1001. #TFCMS - Why Carrier Compliance Is So Important!

Lightning like Steve McQueen I'm in the fast lane when the light turns green and I built tough I ain't nothing but grit cause I made rugged blood, sweat and spit yeah like a horse I fly for a bumpy ride I like to play hard but I work harder and I weather the storm cause I'm building stronger.

What is up, ladies and gentlemen, we are back. We are live. It is the freight coach morning show. The top morning show in transportation. Coming to you guys every single weekday 08:30 a.m. Pacific 1030 central to break down some industry headlines. But most importantly, you guys provide some actual insight into what you can do with all of this information. If this is your first time tuning in, welcome. This is the real side of freight, ladies and gentlemen. And I say that before every single show. And what I mean by that is I only speak with transportation professionals because I want to talk to the right individuals who have done what you're looking to do or who are currently doing what you're trying to achieve.

Morning, coach. What's going on?

Oh Mike, I am just, I'm ready to rock. And I like, I'm ready for you to tell people about your t shirt here, man, because anybody can get this stuff.

Yeah, if you go to my, I actually have the link in my LinkedIn profile. I teamed up with a j two sport offender out of Michigan there and started with this design and kind of filtered in. We got another 85 schools up for sale, a few more on the way through there. So yeah, get them. It's the time of year we're leading the college football season. Everyone needs some new gear. So why not when I get something that a little. Little more edge hits a little harder than what you got out there.

No, that's exactly it, man. College football is my favorite time of the year, man. I. I used to, like, legitimately shut down for, like, four days. I'd take off that Thursday and Friday from work, and I would binge watch college football for that opening weekend. That's like, that's my jam, man. I like, I love watching, you know, football altogether, but, like, college, man, there's just a different element to college football that I could watch. It doesn't matter what two teams are playing. I could watch any one of those games.

Yeah, no, I agree. I think, you know, growing up in Ann Arbor, it was obviously, that's all I knew was Michigan. But being down here in Nashville, I mean, it's a little. Little different feel with the SEC country, but it's a different atmosphere. But I do love it.

Dude, I'm going to have to get Ken Adamo from Dat. He's a massive Ohio state fan. I'd love to have you guys just come on and debate about that.

We. Yeah, you might want to get a little. Little more time for that one, but, yeah, if you want to light that. That powder keg, we'll go for it.

I'm always down to light that powder keg, Mike. I think it's hilarious, but. So, dude, what's new, man? How's everything been going on your side of the fence with everything going on in the market and kind of the industry?

Yeah, it's interesting. I, you know, different, you know, aspect where in my role here at Amazon through there, we're in the global logistics side, but it's, you know, so more on ocean and drayage, you know, various things through there, but, you know, such a. Such a large company through there. So you do see those effects, I think, with the supply chain stemming from, you know, back from COVID and where we're at now, I mean, you're still kind of those bullwhip effects through there with, you know, the ocean capacity that then leads into the drainage leads into your domestic freight through there. So, yeah, the rates, we do feel them, too. You know, it doesn't matter where you're at. You're going to. You're going to see those effects and it's going to be passed down through the carrier.

Yeah, dude. Drayage is interesting to me because, like, we're actually starting to move, like, a lot of containers for a customer of ours, and they had built out a new facility, and they're like, hey, we got to bring everything in. And they're like, we want you to be a part of it. And it, you know, like, admitted I'd moved rage before, but not at volume. But, you know, I have come to realize that was just like, with everything, man, there's a system, and that's all you need to do is once you crack the code on the system, on how things need to operate, I'm not going to say it's smooth by any stretch of the imagination, but as long as you have your system down on that, it's so much more manageable.

Yeah, exactly. And you make, you know, there's a few more moving pieces as you probably know as well, comparison to just standard truckload overall. But it, you know, there, as you mentioned with the moves, I mean, you got to pay the fees up front, everything. So it's harder to do that ad hoc or load board freight in that world. I think you're looking more of your dedicated providers have x amount in certain given ports, you know, but once, you said, once you get those operations moving, it's pretty smooth, you know, you figure those things out, you know, with your chassis pools and your empties and the free time through there. So, yeah, it can get out of hand, but yeah, if you're in anyone that's organized the shipper basin and your carriers too. Yeah, you can do well, dude.

We, I mean, my business partner, he's a former mechanical engineer. So the dude just loves to write up processes, spreadsheets and stuff like, that's all we do, man, is we, after our first couple of rounds with it, we just created a spreadsheet where we have everything listed, container number, master bill of lading vessel, all of that stuff. And we just have a little checklist that we knock off every single time. We know where all containers are, that we're moving out there. And I know somebody's going to be like, oh, there's technology for that. I like spreadsheets and Google Docs in this situation. And it's very easy to follow along. We're able to keep our customer updated because ultimately that's what's most important in this situation is keep your carriers informed and your customers informed and, you know, you'll be all right.

That's it. You said it right there. And I think we've gotten the age of the digital brokerage and we've seen a lot of that come up over the last five to ten years and a lot of things that filter out. But there's something about that, the communication, you just can't get away from it. The old, you know, it's between, you know, yourself, your carrier, your customer, it's, it goes a long way, I think, especially on the drayage. If, as you mentioned to a lot of, there's a lot of great technology and tracking, you know, that tracks that. The on the water reports where the containers at from the ship gets to the port, gets to the DC's, you can get a lot of visibility on that, but it's, it's not 100% of the business.

Yeah, and it's, you know, I just had a situation that happened last week, you know, same thing. It was, you know, late shipments. You know, obviously you turned into a pretty big deal, but after it was all said and done, my customer replied with a simple, hey, Chris, thank you and your team for just keeping us informed, letting us know what was going on. You know, ultimately, that's all I can. You know, we control a lot more than we think, Mike, but ultimately, the most important component is always going to be communication, and it's more important to do it when things aren't going right than it is when things are going right. You know, might sound catch 22 or whatever. I don't know. I went to public school. I didn't go to Michigan, but, you know, I went to a state school.

Yeah, it depends. As you mentioned through there, I mean, I grew up in the expedited industry as well. And, you know, some customers, it's, you know, just in time. Or automotive, I mean, it's, hey, every minute they're down is hundreds of thousands of dollars. Other customers aren't so sensitive. But if you're able to communicate it up front, it's so easy to take the creditor patch stuff on the back. But when in transportation, I've been in some ugly situations. I mean, you got, again, you can't control everything or breakdowns or traffic or just various things like that. You just, you got to be upfront honest with them, with your customers. It's going to happen regardless of whoever.

They use because, like, you guys aren't immune to issues, you know, like, I think some people will see a company of your size and be like, oh, they must have it all figured out. You guys are probably scrutinized or scrutinized things ten times more than most people. So, like, how are you guys kind of dealing with the current climate that's going on out there? Because, I mean, I know you've been in this industry for a while and like I had mentioned, Mike was my first like actual compliance manager that I ever had back in the industry. So it's like things have, I mean, they're all kind of the same in my opinion. Like I, but it's like it's just evolved in how things are being done now.

Yeah. Yeah. And if you're kind of, you're looking to get more on the compliance end of things or.

Yeah, just, I mean, in general here because, I mean, you guys move a very high volume.

Oh, absolutely.

You know, a freight customer. Freight and your own freight and everything else.

Yeah, that's, you have a unique blend there and I think it's very difficult to forecast that accurately because markets change. And you mentioned through there you got, you know, the seller business that filters in and that can fluctuate greatly. You've got other competitors out there that, you know, look to compete with Amazon for a lot of those things through there. But, yeah, the sheer volume, it's mind boggling when you see how much you got to manage coming in on oceans and then injecting into there. I mean, to keep the speeds we have and to do those racings. I mean, yeah, there's a lot of people that are incredibly, a lot, thankfully a lot smarter than I, I am that figure those things out to get that done.

So how are you guys, and again, you don't have to divulge anything that you don't feel comfortable talking about, but how are you guys attacking the current freight climate that is going on out there, especially with a rise in theft and everything? And I mean, you can see that even down on the package level all the way up to the container level or the truckload level that's going on out there's a very alarming rise in theft that's going on.

Yeah. The global side, I don't see a lot of that I guess when you're doing ocean drayage through there. But we're in a lot of different aspects through there. So once you get to the final mile for example, that comes to your door various things. I mean it gets a little more intricate. I think they do have a lot of protocols and procedures in place to avoid that. I mean as you know, I mean theft rings and the individuals looking at that are probably some of the smartest people out there, period. The intricacies and the efforts they put in. I mean they know who has the high value freight. They know where it comes from, they know where it's going and they can put plans to target that.

So how did you use to attack like the compliance side of things? Right. Because you know, you brought up freight theft ring and that's one of those ones that I think are, I mean I'm of the mindset that the majority of these are an inside job in the sense of like they're paying off a dock worker who, you know, five grand cash, let us know what trucks going out and everything else. Because like I just don't, like, I don't believe in coincidences, Mike. I guess at the end, not in this industry, because it's like, I'll always go back to this one. It was a couple of years ago when there was a train going through Los Angeles and they just happened to pop the seal of the one with Vizio tvs.

Yeah, I think it back to a lot. I think, you know, cutting my teeth on that at the old XPO days through there. I mean we moved a lot of freight. So there were a lot of instances that I was able to learn through there. And you mentioned inside job. A lot of it was unfortunately I remember, you know, not just freight thefts, but checks, the fraudulent of checks. I recall there was someone on the inside working with someone at a loves truck stop and cutting them and caching them I mean, it's, and I believe it like a case like yours. I mean, someone on the inside was able to notify and mark, and for them to know exactly which Cab had the high value product, I mean, you have to have somebody on the inside.

So what can a company do, you know? Cause like, I, I personally think, like the easiest method for anybody to apply day one is essentially you need to actually care about the freight you're moving. And I say, like, you cannot, like, you need to press your providers on the front end. And I, and I tell drivers all the time, you need to press your brokers as well because, like, I've never received a bill of lady and that doesn't have pallet counts, piece counts, pickup information, delivery information. But yet, lo and behold, there's information out, there's pictures of rate confirmations out there that don't have anything. And people are assuming that they're actual loads at that point and everything else. So I always say it's really tough to negotiate with somebody who knows what they're talking about.

I don't think so either. I think, I think I remember working with the FBI at XPO when were dealing with some of that and, you know, they, I remember they had audio or they were dealing with someone out of a ring out of Vegas through there. And I remember they even said, hey, I. You make it, everyone makes it so easy. I'm not going to stop doing it. I mean, straight up telling them through there. So I think you got to go above and beyond, I think, your checks and balances. So I, you know, going back to, I think we talked carrier compliance and bringing, you know, having that set and robust process in place. Every company is going to be different.

Yeah. Is there something that the carriers could do with that? Because, you know, again, like, obviously starting a company, I know there is a ton of scrutiny when you start a business because there is a lot of risk of people working with you. Right. Because I think the biggest thing is it's the financial side of things because, like, I had to personally guarantee every business credit card that I opened right away. The first loan that I took out in my business's name, I had to personally guarantee that because it's not that you have, it's not that you're a bad operator. Right? Like, it's not that you have, but these are just the standards that are out there on the financial side of the industry.

Yeah. One thing I used to do and kind of above and beyond was, you know, because you're looking at these owner operators just start. But chances are they drove for Schneider or somebody else for 20 years through there. I've actually got background where almost like a reference on a resume where I've got a reference from their old dispatcher fleet manager at one of those companies and talked to them. Just legitimacy saw, you know, just kind of got the background on that and, you know, was able to verify, hey, they're legit, their insurance legit. It adds up. The numbers are there and making an exception in that fashion through there.

So I got a question for you. Do you think a lot of this additional scrutiny on carriers is going to be a fad in the sense of people can get away with it now because it's a broker's market and then when it flips and capacity tightens up and rates rise, that all of these stipulations are going to start to go away.

I see a lot of that and I think it varies by company and I guess it starts at up top, as I say. I mean it's, you know, what your philosophy is and how you want to look at and how you want to approach that. But it will. Yeah, I think overall, if you take the averages, it will flip based upon the needs of the market. If things are tight and you're struggling for things, I think you get a lot a push from management and various things to make exceptions, push them through and that's where you make the mistakes. I think not adhering and keeping those guidelines through thick and thin is that's where you get in trouble. That's where things disappear and that's you kind of look back and, you know, unfortunately, you learn your lesson through there too late.

Yeah, I think a lot of these stipulations that some of these brokers have out there right now are all going to go to the wayside when the market flips. And I think, but I like my prediction, Mike, is that unfortunately this is what's going to cause a mass exodus of freight brokers because if they think for 1 second every carrier out there does not have a list of I'm never going to work with these guys ever again, they're, they have another thing coming in because it's like I see this stuff out there on social media all the time and some of these rate reductions are just absolutely appalling. You know, like it's like, I don't think you guys understand what you're doing. It's definitely the short term people are just taking advantage of the situation that's out there.

No, I agree and I think it is a battle back and forth, but you got to take that precedence and try to understand, you know, you look at the things the carriers look for key to work with a broker or customer and overall, I mean Paydev, pay fare rates, pay on time communication, I mean just kind of those basics and I get it, you know, you're trying to make the most margin possible, various things. But I thinking long term, treating them fairly and you know, keeping that relationship overall because it is, I mean you look at a lot of the sites that offer the reviews back and forth, it's just throwing mud. I mean it's, yeah there's, you know those that used to be are there for legitimate reasons. Like hey, business concern. Not just, oh, they don't have communicate, they suck.

Yeah, because I think ultimately the customers are going to suffer from this. And you know, again, there's always an opera. I'm an opportunist, Mike. I know that all the sales outreach that I'm doing in my brokerage will inevitably pay off because I try my best, you know, to not operate or at least take a vindictive standpoint out there. I come from the mindset mike, that it's just cheaper in the long run. To just pay them and move on. You know, like the back and forth about detention and layovers and everything else. Like just pay them and move on. Like you, if you have a customer that doesn't pay layovers, which I think are pretty few and far between out there, it's not as rampant as some of these brokers try and make it sound.

Yeah, yeah. Oh yeah. I can't tell you how many times, especially in the compliance aspect, how many times reps would come to me and hey, this carries this and, you know, various things and we want to withhold it. But you know, not, you know, not only some of those situations wrong, but man, it's got to be spelled out to a t within your contracts and your rate confirmations and various things and what you can and can't do through there. But yeah, it gets back to your customer that's, you know, they're choosing you as their broker for a reason, for that carrier to come to their, it's definitely an eye opening experience. I think I've had a couple situations like that as well. And it does, you learn quick.

Yeah, I just look at it because like, you know, from a customer acquisition strategy and again, this is just data from my company right now. I, this is the longest sales cycle I've ever seen to onboard new customers. Then on top of that get the first shipment from them and it's like if you break down all of those hours and days and weeks you spend because ultimately that's what it leads up to of productivity to get that one customer, is it really worth $50? Like what is it? What's your customer acquisition cost? You know, you should look at that and if you can't define that, man, you're in for a rough time coming up here because I just don't think it's worth it.

Yeah. Oh, absolutely agree. The time and effort you put into that, I mean those are the lessons you, the hard lessons you learn in brokerage and in this industry overall where, you know there's certain times, I mean certain customers are paying as we know, there's certain that are easier to deal with than others and, you know, other, you know, through there. But yeah, and the customers you probably go after now versus what you did 20 years ago or 15, you know, it's probably, you know, you kind of know the industries and various things what to look for and what's worth it, you know, worth your time through there. But yeah, I agree with you there. I think I handle it the same way with, I always look at, I've always been on the procurement side and the carrier side.

Yeah, I mean honestly Mike, my ultimate goal is to be a carrier or a broker and carrier like a broker of choice to my carriers and my customers. Excuse me, that's ultimately what I want. You know, I know I'm not going to be able to appease everybody but I think long term I want when carriers see our name pop up, I want them to be like, fuck yeah. These guys are, these guys are better than everybody else. Same thing with our customers. Every time they see our name pop up, they're like, yes, we want to work with you guys. We've heard about you guys. You know, we would love to talk and stuff like that. That's my ultimate goal with a lot.

Yeah, I think the, in the carrier base that you choose and vet and bring on is a direct reflection of you and how you do your business and you got to do that too. And make sure the carriers knowing their expectations, I mean, what your cuts, what your customer, some of it's more a little higher. Not just high value, but just higher sensitivity. And, you know, I can trust that carrier because they bring it, they understand my business, they value it and vice versa. I value what they do. So I'm going to pay them fairly.

Yeah. No, absolutely, man. Well, hey, Mike, I try and keep these at 30 minutes because I like to get people in and out as fast as possible because they all are professionals and they got jobs to get back to. But one more time, how does anybody reach out to you to find out more to get your shirts and everything?

Oh, yeah. My LinkedIn profile is probably the easiest way if, you know, I think you have a link through there. I do have a link to the j two site that has all my college gear through there. And then I am actually coming out with, as I mentioned, more city state gear that it'll be all 50 states, major cities, various things. But if anyone has any other design ideas or reach out to me, happy to put something together.

Perfect. Mike, I appreciate you as always, man. Can't wait to have you back on here soon. But you guys, we got a rare solo show tomorrow because it's been a while and I'm going to be breaking down some industry headlines. But then I got some guests coming on later this week. I have a shipper coming on Friday for the Q and a show. All right, you guys. So if you guys have any sales or operations related questions for the transportation industry, dm them over to me, my shipper friend who's coming on. We'll answer them live on the show. And as always, if you guys got value, subscribe to the show. You guys share it out there to your network because if you see value, your network is going to see value as well. I appreciate you guys.