Breaking Into Freight Brokerage: Essential Q&A for Success | Final Mile 86

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

• Does Your Business Name Matter? – Should you change “Transportation” to “Logistics” when you become a broker?
• Cold Calling 101 – How to approach shippers as a new broker and what your outreach should sound like.
• Finding Carriers When You’re New – Strategies to build carrier relationships, even when you lack a credit rating.

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Chapters

• 0:38 Welcome and Introduction
• 4:13 Transportation vs. Logistics Company Names
• 6:55 Legal Implications of Company Identity
• 10:56 Effective Cold Call Communication Strategies
• 15:36 Finding and Building Carrier Relationships
• 20:46 Final Thoughts and Wrap-up

Transcript

Speaker 1: 0:19

Welcome back for another edition of the final mile where we answer your questions all about freight brokering. Before we get started, ben, it feels good to be back on the the recordings here. I know I still look like I've been Brick room here at the armory, but I'm finally coming off of five weeks of National Guard duty back to normal life.

Speaker 2: 0:40

So it is nice to have you back, yeah how was your foray into the correctional system.

Speaker 1: 0:49

I'll give a full breakdown on next week's regular podcast of my time in prison. So, but it was. It's been eye opening. We're just going to do some Q&A today, but first, if you're brand new, check out all of our other content at Freight360.net and our YouTube channel and everywhere else. Share us with your friends. And if you're looking for educational options, we have the Freight Broker Basics course, and please check out the sponsors in the description box to help support this channel. Let's get right into it.

Speaker 1: 1:15

Our first question we currently have a company name with transportation. Once I become a broker, legally, do we have to change it to logistics or does it not matter? So actually, I've heard this a lot. If someone has a trucking company, and maybe it's, like you know, kowalski Transportation right versus Kowalski Logistics, for the brokerage right, not required by any means. It is very common, though, for, like a brokerage, to be called logistics, sometimes transportation, but it doesn't really make a difference. I think a lot of people put a little bit too much thought into the name of their company or their website, or you know things like that, and the reality is, this is an industry that is built off relationships and your ability to connect with your customers and to serve them properly. So do you have any thoughts on, like, the naming of an organization? I mean, there's definitely things you don't want to name your company.

Speaker 2: 2:11

Here's another way to. I was thinking of this as your answer and I'm like that is a good question. And no, it doesn't matter what you name the company. I mean, you could name it Grandma's Cookies, and it could be a 3PL or a trucking company. You can literally name your company whatever you want, right? Yeah, also like the. I also want to put like if you have a company, right, and you don't want to pay to create another company, but you want to use a different name, you also can file for a dba, which is a doing business as, and you can literally have another name, even though your legal entity is called something else. That's also very common. But what about this one? What if your company is Nate Cross Trucking and you open a freight brokerage? Would you change your company?

Speaker 1: 2:55

name. So I think I think rule of thumb don't call yourself a trucking. Don't call yourself trucking if you're going to be in the brokerage business. I think it's misleading, you know, know, it just kind of sounds weird. Um, when you because you hear truck and you think, oh, they have trucks right, whereas if I hear logistics it doesn't doesn't make me think they have trucks, I'm gonna assume they're a brokerage, honestly. But a lot of companies that go with logistics have both all right. So so like I think about like, going back to like, when I worked at Conway and there was Conway Freight and then there was Menlo, logistics was the brokerage and then when it was bought by XPO, it was XPO Freight and XPO Logistics and it kind of separated the two to the asset based side versus the non-asset-based 3PL or brokerage. So yeah, I wouldn't personally call it trucking. It doesn't mean you can't legally do that. I'm sure there's plenty of brokerages that do, but I wouldn't personally. That's my take on it.

Speaker 2: 3:57

But I also want to point something out too, because the laws and liability are very different for a trucking company than a brokerage, and this is why we talk about this a lot. You don't want to misrepresent yourself as a company. You aren't One, because it opens you up to liability. For one you can be sued. You can take on risk that you're unaware of. And there was a case yesterday, I read, with RxO and PCS Wireless.

Speaker 2: 4:27

Rxo used to be part of XPO. Xpo spun off RxO right into a standalone brokerage, right. But the high level situation where somebody brokered a shipment of like $11.5 million cell phones. They were stolen and the shipper's insurance covered like five million. So pcs wireless is now suing rxo under basically the carmack amendment I think it's like 1907 or whatever right related to liability. And part of this dispute is were they a broker or are they a trucking company? Right? And I'm going to be anxious to kind of see how this plays out, because it's like they literally third partied the load to another company, right? So like I don't know how they're going to make the argument they are a trucking company when it was literally a brokered truck that had the load stolen from them.

Speaker 1: 5:16

But it does matter, and this is where companies get into trouble too. Like if you have both a brokerage and a trucking company and you take freight as a trucking company and you put it through your brokerage. Or if you just take it like kind of unspoken, like yeah, these guys have trucks and they have a brokerage, like it needs to be very clear. Yeah, you know the legality of it all.

Speaker 2: 5:39

And that's a really good question and I'm very curious to see how this one plays out and I know I think we're gonna be doing an episode with Matt Leffler, the armchair attorney because the question I'm very curious of is we know the FMCSA and you've been doing work with them and the government for them to be able to impose fines for double brokering right, but I'm going to use the word unlicensed brokering, which is when a shipper gives a load to a trucking company, that trucking company gives that load to another trucking company.

Speaker 1: 6:06

Fraudulent brokerage activities is how they're defining it.

Speaker 2: 6:14

Fraudulent brokerage activities, right. So in that scenario that shipper is doing business with a trucking company right which has, like, the full responsibility and liability right Of that product, which is different than as a broker. So if that trucking company gives that load to another trucking company and it's stolen, I would imagine they are liable for all of the money.

Speaker 1: 6:31

I mean, there's definitely an argument to be made for sure. It's a dangerous, dangerous territory. But back to the question. No, you don't have to legally change your name, but most people will have a different name for their brokerage. So all right.

Speaker 1: 6:46

Next question as a new agent or broker, what does the cold call outreach sound like? Man, I feel like. I love when we talk about like people are like. What do I say? What's my script? Like people are is like. What do I say? What's my script? Right?

Speaker 1: 7:03

I love this question because one of the beauties of being in this industry is you can really create yours to be however you want it to be and you can change it at any time. And you can also, you know, maybe it's one way towards one customer or another, towards like a different, and there's there's a lot of psychology that goes into mirroring and the way that you can psychologically connect or communicate with folks. There's the one book you and I both read. I think it's called Super Communicators. Is that right? Yeah, I highly recommend it for anyone that's trying to find their voice and say, oh, good book. But I think you and I do this a lot. When we're around each other, we're both very excited and both very active. Right, if we have a meeting or a consultation with someone who is very different from, like, our tone of voice, we tend to like kind of meet them where they're at Right, and I think that's a lot goes into that.

Speaker 1: 7:56

As far as, like, what does your cold outreach sound like? Everyone is going to be a little bit different. I've had, I've had people that have called, called me to sell me something, and the ones that I don't like are the ones that sound salesy, they sound scripted, they sound robotic or not genuine. The ones that I tend to have a really good conversation with, whether or not I buy from them, are people that just really tend to connect with me. Right, it could be that, hey, you know, I know you're a big Bills fan, what'd you think about the game last weekend? Or like, hey, you know, I know you're in Buffalo, like you guys, guys still getting pounded with snow, like there's like little things that you can do and say that allow you to connect, just as two individuals versus hey, I have trucks in the area, can I have your freight? Right now, there are definitely. I'd encourage you guys look at the content we have on our Web site about questions to ask, but your opener is going to be different for everybody.

Speaker 1: 8:52

Like the way that I open a sales call or you open a sales call are two different ways about doing it, but there tends to be in any sales technique. There tends to be like you identify the customer's need and you have a solution and a proposal to that need Right. And there's like a million different sales methods, but they all generally kind of go in that realm in the area. Or hey, I wanted to reach out to see if we might be a fit to work together, because I've got some drivers that deliver here every single Tuesday looking to get back calls to wherever. Right, your need is getting trucks from here to there and my solution is here's the trucks, right. So there's all kinds of ways to do it.

Speaker 1: 9:35

I always encourage people like play around with it, figure out what seems to get the best response, the least amount of pushback, because you take two people that have terribly I shouldn't say terribly, but wildly different dialects or tone of voice or speech speed, and if they say the same thing, it's going to be taken differently by whoever is receiving that message. So what are your thoughts on this one?

Speaker 2: 10:03

So there's another book I'm reading right now that it's fantastic. It's called Connect and it's by David Bradford and Carol Robin and this book was written by she's a Stanford professor. There's a class I learned at Stanford that is like the number one attended class that like almost everybody that goes through their graduate level tries to get into. It's very, very competitive to just get in it. And what happens in all human communication? Right, and I was listening to it because one CEO was talking about he's taken this twice. They now do a seminar for like CEOs. It's like a week long and he's like not only has this just made business and sales more effective, he's like, but my marriage is better, he's like my relationship with my family and kids is better.

Speaker 2: 10:58

Because she really outlines the things we do that make it harder as well as things you can do to make it faster and how you can gauge how deep a relationship is with any human being. Right, sales, to your point. It's really pretty simple. It's like it's just can I connect with you, find some common ground where we're comfortable and trust each other a little bit? And then how deep can we go from there? Right, talking about surface things like sports or the weather we talk about, which are like trivial, but that gets you comfortable with tone of voice and just interacting. And then you can ask some deeper questions where people are more comfortable.

Speaker 2: 11:31

Whether you're on a date or talking to a prospect about their shipping lanes, they're not just going to share what they're paying on loads to somebody that called them out of the blue. They've talked to you for 30 seconds Like they don't know you. They are not going to just divulge information about their business, how they operate, until they have a little trust, right, yeah, and the thing I would start by saying is like the thing that does not work to get a relationship. You can't build a relationship with somebody via email. That is not a human to human connection. So an email might, yeah, like an email is effective to get somebody's attention and maybe engage them into a conversation. But the thing I work with most are folks that, honestly, they don't even probably realize themselves. They're just avoiding the fear to pick up the phone and being rejected. So they keep sending emails. But then they wonder why they're not really getting relationships established business customers, right? So again for a deeper answer in this, check out our episode on prospecting with a purpose.

Speaker 2: 12:28

We spent like more than an hour discussing this. There's a lot that kind of goes into it, but, like I'm going to approach a sales call differently, based on who I'm calling, right and why I'm calling, and it all revolves around, I'm trying to find or guess at what their need is likely to be. That's what my intro is related to. If I'm calling an area in the country of shippers and a snowstorm is coming tomorrow, that need I'm going to try to engage with them about is hey, did you get everything out before the storm came? Just wanted to know. I got some guys maybe in your area today. Do you need any help? If you need any help after the storm, let me know.

Speaker 2: 13:01

Right, every call is going to be that intro. If I'm calling about a shipping lane and I actually move the other side with another customer every shipper that I can find that moves the other side of that lane I'm genuinely going to come like hey, look like I ship for XYZ. We run Texas or Dallas to Chicago like three days a week. I'm pretty sure you guys move Chicago to Dallas If we're sending guys up and we can match up on your days when your loads come back. I'd love to be able to talk about some reloads possible, right. Every single one of those shippers that day has the same intro, because it's all revolving around what is their likely need, right, 100%.

Speaker 1: 13:37

Definitely dependent on the situation.

Speaker 1: 13:38

The last thing I'll add in is a tip If you're trying to figure out how to find your voice or get more comfortable talking, I'm a big fan of listening to other people that are great communicators and, in the form of like, if you're a podcast fan I mean, if you're listening to us, you're probably a podcast fan Listen to people that podcast and talk to other people on their podcast, whether it's like me and you, or they interview, and they do a good job at it and you could pick up on some of the things that they say, some of the ways that they can guide a conversation, and you can like.

Speaker 1: 14:12

I love to take like certain tactics from you know this, you know this guy, I love the way that he does this, I'm going to try that out and you start to adopt things from other people that you find as effective in your own style, so I'm a big fan of that. It's kind of like the more you read, the more you learn, the more you consume the content of people communicating, the more you'll be able to learn about your own and doing it yourself right.

Speaker 2: 14:35

The only real way to improve this skill is doing it. And in every sales job it's a little different. Like before I came into freight, I made probably tens of thousands of sales calls in, like different industries. It still took me a month or two to get the hang of the objections, my intros, what I was going to say, what was going to be effective, my tone of voice. Like it's all a little different because the needs are different and, at the end of the day, not one thing works on all situations because all people are different.

Speaker 2: 15:04

You can't connect with the same person with a different person. And even the other thing, too that I always remind everybody is like, just because a call didn't go well the first time you called, like that might've had nothing to do with what you said, how you said it or what was even done there, that person's mood or situation, just they could have had a bad day and they weren't going to be receptive, no matter who called them. So you want to keep trying and following up because you call them two days later they could be in a completely different mood, might be willing to talk to you and share a bunch of information, and then you might not be able to reach them. It takes a lot of time and attempts. Don't make one phone call and give up on the shipper because you didn't get a yes right away. It takes a few weeks for sure, probably more like a month Repetition.

Speaker 1: 15:47

Exactly All right. Our last question when do I find a list for new carriers? I've dealt with the oh, with the quote you don't have a credit rating and you're too new, so they wouldn't work with me and it's cost me my first shipper. So where do we find new carriers? I would encourage you to check out our other content on developing a carrier network. But this is a it's like a song and dance, right, like what comes first the shipper that's going to give you a load or the carrier that's willing to work with you. It's usually the carrier you'll be able to find first, but there's different sourcing tools out there and I'll name a few and then we'll talk through some of the techniques to how to overcome some of the hurdles here.

Speaker 1: 16:26

But we did a show with DAT on our last podcast and we went through their carrier directory, carrier profile. You can search for carriers based on location, equipment type, et cetera. Highway has a very similar feature where you can source carriers. There's plenty of tools out there that allow you to put an origin, destination, equipment type. Gen logs is a great one, right, but the reality is and the issue is coming into is like you don't have credit, which could be the factoring company saying we can't work with this customer or with this broker, or it could be like you're too new, we don't trust you.

Speaker 1: 17:03

We did We've done well multiple episodes where we've interviewed folks that have consumed our content. Des Clark is like one of my favorite ones to reference back from a couple of years ago where he started as like day zero. How do I build up a carrier network and get factoring companies to approve these carriers to work with me? And it's like pick up the phone, call whoever it is that's telling you no and figure out why is it a no and what will it take to be a yes and in some cases it's going to take time with some of these folks.

Speaker 1: 17:31

For others, if you can just build some rapport and trust with them, that will give them that warm and fuzzy and okay, I'm willing to work with you. I just need to make sure we're either getting, like you know, quick pay with no additional fee, or, you know, an advance after I pick it up and the rest of the payment upon delivery with no additional fee, Like there's. There's kinds of ways you can work with it and establish a reputation, because otherwise they don't know you from anyone right From anyone else. So it's, it is just a lot of it's selling yourself the same way that you've got to do that with a customer. Anything to add on that one.

Speaker 2: 18:06

For new brokers. Right, if I had to start a new brokerage right now, right by myself, I would probably I mean, I would be doing both I would be starting to prospect shippers. But I think the faster path would probably be to start with the carriers Because, to your point, like the customer is, typically, even if you get one and they onboard you when you get your first load, you're going to have like a day or two or maybe the same day to move that load. It is very hard to get a carrier to trust you in that short of amount of time, right Like in like literally a few minutes or even a few hours to get through the factoring situation, to be able to get them to trust you. They're just going to go grab another load because it's easier, faster and they're not going to waste that amount of time and risk not getting paid by you to move a load if they can get a load from somewhere else. But if you start building relationships with carriers and you can work with them and say, hey, listen, I'm a new brokerage, I'd like to be able to establish myself working with you guys. What can we do? Over a couple of days or weeks you'll probably be able to work through something, some payment arrangement, a prepay pay, half up front, half after, whatever that is.

Speaker 2: 19:16

Now, if you've got a carrier, the thing I would say is like, ask the carrier what lanes and what shippers they would want to work with. Most carriers probably have a short list of companies they've wanted to work with that they haven't. They probably don't have as robust of a sales team to do as much of this as possible as they would like. So you can basically sell the carrier on hey, I will go help you find the business you want. If you help work with me on my credit, then they'll give you the targets for the shippers for you to prospect.

Speaker 2: 19:46

You already have the carriers lined up and you have an intro into the shipper, like you're literally calling them like I. You know I'm calling because, like my carrier that I work with, abc trucking right, literally, is doing this. They've been to your facility, they'd like to be able to work with you and then over a month or two or three, you can probably get one or two shippers that will give you some loads that already line up with this carrier. Now you can start building that credit, because that takes four to six to nine months and it's, I think, easier to go carrier than shipper, than it is to find a shipper and then expect to get a carrier to work with you in like 10 minutes.

Speaker 1: 20:23

Like a phone. Almost fell down there yeah. I agree, man. It's kind of like the you build a relationship with them, figure out their need and you go solve their need by talking to Shipper. So great stuff, great questions. Continue to send them our way and we'll continue to answer them.

Speaker 2: 20:42

Final thoughts.

Speaker 1: 20:45

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