful, and everyone else is hiring a hundred and 10 are successful. Like the numbers pretty much play out equally wherever you are, which to me speaks to the likelihood of the individual being the differentiator, their willingness to learn, their hunger to compete, whether they're aggressive or driven enough. However you want to define that, it's usually not intelligence. There's a really there's a quote, calvin Coolidge quote on that same topic and I heard it recently but I didn't want to cut you off, but I really do believe that that I mean like it's almost objectively played out.

Speaker 2:

Yeah, and and so, to be fair, I guess, as much as I'm willing to be on this topic, you know the importance of good management cannot be overstated. You know I've had good managers and shit managers in this industry and other totally unrelated industries and I and I and I have managed teams and people, and you know it. I think that there could be a strong argument for non-complete, non-complete enforcement at the management level because of the importance of those managers. And managers, of course, course, do have some decision-making authority. As you know, as you climb the rungs you accrue more, more authority.

Speaker 2:

But but yeah, I mean the the basics of learning the industry are damn near the same at any brokerage that you work for, because we all have to do the same shit. You got to vet the carrier, pretty much the same way. You bypass the gatekeeper pretty much the same way. You deal with claims exactly the same way, or it won't get dealt with. So I mean it's like it doesn't matter if I sit in this chair or that chair, yeah, the customer. So. And the second specific thing you know everyone in our company well, of a certain experience, knows exactly how to broker the freight that they broker. But if there's an issue with some sort of niche or there's a customer or commodity specific issue and any other person answers the phone during that situation they have no idea how to help.

Speaker 1:

Yeah, there are differentiators, there are skills, there are performance differences on individual training and management. I mean, I don't want to go down the rabbit hole of like I think there are other issues in our industry where most managers are just the top performers that make it to management without looking at their different skill sets. And I found that quote right Because I feel like this is like kind of spot on. It was from Calvin Coolidge and it's nothing in the world can take the place of persistence. Talent will not. Nothing is more common than unsuccessful men with talent. Genius will not.

Speaker 1:

Unrewarded genius is almost a proverb. Education will not. The world is full of educated derelicts. Persistence and determination alone are omnipotent. Right, and the slogan press on has solved and always will solve the problems of the human race. Right and like. To me that really does define almost every top performer in any industry and almost any profession where you are. Performance-based compensation, like the ability to keep doing a hard thing even when you don't feel like it, to me is the single biggest determination of whether or not you're going to get where you want to go determination of whether or not you're going to get where you want to go.

Speaker 2:

Yeah, yeah, and uh, the the education you know? No-transcript. Yeah, there's plenty of smart people who come through the door and they overanalyze things when they just need to get back on the phone.

Speaker 1:

Like how many conversations?

Speaker 2:

Yeah, you've only made 60 calls today and you have no. You have no customers, no clients. You have no trucks on the road, like I think I know what your problem is.

Speaker 1:

My biggest issue when I first started and my background was as an analyst, right. So, like I'm trained and looking for things, trying to do this, looking through numbers and the context of business situations. So when I got into the industry, my first six weeks where I was genuinely trying to solve the problem of really, if I get to the root of it and I'm honest the fear of picking up the phone and calling and cold calling I had done it tens of thousands of times before that, but that is still there in a new industry when you haven't had the conversations yet. So I was spending time trying to find the perfect lead, the perfect industry, the perfect niche, to find the right company with the right research to be able to like thread that needle to basically get to success without overcoming the uncomfortable part of picking up the phone. Right, and my manager, early on, went. I'll never forget this. He goes do you trust me? And I went.

Speaker 1:

His name was Jason. I go, yeah, he goes. Will you just listen to me and do what I ask or what I'm suggesting you do? Give me six weeks and I go. What should I do? And he goes just sit down in front of the prospecting screen, pick a category, make a hundred to 120 calls a day, do that for six weeks and let's talk again Six weeks later. I had a customer that was doing like 10 K a week and it wasn't that I found the perfect one. It was just to your point put enough effort in practice, enough having the conversations screwing up, saying I'm sure dumb shit, being embarrassed at times, hanging up the phone and trying over and over until I got better at it to be able to work through it, and it was the single most important piece of advice I probably had. That actually determined whether or not I was going to stay in this industry or leave and go somewhere else.

Speaker 2:

Right, Well, and, and this just like with a lot of other things, it is about the reps, but they have to be good reps. You know, we have all, I'm sure, seen people fudging their call numbers because they say well, they said I got to make 100 calls today, so I don't get fired, so I'm going to call this number. I know that won't answer three times Call the 800 numbers Boom, boom, boom.

Speaker 1:

Sit on call waiting or you're on a call queue because your call time is going to go up while you're pressing one, three, two for nine minutes.

Speaker 2:

I got to have 28 minutes of talk time today. I'm going to call this Walmart distribution center. I'm halfway there now. I'll be on hold for a good nine ten minutes. Yeah, I'm going to go heat my lunch up while I just set my handset down. But you know, you've probably heard stories. You know Kobe would wake up at like four o'clock and he wouldn't shoot 100 free throws before practice. He made himself make 100 free throws. So if you're just throwing, the're just.

Speaker 1:

You've got to be learning from mistakes.

Speaker 2:

Yeah, if you're just throwing the ball at the backboard a hundred times, you can call that a free throw, but it's not a free throw. I think that's a really important thing is I've had folks to your point.

Speaker 1:

I wanted to hit on that for a minute, cause we're going to talk about prospecting in your niche in a minute. But like, the one thing that I try to get people new to understand is it's like it sounds so cheesy or cliche, right, but like, why you learn how to ride a bike by doing it is because when you don't do it right, you fall and it hurts, so you learn to avoid the thing that hurts. But if you're making phone calls and you're not present and you're not paying attention and really listening to whether or not you got farther you had a better call, did you connect a little better? And then trying to improve based on that feedback, to your point like you just call a hundred people, not pay attention, you're going to do the same thing tomorrow and not have improved at all.

Speaker 2:

Yeah, so when? When anyone? When I bring in on a new intern or new assistant or whatever, when anyone, when I'm bringing on a new intern or new assistant or whatever, you know, if it's a, if it's someone who broke, you know the sales side didn't work out and they're getting put on mine or another senior broker's board, whatever. You know, they know how to use the tools but they, for whatever reason, have been unsuccessful at securing their own customers. That's fine, cause there's different. You know there's different skills different personalities, right.

Speaker 1:

Some people like it, some people don't, yeah exactly.

Speaker 2:

Yeah, and you know, if, if you're good at talking to trucks, but you, but you, you can't ever ask a prospect for the load, well, I mean, maybe you should just talk to trucks, um, and when involved in training anybody that's new or someone asks me a question, you know, hey, I'm moving this thing out of this part of the country for the first time. I'm trying to. I always tell folks, you know you're going to hear categories of the same objections over and over. You need to write them down, because if you hear the same objection over and over, you need to write them down, because if you hear the same objection over and over.

Speaker 2:

Yeah, yeah, well, I, I have them physically write them down because you know there's there's a lot of you know data that shows if, if you create the letters with your body, you will remember the information. But but if you're hearing the same objections over and over, guess what? The overcoming objection part is probably similar as well. So if you make, if you'll never have a hundred conversations prospecting a day, that'd be incredible. But but let's say you have 10, uh, and there's a rule in finance says the 10, three one rule rule. I don't know if you all have heard about that for prospecting, but if you have 10 conversations and seven of the objections I already worked with Sweet Sally over at Scotland Freight Brokers it's like okay, well, you've heard that seven times out of the 10 conversations today.

Speaker 2:

What else did they say? What did you say? You didn't say anything. Well, I mean, that's all right, call them next week. They won't remember you called. But let's think about that objection that you seem to be hearing a lot more than the others and the chances are, if you can find out more information, you know, maybe that's not true, maybe it is true and Sal, you know sweet Sally's not doing a good job or sweet Sally has late trucks all the time, but she has good rates, you know. Whatever, what are they actually saying no to?

Speaker 1:

getting to that point and I went through this with a coaching client recently. Right, we pulled a bunch of calls and they said everybody tells me, basically kind of blows me off, says they're not working with, they're not on board in anybody. It's like the to your point, it is the seven of 10, right, we don't have any need, we don't have anything, right? And I'm like and I always start with cause someone taught me this was one of my first sales coaches in my twenties. He goes whatever you're hearing is always a reflection of what you're saying. So if you're hearing the same thing over and over again, go back in your calls and listen to what you say. That precedes that objection, because it usually you're initiating it in some way, whether you realize it or not, right? So we go back and listen to the calls and every single call is starting the same way hey, I wanted to see how you guys onboard your vendors and see what it takes to get set up as a broker. And I'm like pause, and I'm like so you start every call with the same thing Well, yeah, okay, if somebody called you, I said well, first, let me ask you, is that something that benefits you or the person that you just called interrupted their day, took them away from what they were doing and then ask for something you need or something that would help them.

Speaker 1:

And I'm like, well, I don't know. I'm like, well, think about it, does that benefit you or does that help them? Well, I guess it would benefit me. I'm like, okay, well, if somebody called you out of the blue and said, hey, do you want to go? Do you want to buy a new internet service? Who do you use for your internet service? How do I get you to buy internet service from me? How do I get you to buy internet service from me? Would you want to talk further with them or would you want to make them go away? Like, well, I'd probably want to make them go away.

Speaker 1:

I'm like, okay, well, if you start with something different, you will get a different response? How about trying to find something that's valuable to them when you call, whatever it is, whether it's? You literally do have trucks that deliver there two day or three days a week with another customer and you thought it might be a fit if those lanes matched up with your carriers. Maybe it's that you have experience in their niche and you saw something interesting and you want their thoughts on it. Maybe you work with their customer and you thought it was worth the conversation because you've done well with them and they referred you over. Whatever it is, get to something that they care about. If you expect them to care enough to talk to you when they're busy doing other things, right, like you're probably creating that 70% of objections in one way or another, right?

Speaker 2:

Yeah, yeah, and so I like this guy, patrick. But David, he's, he's in the insurance industry and he's kind of you know, he's he's grown into probably more than that. He gets into stuff that's not industry related. But I remember he said something one time where if you can seek out a problem for somebody that they don't even really like to talk about and then solve it for them, you will be allowed in their mind, subconsciously, to ask for something.

Speaker 2:

So there's a story about you, story about some guy's son was in prison. He was in another state and this guy I don't remember what he was trying to sell, but he was like, well, how often do you go see him? He was like I don't get up there very much. And this guy found out his address. He was like, hey, I talked to your dad. I understand you're going through a hard time right now, but you don't know me, I don't know you, but I can tell by the way, your dad talked about you. He really cares for you and he's excited for you to learn your lesson and to come back home.

Speaker 2:

And he said he saw that guy at a hotel in New York like a year later. And he said, hey, I didn't tell you you could write my son a letter. I was like, yeah, fair enough, I didn't ask either, but the way you were talking about your son made an impression on me and I thought that he should hear that. And this guy was like, come with me. He thought he was going to kick his ass and he was like, hey, listen. So I was having a hard time getting over my mental block, this river of resistance I was experiencing, because I'm ashamed that my son is in prison and I wanted to tell him those things that you said in your letter, you know, and that gave me the balls to you know, yeah, and he was like you know what, what was that thing you called me about?

Speaker 2:

You know, stop by. You know give me a call next Tuesday at two or whatever. Let's get back to that because, because you know it sounds, it sounds like you actually give a shit.

Speaker 1:

There's a. There's a cliche saying too. I learned in sales coach. So like nobody cares what you have to say until they understand or believe that you care Right.

Speaker 1:

Like you have to establish and it's not even trust that that person believes you actually care about the thing you're talking about, or helping them, before they're going to care about your solution.

Speaker 1:

Right, and however you get there, I mean, that has a fantastic I would say probably extreme example. Not something you'd be able to do every day, but it does highlight the fact that if you do just go a little beyond what your competitors are doing to show that you either know something, care or want to help, and it is genuine and you're vulnerable, that is what people look for in just every human relationship every friend, every colleague, people they do business with. People want to do business with people that they trust. They don't want to constantly have to double check. They want to be able to go about their day and know that, in our scenario, like, their freight is taken care of or, in yours and I think this is a good segue their horses right. So tell us a little bit about how you got into the niche and let's segue right into that, because I think this is a really good way to get into that topic.

Speaker 2:

Yeah, by saying you know, though I didn't know anything about freight, I knew a lot about the people involved in the industry that I was interested before I even had this opportunity. So you know, the equine industry, broadly speaking and then definitely in the racehorse world, is so deeply ensconced and entrenched in, you know, tradition and relationships Like it's. It's incredible. There is absolutely loyalty that can be cultivated and once you have it, you know it's, it's it's harder to lose from a relationship perspective. That being said, there's millions of dollars on the line for for your you know, your customer shipper, as you could say let's go, let's go through the basics real quick before you even go that far.

Speaker 1:

I think, just kind of lay out people for layout for the audience, like from a high level, like what does the industry look like, how and what is done? Just for people that aren't familiar with how and what even happens in the horse industry.

Speaker 2:

Yeah, so these racehorses, they call them equine athletes. So these athletes make a lot more movements across the globe really than most people realize. So when you're in the racing season you can turn on the TV and watch. You know the Kentucky Derby run at Churchill Downs. But when they're not racing, uh, they're moving, you know, between you know Florida or Kentucky and New York to Australia for breeding, or they're coming from a sale in Saudi Arabia and, um, all of these horses have a lot of stuff.

Speaker 2:

So you know, if you've got a several million dollar athlete on a football team, you know that team feeds those athletes when they're in spring training because they want to make sure they're getting what they think they need to be able to perform at a high level. So it's not just the horse, it's the particular. You know feed, it's a follow vehicle that has a veterinarian in it and maybe even you know a trainer's assistant who has all the legal documents. And anytime you cross a state line with a racehorse, there's, if that horse, if that state has a racing commission, uh, you've got to pay fees and and you know there's a duty to inform that there's this, this horse, in your borders, because if you, if you're like sneaking into Arkansas to breed your horse. They from just kind of a general information standpoint.

Speaker 1:

There is a, there's a lot lots of hoops that jump through, lots of things, lots of boxes to check, lots of regulations to follow, and for good reason, like you said, I mean like one. The thing that I feel like is interesting and the little bit that I know and that I've followed or read about it is that like one. Yeah, they're incredibly expensive in some aspects, right. But also, like, the ability to determine which horse is worth more than the other is a very specialized skill honed over very many years and lots of cases, decades Right. To be able to tell the difference within a breed, which ones are going to be able to perform the best breed, the best, make the most money Like. And to the other point is like to the layman, someone not in that like a horse kind of looks like a horse, I think to most people, right.

Speaker 1:

But when you're in the industry, like you said, like you bring on a horse that's worth 10, $20 million. Like there was a huge case where the cartel was. There was a giant case where they got busted because they were literally laundering money into one of the guys that and I can't remember which part of horse racing I think it was quarter racing or something but basically they were laundering tens of millions of dollars because they were sneaking horses in places that they didn't or weren't supposed to be breeding them with other horses, and they were winning races and no one knew how this no-name person was all of a sudden literally at the top of their field and they found out like it was basically violating all these regulations and laws that, like you're kind of outlining, that exist for these very reasons yeah and and so.

Speaker 2:

So if you're doing it the right way, which which you behooves you to, because the financial and legal implications are massive and if you do something wrong on purpose in horse racing, you will absolutely be in the newspaper for it. So if your truckloader Asbury flips over, your uncle's never going to hear about it. Yeah, that's good, but but you know the lead time is is an asset Cause, like you know when the sales are, you know when the races are, but the amount of planning between the, the various commissions and you know USDA quarantine rules if they're coming back from Australia for breeding or whatever, it's just a massive pain in the ass. So you can really only handle something like that if you've, if you decided to niche down and you know, learn the details and then you can go.

Speaker 2:

How did?

Speaker 1:

you start.

Speaker 2:

So I was a former congressional staffer and my boss was a member of the Congressional Horse Caucus, and prior to that I didn't have much interest in horse racing, to be honest. But just through the work of the day I was reading bills and marking up legislation drafts, and when you do that you have to meet with other human beings involved in the industry. So the various stakeholders, other congressional staffers who've been there longer than you, from another state, probably with a different political perspective, but they care about this issue you're working on. You know perspective, but they care about this issue you're working on. So I was kind of accident, I accidentally got involved in the industry because of who my boss was. So that's how I started to just meet I didn't know at the time I started to meet the people who became important and vital to what I'm doing now.

Speaker 2:

You know, years ago, yep, and you know I started training in freight and doing what everyone else does, and I was like now, you know years ago, um, yep, and you know I started training in freight and and doing what everyone else does, and I was like you know what these, these horses? Uh, they don't. You know, they don't walk from new york to kentucky, to to california, uh, and then you know everything around you you touch, you smell, eat, whatever. Look at it, it comes on some sort of van, some sort of trailer. I'm like man there's, so do horses. Let me see if I can crack this nut.

Speaker 1:

And I think that's something that Nate and I talk about this a lot is people always say, like, what should I prospect first? And we always kind of give the advice that, like, we think a great place to start is something you have experience in and know about. And the great part about our industry is if it is any physical good, right, even if it's a service, there's probably a physical good related to it where you probably understand that, understand the inner workings of how those things function and can probably have a very good conversation and establish some relationships with less I don't want to say less effort, but like less than learning something. If I had to jump into horses, like it would take me weeks and months to be able to get up to speed, even understand some of that. And guess what, if that's something you want to do to your point earlier, the internet chat, gpt, like you can go and get this knowledge If you want to take the time to learn about something you really want to get into.

Speaker 1:

But let's say, even like, if you're a bartender, right, like you probably really understand the food beverage industry, if you are a waiter, you probably really do understand where that food comes into the kitchen, who the suppliers are, where your chefs buy the food from. What makes up that menu? Again, like doesn't mean you need to ship food, but there are very close things and industries that you probably are really comfortable talking about already. That is just a little bit of a segue that gets you into that, to where you can learn those nuances, right. So, as you kind of decided to dip your toe into it, like tell us a little bit on some of the stuff that you know you want to share about, like actually moving these things and what you're you're kind of comfortable sharing with everybody things animals, horses, right.

Speaker 2:

So, uh, so um it, it. It is nice, you know, in freight there's a lot of, you know hot load 911, please help stuff, but that really doesn't happen. Uh, in the In any racing industry.

Speaker 3:

You know whether it's, you know, auto car racing. I don't know where they're going.

Speaker 2:

It's like they announced the date of this race. You know the Kentucky Derby is the first Saturday in May and it has been for 151 years, so we know when that movement has to be made. So you know highly regimented industries, that's kind of good. I would equate that to you know, if you're working with government freight, there's usually not like a hey, this truck didn't show up, please help. Um, so so that's an advantage. But you know, uh, just I had the idea and I'd become close friends with with some, uh, maybe not horse owners, but at least like assistant trainers, things like that Started having that conversation.

Speaker 2:

I was like, well, how do you get these animals around? You know, what do you do? Like, do you guys? You know, get the Sally van and take it? And he was like, well, it depends. And I was like, well, what does it depend on? So I thought I already knew a lot. And then he's like, well, what do you mean it depends? Why would you take your own truck from, you know, ocala to Orlando or Ocala to Saratoga, but you won't drive your own horse across the street to the vet? And I was like, oh, hell, no, we would never do that because this, this and this.

Speaker 2:

I was like, well, who does that? Yeah, yeah, so yeah, this, this and this. I was like, well, who does that? Yeah, yeah, so yeah. I was like, well, why not? Um, and a lot of it is, is, uh, is uh, depending on how close, uh, you know, it's like you've got a two-year-old, or if you're going to a yearling sale soon, um, you want those movements to be conducted by a contractor. Um, because you want the, the a contractor, because you want the. So, though the industry relies a lot on tradition and and relationships, there's also a lot of fraud, so you want to be able to document through somebody else.

Speaker 3:

That yes, this horse went to this.

Speaker 2:

Yeah, it's like you know. Yes, this horse went to this breeding facility at this time and if you don't believe me, you can call Joe. It's like, ok, and again.

Speaker 1:

I could see, like why that would matter. It's like hey, if you're going to buy a certain stock or breed, you want to know how many of them are out there. I guess probably depends on the value, supply and demand. If the horse breeds more, I'm guessing there's different rates. I mean anything depends on the value, supply and demand. If the horse breeds more, I'm guessing there's different rates. I mean anything that there's more of tends to change the price.

Speaker 2:

So having some paper trail is able to verify what and how and when these things happen. I guess, yeah and and. Um, there's also, you know, when you're crossing a state line those issues can become different. But but, um, some, some owners, you know, if you're not a massive, you know well-known like household racing name um, you probably want to shift the liability to somebody else you know you may have, you may have your own, you know, it's like one of those. If you're calling anybody and they say, well, we have our own trucks, it was like, yeah, well, that's why I'm calling Are you a growing company or are you shrinking? Because if you've got four trucks and you need seven, what the hell do you do with the three? So if someone has a good horse but they would prefer that God forbid something happens, it becomes someone else's fault. That's a good business decision.

Speaker 1:

Yeah, I mean mitigating the risk. You're able to mitigate the responsibility. You've got a paper trail, there's insurance involved, like all of those things kind of make sense.

Speaker 2:

What would you? And from just a industry experience perspective, you know I, you know I'm learning more every day, hopefully usually not the hard way. But you know, if someone, there are new people who become interested on the ownership side of racing all the time, they buy into a syndicate, whatever. That's another issue. If you've got 17 owners, they all want the same information, all this stuff. So, uh, you know the, the, the, the farm, the stable would prefer that they just talk to me and I can communicate with their very, so it's like you've got one customer but there's 17 people you got to answer to. So that can be the pain in the ass for a trainer who's trying to train the horse instead of you know making sure you know the the hallway feed got. Trainer who's trying to train the horse instead of you know making sure you know the the hallway feed got from this, this place to this place. Like, yes, the the quarantine paperwork is prepared for this racetrack, whatever it is. Yeah, they just want to train the horse.

Speaker 1:

And I think that's a really good example. Right, and I think for everyone out there listening, right, like this is not specific to horse industry. Right, like what you just described and what I'm hearing you say. Right is like there are other aspects of value you are providing to the customers to that industry, beyond just picking up stuff or an animal and going from A to B or A to B to C. Right, it is making sure the paperwork's involved. It's communicating with other people that maybe aren't your customer, as an additional service to your customer. Hey, I'm sure there's instances where they're emailing and saying, hey, can you get the paperwork over to these folks? And you've got it organized and you can get it to them. Right, there are scenarios that, like in other niches, this happens all the time. Anytime you're moving something from the United States to another country and you're using a customs broker, just the fact that that broker is dealing with the customs broker and the shipper doesn't have to making sure the paperwork's done, making sure all those things happen without them taking those extra few steps is a service and is a value add, not just moving from A to B. Anytime you're managing a container pool or even a trailer pool and organizing who's picking up which loads in which day, takes that burden off of your customer.

Speaker 1:

Like the one example that I remember and like what I've done is like I moved. We had literally ships full of steel. It looked like rebar, like large poles of steel coming in from Brazil and New Orleans. We shipped them all the way up to the different steel mills and the delivery places. But the thing we did that no one else was either willing to do or thought to ask was they all came in bulk and they all had different POs. So the stevedores that loaded them on the trucks weren't organizing and keeping track of what went on where. So we just created spreadsheets and made sure that when anyone else the customers or any third party sent hey, which went there on which day? Who got what? We had. All that provided that paperwork and yeah, that's not just moving it from you know a to b, it was also organizing the information and then being willing to communicate with whoever our customer asked hey, can you send these documents over there? Hey, I sent them, but they didn't get them. They want them from you. Again, it's more work and in some cases, like you, can charge more margin, but that margin isn't what you're taking away from a trucking company. It is an additional service you are providing to your customers and your customers' customers that might not even be involved in that shipment, right, but those are the nuances that you only learn, or the things that someone needs.

Speaker 1:

To your earlier point by asking questions. Right, it depends, depends on what. What else do you have to do? Are there any other things you've got to do related to these shipments? Is there anything that's a pain in the ass that I can maybe take off your plate, because I've got the information anyway? I'm more than happy to have my team get this information to who you need. Now you don't got to send 15 emails about every load to everybody else involved in this, every third party. Like we have tanker lords I was looking at one last week. There are six intermediaries involved in this shipment. Like one company sold to another company, sold to another company six times, it still picked up from the same place and went to the same place. But there were that many transactions in the middle and everybody needed a paper trail, needed food grade certifications and all these things and like again, that doesn't mean you're charging more money to move the thing, it's your pricing, the time and the service you provide, above and beyond just getting it from A to B, right.

Speaker 2:

Yeah, absolutely, and therein lies the rub that I have, and sounds like you do with the transparency issue Also. What a misnomer like transparency for what?

Speaker 1:

You have no idea what we're doing on this load or what the situation is.

Speaker 2:

Like you know, for certain commodities I damn near work with the same like five carriers every time and they don't say shit about transparency because they know.

Speaker 1:

They don't want to do what you're doing.

Speaker 2:

Yeah. So it's like if you can just kind of juxtapose a rate to a different commodity, which is silly, but just for example of this topic, it's like all right, mr Carrier, me and four other people have been working on this specific load for seven weeks. One load, yeah, one load. And you think, because this customer is going to pay us $12,000, I should pay you $11,000? Like, kiss my ass. And also like, when you deliver this load, I'm going to have to still work on this load for another four days. So, like you know, thanks for getting it to A to B safely, but, you know, kiss my ass.

Speaker 1:

Well, and again, like I don't think it's and I don't even think I look at it as, like it's not the negative to the carrier, right Like pay a fair rate for the thing you're doing.

Speaker 2:

I don't have to have that conversation. Actually, it's usually a Twitter thing.

Speaker 1:

Exactly. But I think it's a really good point, right? Because, like again, I'll just go to that example. Right, I worked on each one of those shipments for probably six to eight weeks before the boat arrived, right, organizing it, going through POs Excel sheets, figuring out which is going where, how it was loaded on the boat. I'm paying somebody to literally do this with me. Organize it with me, right? And then, once it ships, right after that, to your point. This also happened around 2017, when the tariffs went into place and we had to divert shipments into storage, keep track of where they went then pick them up again, then get them there start all over again, right, and then keep track of which invoices attached to which.

Speaker 1:

Who's paying for what, who's responsible for this portion? Who is this? We didn't get paid for like nine months until it all played out, and it's like, ok, well, like, is that really the same thing as picking it up and getting it to the warehouse and then maybe picking up, like there are a lot of things and again, this is not every shipment and I wouldn't say this is common in everything that has moved in our industry but there are so many variables that just go unnoticed that nobody talks about and everyone goes. Well, I just want to see we're getting paid and it's like, okay, well, can we line item the things that are happening above and beyond? Somebody handed me a load and I handed it to somebody else, right?

Speaker 2:

Just no one wants to talk about those aspects. Yeah, we're not moving bulk potatoes from. You know Idaho falls to Denver. We're, you know we're bringing containers of steel from Brazil, subject to tariffs, and it's in once it gets here. We got to put it on 18 different other. It's like yeah, you're a link in the chain which is important, don't get me wrong.

Speaker 1:

but I mean it's vital. It doesn't get done without it yeah, and to your point. I know we were talking off air about how many things go involved into moving just a few horses, right? How many did you say? Van load equivalent of stuff sometimes goes with moving one or two horses and like, how long does it take you to organize that?

Speaker 2:

well, yeah, here's the answer. Well, it depends. So, uh, uh, it. So, if we can just take a rate, uh, you know a racing movement, so, uh, some of these states require the animal to be on deck for a certain number of days. So horses have to eat, right? So, and these horse owners who have, you know, some multimillion dollar athletes, aren't going to go to tractor supply and get a bag of feed. So you know, we, we take the feed with us. Also, if you can certify that the feed that arrives is the same feed that left the horse farm, there's less state Department of Agriculture and or Racing Commission bullshit that you have to go through, do you weigh that to verify it, like from point A?

Speaker 1:

Do you scale it to determine how do they do that?

Speaker 2:

They accept printed package information. So if you don't open the bag of feed and you have the original purchase receipt, or if you've got the you know POD from where that feed came from, that's helpful, you know, even if someone else brings it in, whatever, I don't care. But yeah, we're bringing feed, we're bringing. You know you got to bring your own rake, Like you got to bring. You know all the hal to bring. You know all the halters and and tack and everything like all of that shit. You know, um, you know, yeah, the racing saddle is tiny but you bring like seven of them with you, just in case. Um, you know there's all that stuff. It's.

Speaker 2:

You know, it's like you're, it's like you're, if you got, you know, steven, you got three kids. Is that three sons? Yeah, how much shit would you have to bring for a month long vacation in Italy? You know it's like uh, and you're not allowed to eat at a restaurant, Right? So, like you got to bring all your own, your own vegetables. You got to bring your own. So, like that's what we're talking about, it's like we're, it's like we're going on deployment with a horse, you know who, as far as they know it was. Just you know they get out of the trailer and it's. It was sunny when they left Florida and it's sunny when they arrive in Arkansas. They're just happy as can be. But you know there's a lot of stuff that that goes into keeping them happy and healthy.

Speaker 1:

Yeah, and it's really a point I just keep thinking. Well, mostly probably because, like Daytona 500 was just on right. It's like oh, you think that race car just went from one place to the next race. How many tires do you think they take just for the practice laps? How many different steering wheels, how many different engines, transmissions, how many different spare parts go? I have no idea what it takes to move a NASCAR from one race to the next, but I got to imagine it's four or five trailers and I can't believe that a horse would be much different To your point. You don't feed a race car and you don't kind of take the fuel with you. Maybe you do, I really don't know, but I don't think so.

Speaker 2:

I think it has to be standardized yeah.

Speaker 1:

A horse eats a lot Like. You're not stopping at McDonald's to feed the guy, you're not going to tractor supply to pick up a bale of hay to just throw it out, you know, while you're commuting from point A to point B.

Speaker 2:

Yeah, hey, secretary, sorry we ran out of your third cut's alfalfa, but here's some straw from you know, down the road. Yeah, that's not happening.

Speaker 1:

Wow. Well, this was super interesting. We're definitely going to have to have you on again, especially when Nate gets back. Anything else you kind of want to share or add before we kind of wrap?

Speaker 2:

Implementation of transparency, as some organizations are advocating for, will immediately and specifically hurt owner operators, and they should stop.

Speaker 1:

You want to elaborate? You got the forum.

Speaker 2:

Yeah, follow me on X. But so if you are demanding transparency, you're adding steps to the process and vet viable carriers and to find more customers to fund the administrative bureaucracy that would be foist upon them. So that means less business for trucks who want to be assholes.

Speaker 1:

And I will summarize that right be assholes, and I will. I'll summarize that right. If you are going to make a lot of freight brokers create more paperwork and more things to do, they are going to have to hire people, which makes it more expensive to run that business, which means that cost has to go somewhere, right, like it's not going to go nowhere or come from nowhere right. And the more expensive it is to run a business, that and again, whether any trucking companies want to believe this or not, and I see all these memes are like well, we'll just work with shippers, great. Well, guess what you then have to do? You're already not making enough money, but now you want to hire salespeople, train them and run a back office that is twice the size to go. Establish this Like you can by the way, no one's preventing you and you can do that right now.

Speaker 1:

And this is not like to disparage trucking companies like margins are thin. The industry has been down for three some years, which hasn't happened in the entire existence of the way we've operated. Like I am, I'm empathetic, I get it. I know that is difficult. We work with a lot of trucking companies but, at the end of the day. Forcing intermediaries to do more work that accomplishes nothing is just going to leave less money for anyone to be able to distribute to you guys working with them. Right, it's not going to make anything more efficient.

Speaker 2:

Yeah, I think it's. It's. You know, it's analogous to you. Know, yeah, I'm sure you can cook a very nice steak at your house, but sometimes you go to a restaurant and you want someone to do it for you so that you don't have to do all the dishes oh, by the way, they're really good at cooking. You know steak for 700 other people at the same time, which you couldn't possibly do. So it's like you know. Yeah, sometimes it's just easier to go sit down at a restaurant because they already got all the shit that you want to eat. Like I got the freight that you want. You didn't have to call this customer for three years, uh, and and work on this load for seven months. But if, if you look like a good truck, um, you know you can read and write English fluently. Yeah, I'll work with, I'll run this, I'll run this lead with you and I'll probably pay you a lot more than what DAT says I should.

Speaker 1:

And and oh, by the way, right, A shipper is not going to work with 25 or a hundred thousand different small trucking companies and coordinate which lanes and which days of the week make sense. They're not going to pay to do that. That is why they outsource to brokers, so that we can get the capacity of the smaller companies, Like huge companies do not want to be able to negotiate and work with that many companies. It's not efficient, it's too expensive. That is the service that we're able to provide, which allows there to be more work. Again, I think as loads and business picks up and freight changes, I'm sure this will become a distant thought and nobody will be complaining about it again. But it is important to understand where and what happens and where value is provided to both shippers and to carriers. I don't think it is a one-sided argument but honestly it was really great having you on, really looking forward to having you back again when Nate's back from his deployment. Any final thoughts?

Speaker 2:

Yeah, thanks for having me. I appreciate it.

Speaker 1:

And whether you believe you can or believe you can't, you're right.

People on this episode

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Benjamin Kowalski

Co-host
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Nate Cross

Co-host
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Stephen Ruhe

Guest