Came back with a bank hey oh Got the foot on the gas pedal to the metal when I'm get to the back hey Got the foot on the gas pedal to the metal when the lane moving fast hey Let them all cross if they hate then let them hate them make a bigger.
Balls hey what is up ladies and gentlemen? We are back. We are live. It is the Frick Coach Podcast, the top podcast in transportation coming to you guys every single weekday, 8:30am Pacific, 10:30 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 do say this before every single show. And what I mean by that is I only speak with transportation professionals because at the end of the day, you guys, 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, so you can take that information, apply it, utilize it, and see a meaningful difference in your business and your life. Happy Wednesday, everybody.
I got a very special guest I always enjoy when he comes on. Shows never last long enough. And we're going to dive right in, you guys, because again, fiscal responsibility and financial awareness is key in business. And with that being said, I got my man product, Sean on the show. Sean, thank you so much for taking the time to join me today.
I know today is Wednesday, but like, I might not work for the rest of this week just because I'm in the rhythm and it's Friday. I come on Fridays and so I just, I might not go back in.
Dude, I don't blame you, B. I'm pushing this through for you. All right? For the rest of the week, Sean needs the time off, man, especially after the heat we're about to bring here. You might need a few days to recover after this, man.
You might where and you know, there's a really important part of healthy financials is costs and revenue. And so hopefully we can be able to help with both of them today and give folks some good tips to take away.
Dude, absolutely, man. And you know, so you guys and I broke a little bit of this down on the show last week, right? Because like, I think one of the outside of how do I find shippers from the questions that I get more than anything is like what, how do I separate myself, right? Like what's actually important to the shipper community and it's not like you can just like waltz into a place and be like, hey, tell me, what are you guys looking for? Like, is this actually important or not?
Outside of meeting somebody in the streets and then, you know, having just an open ended conversation and you know, so you guys put together a phenomenal study on this and firsthand responses is crucial. Right? And that's like, those are the shows that, you know, I haven't had a shipper on in a while now mainly because like every time I have shippers on, everybody bombards their inbox.
Yeah. They get blown up.
Yeah, yeah. I can only come on like once a year to give my inbox a minute to recover. But, you know, so you guys did that, right? You guys went out and talked like a hundred shippers and got some first hand information. So like, what inspired that study to like come about where you guys internally like, hey, we got to go out there and find some more information out.
Yeah, these research studies that we run are my favorite. They're my favorite things that we do. It takes our, like Emily and our content team, our marketing team, a ton of time and effort to be able to go through them. But the data is so rich. And that's the thing that I love the most about them is that the topics are related to like what we're hearing from our clients or what our clients are looking for to hear from their customers.
And so it's really hopefully going to give people kind of a direct view into the mind of a shipper and when it's coming from questions from a factoring company.
Right.
So like they're sort of related to how our clients work with us and how we can help them. And so we touch on a bunch of different topics. I'm sure people are going to be terribly surprised, but I think it's good to still hear stuff straight from the horse's mouth, so to speak.
Absolutely right. You know, so the pricing paradox is the first thing I want touch on because so many sales reps, and this isn't just in transportation, they want to sell on price and that's like a major factor in their outbound approach. And you know, again, yes, price is taken into consideration, especially if you're a newer provider, but it's not everything at the end of the day. And when I'm out there cold calling like, dude, I never mention price at all. Like I am all value.
Here's my knowledge. This is what we do, this is what we're about. And then when we get in to start on freight, obviously price is a concern consideration. So like I was kind of shocked when I read your report though that only 10 say price is the top factor.
Yeah. This is so for everybody following along. You go to denim.com we've got a little banner at the top you can click and download. We're going to take your email from you. Sorry. But you'll be able to get your full copy to read through and you'll be able to follow along with us. The pricing paradox is funny because if you want to, if you ask a shipper what you can win on, they're going to say things like, you know, yeah, reliability and trust and service and things like that.
But what you lose on is like, oh well, the rates are too high. Right. So like there's a sweet spot there for the freight professionals out there, whether you're running a fleet, going direct or whether you're a broker prospecting where like you're not going to win on the lowest price. And, and as a matter of fact, I'm sure this doesn't surprise people. People kind of think you're full of shit if you've got a rate that's too low.
They're just like, I don't feel like you're going to be reliable, which is the thing that I think people care a lot about. I don't think your reliability is going to be very good if you're writing a check that we know your butt is not going to be able to cash when it comes to be able to fill freight for us.
Yeah. And dude. And that, and that's exactly it. Right. Like I look at it as, you know, I've said this before where price becomes secondary for individuals after you've proven yourself. And I want to set the stage like this isn't like the first month too much.
This could be a couple of years down the road where they're like, hey man, you're higher than everybody else but we know what we get with you, that communication is there, the consistency in the pricing is there where there's no flip flopping. Right. Because a lot of people who, you know, again, when I say you live by the spot market, you die by the spot market where customers at the end of the day, man, like if you're going to quote $1000, they want to see $1000 every single time.
Not hey, 800 today, 1400 in the next day, you know. Yeah. And so on and so forth. And that was, you know, because it had mentioned and they're like 56% of the respondents said pricing is their biggest day to day challenge. Was that more from like a budgetary perspective due to like living by the spot market and it jumping up so much at times?
Yeah, that was our read on it is like if you commit to a price and we agree on a lane and then all of a sudden we've got fees that get added or we've got rates that start changing or you're putting in different sort of change orders. Like it really comes down to are you going to deliver what you said you were going to deliver? Are you going to do for us what you said you were going to do?
And if you commit to a lane on a particular rate and then you come back 30, 60 days later and you say hey, you know what, my bad on this one. We're not going to be able to fill it. Right. Can we do X, Y or Z? That is a challenge. That is a day to day challenge. If I'm a shipper, right. Especially if I'm using a handful of freight brokers, right. It's like I'm hearing that from four. Like that's not fun.
Yeah, no, I agree man. And here's another thing that I think I get a lot of shit on when I say this is rates don't change as much as people are trying to sell people on that rates are volatile out there. They're really not like when you're out there. And again, if you're only moving a load once in a month, I could see the volatility argument because depending on the day of the week there's a lot of factors that come into it.
But if you're looking at a consistent price because again in the open deck world where I operate in for the majority of our customers, we bid on future freight all the time. Almost everything is exclusively project based for the most part. And I like to break down, you know, depending on the size of the state. For example, like I'll use Florida, anything going into Florida, south Florida, Fort Myers on down, same rate.
If we're looking Fort Myers up to like Orlando, so same rate, Mid Florida and then North Florida, it's going to be the same rate out there, right. And again and I don't care if it's going to Tallahassee or Jacksonville, it's essentially going to be the exact same rate going into said market. Right. So again to sit here and say that you got to change your prices all the time.
That is, that is wrong and I would advise you guys against that every single time if you're going to go out there and bid on any long term freight because again they might not be RFP or contracted pricing out there. They're looking for consistent pricing because they are going out there and passing that along to their customers and everything there's any spikes, it cuts into your customers profit.
I think that's the biggest thing is like realize that you're not the only one that's at the table here and it's not you and your logistics manager at the shipper who's sort of haggling back and forth. It's like they've got bosses, right? Like they've got customers. Like they're trying to manage this too. And so I think you know, some empathy to this is like probably a good thing to introduce.
Another thing I found really cool and I haven't seen this take place so much, maybe you'll know better than me but I, I've enjoyed some of the discourse on like index based rates. It's like I will give you the DAP price plus or the sonar rate minus or whatever the truck stop rate is for that particular lane like pricing guide and I think that's a cool way to be able to provide reliability.
Now does the, you know, manufacturer, your customers, customer going to care about the DAT lane for that particular rate or the truck stop lane or whatever? Probably not. But like it's a way to be able to create some softness. One thing that I've loved on some of Craig's tweets that you've probably seen too is when they show like a short term period, like a one month window or a week window or whatever. The size of the rows are so large it's like 11:12, it's like 12 cents like this.
It looks like it's a huge ship. Like in reality it's a penny right on the ship. It's not that much. And so I think there's to your point like it's not as volatile as people think. You've got the chart zoomed in.
Make this close dude. And, and that's exactly it, right? Like we're literally talking about pennies on the dollar here. And if we're looking at even we're talking about like just hypothetical example you guys, if it, if the load goes a thousand miles and say again, I'm not advocating for cheap freight here, driver friends that watch their show. But if a load is paying $2 and 1 cent a mile, all right, were at like 2,000, you know, like $2,010 on that load, right?
But then if it spikes up 4 cents, right, which again some people's graphs, boom, that it's going to the sky. We're talking $40 here, all right? And then if you're out there pricing long term, whether you're paying 2,000, 20, 50, 20, 100, if you've bid your freight even with a 15% profit margin on there, you should not be going back to your customer for literally anything at that point. Whether you're paying $2 and one, even $2.10amile, you should be keeping your rates as similar as possible.
Because again, what you start to see is pockets of change, you know, where again days of the week, not, you know, like if you're looking at a thousand mile load, Sean, on a weekend run, for example, or like 800 to a thousand miles, you're going to pay more money on that if it picks Friday and has to deliver Monday because people need miles they want to run on the weekend.
So again, not all of those shipments are going to be priced the same because again, if that load picks up on a Wednesday for a Friday, you going to pay a significant difference on that load, right? So again, there's a lot of different factors that come into play here and that is why I personally hate national averages out there.
And then people go out there and price on that and then an 800 mile load picks on a Friday and delivers on a Monday is exponentially more expensive than if it picks on a Tuesday to Thursday, Monday to Wednesday to Friday, like that. So there's a lot of different factors that go into it as you're pricing freight out.
And there's a reason why companies aren't valued as a ratio of the S and P. Everyone sort of sits on their own. And so if you look at your national average and say, well, you know, fuel is up or you know, whatever, like there's, I think there's something to be said for reliability of your pricing, which was the thing that was the most important.
There's service level, are you filling the lanes, is the driver acting professional, are you following up on time or it's like the documents in a timely manner. All that stuff I think contributes to a story around reliability, including price. Right? It's like, is the price reliable? Am I able to avoid any surprises? I think those are all big factors. When it comes to how reliable you're delivering your services.
No, I agree, man. That's everything. At the end of the day, customers, when you tell them the truck's going to be there at 2 o' clock, they expect the truck to be there at 2 o' clock. And that reliability will always be the most important thing. Because at the end of the day, if that product sits on that dock and any longer than it needs to, they, as in our customers are going to have a pissed off customer asking, why is this truck delayed?
And I mean, hell, man, there's even people who get upset when the truck shows up early to deliver.
Right?
Like there's a. Yeah. You know, so that reliability comes in. And again, like, just consistency is another thing too, right? Where, you know, I, one thing that stuck out to me was 72% say consistency is the key to lasting partnerships and consistency in your communication as a broker, again, that's the only real value that you bring to the table, right? I don't care about your pricing algorithm and your tech stack and everything.
If you cannot keep your customer informed on what is going on, good, bad or indifferent, you will work yourself out of a relationship, all right? And it is going to come quick. Because at the end of the day, people can handle it if you're wrong. Right? But what they can't handle is if you're wrong and you don't tell them you're hiding shit.
That's not how you build up, build a relationship. That's, that's based on trust. The, the thing that I would say to folks, at least, of the data that I'm looking at, there is a pricing band of acceptability, right? And the one that you're going to look at it, you're going to say, yep, okay, this is good enough, but you'll win on this, like, reliability, service trust aspect, right? To make people feel comfortable that you're going to be able to deliver.
And that's, that is where you can win by performing really well. You've got references, you've got case studies, you're able to provide scorecards, you've got a process. You're able to articulate why you should take my freight or allow me to take your freight today, and why you should believe what I'm telling you in the claims that I'm making. And so if you can create some opportunity to differentiate there, that's awesome. Also, great way to fuck up and lose, right?
Because it's the area where you fall down and they're going to be the first one to say, you know what? You didn't have it. You said you didn't.
Yeah, and that's exactly it. Right? And that's why it's like your relationships are. You can. You need to start working on establishing credibility from like the very first conversation you have with somebody. You know, like I've, you know, like last week we had two calls with some prospects of ours that were deep discussions with, at the end of the day. And both of them had asked, why are you different than the 5 to.
I think one said 10 other providers that we're vetting right now to see if we can bring them into our network. And my response was simple. I'm not going to lie to you if we're messing up. I'm not going to lie to you if there's something that's going on that you need to know about. And then again, my number one line out there when I'm talking to people is good, bad or indifferent, you will know exactly what's going on at any given moment with your c. With that freight.
Because at the end of the day, I am a glorified communication expert. All right? That is all I am as a freight broker. Because again, your ability to find capacity is irrelevant because, like, that's your literal job. That's like going to McDonald's and being impressed that they serve a burger because, like, that's literally what their business is a hamburger, you know? So again, it's like going out there.
I feel like the value proposition that people fall back on are the wrong value propositions. Because at the end of the day, where we need to communicate, we need to call ahead, shippers, receivers, everybody needs to be in the loop of what is going on out there. That is, again, back to that consistency factor. You need to do that on every single shipment. Whether you're making fifty dollars, losing five hundred or making five grand.
You're.
Your customer should never experience any dip in service or communication.
Yeah, I think if I'm a small and medium freight broker, I've got references, I've got a track record, I've got a process. You know, what you can expect of me. And by the way, you've got my phone number. Chris Jolly, Brokerage. I'm Chris Jolly. Here's my cell phone. Like, those are the things. If I'm a small, medium freight broker that I'm going to lean hard on when I start a new relationship, because that's not going to be the case at a lot of the top 100s out there.
Yeah, I will literally until, like, for the absolute foreseeable future, my cell phone will be on every single one of my business cards, whether it's mine, sales rep of mine, anything. If you are not satisfied, call this number and it's going to be my direct cell phone number out there that I'm going to keep with me at all times. Because. Because of that, right? Because most people won't every again.
It's just like on social media, man, everybody's perfect online, but nobody does it offline, you know, at the end of the day. And I feel like that's one of those little separators out there that you can go and bring to the market. And you know, another thing, and I was like, inside, I was like very pleasantly surprised and like really happy that this was a major part of the discussion. In your guys's study there was. Is collections accounting.
Like that's a major factor in if shippers are going to work with you or not. Because I think like, that is important. Number two out there is if you cannot build them properly, why are they going to work with you? And that's, you know, another one of those factors where I'm like, take five minutes. Obviously five minutes is an over exaggeration. I said, when I say take five minutes on the front end to figure out their processes, that is one major factor that comes along with it.
Because at the end of the day, it doesn't matter how great your service is. If you cause their back office a nightmare because you can't invoice them properly, they. They're not going to want to work with you.
It's about being easy to work with for sure. That's one. And I think if you kind of call back to reliability, if they're paying in an area that's not familiar to them, if you're calling them in a panic about invoices that are old because you never sent it to them or you never got a reminder, or let's say your cash flow is crunched, you don't have a good partner and you don't have any sort of fallback, and all of a sudden you're beating their door down, that's just like not a good experience.
If I'm a shipper and I'm trying to run a regular business again with 10 other partners who I'm trying to work with, you're being measured all the fucking time, right? You're all being measured always. It's Always a test. Sorry. But like. And it doesn't. No days off. There's a. Like, you meet somebody in an elevator going into an interview, and you ignore them and kind of treat them like shit. And then you bump into them in the hallway on the way to the interview.
It's like, oh, whoops, that was the person I was supposed to meet. Same thing goes with collections, for sure.
Yeah. No, I agree. Right. And I feel like, you know, it's just like. And everybody. And this is like, the biggest knock with cold calling out there. Nobody enjoys getting phone calls from people they don't recognize or, like, don't under. Especially in today's day and age. Right. Again, news flash. Cold calling still the most effective sales method out there. But we're not talking about cold calling. We're talking about collections here. And not.
I feel like it's such a myth by some people, Sean, by not letting their customers know, like, hey, Denim is my factoring company. They will be contacting you for billing. Can we set up a call with them? And you establish a process to make sure that we're all aligned.
Totally. And, like, we'll get an. No, like, a notice of assignment confirmation to, like, begin the relationship. And our best clients will send a note ahead CCS on the email and say, hi, we're working with Denim. You'll receive a note from them. Like, just setting expectations, building the relationship, making the connection point, letting them know all that stuff. The other thing, this is something we may. We may actually talk about this in the next upcoming financial Friday.
We'll have to make a note, but we released some new pretty neat army customization tooling for our clients in basically direct response to this survey because they want to be cc'd on emails so that the domain name is recognizable. They want to see their logo at the top so that people know Freight coach. That's me. Here's Chris. He's in the email. We're working on behalf. Nothing is no, you know, no shadiness here. And so everything is sort of on the up and up.
And all that helps us be able to be an extension of our client's brand as opposed to a substitute, which is, like, not the best way to get paid is to come in like a stranger with your own process and your own words and your own reference numbers that don't connect at all to, like, what the shipper and the broker spoke with 30 days ago when they ran that freight.
Yeah, and, dude, that's the thing, right? Like, I also look at it as, like, As a business owner, my ability to get paid for the work that I do out there is imperative to my survival. So, like, I don't understand how people don't envelop invoice.
You know, Like, I, if there is one thing that I can say is the thing that, like, bothers me the most, and I completely lack any real understanding of is how do you not invoice somebody for the work that you did one side and then complain about how nobody pays you on the other side, right? Like, I, I will tell you this from somebody's perspective who has bootstrapped his businesses up, all right?
And for those of you out there who don't know what bootstrapping is, I have zero investors, all right? I. Money that comes in to fund this business outside of the sweat equity that I put forth to generate revenue. I could not fathom all of that work being put out there. And then not invoicing people or making it so easy for my customers to pay me for the work that I've done that it's just like butter, man. It's got to be smooth.
Totally. I would, I would also say if you're, if you're building a relationship out there and you want to be able to have some continuity, right? Continuity of service, continuity of people just like turning on a different face once the bill is due is. Is tough right now. So that's different. At, you know, 85 days open, they've acknowledged the invoice and they refuse to pay. That's a different conversation.
I'm talking about regular freight, regular invoices, regular communication, being reliable, clear, transparent. All those things matter, whether it's preload or it's postload.
Yeah, no, I agree, man. And you know, you guys had put in there about, you know, back office friction as well, and it was like 30 some percent, 33% managing disputes out there. Like how are you guys doing that? And when you say managing disputes is that the broker invoiced them the wrong amount or, you know, they were like, hey, we're going to slide in this little fee that we didn't tell you about and hope you don't notice and get paid.
Is that the style of disputes that you guys were kind of talking about there?
Yeah, the dispute, our definite how we think about dispute is I'm not paying this invoice and I'm not paying this invoice because it's the wrong amount because your driver ran through the gate because you don't have all the reference numbers. I Don't know what it goes to because I don't have the right information. I'm, I'm just going to sit on this until you can put this in a spot where we can action on it and pay it.
Now management of disputes can be tricky because if you slide in a fee and they notice and their 1785 doesn't match your 1785, that's going to cause a dispute. And so for us where we take a role in that, we send the invoice, we follow up, say hey, is this good? Do you, are we on the same page here? And if they're like no we're not. This is not what we agreed to. That's us red flag. Like we got to get our clients involved.
You guys got to get on the phone, like there's a miscommunication here that you've got to sort out and it's follow ups are not going to do it right. There's some action that's got to be taken here and I think it's pretty related to one of the other stats in the survey around missing paperwork. It's like you didn't get a rate con from this. You're not approved to be able to provide this rate or this exception or this accessorial or whatever it is. You didn't get a written confirmation first.
All that stuff is like all that documentation and that clarity of communication is a way for you to avoid disputes in the future which is going to only cause delays and it's going to cause your books not to balance, which is not a fun time.
What's a clean back office operation look like? You know, like what is it to a shipper out there? What does that look like? And then do you think that some of these tendencies are tolerated until somebody comes in and like blows their doors off of like holy. We've never experienced anything like this before.
Yeah, I, I don't think it could. I don't think it gets that bad because I think you just don't get the freight anymore. It's just like you become more trouble than it is to work with you. Like that's the phrase sort of silently disappears and then you're like, oh, I wonder what happens. Well, you know, look in the mirror a little bit. I think a good back office and one that we try to help our clients model is like consistent communication.
You know, easy availability of information, clarity, supporting documents, accessible, you have the right point of contact, your communication is professional. It is not harsh and rude. I think especially if there's a miscommunication problem. If a factoring company is coming in hot on why the f didn't you pay this invoice we're supposed to be due. We're going to send a cease and desist, we're going to send a demand letter. We're going to do all this sort of stuff.
You start throwing threats around if you didn't establish a foundation first. All that stuff to me is signals of disorganization. And so if you're straight up from the beginning, clear, transparent, accessible, available, that's a clean back office to me, and that's somebody that's taken care to be able to develop a process that makes sense.
Yeah, I just. Just a news flash out there, and this is coming from somebody who's been, you know, screwed out of tens of thousands of dollars in my short, brief career as an entrepreneur. Here in five years, arguing and telling people to fuck themselves does not work out in your favor in the. All right, so I would say to Sean's point there, you really got to build up your case, and you really, really got to keep that ego in check in that moment, because again, the first one to argue loses.
In most situations, you guys just hate to break a tea. And especially if they have more money than you. Right. They can really drag that shit out if they want to. Because again, ultimately, you got to ask yourself this. If somebody's not paying you, can you afford to fight them in court? All right, lawyers are expensive. We're talking anywhere from, like, probably 500 to a thousand dollars an hour for the most part. Can you afford that? And then again, is the invoice even worth fighting?
Because if we're talking five grand and you're gonna have to pay 8, 000 to fight it, you know, again, you got to look at it from that perspective. And I feel like a lot of people are rushing to judgment out there in some of those situations. And again, it might even be you as the. The broker or the carrier. Maybe you're not doing your job to invoice people in the right way, and that's what's causing friction.
And then again, you can't invoice somebody 40 days after you delivered a load and then all of a sudden be like, hey, why aren't you paying me for it? I just invoice you. That's not the way it works.
Yeah, you've got to establish a strong foundation, especially when things get hairy. It's a common piece of pushback that we get from new clients is like Man, I don't want to provide the right confirmation. Our shippers tell us stuff over the phone, and we go and deliver on it. And, like, when the sun is shining and everything's rolling, that sounds great. But the moment you get some weather, figuratively or literally, you're gonna wish you had it.
So, like, just follow a process and make sure that you've got all your ducks in a row, and hopefully you won't need it, but when you will, you'll be glad you had it, dude.
100%. Sean, thank you so much for.
Good to see you.
Good to see you, too. And how does anybody find this study? How do they go and register for this to get this information?
Yeah. Go to denim.com. you all know where to go. We've got a banner right at the top. Ship or pulse report. Click here to read. Now, try to make it as accessible as possible for everybody. We want our folks to win, and so the more that we can get you this firsthand information, the better positions, hopefully, that you all get put into when you get into a sales process and when you win, that work perfect.
Sean, I appreciate it. Thank you so much for joining me. That is going to be it for today, ladies and gentlemen. As always, if you got value in what you heard, subscribe to the show. You guys. And if you're feeling really ambitious after this one, rank the show on itunes and Spotify. Because if you see value, your network's gonna see value as well. I appreciate you guys. I love you guys, and we'll be talking to you soon.
Came back with a bank get to the back a got the foot on the gas pedal to the metal when the lane moves fast a let them all cross if they hate them, let them hate them Make a bigger boss Hey.