Your SOPs Only Work When You Enforce Them | Episode 346

One bad shortcut can turn a routine load into a claim, stolen freight, or a cash-flow disaster. We break down how brokerages should handle policy violations, strengthen SOPs, use technology to reduce risk, and determine when mistakes are correctable versus grounds for immediate termination.

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Transcript

Cold Open On Brokerage Mistakes

SPEAKER_01 0:00

What do you do when someone messes up at your brokerage? We're gonna break it all down today. Everything from not following your uh let's see, Ben, we went through carrier selection and compliance, we went through um credit policies, we went through uh talk time when you're prospecting. So this is the the people side and the corrective behavior side of brokerage that uh isn't always talked about, but I think it's very important. So um make sure to let us know uh what you guys think. Listen all the way through to the end. There's uh a lot of good examples and stories that we tell here of things that went uh good and things that didn't go so good. What are your uh what's your take on it, Ben?

SPEAKER_00 0:43

I think it's a it was a really good conversation. We really talk about like why some of these things are in place in larger companies and some of like the things you probably already have access to in your software that makes these easier to oversee and just make sure they're done. And I think more importantly, whether you're the employee, the owner, an agent, wherever you're at in the industry, we did a really good job, I think, of explaining like why these things exist and why they're not just companies trying to make you do unnecessarily things for absolutely no reason, which I think is helpful.

SPEAKER_01 1:12

It's kind of the crossroads of uh having the the technology, the procedures, and the knowledge of uh of everything as it comes together and how to make sure your people are doing things the right way. So, with that said, let's hop right into it.

Resources And How To Follow Along

SPEAKER_01 1:28

All right, we're up to episode 346. We're gonna we're gonna get into some uh some good stuff today as far as the the people side of brokerage when you're you know trying to implement certain processes and um you know SOPs, if you want to call them that, for your company. So uh if you are newer to the podcast, make sure you check out all of our other content. The library is fully accessible on our website, freight360.net. You'll also find the Freight Broker Basics course on there if you want a full self-paced educational option for yourself or your team and continue to share us with all of your friends, and you can subscribe to get all of our episodes um coming to you twice a week, and we're dropping YouTube shorts on clips on a daily basis almost at this point. So uh yeah, let us know what your thoughts are. If you guys have a request for an episode, we get a lot of those coming our way. Just let us know. Leave us a comment or send us a message. Uh

World Cup, UFC, And Sports News

SPEAKER_01 2:31

Ben, have you been watching the World Cup at all?

SPEAKER_00 2:35

No.

SPEAKER_01 2:36

Uh there's uh well, somewhat related to that, there's this guy on Twitter or X. His name is uh Freddie. And like him and a lot of others have been making like viral news, like in like national news media too, because they're Europeans that are in North America for the World Cup. It's like six weeks, right? Um, mostly in the US, but if there's a few matches in uh Canada, Mexico, but these Europeans that are first time in like the states, and they're blown away by like some of the things that we have in the US that they're not used to in in Europe. And there's this one guy, Freddie, who like he's documenting his entire journey and he's like traveling all over, going to like all these different arenas and stuff. But like he went to LSU for one of the matches and was like, This is crazy. And then he went to a Bucky's gas station and is like he's like, This is a gas station? There's 120 fuel pumps here, and you walk in, it's like a giant grocery store. Um, but he got so famous, like he was in or he got so viral and popular that when he was in Houston, um one of the like NFL players like threw him up in a super nice hotel and like got him all this stuff. Like people are sending him gift baskets and stuff now. Um I don't know, it's pretty it's pretty funny though. And like there was another person, I don't remember who it was, but like they're like, This is a high school football stadium, and it had like 15,000 seats and like you know how like Friday night lights is like huge in the south, and so just kind of funny um little sports uh thought there, but the World Cup, man, the US had a nice had a nice win last week, and um we'll see how they fare the the next couple weeks. And then also, I don't know, uh are you a UFC guy at all? Did you see this UFC fight on the white in the White House? Let the White House on?

SPEAKER_00 4:36

Saw some of the headlines, but didn't get a chance to watch it.

SPEAKER_01 4:38

It's crazy. It was nuts. Um the the big story is like the guy like the headline title match at the end, the guy was like a five or six to one underdog and like won by knockout. So I think it was a TKO, but um, yeah, it was wild, man. It was uh interesting to see UFC outdoors um and like in front of the White House.

SPEAKER_00 5:03

So good stuff, yeah. I mean, I listened to Rogan pretty often, actually, and like I he'd been talking quite a bit like a commenter for years. Definitely wasn't a fan of the event being outside. He's like, What? Like, you don't want the natural elements involved in that sport was pretty much his take.

SPEAKER_01 5:24

I mean, like they had a rain delay, dude. It was crazy. Like they had they couldn't start it because there was like thunderstorms coming through. Yeah. Yeah, but anyway, what's going on in the news right now?

SPEAKER_00 5:35

Well, the Knicks won the first championship since '73. That was apparently pretty big sports.

SPEAKER_01 5:41

Yep.

SPEAKER_00 5:41

Yep.

SPEAKER_01 5:42

Yep. That city went nuts, man. A lot of lot of uh lot of arrests. You see like any of those like man on the street interviews like outside of Madison Square Garden, and they're just absolutely wild. So to all the Knicks fans out there, congrats. Um, but yeah.

Freight Market Update And Seasonality

SPEAKER_01 5:58

Um in the freight market, what do we got new going on? Um I feel like rates flatbed has still just been like crazy, but I do feel like Van and Reef are still strong, but like kind of had a little bit of a self-correction. I was reading Dean's DAT update that came out over the weekend, and seems like it it came back to a bit of a healthier um correction. Because between like, you know, obviously you've got carrier capacity that's exited. You had carrier capacity that just chose not to drive during enforcement week, and then you've got produce season, and we're heading into like this is like some of the busiest times of the year with just a lot of things happening in the summer months, right? Like people are having parties, people are traveling, kids are getting out of school school, and like you just see a little bit of consumer activity uh boost. Um so yeah, you know, it was kind of a bit of a a boost there the last few months. I was reviewing numbers um for our company yesterday, looking at like uh April and May, and it was like you know, when you adjust for the number of billing days, they both kind of like were just about even for like a s a huge surge compared to a bit of a softer start to the year. But um yeah, outside of that, trying to think what else. Uh

Fuel, Strait Of Hormuz, And Delays

SPEAKER_01 7:25

let's see, the the uh we should I'm I'm assuming we should see oil oil prices and fuel prices um start to come back down a tad now that the the uh Strait of Hormuz is set to reopen. Um we'll see how that all pans out.

SPEAKER_00 7:42

I don't know that that's gonna be the case. Again, like I that's probably the one thing I've been keeping up with on the news, like from a very high level of like there maybe is an agreement. Like I know they announced it, and I know Tehran basically said they didn't want it announced on Trump's birthday, so they intentionally did it like two in the morning Monday and time in Iran. Um, and I also know that I was reading that like even though they have the tentative agreement, um, apparently Hamas and um Israel are still fighting, which may or may not have a direct impact on whether or not that actually plays out. And the other thing I had read was even once it's opened, it is going to take a significant amount of time before traffic picks back up. There's mines all over it. Like sweep those mines out.

SPEAKER_01 8:29

I saw something on the mine sweeping.

SPEAKER_00 8:31

Yeah, being able to clear that, whether or not it will be clear, and the time it takes a lot of the manufacturing to ramp up, and a lot of the manufacturing has just been devastated. Like, there's just a lot more than just the agreement, I think. Before you're gonna start to see everything, because there's like a lot of stuff that comes through there, right? It's it isn't just oil, there's like quite a bit of other things that come. I think fertilizer was a big one. I can't remember off the top of my head, but like it's significant, like it's not like a small thing. So we'll see how that I mean.

SPEAKER_01 8:59

Think back to like um the ports of LA and Long Beach when they had like a hundred, maybe more than a hundred different container ships that were just kind of like sitting out there in the ocean, like waiting to come in. Um and you know, the the government's like, all right, well, we're gonna we're gonna ease on some regulations, allow for like 24, we're gonna try to make it a 24-hour operation there and let the uh hours of service rules slide. And um it took forever, man. It it felt like the longest like you look at that shutdown of the initial shutdown of like two months took like feels like over a year for things to kind of like stabilize after that.

SPEAKER_00 9:44

So just a while. Or longer. So and other news, completely unrelated to logistics, but like the federal government released UFO files or I'm sorry, UAP files and made public and almost have acknowledged that like we don't know what these things are, they're flying around.

SPEAKER_01 10:01

Like a few weeks ago. Is there anything newer than that?

SPEAKER_00 10:03

Yeah, newer stuff dropped. The site has over 500 million hits so far, more than the population of the entire United States. A former president, pretty recent one, Obama, and Trump have almost acknowledged that they exist. Um one said Obama said they did, then walked it back, and then Trump confirmed that he couldn't say anything because it was classified. Well, things that don't exist don't become classified. So like that was kind of like acknowledgement of this in one way or another, which again is pretty wild that like nobody is really talking about that. Because if you would have said that 10 years ago, you would have looked like a lunatic. And now it's just on a.gov website

UFO Files And A Quick Detour

SPEAKER_00 10:48

for the White House.

SPEAKER_01 10:49

Did you imagine if you're brokering a load and like on the rate confirmation for commodity, it says like alien spacecraft parts or something like that? Yeah. Like we're gonna need some special insurance on this. That's wild, man. I'll have to take a look. I'll have to take a look. Yes. Um, all right. Well, we uh we did an episode recently on you know compliance and carrier selection. It's been a big talk lately with the Supreme Court case. That's kind of like the big one, the Montgomery case. But this is an important concept overall because if you're building a brokerage or growing your brokerage or just re you know, reorganizing or shipping some things around, having proper policies in place is a very important. Um it's an it's a very important part of the business, right? Like we always say you should have documented SOPs and processes so you can plug and play people when you go to like if somebody's out, right? There should be somebody that can backfill their role, and they should there should be some kind of like a uh, you know, call what you want, like a manual that tells you how to do the job, right? And what is considered um the correct way to do things. Now, um having that clearly documented and accessible is one thing, um, having it followed

Why SOPs Must Be Defensible

SPEAKER_01 12:10

is a completely different thing. So I was listening to some attorneys recently that were talking about just having a document an SOP means nothing because if your employees don't have access to it or don't know how to use it or choose not to use it, and there's no enforcement if they don't use it when they know about it, then it's not really the word the word they're using is defensible. Like, what is a defensible policy? So, one of the things um we actually are doing this at at Pierce is to create a an actual detail, like we've been doing this for years, but we're trying to like you know, actually make it an officially documented thing now is well, how do we treat you know failures to abide by company policy? Like, what is the correct way? And like, you know, usually kind of in the past would handle them like case by case, like in the event of like, oh, somebody books a load when there's no credit approved, or somebody books a truck when the truck wasn't approved, or somebody prospects someone else's customer. Like you kind of handle this case by case, but there's a lot of scrutiny now with this carrier selection, and it's like, well, you need to have a very clear set of rules and policies about not just what your selection and vetting criteria is, but how are you going to enforce the adherence to that policy across your company? And we've got, you know, when you deal with an agent that's a contractor versus a W-2 who's an employee, there's like a very fine line about how you have to manage that relationship when you're employing one and contracting another, but adherence to the policies, you know, doesn't matter to a court, right? They if you're brokering under an authority, you've got to follow.

SPEAKER_00 13:54

Well, here's here's something interesting that I think kind of like dovetails with this that I'm doing with another pretty large company, like 25 million, you know, 30 employees, 25 employees, give or take. And they've been around for a better part of a decade. And we're revamping all of their SOPs and procedures, right? So like we're going like, what is the thing? Like soup to nuts, the whole thing. Like, what should be happening? Let's get this documented. And to be honest, like they were doing things, I would say, like really well. It wasn't that things were like disorganized. It was more just like, how do we prepare to double the size of this company, right? And this is one of the things. And the one of the things I'd come back to recently, and I hadn't thought about for a while, because I did this with two clients similar size, and it's what reminded me of this is I kind of start with like, what does a really big company do? And the reason that's helpful for me to conceptualize is well, you probably have different procedures when you're five billion dollars than five million, because you just have 7,000 people that you need to be able to make sure doing it correctly. Because to your point, if somebody doesn't do this once incorrectly and there's an accident, the whole company is liable, right? And these could

Scaling Policies For Bigger Teams

SPEAKER_00 15:06

be hundreds of millions of dollars. So it's even more risky. You're bigger at target when you're bigger, and you have more people to try to oversee, and you can't micromanage like you do at a small company, right? And one of the very simple things I've done in both was go back to the TMS fields and go, what can we require? Like, what do we basically can lock and unlock? And like here's another example. I wasn't getting enough load values to be able to get insurance quotes on a per load for like the one company. And it's because, like, well, the customers don't always give it to you. And then the brokers don't have it. So they'll leave it blank. But now I've got no data, right? And then we talked there and I'm like, well, you can kind of guess. Like, if you have a BOL, you could even just throw it into an LLM right now and be like, hey, like, what is the closest cost of goods sold based on this, right? At least you have a number. Like, is it way over 100 grand or below is kind of what I'm trying to figure out first. And we realize, like, oh, like let's just require this because now they can't dispatch a load unless they put a number in, right? Yeah. Now that doesn't help you if they just guess and throw in 80 grand for all of them just to make sure it goes through. So you still have the people issue. But there are a lot of things that I've noticed that like smaller brokerages aren't utilizing that

TMS Guardrails And Required Fields

SPEAKER_00 16:17

much bigger ones do for this very reason, right? And like just field requirements are one, right? Like, do you have a driver before you're able to dispatch the load in the load, right? Do you have a truck number, a trailer number? Have you confirmed like very basic things? Because like in a small company, sometimes you're one or two people, like you're just moving to get things done because you don't have enough time. But once you kind of get into the at least over the million dollar mark, like some of these things should be kind of re-evaluated because some of them are the procedure, but these tools are meant to help with adherence across it. Because the thing that went through my mind when you were saying that is like, oh, what happens at a bigger company? You get like one, maybe two strikes and you're fired. Like there's like a no tolerance policy on some of these things. You end around a system to force a carrier to take a load that is not approved and shouldn't have been, that may or may not be a firable offense the first time. For sure if you do it the second.

SPEAKER_01 17:11

So can definitely talk through that a little bit because you bring up a good point. I was talking with one of our other leaders, uh, Pierce the other day, and we were talking through kind of like you brought up the strike system of like there's a range of like if something is not done correctly, right? There's a range of like intent and severity around it, right? And like it's not very if it's not intentional and it's not very severe, like yeah, you can go through a hey, three strikes or whatever, but I want to talk through examples of like what is a one one strike and you're out, like because there's there's there's many examples of it, but I'm curious from your perspective, what are those like egregious examples?

SPEAKER_00 17:51

Um like skirting the system intentional, all fall under the same bucket of like dishonest, dishonesty, intentionally misleading, lying, they're all some version of kind of that bucket. Like when you're intentionally doing this because you know you shouldn't have, and you lied, because even though you didn't say it out loud, you basically are lying in the system, which is creating

Defining Intent And Severity

SPEAKER_00 18:16

this vulnerability for everybody, like your coworkers, the whole company. And here's one that um is pretty obvious for salespeople is um like fake dialing. Just dialing phone numbers and hanging up when people answer to get your call numbers up is a one strike in your out policy in most larger companies. If they go through your call recordings and you have no talk time for like a few days, but yet you've made three or four hundred calls, that's the flag. And then when they audit your calls and they find that you're just dialing numbers and hanging up on people, one strike in your out policy. Um

One-Strike Offenses And Dishonesty

SPEAKER_00 18:53

second one would be very similar, but another way that people would fake call numbers is they would used to, I don't know if this happens that much anymore, but you could call like a 1-800 number for a large shipper, and you could just sit on hold and transfer.

SPEAKER_01 19:06

And like at their phone tree or the directory system 30 minutes.

SPEAKER_00 19:10

Yep. And you could just leave that phone line live, never actually get to somebody, and you can just sit and hold and you can't.

SPEAKER_01 19:16

And what's wild about that is like the broker's not doing anything to help themselves there, right? Whereas like situations where I've seen people cut corners, it's to benefit themselves, right? Like, yes, I with you bring up a good point about having required fields because you can you can use your technology to force people to do things a certain way to an extent. And um years back, before we had a lot of our systems in place and and processes that force people to do things a certain way, they had they had a little bit more autonomy, and we had to just kind of like, you know, there was an honor system on getting things done right. Like, so rate confirmations, for example, like now we have it set to like they can only be generated one way and sent one way and you know, accepted one way, and it's all secure. But historically, like before a lot of the tools existed, like you would just generate a uh a PDF and it would get emailed out. We would have I would catch brokers that like they would generate a rate confirmation for a carrier that was approved, and then they would go into like an editing software, put the a different carrier's information on there, send it to that carrier so that they can dispatch them. And then meanwhile, they're trying to work an override for that carrier with our uh uh compliance team. So they're basically trying to buy themselves time and not lose that carrier, and then they go in and they you know change the carrier on the load, and we're like, I would catch that. And I'm like, I would give them like a if the carrier was approved ultimately, I would give them like one firm talking to like you clearly tried to like break the rules. Like, I'm like, we're here to try and help you out. Like, if it's if something's urgent and needs to be escalated quickly, like just let us know and we'll prioritize it. But by just blatantly altering documents, like that's a firable offense right there. And we've but we've had folks too that like it was a one strike and you're done because of the career that they booked. Um we never would have approved. And we were forced to to get that load done. Um, but you know, they were simply just trying to buy themselves time. I've seen the same with credit, where like someone um they know the credit line's gonna open up. And they adjust the number after they get their load. They put like a dollar or they put a different customer on, then switch it. And it's like that's the other deal. Like that is that is a bad one. And I talked to a guy, um, I forget where he worked. It was uh it was like two years ago. And when we when I was training him up, uh I he came from like a really small company, I can't remember the name, but when I was training him up, he's like, uh, we were talking through like credit and all that, and he's like, All right, so like, you know, when when the credit's out, like do I just put it at zero? Um, or like you put a play like a training customer on there as a placeholder. And he explained like that was like their standard procedure at his old company. And I was like, no.

SPEAKER_00 22:12

I was like, no.

SPEAKER_01 22:13

I was like, absolutely not. Because we you could put an at like we can put stuff on credit hold in our TMS. Like if you if you put an amount that's over their available credit line, like it'll just put them on credit hold and you can't dispatch the load until it gets, you know, released by someone at from the credit team. Um and by switching customers, like that just looks really bad. Um but those are some of the more severe ones. Um here's another one.

SPEAKER_00 22:40

Here's another fireable offense. So I had uh an assistant that did this once um he I used to have like massive Excel files for rates for different customers, right? Like lanes, projects, whatever. And um they caught him sending my rate files to his Gmail. Like I genuinely, because I remember when this happened and I'm like, I don't even know what he would have done with them like or how or what he could have done. But I remembered because like I like walked out of the office to get coffee, came back and they were gone. And I remember walking over and I was like oh where did a so-and-so go? And they're like oh called me into the manager's office because they didn't want everyone else to know close the door told me this and they're like yeah we walked him out immediately. I was like oh okay I'm like I didn't know that that happened didn't know he would have done it and didn't know that it did happen but like they for sure caught it and walked him right out of the building.

SPEAKER_01 23:34

Yeah I mean and you got to think in your employment in your employment uh contract you dep you typically have like a confidentiality clause like that's just normal in any sales environment like you can't be taking pricing and like sharing it with anybody outside of the organization.

SPEAKER_00 23:51

Not only is that for sure in like pretty much all the agreements because like it's proprietary information but like there were recently like I think criminal charges definitely lawsuits between two large brokerages. Again I can't remember who it was this the Chattanooga one where like the dude was going down the street to a yeah they had an NK I think he got a second job like literally got a second job at the brokerage across the street while he kept his first job was going in there and stealing customer rates to feed back to his other job and then they caught him and I can't remember how the prosecution was but like that's corporate espionage.

SPEAKER_01 24:33

Yeah that's definitely a crime um so let's talk through the correctable stuff right so like the way I looked at this recently was like all right if somebody is brand new we're gonna treat them in one bucket right like basically they shouldn't have the ability to make an egregious mistake because they should have so much I'll I usually call them like training wheels like you know virtual training wheels like someone should be helping them through their you know all their processes until they're comfortable doing it on their own right because they're they're learning right but now when someone's fully trained up and I guess the same applies to like if you roll out a new process right there's a there's a period of time where it's being implemented and people are learning it. All right let's now let's say you have your trained broker on a trained process and we'll go with carrier selection for example or carrier you know your whole entire carrier booking process if you have requirements

Correctable Mistakes And Three Strikes

SPEAKER_01 25:34

for um how to select them how to um how to track them for example how like some companies will require you have to have tracking set up some will require um photos to be taken I mean there's a there's a slew of processes that brokerages will use to make sure that they've got a legitimate good quality carrier and that they have the right person in the right place at the right time so they're not dealing with a stolen identity or a stolen load or a chameleon carrier. Like there's all these things you can do and there's a lot of technology that'll help you with that. So like um obviously you've got tools like gen logs and highway um you know etc that will help you verify identity and um all of the things with a carrier right but let's say a trained broker messes up right they screw something up and you know load details get into the hands of a carrier that we didn't properly vet. The way that this is where I would kind of go to like your if you want to call it a three strike policy, right? Or however you determine you want to make it and I've always said like the company has discretion to like terminate anybody before three strikes if they believe it's that you know bad right like we just gave a lot of one strike examples. But I usually am a fan of like the three strike method where like I don't even want it to sound negative it's more like corrective like how can we correct the behavior because we don't I don't want to like I don't want to cut somebody or fire somebody or you know penalize somebody if I can just correct the behavior and make it better. So like I'm usually like take care of it early and often right like what's I always say like the you know bad news gets worse with time right if you can address something immediately get out in front of it and explain how serious it is and what the potential consequences are and kind of coach them through that usually it's like corrected after the first incident because they you might find out they're like oh yeah I knew that but I didn't realize it like it was that strict and that firm and it's like well yeah that's why we have the policy.

SPEAKER_00 27:48

That's the thing that I think is helpful for us to share with the audience because not everybody's worked in large companies and like sometimes like you just kind of feel like it's just a company that does this just to make more work. But like take the credit one okay I don't have enough credit really want to move a load for a customer and build it under another customer and change it. Or I do it at one dollar and try to change it later, right? Just that one. I came into a brokerage once that had like $3500 outstanding to like their second biggest customer the factoring limit was 200 grand. So what happened was since the broker was ignoring the system and kept building loads, they had $150,000 worth of loads that were not factorable. Well all of those carriers still needed paid inside of like 30 days. And the brokerage didn't have an extra hundred and fifty grand on hand to pay the carriers so it became very very serious because the whole brokerage almost lost its credit to be able to do business at all because of what one broker did. And they'd been in business like seven years. And they were doing like $30 million like it was a large enough company that was doing really well but that one broker doing this because he kept making good commissions and didn't pay attention or care and the accounting person didn't catch this was an enormous issue that was very very difficult to solve inside of a month. Not too many people just have an extra $150 grand lying around. Like that's just that one alone, right?

SPEAKER_01 29:17

I'll give you another one on the carrier side this is uh probably eight years ago so things have changed a lot but there was a uh USPS account right so the postal si postal system postal service right and um you know brokerage might have their own set of carrier requirements but usps has their own maybe you know more you know strict carrier requirements and there's a broker that started picking or using carriers that didn't meet USPS's requirements and we caught it internally but you know and it thankfully before USPS because nothing nothing bad happened but had something bad happened the big risk there was like it's not just USPS USPS is a government organization which means that every other government account that we're working with FEMA DOD you'll get black flag from all of them you'll get booted out of all of them like for like 45 days can

How One Error Breaks Cash Flow

SPEAKER_01 30:16

screw everybody's access up.

SPEAKER_00 30:18

Yeah oh yeah that was true because I ran the military accounts at TQL and like there was only like I think it was like six or seven of us that managed all of that stuff the government stuff like SDDC there's there's like a handful of them but I remember like we would have that meeting like once a quarter of like hey guys how's everything going because like one person doing that you get black flagged across the whole and like you could commit to a load or a handful of loads for like actually you had that job of the transportation officer for like a base move like a troop move. Yep and if you didn't get them the trucks you said you would because you didn't want to lose money that you had the ability to black flag everything. Everything like one of them. So like it was like what would seem like something that you would do for another customer kind of here and there was like a huge issue that could cost millions of dollars if you did that in that scenario.

SPEAKER_01 31:10

Yeah we had it happen with uh I think it was Pepsi Pepsi had like a um basically like a spot board or a bid board and and this applies to any any customer that has these like bid boards where if you have more than one person in there and they can see each other's stuff um one like the service failure from one can destroy everybody else that's remotely involved in there. So so that's why I think it's important. And I think the the way that I like to handle it is like you know document everything as well right and it's not it's not meant to like be intimidating or belittling to anybody. It's just I want to make sure that there's clear documented discussion here so that the person that we're talking to that made the error maybe they're embarrassed and or confused and they want to be able to like reference back to what that conversation was so they don't have to come ask their boss like hey am I allowed to do this um like we always say like there's no dumb questions but some people are just like embarrassed or nervous to ask for help and they just do something and it could it could cause issues but to document all of it like here's what happened here's the here's here's where the breakdown in understanding or whatever happened and and I always want to know the level of like intent behind it from like zero intent it was just a misunderstanding or lack of knowledge or you know moderate intent like oh you know um I I learned this at my previous company and I didn't think it was like really bad because I didn't intend to you know do anything terrible it was just kind of a way to buy myself time to like you know full full intent to like like your case of I'm making phone calls to nobody and not talking to prospects when I'm that's my job I'm being paid to to go sell. Full full intent to skirt the system there right and that's where you can determine like all right are we gonna are we gonna do a you know three strike policy or is this like you're done um and then I usually would say like create some sort of a period of time if you want to call like a probationary period where like you're going to work with that person you know maybe it's a month two months three months whatever depending on what this the incident is and say like hey um you know if it happens again you know there's we'll we'll do another second warning and you know it's kind of like your final warning um and if it happens a third time that you you've cre you've established a trend and you're not correct in the behavior and we're giving you every tool possible. So like and if because if you just keep giving people another chance and another chance and another chance and another chance like they just create the most headaches. Like we had somebody that um

Documenting Incidents And Probation

SPEAKER_01 33:58

we're uh we're gonna be letting go uh this month uh they already know so I'm not like you know popping it off on a podcast here but they've already got their like exit plan um but I basically just said like your team this is an agent and I'm like your team has just you know for for years has had constant issues with you know you hire new people you don't train them properly they don't understand so then we try to treat them like they're a new broker but they're not because you guys have been here for four years or five or six however long it's been and I'm like and your numbers are really struggling and I'm like you're just the majority of our complaints and headaches from our staff tends to come from your team. I said it's just not a good fit like you might be better off going to another company that's more lax or just start your own brokerage. I'm like but we just can't do it anymore. Um but the the reason that got so bad is that we just kept giving them another chance and another chance and another chance like for years and years and years because we would look at every new rep on the team as a different individual in a different instance and the reality is then we we started to realize that like they would start to share people's emails and logins so that like if somebody screwed up they're like oh no that wasn't actually me that was so and so who's new and we're like what are you guys doing here like we we can't keep any accountability of your team and and who's responsible for what when you guys are operating that way so yeah the whole the whole thing is like you know and you might get to that third strike and you sit down you know you maybe another manager and this this rep and you're like man like they're really trying and we you know you have discretion like you could say like all right we're gonna go back to the basics here and we're gonna retrain this person from scratch and treat them like a newbie and we're not gonna fire them because they're they're really showing progress in other areas or whatnot. But either way to have some sort of a a process to um

When You Give Too Many Chances

SPEAKER_01 35:55

to handle and manage and correct behavior that's deficient or however you want to title it but that's that's really the point here. And I think the whole the whole point of this discussion is like for your policies to be defensible when we talk about this big Supreme Court case decision um and we're not gonna know how this plays out until someone gets sued and we start to see precedent set but the your best bet is to have a very good process that is followed and documented to make sure that the behavior is um done correctly so that you're not negligently hiring a carrier that doesn't meet the standards that you deem acceptable or that you're not letting a like the same way that they're like CH Robinson you hired this carrier but you knew they had their conditional and they had these crashes before how defensible is it if as a brokerage I'm like yeah we have these policies and then the the prosecution's like yeah but this broker who has failed to follow them on 10 loads in the last two months and you didn't fire them like not defensible right like that's the whole point of this is um you should be able to argue if a mistake was made why your system that you have in place is strong and is is adequate to do the best you can to you know not negligently hire carriers. And I don't think anybody's gonna ever have a process or a policy that is ironclad and can't be messed up or screwed up because you're gonna have human error right but it's it's a matter of how do you how do you treat human error um when it happens, I guess. So that's the people side of brokerage that most people don't talk about we talk about selling and cold calling and all that but you got to deal with human beings and when they're having a bad day and they're pissed off because they're you know I got in a fight with their boyfriend or girlfriend or spouse or whatever and they come in and they bring that bad juju to the office and they just get pissed off they're like screw it man I'm just gonna do whatever I want today. It's bad.

SPEAKER_00 38:01

Yes very much so because again like the way that I definitely did not agree with a lot of these policies as an employee and thought they were a waste of time and they were preventing me from actually making money. So like I can see both sides. I can definitely say that like on the other side of things where you're like responsible for dealing with these things like they jeopardize the whole organization right like and if you think about it again we talk about this a lot but it's like any employee any contributor right doesn't make any difference. Like you have to create more value into the company than you take out of it. Otherwise eventually like you don't have a job like that's ROI.

SPEAKER_01 38:41

Okay. Your job needs to ROI.

SPEAKER_00 38:43

And the company needs to look back at it the same way and make sure it's at least making enough money to keep paying everybody so it stays in business. So like it really should be like a team where everybody's cooperating. So when you don't do these things you're like literally jeopardizing all of your colleagues and everyone around you's job because you just feel like what you need to do is more important or faster. Right. And like to me it like very much borders entitlement like oh I'm special and I don't need to do these things because like I was literally as we were talking somebody just emailed over a claim. I looked at the claim and I looked at the carrier and I looked at how it went through and it was definitely one that should not have gone through the way it did definitely has created a lot of issues and a lot of work and possibly a lot of money that the whole company loses because somebody didn't feel it was important to verify some very basic fundamental things. So very much ironic to what we were talking about. I'm like, oh like this carrier doesn't look like they have active authority or active insurance. When did it go inactive? Why was this load delivered three months ago and we just found out about a claim. So many questions right just in this email I just saw like 10 minutes ago and I just wanted to look at it. I'm like this is literally what we're talking about right?

SPEAKER_01 39:58

Yeah I've got two more examples and I think that should pretty much drive the point home here but I had one um earlier this year where

Claims, Stolen Loads, And Metric Cheating

SPEAKER_01 40:06

it was a stolen load and the the the broker didn't follow the right procedures and had they followed the right procedures the load wouldn't have gotten stolen um and what we did is yeah we had like a pretty pretty you know immediate meeting about the incident when it happened and then I was like look I'm not one to want to micromanage um I said and I see that you're trying here and you're you screwed up and he explained he's like man I usually go above and beyond the company's requirements and I do X, Y, and Z in a dish and he goes he goes it was like a Friday a little a truck fell off and you know I was in a rush I was like that's I'm like but you can't let your guard down because that is when it's most likely for like fraud to happen is like the Friday like fall off Fridays, right? Or like when you're dealing with a a holiday weekend like those are huge huge um areas of time when like this stuff is is going to happen. I said so you it doesn't matter like you you've got to do it right every single time no matter how badly you're trying to cover a load. So I was like I'm like I'm not going to um make you you know sit on a screen share with me when you build your loads I said but I'm going to spot check for the next two to three weeks all of your loads and just make sure that you're doing stuff in the right order. So I said just know that like if you try to cut a corner like it will be seen and I'm not doing it to try and punish you I'm just trying to do it so that you know that you don't have the ability to cut corners and by like the second week he's good. Like you know he's like I don't you know and I you know I kept kept on it for like another week but that was it. Like it was we corrected it early on and the dude's been a stud ever since and the other example this goes back to my carrier days is um we had this metric when I worked at Conway it was called uh Q I think it was called cube utilization and it was basically the the amount of trailer space that was being used and the goal was like to maximize that right you want to use as much of a trailer's interior space as possible right so if I'm trying to you know if I've got I'll just make it up if I've got like 20 trailers going out one night and I've got all these different shipments that I can put in the different trailers what I don't want to do is you know fill up one all the way with ping pong balls and not maximize the amount of weight that I can load and I also don't want to floor load a bunch of steel and leave a bunch of empty space you want to utilize as much of the weight and space of that trailer as possible for efficiency right so we're not having to send an extra trailer out and pay a driver to do that. So we had um we would get rate we would get rated on the utilization of all the trailers that we sent out and 100 would be like a perfect perfectly cubed out trailer 100% of the space was being used. And I forget what the required amount was but it was the target was probably like I don't know 80. I'm just guessing I have no idea um but what would happen is like you we had a guy get fired because he would go he would re he would scan a shipment and then say he was doing a manual measurement and he'd remeasure it and he'd put like huge dimensions on like one one piece to make the system think he was like filling out a trailer and his like they're like yeah his cube would show like an average of 140 on all of his on all of his trucks and we're like first of all that's impossible. Um but second of all and we're so when they they fired him they asked him like why well when they first were like counseling him on it and he didn't stop doing it they're like why are you doing it? And he's like well because you guys give us this goal that we have to hit and it's like yeah because we actually want you to meet the standard not succeed it's kind of like your your call call metrics. And the reason is like that metric can lead to an increment Massive, massive cost saving if you if you get the efficiency up, right? You're you're moving it you're moving as much rate as possible on as little trucks as possible. So you're gonna save on fuel, on driver pay, everything, wear and tear on the equipment. Um, so you know, to try to make yourself look good because the metrics there doesn't actually solve for what the goal of that policy is, which is the same as your cold calling metric of like, yeah, we want you to have X amount of calls or this much talk time in a day when you're in a sales role. And if all you're doing is calling the weather station or uh you know, calling into a webinar and logging calls and talk time, like you're not building up your pipeline. Like, that's what the goal of this is. We're telling you that if you if you follow these metrics and you hit them, your chances of success are higher at this. And the same with carrier vetting, like if you follow our processes and don't cut corners and skirt the lines here, you will set yourself up to not have a load stolen and not have a bad carrier get in a crash, which ultimately is gonna protect your the yourself, your job, the business, and your customer relationship. So there's a reason behind all this. And I think if you explain the why behind all these these situations when you're um, I don't want to use the word counseling, we use that in the army, but like when you're coaching somebody in their brokerage job, like the why behind all of that, I think that's what it takes to sink in for a lot of people.

SPEAKER_00 45:27

And that's why I totally agree. Yeah, the thing I was gonna add is there there was a story that reminded me of this, like it was like right after the pandemic. There's a um bunch of business podcasts I was listening to. They were talking about how, like, I forget the name of it, but it was basically when people were like getting more than one full-time job, like getting two full-time jobs because they could work on two laptops, and genuinely they were able to do both jobs well. But in your employment agreement, you get the salary to give up all of your hours for a week. So you don't have the ability to work multiple jobs. Like that's how an employment agreement's written versus 1099. You could work 30, doesn't matter as long as you get the work done. But um, there was this one guy that was doing I the cause why it was funny was I think he had like three or four jobs, right? And when they added them all up, he was making like it was like really good money, like 190 grand. So it was not nothing, right? But in his interview, the guy who got caught doing this was talking about just how much work went into lying and manipulating all four companies into believing he was working with like mouse jigglers and different software and all of this. And it was so funny because, like, at the end of it, like the guy interviewing was like, dude, I genuinely believe that if you would have put all of that intelligence, effort, and execution into one job, you would have probably made twice as much money. Like you would have probably made 300 grand and been promoted and not had to lie, and the whole thing wouldn't even have collapsed on yourself. Like, you work so hard trying to manipulate everybody that if you just put all that effort into one place, you probably would have made twice as amount of money and you'd probably still have the job. And I'm like, to me, I think that's like the takeaway.

SPEAKER_01 47:08

Agreed. Agreed. All right, good discussion. Let us know your thoughts. If you guys have any funny stories or wild, crazy stories about someone uh violating policy or what they got fired for. We want to hear them. Let us know. Final thoughts, Ben.

SPEAKER_00 47:24

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

SPEAKER_01 47:28

And until next time, go bills.