Export Rail, Cross-Border Hay, and Load Cancellations | Final Mile 98

Stephen Ruhe & Ben Kowalski answer your freight brokering questions and discuss:

• 🚆 Export & Domestic Rail Freight - How can brokers source both export and domestic rail freight?
• 🍁 Moving Hay from Canada to the U.S. - If you’re brokering freight like hay from Canada to the U.S., can you handle customs clearance yourself—or do you need to involve a customs broker or freight forwarder?
• ❌ Carrier Cancels After Booking – Now What? - What happens when a carrier books a load and then cancels before pickup?

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Chapters

• 0:00 Q&A Introduction
• 1:00 Sourcing Rail Freight Options
• 4:29 Moving Hay Across Borders
• 5:47 Carrier Cancellations and Consequences
• 8:38 Importance of Clear Accessorial Agreements
• 15:28 Episode Wrap-Up

Transcript

Speaker 1: 0:19

Welcome to this week's episode of the Final Mile where we answer your Q&A. All the questions you guys email us, put out on our Facebook group, send us directly. Try to pull them all together and answer a few of them every week. So let's dig in and look at the first question. What's our first question, stephen?

Speaker 2: 0:41

My first question is brokers any info on sourcing export and domestic rail freight? You got any thoughts on this?

Speaker 1: 0:51

one.

Speaker 2: 0:53

Uh, I mean for me, if you're looking at exports. Uh, specifically, um, I'd be wanting to talk to freight forwarders, cause they're the ones that are going to be handling the import export business, um, and they're not doing domestic freight, so they're going to need, either on behalf of the customers, or they'll get you in touch with those customers that are arranging that that transport either to the ports or away from the ports yeah, both like domestic.

Speaker 1: 1:23

The difference between domestic and export rail is they're typically in different container types, meaning like domestic usually ship in 53 foot rail containers and international are typically 20s or 40s. There is a company I just met with last week that has large, huge amounts of information. It's a team from that used to work at freight um Flexport, sorry and this company has all of the import data. So basically you can find who's importing what, who the freight forwarder is, and use this for prospecting. It's a really good piece of software and I am trying to find it right now to share with everyone. It is why can't I find it? Revenue vessel, that's the name of it. So, really cool tool Again. It's got like this massive amount of information, like every shipment that comes in as an import has a record and basically those records have who the freight forwarder on record is, who the customs broker is. So if you wanted to prospect freight forwarders, you could see a lot of that information to reach out to them, to help them source capacity.

Speaker 1: 2:45

On the domestic side, honestly, you can source the carriers through like Loop, which is Union Pacific's platform, which is a co-brokerage, basically that access Union Pacific's railroad and then Ship CSX is CSX's. You can get set up with those and you can book loads on rail domestically easily. You go on their platform, put in the details it gives you the price, sourcing the freight. I mean you can put anything on a domestic rail as long as your customer is okay with it. So the platform will send the truck, pick it up, put it on a rail, send another truck on the other end and take it to your customer.

Speaker 1: 3:21

And it used to be a big difference in time, like if you ship Jersey to California that's five day transit with a truck. It used to be like seven to 10 days on rail. They've gotten so much better, like I've looked at lanes that are actually faster on a train than actually in truckload in some cases. So the timeframes are pretty comparable. The rates are typically cheaper and any company you can ship domestic rail on if the customer's okay with it, and the larger customers almost always some percentage of their freight is already on rail. So like that's a really big bucket. And then if you're looking for exports again, I would go to the freight forwarding side. That's going to get you a pretty good idea of who's handling the import and export, because usually they're the ones that arrange the transportation and actually tender those loads Right.

Speaker 2: 4:09

What's next? Next question we have a customer looking to move hay from Canada to the US. As a freight broker, am I able to do the customs paperwork to get the product across the border, or do I or the customer need to contact a customs broker or freight forwarder to get this done?

Speaker 1: 4:29

Okay, so Canada and Mexico don't require a freight forwarder, but they do require a customs broker. And as a freight broker we don't handle the customs paperwork. The shipper does the beneficial cargo owner. So your shipper would need to contact a customs broker to get the customs paperwork and then, as a freight broker, all we do is we're in contact with the customs broker and we connect them with the carrier, who then gets the paperwork to take it across the border. So from our point of view it's pretty simple. You really just if your shipper has never done this you just look up some customs brokers and give them a referral. They can handle the paperwork to go from Mexico to the US, vice versa, or into Canada. If you're going to go to do anything international outside of those two countries, then you're going to use a freight forwarder or an NVOCC.

Speaker 2: 5:22

Gotcha Okay, let's see Last question. When a carrier cancels a load, even right after they booked it, without picking it up, what are the consequences and repercussions for the brokers and the carriers?

Speaker 1: 5:41

Here's a rhetorical question I'll put out there to anyone that's asked this as a broker, if you get a load for a shipper and you cancel because you can't get a truck for the right rate or a truck at all, does anything happen to you?

Speaker 2: 5:57

Yeah, you don't get to work with that customer.

Speaker 1: 5:59

Right, but is there a fee, a penalty or a slap on the wrist? No, you just lose their trust and they don't work with you again. Right, it's the same thing with a trucking company, right. Right, it's the same thing with a trucking company, right, like they agree to do it, they're going to book a load with you if they can't make it or if their truck breaks down or they get stuck at their last load. Like, you can't find them, like they didn't start working with you yet anyway. So the answer is like nothing happens. It's incredibly frustrating because if you book a load with a carrier, though, and your customer cancels the load on you, you owe the truck a truck order not used, but in those scenarios, the truck usually is working for you, like they're driving to your shipper, they're spending money, they're spending time, they're spending gas and effort, and they're not going to pick up a load somewhere else. So that's why you owe them money, but that's why nothing happens if they cancel on you.

Speaker 2: 6:51

Right, yeah, and it's. It's a conversation that happens a lot online and it's the. You see the brokers in the in the comment section Well, you know, if you cancel on me, then the I can't get any money for it, but and it's just, it's a perspective thing. It's like well, I hired you to do a job, they didn't hire you to do a job. So there's yeah, correct, yeah, and for any broker out there, like you got to make sure that your contract with your shipper, like that is outlined, your necessarial should be outlined.

Speaker 2: 7:23

So there's usually a timeframe, it's 24 hours, or have they started moving in it 24 hours? Or have they started moving in it Like? You need a way to measure it so that if that does happen, the shipper says, oh, this load's canceled. You don't have to have that argument of, well, you canceled at 10 hours and you know the driver was already on his way there, so we owe it Tony. And then you can avoid that conversation if it's written on paper and both people signed it and you know what the guidelines are and you can tell the carrier hey, these are the guidelines, and that hour long conversation never has to happen.

Speaker 1: 8:00

Correct and I think this is one of the overlooked things that really needs to happen. Like you should be talking to your customers about this ahead of time. Like you should ask them like hey, in the off chance that you guys have an order you send to me and I'm working on and, for whatever reason, like, your customer cancels it, how do you guys handle truck orders not used? Do you have a time frame? Like, how does that look? How do you guys handle truck orders not used? Do you have a timeframe? Like how does that look? Because, again, if you ask this question before it happens, like now, you're just being proactive. It shows you pay attention to details and it shows you're trying to solve problems before they happen, which are all good impressions to give to your customer, right, when you call a customer after a load's canceled like sometimes they're already frustrated Then you're going to go and be like hey, I need this truck order not used and they're already in the mindset where they're irritated. So now it's like confrontational sometimes. But if you ask this upfront and you just go like, hey, do you guys have anything? When I'm onboarding with any shipper, I'm always asking this like what is the cancellation policy? How do you handle truck orders not used? Another good segue how do you handle detention? How do you handle layovers? Because every shipper and receiver handles them a little bit different, right? What is the cutoff between detention and a layover? Right? Some companies will pay four hours of detention and then it becomes a layover. Some will pay you all day and then it becomes a layover, and they're all different, right? So when to the original point of like, how do you handle the carrier? You want to be able to handle the carrier clearly and upfront in the same way your shipper is doing business with you. So there is no contradiction, right, and carriers should be able to know this upfront. I advise this to all the trucking companies I work with too. Like you're going to ask your dispatchers, when they're negotiating a rate, to ask these questions what's your detention policy? What's layover? How do you guys handle truck orders not used? What documentation do you need? Right, because when you ask that up front and it's clear and in writing, there is no conflict after right, now that carrier can request it exactly the way it was asked and have it in writing. Same thing for the broker and the shipper, right? If I've got this document from my shipper. I have a file with every one of my customers, actually, to our last episode. It's in my TMS. These are the procedures, these are their policies. This needs to be done when and where. Now there is no discrepancy.

Speaker 1: 10:19

Like I worked with this company last year that onboarded a pretty big shipper, that worked with even larger shippers right Food company, very well known, also delivers a lot to every major grocery store. They would be on top of this brokerage and going we need the detention, check-in and check-out time signed. The brokerage is sending it to them and going okay, well, like we got to pay this driver detention and then they just wouldn't respond to emails. Then the manager calls the customer like hey, I got like six detention requests for carriers that are like six hours, right, like these are not small bills, like 300 bucks here, 400 bucks here, 300 bucks here, and then they just didn't answer.

Speaker 1: 10:59

And then, finally, the owner of the brokerage gets on the phone with, like the senior person at the their customer and like, oh, like we don't pay detention.

Speaker 1: 11:07

And he's like, well, if you don't pay detention, shouldn't they? And then they said this they go, well, you should just quote more on your lanes. And then he was like well, I would have had you told me you don't pay detention, but you intentionally misled me. And then you tell me after fact because like two out of three loads ran into detention. It wasn't like a one-off thing, like clearly they dealt with this a lot Right, and in the food world like that's pretty common. So not only did they intentionally mislead him, didn't tell him, then told, and the rates were locked in for three months, so it wasn't like just the next week's loads they could quote differently. So now they're in a terrible position. On top of that they got to pay the carriers, because they can't stiff the carriers just because the customer stiff them. But the funniest or the most ironic part was they were making them send in the check-in and check-out times for detention at the receivers. Why do you think that's the case?

Speaker 1: 11:57

Because they were charging their customers detention and then just not paying their brokers they worked with intentionally just to make money off it, right? So like there are some, definitely some underhanded shady things that can happen in this industry if you aren't clear and concise when you're understanding what are the terms of working with this customer. And again, same thing with the carriers.

Speaker 2: 12:19

Carriers should be asking this of brokers and the shippers they work with, right, and we absolutely have a responsibility to know these things to hire a carrier on behalf of this shipper, which is really our job yeah, and that's one of the things that, uh, even before I started, before I took over, uh, the brokerage here is, I I had already generated a sheet that was a list of accessorial charges and it's official, it's got a letterhead on it and everything.

Speaker 2: 12:47

Because, especially when you're talking to these smaller companies, which is kind of like the target demo for a freight broker, the whales are hard to get into. The smaller ones don't have enough freight, so these medium-sized ones, typically they're not going to have like an accessorial list, right? Um, they don't. You have to ask, right? And? And for the ones that don't, they really appreciate it when you just send them an official thing and then you can sign it. They can sign it and then we both have it on record and this is what it is, and then that goes into their customer file and you don't have to worry about it. And some of them are going to push back and you have to change things, but you know, whatever, and that's okay.

Speaker 1: 13:27

But you should outline all the terms of what it's like to work with somebody, right, like, that's all that really is. Like, you don't have to overthink it. Like, hey, if this happens, what do we do? What do you want to do? This is what we typically do, different, all right, well, let me know, because then, like, at least you can be clear with the carriers you're hiring. Right, all the problems and conflict come because somebody didn't understand, right, what they were signing up for working for, right, like, and that's an area like didn't understand they weren't getting attention because they lied to them, right, but even so, I made the case that, like, they should have known that upfront and it was their responsibility to ask that. And if the customer won't tell you that, should throw up a red flag. Like, they answered every question in your email except the one about the tension.

Speaker 2: 14:09

Like, there's probably a reason for that, right, like, maybe clarify this before you start running freight, because once you've done it, like, Right and that goes back to the last episode that we talked about when you know doing processes and CRMs and data entry and stuff. Like a CRM a good CRM you can log your emails in to every customer. So even if you forget to put you know these specific details into like the customer file and your TMS, like those conversations, should be logged in detail in a CRM, not stored away in your, your inbox or a folder somewhere where they're going to get deleted once your mailbox is out of control. Yeah, so it's very important to be detail-oriented, especially in this, because we're facilitating stuff. We don't have a product that we're selling.

Speaker 2: 15:02

Right, exactly.

Speaker 1: 15:04

So you should have all of it or you're not doing your job right. Yep, 100%, sweet man. Got any fun plans for Father's Day?

Speaker 2: 15:14

My nephew's first birthday is Friday, so we're going to go to Indianapolis and hang out with them. And then Father's Day. I'm not 100% sure what we're doing yet. I know we're staying there probably until Sunday, but I'm crossing my fingers that there's a golf simulator in my future. We'll see.

Speaker 1: 15:40

Just throwing that out there.

Speaker 2: 15:42

Yeah, in case, the wife listens to this episode. I'm hoping you want me. I'm pulling for you. Yeah, in case, in case the wife listens to this episode, I'm hoping. Yeah, All right buddy.

Speaker 1: 15:50

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