Freight 360
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Freight 360
Breaking Down the Freight Broker Role | Episode 285
Benjamin and Stephen break down the many roles in freight brokerage, from freight agents to carrier sales reps, and the challenges of customer acquisition. They dive into market trends, tariffs, cargo theft, and cyber scams, highlighting the need for clearer job titles and stronger fraud enforcement. Plus, they discuss AI’s impact on logistics and the challenges of economic uncertainty in this high-stakes industry.
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Welcome to this week's episode of Freight 360. It is Stephen and I going to be with you this week, as Nate is still active duty with the National Guard dealing with the strike up in upstate New York prisons. We're going to dig into what is a freight broker, but what we're going to answer is that that definition is commonly used to describe lots of different roles in the industry, different types of companies, different types of positions, and it's really so generally used that we're going to kind of break down what that means, what it means to different folks, what it means when you hear it from different people and if you're looking for a job or you're looking to start your own freight brokerage, how and when, and what that word actually means in which context and who you're talking to. So we're really going to kind of break that down and explain a lot of really the industry's view of it and how some people refer to themselves, so you can kind of really better understand what this role and position might look like, what it might look like at different companies, different roles, and what it might look like for your own organization.
Speaker 1:If you're a fan of the show, please like, comment, share us with any of your colleagues. We're going to answer all of your questions that you throw on YouTube If we don't get to them immediately. We try to answer them once a week, which we'll be covering in this week's episode of Final Mile and in the news. I mean, there's a ton of stuff in the news, I don't even know where to start. I know that apparently we just increased tariffs on aluminum and steel in Canada to like 50%. Who knows how and what that will affect. I think the other interesting thing I saw and I didn't get a chance to vet this, but I didn't know this and if what I saw was actually true, which I didn't really get a chance to dig into that Canada is, like the largest supplier of oil to the United States of like any other country. Did you know that and do you know if that's?
Speaker 2:accurate? So yes and no. And do you know if that's accurate? So yes and no. I dug. This came out two months ago, whenever they were talking about the original tariffs. And yes, canada is the largest exporter of unrefined crude oil to the United States, but that is because Canada doesn't have the facilities to refine the fuel. Enough of them, yeah, so they send us the crude oil, we refine it and then we export it back to them, which is why their levels are so high.
Speaker 1:But a lot of that ends up coming back to them, yeah, so we get as a raw material, refine it, sell it back to them and make money on it as an export to them from what?
Speaker 2:from what I read, uh, it was more of a wash kind of situation agreement between the countries on the refining process and the crude like we refining process and the crude Like we get a portion of the crude to use for us and then they get back. I don't know Someone someone in the comments will have to uh get into the weeds on it, but that's kind of what I saw.
Speaker 1:I mean that's really pretty interesting Cause I know a lot of that crude comes in here which means we make money when we send it back. So I mean that's really pretty interesting because I know a lot of that crude comes in here which means we make money when we send it back. So I mean, disrupting that supply chain has got to do quite a bit. I know that Trump announced he was going to call it a national emergency on energy to be able to do something else, I guess, to mitigate that, but I don't know what that's going to look like or how that's going to affect anything.
Speaker 2:I don't know what that's going to look like or how that's going to affect anything and, to be honest, I mean this administration has been, is running so much differently than any other administration that until something actually happens, like I just I don't even give it any thought, because the headlines change every single day.
Speaker 1:Tariffs are on, tariffs are off. Tariffs are on, tariffs are off and that's creating like huge issues, like I don't know. The stock market tanked this week. There's definitely more and more talk of a recession and it is getting that.
Speaker 2:I can't remember it was. Some talking head on X was speculating that there was intent to drive the stock market down because in May of this year we have to refinance our national debt.
Speaker 1:Yeah, it's a huge number, so they're trying to bring yeah, the 10-year Treasury bill has come down and it's mostly that's why everyone's waiting to see what the inflation numbers come out. Today it's Wednesday, so those are going to be a real big indicator. If inflation numbers come down, likely our ability to borrow and refinance that debt will become cheaper, right. However, tariffs, while they make the economy move slower, which means less cargo to move, less business, less money spent that reduces inflation. But you have the other side of that, meaning that even though people buy and ship and use less services because things are more expensive, if that price increase because of the tariffs outweighs people spending less money, meaning if one is bigger than the other, it actually drives up inflation while also slowing the economy, which does two negative effects in kind of the same direction. So those are going to be super interesting.
Speaker 2:Yeah, the thesis of the guy is essentially to drive down, to artificially drive down interest rates through the stock market coming down, so that when they refinance in May they can lump the national debt at a lower interest rate and then start building back the economy. Whether or not that's true, I couldn't tell you lump the national debt at a lower interest rate and then start building back the economy.
Speaker 1:whether or not that's true, I couldn't tell you it's the only counter argument to doing any of this, to be honest, because doing this this fast, even if you want to transition our country from a global supply chain to more of a domestic, with more production in the us, that doesn't happen overnight and trying to do that is like whiplash and is going to create massive discontent and huge stock market losses. A lot of less loads to move, carriers are going to get destroyed. The entire economy is going to go into a pretty significant recession, unless, to your point, it's a short-term thing that allows them to rein in recession, slow things down enough to refinance the debt, then maybe reduce interest rates from the Fed to speed it back up again. I don't know. It's kind of exhausting, to be honest. I will tell you I mean what we're seeing right now, though.
Speaker 1:This was in from Freight Caviar today. Where are all the loads at? According to market conditions, the us freight scene is on ice majority of the country and the map, excluding two parts of texas, is all blue, meaning many have been left reeling because of this huge decline, with a lot of people commenting that they are seeing a 30 to 50 percent loss right now from last year, while some are saying, oh, just be patient, it'll turn around. It does not look great. Canadian spot market freight inbound from Canada has slowed down as well, with rates normalizing, but the volumes fell off a cliff, meaning like nothing is really coming in from Canada to the United States.
Speaker 1:There was a hell of a lot of optimism heading into 2025, especially from Craig Fuller over at Freightwaves, and it certainly does not look like the freight recession is anywhere near from over, if not getting worse.
Speaker 1:So for all of you that were super hopeful that this administration was going to turn things around and it was going to be great news for carriers, it looks like it is going to be hard times, at least in the short run, until, however, this plays out, whatever that looks like, I don't know that anybody knows what this is. All I hear are lots of smart people and economists literally just confused, grasping at straws, trying to understand how in the world any of these policies or even statements are going to positively impact anything Other than, like you said, the only real takeaway is that somewhere in there, if things get so bad, the country is able to borrow money cheaper, because inflation is a distant memory, but again, tariffs make things more expensive. So the thing that is supposed to fix it could potentially also make inflation even worse, while making everything worse for everybody else. So hey, like you said in the beginning.
Speaker 2:it's been so back and forth that it's it's hard to like even and that is a problem in and of itself, right, like that is a problem even of itself that it's hard to even put your finger on it and that is a problem in and of itself.
Speaker 1:Right Like that is a problem even of itself If anyone's just like oh well, this is just like negotiating Businesses can't invest and do anything long-term when there is uncertainty. So the more you have random comments that don't turn into anything, the less likely any businesses are willing to do anything. So they're just not. They're like, not placing orders. Even companies that would want to invest in some infrastructure in the United States to offset some tariff costs. Nobody knows what's true. Nobody knows if it'll be in for two weeks, three days, 24 hours, three months or just words to just I don't know get tweets, who the hell knows. At this point, it is making it very difficult for anybody to do business any businesses to do anything long-term, what is certainly impacting everybody's pocketbooks.
Speaker 1:This was an interesting article too. This was this week. It was titled Our American Dream Turned Into a Nightmare, and this is a good little piece in Freight Caviar, and I didn't really get a chance to read much of this article, but the highlights were interesting. I guess Adam Blanchard, the CEO of a company called Tanager Logistics T-A-N-A-G-E-R was testifying before Congress. His San Antonio-based trucking and brokerage, founded in 2014, had about 90 trucks, 300-some trailers, 20 freight brokers. They were a victim of an elaborate identity theft scam that drained the resources and blackmailed his company from factoring firms Posing as Tandager Logistics. The criminals brokered loads to unsuspecting carriers who delivered that cargo, while the scammers just pocketed the money. They diverted full truckloads of energy drinks worth six figures from Texas to California. Despite clear evidence, blanchard said the FMCSA refused to remove the fraudulent company's name from its system, leaving its business vulnerable and costing them customers. He said at this very moment, two Tanager logistics are listed on the FMCSA official website my company and an imposter. We provided this evidence to the FMCSA and they refused to take it down.
Speaker 1:Cargo theft has evolved from simple truck hijackings to complex cyber scams, double brokering, frauds, identity theft. In 2024, there were 65,000 reported cases. 40% jump over the previous year. I feel like that number was like in the 80,000s, but regardless, it's a lot. This was also interesting. Robert Howe, chief supply chain officer at Academy Sports and Outdoors, testified that criminals are exploiting online systems to intercept shipments and reroute them before anyone realized what's happening. In my 25 years I've never seen theft this bad. They had said they had lost an entire shipment. I mean, that's happened to people I know in the past week, if I could name a few. I mean, that's happened to people I know in the past week, if I could name a few.
Speaker 1:This is the part that I wanted to get to what Congress is being asked to do and I'll be anxious for Nate to jump in when he gets back because he does a lot of work with folks in lobbying Congress. They are asking that a federal supply chain crime coordination center and cargo theft task force be established. Tougher penalties for cargo theft and fraud this is an important one Modernizing the FMCSA's carrier verification process to prevent fraudulent brokers and scammers, and I think this is probably also one of the most important points Dedicated federal funding for prosecutors so that they can go after organized cargo theft rings. Will Johnson, a chief special agent at BNSF Railway, emphasized lack of coordination between states is the key problem, something that we've talked about on this show for the better part of five or six years. Strategic cargo theft in the trucking industry increased 1500% from 2022 to 25 and accounts for 33% of all cargo theft reported by CargoNet.
Speaker 1:Cargo theft cases often cross multiple state lines and making jurisdiction, coordination, prosecution and collecting information difficult. Yeah, oida, same thing made it clear for small trucking businesses, one cargo theft could mean shutting down for good. I mean, these are all things that we've been talking about. The TIA highlights $800 million in fraud and issued this to Congress recently. So, again, things we've been working on here. Nate's really been instrumental in trying to get some of these changes done sooner than later, because everybody's paying this cost. Whether you're a broker, a carrier or you just buy stuff in the economy and you're a US citizen, you're paying for this bill one way or another.
Speaker 2:Yeah, and one thing that's really highlights, especially with the case and specifically, is when you look at, like the broker transparency stuff that's going on and they extended the comments on that, but I mean they're all like everyone who's for transparency is hinging on. You know, the fmcsa doing their job when clearly there is no enforcement mechanism that they can utilize to do it. So instead of pushing for regulations like transparency and stuff, let's push for enforcement, enforce what they already have on the books and then we can go back and talk about other stuff.
Speaker 1:They need more money too.
Speaker 2:Yeah, and there's already laws on the books at the FMCSA that people committing double brokering are subject to a $10,000 penalty and to my knowledge that's never been collected once.
Speaker 1:They couldn't penalty and to my knowledge that's never been collected once they couldn't. But the one bill that Nate was involved in getting passed was the one for I forget the name of it, but it is the one for household goods, yeah when they're now able to start enforcing this. So that is the first step in them being able to enforce it, giving them the authority to do so. The second step is going to be getting them the funding and the resources so they can actually go and investigate these things, and it takes money and resources and human beings to go look into this stuff, figure out what happened, go chase them down, put a case together, prosecute them. I mean, without those things happening, like it's literally the wild west. Like if there's nobody coming to chase you and nobody's going to come and arrest you and nobody's even looking for you. What is to slow down or any disincentive to criminals at this point? Like if you can keep getting away with it and they keep doing it. Like it's just like why not keep doing it? Nobody's coming after them, nobody's looking for them.
Speaker 1:I mean, I had a client run into this literally two days ago and it's like we had pictures of the driver, pictures of the guy who supposedly owned the MC found the verified phone number, talked to the previous trucking company owner and he's like, yeah, this guy ripped me off, was supposed to buy my trucking company, lied to me. Basically, the old owner told us that the guy who scammed him was definitely in some criminal organization and they had gotten away with at least 15 loads in the past four days before they were able to get to the fact that, like, all of their numbers were fraudulent and I mean all of the vetting softwares had the wrong phone numbers, like there literally wasn't one that actually had this one. Right, we worked backwards through it I was involving Genlogs and their theft recovery team and everybody else but at the end of the day, like once it's two, three days after that thing's probably already been in Mexico, what are you going to do? I mean, if they had fake IDs, you can't really track that back. I mean, if they had fake IDs, you can't really track that back.
Speaker 1:Going to be really cool, as Genlogs gets more of this stuff online, to be able to alert folks when these carriers aren't where they're supposed to be, when they're going to be crossing the border, possibly into Mexico, to be able to alert authorities so that they can go and crack down on these when it occurs, is going to be one more step in that right direction, making progress from the for sure, I think entrepreneurial side of the industry. Trying to solve this, because it sure as hell doesn't seem like the government's moving fast enough to make up for what the industry is losing.
Speaker 2:And then when you pair that with the advancements in AI just this year alone, the things that people can do are ridiculous, and I mean for example, someone on X made a video game completely from AI and is currently making $100,000 a month in ad revenue.
Speaker 2:It's only been up for like a month, it's crazy. So to think that, especially in our industry, where our security systems are, in our tech is like five, ten years behind the rest of the world, uh, to think that these scammers aren't using these ais, plus knowledge of computers, to take advantage of our systems. Um, I think cyber security is something that our I mean our largest stakeholders are the carriers and they're the least likely to invest in this kind of stuff, and that's a really good point. But it'll be interesting to see, especially over the rest of this year, because, like Cursor, the CEO of Cursor stated, I think, just yesterday in an interview that they think within 12 months, 100% of code and software will be written by AI. I don't believe that because there's I mean, I've been using AI to write code and the second you get a bug. I guess it just goes off the rails and it can't fix it.
Speaker 1:So I read the same thing too, and also integrations between softwares. I mean, even within the largest companies that have spent hundreds of billions of dollars in this. Don't have it right. I mean, just my iPhone works less than it did two or three years ago since they rolled out to do AI stuff, and I've opted out even in some because, like other stuff, just doesn't work right anymore. Even basic functions in their tools work less, and I know it takes time, but it's like between Microsoft and Apple. I'm like I have issues with Outlook constantly in their newer version.
Speaker 1:I have constant issues now with hardware and software that weren't a problem, as things are supposedly getting more advanced and I'm like, well, are you getting better code? Are you getting better at the code that integrates it between your product and another one? Because all of it, from a user point of view, to me this seems not as good. It just doesn't work as well, has more issues constantly running into things, and I mean I'm using AI stuff everywhere. We're automating a lot of things, I think, from a cutting edge perspective. So we're like working with folks that are using this on a daily basis and, yeah, it is a really cool.
Speaker 1:Whatever technology like that is, I think, moving things forward. I'm not as optimistic that it changes everything as quick as it does, but hey, we'll see, let's get into it. So what is a freight broker, steven? What does that mean to you? When somebody says I think it's a good place to start, you were telling me off air, you were at a flag football game and the topic came up and I think it's a really good place to start. So somebody said to you tell just a little bit of context.
Speaker 2:Yeah. So I was talking to the referee and he was just asking me some general questions and and he kind of caught on that I was in freight and he mentioned he's like, oh, I was at uh tq, I was a freight breaker. I was like, oh cool, would you? Um, how many customers did you have, like where were you moving a lot of freight? And he's like, well, I didn't really, I didn't really manage the customer side. I did the carrier side. Oh, okay, so you were in operations. I wouldn't consider that a freight broker. You work at a freight brokerage, but you're carrier sales.
Speaker 1:You're not, you know, the customer facing side and this is the other place that I see this a lot too. Like we interview a lot of people. I read through lots of resumes have for years now and it's like you'll see that on someone's resume I was a freight broker, right, and I said this to clients, a lot like when they're telling me they want to hire somebody, like what do I look, what to look for in a resume, what questions to ask, what are the criteria? Right, and I and I'm like the one thing I say and like this is not uncommon in our industry, cause you see similar things happen at shippers. They're this probably 40 different titles for the same position across different shippers. It's just different companies. And like freight broker is another one of those terms that is so general and commonly used that you really have to ask more questions to know what somebody means when they say that right, so, like I'll see this on resumes, I was a freight broker at this company from this time to this time.
Speaker 1:The first thing I look at are what was that person's responsibilities? Right, because technically, the freight brokerage that folks work for, right, they have a different job for a freight brokerage. They are not doing the entire process right, which means technically it's kind of misleading, and here's what I mean by that. To unpack that right, if you are owning your own freight brokerage and you are the only employee, you are a freight broker. And I will define freight broker as I understand it and how I think that word should be used versus how it's commonly used, right To me. If you are a freight broker, you are in the job or in the role of literally doing the entire transaction, meaning one. You can and have acquired customers either by going in person and locking doors until you get a shipper that will work with you, doing it over the phone, doing it over the phone, email and in person Any of those three ways that you have acquired a customer. That is the first job for a freight broker. If you can't get customers to me like you're not necessarily a freight broker, you probably work for a freight broker. The second job would be not only have I got a customer that is willing to work with me, I've negotiated loads with that shipper. I've got onboarded first, they've become a customer with that shipper. I've got onboarded first, they've become a customer. Then I have negotiated shipments to which I was awarded that shipment. So that's the second job is not just getting them to work with you but being able to negotiate a load to move with them. You can get a company onboarded and never move a shipment with them. You haven't brokered any freight. If I've now got the load and negotiated that load, I have that load.
Speaker 1:The next job of a freight broker is to go find a carrier or source a carrier. Now I need to either go to a load board post that load up or go through a sourcing tool or even go through Google and call phone numbers of trucking companies until I find one that will take that load. Once I have found or sourced that, I need to know how to vet that carrier, meaning I've got to be able to look for criteria to determine if that carrier meets my shipper's requirements. That is insurance, that might be age of the vehicle, that might be driver ability or experience and their ability to actually do the job my company, my customer, paid me for. Once I have negotiated with that carrier right then I need to be able to run that load, meaning make sure that driver has all of the information is there on time, picks up that load, gets that load loaded, gets it now in transit to delivery within its expectations, either by appointment or first come, first serve. Finally, making sure that load is delivered without a claim.
Speaker 1:But that isn't even the end. So once the load is delivered, then I need to make sure I get the required paperwork from that driver and carrier. That would be the POD proof of delivery. Once I have that document and the carrier's invoice, I then need to take that document, invoice my customer with the POD proof of delivery. Once I have that document and the carrier's invoice, I then need to take that document, invoice my customer with the POD, our invoice, and I need to be able to invoice and take that carrier's payment, put it into my system for what they need paid. Then I need to make sure my customer pays me by their terms, usually 30 days. I also need to make sure I pay that carrier on their terms, whatever that is negotiated.
Speaker 1:Maybe it's a quick pay, maybe it's 14 days, maybe it's 30 days, but until all of those things happened, you have not performed the operations of a freight broker. You might have done portions of them and you may have worked for a company that brokers freight, where you have one or many of these responsibilities, but a freight broker is somebody that not only has, not only can do, but has done all of those from the very beginning to the very end. That is brokering freight. Now, if I am working at a company where I just go and get shippers and get them onboarded and someone else negotiates the loads, I'm in sales at a freight brokerage. If that person is just coordinating and negotiating loads with a customer that exists, I'm an account manager, meaning like I know how to negotiate loads, I understand the industry, but I'm primarily getting more business from an existing customer. If I'm then taking those loads on a load board, finding trucks, negotiating with those loads and covering them, I'm usually a carrier sales rep or load coverage.
Speaker 1:If I am somebody that is just making sure the loads pick up and deliver on time and that I get the right paperwork and schedule appointments, I'm usually track and trace or like a scheduling role. That is a role that you'll see in lots of companies that sits by itself. Then you have a whole other department at most companies that is for accounting, invoicing, reconciling and making sure all the money goes both in and out when it's supposed to right. So that job of a freight broker is technically in some companies four, five or six different positions, could be four or five different departments, could be one or two people doing many of those. They could overlap. Some companies have them broken up different ways. There are lots of ways a company can structure all of the responsibilities and roles of a freight broker or freight brokerage.
Speaker 1:Just because you worked at a company that does all of them and you did one of those roles does not necessarily mean you are brokering freight. You're working for a freight brokerage. You might understand all of them and you might be qualified to do the other ones at another company because you've been trained on them and done them periodically. Right, but what I really wanted to break down and outline for everybody, like what a freight brokerage is, what it means to broker freight like a verb, like I'm in the action of brokering freight, negotiating, getting it from one place to another place, making sure that thing happens and making sure all of the other tasks need to be done along the way to actually finish that transaction. That is brokering freight, but working for a freight brokerage.
Speaker 1:Really, you want to ask again if you're hiring somebody. You want to ask like, what were you specifically doing? And I always ask that question like what does a day in the life look like. What did a Tuesday look like from you? Walk me through it, from when you get there to when you leave. What were you doing all day? Tell me about your day. That is going to give you a window into what that person was doing.
Speaker 1:Experience wise, Now, that doesn't. You can't just assume that because anyone says these things, oh, I worked on this side of the business. You want to ask more questions because freight brokerages, like I said, are structured in many different ways. There is no right, there is no wrong way to do it. There are different types of freight brokerages, different business models, different risks to doing things differently, different rewards to doing it. They are not all made the same. Understanding these things are really helpful for both somebody looking for a job in the industry, somebody looking to build this company, looking to structure it. There are different ways to do it. Again, they're not right or wrong. There's many different ways that have advantages and disadvantages. But what are some of your thoughts and what have you seen related to this?
Speaker 2:So one thing I want to mention, especially for the majority of the audience that might be looking to become a freight broker when you're looking at job postings, like some of the things you can look for either in the posting or when you look up the company itself, is, you know some specific key terms like freight agent 1099.
Speaker 2:That's going to be someone who is, you know, your freight broker, that does everything and we'll I'll break down some key terms and we can go into detail on them separately. W2 cradle to grave is going to be like a freight agent. You have pod models and then you have your team models where a pod model is going to be. It could be someone who you're a cradle to grave at the start and then you get in so much business that they bring in you know your coordinators, your carrier sales underneath you to kind of build out your pod. Or you'll have separate teams where it's freight sales on one side, carrier sales on the other. It may talk, but for the most part someone's just bringing it. This team is bringing in customers and this team is coordinating the freight. So with that list in mind, I mean I think we can go and kind of break down each one.
Speaker 1:So let's yeah, let's look at a few of these and just talk about what kind of happens and why they look the way they do, right. So the I'm going to start from the beginning of call it the process, meaning like the person that has to negotiate with a shipper or get a shipper to work with that business, like cause that has to happen before any of the other things happen. Without a customer, there's no freight to move, there's no carrier to talk to, there's no lids to move, nothing to invoice, right. So the role that kind of sits at the front end of a business, right With customer acquisition, that is the riskiest job to hire for. It has the highest failure rate but with that it also has the highest upside potential to make money. It has the highest potential not only for income but for just fast success, meaning like it is one of the few jobs I've seen in any sales and I've worked in lots of them, coached in lots of different ones, been involved with companies in different aspects. Like that job still to me is probably one of the fastest way to go from making 40 grand a year to 400 grand a year or a couple million dollars a year, like I've a year to 400 grand a year or a couple million dollars a year, like I've seen folks do that in a year or two.
Speaker 1:Again, that is not common, that is definitely an outlier. But you absolutely can go from graduate out of college to within two years making more money than probably anybody. You know Very few industries I've ever seen that. Maybe investment banking you can probably get to those numbers a little bit faster. But even to get that job you need to be like top 1% in Ivy League, top 1% probably in the NBA of top 1% colleges in the world and even then it is the most competitive job to get. That is the only faster way I've seen to making that amount of income in that short amount of time, right? So for somebody that is coming either with no formal education, college or even just blue collar getting into an office job, this to me is that fastest path to being able to do that right. So there's a huge reward, but there's a huge risk to the company, right?
Speaker 1:So again, like I want to say, it's probably like 95%, if you looked across the whole industry of people that get hired every year for that job, that don't make it six months for sure. Don't make it a year, like if you're hiring 100, somewhere between 90 and 96 out of those 100 people will not be there a year to a year and a half, and part of that is because sales in and of itself right One, it's an easy job to get, meaning like you usually don't need experience to get a shot at a sales job, and the reason for that is, like, what makes people good at sales isn't really education, it's not experience, it's somebody's ability to connect with people, their willingness to be doing things that are uncomfortable, getting rejected over and over again, and then their desire to want that outcome so bad that they're willing to do that day in and day out for weeks, months and years. If you can do those three things right, you will arguably almost be a success in any sales job. So lots of companies will give anybody a shot for a timeframe because, like it's so risky, you just don't know where those two or three or five people out of a hundred are going to come from. And the interview process it's really hard. And the other reason it's hard to interview that is because one most people that end up being good at sales probably didn't even know they were going to be good at sales until they started doing it. Like they don't even know themselves because it is so different than anything else you've done that you kind of don't know if you're fit until you start doing it. Even if you think you'd be good at it, you don't know you won't like it until you've done it. So you kind of have to spend the money as a company to give somebody an opportunity for some defined period of time and then just see how it goes. There's really no perfect way to vet that. And I want to put the last caveat is lots of other companies think like I'll just hire an experienced salesperson. The problem and the risk in that is just because somebody was good and did it once does not mean one they can do it again is the first thing.
Speaker 1:Second, a lot of folks that were really good and were able to grind and do that for a few years, they're just burned out and they want to be able to get a job in sales so they can go. Hey look, I did this amount of business and it's been obscene and I'm really good at this, but they're just tired and even though they want to keep doing it, they just don't have really kind of like I don't want to say like it's not the ability, it's like the drive to keep getting worn down and rejected all day because they're just tired. So they end up getting a job and being able to say, hey, look at my track record, I'll do this for you. But the reality is like they were able to do that, but like they're a different person four years and they're just kind of beat down. And that's why you see lots of even successful freight brokers at large companies do well for three to four years and then they just leave the industry because they just don't want to do it anymore. Same thing in stock brokerage.
Speaker 2:You see that in those industries for the same reason. Yeah, one of the things that I would tack on to that.
Speaker 1:Well, so you were talking about. You know you can go from zero to you know 400 000. You can also go back to zero, like overnight.
Speaker 2:Yes, uh, it is a very like influx industry um, but the other like to the uh. The sales experience point, like one of the things I've noticed in like the last five years is, you know, hiring a salesperson from the freight industry isn't always the best option because, like you said, they're burnt out. They've done it, they're looking for something different and this I mentioned it on a previous podcast I firmly believe that sales in this industry is one of the toughest sales roles to have have. So looking outside of the industry to find someone who sells widgets that still has that hustle and grind would probably do really well in this industry if they can, if they have that drive and they want to shift and they're looking for something more challenging the. The other place to go to um and I've done it twice with success is the service industry. If they work at a restaurant and they have drive, they are going to crush it in freight because they already have that innate charisma.
Speaker 2:I worked in the service industry. It's not great. You're dealing with rude people all day long and when you're a freight broker and you're calling on shippers who you're their 70th call that day, they're going to be rude and managing. Managing that conversation is a is not a skill. That is natural. You have to develop that over time and servers and bartenders is that's something they do day in and day out.
Speaker 1:Exactly it's the ability to talk and connect with people very quickly. That is a skill set that really differentiates and it out Exactly it's the ability to talk and connect with people very quickly. That is a skill set that really differentiates and it's a habit. It's something that's developed over time. It's practice. I definitely agree. That's one of, I think, the highest.
Speaker 1:Somebody has sold things door to door for any extended period of time and been somewhat successful at it. Those folks tend to be very good in sales at anything, because it's the hardest rejection and like I've done that too Like if you got a knock on someone's door and they close the door in your face, yell at you or a rude to your face, it feels a lot different than when it happens over the phone and an email doesn't feel like anything at all. It is not a surprise that all of your salespeople I can guarantee you would rather send emails and pick up a phone, right. And it's not a surprise that people would rather pick up the phone than do this in person, right. But if you can look at someone's resume and they sold something door to door, I don't care if it's textbooks, newspapers, subscriptions to cable TV or internet I we interviewed somebody that sold refrigerators door to door and this guy is killing it now and I'm like, absolutely, I'm like I don't even need to talk to you much more.
Speaker 1:I saw you did that for a year and if you were able to pay your bills selling refrigerators door to door, you can handle the rejection as a freight broker. Like that, to me, is like one of those things that like for sure jumps out to your point. Like so that's the sales piece, that's like the customer acquisition under a freight broker. So let's go to like account manager, right? So like what does account manager mean to you? Or how do you see that role If somebody says, hey, I work at a freight brokerage and I'm an account manager?
Speaker 2:yeah. So if we're looking at the, the models that I kind of laid out prior, like your, your account managers are going to fall into that, that pod area or that, that, that team model, um, and typically the account manager is someone like for me, for example, I've got a couple larger customers and I've got a guy that works underneath me. He knows those accounts very well, so he knows when and where to schedule appointments, what equipment is required, which carriers are preferred, and he can schedule those with and he can work well with that account and I wouldn't trust anybody else with it. And he can work well with that account and I wouldn't trust anybody else with it. And I know when I'm pulling freight from that customer that he is going to handle it 100% without me needing to get too involved.
Speaker 1:Yes, and now here. So for, like the account manager right, like I'm going to start with what I think are the really the things I would look for if I'm going to hire somebody. I want to be successful at this right. Like most account managers, if they came from a big brokerage, they probably had some success acquiring shippers and doing cold calling to be able to get some business to keep their job. If they came from a big company, they probably managed those accounts and then they were probably very successful at one organization being able to make sure they knew the details of what and where things were going. Being a logistician like coordinating, making sure the details are right, making sure all the information from your shipper all the way to the carrier is correct. Making sure all the information from your shipper all the way to the carrier is correct. Preventing those issues, looking at those things ahead, trying to one get ahead of a problem, not just fixing it once it's occurred. Right. They also tend to be very effective at establishing not just establishing, because that's more on the sales and acquisition, but penetrating an account, deepening relationships, getting better and deeper rapport with that customer, learning and connecting and building relationships at the receivers where the places they need to coordinate or schedule appointments, building relationships and finding out and learning who else maybe does business out of that same shipper that they can meet right, penetrating mean like hey, my sales guy gave me this account, he's got one person that sends this many loads. They ask enough questions to meet the other people that work at that shipper that also tender freight. They then create more relationships with them, negotiate more business and expand that business more than where it started, because they all start small with a little bit. Those folks are really good at penetrating and expanding, which is a valuable role.
Speaker 1:Right Now.
Speaker 1:Most brokerages like that is going to be a lower commission because it's less risky, like once you've got the customer, as long as you don't screw it up and you don't lie, it's less likely you lose it, right.
Speaker 1:But they're also they don't have the big risk of not being able to get new ones. It's just growing, kind of what you have Right and to me like they're very, very valuable positions and usually again, if I'm looking at a resume, if they came from a big brokerage it's cradle to grave. I know they've at least done that and they probably just didn't enjoy the sales piece but they really enjoy the logistics piece, the coordination, the relationship side and those folks right can add a lot of value to your business if it's structured in a way where you've got more customers than your current sales guys can manage. You don't want to get rid of the business, but you need to plug somebody in that can just offload this business from your sales guys to free them up to go get more so you can keep maintaining the service and growing the relationships you have right.
Speaker 2:The one thing I would point out, because you mentioned the cradle to grave if somebody is applying and their resume does say account manager, account executive, but they come from a smaller brokerage and they're cradle to grave, that could just mean that they were acting in the capacity of, say, a freight agent, but their title was accountant manager. So they may have done the whole thing from A to B, but because, again, like these terms are so fluid in our industry, you really need to understand how big was the brokers are coming from. What specifically were they doing? Because they could have just been handling house accounts, like you mentioned? Were they doing because they could have just been handling house accounts like you mentioned? Or they in my role, I'm a w-2 I would say I would probably put account executive on my resume, but I am 100, like cradle to grave and I have an lc that handles some of my accounts right yep, now and then.
Speaker 1:That's the next one, right? So once you've got account manager, you usually again under an account manager. You've got some carrier you usually again under an account manager. You've got some carrier sales reps, some companies they'll call them LCs like load coordinators, carrier sales reps. But they're usually doing one of two things, right, like. They're mostly covering the loads that the company has. They're finding carriers, drivers, negotiating rates, trying to. If they're good at it, they should also be having good conversations with carriers, building relationships, asking these carriers what other lanes they need, getting that information of where the carriers need freight over to the sales guys so the sales guys can go and target the companies for where the capacity of the company needs more business. Because if you can line up more business that already aligns with your other loads, it's easier to cover. The drivers win. The shippers get better rates. The brokers have less issues because you're working with the same driver on multiple loads throughout a week instead of many different ones. Less transactions between carriers it adds a ton of efficiency. It makes the whole supply chain more effective and efficient. Right, but you're primarily again negotiating with carriers. Maybe you're covering dedicated loads and negotiating with carriers and drivers for dedicated freight and spot freight. Like that's primarily the carrier sales role.
Speaker 1:Some organizations track and trace and scheduling falls under carrier sales as well. Meaning, like Steven, you're my carrier sales rep. If I give you a load from Miami to Detroit, you've got to go find a truck for that. You got to negotiate the rate that works. You got to make sure their requirements and vet that carrier.
Speaker 1:You have to confirm the scheduling at the pickup and the receiving. You've got to confirm that driver is who they say they are. You've got to confirm that what the dispatcher said was true. Meaning, if the dispatcher tells you he's going to be empty and wherever in Homestead Florida that you talk to that driver, confirm that he is where the dispatcher said he was to prevent that issue. And then you got to track and trace that driver all the way to pickup that he loads on time, all the way to delivery that he delivers on time. And finally getting that driver to send you the POD, hopefully once he delivers to make sure there were no issues, no claims, that it delivered clean. Getting that paperwork back to the brokerage so it can invoice the customer and start the process on paying the carrier right. Like that is very common for a carrier's rep to look like for all of their roles. Sometimes it's just covering the load and then you give it to the next department, which we can cover Anything you want to add to the carrier sales piece.
Speaker 2:No, that pretty much covers it up, I know I've seen. The only thing I would point out is in varying models is where I've seen a division between sales and carriers, where sales is literally pulling in freight and it goes onto the load board and then sales like there's like not like a streamlined account management, but their carrier sales are literally just staring at that load board and they're like I gotta, this is a covering those. I'm just covering everything, right, yep, um, and then, whereas the pod model right, it's usually a broker, maybe two, and then they have's all like this is their load board and then that whole company might have you know pod A through Z and they have their own load boards and just those teams are interacting with inside of each other. It's not a company wide thing. So there's just the to consider.
Speaker 1:And then again, like I, where the final breakout is. Sometimes you'll see, and this will be outsourced at lots of brokerages to someone overseas of just track and trace, just somebody calling, sending tracking to drivers and making sure it stays on it, confirming the drivers are empty where they're supposed to, that they are at pickup. They also work on issues and scheduling, meaning, like driver showed up, the PO isn't good at the shipper, you're going back and checking, calling that shipper, finding out they also work on issues and scheduling. Meaning, like driver showed up, the po isn't good at the shipper, you're going back and checking, calling that shipper, finding out what the issue was, getting that resolved, doing the same thing on delivery and really just working on kind of scheduling and making sure that all the trucks that were booked are where they need to be when they need to be right. Like that's probably the last, I would say that, like for anybody looking to structure their company in a different way, that's where I see most of the issues arise. When you separate those Lots of brokerages go. Well, track and trace is the least time to train somebody. It needs the least skill. So, like let me just pay somebody wherever in the Philippines. You know a third of the price of somebody in the US. They're just going to call my trucks all day and make sure they're where they're supposed to. Right, yeah, that saves you money in the short run.
Speaker 1:But here's the cost, or the risk, when that person doesn't really understand the rest of the process and brokering freight. They don't know what problems to look for. They don't know which problems to look for. So, like if a driver is like, hey, I'm going to be good, they don't think intuitively. Well, wait a minute, that guy's 150 miles away. He's supposed to pick up in an hour. Like there's no way that guy's going to be there in time, so they just miss that. Then what happens is the guy shows up late, no-transcript. So he shows up late. They didn't tell the customer. But the shipper emails and starts yelling back at the logistics person who's the customer of the freight broker. She goes dude, do you not know where your trucks are? Like, this guy was 45 minutes late. How did you not know this? Why am I finding out from my loading dock that your truck's not on time? You guys should have told me this two hours ago.
Speaker 1:This is what really pisses shippers off and it risks you losing not only just a few loads, but it risks you losing that relationship altogether, right? So when you outsource that piece, that seems to be the most obvious and one to save money, to put somebody with the least skill. Those folks are responsible for some of the most important problems that need to be communicated to the shipper, and if they don't have experience, they don't notice them and they miss them constantly. And what that does is it creates way more work for your most expensive employees, your account managers, the people working with your shippers, because they spent weeks, months or years getting this shipper, negotiating these lanes, developing this relationship.
Speaker 1:Meanwhile, one person not paying attention to all the way downstream in the freight brokerage doesn't see these things. This person's getting yelled at and they're threatened to pull hundreds of thousands of dollars of business away, all because you saved eight dollars an hour on the person following the trucks which, by the way, is what the shipper's paying for. At the end of the day. I need you to know where my loads are, when and where they are, when and when they aren't going to be where they're supposed to be, and if that person doesn't know what they're doing, it not only creates way more work for everybody. That costs you more money to pay. They got less people to call. They've got less business to bring in, they got less time to do that, but you're literally gambling with the most valuable thing that business has acquired right, and to me that is one of the biggest downsides to doing that.
Speaker 2:Yeah, and on the other side, I'm currently on the receiving end of that outsourcing right. So we have an asset company I help run 10 owner operators and somehow my cell phone number ends up on those lists of people to check call. And every weekend I get probably six or seven calls from different outsource brokerages and they always it drives me insane, insane. They always start the conversation with hey, I just want to make sure your driver showed up in greenfield, indiana. Okay, I've got 120 trucks. We go to greenfield all the time. Can you be more specific? Do you have a load number and like like, well, it's okay. Did you call the driver? Cause you should have been calling the driver. Did you call the after hours number? Well, no, we didn't call. Okay, and then an hour later I'll get the same phone call from a different person because I forgot to update the system.
Speaker 2:And when you create, when you create departments like this within your brokerage, you're putting too many cooks in the kitchen and that communication is getting broken apart, like you mentioned, and it can cause more disorder than what you think you're accomplishing through organization.
Speaker 2:Yeah, efficiency, one of the things this kind of leads into, one of the things I wanted to highlight at the end of this is, as we've talked through all the different models of you know what is a freight broker, right? What does that mean for a shipper who is looking for a freight broker, right? If or is talking to someone who is a freight broker, you look at it from 1099 Freight Agent Cradle to Grave Pods to Teams what you can expect is, as you go down that list, the further down the list, the more people you're going to have to talk to when your load has a problem. And does your shipper want to do that? Unless your brokerage has put in some kind of system to handle, just make sure they're contacting one person Like. You're going to put too many people in the equation, which is going to cause frustrations on the shipper side. But putting more people in that does allow you to grow faster.
Speaker 1:But you grow faster, efficiently.
Speaker 1:Yeah, the thing that reminds me of this you ever play a telephone game when you're a little kid. They sit kids. You know what I'm talking about? Yep, I know exactly what you're talking about. Yeah, so, like I remember, here's probably kindergarten to first grade, it's like around my daughter's age, right, they line 10 kids up and they sit next to each other, right? So there's like, call it like four or five lines of eight kids that are all sitting next to each other Indian style and then the teacher walks to the end of each student and whispers a word in their ear and says then they have to whisper that word to the kid next to them. And you'd think, right, with like only six or eight people, one word, or maybe it's a sentence, gets from one person to the other person and inevitably, when the last kid says hey, the teacher says what, what was, what was the chain like? What did it start with and what did each kid say all the end? Where does it end up? And it's always a different message or a different word.
Speaker 1:Right, and it's like communication, while it is by far, you know, like one of I would say arguably like the largest advancement in all of human civilization. If, like we couldn't talk to each other and communicate our thoughts through words for you to understand them. Like we couldn't talk to each other and communicate our thoughts through words for you to understand them. Like we couldn't do any type of labor. Like we couldn't coordinate anything, couldn't build a house, couldn't build a shed, couldn't hunt for an animal. Like if I can't communicate to you what I'm doing and what you need to do, or vice versa. Like none of these things happen right. But it's also not perfect and everybody, I think, kind of misses. That is, that, like to your point of cooks in the kitchen, when you've got lots of people taking this information over and over again, whether it's email or by the phone or by text message, things get lost. The context, the greater meaning of what somebody said gets lost, diluted, inflated to where it's a completely different message by the time it gets to the other person. And the less folks you have there, the less opportunity for a mistake to happen. That things get lost, confused, mixed up. And again, it's not an episode on communication, but it does really point out that like there are pros and cons to all of these models and I really hope this episode was good for everyone out there to kind of understand, like what are the differences in companies? What are the different roles? What do they look like? Working at a freight brokerage, what does it mean to broker freight? And where are you in that process, right?
Speaker 1:Just because you sit in one of those and you have a preference for it doesn't mean you're any more or less valuable than somebody that does all of them together. There's advantages and disadvantages. To cradle to the grave, there's advantages and disadvantages to pod model and department models. Right the cradle to the grave. There's advantages and disadvantages to pod model and department models, right. It's not that any are better or worse, it's that all of them have nuances. They have advantages and disadvantages.
Speaker 1:And again, if you're hiring, you want to know what that person has done so you know where they would not only be adding value to your company, but where that person enjoys working. What do they like doing all day, right? Like you take somebody that was really good at this and you put them over here. Even if they could be good at they might hate it and, to be honest, like they're not going to stay at that role long either. And for anybody looking for a job it's the same thing. Like you want to think about what you actually did enjoy doing at a freight brokerage.
Speaker 1:So when you are applying for other positions, you can explain these things. You can talk to the person hiring and go like this is what I did, this is why I enjoyed it and this is why I want to do this for your organization. That is far more important than saying I just did this and I've done this for this long, like that doesn't tell me anything. Like lots of people can do things for a year or two. Did you enjoy it? What did you like about it? What didn't you like about it? Why do you want to keep doing this? Those, to me, are the better questions to both ask an interviewee or, if you're applying for a job, to be able to explain to somebody that is hiring for this role, because that's going to give them a far better picture of whether you could be a fit for where they're looking for somebody in their company for where they're looking for somebody in their company.
Speaker 2:Yep, yeah, totally, and especially for someone who's like really green to logistics, looking to get into the space. I mean, quite honestly, the best place to start, in my personal opinion, is probably a company that has carrier sales and just kind of learning the business from the operation aspect, but leaning into the sales team and like learning how do you guys do, what do you do? Because, like you mentioned at the top of the episode, you know the most successful sales people probably didn't even know they could do sales. They just got thrown into the role and and three months later they're they're cooking, you know, yep.
Speaker 1:Sweet man. Good episode. Any final thoughts?
Speaker 2:Uh, no, I mean, you know like share, subscribe. Uh, if you got any questions, any thoughts on the episode, leave it in the comments below. I know the last couple of weeks we've had a lot of discussion on the YouTube channel, which is great to see. It also helps us source questions and get you the answers that you want when the final episodes come out on Tuesday.
Speaker 1:And whether you believe you can or believe you can't, you're right.
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