The Pipe Stake Hustle That Won A Customer | Final Mile 146

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

🏗️ Pricing steel coil loads and accounting for added challenges

🚛 Fair owner-operator splits, insurance, and operating under your MC

📞 Overcoming the “customer-routed” or “vendor-routed” objection

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Transcript

Q and A Session Kickoff

SPEAKER_00 0:00

We're back for another QA session here on the final mile. We've got a lot of good questions today. If you guys have a question that you want us to answer on the show, let us know. You can send us a message through the website. You can leave a comment on YouTube. We've got a Facebook group that's listed in the description box with well over a hundred thousand of you. And we got a lot of questions in there. Check out the sponsors listed below as well. That will help support the Freight 360 channel

Pricing Strategy For Flatbed Loads

SPEAKER_00 0:24

here. All right, Ben, our first question. For those of you who haul steel coils, what is your experience been? Do you typically factor anything additional into the rate for those loads? If so, what drives the decision? If so, what drives that decision? Wait times, loading procedures, detention, appointment issues, driver delays, prior experiences, or something else? All right. So I picked this question not because of steel coils, but because the bigger picture of like how do you what do you factor into a rate? And there's kind of two ways to go about it. And then I'm curious on steel, because you've dealt with steel quite a bit in the past, if there's any differences here. But I'm a big fan of an all-in rate, if you can do that. Meaning it's inclusive of fuel, of if there's driver assist, the line haul, if there's any deadhead, deadhead you're gonna pay them for, etc. Lumper, like you just have an if you can get all in, that's great. Um, you can't always do that because some of the stuff is not predictable. So if you're gonna have detention or if you're gonna have layover, or we don't you don't know what the lumper is gonna be. Sometimes you have to add those in as line line items at the end. Another option you can do is if you want to itemize everything out, you can always do that. You can say, I'm gonna pay you this amount for line haul, this amount for fuel based on what the fuel surcharge is currently. And we're gonna have, you know, there's three stops, so we're gonna pay you X amount for each additional stop. You need to tarp and strap the load. We're gonna pay you for you know your time on and doing all that, etc. You could break it all down. It just gets very like monotonous, and uh, I don't know. I like to keep things clean. I'm curious in the steel world where you're probably dealing with the driver having to do to do like tarping, strapping, etc. What how how did you handle it historically? And do you have any tips or feedback on it?

Steel Coils Requirements And Risks

SPEAKER_01 2:21

Coils don't typically have like a lot of additional charges. Here are the questions you want to ask. I was just doing this yesterday. I did a lot of coils and a lot of pipe, and they both have very specific things to ask. So I'll just go through both. But coils, the questions you want to ask are like, and this is a question you want to ask anytime you ship anything for the first time, even if you've shipped it every time you got a new customer or a new location. Hey, what are your driver requirements for PPE? How do you guys secure this? What are the equipment requirements? Here's why you always ask those three things. You need to make sure the driver has whatever PPE, because they are a little bit different. Most flatbed drivers kind of have steel-toed boots, the orange vest, a helmet, gloves, and glasses, which are kind of like your standards. But you just always want to ask this because like I've had drivers rejected because there's like some obscure requirement or like their specific boots did not meet that steel toe requirement. And you want to know how stringent those are. So, like you go driver, equipment, and then securing whatever goes on the truck. So for steel coils, they're loaded one of two ways. And you definitely want to ask this is take a roll of tape or a donut. Eye to the side is it's a donut on its side. And if you looked at it on the truck, you could see right through the hole. Eye to the sky means the coil is loaded flat and you can't see the hole when it's laying on the on the deck of the truck, right? Now, why does that matter? That's also why you want to ask, how do you load the coils? Because sometimes they're by forklift, sometimes they're by crane. That can matter on the time it takes to load and the issues you can have loading them, right? Because it's certain weights, a forklift can't lift the coil unless you have like these massive forklifts with these enormous counterweights. So, like you can run into issues sometimes with like really heavy coils. So it's just a good principle to ask like, how do you load it and what are you loading it with, right? Now, if it's eye to the side, they have what are called coil racks. They're kind of like little things that just sit right under the side of the round part of the coil so it doesn't roll. And you need to know how many they need because drivers don't always have like six of them. They might have two or three, they might have four or five. So you need to know how many coils, how they're loaded, so you can confirm the driver has the right number of coil racks. And if they're chains or straps, because some coils you want one or the other because some get damaged with chains. Some straps aren't strong enough, and you want change. So that definitely matters. Standard tarping question: four, eight, 12-foot tarp. How do you want them tarped? That's pretty standard for flatbeds. I will say there was one very specific coil type that we made the most money on because they were the highest claim risk, and asset carriers would not take them directly with shippers because they just had too many claims. And they were coils going to the core's brewery for beer cans and they were aluminum. Super thin gauge. So what you realize is when it's really thin steel, like if a pebble kicks up off the road and hits it, even though it might look like a little dent, it'll go through like like hundreds of meters worth of aluminum. And that's just ruined, and they got to scrap it, right? So those coils, like we had to bubble wrap them, then cardboard went around them, and then a tarp went over top of that. And even with all three of those and having pictures taken in the winter, like there's just so much gravel and cinders on the road that like you would still have a few claims per month, and they were like very expensive. Those are like the most extreme securing I've run into with coils for that claim

Pipe Safety Gear And Rejections

SPEAKER_01 5:58

risk. Uh pipe, same thing. Like, what does the driver need? What do you need to secure this? And what do you need on the equipment? And the reason I wanted to do pipe is pipe's the unique one where you need a headache rack. And this came up yesterday with a client. And they're like, Oh, the shipper says they have everything. I'm like, Well, that's something that's installed on the truck and the shipper can't provide. It's basically like a metal cage over the back window, like you see in the back of a police car, but way thicker. So if the driver slams on the brakes, the pipe doesn't go through the back of the truck and decapitate them, which is very common. Also, that's why coils, when you load them eye to the side, if the guy slams on the brakes and they're not secured well, they will roll right through the cab and just flatten the cab because these things work a lot. Yeah. So, like that's why that's really relevant on what you need on the equipment. And then pipe, sometimes you need pipe stakes, which are literally poles that go in the corner of the flatbed and they load the pipes on top in the middle. Sometimes they load pipes pyramid. Sometimes they just stack them. Sometimes you'll do stringing pipe, which is what they do to oil fields where they run a cable through the pipe, connect it to the back of the tractor, and they drive across the field and the cable pulls them off and they slide into the ditch. So, like there are lots of different ways you do both of these things. But like as a rule of thumb, you just ask the shipper, hey, what are your driver requirements, equipment requirements? How do you load it? And how do you want it secured? And then my favorite question is what issues have you run it in the past, or which one have you had the most issues with like rejections? Like, how of all these categories, which do either your receiver or shipper tell you they can't load a carrier for one of those reasons? There's usually one that's like way more common, and that'll tell you like that's the one you've got to make sure you confirm a dozen times every time you book a carrier. Like Texar Cana Alcoa was like pipe stakes and headache racks. They would reload 20 trucks a day, they would reject four every day because they didn't have one of those two things from brokers. So they were willing to pay more if you could guarantee that your carriers had those things.

SPEAKER_00 7:56

So, do you recommend do you do you list that out as a separate pay item on the rate confirmation of the carrier or just no, it's just a requirement.

SPEAKER_01 8:03

It's like a tarp. Like, hey, you'll pay them more to tarp it, but you roll that into the flat rate. You usually don't line item it out, they just you just negotiate it. I rarely line itemed any of

Solving A Problem To Win Freight

SPEAKER_01 8:13

these things. The one thing I did do that was like super unique, but is a I still think a pretty good story for getting a customer. So when I was prospecting Alcoa, I was asking those questions. I'm like, oh, you know, I got capacity here, like, oh, we don't need anybody, we don't need anybody. And I go, well, like, what are your common issues that you guys have run into in some of these places? And they were like, our Texar Kano location rejects like a significant amount of trucks because they don't have pipe stakes regularly. And I'm like, that's interesting. If I could guarantee a hundred percent that my carers would have those, could I get a couple of loads from you guys? Like, if you could do that, we'll give you a couple and see how it goes. I ran into the same thing because when you ask that question very specifically to a carrier, and you go like, dude, you're just gonna get rejected if you don't have them. Like, you do have them. And I think there was a specific height they needed. And most of them didn't. So I'm like, okay, well, what's a pipe steak? It's a piece of rebar. So I called steel fabricators in TexArcana and said, Hey, could you guys make pipe stakes at your facility? Because they were like 20 miles from where they loaded. They're like, Yeah. I was like, how much would it cost per truck? It's like, I don't know, 70 bucks. I was like, well, if I paid you like a hundred dollars, could you do like five trucks worth and just like leave them at your shop? And as they pick them up, I'll pay you an extra hundred bucks. I was like, you'll just make some extra cash, selling some rebar. They're like, Yeah, we'd definitely do it. So I basically created the supply of pipe stakes down the road from the shipper. And every time a carrier was cheaper and didn't have them, I had them stop there on the way and I cut a comm check. They paid the welding shop, put the pipe stakes in it, and then made sure they were able to load. So again, it's just like thinking outside of the box to be able to solve like a pretty simple problem instead of just going, oh, well, oh, it is what it is, right? And like that's interesting.

SPEAKER_00 9:55

That's a good story. I like it. All right, our next question trying to hire owner operators to work under my MC and insurance, what percentage of each load is fair for them? And do they have to be on my insurance or not? If not, what percentage is fair as well?

Fair Pay For Leased Owner Operators

SPEAKER_00 10:11

All right. So in the past, when when I was with uh a previous company and we had an asset authority as well that leased on drivers, we did whatever the load was paying, we paid 90% of the line haul to the carrier plus full fuel. All right. So, like if the line haul was paying a thousand bucks, again, that's separate from fuel. We pay them 900 plus whatever the fuel was, and the company made 10% off of it, basically. A little, and we had to insure them though. So a lot I've seen a lot of companies that'll pay less because they want, you know, they they're not for what they're paying in insurance and having to, you know, get loads for this driver, you need to be getting making some money out of it, right? So I've seen 85%. It just depends, but that should be clearly stated out in your lease, too. The insurance part is huge though, because how many times have you like you know, someone like the truck's not insured, or we can't see that it's insured, and they're like, oh yeah, he's got his own insurance. And it's like he's got his own insurance, but he's operating under your MC. Like, if he's operating under your MC, you need to have him listed on your insurance. I guess the alternative would be he could have his own insurance that lists you as a uh additional insured, but people don't, you know, they're typically not gonna do that. You what I've seen historically is people claim they're leasing on drivers and they're really not. They're just double brokering, they're just rebrokering loads out, somebody else. They might even throw their placard up on the side of the truck and not insure them, but yeah, I think the that 85-90% of the line haul in full fuel, you should not be profiting on fuel. That should be 100% for the drivers. They're the ones that are purchasing and using that fuel. So that's my take on it. I don't know. Have you dealt with any of the leased on agreements?

SPEAKER_01 12:05

Not particularly, or at least just like not a lot, to be honest. Like, I just like always use your procedure. I mean, like, hey, send a lease agreement, upload it, because like that's the thing that the insurance company's gonna ask. And to me, like, that's the thing that matters, right? Like, yeah, it's just I always just kind of think like, what is the worst thing that could happen? A claim, total loss, what do you need to make sure? Insurance. Okay, if you're leased on, you should have this. And then like you can tell real quick when you start hearing, uh, well, well, like I got the MC on the side of the truck, and it's like, well, okay, well, like, whose insurance are you running under? Like, are you listed on theirs? Are you listed on yours? And then where I that usually get back is like, oh, well, I got a special insurance where like I'm covered when I work under other MCs. And I'm like, all right, well, can you send me those details? Because I just need to make sure that like the commodity my customer needs moved has insurance, right? Because that is probably one of the areas where things are very often and frequently moved fast and loose.

SPEAKER_00 13:06

Yep, exactly. All right, last

Insurance Requirements Under Your MC

SPEAKER_00 13:09

question. Um, do you think people have picked up the quote oh, if I just say I'm customer routed or vendor routed, they'll leave me alone, end quote. Let's see. Do you think people have the whole question was like, do you think customers are saying this? Because it's the easiest one to get people to get them off the phone. The whole customer routed objection. If so, how do you usually punch through this objection? So we actually did a a pretty good video on this. So check out on our YouTube channel. I I broke down customer routed freight and the objection when it's not actually customer routed. But in the event that freight truly is customer routed, and we've got customers that operate this way, what that means is uh we'll just say, like, we'll use Ben, we'll use me and you as an example, right? Let's say that I am the receiver and you are the shipper. Let's say that you have we'll say steel coils. We'll just go back to the steel question. So in a customer-routed situation, I'm buying steel coils from you, and that means that I'm responsible to find a truck, send it in there, and get loaded with the steel, and I own it as soon as I pick it up. Vendor routed is the opposite. Vendor routed is the common one that we tend to deal with, which would be you make steel coils, I'm buying them from you, and I say, All right, I want to buy five steel coils, and you give me a price, I buy it from you, and that price includes transportation. So now you, as the steel vendor, have to go and find a truck and get it picked up and delivered to me. And I don't own it until it gets to me. So, where that can impact things, if there's a claim that happens,

Beating The Customer Routed Objection

SPEAKER_00 14:49

the beneficiary of the claim is whoever owns the freight at the time. So it's vendor routed where you're selecting the truck, it's your freight until it gets to me. I'm gonna reject it if it shows up damaged. Vice versa, if I pick it up and it's customer routed and it gets damaged in route, I can't come back to you and say, you know, hey, this, you know, there's a claim on this or whatever. So that's customer versus vendor routed. Um now it is a common objection that shippers will throw. So like if if a broker's calling you, right, and you're the steel guy, and you're let's say we're doing customer routed, and you're like, Yeah, I just you know, I don't, I don't do the I don't pick the trucks, like my customers select all their trucks, blah, blah, blah. All right. So I would say in that case, you can, there's a couple ways you can go through that conversation. Is one, well, find out who the who the buyer is, right? Because you may want to prospect them if that's truly how it operates. But there's other questions you can ask too. Like, all right, cool. So what happens if the truck that your customer sends in falls off and then it still has to get shipped, right? Are they responsible to repower it, or do you have the ability every now and then to find your own trucks to get your customers' freight delivered? And I think when you you know ask different questions, you don't want to come across as like an asshole or try to call them a liar. Some of them are lying to you when they say it's customer routed, but some of them might not be. You just want to have a you know low pressure conversation trying to figure out you know, is this actually the case? Do they have any instances where they are having to select the truck because the customer wasn't able to do so, etc.? So I don't know. What are your thoughts on the the customer routed?

SPEAKER_01 16:30

Similar. I always I use like they call like a pattern interrupt. They expect me to go away. So I intentionally change my inflection and sound excited. I'm like, that's fantastic. Because then they go. You don't have to deal with any of the headaches, yeah. But you don't have any of the headaches to deal with. And I'm like, oh, out of curiosity, like I'll usually go like like what percentage? Because usually rarely is it a hundred. And then if it's outbound, I like ask about the other end. Like, oh, how do you guys deal with like your raw materials? You guys kind of like just arrange those. How's that? Do you schedule them? How's that work? And then when they go, I don't know, like we don't arrange any of the inbound or any of the outbound. I'm like, you've got the best logistics jobs in the country. Like trucks just show up and deliver and show up when they're supposed to pick up, like all of the dime. And then like it, you're kind of like baiting them. I for there's a psychological term to it, it's soliciting, because like people then take offense and they feel like you're insinuating they have an easy job, and then they immediately will tell me how hard their job is and they give me all their problems, right? So I go at it like complimenting them and like, oh man, I'm super jealous. And eventually go, Oh, well, it's not that easy. Like, I got three or four trucks that don't pick up every day, and then I gotta go call and then arrange one. And I'm like, Oh yeah, tell me more about that. Like, and then you can get them to tell you their problems.

SPEAKER_00 17:45

Yeah, that's good. Yeah, I mean, there are there are a lot of instances where stuff is customer routed, and then you'll also have instances where the shipper and the receiver, neither one of them is gonna be the customer of the broker. Like you could have a third party that's a buyer and seller of a certain commodity. Like we'll see this with like produce brokers, we'll see it, you see it with like seafood brokers. They're basically arranging from a wholesaler to an end user, and they're the middle person, but they're arranging transportation. So you might go to a distributor and they're like, Yeah, we don't, we don't arrange any of the trucks. And you go to like the buyer, or I'm sorry, the actual like receiver, and they're like, we don't arrange any of the trucks like this third party does. Find out who the find out who is arranging transportation in any of those instances, and that can redirect you to a prospect. So and by the time you go talk to that third party, you already at that point can then bring up like, hey, I know that you're the guy that's arranging from here to here. Uh, so you've got that you've got

Pattern Interrupt Questions That Open Doors

SPEAKER_00 18:46

that knowledge. So good questions, keep them coming our way, and we'll continue to answer them on the next edition of the final mile. Ben, what do you got for us?

SPEAKER_01 18:55

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

SPEAKER_00 18:59

And until next time, go bills.