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Hello, welcome back to the show. My name is Matt, my name is Noel.
They call me Ben.
We're joined as always with our super producer Paul, Mission Control Decant. Most importantly, you are here. That makes this the stuff they don't want you to know. Big, big thanks. That's how we begin tonight's episode to all our fellow conspiracy realist in the trucking and shipping industry. We get a lot of amazing correspondence from people on the road. We hear a lot of crazy stories, and we want
to begin by expressing our gratitude. We are mensely fortunate that you all have joined us this evening and now there.
Are a lot of you out there right and it's a lonely road, and it's a long road, and we just we appreciate that you let us hang with you.
So thank you, And Matt Nole, maybe we get into it this way with our with our thank yous put out there on the record. What's the last thing you guys, bought that got shipped to.
You filters for my air unit that were the wrong size that I then ordered some more that were the right size. Just happened.
Modular synthesizer piece component. It's a module. Yeah, that's That's mainly what I've been ordering these days. I don't know, guys, have you ever ran into a situation? I know, Amazon is it's a whole other thing, and like it's a whole other like questionable, potential ball of evil.
I use it.
I'm gonna gohead and cop to it now. And sometimes you'll order a thing and then it'll come the same day, and I'm like, why and how and.
Who is being put out?
And whose life is being made miserable so I can get my whatever the heck, you know, phone charger on the same day I place the order.
Well, well, let's imagine though, so at least in my situation, the products that I ordered came from some distribution center somewhere, and then it was whatever that company's like standard shipping route would be or shipping company would be. So in this case, it was a FedEx package. So FedEx as a company shipped it to me. And there I think we have to just maybe as we're getting into this set up that FedEx and ups and the postal service are kind of one thing over here to the.
Side asset based carriers or parcel carriers often.
Exactly, but that's not really what we're talking about today, right.
Yeah, yeah, And to answer that question, I was making this face because guys, I've been drinking from these plastic straws. You know, our other co host is coffee, and they're just not as good. I gotta say it, but those get shipped. So many things get shipped. These real life road warriors play this often unacknowledged role in without hyperbole, in keeping civilization going. Virtually every single industry that you will ever interact with relies in some way on trucking
and shipping in one method or another. It's a hard life. A lot of truckers, a lot of people in the industry, as we know well, are increasingly squeezed by any number of factors. But our question is how deep does this squeeze go? Is there something they don't want you to know? This evening, fellow conspiracy realist, we ask what are freight brokers? Here are the facts, I guess guys to understand freight brokers, freight forwarders, and the related roles in this industry and
the controversy surrounding them. We first have to talk about shipping, which is amazing, like that did. That was not a thing for a long time.
So if you live anywhere near a you know, more of a metropolitan area, or even you know, a smaller city, you're gott to see tractor trailers and semi trucks every day on your roads or interstates or you know, highways and byways. Some of these are what are known as general carriers, and some of them are company.
Or industry specific.
These semi trucks you're talking about come in lots of different varieties, types and sizes. Shipments over one hundred and fifty pounds that's considered freight, which differentiates that shipment from the parcel services that we were talking about.
Freight is ball goods.
Freight is the stuff that's going to end up at that warehouse that Matt's talking about, which then gets filtered
down into more regional, you know, localized carriers. And actually I answered my own question in my head, I think this is right when I said, how is it the thing that I ordered today gets delivered today is somehow through the infinite wisdom that is the logistics I guess department or whatever of Amazon, they figured out that the thing that I want, that toothbrush, already exists in a local shipping warehouse, a local one of these depots, and they then hire out more like the equivalent of an
uber driver to go pick it up and bring it to me. Because I've noticed every time I get some in the day of it comes in a civilian vehicle.
So there you go.
Yeah, it's it's even.
We can take it a step further and say that the logistics industry aims for a bit of prognostication, a bit of prescience. They're not specifically thinking about one person ordering a thing. They're saying data shows us the X amount of people will reliably order why product right or category thereof, And so with a little bit of planning, and this happens in every industry, grocery stores as well.
With a little bit of planning. The idea is we can buy something in bulk or manufactured ourselves, we can sell it to someone at a markup, and we can pay the people who bring the physical object to the customer a little bit less than our entire profit margins,
such that when it works, everybody wins. And this applies to cargo ships, it applies to aircraft, it applies to little like crazy story I was when I was living in a different part of the world, the most reliable way to ship stuff was just a bunch of crazy ass dudes on tiny motorbikes, like on tiny like dirt bikes, and they where they had made their peace with God the way they drove.
I thought you were gonna say, buy tuck Tuck, But no, dude, that's even drones now are in that category, by the way, and on a lot of these websites we were looking at that just kind of teach you about what freight is, what logistics are, what brokers do. It's they're talking about drones more and more, which I honestly thought was an Amazon only thing, but it appears that that's becoming a part of logistics.
You save so much money not needing to worry about the state of the pavement or the roads.
Not to go too.
Far a feel, I think this is appropriate if you're talking about buying in bulk, in terms of what consumers are able to do. You go to a place like Costco or you pay a membership for the privilege of shopping there and being able to buy things in bulk. But they don't have all the things. They just have some of the things, and they do a lot of research and logistics numbers running to figure out what those things are and how much much of them they're going to be able to successfully move.
Yeah, I mean things can be transported domestically or international by internationally, i should say, by land, air, or sea. The best way to put it is that human civilization makes so much stuff every day, every hour, constantly you want a thing, can you imagine a thing, someone will sell it to you by legal or illegal means. And for those folks making that stuff, whatever that stuff may be, it is a waste of time for them if they
can't get those products to the consumers. You know, you have a shoe factory, and of course you would save a lot of money if everybody in the world who wanted those shoes traveled to you and just bought your
stuff where you made it. But that's not feasible. So we see a kind of meta industry, an uber industry, not related to the company Uber, but they're into freight as well, it's like a thing that is entirely designed to get all the stuff across the world from point A to point Z in theoretically the fastest, safest, most efficient manner. And it's huge. We all kind of know
it's huge. Like we were saying earlier, if you are in an urban area, if you're in a metro area, you will always see some sort of freight truck on the road. They're going somewhere, they're doing something. But I think once we look at some of the statistics, we get an experiential sense of how massive this industry is, Like it is a sleeping giant. And without this industry, the world as we know it simply does not exist.
Okay, so let's say you're driving on a highway in these good old United States. You're going to see a lot of trucks on the road. They're pretty popular, and we're talking everything from like a Tacoma to what an F three fifth or you know, a giant consumer truck.
But there are Yeah, man, I hate the environment. Let's get the trucks.
Some of them are electric, sir. The rivian trucks an electric vehicle. Yeah, what about the cyber truck? Truck?
Let's be honest. Well, that's something called a fronk. I mean, give me a break, that's right.
But there are thirteen estimated thirteen million trucks of all shapes and sizes out on the road and in garages, and out of those, there are two point nine million of those semi trailer trucks, the huge ones. They can put an entire load of freight on them and ship it across the United States. And again, many of you listening right now are in one of those and just rolling down the road.
I'll tell you what occurred to me when when we're looking at these numbers is just how powerful the Teamsters union is and always has been, and perhaps why it was such an interesting target for corruption and for infiltration by you know, criminal elements, because a strike from Teamsters, as you pointed out, Ben, would literally bring civilization grinding to a halt.
Yeah, that's a.
Rough one, and I'm glad you're making that point. Also a powerful union also, folks, Teamsters just for the etymology nerds in the crowd, Teamsters were named after like the idea of running a team of horses, right, Yeah, And you know, transit has always been oriented toward the idea of the best way to move stuff?
I mean it is.
Is it not kind of silly that the measure for the power of an engine is called horsepower?
YEAHTI horses know about that.
It's borderline one of those skewmorphs you were talking about.
Ben.
I'm sorry I've been hung up on that, but it's this idea of like keeping a little remnant of the past alive, either in a design feature or terminology I think applies here.
Let's let's change it up, Ben, what I'm gonna pitch this to you? Ready? What if it's how many Porsche nine elevens? It is? So like? He would be like point one four port nine elevens.
Rate America will love that.
Explosions explosive this card.
You can fit so many nine eleven.
No, no, I was just trying to think of Okay, how about mustangs. How about instead of horse powers, it's a specifically Mustang, but it's a but it's enough Broncos Mustangs. It's like a standard Mustang. It's not a g T. It's just a Mustang. And that's your your rate of Like, I don't think so is Porsche a horse that's a new search term for me in our.
Search history again, I think no, But there are a lot of car brands named after named after Hosses.
The animal on the logo was a horse.
Well sure, yeah, because you wanted to popularize and normalize the idea of an internal combustion engine.
Right there you go, you know, and.
Hit the market of people who could maybe afford a car, but probably couldn't afford a horse ranch. Anyway, that's a little ridiculous history. In twenty twenty two, just two years ago, now, the trucking industry in the United States did how was this even a real number? They did nine hundred and forty point eight billion US dollars in gross freight revenue. Not the same thing as profit, but that is so much money.
That's all the money that went through the system to get stuff to other places.
And as for where that money ended up, you know, that's part of tonight's question.
We ended up Vegas, baby, where it goes?
Yeah, I doesn't mean it built Vegas, you know, sure again, there's no question.
Yeah, and there are you know, there are three point five million truck drivers in the United States alone. That's that counts employees of larger interest and it counts a lot of self employed drivers, you know, owner operators, and the numbers get even weirder when we look at the global scale. I think, okay, I think we're all surprised to find that this industry, despite the pandemic, has still
been growing. Overall. It's growing at a rate of three point four percent per year until twenty fifty or so. And this means is where we have to introduce one metric not to get two into the weeds. But the boffins generally measure this stuff and what they call ton kilometers, which is how much money does it take to move a thing one kilometer to move a ton of a thing, whatever that thing will be, how much does that cost?
And right now we're seeing that trend grow through. In twenty fifteen, one hundred and eight trillion ton kilometers moved through the world, and it just keeps growing. Most of it still happens by sea. And yes, folks, for the twelve people in the crowd wondering, you can travel as a civilian on a cargo ship, which'd be a very cool thing.
Yeah, congratulations to you for choosing to do that.
Congratulations to your schedule.
It's nuts.
Yeah, they're like we.
Can get you to where you want to be within about three months, so when you want to be there.
Yes, But as we talked about, part of this whole logistics thing and being what we're going to talk about here, this broker thing that's mythical, a morphous thing that we're talking about. It is about getting that freight usually across the sea or the ocean, as you're talking about ben to a hub, a port somewhere. Then it's got to go from there, and how does it get from there to the next place, and then how does it get from the distribution center to the end user. It's all
of that stuff. And as you said before too, I never thought of about this until a friend of mine who was one of these people that we're talking about, freight broker was almost said froat breaker, but he kind
of gave me some insight on this thing. And I didn't think about the raw materials that you'll see on like a train, like the coal train cars that we'll see right and by in Atlanta at least we'll see that a lot and other just raw materials that end up getting moved like this through a broker system.
Oh yeah, dangerous chemicals, yes, Matt being a whole other bag of badgers exactly. We know that the global freight demand will apparently triple by twenty fifty. As you might imagine to Noel and Matt's earlier points, this becomes cartoonishly complicated. How do you like, Okay, there are billions of things moving? How do you figure out the best way to get your one thing from its origin point to another point without getting damaged while avoiding danger and delays and mistakes.
That is where freight brokers come in. They are the fixers of the international it's redundant to say international global, but they're the fixers of the human trade system exactly.
And it's really important to think that they are working on behalf of the person attempting to sell the thing, right, whatever the product is, they're working on that person or
company's behalf. And that's where it gets really tricky and in the weeds, because they're trying to get a good deal for that person, but they're also trying to make money for themselves because they're in a middle position there between a buyer and a seller, right, so they they're money is going to come somewhere off the top from
that transaction. Uh, and that's where that's why it's I think that's why it's such an interesting thing to discuss on this show because the motivation to make that, to skim that part off the top, and how much you get to skim per transaction it can it can be a real uh what what we say, attempting thing to maybe goose a little.
Yeah, the vigorous right, they exist in that liminal space.
Yeah, and Yetta, you know, you always hear about it in the modern day of like apps for everything and trying to sell things directly the consumer more frequently, you're always hearing lines about removing the middle man. Let's get rid of the middle man, sell directly to you. It does feel like this idea of these go betweens, whether it be you know, even like in criminal activities you got the fence, right, the fence is the guy who
sells the goods for you that are stolen. In regular legitimate business, you've got these brokers in these middle member. Is it kind of an anti equated formula? Is it still around because there are too many people that have things to gain to see the system maybe change to something more efficient.
That's a great question, and it is the free brokerage industry is the result of technological innovation. It's also the result of increasing complication in a system. It is the result of people wanting to genuinely avoid organizational headaches. Let's find some folks to specialize in the best possible route, the best possible deal, and if they make it convenient enough,
then we will pay them to do so. And then on the flip side of that, if we transport stuff for these freight brokers, right, if we're on the other side of the equation and we're moving product for them, they get their vigoroush they get their skim, and then event theoretically we the carriers get paid. However, that's where some problems arise. Before we continue, Uh, let's just say the following. Let's explain what a freight broker does and who oversees freight brokers in the United States.
So, in general, brokers and forwarders both gather all of the pertinent information that they need about of given shipment. Then they go into their systems to figure out the best scheduling, confirming exact pickup and delivery times. And as long as everything goes according to the plan, this, you know, really does help I mean the word logistics kind of says it all right.
Yeah, And the big part of that is that when when a broker receives a request right to to apply their logistics knowledge and find somebody who is going to ship their stuff, they put out almost like I'm trying I was trying to think of one to one guys.
But it's a bit system. So the individual companies that have a fleet of trucks that can actually ship stuff like that or have you know, ships, boats, rail whatever it is, they then bid on they bid for the right to ship that thing, right because they're going to make money doing it as part of their service. That's what it is as a service industry. But it could be too expensive, it could not match up with the timing of their other shipments. You know, there's all these things.
That's why a broker is important because they're the go between and the company that's selling in the company that's running it. They don't have to do all of the let's say logistics, they don't have to run through all those things. They can just say here are our openings as a shipper, here's the stuff coming in as this company ship trying to ship things, and here here's what we can provide to you as what a freight shipping company.
Yeah, as a subcontractor, Yes, exactly this Matroshkadal of Services and Industry loves a subcontractor a specialization. So just quick made up mocktail math here. Let's say you are a broker. You are going to get a lump sum price fifteen hundred bucks to move a thing, right, the numbers are
usually much higher, but you're game fifteen hundred bucks. So what you want to do is maximize your slice of that pie such that maybe you find somebody who will take stuff from Poughkeepsie to Albuquerque and they'll just do it for a percentage of that. They'll do it for a grand and then as long as you can keep up with the paperwork and make sure everything's above board, you walk away with five hundred bucks. This is generally the ideal way that it works.
Well.
Yeah, and there's a lot of undercutting that can occur, right, and then we're going to get in that when we get into some of the potentials for bad actors.
And in these United States, the authority in charge of supervising this strange relationship is the super sexually named Federal Motor Carrier Safety Administration or folks. We'll see that brokers and another related field, freight forwarders. They play a crucial role in this unending game of logistics. But depending upon whom you ask, some of these folks may be up to no good. A lot of them seem to have gone bust in recent years as well. So our question
what on earth is going on? Pause for a word from our sponsors. Here's where it gets crazy. So why did all these freight brokers get into such financial hot water in recent years? It looks like there were a number of interrelated factors, obviously the elephant in the room being a global pandemic that continues today. But also they had a crazy amount of growth, like a cartoonish amount
of growth. I don't know about you, guys, but I was surprised to learn how recent freight brokerage was and how quickly it has grown.
I guess maybe that's where my confusion was coming in, because it felt to me like a lot of this stuff. In the past, there would have been a department, you know, for various companies that would have handled this level of logistics.
Well, think about the major huge manufacturers and sellers of goods that have grown since the year two thousand. So over the course of twenty four years, some of the biggest companies you can think of were not nearly as
big as they were in the year two thousand. Sure, right, And as these huge companies build and build and build, and as more and more manufacturers exist, I think having that middle person, that middleman thing, so you don't have to have an internal department that does all of that stuff. You're just kind of getting it done, which is a bit weird to me because it feels like the bottom you would save a lot on the bottom line if you were doing direct shipping with some partner or something.
That's what I was wondering about.
A lot of the big dogs created their in house stuff and then they spun it out as a logistics service to other people because it was such a profit center. It kind of reminds me of since we've got our car stuff hats on this evening, it kind of reminds me of how Michelin, the tire manufacturer, became in charge of what constitutes a good restaurant.
Yeah, just just from being first to market once again, they just figured it was a good promotion and they started, you know, doing these kind of little guides that they would pass out for travelers to sell tires.
And the next thing, you know.
They've been the oldest running game in town as far as like, you know, pointing out points of interest in good restaurants and stuff. I know this is sort of outside the scope of this episode, but I did just want to bring up or ask, we're not really talking about Amazon today because it is kind of its own universe in many ways. I was even just looking up freight you know, brokers, and one of the first links that came up was Amazon has their own kind of
freight brokerage like Wing. And I was going to ask, maybe, at least for the purposes of this conversation, do they still use the same kind of like freight means of freight that other companies use or are they so big that they almost like have their own special fleets even in the larger, you know, bulk kind of area of shipping.
It's a great question. I want to be careful how we answer this.
One of the.
Probably the most accurate way to put it is that an entity of Amazon's size will always attempt vertical and horizontal integration. To and beyond the letter of the law. Right, So they were.
Talking yet circular integration, right exactly.
Three DH y'all. No, I mean, I mean it's true.
You know, I'm sure there are certain industries and types of products that they do business with or you know, large suppliers where they do have to go through those more traditional channels. But any chance they get, they're gonna circumvent that as well in favor of their own owned and operated stuff.
Henry Ford was so pissed about having about having to buy rubber from other companies that he started an ill fated outpost in Brazil, which kind of continues today just to make rubber. So like, corporate greed is anything but original. I think it's also this was hand over fist money. This was I think the technical economist term would be
stupid money. This is like, of course, like Uber has a freight arm still Amazon of course once won because they're saving money every time they take stuff in house and freight brokerage industries. At first, like they were six percent of trucking, as we said in two thousand, you could call him a cottage industry. Just a year ago they were twenty percent of all trucking freight. This is bonker's money.
Yeah, and it's just it's going to people that are that have really good software and connections, right.
Deep bilodexes, that's what it is.
Gosh, it's so interesting. Again. We have a few friends of the show and of our lives that have done this before. And I would say one of my friends in particular, made the most money he's ever made. And he has degrees and he's extremely intelligent, and he just went and made bank for several years and then just kind of stopped working for a while after being a freight broker.
Yeah.
Yeah, it happens.
And that is not this enterprise like finding the opportunity in the complex logistics involved. This is not inherently a bad thing. We can argue it is a necessary thing.
Yeah, and it could be great. I'd love to retire after work in like four years.
We have to keep doing our show, though, I do just say it. Wow, yeah, yeah, I think.
Man.
Well, we know also that a great like if we were to trace the origin point of the freight broker industry in the US, it would go all the way back to deregulation in nineteen eighty and a lot of times. When people hear the phrase deregulation, because it's been weaponized,
we associate it with corrupt politicians. Right, it may surprise some of us to learn that this deregulation was championed by more of the political left wing, and this idea removing it, removing the industry from the supervision of the Interstate Commerce Commission, which had run things since nineteen thirty five. Removing it made things much more competitive. It led to more reliable shipping, It led to lower prices for consumers.
And yeah, some businesses went under, good businesses, but other businesses sprang up in their wake, just like trying to kill a hydra, you know what I mean, the money moves.
Oh yeah, Well, it's theoretically a way to break up some organized crime, right that become these monolithic things that were in place for a long time, that could just control it and that's it, And doesn't matter how many other trucking businesses there are out there. You're never going to get a piece of pie because it's already baked in. So I mean, I could see why there was motivation to break out from that older system.
Oh yeah, yeah, because otherwise you're going up against totally legitimate truck is out of Jersey. You know, no questions asked, no questions answered. That's I guarantee, that's funny.
There's a sketch on old school sidel called.
Jay Z Guy, and I can't remember what it was. I think it was, you know, it was on a Curb your Enthusiasm. Larry was talking about jay Z Guide to this dude from Jersey and he goes, yeah, we over in Jersey didn't really care for that sketch very much.
Right.
This also shows us there were levels of growth. So the growth of the industry in terms of number of companies or individuals working as freight brokers, that growth exploded, but also the nature of what a freight broker does exploded. It grew in step because back in the day, freight brokers were kind of like the last resort for shipping.
There was someone who couldn't make money through their usual routes, and they literally called some guy or some group who was like, I will find I know a dude named Darren. He's probably already driving out to Seattle. So we're gonna get Darren to take this load of stuff, and you owe me money.
Well, yeah, because think about it. You're losing money. If you're the person make manufacturing or shipping the stuff initially and you go to a broker, they are definitely taking stuff off the top. That's the nature of the business, right, Well, not definitely, okay, not definitely, but probably most likely you are going to be paying more to go that route.
So it doesn't maybe objectively it doesn't seem to make that much sense until you think about time as a as an expense, right, or as something you have to factor into the price. And especially, as you said, Ben, if you don't have that internal system already in place, or those relationships in place, then why not just okay, this is part of our business plan. We use brokers.
It's kind of the thing where you start the day wanting to make ten dollars and then you know you need to make six dollars. So if you can get a deal that nets use seven bucks, then you have to do it.
Yep, which might sound boring.
I know we're being very loose with the math, but in essence, that is the calculus.
I mean.
Also, when these things started to go belly up, it affected the world in a butterfly, what's the name of that butterfly effect.
You kind of got it in the resort A butterfly.
What's that thing?
So it's amazing.
I love it. You got there, buddy.
Thanks man. Still learning this language.
But we know that there were widespread consequences for all of the world's global trade when freight brokers, when these great sort of fixers of money and relationship, when they ran into problems. It affected everything beyond the semi trucks, beyond the tractor trailers. It affected the cargo ships, It affected the air freight, It affected you know, even even those weird dudes on those motorbikes. To be honest with you, well.
I guess that's one of my questions too, Ben. Is all of this stuff in the same logistical network, Like do they take into account ships and air freight or are there like webs within webs of all of this kind of stuff. Are there freight brokers per medium of transport?
Yeah, yeah, there are specializations. Just like some freight companies or freight carriers will say we primarily have flatbed trucks. We carry stuff that would go on a flatbed. There'll be freight brokers who say, well, we make deals for the cargo chips.
You know what I mean.
My friend I keep talking about was primarily reil. So like trains, rail rail is huge.
Yeah, And because of these consequences, these knock on, these ripple effects, a lot of people who maybe didn't expect
to get hit got smacked pretty hard. These broker companies, we'll talk about this in just a second, they became insolvent, which meant that they The way their billing cycle works is that the carrier will send an invoice after doing the work, right after delivering the thing and driving it or transporting it all the way over, and then the carrier will have a window of time in which they will pay their invoice. They will make good on the work and the compensation. But when the brokers go belly up,
who gets left holding the bag? You know, how do these peopleeople get paid? If you are if like if we went into stuff, they don't want you to freight or whatever, and we all had a you know, trucks that we're moving stuff.
On and stuff.
They don't want you to ship stuff.
They want you to ship there is thank you, yes that one. If we did that and a broker that we had worked with went bankrupt, then they would do so before we got paid, and if we were to achieve the compensation to be as the teamsters would say, made whole, then we would have to go through this byzantine level of bureaucracy. It's stupid, especially considering that every moment we're doing that paperwork instead of moving other stuff, we're losing money.
We're paying to get paid at that point, weird.
I just imagined taxes as like paying to get paid. I don't know why that's shot in my.
Mind, because that's absolutely correct.
It's also kind of like what, yeah, that's part of it. Or also not to mention like bank fees or if you ever like, oh, let me transfer my Venmo balance to my bank account, well you can do it.
Today for a dollar ninety nine a wait four.
To six businesses. Hey guys, here's the trick, though.
It always happens instantly whether you pay or not. Just like wait and save on Uber, it's all a trick. If you do wait and save nine times out of ten, it comes just as quick as as the regular one that's twice as expensive.
Can we do a whole episode on those specific fees like transaction fees or something, Yeah.
Let's do it.
Yeah, let's do that, because that is rent seeking, right. Also, I love that you're giving these tips, these life tips to sorry life hack tips.
No, they're true.
I agree with you.
Also, Also, folks, if you are a fellow cheapskate, the secret with ride share apps is to open it, put in the address, and then close the app for five minutes and then open it back up. Well, I'm thinking about it.
Well, yeah, even if that's an illusion or a placebo effect, it certainly will make you less on edge. But I think to your point, Ben, if it knows you're looking at it, doesn't they game you a little bit and show you some stuff and kind of string you along in a certain way.
Yeah, this is all part of again, this crazy system of logistics that humans have built. The shipping industry overall is in a crisis point. You know, if you are an owner operator in the freight industry right now, you know full well that costs have gone up, margins of profit have gone down. Automation is becoming increasingly expected and normalized. So a lot of people in the industry are going to lose their jobs to so called artificial intelligence.
Isn't this a system though, that is sort of built on antiquated infrastructure, Like a lot of these like legacy shipping and receiving kind of companies, freight companies whatever, they've got these fleets that are kind of aging, so they're not buying brand new whatever vehicles that are outfitted with the latest technology or the latest like tracking or what.
I'm sure you can install things, but I would imagine in the same way that certain airlines you know, are dealing with kind of aged fleets, that a lot of this stuff is limited by those factors.
Yeah, I mean, how do you get all of those disparate Boeing parts from all those different factories to that one place to put them all together and slam all the pieces in there that don't fit just.
Jam in there like an ill fitting puzzle piece.
Yeah, but we are not spending money on parachutes.
No, we will not never have Well I get I have thirty thousand feet or whatever.
Yeah, I got with that attitude.
Remember if it was a land Tunes gag, but it was this idea of the parachute and it's actually just filled with like cutlery and like picknick stuff. You know, that's it there too. Just throw all the leftover forks in there will be fine.
I would love it if every passenger on an American Airlines flight gets their own rocket suit capable of taking you all the way to the ground from forty thousand four.
Wait a minute, the one we need the plane for if we got the rocket suits.
Matt, Well, I guess that's true. I think it's more of the I'm imagining the suit that you could do. What's the high jump that has been achieved, I don't know, make a decade ago or somebody. Yeah, and they just dropped, but they had to have a specialized suit with oxygen and everything to do. Yes, it's one of those.
Well, also, the real answer put plane. We can't have parachutes on commercial aircraft because it is statistically inevitable that some dumbass will try to open the parachute course in the place.
Yeah, and that's bad luck.
It might be us. You might be the one two years.
It's way worse than opening an umbrella indoors. Yeah.
I just got an image of you know those planes that do the paro or parabola, what is it parabolic flight that caused you to have the almost.
Or near zero G Yeah, yeah, yeah, yeah.
I'm imagining a bunch of airbags on one of those that get deployed at once while they're like mid.
Just well, you guys, all this talk of like, you know, contingency rocket suits really reminds me of this kind of easter eggy thing. And I want to say it's fallout New Vegas where you come to a point. I believe it's in one of the DLCs where there are just these like weird super soldiers that are clearly skeletons and like they just have like exposed skulls under these helmets. And what it is was a technology that if a soldier was injured, the suit came to life and just
walked them home. But then the suit's malfunctioned, and then eventually the soldiers just died of natural causes from being walked around. And then now they're just being their corpses being walked around inside these suits.
So I'm picturing a.
Potential problem with a bunch of like you know, emaciated skeleton flying around space in these rocket suits.
Love it.
I'm sorry we went this far, guys, as much.
It close to mine the earlier thought experiment of the dead Internet theory. Oh yeah, a haunted house automation continues, robots, and so there are still brokers that remain. If you are listening to this and you work in a freight brokerage, we have your back. We understand that there's a lot of difficulty. There's a lot of sensitivity, as Corporate America would say, in the industry right now. And of the brokerages that remain, several have been allegedly involved in crime,
both as victims and perhaps as perpetrators. We're going to take a break for word from our sponsors and we'll get into some examples. All right, There are too many examples to name, but maybe it'll be helpful to walk through a few of them so people can get the non truckers in the crowd can get the sense of the gravity.
Here.
Oh, here's one from that same website we mentioned before, Freight Waves Wave s. This is a company out of Texas that had some bad luck with gambling machines.
Yeah.
I also like that you say bad luck with gambling machines is nice.
Even if your luck out once, it's it's not gonna last forever. Speaking from experience, No, it's true. It was video poker machines, specifically in twenty twenty three, a guy by the name of Dennis Martin's, the CEO of sel Supply Chain Solutions also Selsks, Yeah sc sounds Selks of Fort Worth, Texas, announced a bit of a going out of business sale.
He had a terrible year, really bad.
Started off with a seven hundred K purchase of a load of video poker machines that.
Were stolen in Vegas.
That is a layer of irony that I find delightful and maybe ironic isn't the right word, but I don't know. Doing a heist of machines that are intended to hoist the money from, you know, kind of rubes. I think it's pretty funny, poetic justice perhaps. Then Martin said, everything just went downhill from there, and I do want to take this as an opportunity to make sure everyone is clear. I'm clearing this up for myself. Going downhill from here is bad.
It's bad.
Oh. I sometimes get it confused. Well, if it's downhill, doesn't that mean it's easy, breezy, you know, uphill? It seems like it would be bad. That would be hard if it's all uphill. But no, maybe I don't know. Maybe it's up to the interpreter. But yeah, bad times ahead on. This is him speaking, by the way, I would describe this year as being the year of fraud, theft, and abuse, starting out with that seven hundred thousand dollars load stolen. Then insurance goes up and costs go up.
After a solid year in twenty twenty two where we generated sixty four million dollars in gross revenue, we lost forty percent of our business this year for whatever reason.
I like that, he said, for whatever reason. We got to know the reasons, at least some of them.
But well, yeah, if you're if you're okay, just imagine that scenario, right. The seller trusts you to make this deal work, and it's going to be a good deal. So your goods actually get shipped to the endpoint right, and then everybody gets to make money. But if somebody steals all the stuff that you were kind of tasked with getting from point A to point B, nobody gets paid.
Uh, And I guess there's shipment of that scale that could cause a ripple effect, right, I mean.
Yes, it is ensured.
We all know that.
We always hear the justification of oh, bank robbery is no big deal, or these kind of highest to No big deal because everyone's got good insurance. But what happens when you actually have to make a claim like that of that amount the rates code through the roof, and that can affect people downstream as well.
What about when word gets out, oh, don't use selks. You heard about them gambling machines.
Right exactly, Someone's like, yeah, that's not a gamble I want to take. But also if the insurance works, you know, privatized insurance is an amazing grift ethics aside. It's one of the few products that becomes more expensive when you use it, and so like that's.
I mean, that's a way to put it.
And so the insurance I'm just going through a bit of an insurance like irritation right now, and I'm absolutely met up with the industry as a whole.
Oh don't worry, it'll get worse. So the the the idea, you know, we see another comparison in home insurance or flood insurance in Florida. You don't have to pass a law. You simply increase the amount that it costs to play the game, and then you price people out sort of like yahowe in Gattica, they never made a law that said you have to be genetically modified. They just made it very expensive to not be genetically modified.
Exactly.
While we're on the subject of insurance, just really quickly, please allow me to take a micro diversion. What my situation is is, like my homeowner's insurance policy got canceled without me knowing it, because I guess I did it, like I don't know, check up on them and make sure that it like continued. And now all of a sudden, I get my mortgage and it's like way more than it was. And it's because my mortgage company signed up for an insurance policy that they chose and it's a
lot more expensive than the previous one. So the moment I started looking into a new insurance policy, I literally make one phone call and fill out one form on the internet. I am flooded with fifty different calls within an hour and a half of people trying to sell me an insurance policy. And yet the company that I'd been using for a year didn't call me once to tell me they were going to cancel it. I just think the insurance industry is very confusing, perplexing, and it's a bit of a black box.
And I just don't trust it.
I just think it's absolutely inherently obfuscating and kind of meant to be mystifying.
Yeah, by design, it's on purpose, right, because consider the way it works in so many other countries. Kid, you not folks. And this is not obviously just speaking for myself. I am a patriot of the United States. I believe in the experiment. Even though it gets a lot of things wrong. It is not unpatriotic to point out that pretty much every other developed country as we call them, is doing a better job with insurance. They're making the
prime industries active. There are making less money, but the average quality of life is much higher as a result. So it goes down to what you as a government want to prioritize. Off my soapbox here, Martin, this guy, the CEO, we noted that he had to he had to fold the business, and he said he could have kept continuing if he were able to reach a financial
agreement with his bank. And what we have to consider is that if you are a if you're a freight broker, in many ways, your financial cycle is like that of a farmer. You are gambling on the idea that you can accurately predict future profits and you need that liquidity, You need that money to play the game, and you start off owing money and if you don't, if you don't make your if you don't make your threshold, then you're asked out.
Well, Ben, do you think that they've cracked that code or is there still a bit of throwing spaghetti at the wall? Like I just I get the sense. You know, it is all about predicting stuff. We know, there's a whole market of investment called futures, and so you're rewarded if you get it right, you know, But is there really I mean, I know the algorithms have gotten better and better and to your point of a lot of these processes being I guess enhanced or replaced by you know,
machine learning. Where do we stand, Like, is are these systems pretty good or not?
Stuff?
Honestly, it's tough because it's not one predictive system that's evolving. There are multiple predictive systems, sometimes betting against one another, and each one is becoming more sophisticated in response to the patterns of its rivals.
Right, So, like just the.
Systems theory of it alone dictates that the problems we're outelining will continue you as long as there's more than one fish in the poland, which sounds a little academic. I don't know if that makes sense, but it's like everybody is becoming more sophisticated.
Yeah, and I do not understand anybody out there who is a free broker. The difference between application programming interfaces and electronic data interchanges, I don't know what that is. I don't understand. I've read articles about this. An application seems the same as an electronic data exchange. I just
don't get it. But innovations like that are changing how much human intervention you need, because it really does seem as though the functionality of a broker is connect A to B successfully, right, make sure all of those humans on either side of that equation are good to go with the transaction, and then that's it. And you don't have to pay an algorithm.
No, I mean you have to pay the people who make it or license it.
Oh my god, can you imagine? And like the big what they would call an AI broker like this is like what that's going to do, because you they would take a much smaller amount of money, probably than any human brokerage and they would just do it in bulk, right, they would make their money the way McDonald's does on their fries.
M hm, we see it this way, or their real estate right. Oh, is McDonald's is a real estate company.
I just mean like selling you. Yeah, maybe it's not fries. Was on the burgers. You make a tiny, tiny bit of profit on the burger. You make it somewhere else. But in this case, you've got so many burgers being sold that you're the most profitable broker ever.
Yeah, like a lost leader philosophy, the strategy. Right, you sell the console for less than it takes to make the console, and you know that you will sell fifty games.
Right, It's like Red Lobster and all those endless shrimp. Oh wait, no, it didn't actually work out for them here that there are a billion dollars in debt earlier.
Uh, it's too close to home for a code named Doc Holliday and myself. Because I love the absurdity of I love the absurdity of Red Lobbs.
No, one just always Lobster the shrimp.
We gotta stop this, We gotta turn the strip.
Just just have a regular day. It doesn't always have to be a festival. Sometimes it can just be Wednesday.
I'm telling you, if you're listening, big Lobster out there wherever you are, big big Red, Big.
Red, you're picturing the CEO Red Lobster as a giant anthropomorphic lobster in a suit.
Yes, yes, just listen here, listen. This is this is your idea. You can you can get out of debt tomorrow. You scrap all of the brick and mortars that you own right now, start buying up tiny, tiny little brick and mortars in you know those uh live, laugh, love places where you like eat, work and where the apartments are and all the restaurants and all that stuff by tiny little boutique spaces. Just sell the biscuits. That's it. Nothing else, No other products. The biscuits.
Baby.
Well you know they sell it as a mix that you can buy at the grocery store.
That's not what I'm saying. I'm saying. They got to come to you.
Still, fig.
There was an amazing story on the Onion many years ago where it was like cheddar Bay and desperate trouble over overfishing of biscuits or something like that. Oh no, the ecosystem of Cheddar Bay at risk overfishing of biscuits, and.
Biscuit biodiversity is of course one of the key interests of stuff they'll want you, so that's why we got into this.
And extra terrestrials.
Yes, yeah, and supply chain story is sadly far from unique. There are multiple other cases of supply chain or freight brokerage outfits closing down or laying off tons of people, especially last year, and part of it is because a lot of other people got in the game. There was new capacity flooding the trucking industry. You could be a quote unquote freight broker and you would just be running an algorithm, right. You never leave your desk, you know,
you might not even need to call the actual driver. Historically, freight brokers kept a line open from pickup to drop off or delivery. In twenty twenty three alone, we saw so many companies either closed down entirely or lay off a ton of people. There was a freight forwarder called flex Port which laid off twenty percent of its staff. Uber Freight cut three percent of their workforce. Outfit called Convoy had their ass hit the f they closed their
Atlanta office. We still don't know how many people they fired in October twenty twenty three.
And Convoy was huge, convoys huge. I think we had a few, I don't know, you guys. I had a few friends that ended up working at Convoy, and it was because of the boom, the all everybody shipping everything everywhere as the pandemic was occurring. They hired up like crazy. They were doing business like gangbusters, and then all of a sudden it started to slope down and they're like, oh, oh uh oh, this is It's the same thing that
was happening with silks, right, same exact thing. We're making a crapload of money, but it's not enough to cash back up to that initial investment.
Especially when the demand changes again. The comparison to farming is surprisingly apt because there are variables that the farmer and the freight broker simply cannot control. And it also it also makes me remember something we're far overdue for. In this episode, Paul, as you know well, one of my favorite songs is JW.
McCall's Convoy. Could we play a clip.
Franker on nine this year is a rubber duck? You've got a copy on me?
Come on there, it is?
Do you guys, remember Convoy, Yeah, Darko.
There's a movie right with the kid.
Yeah, there's a movie based on the all that's right.
Yeah, yeah, okay, so that's what I was. I'm sorry I was getting confused there. Yeah, that's too meta. And guys, Uber frate is definitely not associated with Uber the ride share definitely is. It is, yes, but it's confusing because it says nowhere on their logistics portion anything about the ride share thing.
But I swear the logo is the same.
And for some reason, I thought earlier you had said not to be confused with, so I just wanted to make sure that's clear.
But it is a total Yeah, they're definitely the sad as wild.
And again you type in freight broker, the top two that come up or Uber Freight and Amazon and then and then you go and look into their details and they talk about all of their end to end logistical you know, proprietary algorithmic software that nobody else has.
Because why why didn't we make this connection yet? And I'm sorry that I'm just doing right now. Stockbrokers the go between when somebody wants to sell a stock and somebody wants to buy a stock. It's the exact same thing. I'm thinking about Wolf of Wall Street. I'm thinking about the collapse. I think this is I'm scared, now.
Get them out of here. But people, you're absolutely correct.
Use stockbrokers anymore. Isn't like the idea of a stockbroker almost anachronistic, Like everyone's using.
You know, h E trade or what have you. And maybe you might have a money manager.
But I don't even think people call themselves stockbrokers anymore, do they?
I mean, if they're on enough cocaine, all sorts of that part little Little Tootski that scene of.
Wall Street when he's like he does oozy woozy whatever.
Anyway, automation came for the financial markets, you know, very early on, right, So the function of a stockbroker still exists, it's simply increasingly automated, right, movie in microseconds because again, speed is very very much a priority, right when you're trying to get in front of someone in the market.
And you're absolutely right, the broker thing, the weird middleman industry. Again, it's not inherently bad at all, but it is becoming increasingly complicated because of the technology that is entering the theater, you know, and there's so much money to be made. Just like with stockbrokers, freight brokers have the ability to dip into a great deal of cash, so of course there are going to be bad faith actors in this industry.
It leads us to the ideas of things like freight fraud, which is I'll say there was a thing, and then I'll say it's lost, aka, stuff falls off the truck. And then there's the idea of double broker n which is like a complicated shell game of subcontracting stuff. It's like, how would we explain that and why is it bad?
Well, it typically involves a fraudulent broker posing as a legitimate operator or carrier and offering to arrange kind of lays this shipping service for a customer at a discounted rate. The fraudulent broker then, I guess hires out a subcontractor for the job to another.
Carrier or broker.
But this is outside of the knowledge of the customer they're dealing with in the first place. So this is classic double dealing. I would argue if that expression exists, it is to describe this where I'm not being straight with you, I'm going to use you're thinking I'm the one doing the deal, and I've got someone else on the side doing it, and that's benefiting me, not you. So in this situation, the fraudulent broker subcontract that job out,
as we said, the double dealer to another carrier. So then once this has happened, the fraudulent broker pockets the difference. So basically he gives himself a deal while saying the price as the X for the original customer, and then you know, pockets the difference in the in the price or the savings. It gets passed right on to him.
So they don't actually do anything rather than take money and forward the email.
Exactly way to think about.
It, And I would speculate they do not make as much money as any legitimate broker because they can't. Right, they are paying somebody to do the actual work, but they don't.
Do any of the actual work, so therefore it's all profit. Right, it's a numbers game, so it's a numbers grift. Yeah, it's a grift, and a broker. A broker is already a bit like a currency speculator. Right, we get a couple of friends of the show who have worked extensively in global currency speculation, which is again not an inherently
sinister job. But you're saying, oh, the euro or the yen is at x amount versus the US dollar, So let me make a transfer switch that do a switch aoo on that stuff real quick, and then hope that circumstances change in an advantageous way. So all of a sudden, my fifteen hundred bucks that I turned into yen or whatever, now they are k tall.
It doesn't matter. Now it's turned into twenty five hundred dollars. Right, It's it's interesting. People are finding the margins, they're finding that gray liminal space.
And what's put it all in bitcoin?
Put us all in bitcoin.
Scenes Tom Brady said a lot of things.
Man, Yeah, Tom Brady's got a great roast out recently, so what.
I'm talking about. He regretted some of the things that he said at that.
Rose And congratulations to Kevin Hart on the Mark Twain Prize for Humor. I'm just thinking of that because he I think e mc the Brady roast I'm remembering correctly anyway, So all right, it all goes back to the paperwork. If all the paperwork look legit and passes these governmental oversight systems and processes, then there's a very good chance that a nefarious or even nonexistent shipment can make it through.
I'm doing air quotes so hard right now, you know, because you can just pay off the inspectors in some cases.
Yeah, theoretically you could, right, It's it's kind of a long shot that you could get it to work. Right, But if you had all the paperwork, you looked like a legitimate broker and it was a bad actor on the seller's part, then the uh, you know, there's there's a huge process. By the way, if you want to look at some of this stuff, Ben, where would you
say freight waves is pretty good? There are so many logistics websites that are like a part of a logistics company that are trying to be an explainer and under give you an understanding of what the company does and how it all functions. Some of it's a little self survey, yeah, yeah, a little bit. But again just this idea of it's
a complicated system. You have to get through with some of the regulations with whenever you're shipping anything, right, there's supposed to be a record of exactly what is inside that truck or ship right, whatever it is inside that train car, and you're not even supposed to open that sucker until it gets to its end to location, so that there's this security and chain of custody of what actually was shipped, and there are inspectors who go through
at different points that could actually catch something like this if it's let's say, AAK forty seven's instead of refrigerators or refrigerators filled with AK forty sevens like that. But what I mean is, if you've got somebody who fills everything out and everything looks above board, you probably won't ever even have an inspector go into that shipping container to look at it.
Quite often, yeah, because the private industry will. It is not unusual for private industry bad faith actors to have advantages over the public industry watchdogs that are meant to keep an eye on stuff. I mean, also, this industry does have to exist. It cannot collapse. Civilization will not work without it. So again, if you are in the shipping industry, if you are a trucker, if you are a freight broker, thank you for keeping the lights on
and keeping stuff running. We know that the shipping industry and freight in general overall is increasingly vulnerable to compromise. What we could really say, without hyperbole, is that the humans have built a complex system that they do not fully understand, and that same system is growing ever more sophisticated year over year. Legislation is trying to address some of these issues. It's kind of at a crisis point. There's something in the wind. We have to ask what
happens next. I was surprised to find that are super sexy bureaucracy, the Federal Motor Carrier Safety Administration. They just put out a rule earlier this year to try to crack down on unscrupulous or fraudulent freight brokers.
Did you guys hear about this?
Do tell.
That's the log and short of it. And I know we're going over time. We don't have to go with the weeds. But you can you can see this. You can find it on their website. You can find public statements about.
It as unscrupulous freight brokers. Though I'll tell you that right now.
Yeah, they said you got to stop ripping off these folks who are actually driving the trucks, right They because they're at a disadvantage because often they've already done the work. They've transported the thing, you know, so they have to be able to be paid for their time.
It says FMSCA, but les that most brokers operate with integrity and uphold the contracts made with motor carriers and shippers. However, a minority of brokers with unscrupulous business practices can create unnecessary financial hardship for unsuspecting motor carriers. Tight, that'll fix it, right, yeah, sure, no one will figure out another more elaborate grift.
That's that's harder to track.
Yeah, and nobody will ever automate the legislative process, right, Oh.
Jeez, can you imagine? I mean, that's the thing, would you.
Well, that's a whole other conversation. I guess right, I know what you're doing that. But whatever, there are tons. It's the same with like you know, nickel and diming bank customers with these fees. Whenever there are tons of transactions taking place and a ton of things moving, a ton of products moving whatever, it's really easy for these things to go unnoticed.
That's it. It's it's just a breeding ground for.
This type of like kind of what a single tre actions super small time, but you add them up, it makes a lot of money for these individuals that are trying to rip.
People off, and it loses a lot of money.
Death by a thousand cuts kind of stuff.
You know, I would just say, there is that philosophy, and is there for a reason that, Hey, I don't ask any questions. We're all making money here, just getting whatever this is to where it's supposed to go. Does that make sense? And I'm not saying that's what's happening or that's the way everybody thinks. I'm not trying to generalize. I just mean there's a reason that exists because if you don't ask questions, if you kind of just let the system run, it's highly highly profitable.
Sure, yeah, as long as you're not the one left holding the bag of consequences, as long as you are at the very least the second last person. And that great game of hot potato, and we've got some We've got some cats coming in. This show is brought to you by a pnopoly of Pets. We hope your pets
are well. If you are on the road right now, we want to get and thank you for your time, thank you for tuning into the show, and we want to hear your thoughts, folks, if you are a trucker, a long haul driver, a short haul driver, a hotshot driver, if you are in the shipping that's a true thing. If you are in the shipping industry at all, in any capacity, we would love to hear your strangest stories.
Give us your tales of war. One thing that's always rewarding is I swear every time we ask our fellow conspiracy realist to send us tales of the strangest stuff they've seen driving in the middle of nowhere, we get these astonishing, astonishing narratives. So we'd love your take on free brokers other potential trucking conspiracies. We try to be easy to find online.
Conspiracy Stuff as the handle under which we exist on all the social media platforms of note, including Facebook, where we have our Facebook group Here's where it gets crazy, on YouTube, where we have video content rolling at you every single weekend. On XFKA, Twitter, on Instagram, and t we're conspiracy stuff show.
Hey, we have a phone number. You can call it right now. We would say, if you are on one of those long haul road trips in your truck, do wait a little bit of time until you maybe hit a loves or another you know, a little stop there to give us a call. Yes, that's it, just.
Bullin's just just wait till you hit one of those areas, just to give us a quick call, because sometimes the road noise really is overwhelming and we just physically cannot use your message, uh, because it's just too noisy.
So pilot, there we go in all right, just naming them.
I just I had when I think about a truck stop, I see loves. I don't know why, that's just what I see. But yeah, do give us a call. Our number is one eight three three st d w y t K. When you call in, give yourself a cool nickname. Let us know if we can use your name and message on the air, and if you got more to they can fit in that three minutes. Why not instead send us a good old fashioned email.
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