November 11, 2025 • 53 mins
SPI Logistics CFO James Lemon joins to cut through the noise on agent and brokerage finances in a tough market. We cover the real signals your brokerage is in trouble, what healthy margins look like now, how to set up your money from day one as an agent, and where AI is actually paying off (hint: 42% of SPI invoices now auto-approve without a human).
You’ll learn:
— The first red flag: carriers calling about late pay—what it really means for your book of business
— How slipping “days to pay” crushes carrier trust on DAT/Truckstop and pushes you back to the spot market
— Today’s margin reality (8–30%), why 15–18% is harder, and what to target
— W2 vs. agent life: taxes, cash-flow risk, and the simple system to avoid the “surprise” tax bill
— The overlooked first-year expenses (and the bare-minimum tech setup that won’t choke under load)
— Why a 30–60 day cash cushion matters when customers and vendor onboarding drag
— AI that’s worth it: document imaging, scheduling, and keeping a human in the loop
— What shippers now expect: real-time visibility, API/EDI ties, and proof you’re fighting fraud
— Conferences and ROI: how one five-minute tool can pay for the trip
— 2026 outlook: why disruption favors prepared agents who keep relationships tight and processes sharp
Feedback? Ideas for a future episode? Shoot us a text here to let us know.
-----------------------------------------
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:05):
Document imaging is that's the the biggest one we've
had recently is starting toutilize AI for we we're up to
like 42% of our all of ourinvoices are auto-approved by
AI.
A human never touches thosedocuments, they get approved,
(00:26):
sent to the customer, andeverything goes smoothly.
SPEAKER_02 (00:31):
All right, welcome into another episode of
Everything Is Logistics, apodcast for the thinkers in
Freedom.
I'm your host, Blake Milligan,and we are proudly presented by
SPI Logistics.
And with us today, we have JamesLemon, the CFO of SBI Logistics.
And we're going to be talkingabout a very important topic
around this time of the year andreally like any time of the
year, and that's financialliteracy for agents and probably
(00:56):
just brokers as a whole acrossthe industry as we face a very
challenging freight environment.
And that's kind of to put itlightly because there's so many
things that are affecting thecurrent freight market.
So this is the perfectopportunity to kind of get our
own ducks in a line and controlwhat we can control.
And that's on the expensive sideof things.
(01:16):
And then also from a marketingand sales standpoint, because
obviously SPI logistics is verygood with their marketing and
sales and creative outreachesand approaches.
So we're going to get into allof that today.
So but first, James, welcome tothe show.
SPEAKER_00 (01:31):
Thanks for having me.
Really excited to uh be here andtalk about all this fun stuff
that bores the bores a lot ofpeople, but is one of the most
important things you can thinkabout.
And like you said, there's verythere's very strong headwinds
right now in the market andbeing able to ride that out and
(01:51):
not uh be one of the uhunfortunately one of the
statistics that are bound tocome out of this potential
freight recession is important.
SPEAKER_02 (02:00):
Yeah, because I I think it's I was reading a lot
of reports, especially over thelast week, because a lot of
movement has been made,especially on the carrier side
of things, which is causing alot of brokers to, you know, not
rely, or maybe not rely, butthey've been relying on the spot
market.
And so that's kind of you knowproving to be a little bit more
challenging for them andespecially from geopolitical
(02:22):
tensions and things you can'treally control.
But I think some of the bestadvice is that you can't what
what's the quote?
You can't control your revenue,but you can control your
expenses.
And so from that standpoint, Iwould like to just kind of sort
of you know come out of thegate, uh, you know, with a I
guess strong.
And that is for the currentmarket that we're in, what are
(02:46):
some maybe red flags or greenflags of that you're working for
a company that is strongfinancially?
SPEAKER_00 (02:54):
Well, I mean, the biggest thing, the the canary in
the coal mine most of the timesis when you start getting calls
from your carriers sayingthey're not getting paid because
the broker, they're gonna say,oh, we're having trouble with
paperwork, or oh, we're havingtrouble with this and that, or
well, we don't have an approverin house.
But if it continues to happen,it's a sign of broader issues
(03:17):
where they're trying to nowstretch their payables to try
and steal cash flow essentiallyfrom the future.
Um, and I mean, if especially ifyou're an agent, an agent
working for a broker and youstart getting those phone calls,
that's that's a sign that maybesomething's happening.
Your service levels might startto drop because all they're
(03:39):
gonna have to lay off people,and then so now they don't have
as many people to service all ofyour customers or even service
you as an agent.
And if you start seeing thosethings happening, it it's a sign
that there could be a problem.
And I mean, right now it's avery tight freight markets,
rates are I mean, rates aresupposed to come back, but
(03:59):
they've been saying that forthree years, and unfortunately,
I think this just might be thenew normal.
So if that's the case and you'rethe companies are expecting it
to come back or hoping it'sgonna come back and it doesn't
come back, there's gonna be somebrokers that just all of a
sudden go under because thefreight market just doesn't
(04:21):
bounce back like everybody hassaid it will for three years.
SPEAKER_02 (04:25):
Yeah, I I I wish I would have heard that advice
years ago.
I I worked in-house at anasset-based brokerage, and you
know, I was executive assistant,so I heard some sort of
rumblings from you know, hereand there.
But I, you know, admittedly, Iwas very not strong in uh
finances or even, you know, justacumen in in general.
(04:46):
I'm I've gotten better at itwith age, but I still feel like
I'm I'm very much a novice.
But I I do wonder, are therethere probably are plenty of
brokerages out there that, youknow, maybe are going through
this similar thing where they'rehaving a lot of closed door
meetings and you're not exactlysure.
You're you're hearing from otherpeople that you're running out
of runway and you hear all thesethings, but you're you're saying
(05:09):
one at one of the canaries inthe coal mine is is the carriers
calling and asking for forclarification on their payment
terms.
Is is are there any other thingsthat maybe um would kind of
signify that maybe somethingelse is going on within this
company?
SPEAKER_00 (05:24):
Well, I mean, it it's it's harder when you're
you're especially foragent-based, it's harder because
you're not in the root, you'renot in like a bullpen area where
you're gonna hear, like yousaid, you're you're seeing a lot
of closed door meetings, all ofa sudden the the staff list is
getting smaller and smaller, anda lot of the times if you're not
like in it, you won't noticethose kinds of things.
(05:44):
Uh I it's really just I thinkthe carrier thing is the biggest
thing that for an agent that youcan just watch out for.
You don't because having yourcarrier, like that's what you're
selling.
You're selling, hey, we're we'regonna pay you in 30 days.
And if all of a sudden you'retelling the carrier that you're
gonna pay them in 30 days andit's now 40 days, 45 days, 50
(06:06):
days, and there's no real reasonfor it, they're gonna stop
hauling your loads for you, andthen now you're going up to the
spot market, but then uh allthose carriers are reporting to
things like DAT and all thesethings, and they're seeing that
broker, their days to pay isstarting to increase, so less
and less carriers are gonna wantto haul for you because they're
thinking, well, I can haul forbroker X and get paid in 30
(06:31):
days, or I can haul for you andget paid in 50 days.
So why am I hauling for you whenI can haul for broker X and get
paid in 30 days?
SPEAKER_02 (06:37):
So it almost sounds like maybe like a snowball
effect that that's going on withsome of these issues where it
starts at that maybe 10 to 15days and then it evolves from
there.
SPEAKER_00 (06:46):
Well, absolutely.
And I mean, now that whattechnology is more and more
pervasive within the industry,it's a lot easier for those
metrics to get to the reportingagencies because in the past it
was only like the only peopleyou would report to is like DB,
and nobody reported D and Bbecause they're so expensive.
But now we have things likeInsonia and DAT and truck stop,
(07:08):
they're all tracking days topay, and they're all now being
or incorporated into financialtechnology companies like Tri of
Pay and all these things.
So it's a lot easier for them toknow this information and
disseminate the information toeverybody within the network
where that wasn't the case inthe past.
SPEAKER_02 (07:27):
So, so what would you suggest to be like maybe a
plan of action or controllingwhat you can control when you
you do start seeing you knowthese little canaries kind of
start popping up?
What should you start doing?
Maybe you're you're in-house ormaybe you're a freight agent
working for another you knowcompany, and obviously not you
know, SBI.
Um, but what would you suggestthat they start doing to maybe
(07:49):
start putting their ducks in aline?
SPEAKER_00 (07:51):
I mean, the easiest thing, you just ask questions,
like uh call call into yoursupport staff and say, I'm
getting all these calls, what isgoing on?
Try and see if they'll getanswers.
And if they're not gonna giveyou answers, try and go up the
chain, up the chain as far asyou can to try and find out
what's going on.
Sometimes there is a reason.
Maybe they switch billingsystems and they're having like
(08:12):
it happens all the time.
Everybody thinks you're gonnajust flip a new technology on
and it's gonna work seamlessly,and it ends up being a disaster.
And yeah, sometimes that'llhappen, and that's why they're
not getting paid.
But if they start avoiding yourcalls or ducking your calls, or
they're giving you blanketanswers that don't actually have
(08:34):
any substance, that's a badsign.
And then maybe you start to lookat other avenues for what you
could do.
Because I mean, in logistics,there's a job free anywhere if
you want it.
So it it doesn't if you're ifyou're getting worried, it
doesn't hurt to see what else isout there.
Because you never know, it couldbe especially if you're an
(08:55):
employee, one day you are anemployee, the next day you're
not, and then if you've alreadydone your work and done a little
bit of homework, you can bounceback right onto your feet.
Uh but if you're you don't,you're a little bit behind the
eight ball when something likethat happens.
SPEAKER_02 (09:10):
Now, for uh some of my former and even uh current uh
broker friends, uh anytime Imention, you know, why haven't
you gone out and just you knowbecome your own agent or or
worked for a freight agency?
The first question that theytypically ask is somewhere
around taxes, like, oh, I don'twant to, I like you know, being
a W-2 employee, I like, youknow, not having to worry about
(09:32):
my tax bill at the end of theyear.
How do you, I guess, sort oftalk through those types of
people when they they have thatinitial concern?
Are taxes like a huge issue thatfreight agents have to be
worried about and occupied with?
SPEAKER_00 (09:45):
Uh, I mean, I would suggest that if you are gonna do
that, you find a goodaccountant.
And I mean, it's gonna cost youa little bit of money, but in
the end, you're gonna make moreas an agent than you are as a
W-2 employee because you'regetting a way bigger split of
the of the revenue.
The biggest thing is taking therisk because I mean, I I
(10:09):
personally I could not do it.
I have a fam, I have a familywith young kids.
I'm obviously an accountant, soI'm very risk averse.
I I I couldn't not know where mynext paycheck's coming from.
But if you are in the salesspace, odds are you're a much
bigger risk taker than I am.
And yes, it is scary to go outonto becoming a broker and not
(10:33):
knowing if your customers aregonna follow you or if you're
gonna have the same sales levelsas you had before, and maybe
your pay might go down for alittle bit.
But in the long run, you'regonna you have unlimited
potential because now you're notcapped by any ceilings, you
don't have only 10% commissionsbecause you have a salary, you
make what you you you kill, oryou eat what you kill.
(10:57):
So you are out there, you canmake as much money as you want,
you have a good tax accountantbehind you who's handling all
the other things for you, sothat you that's not on your
mind.
Because you don't want you as anagent, you don't want to be
thinking about oh god, I gottapay my taxes next week.
You want your accountant to belike, hey, here's here's what
you need to pay, and this is theall you have to do, and you just
(11:20):
send them a check and you'redone.
SPEAKER_02 (11:22):
Yeah, I think I think it's more about avoiding
also the the surprise expensesbecause uh especially in the
first year of business that Ireally did well, when that tax
bill comes due and you aresurprised.
SPEAKER_00 (11:35):
It can be a shock, it's and it's always gonna be a
little bit higher than you thinkat first, because you think, oh
yeah, my like I have all theseextra expenses that I can now
deduct.
But when you're not paying anytax, like because you don't have
it just coming straight off ofyour paycheck, it can be a big
surprise, especially if youdon't have an account that's
telling you to.
SPEAKER_02 (11:56):
Oh, absolutely.
SPEAKER_00 (11:57):
And and in reality, like for me personally, I would
be setting aside every time Igot a commission check, I would
send just open up a separateaccount that's just there for
taxes.
And you transfer 10, 15, 20,whatever you feel comfortable
with, transfer it into anaccount, make sure it's a
savings account so you get alittle bit of interest on it,
(12:20):
and just let it sit there.
And then that way when your taxbill comes, it's not like, oh
man, I gotta come up with$15,000,$20,000.
It's like, oh, yeah, I have thisaccount.
Maybe you put a little bit morein there, and like, hey, now I
have a bonus five thousanddollars I wasn't expecting.
SPEAKER_02 (12:34):
Yeah, that that's definitely the strategy to take
because when that firstunexpected tax bill comes in,
which I guess technically itshould be expected, but it is
still a a real shock when youget it and you didn't expect it.
I am curious, what's the firstwhen when someone decides to
become an agent, what's thefirst big oh wow expense that
(12:55):
they might see coming?
SPEAKER_00 (12:57):
I mean, the biggest thing is probably just you don't
realize like you you might havea laptop that you think is is
good for just like surfing theinternet, and then all of a
sudden when it's now yourprimary driver of your work, it
pays to have good technology andit pays to have good hardware.
So you might be surprised likethat$500 computer that you
(13:21):
thought was great isn'tnecessarily the best when you
now have like 15 different tabsopen and you're talking with
carriers and you're trying tolook at rates here and rates
there, and all of a sudden yourcomputer's bogging down and you
can't have quick decisionsbecause you're being hurt by
your hard work.
You don't you don't realizethese things and like when
(13:43):
you're working because nowyou're probably working from
home, you're gonna want toconduce some space to work, so
you might spend a little bit ofmoney on that kind of stuff.
Depending obviously depends onhow people work.
Some people can sit at theirkitchen table and just work all
day, and some people need like astructured area to actually do
their work.
(14:03):
It all it really just comes downto the person and knowing how
you work best and doing what youcan to make yourself the most
ready for going out there andjust making money.
SPEAKER_02 (14:16):
So you want to be thinking about getting an
accountant, you want to thinkabout you know having some some
good, you know, laptop or a gooddesktop, a good work area to get
work done.
So you want to think about thosetwo big things.
And so what uh is there maybelike a savings that you should
maybe be thinking about too ifyou're an in-house like
brokerage or and you want to goindependent?
SPEAKER_00 (14:39):
It definitely doesn't hurt, especially because
the ramp up time is alwayslonger than you expect.
You you expect your customersare just gonna like be able to
come over right away every timewe have a new agent or uh when
we have a new agent, they comeon board, they expect everything
to just go smoothly, but you gotall the paperwork that needs to
be filled out, you got all thethe the customer now needs to
(15:02):
change all of their processesand set up because they're
setting setting up a new vendoron their side too, so they got
to go through all their checksand balances to make sure
everything meets their criteria.
So, like you said, it's it'ssmart to have to plan that maybe
the first month you might notmake any money because you're
gonna be going through all thesetup process.
(15:22):
So have have a little bit of arainy day fund so that if that
does happen, you aren't all of asudden scrambling because we've
we've seen it time and timeagain where an agent will come
on board thinking everything'sgonna go smoothly, doesn't get a
paycheck for three weeks andjust goes back to being a W-2
employee because they were tooafraid to keep going, which I
(15:44):
don't blame them.
Like I said, I could never do itmyself.
It takes a brave person to doit.
But the ones that aresuccessful, I like we've seen
agents who were W-2 employeesmaking good money, and then they
come on board, they have acouple of hiccups at the
beginning, and now they'remaking like a million dollars a
year, which you couldn't do asan employee making a minimal
(16:09):
commission.
SPEAKER_02 (16:10):
So, what does that look like?
So, say I I am bought and sold,I'm I'm ready to dive in, I'm
ready to become a freight agentfor SBI.
Uh, what does that process, Iguess, look like from a
financial lens on that firstsort of maybe 60 days?
Is is that when you canrealistically expect to be fully
onboarded, have your customersonboarded, and then already move
(16:33):
in freight within 60 days?
SPEAKER_00 (16:34):
Well, I it should be a lot faster than that.
I mean, in most in most cases,we can have people up and
running within a week on ourside.
Obviously, all brokers aredifferent, and then it also
comes down to your customers.
If your customers, if you'redealing with large, large
companies, that onboardingprocess, it's kind of faster for
(16:57):
us because they're a well-knownquantity, but them onboarding us
as a vendor can take more timebecause they have certain
quality standards and everythingthat needs to be met.
And it's a lot harder to get onthe phone with people who can
actually help you becausethey're a large corporation, so
they have lots of lots ofmiddlemen in between.
(17:18):
So but if you're a smallercompany or you have smaller
customers who can onboardquickly, like yeah, you can we
we've had agents who onboard andare moving loads the same day.
Oh wow.
It really just comes down tomaking sure you have everything
ready to go.
Like if you have customers thatyou're porting over from
(17:38):
somewhere else, make sure theyknow what you're doing.
Tell them, like, hey, just aheads up, I'm planning and tell
them ahead of time.
Let them know a week in advance.
Like, hey, I'm planning on doingthis.
You're gonna be receiving somepaperwork, you're gonna be
receiving some new stuff.
Can you help me expedite this sothat we can keep our
(17:59):
relationship going smoothly?
SPEAKER_02 (18:01):
Yeah, because I would almost imagine that I
would be maybe a little bitnervous about telling my
customer that maybe I am moving,but then it's almost like a
level of reassurance that theagent has to provide and SBI has
to provide to some of thesecustomers.
Or are they, are you guys moremaking the sales pitch of this
(18:22):
is going to actually be betterfor you as a customer to come
with us on this journey versusmaybe exploring other options?
Is is is the sell to thecustomer uh that important too?
SPEAKER_00 (18:35):
I I would absolutely say so because I mean it is a
lot of work for them to get setup with new cut companies.
And I mean, some of them won'tcare.
And like you said, it is it is alittle bit of a risk because
maybe they don't know.
So maybe you're working forsomebody, a big brokerage, and
you're going to maybe a littlebit of a smaller brokerage, and
they've never heard of itbefore.
(18:55):
So they might have someapprehension.
But the biggest thing is if youhave a good relationship with
your customer, they're gonna beton you, they're not gonna bet on
your broker.
SPEAKER_02 (19:05):
Yeah, that makes sense.
What about as far as like thecurrent market conditions?
You know, we we've been hearingabout a uh you know, a freight
recession for a little while.
We've probably been in one forfor we just haven't exactly
defined it because everybody'safraid to say the word.
SPEAKER_00 (19:19):
Uh but nobody wants to admit it.
unknown (19:22):
Right.
SPEAKER_02 (19:23):
Well, I think once once uh like the big government
entities can agree on like whatan actual recession is, I think
it maybe it could trickle downto other industries properly
defining it as well.
But I am curious, you know, whenI was working in-house at a
brokerage, you know, the health,healthy margins were, you know,
15 to 18%.
(19:45):
Are those days gone?
And is it, you know, maybe like10% margins of what we're
looking at of HERD as you know,as low as 8%?
What does a healthy margin looklike in in brokerage right now?
SPEAKER_00 (19:56):
I mean, it really comes down to like everybody's
different.
Like we have some agents who do10, 12% margins, we have some
agents doing 25, 30% margin.
SPEAKER_01 (20:04):
Oh, wow.
SPEAKER_00 (20:05):
It depends on it depends on what your load mix
is, what what kind ofcommodities you're moving, what
value, like what value levelsyou're moving at.
Uh, I still think the 15 to 18%is where you want to be, but
it's definitely getting harderto achieve that.
Like rates are lower.
And I mean, it's because ratesare so low, it is easy to go out
(20:26):
there and you just try and findcheaper mar or lower freight
costs for the customers becauseeverybody's trying to move stuff
because everybody's terrified ofthe potential recession.
So everybody's just trying tograb market share where you're
seeing, like you said, eight toten percent margins, which is
insane.
Like, how is how is a brokerworking on eight percent
(20:48):
margins, especially if you're anagent-based broker and now your
portion of that is very, verysmall, and the cost of running a
brokerage is really, really highright now with all the
technology costs and insurancecosts and everything that just
keeps going up and up and up andup.
So, like if you're working for abroker who is fine with eight to
(21:08):
ten percent margins, I mean,maybe they're super lean in the
back, but also that could be asign that that something could
be wrong or could happen reallyquickly because if they're only
getting two, two and a halfpercent of the total gross
profit on that to fund all ofthe stuff that they need to
(21:28):
fund, that's not a lot of money.
SPEAKER_02 (21:31):
Well, that that brings me into my my next sort
of group of questions, andthat's around just sort of like
what does a a freight agent PLlook like?
Uh, you know, the profit andloss statement, what are some of
maybe like the those top youknow expenses versus those top
revenue items?
I mean, obviously revenue isgoing to come from their their
customers, but are they dealingwith you know 10 customers or
(21:52):
two customers, or is it kind ofjust varies agent to agent?
SPEAKER_00 (21:55):
Varies agent to agent.
Some have one customer who'stheir primary source of revenue.
Some have like we have a fewagents who are in the hundreds
of customers who they're dealingwith, I mean, that the but those
people also have big teams, sothey have big expenses for
covering the teams, having anoffice space.
But those are good problems tohave because that means you're
(22:17):
being very successful.
SPEAKER_02 (22:19):
Is it for expenses?
Is it more on like the insuranceside of things?
Is it technology, or do theyeven have to worry about that
with being with SPI?
SPEAKER_00 (22:29):
With SPI, you don't have to worry about any of that.
We cover all the technology, wecover all of the insurance, we
cover everything.
Uh the only expense they have iswhere they're working and what
they're working on.
They just as long as they havean internet connection, a
computer and a cell phone,they're good to go to work for
us.
SPEAKER_02 (22:48):
That's why I don't I I just speaking at you know, at
it at a turn, but that's why Ijust I don't understand why
people are freight brokers andnot a freight agent.
SPEAKER_00 (22:57):
I it kind of maybe goes back to what your earlier
comment was, you know, riskaverse and absolutely like it it
is it is a scary jump to make,but like like our CRO says all
the time, being a freight agentis a like license to print
money.
SPEAKER_02 (23:10):
So I just don't get it.
I feel like it's the best likeentrepreneurial opportunity for
you know a lot of the freightbrokers that I've known
throughout my career.
I'm like, why didn't you juststart this earlier?
Um, so it's it's it is cool tosee maybe you know more of the
the market shifting in thatdirection.
I guess maybe that's sort of ahigh-level question.
(23:32):
I I'd love to hear yourperspective on.
Like, what do you think sort ofthe the state of freight
brokerage looks like right now?
And do you see it evolving intomostly an aging game?
SPEAKER_00 (23:46):
There's always gonna be people who want the
dependability of a paycheck.
So I don't think the employeemodel is ever gonna go away.
Uh, and I mean the employee sidedoes have the benefits of like a
we're a cradle to grave shop.
So, but when you're an employeebased, you could have carrier
sales reps, you can havecustomer sales reps, you can
(24:06):
have all that other stuff.
Where when you're agent-based,odds are you're all cradle to
grave because you can't reallyprovide those services for them.
So I don't, I don't, I thinkthere's always going to be a
healthy mix, but I definitelythink more and more people are
going to see the benefits ofbeing an agent, and it's gonna
become more and more of anoption that people take because
(24:30):
I mean it has the potential tomake you a lot more money.
SPEAKER_02 (24:35):
Now what we're looking at, you know, this is uh
October just ended.
We're recording this at thebeginning of November.
So a lot of folks have eitheralready finalized their 2026
budgets or are currently workingon them right now.
What does I guess a typicalfreight agent budget look like?
Is it you know just uh officespace?
(24:56):
Is it equipment, employees, andthen you don't necessarily have
to worry about any otherexpenses?
SPEAKER_00 (25:01):
Or is it I mean if you especially especially if
you're just the one man, one manshow, you don't you don't you're
not really thinking about any ofthat.
You're you don't need to becauseall like I said, all you need is
your laptop, your cell phone,and an internet connection.
And you can you can literallywork from anywhere.
We we have some agents who theylike they'll go on vacation and
they're working at like they'retaking phone calls at the beach.
(25:23):
That's awesome because they theyhave Wi-Fi and they they can do
that.
Uh I mean the biggest thing isjust making sure that you're
you're forecasting like yourcustom, like you need to you
need to know what your customersare, what your customers'
budgets are because sometimeslike we do they have somebody
new in transportation who's nowlooking to change their freight
(25:46):
budget and lower their freightcosts, and you need to be
cognizant of those thingsbecause if that happens and they
go to an RFP and you you're oneof those agents who are doing
the 20-25% margins, and now allof a sudden they're looking at
their freight spend.
If you go in at 20-25%, youmight lose some of those lanes
because you didn't make theconnection that hey, they're
(26:10):
doing this for a reason, they'redoing this to potentially lower
freight costs, and because theyhave somebody new in-house that
you don't necessarily have therelationship with where maybe
you had it with the old person,which is why you were able to
charge those kinds of margins.
Now you're if you're not keepingup with what your customer is
doing, you have the potential tolower your revenue on that
(26:32):
customer because you might losethe lane.
You might lose, you might losethe customer because you come in
too high.
It's just being cognizant ofthose things.
SPEAKER_02 (26:40):
Now, with with your role, you you have also been
heavily involved in thetechnology side of things.
We were recording this on aMonday right before TIA,
Technovations, um, which is aconference I believe that you
you go to each year or try toanyways in every single year.
And so I'm curious what youryour take on the overall sort of
(27:03):
technology aspect side of thingsis where are people maybe over
investing or underinvesting whenit comes to freight tech?
SPEAKER_00 (27:11):
Well, I mean, if you're gonna talk about freight
tech, you gotta talk about AIbecause I mean at technovation,
that's gonna be every everysession is gonna be a drink
every time you hear the word.
I mean, so I mean technology isthat's one of the reasons to
(27:32):
like transportation is so funright now is because it's a
technology gold gold rushbecause transportation went from
everybody hating technology tothe last seven, eight years.
Now all of a sudden technologyis booming and there's new tools
left, right, and center.
And the the biggest thing isdon't just like all the
(27:57):
presentations are gonna lookamazing.
But when you're going into demosand you're going into see these
tools, make sure you're askingquestions about how it will work
with your business processesbecause every broker does things
differently.
And they're like, especially forus as an agent-based model, we
(28:17):
go into a lot of these tools andthey say, Oh, it's gonna work
great, it's gonna work great.
And then we say, Well, we'reagent-based, so we can't mandate
that our agents use anytechnology because they're their
own independent entities.
We can't say you must use thisor else because then they'll
say, Okay, bye-bye.
So a lot of companies they don'tthink like that.
(28:39):
They they just assumeeverybody's employee-based and
it'll work for everybody, butthat's not always the case.
And then, I mean, if you'regonna talk about AI, I think
there's been a big change in AIbecause before like two years
ago when the AI boom started, AIwas gonna do everything.
(28:59):
Like every tool AI was trying toreplace the entire process.
But I've seen in the last like18 months, everything's now
being crunched down to it's onlytaking tiny slices of processes
to because in reality, like AIis never gonna replace agents,
(29:23):
it's never gonna replace brokersbecause AI can't handle when
things go wrong.
It works great when everythingis it's a standard shipment,
everything goes smoothly.
But as soon as something goeswrong, the I the AI can't handle
that.
So using AI, but AI is anecessary thing for any broker,
(29:44):
but you you gotta like if ifyou're afraid of AI and you're
afraid of technology and you'reafraid of what it's gonna do,
you're gonna get left behind.
But the most important thing isthat you use the AI to help
make.
You better.
That's what, like at SBI, that'swhat we're trying to do.
(30:04):
We we do have a few AI toolsthat we're using, but we use it
to empower our people.
We're not replacing people withAI.
We're empowering people so thatthey're not necessarily doing
all the mundane tasks that don'ttake any brain power.
Why are we spending their timeand efforts on those kinds of
things when they can be doingmuch more complex things that
(30:26):
are more interesting for themand also more revenue generating
or expense saving on our side?
SPEAKER_02 (30:35):
Where are you seeing you mentioned um when AI is
involved in like some of the theyou know, I guess uh smaller
processes are built into thebusiness processes.
Are there any specific examplesof where you're seeing it
actually make some real impact?
SPEAKER_00 (30:49):
Well, I mean, document imaging is that's the
the biggest one we've hadrecently is starting to utilize
AI for we we're up to like 42%of our all of our invoices are
auto-approved by AI.
Wow.
So we I a human never touchesthose documents, they get
(31:13):
approved, sent to the customer,and everything goes smoothly.
Uh I mean it's in schedulingassistance and all those kinds
of things.
It's just utilizing the tasksthat like take time but don't
necessarily provide any value,and trying to find a tool that
(31:34):
can replace that time and makeit so that you can do something
much more valuable with yourtime rather than trying to
schedule appointments or allthose kinds of things.
SPEAKER_02 (31:43):
Yeah, because I I would definitely, especially in
in my business, there areinstances where it has made a
dramatic impact.
The perfect one I use every timeis uh transcribing like social
media clips.
I I used to have to do it.
I used to pause, play the video,pause it, play it, pause it, and
then in between, I'm typing outexactly what the person is
(32:04):
saying.
That the fact that it does itautomatically now has saved me
so many hours.
And you know, for a lot of thethe people out there who sort of
poo-poo on the benefits of AI umor the the lack thereof, and
that it's not actually provinganything.
I said, well, and first I thinkyou have to kind of adjust your
definition of AI.
(32:25):
Yes.
Uh, and then from there, you canuh attack certain business
processes to your point um whereit's going to make a dramatic
impact.
I do not want to be sittingaround and hand transcribing
podcast episodes in order tomake the podcast a little bit
more.
SPEAKER_00 (32:41):
Like but AI isn't infallible.
So make sure that you'reactually like all of these
processes, make sure that you'restill spot checking.
SPEAKER_02 (32:49):
Yes.
SPEAKER_00 (32:50):
Like, especially like in your transcribing thing,
make sure you're actuallyreading what it's transcribing
because especially when you havepeople who have slight accents
and all those kinds of things,like it can think it said
something that it did not likethe person did not say, and it
can look really bad if youactually put that out there.
So always make sure that youhave a human in the loop.
SPEAKER_02 (33:12):
Yeah, definitely uh check on those because
especially when it comes to likenames and companies, uh we we
still hand verify those ormanually verify uh those.
But the the perfect explanationthat I've heard is that AI can
do great at the messy middle,but you have to be the one to
start it, you have to be the oneto to sort of reprompt it and
(33:32):
and reprogram it.
But if you're as long as you'reinvolved at the start and at the
end and let AI kind of take overthat messy middle, then that's
where you'll find like the, Iguess, the the sweet spot when
it comes to to using technology.
Um I'm I'm curious with on theshipper side of things, because
we've heard like more shippersstarting to become uh more
(33:55):
cognizant of the shippingprocess.
Uh, you know, they they want toknow more about you know driver
qualification and who's haulingtheir freight and you know,
important questions like that.
Um, but I I've also heard youtalk about shippers becoming
more tech savvy too, or freighttech savvy.
What are the I guess maybe thetech solutions that shippers
(34:15):
care about that maybe are alittle surprising?
SPEAKER_00 (34:18):
Well, I mean, visibility is obviously first
and foremost.
Uh, we've seen a lot of a bit alarge increase in the number of
customers who, when we signtheir agreements, require
visibility for all of theirloads.
Where five years ago, that neverhappened.
Like we wouldn't, we would neversign a contract that had a
(34:40):
requirement for visibility.
And I mean, because technologyis becoming so much more
pervasive, there's a lot ofrequests for EDI and API
connections, which I think areawesome.
Like the more the moreinterconnected you can get with
your customers, the harder it isfor them to leave.
(35:00):
Because now you have all of thatwork already done.
And in order to move to anotherprovider, they now have to do
all of that setup again withsomebody else.
So it can help keep your foot inthe door on those kinds of
things.
And I mean, so yeah, we've seena lot of connections with that
(35:22):
visibility, like I said.
And I mean load uh we're seeingit more and more companies go to
load boards on their owninternal side.
Where I mean, there's there'sbenefits and there's downsides
depending on how you like to bidon your freight.
(35:42):
And I mean, with RFPs, those arestarting to get more and more
sophisticated because there'smore tools now to ingest that
data and analyze that data.
And now because they arehappening so much more
frequently, uh I shippers havestarted to invest in those sorts
of technologies because they'redoing so many more like what
(36:05):
used to be a once-a-year RFP.
There's some customers now doingthem quarterly because rates are
so in flux.
I mean, now, like I said, we'resort of starting to see where
everybody's expecting likenobody wants to lock in for a
year because they're the ratesare gonna go up.
But I don't know, are they?
SPEAKER_02 (36:26):
Yeah, who knows?
I mean, it just feels like youyou mentioned earlier in the
show about, you know, maybe weare just in a new normal, but I
feel like ever since 2020, we'vebeen kind of wondering like what
does even normal look like?
And I don't know that anybodyknows.
And obviously those purchasinghabits right after, you know,
sort of some of the lockdownsstarted to end, where you know,
(36:46):
you saw this interesting, Iguess, move from uh people
spending in the goods economy tomore the services economy.
And then I think everybodyexpected that pendulum to swing
back to goods, but uh maybe weare, like you said, kind of
evening out with it with goodsand services alike.
It do you maybe see that as faras the, I guess, the habits of
(37:08):
the population for you know thenext couple of quarters.
SPEAKER_00 (37:13):
Uh it's definitely possible.
I I think service might go downa bit only because of all the
fear out there of a recession.
And so people are gonna stopspending on experiences so much
because they're gonna get waryof potential downside of.
I mean, when you look at thedebt ratio of all of both sides
(37:36):
of the border, obviously I'm inCanada, so ours is not the same
as down south, but the debtratios that like in households
are now carrying are so highthat there's they're a lot more
sensitive to all of this talknow and of a potential recession
because you're worried thatokay, now how am I gonna pay off
(37:59):
my credit cards because I can'tmaybe I can't go do that trip to
Disneyland because I don't knowwhere my uh I don't know what's
gonna happen with the economy.
I don't know what's gonna happenwith interest rates.
SPEAKER_02 (38:12):
Yeah, because they I mean, especially on the Disney
side of things, they're notgetting any cheaper.
SPEAKER_00 (38:18):
Definitely not.
That and that and groceries,like the two things you know are
always gonna get more expensive.
SPEAKER_02 (38:24):
They mentioned that.
I feel like that's a socialmedia clip right there.
Uh switching gears a little bitto the marketing and sales side
of things.
How are you seeing agents adaptto all of the turmoil or you
know, potential of turmoil thatexists in the market?
Are you seeing them marketingthemselves more, uh, you know,
(38:44):
selling themselves more, doingmore cold outbound?
What we're talking to ages, howare you seeing them adjust to
the current market?
SPEAKER_00 (38:51):
Well, I think the biggest thing is their focus on
their existing customers, makingsure that they're making
essentially reselling themselvesto their existing customer base,
so that because there is allthis turmoil out there and all
this talk of rates and all thiscustomers are being bombarded
every day by 15 to 20 otherbrokers trying to get their
(39:14):
business.
So it's important that thecustomers you have make sure you
have good relationships withthem.
And if if you your customer baseis starting to go down, pick up
the phone call, pick pick up thephone, make do the cold calling,
send out emails, send outanything you can do to try and
get more business becausethere's no time like today, and
(39:38):
there's with the loomingpotential of a recession and all
this other stuff, there's gonnabe companies that unfortunately
don't come out of this alive.
So be ready to when thathappens, be ready to pounce on
because all of that businessneeds to go somewhere.
(40:00):
And it's up to you to be able togo get it.
SPEAKER_02 (40:04):
No, that that's a great point, especially when
there is so much turmoil that'sgoing on, seemingly, especially
uh surrounding us, you know,with grocery prices and then
geopolitical issues and thingsyou cannot control, but you can
control the relationship thatyou have with your own people,
and then also maybe alleviatingor taking some stress off of
your customer's plate where theydon't have to worry about moving
(40:27):
their freight, the security oftheir freight, uh, you know,
even all of the changemanagement that would have to
become involved if they were to,you know, go with another
provider, you know, remindingthem of that comfort of uh the
worry-freeness of working withyou, I think is a really smart
angle to think right now.
SPEAKER_00 (40:45):
I mean, the other another strong thing, like
fraud, unfortunately, is amassive part of our industry
currently.
So sell up the tools you'reusing to try and alleviate
fraud.
If you're using an onboardingprocess, I don't want to name
any names, but if you're usingonboarding processes that
(41:05):
monitor those kinds of things,sell your customer on that.
Teach your customer that theyshould be monitoring the
carriers coming in and out oftheir facility.
If you tell them ABC trucking isgonna be picking up the load,
the person on the dock who'sloading that should be
confirming that ABC trucking isthe actual trucking company
(41:28):
picking up your load.
Because we've seen it time andtime again where our agent sets
up ABC trucking, DF truckingcomes in to pick up the load
because they have the pickupnumber somehow, some way.
The person on the dock doesn'tpay attention to that because
they got a reference number.
They they said they're pickingup the load to Ohio, and they
(41:50):
have a load to Ohio, so they'relike, all right, here you go.
And all of a sudden now thatload is gone.
SPEAKER_02 (41:56):
Yeah, because I remember back as you were
talking, I was remembering backat uh the TMSA Transportation
Marketing and Sales conferencethat I went to back in June.
Mike was there too, of SBI aswell.
And there was a talk that wasgoing on about fraud.
And Cassandra Gaines, uh, sheasked the audience who in here
is marketing their fraudprevention to their customers.
(42:19):
And out of a room with close to200 people, two people raise
their hand.
So there it's it's prevalentamong this industry that the the
brokers of the ages, they're nottelling their customers about
what all of the work thatthey're doing to help their
freight move uh smoothly and andquickly.
And so I think that that's suchan important marketing lesson to
(42:40):
hit home on is show the work ofwhat you're doing in the
background so your customer hasless to worry about.
So they're not going to make achange in the future, and that
they're gonna trust you more andrely on you more and see you as
more of the educational resourcein this, you know, sort of
fraud-driven environment that wewe find ourselves in.
Um last couple of questionshere, you know, as someone who
(43:04):
who goes to you know a lot ofconferences, I am curious from
you know, the I guess the theagent lens, how would you, or
maybe even like the profit andloss statement, you know, how do
you justify, you know, what doesROI look like whenever you're
going to a conference?
And how can you kind of justifythat from like a business
standpoint?
SPEAKER_00 (43:24):
I mean, the biggest thing is well, a especially like
an industry conference like TIA,it's important to at least have
a somewhat of a presence justbecause I mean it is it is our
industry, it's all our peers,and it's a good place just to go
and connect.
But to get that ROI, you need tobe making connections with
people there who can potentiallyhelp you down the road and
(43:48):
seeing all like all of thetechnology, because like I said
before, it's a technology boomright now.
So you need to be up to date oneverything that's coming out
there, and if you can get a toolthat saves five minutes a day,
that's probably worth theinvestment you just spent to go
out there for a few days to goto see the conference.
(44:09):
So it's just making sure thatyou're you have your ears and
eyes open for any potentialpossibilities that can help you
down the road.
SPEAKER_02 (44:20):
And then I think too, from uh even like SBI
standpoint, you guys are alwaysinvesting in new technology.
And so even if you have acurrent tech stack or you're
thinking about adding somethingelse to your to your tech stack,
we've had you know a VP of techor VP of IT, I believe is his
title, Eze Peralta on the show.
(44:41):
And he's talked about how heintegrates all kinds of
different technology for all ofthe agents.
And so, you know, having apartner like SPI to be able to
help you with that financialburden, but also to help
increase you know processes orproductivity, you know, things
like that, like the these kindsof decision making and the the
(45:01):
network effect that you can getby by working as a freight agent
for SPI, I think it's just youdon't really realize that in the
bottom of your you know profitand loss statement, but well,
you probably do because yourexpenses are a lot less than
what you know a traditionalbrokerage or if you were running
a traditional brokerage wouldbe.
Um but I would love for you tobe able to sort of speak to the
(45:24):
I guess the investment that youmake in your agents in the in
the tools and the processes thatthey prefer as well.
SPEAKER_00 (45:31):
Absolutely.
Like so we're we're always opento new technologies, like you
said.
We have agents coming to us allthe time, like, hey, we have
this new tool, or we we foundthis new tool.
Can we can we put it onto thenetwork?
Can we put it onto the TMS?
And we evaluate all of thosethings.
Some of them we're gonna sayyes, some of them we're gonna
(45:52):
say no, because maybe they onlyare good for you and not for
everybody else.
But we're gonna evaluate itnonetheless, and like you like
going to these conferences, younever know what new tools are
out there because a lot of thetimes, like I get a hundred
emails a day from vendors tryingto sell me some new tool, and
all of those I just ignore anddelete because I get them all
(46:14):
the time every day.
But when you can actually go andtouch and feel and see what
these tools do, and you yourealize, hey, I I've seen their
name like 15 times in my inbox.
I've never actually looked atit, but now I see what they do,
and yeah, maybe I can schedule ademo to see if that'll work for
everybody.
And most technology, it's nevergonna work for everybody,
(46:35):
especially in an agent-basedmodel, because everybody does
their does their thing a littlebit differently.
But we're going to invest in ourtechnology to make sure that our
agents have the best tools attheir disposal so that they're
not getting told no because thetechnology can't do something
that the customer needs.
SPEAKER_02 (46:56):
All right, James.
We have talked about we'vetalked about taxes, we've talked
about technology, marketing,sales conferences, all of that
good stuff.
Uh, what would be maybe some endof 2025, uh going into 2026
advice that you would give toprospective freight agents out
there that are thinking about mtaking the leap?
SPEAKER_00 (47:19):
I mean, there's a lot, there's a lot of turmoil
out there.
There's a lot of unknown.
So if you have the wherewithalto make the jump, make the leap,
now is as good a time as anybecause there is so much turmoil
out there.
Your customer might be morewilling to open up to another
(47:40):
vendor because it's happeningall the time right now.
And so now might be beforeeverything does turn, now might
be the best time to do it.
You're gonna you have thepotential to make a lot more
money.
Not everybody's gonna make moremoney.
There's some people, it it justwon't work.
Your customers don't come over,something happens, you're maybe
(48:03):
you can't get credit on thatcustomer from the new broker.
But if you if you're willing totake the risk, I think it's a
super valuable risk you cantake.
And it's just it just has thepotential to completely change
your life because you're now youwork for yourself.
(48:24):
You're you're you're not you'reyour own boss.
You don't have somebody tellingyou what to do every day.
I mean, that sounds real, realnice to me.
SPEAKER_02 (48:33):
Well, I think too with with everything that you
you've talked about, especiallywith with building the
relationships with yourcustomers and having them see
you as you know the thetrustworthy, knowledgeable
person within this industry, ifyou are proactive in those
conversations, then they'regonna trust you to continue
making the best decisions fornot only for themselves, but
(48:54):
also in in turn for your freightas well.
So I think this is all, youknow, just it's it's kind of the
the time of the year for likethe housekeeping of looking at
wherever your all where all yourmoney went and where it's maybe
gonna go and where it's comingfrom and uh you know making
those adjustments and andgetting ahead of some of those
you know new year's resolutions.
So I guess a final piece of ofyou know, maybe advice or where
(49:18):
folks can connect with you,maybe connect with you at you
know upcoming conferences, um,all that good stuff.
Where can they find you, James?
SPEAKER_00 (49:25):
Yeah, so like I said, I'm gonna be at
Technovations uh later in thisweek.
I'm on LinkedIn.
You can find me there.
You can email me, JLemon atspi3pl.com.
Uh if you're a vendor, I'mprobably gonna ignore your
email.
SPEAKER_02 (49:38):
But unless they find you at a conference.
SPEAKER_00 (49:43):
But you find me at a conference, I'm always willing
to have a conversation.
I like I surprisingly like totalk.
So I mean, yeah, and like Isaid, I'm on LinkedIn.
You can connect with me there.
I accept pretty much everyconnection on there, so yeah,
same.
SPEAKER_02 (49:59):
I just accept everybody, and then all of a
sudden I have no followers andI'm like, what the heck?
Oh, wait, they're all in theconnections tab, not the
following tab.
So LinkedIn is a little weird inthat regard, but it is the best
networking platform, a digitalnetworking platform um that our
industry has to offer.
So, James, this is great.
This is uh very eye-opening asfar as like the financial lens
(50:19):
is is concerned.
So I am excited to kind of likedive into my books now and and
and see what we have planned forfor 2026.
So appreciate you and your timeand and the relationship,
obviously, with SBI and beingbig supporters of the show.
And so finally glad to get youon, and I can't wait to get this
conversation out to folks.
SPEAKER_00 (50:37):
Sounds good.
Thank you.
SPEAKER_01 (50:43):
Thanks for tuning in to another episode of Everything
Is Logistics where we talk aboutthings supply chain for the
thinkers in the freight.
If you like this episode,there's plenty more where that
came from.
Be sure to follow or subscribeon your favorite podcast app so
you never miss a conversation.
The show is also available invideo format over on YouTube
just by searching Everything isLogistics.
(51:04):
And if you're working in freightlogistics or supply chain
marketing, check out my companyDigital Dispatch.
We help you build smarterwebsites and marketing systems
that actually drive results, notjust vanity metrics.
Additionally, if you're tryingto find the right freight tech
tools or partners withoutgetting buried in buzzwords,
head on over to CargoRex.iowhere we're building the largest
(51:25):
database of logistics servicesand solutions.
All the links you need are inthe show notes.
I'll catch you in the nextepisode and go check.
Document imaging is that's the the biggest one we've
had recently is starting toutilize AI for we we're up to
like 42% of our all of ourinvoices are auto-approved by
AI.
A human never touches thosedocuments, they get approved,
(00:26):
sent to the customer, andeverything goes smoothly.
SPEAKER_02 (00:31):
All right, welcome into another episode of
Everything Is Logistics, apodcast for the thinkers in
Freedom.
I'm your host, Blake Milligan,and we are proudly presented by
SPI Logistics.
And with us today, we have JamesLemon, the CFO of SBI Logistics.
And we're going to be talkingabout a very important topic
around this time of the year andreally like any time of the
year, and that's financialliteracy for agents and probably
(00:56):
just brokers as a whole acrossthe industry as we face a very
challenging freight environment.
And that's kind of to put itlightly because there's so many
things that are affecting thecurrent freight market.
So this is the perfectopportunity to kind of get our
own ducks in a line and controlwhat we can control.
And that's on the expensive sideof things.
(01:16):
And then also from a marketingand sales standpoint, because
obviously SPI logistics is verygood with their marketing and
sales and creative outreachesand approaches.
So we're going to get into allof that today.
So but first, James, welcome tothe show.
SPEAKER_00 (01:31):
Thanks for having me.
Really excited to uh be here andtalk about all this fun stuff
that bores the bores a lot ofpeople, but is one of the most
important things you can thinkabout.
And like you said, there's verythere's very strong headwinds
right now in the market andbeing able to ride that out and
(01:51):
not uh be one of the uhunfortunately one of the
statistics that are bound tocome out of this potential
freight recession is important.
SPEAKER_02 (02:00):
Yeah, because I I think it's I was reading a lot
of reports, especially over thelast week, because a lot of
movement has been made,especially on the carrier side
of things, which is causing alot of brokers to, you know, not
rely, or maybe not rely, butthey've been relying on the spot
market.
And so that's kind of you knowproving to be a little bit more
challenging for them andespecially from geopolitical
(02:22):
tensions and things you can'treally control.
But I think some of the bestadvice is that you can't what
what's the quote?
You can't control your revenue,but you can control your
expenses.
And so from that standpoint, Iwould like to just kind of sort
of you know come out of thegate, uh, you know, with a I
guess strong.
And that is for the currentmarket that we're in, what are
(02:46):
some maybe red flags or greenflags of that you're working for
a company that is strongfinancially?
SPEAKER_00 (02:54):
Well, I mean, the biggest thing, the the canary in
the coal mine most of the timesis when you start getting calls
from your carriers sayingthey're not getting paid because
the broker, they're gonna say,oh, we're having trouble with
paperwork, or oh, we're havingtrouble with this and that, or
well, we don't have an approverin house.
But if it continues to happen,it's a sign of broader issues
(03:17):
where they're trying to nowstretch their payables to try
and steal cash flow essentiallyfrom the future.
Um, and I mean, if especially ifyou're an agent, an agent
working for a broker and youstart getting those phone calls,
that's that's a sign that maybesomething's happening.
Your service levels might startto drop because all they're
(03:39):
gonna have to lay off people,and then so now they don't have
as many people to service all ofyour customers or even service
you as an agent.
And if you start seeing thosethings happening, it it's a sign
that there could be a problem.
And I mean, right now it's avery tight freight markets,
rates are I mean, rates aresupposed to come back, but
(03:59):
they've been saying that forthree years, and unfortunately,
I think this just might be thenew normal.
So if that's the case and you'rethe companies are expecting it
to come back or hoping it'sgonna come back and it doesn't
come back, there's gonna be somebrokers that just all of a
sudden go under because thefreight market just doesn't
(04:21):
bounce back like everybody hassaid it will for three years.
SPEAKER_02 (04:25):
Yeah, I I I wish I would have heard that advice
years ago.
I I worked in-house at anasset-based brokerage, and you
know, I was executive assistant,so I heard some sort of
rumblings from you know, hereand there.
But I, you know, admittedly, Iwas very not strong in uh
finances or even, you know, justacumen in in general.
(04:46):
I'm I've gotten better at itwith age, but I still feel like
I'm I'm very much a novice.
But I I do wonder, are therethere probably are plenty of
brokerages out there that, youknow, maybe are going through
this similar thing where they'rehaving a lot of closed door
meetings and you're not exactlysure.
You're you're hearing from otherpeople that you're running out
of runway and you hear all thesethings, but you're you're saying
(05:09):
one at one of the canaries inthe coal mine is is the carriers
calling and asking for forclarification on their payment
terms.
Is is are there any other thingsthat maybe um would kind of
signify that maybe somethingelse is going on within this
company?
SPEAKER_00 (05:24):
Well, I mean, it it's it's harder when you're
you're especially foragent-based, it's harder because
you're not in the root, you'renot in like a bullpen area where
you're gonna hear, like yousaid, you're you're seeing a lot
of closed door meetings, all ofa sudden the the staff list is
getting smaller and smaller, anda lot of the times if you're not
like in it, you won't noticethose kinds of things.
(05:44):
Uh I it's really just I thinkthe carrier thing is the biggest
thing that for an agent that youcan just watch out for.
You don't because having yourcarrier, like that's what you're
selling.
You're selling, hey, we're we'regonna pay you in 30 days.
And if all of a sudden you'retelling the carrier that you're
gonna pay them in 30 days andit's now 40 days, 45 days, 50
(06:06):
days, and there's no real reasonfor it, they're gonna stop
hauling your loads for you, andthen now you're going up to the
spot market, but then uh allthose carriers are reporting to
things like DAT and all thesethings, and they're seeing that
broker, their days to pay isstarting to increase, so less
and less carriers are gonna wantto haul for you because they're
thinking, well, I can haul forbroker X and get paid in 30
(06:31):
days, or I can haul for you andget paid in 50 days.
So why am I hauling for you whenI can haul for broker X and get
paid in 30 days?
SPEAKER_02 (06:37):
So it almost sounds like maybe like a snowball
effect that that's going on withsome of these issues where it
starts at that maybe 10 to 15days and then it evolves from
there.
SPEAKER_00 (06:46):
Well, absolutely.
And I mean, now that whattechnology is more and more
pervasive within the industry,it's a lot easier for those
metrics to get to the reportingagencies because in the past it
was only like the only peopleyou would report to is like DB,
and nobody reported D and Bbecause they're so expensive.
But now we have things likeInsonia and DAT and truck stop,
(07:08):
they're all tracking days topay, and they're all now being
or incorporated into financialtechnology companies like Tri of
Pay and all these things.
So it's a lot easier for them toknow this information and
disseminate the information toeverybody within the network
where that wasn't the case inthe past.
SPEAKER_02 (07:27):
So, so what would you suggest to be like maybe a
plan of action or controllingwhat you can control when you
you do start seeing you knowthese little canaries kind of
start popping up?
What should you start doing?
Maybe you're you're in-house ormaybe you're a freight agent
working for another you knowcompany, and obviously not you
know, SBI.
Um, but what would you suggestthat they start doing to maybe
(07:49):
start putting their ducks in aline?
SPEAKER_00 (07:51):
I mean, the easiest thing, you just ask questions,
like uh call call into yoursupport staff and say, I'm
getting all these calls, what isgoing on?
Try and see if they'll getanswers.
And if they're not gonna giveyou answers, try and go up the
chain, up the chain as far asyou can to try and find out
what's going on.
Sometimes there is a reason.
Maybe they switch billingsystems and they're having like
(08:12):
it happens all the time.
Everybody thinks you're gonnajust flip a new technology on
and it's gonna work seamlessly,and it ends up being a disaster.
And yeah, sometimes that'llhappen, and that's why they're
not getting paid.
But if they start avoiding yourcalls or ducking your calls, or
they're giving you blanketanswers that don't actually have
(08:34):
any substance, that's a badsign.
And then maybe you start to lookat other avenues for what you
could do.
Because I mean, in logistics,there's a job free anywhere if
you want it.
So it it doesn't if you're ifyou're getting worried, it
doesn't hurt to see what else isout there.
Because you never know, it couldbe especially if you're an
(08:55):
employee, one day you are anemployee, the next day you're
not, and then if you've alreadydone your work and done a little
bit of homework, you can bounceback right onto your feet.
Uh but if you're you don't,you're a little bit behind the
eight ball when something likethat happens.
SPEAKER_02 (09:10):
Now, for uh some of my former and even uh current uh
broker friends, uh anytime Imention, you know, why haven't
you gone out and just you knowbecome your own agent or or
worked for a freight agency?
The first question that theytypically ask is somewhere
around taxes, like, oh, I don'twant to, I like you know, being
a W-2 employee, I like, youknow, not having to worry about
(09:32):
my tax bill at the end of theyear.
How do you, I guess, sort oftalk through those types of
people when they they have thatinitial concern?
Are taxes like a huge issue thatfreight agents have to be
worried about and occupied with?
SPEAKER_00 (09:45):
Uh, I mean, I would suggest that if you are gonna do
that, you find a goodaccountant.
And I mean, it's gonna cost youa little bit of money, but in
the end, you're gonna make moreas an agent than you are as a
W-2 employee because you'regetting a way bigger split of
the of the revenue.
The biggest thing is taking therisk because I mean, I I
(10:09):
personally I could not do it.
I have a fam, I have a familywith young kids.
I'm obviously an accountant, soI'm very risk averse.
I I I couldn't not know where mynext paycheck's coming from.
But if you are in the salesspace, odds are you're a much
bigger risk taker than I am.
And yes, it is scary to go outonto becoming a broker and not
(10:33):
knowing if your customers aregonna follow you or if you're
gonna have the same sales levelsas you had before, and maybe
your pay might go down for alittle bit.
But in the long run, you'regonna you have unlimited
potential because now you're notcapped by any ceilings, you
don't have only 10% commissionsbecause you have a salary, you
make what you you you kill, oryou eat what you kill.
(10:57):
So you are out there, you canmake as much money as you want,
you have a good tax accountantbehind you who's handling all
the other things for you, sothat you that's not on your
mind.
Because you don't want you as anagent, you don't want to be
thinking about oh god, I gottapay my taxes next week.
You want your accountant to belike, hey, here's here's what
you need to pay, and this is theall you have to do, and you just
(11:20):
send them a check and you'redone.
SPEAKER_02 (11:22):
Yeah, I think I think it's more about avoiding
also the the surprise expensesbecause uh especially in the
first year of business that Ireally did well, when that tax
bill comes due and you aresurprised.
SPEAKER_00 (11:35):
It can be a shock, it's and it's always gonna be a
little bit higher than you thinkat first, because you think, oh
yeah, my like I have all theseextra expenses that I can now
deduct.
But when you're not paying anytax, like because you don't have
it just coming straight off ofyour paycheck, it can be a big
surprise, especially if youdon't have an account that's
telling you to.
SPEAKER_02 (11:56):
Oh, absolutely.
SPEAKER_00 (11:57):
And and in reality, like for me personally, I would
be setting aside every time Igot a commission check, I would
send just open up a separateaccount that's just there for
taxes.
And you transfer 10, 15, 20,whatever you feel comfortable
with, transfer it into anaccount, make sure it's a
savings account so you get alittle bit of interest on it,
(12:20):
and just let it sit there.
And then that way when your taxbill comes, it's not like, oh
man, I gotta come up with$15,000,$20,000.
It's like, oh, yeah, I have thisaccount.
Maybe you put a little bit morein there, and like, hey, now I
have a bonus five thousanddollars I wasn't expecting.
SPEAKER_02 (12:34):
Yeah, that that's definitely the strategy to take
because when that firstunexpected tax bill comes in,
which I guess technically itshould be expected, but it is
still a a real shock when youget it and you didn't expect it.
I am curious, what's the firstwhen when someone decides to
become an agent, what's thefirst big oh wow expense that
(12:55):
they might see coming?
SPEAKER_00 (12:57):
I mean, the biggest thing is probably just you don't
realize like you you might havea laptop that you think is is
good for just like surfing theinternet, and then all of a
sudden when it's now yourprimary driver of your work, it
pays to have good technology andit pays to have good hardware.
So you might be surprised likethat$500 computer that you
(13:21):
thought was great isn'tnecessarily the best when you
now have like 15 different tabsopen and you're talking with
carriers and you're trying tolook at rates here and rates
there, and all of a sudden yourcomputer's bogging down and you
can't have quick decisionsbecause you're being hurt by
your hard work.
You don't you don't realizethese things and like when
(13:43):
you're working because nowyou're probably working from
home, you're gonna want toconduce some space to work, so
you might spend a little bit ofmoney on that kind of stuff.
Depending obviously depends onhow people work.
Some people can sit at theirkitchen table and just work all
day, and some people need like astructured area to actually do
their work.
(14:03):
It all it really just comes downto the person and knowing how
you work best and doing what youcan to make yourself the most
ready for going out there andjust making money.
SPEAKER_02 (14:16):
So you want to be thinking about getting an
accountant, you want to thinkabout you know having some some
good, you know, laptop or a gooddesktop, a good work area to get
work done.
So you want to think about thosetwo big things.
And so what uh is there maybelike a savings that you should
maybe be thinking about too ifyou're an in-house like
brokerage or and you want to goindependent?
SPEAKER_00 (14:39):
It definitely doesn't hurt, especially because
the ramp up time is alwayslonger than you expect.
You you expect your customersare just gonna like be able to
come over right away every timewe have a new agent or uh when
we have a new agent, they comeon board, they expect everything
to just go smoothly, but you gotall the paperwork that needs to
be filled out, you got all thethe the customer now needs to
(15:02):
change all of their processesand set up because they're
setting setting up a new vendoron their side too, so they got
to go through all their checksand balances to make sure
everything meets their criteria.
So, like you said, it's it'ssmart to have to plan that maybe
the first month you might notmake any money because you're
gonna be going through all thesetup process.
(15:22):
So have have a little bit of arainy day fund so that if that
does happen, you aren't all of asudden scrambling because we've
we've seen it time and timeagain where an agent will come
on board thinking everything'sgonna go smoothly, doesn't get a
paycheck for three weeks andjust goes back to being a W-2
employee because they were tooafraid to keep going, which I
(15:44):
don't blame them.
Like I said, I could never do itmyself.
It takes a brave person to doit.
But the ones that aresuccessful, I like we've seen
agents who were W-2 employeesmaking good money, and then they
come on board, they have acouple of hiccups at the
beginning, and now they'remaking like a million dollars a
year, which you couldn't do asan employee making a minimal
(16:09):
commission.
SPEAKER_02 (16:10):
So, what does that look like?
So, say I I am bought and sold,I'm I'm ready to dive in, I'm
ready to become a freight agentfor SBI.
Uh, what does that process, Iguess, look like from a
financial lens on that firstsort of maybe 60 days?
Is is that when you canrealistically expect to be fully
onboarded, have your customersonboarded, and then already move
(16:33):
in freight within 60 days?
SPEAKER_00 (16:34):
Well, I it should be a lot faster than that.
I mean, in most in most cases,we can have people up and
running within a week on ourside.
Obviously, all brokers aredifferent, and then it also
comes down to your customers.
If your customers, if you'redealing with large, large
companies, that onboardingprocess, it's kind of faster for
(16:57):
us because they're a well-knownquantity, but them onboarding us
as a vendor can take more timebecause they have certain
quality standards and everythingthat needs to be met.
And it's a lot harder to get onthe phone with people who can
actually help you becausethey're a large corporation, so
they have lots of lots ofmiddlemen in between.
(17:18):
So but if you're a smallercompany or you have smaller
customers who can onboardquickly, like yeah, you can we
we've had agents who onboard andare moving loads the same day.
Oh wow.
It really just comes down tomaking sure you have everything
ready to go.
Like if you have customers thatyou're porting over from
(17:38):
somewhere else, make sure theyknow what you're doing.
Tell them, like, hey, just aheads up, I'm planning and tell
them ahead of time.
Let them know a week in advance.
Like, hey, I'm planning on doingthis.
You're gonna be receiving somepaperwork, you're gonna be
receiving some new stuff.
Can you help me expedite this sothat we can keep our
(17:59):
relationship going smoothly?
SPEAKER_02 (18:01):
Yeah, because I would almost imagine that I
would be maybe a little bitnervous about telling my
customer that maybe I am moving,but then it's almost like a
level of reassurance that theagent has to provide and SBI has
to provide to some of thesecustomers.
Or are they, are you guys moremaking the sales pitch of this
(18:22):
is going to actually be betterfor you as a customer to come
with us on this journey versusmaybe exploring other options?
Is is is the sell to thecustomer uh that important too?
SPEAKER_00 (18:35):
I I would absolutely say so because I mean it is a
lot of work for them to get setup with new cut companies.
And I mean, some of them won'tcare.
And like you said, it is it is alittle bit of a risk because
maybe they don't know.
So maybe you're working forsomebody, a big brokerage, and
you're going to maybe a littlebit of a smaller brokerage, and
they've never heard of itbefore.
(18:55):
So they might have someapprehension.
But the biggest thing is if youhave a good relationship with
your customer, they're gonna beton you, they're not gonna bet on
your broker.
SPEAKER_02 (19:05):
Yeah, that makes sense.
What about as far as like thecurrent market conditions?
You know, we we've been hearingabout a uh you know, a freight
recession for a little while.
We've probably been in one forfor we just haven't exactly
defined it because everybody'safraid to say the word.
SPEAKER_00 (19:19):
Uh but nobody wants to admit it.
unknown (19:22):
Right.
SPEAKER_02 (19:23):
Well, I think once once uh like the big government
entities can agree on like whatan actual recession is, I think
it maybe it could trickle downto other industries properly
defining it as well.
But I am curious, you know, whenI was working in-house at a
brokerage, you know, the health,healthy margins were, you know,
15 to 18%.
(19:45):
Are those days gone?
And is it, you know, maybe like10% margins of what we're
looking at of HERD as you know,as low as 8%?
What does a healthy margin looklike in in brokerage right now?
SPEAKER_00 (19:56):
I mean, it really comes down to like everybody's
different.
Like we have some agents who do10, 12% margins, we have some
agents doing 25, 30% margin.
SPEAKER_01 (20:04):
Oh, wow.
SPEAKER_00 (20:05):
It depends on it depends on what your load mix
is, what what kind ofcommodities you're moving, what
value, like what value levelsyou're moving at.
Uh, I still think the 15 to 18%is where you want to be, but
it's definitely getting harderto achieve that.
Like rates are lower.
And I mean, it's because ratesare so low, it is easy to go out
(20:26):
there and you just try and findcheaper mar or lower freight
costs for the customers becauseeverybody's trying to move stuff
because everybody's terrified ofthe potential recession.
So everybody's just trying tograb market share where you're
seeing, like you said, eight toten percent margins, which is
insane.
Like, how is how is a brokerworking on eight percent
(20:48):
margins, especially if you're anagent-based broker and now your
portion of that is very, verysmall, and the cost of running a
brokerage is really, really highright now with all the
technology costs and insurancecosts and everything that just
keeps going up and up and up andup.
So, like if you're working for abroker who is fine with eight to
(21:08):
ten percent margins, I mean,maybe they're super lean in the
back, but also that could be asign that that something could
be wrong or could happen reallyquickly because if they're only
getting two, two and a halfpercent of the total gross
profit on that to fund all ofthe stuff that they need to
(21:28):
fund, that's not a lot of money.
SPEAKER_02 (21:31):
Well, that that brings me into my my next sort
of group of questions, andthat's around just sort of like
what does a a freight agent PLlook like?
Uh, you know, the profit andloss statement, what are some of
maybe like the those top youknow expenses versus those top
revenue items?
I mean, obviously revenue isgoing to come from their their
customers, but are they dealingwith you know 10 customers or
(21:52):
two customers, or is it kind ofjust varies agent to agent?
SPEAKER_00 (21:55):
Varies agent to agent.
Some have one customer who'stheir primary source of revenue.
Some have like we have a fewagents who are in the hundreds
of customers who they're dealingwith, I mean, that the but those
people also have big teams, sothey have big expenses for
covering the teams, having anoffice space.
But those are good problems tohave because that means you're
(22:17):
being very successful.
SPEAKER_02 (22:19):
Is it for expenses?
Is it more on like the insuranceside of things?
Is it technology, or do theyeven have to worry about that
with being with SPI?
SPEAKER_00 (22:29):
With SPI, you don't have to worry about any of that.
We cover all the technology, wecover all of the insurance, we
cover everything.
Uh the only expense they have iswhere they're working and what
they're working on.
They just as long as they havean internet connection, a
computer and a cell phone,they're good to go to work for
us.
SPEAKER_02 (22:48):
That's why I don't I I just speaking at you know, at
it at a turn, but that's why Ijust I don't understand why
people are freight brokers andnot a freight agent.
SPEAKER_00 (22:57):
I it kind of maybe goes back to what your earlier
comment was, you know, riskaverse and absolutely like it it
is it is a scary jump to make,but like like our CRO says all
the time, being a freight agentis a like license to print
money.
SPEAKER_02 (23:10):
So I just don't get it.
I feel like it's the best likeentrepreneurial opportunity for
you know a lot of the freightbrokers that I've known
throughout my career.
I'm like, why didn't you juststart this earlier?
Um, so it's it's it is cool tosee maybe you know more of the
the market shifting in thatdirection.
I guess maybe that's sort of ahigh-level question.
(23:32):
I I'd love to hear yourperspective on.
Like, what do you think sort ofthe the state of freight
brokerage looks like right now?
And do you see it evolving intomostly an aging game?
SPEAKER_00 (23:46):
There's always gonna be people who want the
dependability of a paycheck.
So I don't think the employeemodel is ever gonna go away.
Uh, and I mean the employee sidedoes have the benefits of like a
we're a cradle to grave shop.
So, but when you're an employeebased, you could have carrier
sales reps, you can havecustomer sales reps, you can
(24:06):
have all that other stuff.
Where when you're agent-based,odds are you're all cradle to
grave because you can't reallyprovide those services for them.
So I don't, I don't, I thinkthere's always going to be a
healthy mix, but I definitelythink more and more people are
going to see the benefits ofbeing an agent, and it's gonna
become more and more of anoption that people take because
(24:30):
I mean it has the potential tomake you a lot more money.
SPEAKER_02 (24:35):
Now what we're looking at, you know, this is uh
October just ended.
We're recording this at thebeginning of November.
So a lot of folks have eitheralready finalized their 2026
budgets or are currently workingon them right now.
What does I guess a typicalfreight agent budget look like?
Is it you know just uh officespace?
(24:56):
Is it equipment, employees, andthen you don't necessarily have
to worry about any otherexpenses?
SPEAKER_00 (25:01):
Or is it I mean if you especially especially if
you're just the one man, one manshow, you don't you don't you're
not really thinking about any ofthat.
You're you don't need to becauseall like I said, all you need is
your laptop, your cell phone,and an internet connection.
And you can you can literallywork from anywhere.
We we have some agents who theylike they'll go on vacation and
they're working at like they'retaking phone calls at the beach.
(25:23):
That's awesome because they theyhave Wi-Fi and they they can do
that.
Uh I mean the biggest thing isjust making sure that you're
you're forecasting like yourcustom, like you need to you
need to know what your customersare, what your customers'
budgets are because sometimeslike we do they have somebody
new in transportation who's nowlooking to change their freight
(25:46):
budget and lower their freightcosts, and you need to be
cognizant of those thingsbecause if that happens and they
go to an RFP and you you're oneof those agents who are doing
the 20-25% margins, and now allof a sudden they're looking at
their freight spend.
If you go in at 20-25%, youmight lose some of those lanes
because you didn't make theconnection that hey, they're
(26:10):
doing this for a reason, they'redoing this to potentially lower
freight costs, and because theyhave somebody new in-house that
you don't necessarily have therelationship with where maybe
you had it with the old person,which is why you were able to
charge those kinds of margins.
Now you're if you're not keepingup with what your customer is
doing, you have the potential tolower your revenue on that
(26:32):
customer because you might losethe lane.
You might lose, you might losethe customer because you come in
too high.
It's just being cognizant ofthose things.
SPEAKER_02 (26:40):
Now, with with your role, you you have also been
heavily involved in thetechnology side of things.
We were recording this on aMonday right before TIA,
Technovations, um, which is aconference I believe that you
you go to each year or try toanyways in every single year.
And so I'm curious what youryour take on the overall sort of
(27:03):
technology aspect side of thingsis where are people maybe over
investing or underinvesting whenit comes to freight tech?
SPEAKER_00 (27:11):
Well, I mean, if you're gonna talk about freight
tech, you gotta talk about AIbecause I mean at technovation,
that's gonna be every everysession is gonna be a drink
every time you hear the word.
I mean, so I mean technology isthat's one of the reasons to
(27:32):
like transportation is so funright now is because it's a
technology gold gold rushbecause transportation went from
everybody hating technology tothe last seven, eight years.
Now all of a sudden technologyis booming and there's new tools
left, right, and center.
And the the biggest thing isdon't just like all the
(27:57):
presentations are gonna lookamazing.
But when you're going into demosand you're going into see these
tools, make sure you're askingquestions about how it will work
with your business processesbecause every broker does things
differently.
And they're like, especially forus as an agent-based model, we
(28:17):
go into a lot of these tools andthey say, Oh, it's gonna work
great, it's gonna work great.
And then we say, Well, we'reagent-based, so we can't mandate
that our agents use anytechnology because they're their
own independent entities.
We can't say you must use thisor else because then they'll
say, Okay, bye-bye.
So a lot of companies they don'tthink like that.
(28:39):
They they just assumeeverybody's employee-based and
it'll work for everybody, butthat's not always the case.
And then, I mean, if you'regonna talk about AI, I think
there's been a big change in AIbecause before like two years
ago when the AI boom started, AIwas gonna do everything.
(28:59):
Like every tool AI was trying toreplace the entire process.
But I've seen in the last like18 months, everything's now
being crunched down to it's onlytaking tiny slices of processes
to because in reality, like AIis never gonna replace agents,
(29:23):
it's never gonna replace brokersbecause AI can't handle when
things go wrong.
It works great when everythingis it's a standard shipment,
everything goes smoothly.
But as soon as something goeswrong, the I the AI can't handle
that.
So using AI, but AI is anecessary thing for any broker,
(29:44):
but you you gotta like if ifyou're afraid of AI and you're
afraid of technology and you'reafraid of what it's gonna do,
you're gonna get left behind.
But the most important thing isthat you use the AI to help
make.
You better.
That's what, like at SBI, that'swhat we're trying to do.
(30:04):
We we do have a few AI toolsthat we're using, but we use it
to empower our people.
We're not replacing people withAI.
We're empowering people so thatthey're not necessarily doing
all the mundane tasks that don'ttake any brain power.
Why are we spending their timeand efforts on those kinds of
things when they can be doingmuch more complex things that
(30:26):
are more interesting for themand also more revenue generating
or expense saving on our side?
SPEAKER_02 (30:35):
Where are you seeing you mentioned um when AI is
involved in like some of the theyou know, I guess uh smaller
processes are built into thebusiness processes.
Are there any specific examplesof where you're seeing it
actually make some real impact?
SPEAKER_00 (30:49):
Well, I mean, document imaging is that's the
the biggest one we've hadrecently is starting to utilize
AI for we we're up to like 42%of our all of our invoices are
auto-approved by AI.
Wow.
So we I a human never touchesthose documents, they get
(31:13):
approved, sent to the customer,and everything goes smoothly.
Uh I mean it's in schedulingassistance and all those kinds
of things.
It's just utilizing the tasksthat like take time but don't
necessarily provide any value,and trying to find a tool that
(31:34):
can replace that time and makeit so that you can do something
much more valuable with yourtime rather than trying to
schedule appointments or allthose kinds of things.
SPEAKER_02 (31:43):
Yeah, because I I would definitely, especially in
in my business, there areinstances where it has made a
dramatic impact.
The perfect one I use every timeis uh transcribing like social
media clips.
I I used to have to do it.
I used to pause, play the video,pause it, play it, pause it, and
then in between, I'm typing outexactly what the person is
(32:04):
saying.
That the fact that it does itautomatically now has saved me
so many hours.
And you know, for a lot of thethe people out there who sort of
poo-poo on the benefits of AI umor the the lack thereof, and
that it's not actually provinganything.
I said, well, and first I thinkyou have to kind of adjust your
definition of AI.
(32:25):
Yes.
Uh, and then from there, you canuh attack certain business
processes to your point um whereit's going to make a dramatic
impact.
I do not want to be sittingaround and hand transcribing
podcast episodes in order tomake the podcast a little bit
more.
SPEAKER_00 (32:41):
Like but AI isn't infallible.
So make sure that you'reactually like all of these
processes, make sure that you'restill spot checking.
SPEAKER_02 (32:49):
Yes.
SPEAKER_00 (32:50):
Like, especially like in your transcribing thing,
make sure you're actuallyreading what it's transcribing
because especially when you havepeople who have slight accents
and all those kinds of things,like it can think it said
something that it did not likethe person did not say, and it
can look really bad if youactually put that out there.
So always make sure that youhave a human in the loop.
SPEAKER_02 (33:12):
Yeah, definitely uh check on those because
especially when it comes to likenames and companies, uh we we
still hand verify those ormanually verify uh those.
But the the perfect explanationthat I've heard is that AI can
do great at the messy middle,but you have to be the one to
start it, you have to be the oneto to sort of reprompt it and
(33:32):
and reprogram it.
But if you're as long as you'reinvolved at the start and at the
end and let AI kind of take overthat messy middle, then that's
where you'll find like the, Iguess, the the sweet spot when
it comes to to using technology.
Um I'm I'm curious with on theshipper side of things, because
we've heard like more shippersstarting to become uh more
(33:55):
cognizant of the shippingprocess.
Uh, you know, they they want toknow more about you know driver
qualification and who's haulingtheir freight and you know,
important questions like that.
Um, but I I've also heard youtalk about shippers becoming
more tech savvy too, or freighttech savvy.
What are the I guess maybe thetech solutions that shippers
(34:15):
care about that maybe are alittle surprising?
SPEAKER_00 (34:18):
Well, I mean, visibility is obviously first
and foremost.
Uh, we've seen a lot of a bit alarge increase in the number of
customers who, when we signtheir agreements, require
visibility for all of theirloads.
Where five years ago, that neverhappened.
Like we wouldn't, we would neversign a contract that had a
(34:40):
requirement for visibility.
And I mean, because technologyis becoming so much more
pervasive, there's a lot ofrequests for EDI and API
connections, which I think areawesome.
Like the more the moreinterconnected you can get with
your customers, the harder it isfor them to leave.
(35:00):
Because now you have all of thatwork already done.
And in order to move to anotherprovider, they now have to do
all of that setup again withsomebody else.
So it can help keep your foot inthe door on those kinds of
things.
And I mean, so yeah, we've seena lot of connections with that
(35:22):
visibility, like I said.
And I mean load uh we're seeingit more and more companies go to
load boards on their owninternal side.
Where I mean, there's there'sbenefits and there's downsides
depending on how you like to bidon your freight.
(35:42):
And I mean, with RFPs, those arestarting to get more and more
sophisticated because there'smore tools now to ingest that
data and analyze that data.
And now because they arehappening so much more
frequently, uh I shippers havestarted to invest in those sorts
of technologies because they'redoing so many more like what
(36:05):
used to be a once-a-year RFP.
There's some customers now doingthem quarterly because rates are
so in flux.
I mean, now, like I said, we'resort of starting to see where
everybody's expecting likenobody wants to lock in for a
year because they're the ratesare gonna go up.
But I don't know, are they?
SPEAKER_02 (36:26):
Yeah, who knows?
I mean, it just feels like youyou mentioned earlier in the
show about, you know, maybe weare just in a new normal, but I
feel like ever since 2020, we'vebeen kind of wondering like what
does even normal look like?
And I don't know that anybodyknows.
And obviously those purchasinghabits right after, you know,
sort of some of the lockdownsstarted to end, where you know,
(36:46):
you saw this interesting, Iguess, move from uh people
spending in the goods economy tomore the services economy.
And then I think everybodyexpected that pendulum to swing
back to goods, but uh maybe weare, like you said, kind of
evening out with it with goodsand services alike.
It do you maybe see that as faras the, I guess, the habits of
(37:08):
the population for you know thenext couple of quarters.
SPEAKER_00 (37:13):
Uh it's definitely possible.
I I think service might go downa bit only because of all the
fear out there of a recession.
And so people are gonna stopspending on experiences so much
because they're gonna get waryof potential downside of.
I mean, when you look at thedebt ratio of all of both sides
(37:36):
of the border, obviously I'm inCanada, so ours is not the same
as down south, but the debtratios that like in households
are now carrying are so highthat there's they're a lot more
sensitive to all of this talknow and of a potential recession
because you're worried thatokay, now how am I gonna pay off
(37:59):
my credit cards because I can'tmaybe I can't go do that trip to
Disneyland because I don't knowwhere my uh I don't know what's
gonna happen with the economy.
I don't know what's gonna happenwith interest rates.
SPEAKER_02 (38:12):
Yeah, because they I mean, especially on the Disney
side of things, they're notgetting any cheaper.
SPEAKER_00 (38:18):
Definitely not.
That and that and groceries,like the two things you know are
always gonna get more expensive.
SPEAKER_02 (38:24):
They mentioned that.
I feel like that's a socialmedia clip right there.
Uh switching gears a little bitto the marketing and sales side
of things.
How are you seeing agents adaptto all of the turmoil or you
know, potential of turmoil thatexists in the market?
Are you seeing them marketingthemselves more, uh, you know,
(38:44):
selling themselves more, doingmore cold outbound?
What we're talking to ages, howare you seeing them adjust to
the current market?
SPEAKER_00 (38:51):
Well, I think the biggest thing is their focus on
their existing customers, makingsure that they're making
essentially reselling themselvesto their existing customer base,
so that because there is allthis turmoil out there and all
this talk of rates and all thiscustomers are being bombarded
every day by 15 to 20 otherbrokers trying to get their
(39:14):
business.
So it's important that thecustomers you have make sure you
have good relationships withthem.
And if if you your customer baseis starting to go down, pick up
the phone call, pick pick up thephone, make do the cold calling,
send out emails, send outanything you can do to try and
get more business becausethere's no time like today, and
(39:38):
there's with the loomingpotential of a recession and all
this other stuff, there's gonnabe companies that unfortunately
don't come out of this alive.
So be ready to when thathappens, be ready to pounce on
because all of that businessneeds to go somewhere.
(40:00):
And it's up to you to be able togo get it.
SPEAKER_02 (40:04):
No, that that's a great point, especially when
there is so much turmoil that'sgoing on, seemingly, especially
uh surrounding us, you know,with grocery prices and then
geopolitical issues and thingsyou cannot control, but you can
control the relationship thatyou have with your own people,
and then also maybe alleviatingor taking some stress off of
your customer's plate where theydon't have to worry about moving
(40:27):
their freight, the security oftheir freight, uh, you know,
even all of the changemanagement that would have to
become involved if they were to,you know, go with another
provider, you know, remindingthem of that comfort of uh the
worry-freeness of working withyou, I think is a really smart
angle to think right now.
SPEAKER_00 (40:45):
I mean, the other another strong thing, like
fraud, unfortunately, is amassive part of our industry
currently.
So sell up the tools you'reusing to try and alleviate
fraud.
If you're using an onboardingprocess, I don't want to name
any names, but if you're usingonboarding processes that
(41:05):
monitor those kinds of things,sell your customer on that.
Teach your customer that theyshould be monitoring the
carriers coming in and out oftheir facility.
If you tell them ABC trucking isgonna be picking up the load,
the person on the dock who'sloading that should be
confirming that ABC trucking isthe actual trucking company
(41:28):
picking up your load.
Because we've seen it time andtime again where our agent sets
up ABC trucking, DF truckingcomes in to pick up the load
because they have the pickupnumber somehow, some way.
The person on the dock doesn'tpay attention to that because
they got a reference number.
They they said they're pickingup the load to Ohio, and they
(41:50):
have a load to Ohio, so they'relike, all right, here you go.
And all of a sudden now thatload is gone.
SPEAKER_02 (41:56):
Yeah, because I remember back as you were
talking, I was remembering backat uh the TMSA Transportation
Marketing and Sales conferencethat I went to back in June.
Mike was there too, of SBI aswell.
And there was a talk that wasgoing on about fraud.
And Cassandra Gaines, uh, sheasked the audience who in here
is marketing their fraudprevention to their customers.
(42:19):
And out of a room with close to200 people, two people raise
their hand.
So there it's it's prevalentamong this industry that the the
brokers of the ages, they're nottelling their customers about
what all of the work thatthey're doing to help their
freight move uh smoothly and andquickly.
And so I think that that's suchan important marketing lesson to
(42:40):
hit home on is show the work ofwhat you're doing in the
background so your customer hasless to worry about.
So they're not going to make achange in the future, and that
they're gonna trust you more andrely on you more and see you as
more of the educational resourcein this, you know, sort of
fraud-driven environment that wewe find ourselves in.
Um last couple of questionshere, you know, as someone who
(43:04):
who goes to you know a lot ofconferences, I am curious from
you know, the I guess the theagent lens, how would you, or
maybe even like the profit andloss statement, you know, how do
you justify, you know, what doesROI look like whenever you're
going to a conference?
And how can you kind of justifythat from like a business
standpoint?
SPEAKER_00 (43:24):
I mean, the biggest thing is well, a especially like
an industry conference like TIA,it's important to at least have
a somewhat of a presence justbecause I mean it is it is our
industry, it's all our peers,and it's a good place just to go
and connect.
But to get that ROI, you need tobe making connections with
people there who can potentiallyhelp you down the road and
(43:48):
seeing all like all of thetechnology, because like I said
before, it's a technology boomright now.
So you need to be up to date oneverything that's coming out
there, and if you can get a toolthat saves five minutes a day,
that's probably worth theinvestment you just spent to go
out there for a few days to goto see the conference.
(44:09):
So it's just making sure thatyou're you have your ears and
eyes open for any potentialpossibilities that can help you
down the road.
SPEAKER_02 (44:20):
And then I think too, from uh even like SBI
standpoint, you guys are alwaysinvesting in new technology.
And so even if you have acurrent tech stack or you're
thinking about adding somethingelse to your to your tech stack,
we've had you know a VP of techor VP of IT, I believe is his
title, Eze Peralta on the show.
(44:41):
And he's talked about how heintegrates all kinds of
different technology for all ofthe agents.
And so, you know, having apartner like SPI to be able to
help you with that financialburden, but also to help
increase you know processes orproductivity, you know, things
like that, like the these kindsof decision making and the the
(45:01):
network effect that you can getby by working as a freight agent
for SPI, I think it's just youdon't really realize that in the
bottom of your you know profitand loss statement, but well,
you probably do because yourexpenses are a lot less than
what you know a traditionalbrokerage or if you were running
a traditional brokerage wouldbe.
Um but I would love for you tobe able to sort of speak to the
(45:24):
I guess the investment that youmake in your agents in the in
the tools and the processes thatthey prefer as well.
SPEAKER_00 (45:31):
Absolutely.
Like so we're we're always opento new technologies, like you
said.
We have agents coming to us allthe time, like, hey, we have
this new tool, or we we foundthis new tool.
Can we can we put it onto thenetwork?
Can we put it onto the TMS?
And we evaluate all of thosethings.
Some of them we're gonna sayyes, some of them we're gonna
(45:52):
say no, because maybe they onlyare good for you and not for
everybody else.
But we're gonna evaluate itnonetheless, and like you like
going to these conferences, younever know what new tools are
out there because a lot of thetimes, like I get a hundred
emails a day from vendors tryingto sell me some new tool, and
all of those I just ignore anddelete because I get them all
(46:14):
the time every day.
But when you can actually go andtouch and feel and see what
these tools do, and you yourealize, hey, I I've seen their
name like 15 times in my inbox.
I've never actually looked atit, but now I see what they do,
and yeah, maybe I can schedule ademo to see if that'll work for
everybody.
And most technology, it's nevergonna work for everybody,
(46:35):
especially in an agent-basedmodel, because everybody does
their does their thing a littlebit differently.
But we're going to invest in ourtechnology to make sure that our
agents have the best tools attheir disposal so that they're
not getting told no because thetechnology can't do something
that the customer needs.
SPEAKER_02 (46:56):
All right, James.
We have talked about we'vetalked about taxes, we've talked
about technology, marketing,sales conferences, all of that
good stuff.
Uh, what would be maybe some endof 2025, uh going into 2026
advice that you would give toprospective freight agents out
there that are thinking about mtaking the leap?
SPEAKER_00 (47:19):
I mean, there's a lot, there's a lot of turmoil
out there.
There's a lot of unknown.
So if you have the wherewithalto make the jump, make the leap,
now is as good a time as anybecause there is so much turmoil
out there.
Your customer might be morewilling to open up to another
(47:40):
vendor because it's happeningall the time right now.
And so now might be beforeeverything does turn, now might
be the best time to do it.
You're gonna you have thepotential to make a lot more
money.
Not everybody's gonna make moremoney.
There's some people, it it justwon't work.
Your customers don't come over,something happens, you're maybe
(48:03):
you can't get credit on thatcustomer from the new broker.
But if you if you're willing totake the risk, I think it's a
super valuable risk you cantake.
And it's just it just has thepotential to completely change
your life because you're now youwork for yourself.
(48:24):
You're you're you're not you'reyour own boss.
You don't have somebody tellingyou what to do every day.
I mean, that sounds real, realnice to me.
SPEAKER_02 (48:33):
Well, I think too with with everything that you
you've talked about, especiallywith with building the
relationships with yourcustomers and having them see
you as you know the thetrustworthy, knowledgeable
person within this industry, ifyou are proactive in those
conversations, then they'regonna trust you to continue
making the best decisions fornot only for themselves, but
(48:54):
also in in turn for your freightas well.
So I think this is all, youknow, just it's it's kind of the
the time of the year for likethe housekeeping of looking at
wherever your all where all yourmoney went and where it's maybe
gonna go and where it's comingfrom and uh you know making
those adjustments and andgetting ahead of some of those
you know new year's resolutions.
So I guess a final piece of ofyou know, maybe advice or where
(49:18):
folks can connect with you,maybe connect with you at you
know upcoming conferences, um,all that good stuff.
Where can they find you, James?
SPEAKER_00 (49:25):
Yeah, so like I said, I'm gonna be at
Technovations uh later in thisweek.
I'm on LinkedIn.
You can find me there.
You can email me, JLemon atspi3pl.com.
Uh if you're a vendor, I'mprobably gonna ignore your
email.
SPEAKER_02 (49:38):
But unless they find you at a conference.
SPEAKER_00 (49:43):
But you find me at a conference, I'm always willing
to have a conversation.
I like I surprisingly like totalk.
So I mean, yeah, and like Isaid, I'm on LinkedIn.
You can connect with me there.
I accept pretty much everyconnection on there, so yeah,
same.
SPEAKER_02 (49:59):
I just accept everybody, and then all of a
sudden I have no followers andI'm like, what the heck?
Oh, wait, they're all in theconnections tab, not the
following tab.
So LinkedIn is a little weird inthat regard, but it is the best
networking platform, a digitalnetworking platform um that our
industry has to offer.
So, James, this is great.
This is uh very eye-opening asfar as like the financial lens
(50:19):
is is concerned.
So I am excited to kind of likedive into my books now and and
and see what we have planned forfor 2026.
So appreciate you and your timeand and the relationship,
obviously, with SBI and beingbig supporters of the show.
And so finally glad to get youon, and I can't wait to get this
conversation out to folks.
SPEAKER_00 (50:37):
Sounds good.
Thank you.
SPEAKER_01 (50:43):
Thanks for tuning in to another episode of Everything
Is Logistics where we talk aboutthings supply chain for the
thinkers in the freight.
If you like this episode,there's plenty more where that
came from.
Be sure to follow or subscribeon your favorite podcast app so
you never miss a conversation.
The show is also available invideo format over on YouTube
just by searching Everything isLogistics.
(51:04):
And if you're working in freightlogistics or supply chain
marketing, check out my companyDigital Dispatch.
We help you build smarterwebsites and marketing systems
that actually drive results, notjust vanity metrics.
Additionally, if you're tryingto find the right freight tech
tools or partners withoutgetting buried in buzzwords,
head on over to CargoRex.iowhere we're building the largest
(51:25):
database of logistics servicesand solutions.
All the links you need are inthe show notes.
I'll catch you in the nextepisode and go check.
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