Exposing Double Brokerage Scams | Final Mile #26

And check out our website , freight360.net , to learn more about our training , especially the Freight Broker basics course . That'll help you do everything you need to do to succeed as a freight broker . So let's get right into it . Ben , today's first two questions are kind of similar .

They're on double brokerage , one from the broker perspective and one from a carrier perspective . So we'll break them down individually . I'm starting with the broker . What do you recommend if you have been a victim of double brokerage and the real carrier contacts you to ask for more money to deliver the load , and they'll even hold the load hostage ?

You were the actual broker here , right , and the carrier that scammed you promised them like an exorbitant amount of money like an unrealistic , so let's say you're going to be expected seven grand on the load .

Because our customer is not paying us seven grand , we can't take a huge loss here . And they might say well , no , I always promise seven grand , I want it , I'm going to hold the load hostage . Typically they don't go as far as holding the load hostage .

You can usually mitigate that by just explaining like this was fraud , we're going to take care of you , we're already going to take a loss by paying this load twice . Holding a load hostage totally different situation . I'm going to defer to check out our episode on cargo theft and hostage loads with the folks from cargo net .

But yeah , you can usually talk them down and explain that like , hey , I'm going to get you paid , but I can't pay you the fake amount . I can pay the real amount . I'm sorry this happened . That's pretty straightforward .

I hate to say that it's a common occurrence , but that's really what tends to happen here is carrier agrees to take a load for a really cheap amount that seems too good to be true . They take it . Then they go and sell it for a too good to be true high amount to another carrier .

The reality is they have no intention of ever hauling the load or paying that actual carrier . It's nasty .

Or they get to the pickup or the delivery or one of the stops along the way and their shipper , receiver or someone along the way is like , oh , I thought it was going to be ABC Express . And you're like well , no , I'm DEF logistics , what do you mean ?

And then they're like , well , no , our broker , ben over at whatever , told us that this truck was coming . And then they , so they can identify it along the way . Right , and you're right , I did . The answer I gave was in reference to not while it was in transit , but it could have been down the road .

But if it happens in transit and they're off or they're threatened to hold it hostage , you can usually talk them down .

But another thing that'll happen to back to my original one is that they might you tell them hey , I can't pay you more that real carrier might take another load from you and try to hold that hostage until you give them more money for the first load . So that's , that is . I have seen that it's not as common .

It's rare , but either way , try to talk them down . Worst case scenario you typically like give them a rate confirmation that says , sure , we'll pay a seven grand . And then it's just , you're going to do a rate deduction for extortion , just what it is . So all right . The next question , which takes us to the carrier side .

This guy is basically asking for a friend . He says my friend was scammed by a broker who changed the delivery location and listed a different broker on the bill of lading . The scam aimed to steal a forklift . Now , dealing with the shipper and the original broker , they're offering a very low payment and threatening to report the load as stolen If not accepted .

This doesn't cover the costs . The load is undelivered . What can be done ? So now we're in the now . If you go back to our first question , this is the actual carrier that's wanting to get paid , right ? They're saying well , they want to pay me less . They're going to report me as holding the load hostage or stolen If I don't accept the actual rate .

What do I do ? The reality here is you want to find out for sure , with no doubt , who is the actual broker here and who , along the way got this screwed up right Cause the broker they're saying that scammed them is probably the fraud double broker , right ?

And now they gotta figure out who's the actual original broker , which is sounds like they're dealing with the shipper and the original broker , which is good , right Identify who those parties are and then have a real conversation like , hey , I'm the one hauling this .

Clearly I've been scammed and you're gonna end up taking a lesser payment because it's just , you were offered way more money than was actually available on that load , Unfortunately , and as carriers the same way that we talked about this on our episode from last week on Frey360 , when you go to vet a carrier as a broker , carriers you need to be vetting your

brokers as well , For sure , Right , If something looks fishy on a rate confirmation , it probably is . If it seems too good to be true , it probably is . If you look up a broker's MC number and it's listed as identity theft on highway , right , Someone has stolen their identity at least once before . All right , so that's a red flag .

What you can always do is , when you're dealing with a broker as a carrier , if the email domain doesn't match the email domain from FMCSA , or if the phone number doesn't match the phone number from FMCSA which a lot of times it won't because you have multiple people you have to do something to verify that you're talking to the right person .

Okay , and unfortunately you know someone tried to steal a fork lift in this one .

I don't totally understand that part of it , but whether you're the broker who got scammed or the actual carrier who's got scammed and will not get paid less than you thought , it's unfortunate , but we can prevent all of this preemptively if we do proper vetting as both a carrier and as a freight broker .

So when they called the shipper where they picked up , they went no , this load goes all the way to Buffalo . And they went well , how much does it pay ? And they were like well , I'm not going to drive all the way to Buffalo for $1.35 a mile with this on here . That's true . I thought it stopped at Atlanta .

And they're like well , I'm not going to drive to Buffalo . And they're like well , you have to , we're going to tell you you stole the load . And they're like well , they clearly didn't steal the load right , like they were loaded .

They were just misled in a way that , like now they got a choice of seems like two terrible choices drive a lot farther to where it was supposed to originally deliver and get a lot less money for all of the work and none of the headache that you got paid for .

I think your other option is to also possibly turn around and just drive it back to the shipper , but now you're getting no money , so like I would probably weigh those two .

I'm going to turn on and drop this thing off . Give me 200 bucks or 300 bucks , whatever , and you guys can figure this out on your own . So unfortunately it still sucks Like toe news , resulting in carriers making less money than they should have . But they're going to compensate it at least for their time . So all right .

Next question as a new freight broker agent , how long does it take to get your first shipper ? How many calls ? Well , there's no perfect answer here , but we can give you some realistic expectations on what you can expect , and I'll tell you it's a little different for everybody . I'm going to assume from this question that this person is green , totally brand new .

But they are trained at this point . Right , let's say they went through training , they understand how the industry works , they're ready to start making their dials , Probably going to take you a month , Maybe less if you put a lot of time in making dials . But that's also ambiguous . What does that mean ? Your first shipper ?

Are you just talking to somebody that's you're gonna call a shipper ? Are you bidding on a load list that comes out every day ? It could be date one you get your first shipper . Or are you actually getting a load to move which could take you a couple of months ? It just depends .

I would say , put in the activity , make sure you check out all of our prospecting on our our lead gen content , because it'll get real , real , granular and thorough on you know how much you should be doing time wise for prospecting and how many calls to make . Then what do you think you you've you worked in a big box brokerage around a lot of people .

What did this look like ? You know you're doing ? different how long to get your first shipper ?

But the only one you can really control is how many calls you make , and I'm gonna answer this with a real-world example of a client that we have that I have .

Soar of sing has been a client of ours since right around middle of November , so you know , right before Thanksgiving give or take Took him a couple weeks to really start making phone calls and get into the you know , understand the questions and the same stuff we talked about in our show . He's been a fan of our show for a long time .

We're now January 9th as we're recording . I did a bid last night with a very , very large shipper that he was able to get in his first call it six weeks , and Three or four other shippers that we are running bids on where on boarding them and going through the credit app Process to hopefully start moving a couple loads this month .

So in this market right now , somebody that is green has never picked up a phone to sell any product and about six weeks has one very large shipper that we did a bid on and a handful of small to medium-sized shippers .

They're doing I don't know 10 to 30 loads a week that we're quoting lanes on and he's starting to get some you know , action to be able to move a load here there . So good deal . Real world right now .

So you know 20 or 30 a day to now doing 60 to 80 and a little bit better on some days , and he's getting results . So I mean the proofs out there .

So I'm gonna go ahead and say right now , if you own your own brokerage , you're a business owner , you're not gonna get benefits . You have to go get your own and set that up . If you're an agent , you're very likely not going to get any benefits . Some might have Health insurance offered . There's like certain rules based on the state .

You know the number of W2s versus 1099s . They can extend a health insurance to yada yada . Let's say you're a W2 , like the majority of people who may be asking because they're thinking about going to work at a and in-house brokerage . I Don't know that it's unique to freight brokerage , but you can typically expect , after some Waiting period , to be off .

You know available to get Retirement . So , like a 401k or Roth 401k option , you might have a , an HSA for health . You might have health insurance options where they might cover part of your annual premium . I I personally , I'm W2 at Pierce and we , so all the above I have offered to me 401k health insurance .

We even have a life insurance , but I mean those are just kind of like standard , you know , standard benefits . What I would tell you when it comes to compensation is that and we've talked with Beth Carroll about this , we talked to Trey Griggs about this you know everybody has a different thing that motivates them and that it's important to them .

So Benefits for me , like , for example , we have great health insurance at Pierce I don't use it because I get it for basically free from the army . When I retire in a few years from the army , you'll bet that I'm gonna go look at there , you know , see what they've got , because it's probably a good .

One Side note here Steven , our producer in the chat said gongs , ping pong tables , free flowing coffee and energy , drink , vending machines , nice , those are like kind of like your in the building benefits I guess I never even really thought about . Do you get ? Do they buy lunch for you ? Are they giving you vacation time ?

Are they filling the blank on whatever other kind of stuff you can get ? But you think your standard ones are like after a certain amount of time you can do retirement health insurance . What did you see when you were a W2Bend ?

And I think if you're looking at a job in brokerage as an entry level , maybe just fresh out of college or something like that , ask about those things too right , because you're not going to get your 401k and health insurance day one typically , but you know what you will get day one is the culture and the climate of that office .

Is it toxic leadership or is it very empowering great mentorship inside of those four walls ? Do you have a great work environment where people get to go play ping pong or foosball on their break and really build camaraderie and build rapport within the office and on that team ?

We legit had a monster energy fridge at the last company that I worked for , not because they were trying to keep us juiced up on caffeine , but Monster was one of the customers for the brokerage . So Monster would send us 20 cases a month or something like that for the 100 people that worked or the 50 , whatever worked in that office .

But yeah , I mean that's stuff like that . We would do fun stuff , have potlucks and celebrate birthdays and all that stuff , and you know that makes your work a lot more enjoyable and that matters to a lot of people Working from home . Yeah , you don't get that . My dog hangs out with me in my office all day long , so that's my benefit .

But you know there's a lot of tangibles and untangibles that just very important wise to different people .

I brought in like all of my golf stuff , so I had like a chipping lane with like a net to chip golf balls into . With the phone ones I had like a real golf net that I would literally hit golf balls in when people like weren't in the office .

Little putting green , which is nice because , like when you're busting your ass , making 80 , 90 calls a day for those breaks every hour or every 20 minutes , to be able to go and just hang out with your buddies and play a game of ping pong real quick , to just kind of reset , really helps get through doing that eight to 12 hours a day for months at a time

and it is not a small thing . And I do think that that is what lots of companies everyone kind of jokes about it . They're like that's where they spend their money rather than spending money on like what .

We would consider other benefits to go to people's pocketbooks , but they're not small and , yeah , they help benefit the company by keeping camaraderie up and , like you said , culture and energy levels , but they're real benefits and I mean they do have a reward to the people there as well as the company .

They're like we you know it's casual dress , we regularly have like picnics and parties in the office and all of that , but they they lacked else wise , like they were trying to make up for where they fell short by having like basically a party like mentality and environment . So but yeah , every company is different .

What I do you mentioned like all this fun stuff to do after making a lot of calls . What I used to love with the team that I was on was we had a warehouse connected to our office and so in the wintertime we could walk around the warehouse , do some laps , throw a football around .

It was nice that we'd go outside and walk around the parking lot and throw a football or just go for a walk and like kind of like unwind . You go to lunch a lot as a team , so that stuff all kind of factors into your . You know You're how happy you are at work . We'll say sure ,

all right . Last question this is a good one . What should I do when my rates never seem to be high enough for carriers , but never seem to be low enough for customers . I think a lot of people are falling into this right now . Right , it's a very well . I think we're climbing out of it .

But we've seen we've been plagued with this for pretty much the last like year . Right , carriers want more money , shippers want to pay you less . Where is that middle ground ? We could go on for an hour on this discussion , but the reality is there's a fair market rate and it is your job to Find that happy medium . Right ?

Different customers are going to have different things that they prioritize . Is it a low price thing ? If it is a low price thing , then set the expectation . It's gonna take me a while to find you , you know , the right truck at this price . I can't do it today .

I've got to , like , take a lot of time , vet some carriers out , see who's in the area needs a backhaul , because very likely , if the carrier wants more money , it's not a bad call for them . Right ? They're prioritizing price themselves .

So you've got to try and find that right carrier that's the right one For that specific shipment and if that's the case , there will be a margin in between that'll compensate you . Sometimes you have to just give you a reality check to your shippers , though , and say , hey , like we , you're not gonna get that move for that .

Like it you might , but it's not gonna be anytime soon . And don't hold your breath , because that you're asking for a very competitive rate , and a lot of drivers are Not willing to do this , especially given whatever the X , y and Z factors are . What do you think about that one ? You , we've definitely seen it a lot . We've we hear it a lot .

What you take .

of what you're doing and how much energy you're gonna put into it . I'll give you an example , right . So , foot , if a shipper says I want this moved for just a random example , a thousand bucks and the market average on that is 1100 , right , and my carriers all want 1200 , right , they want a little bit above the average .

My shipper wants to pay a little below average , right , that's really common when you're new . So everyone always asks well , how am I supposed to make money when they want to pay me less than I gotta pay them , like I would cost me money to do business with them ? Yeah , it's the effort , right , and it's on both sides .

On the shipper you've got to ask questions to one this is their first offer . I always like , kind of Like , compare it to like your Christmas wish list . You're gonna write whatever you want on that , because there's no reason not to . Why not ? Right , right , I want this , I want this , I want this and I want this .

Right , I want to pay a thousand dollars for something that cost 1500 . They don't know you that well , you just called them out of the blue . They're gonna ask because , hell , maybe you're gonna come through with something that would just make their day if you don't ask , you'll never .

You don't get what you don't ask for so you got to ask hey , you know , I know you're looking at a thousand . Hey , is this where you need to be ? Is this what you typically pay ? Is this your target ? Is this just for today ? Can you give me an idea of where you normally are ? Well , let me ask you , okay .

I then try to test that , because they're usually gonna tell me yes , yes , yes and yes , okay , great , well , let me ask you something when does this need to pick up by ? Does need to pick up by today or tomorrow ? If it can pick up today , tomorrow or the next day , they're almost never gonna pay any more than whatever that low number is I .

If they then tell me it's got to pick up in the next couple hours or that day , okay , now I know they're . Probably they needed to pick up more than they care about the money you need leverage . You need them to care about one other thing , other than just what they want to pay . Now I've got time , okay , so tell me about that .

It has to pick up today . Well , let me ask you what if it doesn't pick up today ? Oh , then my customer is going to scream at me , okay . Well , what does that mean ? Is that a big deal ? Can it still just deliver and they'll just be upset ? No , it'll be a huge headache , okay .

So let me ask you , if I go and get you the truck you need right now that can pick it up and say an hour and a half or two hours and the only truck I can make work , and say they want $12.50 , do you want me to let that guy go or do you want me to bring that option to you for you to decide ?

And that question usually gets you a much better answer , because then they'll usually be like well , hey , if you got a guy for $12.50 , give me a call before you let him go . I might be able to make that work . Now I know that everything they first told me was bullshit . The reality is , is there more than willing to pay market rate ?

They just didn't want to . So now I got the other side . I put the same amount of effort on the carrier side . Every carrier is going to ask me for above average . I'm going to ask a bunch of questions to find , hopefully , the carrier that needs to go where my load is delivering , because maybe I'm going to look at their MC .

They're domiciled in Oakland , california . My load delivers 50 miles outside of Oakland and they want this load . It's pretty likely that they want to get home . Okay , I know you want $13.00 , but hey , if my customer is only willing to do $11.50 , can you take this for $11.50 or do you want me to just not call you back ?

Oh , if they'll do $11.50 , I might be able to do that . Boom , back to my customer , get an extra $25.00 , back to my carrier , maybe hopefully make them happy . Now I got a margin . The reality is is you've got to work both sides in opposite directions . They always start where they want so much that it never works .

You've got to be able to get them both to reality and then be able to negotiate in good faith once you're both talking about the same things .

But you can't get to that point in a negotiation unless you ask enough questions so that you're talking about the same things Somebody saying I want a rate and me saying I don't want to give it to you because I can't find it . We're just arguing over one point . You need another piece of information to leverage that point's value away .

Right , if it's just rate , it's only rate and that's all that matters .

If I can add time to it and then a third one service or risk that the load doesn't get delivered on time , not just picked up on time , or that there's a claim because it doesn't get where it's supposed to on time , now I've got more ammunition to be able to maybe get the shipper to pay a little bit more .

That's how you really go to work for your carriers to get more money to help them right . Asking more questions , getting to the root of where this negotiation is right , that's a really good deep dive man . I like that . You've got a margin right . It's just doing this over and over again . This is why it's so tedious and time consuming .

But here's the silver lining , right . Yes , it's a lot of work . Yes , it's difficult and yes , most people don't want to put that effort in . But the great part about that is , once you do that , if you can make that load work . Now you got an opportunity to go back to your customer and say , hey , how did that go ? How's that load coming ?

Do you have that load next week ? This carrier is going to be available Hopefully he is

Now . Maybe you can turn that one negotiation that took you a while into hopefully a load every week all year . So now maybe you only made $150 on that one load . If you can get that load every week , that's $150 times $52 . That's not a bad margin for a little bit of a lengthy negotiation .

That's how you take a situation where it doesn't seem to work at all and turn it into really a part of a book of business that will grow as you do that over and over and over again , outstanding Great explanation .