Credit Policies for Freight Brokers | Episode 294

This episode exposes real cases of internal fraud at freight brokerages—from agents moving loads under fake approvals to inflating commissions and abandoning contracts. Learn how to protect your business with better system controls, document checks, and shared account access. Plus, hear how China’s tariff cuts could shake up freight volumes—and who’s liable when customers don’t pay.

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Episode Transcript

Speaker 1 (00:00):
All right, welcome back Another episode of the
Freight 360 podcast.
Ben, how are we doing down inFlorida this week?

Speaker 2 (00:09):
Man, weather's not too hot yet Like rain for the
first time in like months.
I feel like Dude Monday.
Did you see on the news Like wegot like two months worth of
rain in a day?
There were areas down here thatgot like seven inches of rain
in 24 hours.
Yeah, I did not see that.

Speaker 1 (00:28):
Um, there, there's definitely been some wild
weather going around the country, though we had there was a stat
.
It was uh, I think we actuallyfinally broke it this past
weekend, but previous to thisweekend, this past weekend,
buffalo had precipitation everyweekend for 24 weeks straight.

(00:48):
So, like you think, likeeveryone's looking forward to
like a nice weekend, whether itwas wintertime or springtime, we
either had a snowstorm or likea thunderstorm every weekend for
six months.

Speaker 2 (01:01):
So you know what's funny about this?
I kind of laugh like I talkabout this a lot, is it?
Like?
I grew up in Pittsburgh andlike if you Google this, I'm
pretty sure Pittsburgh has likevery comparable number of like
overcast and rainy days.
Is like Portland, like it'sreally close and it's like same
as Buffalo lake effect and themountains are right next to
Pittsburgh.
So a lot of that rain goes,hits the mountains and it's

(01:23):
overcast and rainy.
And I live obviously in SouthFlorida now, which is like the
sunshine state and it's.
It's so funny.
Like, growing up there andliving here now for like 10
years, I get like supernostalgic, for when it rains
Like it makes me actually likekind of happy in this funny way,
because it's like when it'ssunny out every day, dude, I

(01:43):
feel guilty when I'm in my housefor like not being outside
doing more, and when it rainsI'm like, oh, I can sit on the
couch and not feel like I don'tknow.
Like it's just this funny,weird relationship I always
notice because like my wife andI were talking about that and
she was like on mother's day welike we went out, uh, had a nice
like brunch and went out, didsome stuff and she oh, it would

(02:05):
be so nice if it just rained allafternoon so we could just sit
on the couch and then it pouredlike the whole next day, but
it's just like I don't knowbeing able to relax.
You said two months worth ofrain, and it was some crazy stat
I saw like on the news that waslike we got like either six
weeks or like as much rain asyou normally get over, like
either six weeks or two months,and it hasn't rained really

(02:25):
forever Normally.
Like I remember this because,like the golf changes, I think
May 1st is when like seasonstarts.
Basically, that's kind of whenmost of the snowbirds start
heading up north.

Speaker 1 (02:37):
Yeah, it also gets way hotter, obviously, so, like
the greens, fees are like 30% ofwhat they are in the winter
here uh, yeah, I remember whenwe golfed with trey a couple
years ago and it was like stilloff season, right, because it
was like the beginning of may,yeah, or something like that and
it's.

Speaker 2 (02:55):
It's funny because it's normally like may 1st,
right, like you'll pay 150 bucksto play a course and then, like
the first weekend in may, itdrops to like 45 bucks yeah,
that's, yeah, yeah and itnormally starts raining up here.
Yeah, it gets and it normally,yeah, and it starts raining
almost immediately because, likenow, it's so warm that, like
you know the oceans and theprecipitation, like it'll

(03:17):
usually rain, like everyafternoon, between like two and
four like 20 minutes or whateveryeah, or like a few times it'll
just keep raining and then stop, but like it hasn't rained at
all.
It hasn't seemed to rain forlike a month or two and then,
like apparently they said likeall the rain we hadn't gotten
two months basically fell liketwo days ago got to rain like 24
hours um, well, anyway, uh, ifyou're new, make sure to check

(03:42):
out all the other content.

Speaker 1 (03:44):
Freight360.net go to our YouTube channel.
You got the Freight BrokerBasics course.
If you're looking for education, we were just talking offline
about training options that areout there, and there's a lot of
stuff, a lot of content that'llcome across your YouTube or your
internet search.
It's not all as good as youmight think.

(04:05):
So ours is.
You know, we built our coursebefore AI was around, so we
literally put our own knowledgeand experience into it, not just
chat.
Gpt so yeah, but cool Sportsreal quick.

(04:25):
The NFL schedule will bedropped.
Well, by the time this releases, it'll have dropped.
We're recording on Wednesday.
It's going to drop tonight.
So the rumor as of right now isthat the Bills are going to
host the Bengals Sunday nightfootball week one.
So, stephen, thoughts on yourBengals and my Bills week one.

Speaker 3 (04:48):
So steven thoughts on your bangles and my bills.
Well, the first four weeks ofany cincinnati season is usually
loss after loss.
You remember last year we lostto the patriots in week one,
which was just abysmal.
We should have won by like 30points and I think we lost by
two or three touchdowns.
So while it's exciting to comeand play the Bills, I might have
to look at seeing to gettickets to come to the game if

(05:09):
that's the case, but I do nothave my hopes up for a dub.

Speaker 1 (05:14):
So I was saying this to you before too, like I just
think the NFL, if, if, that isactually, if that rumor is true
and you know, we'll know by thetime this drops but what a
genius move by the NFL.
Two gunslinging quarterbacks,josh Allen and Joe Burrow, throw
them on a primetime game SundayNight Football, week 1.

(05:35):
The over on that game has to bewell.
I mean, who knows what theBills knew, defensive pickups
with the draft and whatnot, butyou're looking at like a 60
point over under.
I mean I don't think it actuallyset the line there, but like a
high scoring game, a lot ofoffense, like a lot of yards.

Speaker 3 (05:54):
So yeah, if I was, if I was to take a bet today, I
would.
I would bet really high on thetotal points for the game, for
sure, exactly.

Speaker 2 (06:04):
But we'll see did you see I they um remove the
lifetime ban from uh pete roseand shoeless joe jackson oh,
yesterday, yeah, now that he'sdead, yeah, now they're.
I mean joe jackson's probablybeen dead for eight years.

Speaker 1 (06:20):
But pete rose.
Didn't he die like in the lastsix months?
I can't remember.
I think it was pretty recent.
Right Is that they were bothfor sports.

Speaker 2 (06:29):
Yeah, she was.
Joe was the guy who wasinvolved with um, the mob and
the black socks in 1919.
Uh, okay, setting up the worldseries and I can't remember I
think it was Lucky Luciano.
I can't remember which guy wasin it Like I've seen a bunch of
movies and documentaries on itand I can't remember which one

(06:51):
it was, but like that was thething that actually almost put
one of them in jail around thattime.
Like Congress actuallyintervened because the world
series was like national pastimeand when they found out like
they rigged it, there was likehuge pushback and he like left
the country for a long time toavoid prosecution.

(07:13):
For that I remember Wow.

Speaker 1 (07:16):
It's a.
If you're a sports fan, this isa fun time of the year.
You've got.
I mean like NFL is not playingright now, obviously, but like
everyone, whether your team isgood or bad, like everyone is,
oh no, right now it's like youdon't have a losing team.
You're excited for the season,but like baseball's in full
swing, you got NHL playoffsright now.
You've got.

Speaker 2 (07:36):
NBA playoffs right now.

Speaker 1 (07:38):
I was watching a game the other night and I'm not
like an NBA fan, but I just likesports.
So like was watching one of thegames and who was Cleveland?
It was like a 43 or no 41 pointlead at halftime for the one
team and it would like set therecord for like the biggest

(08:01):
point differential in like ortie the the record like the
biggest point differential inlike playoff nba history.
Um, and then they gave up like20 something points in the
second half and still won by 20but, um, just wild it's great.

Speaker 3 (08:16):
Do you know how the nba does their draft?

Speaker 1 (08:19):
I have no idea.
I don't.

Speaker 3 (08:20):
I'm not a big basketball guy so, like the n,
it's based on your record rightLosing team gets.
The NBA is a lottery system.

Speaker 1 (08:29):
The entire thing.
I think some of the NHL is tooNHL.
The bottom, like four orwhatever, is a lottery system, I
think.

Speaker 3 (08:38):
I'm pretty sure all teams are in a lottery and it's
just whoever gets pulled up getsthe pick.

Speaker 1 (08:44):
I can't say I've ever watched the NBA draft.

Speaker 3 (08:48):
So it was trending the other day because LeBron was
talking about how the lotterysystem is just trash.
But I had no idea.

Speaker 1 (08:56):
I was shocked to find that out, yeah that's weird,
doesn't seem very commensuratewith how it should be.
You would think maybe it's justbiased from how the NFL works
and that's what I followtypically.
But you would think whoeversucks the most gets the best
draft pick.

(09:17):
But who knows?
And then you got baseball,which is just totally strange
because they work through thefarm system like these guys get.
Like you know, they get draftedinto the system when they're 18
years old and, like they hopein five years they're like on a
roster in the major leagues.
So wild anyway.

(09:39):
Um, what else in sports?

Speaker 2 (09:44):
I didn't have any pgas this weekend yeah, it is.

Speaker 1 (09:48):
Where are they playing this year?
I?
think quail hollow okay, yeah, Isaw that on uh espn this
morning pga championship, umnews, the china tariffs we got a
pause on that.
Dude.
It's crazy the you were textingme about it and like I saw
multiple articles referencinglike basically covid 2.0 when it

(10:12):
comes to freight, like that,because we saw, you know, trump
gets elected and people are likevery uncertain with what to do.
They're pushing a lot of stuffin.
Then tariffs get talked about,then tariffs and everyone's like
pumping the brakes.
You get this big backlog ofimports and now they're like all
right for the next three months.
We're basically pressing pauseand going to these very minimal

(10:34):
tariffs and in comparison to theyou know, discussed ones, so
you would expect like a hugesummer push right Of imports.
I don't know.
I'm very curious.
Here was my.

Speaker 2 (10:47):
I was having some conversations with folks
yesterday.
So two things.
One is they reduced it backdown to 30% the original 10%
plus the 20% considered like thefentanyl tariff, right?
So what you also had was, atthe same time, these orders fell

(11:09):
off a cliff when they went intoeffect, I think, like around a
month ago.
So the stuff that comes ineveryone's got to remember like
lags a month to a month and ahalf to two months, right, just
ballpark right.
So those orders supposed tocome in.
There's a giant glut becausethose orders fell like 50 or 60%

(11:30):
immediately around that time.
But also what happened?
Yeah, there was a huge pushthrough.
They call it like a pullthrough before the tariffs went
in, where every company to getas much in as they could,
shipped as much in.
So there was a massive increase, then a giant fall.
But the next thing thathappened was most of the stuff

(11:51):
that arrived after the deadlinewhen the tariff went into effect
like went into bondedwarehouses.
And for anyone that wants just ageneral understanding, what
that means is hey, I ship thisin, say it didn't make the
tariff deadline and it came in aweek later, whatever, right,
okay, so instead of me paying145% of what the value of that

(12:11):
container is.
Say it's a hundred grand.
I got to pay a tariff of$145,000 to get a hundred grand
worth of goods out, but what abonded warehouse allows you to
do is it can sit there.
You don't pay the tariff untilyou take it out of the bonded
warehouse.
So, basically, everyone thatgot cargo when the tariff went
in place left it in a warehouse,and now that the tariffs are

(12:35):
paused, they can take it out ofthe warehouse and they only pay
30%.
So my guess is we're going tosee a giant influx of cargo
being released from bondedwarehouses in Cali, in the West,
because they basically maxedthat out.
Like all the warehousing wasbasically full the whole way up
the West Coast, with all thiscargo sitting there.

(12:56):
Now that you only pay 30percent, and if they, if the
most of the economy kind offeels like that's where it'll
end up around there and theydon't feel like it'll fall lower
, they're going to release thatnow.
So you're going to see a bunchof loads, I think, coming out of
the West Coast immediately.
The other thing, though, ispeople that did pay the $145,000
, they don't know if they'll getsome rebate or they just got

(13:17):
stuck in that weird window wherethey paid a whole lot more than
they wanted to.
But there's a whole other pieceto this and I tried to find
numbers on this and I couldn'treally get great numbers because
I don't think they actuallyexist.
I've been following RyanPeterson from Flexport, who's
been on a bunch of podcaststalking about how and what this
is affecting anybody right?
So a large portion of what webring in and then just look at

(13:42):
it this way, a large portion ofwhat we buy is just a country is
actually overwhelmingly fromsmall businesses.
Everyone thinks it's thewalmart's and the targets of the
world, but like the reality is,most of the stuff we buy is
from small businesses and mostof those products are like sub
800 now.
What used to exist was calledde minimis, meaning there was an

(14:02):
exemption for any tariff comingin.

Speaker 1 (14:07):
Was the dollar amount on that 800 bucks from China.

Speaker 2 (14:11):
That has been removed .
So, yes, the tariffs went from145 to 30, but the fact that
you're now going to pay 30% oneverything moved in when you
used to pay zero is drasticallyaffecting small businesses,
where a lot of GDP and a lot ofthe stuff we buy comes from Now.

(14:32):
30% isn't enough to make it, Ithink, to sink small businesses.
145 for sure was.
It could have been catastrophicif that stayed in place.
But at 30, they're still goingto be doing businesses, but
they've got to raise prices.
And just for round numbers foranyone to think about this, they
go okay.
If I buy something for ahundred bucks, does that mean
it's 130?

(14:53):
No, Because if you buysomething from China, let's just
say it's a cold plunge.
Right, there's one set outthere I'm looking at.

Speaker 1 (15:01):
Say I buy that Big cold plunge guy yeah.

Speaker 2 (15:04):
Yeah, say, I buy that for $25 and I sell it for $100,
okay, I'm paying 30% on the $25.
So that's roughly $8 tariff.
So my cost to buy that fromChina went from $25 plus $8 to
like $32, $33.
Now, right, that doesn't meanI'm going to charge 130.

(15:27):
It means I'll probably chargenow 108 or 110, which is still
like 30% tax on something thatyou mark up.
Right, four times you're goingto roughly see the price go up
about 8%.
Okay, just for round numbers.
So when most of the stuff we dobuy is from small businesses,

(15:47):
they've got to raise theirprices some.
Maybe not the whole 8%, butthree or four or five, and
that's a real number.
I think that the Fed's lookingat because they decided not to
reduce interest rates, mostlybecause they're scared of
stagflation, and anyone that wasaround knows what happened in
the 70s and 80s.
If you don't, you probablyheard of it.
That was when you have slowgrowth and high interest rates

(16:11):
and when that happens the Fedreally can't do anything because
inflation is very high and theeconomy isn't growing If they
reduce interest rates.
That drives inflation.
So they can't and that meansthe Fed's hands are tied to fix
the economy, which is like theworst scenario for us to be in.
So they're scared to reduceinterest rates because inflation
should go up right, because allthese small businesses are

(16:36):
paying more with this de minimisthat is removed.
However, the inflation reportscame in like yesterday.
I read this morning likethey're actually down, but
they're mostly down because gasprices are down.
The rest of everything else hasstill kind of gone up a little
bit in price.
Now everyone's expecting nextmonth's numbers to really show

(16:56):
this, because all that cargoright that was in warehouses
bonded that you're now payingtaxes on, that you just let sit
there, and the cargo that peopledid pay $145 on.
Those numbers will be happeningin May and remember, inflation
gets a lag month right.
So the inflation numbers noware from last month.
What everyone's expecting isthat inflation may go up in May,

(17:19):
which we'll see in June, and ifthat happens, that's really
going to be the indicator oflike how much of an impact these
tariffs have on the cost of thethings we buy.
So it's going to be reallyanxious because, like I was
debating with somebody, theywere like oh look, everything's
fixed, the stock market's backthis tariff and everybody's
screaming that Trump was beingerratic, had no causes.

(17:39):
There's no problems.
Orders are going up.
The other thing that happenedwas when we stopped shipping all
this volume from china, themajor steamship lines diverted
those ships to other countriesbecause there wasn't enough
coming in.
You're not going to send a shipover there to bring it back
empty.
So they did blank sailings andthey reconfigured where these
cargo ships are going.

(18:00):
So as soon as this happenedlike two days ago or three days
ago, right the price to ship acontainer from across the
Pacific to the US from Chinawent up 41% that day.
So, yeah, your tariff went from$145 to $30, but your cost to
move a container from China tothe US just went up 41%.

(18:22):
And guess what, somebody'spaying that right.

Speaker 1 (18:25):
Yeah, I mean, at the end of the day, the consumer is
the one that is going.
This is the same thing thathappened during COVID too.

Speaker 2 (18:31):
Exactly, and that could have a drastic impact on
our industry, because if we seemajor congestion and the similar
things that we saw related toCOVID, because of this, you
could see 2021 again in ourindustry with massive rates
going up.
A ton of cargo needing movedlast minute, not enough trucks.
Because the other thing that'sinteresting is we have been in

(18:53):
such a depressed rate fortrucking companies for so long.
They're starting to go out ofbusiness now faster, and if we
see capacity shrink, with smalltrucking companies leaving the
industry and a whiplash likeCOVID, you're going to see 2019
and what happened in thebeginning of COVID happen all
over again, where rates aregoing to go through the roof
because there's not enoughtrucks and there's too much
cargo to move, which could begreat for freight brokerages

(19:16):
this year and could be a savinggrace for the trucking companies
that survive.
It's going to be reallyinteresting to see how this
plays out.

Speaker 1 (19:22):
I was explaining this to someone like a week ago or
earlier this week.
It's like it's kind of it's aweird concept that, like when,
when transportation costs go up,the consumer pays more for
products, but truckers andbrokers make more because we're

(19:42):
you know, like brokers were amargin based industry and
truckers Like it's justliterally just extra profit for
them.
So it's also DOT week, DOT blitz.
So you have, you know, threedays of roadside inspection.
I saw the one someone posted.
It was like they had like three.

(20:05):
They got hit three times in thesame day, or something like
that yesterday.

Speaker 2 (20:11):
Well, to that point.
We talked about this withLeffler last week.
One he there was something inFrey Caviar that was really
pretty good and there were twovery significant fatalities
related to driver issuesrecently One like eight car
accident with like two people Ithink that died, and another one
where one person died veryrecently.

(20:32):
So it's definitely becomingmore, I would say, in the public
sphere, of paying attention tothis.
At the same time you're seeingthem crack down on immigrant
drivers or non-speaking English.
Same time you're seeing themcrack down on immigrant drivers
or non-speaking English.
And also, what's interesting isthat, like when the public is

(20:55):
starting to be concerned, youstart to see the government act
more, and we talked last weekthat the FMCSA is drastically
underfunded and understaffed tokeep up with maintenance and
safety.
Like what did he say?
Like one, 25, 20% of trucks onthe road right Are considered
unsafe, like one in five likethat is absolutely insane, right

(21:16):
?
So my hope is that you see moreof this, because the other part
of this it's really interestingis I've read some articles on
trucking company owners thathave been in business 30, 40
years, that are going out ofbusiness and they're like listen
, we can't compete with truckingcompanies bringing in and they
stated illegal immigrants thatthey're underpaying because

(21:37):
they're able to run at lowerrates.
Carriers have been yelling atbrokers all year with broker
transparency and saying we'rethe problem.
The reality, reality is, isit's actually their peers in the
trucking industry that areeither bringing in illegal labor
and then underpaying them.
That's who's running thisfreight for 90 cents a mile.
It's not the brokers pushingyour rate down there.

(21:58):
It's that if three carrierscall you, one goes I'll take it
for a buck a mile and the othertwo need a dollar 90 a mile.
You're gonna pay the guy for adollar a mile if he's got decent
service records, the rightinsurance and can make the times
.

Speaker 1 (22:10):
Even so, that it makes me think of this.
Like the uh, we'll talk aboutsome agent drama today, but, um,
I have seen and talked to, I'vetalked with a lot of these guys
that like work in um Pakistan,armenia, like you know, lower

(22:31):
Colombia, mexico, like lower umI don't know what the phrase you
would use like the the USdollar is strong to them, right,
so like they will like try tobe an agent or a broker for a
company in the states andthey're like they'll take 50
bucks a load as a profit andlike call that a good day
Because to them, like that'slike 500 bucks what it would be

(22:53):
to someone in the States andit's like dude, like that's, and
then they win business on this.
Like you know, you're buildingmaterials and some of your low
margin freight, your low costfreight, and it's like you're
literally like you'reundercutting American workers

(23:13):
because our dollar goes thatmuch further in your home
country.
So it's an interesting thoughtexperiment of how that impacts
everybody.
But yeah, I mean and like youjust mentioned the trucking side
as well, how it'll and this isanecdotal right, this is like
one story.

Speaker 2 (23:30):
But I had talked to somebody and, like I used to do
a lot of business in Chicago soI had lots of carrier owners
that were friends and decentnetwork and I remember them
telling me about this onetrucking company and he said the
guy who I've worked with forlike a decade knew this guy very
well and he said here's what hedoes.

(23:51):
He bought an apartment buildingin Chicago.
He brought over I don't know ifthey were necessarily illegal,
but he was able to bring inimmigrants and basically what he
would do is go, I'll give you ahouse and a job.
He would put them in hisapartment building.
He would deduct the money forrent out of their carrier pay.

(24:13):
So basically it's I don't wantto say it's like indentured
servitude, but kind of like youliterally have to go to work
because he's going to take themoney out for your rent, Can't
negotiate it, you can't goanywhere else, you don't know
where else you can go.
You didn't speak English, solike they didn't have a choice.
And then this is the egregiouspart he would book loads, right

(24:33):
His dispatchers, and then theywould Photoshop the rate cons to
give to the carriers and knockoff like 500 bucks give or take
on every load.
So then he would pay thecarrier out of the rate on the
fake rate con.
So he depressed what he wasactually paying the drivers on
top of that and skimmed moneyoff the top of every load, then

(24:54):
forced them to pay higher rentsand he's like he's got like 50
drivers and he's like, if youwant to know what's affecting
rates, he's like it's situationslike this because, like,
they're paying this driverliterally pennies, they're
basically providing food andshelter they have no choice,
yeah they're just giving them away to survive and taking every

(25:16):
bit of profit off the top andthen undercutting all their
competition because they'repaying drivers 20 of what
they're paying and they'remaking money on all of it.
They're making money on theirhousing like that's's literally
what Carnegie did during thesteel mills in the 1910s and
teens.
He built a town.
You go to work in my steel mill.
You have to work seven days aweek.
You can only shop in my companystore and I own the house.

(25:38):
So I'll give you the money.
Then you give it right back tome so I can take your rent and
make money off your groceries.

Speaker 1 (25:44):
Yeah, wild, well, yeah, anyway, crazy stuff.
So let's get into.
Let's get into this discussiontoday.
So here's a situation that I'mdealing with or that I dealt
with this week and I'm curiousyour thoughts on it, your

(26:06):
criticism, feedback, any of anyof which is welcome.
So had a uh, had a guy thatjoined our company and we
brought on um about three weeksago and get some customers set
up.
Um has one specific customerthat we denied credit on and we

(26:27):
said, hey, the address you gaveus, we can't find anything on
them.
Figure out what you need to doso we can try to get this guy
approved, but for right nowthey're not an active customer.
Guy starts moving some freightfor his customers.
This guy worked at TQL yearsago and then went to a couple

(26:49):
other brokerages and came to usand so then we get a.
We get an email from this likethird party company and it's
like, hey, it almost looked likea scam and it was like you know
we've got.
You wanted to verify youraccount and routing number for
payment for some invoices.
Is this accurate?
And like, right away, like theaccount number, like it doesn't

(27:13):
match us.

Speaker 2 (27:15):
Was it like?
What is it like Stevens textyesterday?
So this is actually alegitimate email.
Literally said scam.

Speaker 1 (27:24):
But like so we're like well, like well, like no,
that's not us.
And like who's this for?
Let me get the the guy's emailaddress and it's this new guy.
So I go to him and I'm likeyeah, like do you know?
Do you know who this company is?
He's like no, I have no idea.
And I'm like, okay, so we goback and we tell the guy like no

(27:44):
, we're, we don't know anythingabout this.
This is not accurate.
Can I ask you something?

Speaker 2 (27:49):
Do you make them upload the load tenders for
invoicing as like a procedurefor your agents?
Are they like in your TMS soyou can look at?

Speaker 1 (27:57):
those.
We don't require them to uploadtheir tenders.
We contractually require themto get the rate from the
customer in writing.
We don't spot check everysingle one of those as a matter
of procedure.
So anyway, we ask like oh, ifyou have payment due to us,

(28:20):
which customer is this on behalfof?
They gave us the name of thecustomer and it's the customer
that we denied credit on.
So I go to this guy again.
I'm like hey man, this guy issaying like it's for this, this
shipper of yours that we deniedcredit on, and he's like no, no,
no, no, it's not, it's, it's uh.
He's like you know, I don'tknow.
I'm like okay, I'm like do youknow?

(28:41):
Like does this specificcustomer that we denied, did
they use this third party?
He's's like I've never heard ofthem.
I'm like okay.
So then my assistant like does alittle research, and he like
he's, he's getting the loaddetails that these guys are
trying to pay on.
And then these loads are likeuh, built in our TMS under
another customer.
So I'm like this guy iscircumventing credit, like he.

(29:03):
He got one customer approved,he's got plenty of credit for
them.
We denied this other one.
So he starts moving loads forthis denied customer, putting
them under the other one.
So then I go to him like dude,I'm like like they're saying
these loads are for this,they're built in the system
under this customer, and he'slike, he's like no, no, no, he's
like that, that third partycompany, like they're confused,

(29:25):
it's, those aren't for thatcustomer, they're for this
customer.
I'm like, expect to happen.
Well, that's why.
So I told him.
I was like hey man, I was like100 of the time that a uh, one
of our brokers or agents triesto circumvent our credit
policies and change a customer,we will catch it 100 of the time
, whether it's from the companywon't pay the bill, they're

(29:45):
gonna get an invoice for a loadthey didn't tender well.
So there's that.
There's that, yes, there's thatsituation.
When we invoice their owncustomer, they're like that's
not our load, but also we have a, we have a steven would
understand this.
Rapid alert is mcleod uhterminology where, like, if
something happens in our tms ittriggers a message to be sent

(30:07):
out to a certain individual, forexample.
So we have a rule set up inMcLeod that, like, if a customer
is changed on a load in thesystem, it will instantly email
out the owner of the company,the credit team, you know
whoever is on that distributionlist.
So we'll know hey, john Doe,broker just changed the customer

(30:28):
on this order from ABC Steel toXYZ Steel.
Right, and we'll.
So everyone knows about it.
It's very clear and obvious andyou know we can catch that.
So we will identify if thatkind of stuff happens.

Speaker 2 (30:41):
Wait.
So I understand that he built aload.
Steven is the legit customerand Jimmy is the guy at the
company that didn't get credit.
He built a load under Stevenand then, once the load was
built, he tried to change thecompany name to Jimmy.

Speaker 1 (30:58):
So he this is like he didn't even get that far, like
I guess the good thing is likesomeone's trying to pay us and
you know, but that's how.
So it could have been worse.
It could have been the customerthat we denied gets an invoice
and just doesn't pay, or thecustomer that got denied.

Speaker 2 (31:17):
You find out 40 days later.

Speaker 1 (31:19):
Never gets an invoice and just doesn't pay us and we
have an outstanding balance.
But in this case, likesomeone's trying to send us
money and we you know.
But in this case, likesomeone's trying to send us
money and we you know.
But anyway, we end up like hetries telling me like oh, you
know, I don't know who thatcompany is.
And then his story changes andit's like he's like oh no,

(31:40):
they're actually partneredcompanies, the one I built the
load under and the company it'sfor.
But it should be listed underthe company that got approved.
I'm like all right, send meyour load tenders.
So we get his load tenders andthey're literally tendered from
the company we denied.
Further, the tender has uslisted as a carrier and has
verbiage, treating us like acarrier.
And we're like dude, like we'relisted as a carrier here.

(32:03):
And he's like yeah, he's likewe did it as a co-brokerage.
And I'm like do you have aco-brokerage contract?
Sends over a co-brokeragecontract that he signed on our
company's behalf.
And I'm like dude.
So like, needless to say, likethe guy's not working at our
company anymore, like we tookcare of that, but like we got a
mess to clean up and the whole.
This is a day like we we talkeduh, we did an episode, I don't

(32:26):
know, last year um with mattperkins talking about, like the
risk of agents.
Right, and this is one of thethings is like, this guy comes
in, we vet him, we train him, weget him um acclimated to our,
our processes.
Next thing, you know, like he'srunning loads for customers
that we've denied.
Luckily we're getting paid onthem, but then he's signing

(32:48):
contracts that we have not seenor approved.
He's taking, he's like using,he's treating us as a carrier.
And then and this just like addsfuel to fire we get like a
notice from like thiscollections company that like
there's a load that was liketriple brokered and this dude

(33:10):
apparently claimed he was goingto pay the invoice on it under
our company and he had.
He hadn't even worked with usyet whenever this load was moved
.
So it kind of seems like thedude got himself in a mess at a
previous company and was like,let me go find a new home, I'll
have this great story and I'lljust bring all my mess over to
them, get it cleaned up andwhatever.

(33:31):
Luckily, like we have layersand layers of like processes to,
like you know, find this stuffearly and deal with it instead
of like finding out six monthslater.
So yeah that was like thebiggest, the biggest headache.
But I'm curious so like thisbrought up the discussion that
this week we're like how do weverify with a customer that it's

(33:56):
legitimate?
Because I've seen situations inthe past where, like, there's,
you know, the customer's deniedand they just run under somebody
else and try to change it.
I've seen that one.
But I've also seen and this wasyears ago at a different
company someone came in as anagent and set up a customer that
was legit but had the invoicessent to an email that wasn't

(34:21):
correct and either them or afriend of theirs was behind that
email address.
So they, the running fake loadsthat don't actually exist,
they're getting commission onthem.
The customer's correspondinglike oh yeah, you know, great
delivery, blah, blah, blah, andthen the invoices don't get paid
and we call the customer andthe customer is like, who are
you guys like we didn't ship anyof those like.

(34:42):
And we're like well, here's theemail.
We are like that's not ouremail domain.
Like, and we're like well,here's the email.
We were like, that's not ouremail domain.
So we had this discussion aboutlike, how do we verify when a
customer gets set up that, likethey're a legit customer, the
loads are legit.
We're not getting scammed insome like scheme here.
And I'm like, I'm curious likeyour processes on like have you

(35:13):
ever run into the like that's apretty layered scam?
Right, if you were to go thatfar with it.
But I'm curious, like what yourprocess is on verifying like,
not just the credit checking butlike verifying that like, loads
are legit, customers are legit.
All that because we talk a lotabout our carriers legit but
like we even had one and not tochange the, you know take a left
turn here.
But you know we had that, thatinbound lead that you never get
Right and they're like we got tomove this blah, blah, blah.

(35:34):
And it was.
It was a fake customerbasically trying to steal cargo.
But I'm curious, like, and wecaught it and it didn't happen.
But I'm curious like what yourprocess is or what your thoughts
are.
I process is or what yourthoughts are.

Speaker 2 (35:47):
I'm just verifying the validity of a transaction
and a customer is legitimate.
So going all the way to thebeginning and this is also
something that I've had to do inmultiple W-2 brokerages, where
TMSs typically will allow you tolimit access to employees
pretty standard and making surethat nobody can build a customer

(36:08):
but a certain amount of peopleis the first thing I would
suggest anyone does.
If they haven't done that,Don't allow any of your brokers
to just build customers.
And there's two reasons forthis.
It's not necessarily a lack oftrust.
It's sometimes brokers areambitious.
They're trying to move freightand get new customers.

(36:29):
So what I've seen prettyfrequently are hey, customer
just prospect just reached out,they got a load to move, I got
to move it right now they eitherbuild it under another customer
and try to change it, Yep.
Or two, they just build thecustomer and then request credit
.
And in that scenario I've seena lot of issues where one, that

(36:49):
customer gets denied credit andthey've run three loads that
week or four loads that week forlike 10 or 15 grand and now you
have no credit.
Now you just got to hope thatcustomer pays, which is a risk.
So that's the one thing youwant to avoid.

Speaker 1 (37:03):
I've had that one happen too, where they just
don't even sign them up, theyjust run the load.
It's already picked up.
I need credit and we're likewhat?
Why would you do that?
You know.

Speaker 2 (37:12):
And also like it creates a lot of back end work
for your accounting departmentbecause they go to factor that
and go like what do you want meto do with this invoice?
So now they got to stop doingwhat happened and then take the
steps to correct it, whichsometimes works.
Sometimes you just end uphoping they pay you.
So in our CRM I added thisfield to where, like, I use a TO

(37:34):
.
Now it's really effectivebecause what a.

Speaker 1 (37:37):
TO does.

Speaker 2 (37:38):
ATTIO.
Actually, ryan over at Genlogstarted using this when they
switched from HubSpot to thisCRM.
I switched recently and thething that is one, it's way
easier to set up and two, youcan put custom fields in there
very easily.
That work and also everythingintegrates.
So, like it creates a companyand a person record for

(38:00):
everybody you email.
So in HubSpot you've got to addthat company in person.
This just creates them.
You got to add that company inperson.
This just creates them.
And then I can create fieldslike my fields and my CRM now
say like is this a shipper orcarrier?
Cause it records everything, soyou know which one it is to.
It says credit approved.
It's just you can click a boxhey, did I get credit approved?
And then is is this set up inour TMS?

(38:22):
Then it's how many truckloads aweek do they ship?
Full truckload?
Ltl reefer all the equipmenthas drop downs.
I was able to add.
I added all those fields inlike 10 minutes.
And RFP when is there RFP?
So it was way easier for me todo than what I've tried to do
this in HubSpot.
But long story short, thatcredit box is important because,
like, we need to know, was thatdone so like we factor through

(38:45):
triumph.
Did we get it back and what isthe limit gets put in there?
Because the next issue thatI've run into is not all
factoring companies are two-wayintegrations with TMSs, like
most of them are one-way,meaning it'll send the invoicing
data to your factoring company,but their outstanding credit

(39:06):
balance doesn't get sent back tothe TMS.
And what you then need to makesure is that your credit
department, even at least weekly, goes in and adjust that credit
line.
Because another problem I'verun into related to this similar
topic is hey, this customer has$25,000 in credit.
How did we run $75,000 worth offreight with them?
Oh, because the TMS is whatlimits your load building based

(39:29):
on the credit line, but yourfactoring company doesn't send
that information back to yourTMS, so you have to manually go
in there and again, ideally youwant that live, so you don't
basically let your customerborrow a bunch of money from you
that you don't have approvalfor, because now that creates
other issues, because thefactoring company won't always

(39:49):
invoice if they're over theircredit line, which means you ran
a load today.
Your factoring company doesn'twant to send an invoice until
they pay that down.
That might be 30 days from now.
Now your customer doesn't gettheir invoice until 30 days from
when the load was ran and now30 days do you get pay.
So it screws up a ton of youraccounts receivable not managing
your credit lines in your TMSto make them match your

(40:13):
factoring company.
It's the second thing.
Yeah, third thing is how do youand what you do as procedures?
One of the procedures I learnedand I liked at TQL because this
helps accounting a ton is Imake sure every load tender if
it comes in an email.
I don't care if it's a textmessage that they get for loads,

(40:33):
because customers will send itin WhatsApp sometimes like hey,
pick up this load.
The procedure is brokers got tojust send an email to that
customer and say please confirmbelow load details, rate what
the load is and what are therequirements.
That email gets saved anduploaded into the TMS.
Why?
So that when we create theinvoice for the customer or get

(40:56):
the carrier bill, we go and cansee without having to go into
someone's email and reach out tothe broker for the tender.
It's just right there.
Okay, what was the rate?
Did that match the bill rate?
If they don't match now there'san exception in the accounting
person can go to the broker Like, hey, why don't these match?
I?

Speaker 1 (41:12):
can see the email.
That's interesting.
So you, every broker, had toget and upload the tender for
every load.
Yes, okay, yeah, like werequire them to get it but not
upload it.

Speaker 2 (41:31):
It makes the accounting work a little
smoother, because now they don'thave to communicate with a
broker, they can just look veryquickly what did the customer
send this for and what am Ibilling them for?
And if the numbers aredifferent and that happens a lot
, detention, accessorial,whatever right.
You look at the notes in theTMS and go, oh, detention.
Well, now the second emailcomes in.

(41:52):
If you have put detention in,there needs to be two things
there One, the POD that has thecheck-in and check-out times
signed, because almost everycustomer requires that.
So like that's just the firstthing.
The second is there needs to bean email that confirms the
communication and the proofright.
Yes, both.
There.
The proof is the POD and thenthere's got to be an email in

(42:15):
there from the broker that saysrequesting detention.
Here's the POD, the check-inand check-out times and then the
customer's response.
It says approved, paid and theamount that gets saved in there.
So it's the tender and anyapproved charges, because that's
what we're going to attach tothe invoice when we send to the
customers.
Because I would say theoverwhelming majority of issues

(42:37):
we have with customer payments,the loads that are aging.
When I go through our weeklyaging with our accounting, more
than half of them are additionalcharges that weren't approved.
Hey, we had a layover.
Oh, I saw three yesterday.
It was like hey, we charged thecarrier wanted $500 for two
days, layover.
Customer approved one day, 250.
Broker accidentally billed thecustomer for two days even

(42:59):
though the approval was for oneday.
Well, that invoice just didn'tget paid because customer goes
nope, these numbers aren't right, we don't pay it.
I see it at 32 days and I'mlike I look at the load and I'm
like, okay, two layovers.
I immediately go in the TMS andgo did we get it approved from
the customer?
We did get it approved.
But then I looked at the numberin the email and I'm like, yeah
, but they approved it for oneday and you billed them for two

(43:21):
days.
This is why this invoice didn'tget paid when all the other ones
did, and that makes it so muchfaster for us to resolve and get
money into the brokers.
It should be because I nowdon't have to go to that broker,
stop him in the middle of hisday, ask him to go find that
tender.
He's got to remember whathappened, find that email from
35 days ago.

(43:42):
Now.
He's got to find the secondemail where he either did or
didn't get that approved then.
He's got to read through themnow.

Speaker 1 (43:48):
Three people just wasted 35 minutes to see what I
could see in 30 seconds Iremember, um, this is probably
like 10 years ago, I had a guythat did bag weight on certain
produce and potatoes, onionslike whether or not it was
intentional, like here's anissue that came up and it comes

(44:10):
down to a very similar situationof like the numbers, so like,
let's say it was uh, bags ofpotatoes, for example, like 50
pound bag of potatoes, forexample, like 50 pound bag of
potatoes, and customer is goingto pay based on how many bags of
potatoes were loaded.

(44:32):
So maybe it's like yeah, theyloaded, you know 50 pound bags,
they loaded.
You know.
Let's say they're going to say,hey, we'll pay you X amount if
you load to 42,000 pounds.
Ok, they end up only loading 41000 pounds, right?
So then the carrier gets a rateconfirmation for um, you know,
they're gonna get paid in bagrate too.
So then when it ended uphappening is like we invoice the

(44:55):
customer for the full rate,they adjusted the carrier's rate
down to the actual rate, so wehave an inflated margin now.

Speaker 3 (45:04):
Yep.

Speaker 1 (45:05):
Broker gets paid their commission 30 days later,
or 35 or 40, whenever thecustomer ends up paying, they
short pay.
And now we're short paid like Idon't know a thousand bucks or
500, whatever, whatever theamount is.
And we had a when this all like, when it all shook out, we

(45:25):
realized like this guy wasoverpaid like eighty thousand
dollars over the course of likesix months or something like
that.
And we're like, dude, like thisis an accounting nightmare.
We've overpaid you, yourcustomers short paying, overpaid
you, your customers shortpaying.
And you know the excuse cameback of like oh, we must have

(45:49):
forgotten to like adjust thecustomer rate down.
Sorry about that.
And it's like well, you didn'tforget to adjust the carrier's
rate to the actual, you knowloaded amount because they got
paid correctly.
I'm sure that carrier wouldhave loved to been overpaid, but
they weren't.
So, like you know, this is thestuff that, like, whether
someone's a w-2 and they're inyour office or they're a remote
worker or an agent or whatever,like these are the risks that

(46:09):
you run with um, you know badactors and like I have heard
horror stories of like chicagoarea and like chattanooga, like
think about areas where there'sa high concentration of freight
brokerage companies and theseguys, like they get fired from
one and they go work next doorand you don't, like you don't
actually vet them before youhire them or like, if you're, if

(46:31):
it's an agent, like before youactually like contract them.
Um, because there arelegitimately people that are out
there that they make theirliving on scamming companies,
right, and sometimes it's like afull-blown, like intentional
scam and sometimes it's likereally small little things where
they're gonna nickel and dimeyou here and it's so small that

(46:52):
you don't notice at first untilyou know six months later, like,
oh my god, like uh, I remembersteven telling us about like an
accounting nightmare where, likeuh, dudes were getting overpaid
.
Stephen, if you want to unmuteand run through that briefly,
but this is the stuff you've gotto watch out for.

Speaker 3 (47:07):
Yeah, and ours came down to just a system issue that
I pointed out probably threeyears ago at this point.
And so we use McLeod, just likeNate does, and, for example,
wire codes and lumper fees.
One of the issues that thesystem had is when we would
issue a wire code for thecarrier to pay for a lumper.

Speaker 1 (47:31):
It wouldn't create an expense from us, it would just
it would bill the customer soagain and then profit is how it
looks right, like if you pay 200of a lumper and it doesn't get
taken out.
It looks like they made anextra 200 bucks on that load
right, exactly.

Speaker 3 (47:45):
And and then, because it's a wire code, the system
default for mcleod is to createa deduction.
So now you're even moreinflated because you're short
paying the carrier, whether ornot they're supposed to be short
paid, and then you're notaccounting for that expense.
On the on our side.
Yeah, so the um, the previousmanager, wanted to like offset

(48:10):
it by.
You know, everyone tries toduct tape or, like you know, fix
their own tms system instead ofconsulting with the people that
built it.
Yeah and that's that's like oneof my biggest pet peeves.
And so his thing was oh, we'lljust create a negative invoice
to us as the company.
Now your margin is correct.

(48:30):
Well, the cloud, and probablyevery TMS system, is not built
to handle a negative invoice.
So now we've got a stack ofloads with negative invoices
that we can't reconcile becausethe system's not designed to
handle that um, yeah, it's anightmare luckily we got it
fixed, but that wasn't after.

(48:52):
you know I was involved, sothere was, you know, yeah,
thousands of dollars in lumperfees that got yanked back out of
paycheck the way we always do.

Speaker 1 (49:01):
It is like a lumper, for example.
I'll give you both scenarios,like an advance versus there's
not an advance, given the driverjust pays for it.
So if the driver pays for it upfront and doesn't take an
advance from us and let's saythe lumper is $100, the way we
do it in our system, this islike, if done correctly, this is

(49:22):
how it would work.
Like you would say all right,I'm going to add a $100 pay item
titled lumper to motor carrierand I'm going to add a $100
charge item to customer calledlumper.
And it evens out exactly theother way, when this is the more
common if they take an advanceout.
Exactly the other way, and thisis the more common if they take

(49:44):
an advance because they don'twant to pay out of pocket, we
issue let's say we issue anadvance for $100 to the carrier
for a lumper right.
The money is sent, itautomatically deducts or, I'm
sorry, it automatically adds theor deducts $100 off of the
driver's total final pay.
And again, we've added the $100extra pay in there it

(50:06):
automatically deducts $100 fromtheir final pay, resulting in
the net final pay of their linehaul.
And the same thing for thecustomer it would add the charge
onto their side as well.
So that's how it should be done.
But again, if you don't set upyour processes accurately or
properly within your system,this is the stuff like, stephen,

(50:28):
like you just said.
Like three years later, you'relike trying to, you're trying to
and to Ben to your point, likeyou're trying to fix something
and you're wasting everyone'stime doing it right.

Speaker 2 (50:38):
Here's another one that I found with agents was
there is an agent a year ago ortwo years ago, I remember um,
technically, the brokerage had apolicy that they didn't really
utilize, which was like, if youdon't get a POD and within I
think it was five days or threedays, like they could charge
them $250.

(51:00):
And the point was more toincentivize the Charge the
carrier like deduction Chargethe carrier a deduction and the
point wasn't to make money on it, it was just to incentivize the
carriers to get them in fasterso they could invoice quicker,
right.
But this agent was just puttingthem on all these loads, just
250 deduction, like the next day, 250 deduction on the carrier,

(51:22):
no paperwork, right?
So at that agent model they gotpaid on loads delivered for
that week.
So they're getting commissionson these fat margins of an extra
250 on every load.
But then every time the carrier, right would get short paid.
They were reaching out to thebrokerage and going where's my

(51:46):
money?
I'm going to file on your bond.
And the brokerage is like theywould look at the load and go,
yeah, the carrier, send the POD.
Three days later We'll pay you.
So the the the agent is gettingpaid on all these fat
commissions and then a weeklater those commissions were
basically given back to thecarrier because they never

(52:07):
should have been deducted in thefirst place.

Speaker 1 (52:08):
And you already paid the agent.

Speaker 2 (52:10):
And you already paid the agent, the commission, on
all these inflated margins andthen every week they're just
reducing it.
So it's one creating a wholebunch of work and problems for
the accounting department,resolving these, talking to the
carriers, researching, givingthem the money they should have
gotten, and then the agent isjust taking fat commission
checks every week as if he'slooking at his numbers like dude

(52:33):
.
I made like 15 grand this weekbut then when I started
comparing what he was doing tolike a month ago, I'm like wait
a minute.
I kept thinking this guy wasmaking like 15 a week in GP.
But when I look at his, when Ilook at last month, the average
is like 7k a week and I'm like,if I look back three months ago

(52:53):
at 7k, I'm like how is this guylooking like every week that
it's happening he's making 12 to15.
But when I look in the back,I'm like it's like three
quarters of that.
And I started looking at theloads and I'm like, oh my God,
we're reconciling and paying himon these fat margins and then
giving this money to thecarriers that should have got in

(53:13):
the first place and, to yourpoint, it sometimes takes a few
weeks or a few months until youkind of notice those little
things.
But it's a lot of money, Likeit added up to probably 20,
$30,000.
And now, if that guy justleaves, you have no recourse.
What are you going to do?
Sue them so, like you, this isthe risk you have when you've

(53:34):
got agents that are operatingtheir own business underneath
your business's name andreputation.

Speaker 1 (53:40):
I'll give you one, one more quick one before we
wrap up here.
So I was telling you about thisa little bit off air had a
project.
We set up drop trailer.
We were renting running trailI'm not going to give the name
of, like any involved partieshere, just for, like you know,

(54:00):
out of courtesy.
But we're renting trailers froma certain organization, staging
them at a customer's facilityand, um, the agent is, you know,
basically getting power.
Only carriers to you know stagethese trailers and then, once

(54:20):
they're loaded, they're haulingthem.
It's a great business.
It's a very, very good,profitable project.
If you do it correctly, a bunchof disorganization happens,
stuff is missed.
This person doesn't understandpricing very good and is
overpaying carriers.

(54:40):
We end up at a loss and we, youknow we press pause, take a
knee, have a conversation monthsago.
We're like, hey, we got to likefix this and get it in the
right direction, Get it fixed.
We're starting to be profitable, we're digging out of it.
This person just decides theother day because now, with the

(55:03):
losses, the broker has to likewe have to recoup those, so
we're holding a portion ofcommissions every week, blah,
blah, blah.
And the broker is likefinancially strained from having
to like make that.
Now they're like I've got todig out of this hole.
Every time I make a dollar, I'monly making 50 cents because
I'm giving half of it back to my, my debt.
Um, and I kind of like see thewriting on the wall like what if
they just quit and walk awayfrom it?

(55:24):
And that's what happened.

Speaker 2 (55:25):
What was the total number?

Speaker 1 (55:26):
It was like $40,000 or something like that.

Speaker 2 (55:30):
How much got paid before they left?
Did you get back the?

Speaker 1 (55:32):
total was like $55,000 and it got like a big
chunk of it got recouped, butstill like we've got this hole
and so this person quits.
Keep in mind we have trailersthat we're paying for that are
just out there throughout thecountry.
Further, we have a contractwith the provider of these

(55:56):
trailers that we have to provideI think it's like 90 days
notice before we want to cancelthat agreement.
Further, we have a 60-daynotice with this customer before
we cancel their servicecontract.
Otherwise, we can be heldfinancially responsible.
So now I'm going to try to make, as you would say, turn, a bad

(56:18):
situation into a positive one.
My goal is like all right, well, I've got other competent folks
that can take this and actuallyrun it the right way and help
us out.
But the whole big point here islike, when you allow someone to
just start running a project,you have to remember there's a

(56:39):
risk of like what if they justwalk away from it?
And they this happened to usthis week.
But we've got, you know, somefolks that are really strong in
this area and we can help themout and transition it.
But like, hopefully you knowthat'll be the the positive
silver lining in all of this butlike we've got a mess on our
hands to try and clean up.

Speaker 2 (57:22):
Right Two things.
Right Two things, three thingsI think of.
Right is the time of your risk,right.
You always have a risk that anyagent you have and also
unfortunate events in theirfamily, and they're out for like
weeks at a time and there's notalways enough staff to be able
to pick that up in a lot ofcompanies, people like you know.

Speaker 1 (57:32):
I don't want to be morbid, but people have died
Like they pass away.
They have a stroke, heartattack, car accident, like that
stuff can happen.

Speaker 2 (57:38):
And I think a learning lesson I have from that
is that anybody running anyproject, someone else in that
organization, needs tounderstand it, because if, for
whatever reason, they are out ofthe office for an extended
period of time, the informationcan't just be in their head, so
it either needs to be writtendown in a document that a
manager can access.
A manager should at leastunderstand what they would need

(58:01):
to do if they had to take itover, because if it's just them,
I've seen this happen at bigcompanies too.
Like in TQL would happen likesomebody who's just gone, and
like they didn't train anybodyelse on this because that was
their job security, and thenthat person's gone.
Nobody even had access to theTMSs, couldn't log in, couldn't
get into these systems, didn'tknow where trailers were, there
was no reporting or it was savedon a different computer.

(58:23):
Like I've seen disastersrelated to only one person,
knowing that the second is thetime right.
Like as an owner of a brokerage, like I'm signing three month
contracts, but, to your point,this guy can leave at any point
in time and I got a 60 daycontract with the shipper.
So like I am committed to atimeframe that is different than

(58:48):
the contract with my employee.
So I need to make sure I atleast have some plan worst case
scenario right To be able totransition if I had to.
Right and then like the thirdthing is like what you said is
that like, though, in most ofthose situations, like there's a
way to turn it into a positiveright, like if you can calm
yourself down, walk away fromthis work on something else and

(59:08):
come back to it with a clearhead, where your emotions are at
least a little out of it,there's usually a way to turn it
into something better than itwas Right and some long-term win
.
Because I feel like that is theone thing that I see over and
over again, just as anentrepreneur in business.
Is it like anytime somethingshitty happens?
The first thought now causeI've kind of developed that

(59:30):
habit for myself is I'm likethere's some way to turn this
into something better.
I don't see it yet, but I knowit's there.
Clear my head, do somethingelse, come back and I'm like
there is some way if youre-approach it usually that you
can turn that into at the veryleast, a break, even if not a
better win than you had, becausenow you've got the right people
doing it instead of the wrong.
You have people that have lessrisk to leave, and you might

(59:53):
make more out of this.
When it's all said and done,get that money back, and then
some by doing this correctly.

Speaker 1 (01:00:00):
So, Well, we unpacked a lot there.
What do you got, Steven?

Speaker 3 (01:00:03):
There's one thing I want to touch on.
It's a conversation thathappens more frequently than I
thought would have to happen asan adult with common sense.
But the concept of risk and thevalue of a dollar just goes
over people's heads constantly.

Speaker 1 (01:00:22):
Well, it's not their dollar.
You know what I?

Speaker 3 (01:00:25):
mean.
So like kind of going back tothis issue, right, we have a
similar issue where there's a anagent that their customer is
over 120 days and they got paida bunch of commission and we're
we're pulling part of thatcommission back.

Speaker 1 (01:00:42):
Yeah, we can't pay commission on money we never
received Like it's.
That's a very simple concept.

Speaker 3 (01:00:46):
Right, and to the agent's point.
You know well, yeah, it's, theydidn't pay, it's not my, I
still ran, I still made themoney.
It's like, well, so there's nomoney to pay you with, so we
have to take this back.
But then on the opposite side,it's the conversation with the
ownership and the people thatyou know pay the bills.

(01:01:06):
It's like, well, we're going totake it back a hundred percent
of what the company owes.
It's like, well, there's alevel of risk that you guys took
that you're paying for.
So, like, if you know at thatlevel you got to return 50, then
you have to eat some of thatcost.
You can't just take itcompletely out of them.

Speaker 1 (01:01:23):
And I understand that it's very common and if you're
going to go the agent routeright, like let's say, let's say
an agent is 50, 50.
I'll just make it round numbers.
A lot of times you see 60, 40,65, 35, 73, but I'll just say 50
, 50, right, that's apartnership gains, gains or
losses.
If the company loses money,you're losing your portion of it

(01:01:46):
.
Some companies have ways tomitigate that.
We actually just signed up forcredit insurance for certain
named customers Because we wantto be able to open the doors and
the floodgates on credit lines,but we want to be able to

(01:02:07):
protect all the parties involved.

Speaker 2 (01:02:12):
So that's a partnership.

Speaker 1 (01:02:13):
That is how being an agent works.

Speaker 2 (01:02:15):
And I think it's important, right, whether you're
an agent or a W-2, it should beshared along with what you're
willing to give.
And again, if I've got a brokerthat works for me and just say
they're cradle to grave and theyget 25% guess what?
They're on the hook for 25% ofthe losses.
I'm on the hook for 75.
Why?
Because that's exactly the riskreturn that we agreed to.

(01:02:36):
If I've got an agent or they'regetting 70% profit of their GP
paid out, if there's a loss,they're paying 70% of that.
I'm paying 30 because that'sexactly what we agreed to.
When things go well, I get 30and you get 70.
When things don't go well, I'mgoing to pay 30, you're going to
pay 70.
Because in a W-2 world, I Idon't.

(01:03:00):
I think also, like the decisionto make that risk is important
and who pays it?
Right?
Like if I'm working at acompany like TQL, I didn't grant
them a credit line.
The credit department did.
I had no say so in that Ididn't decide to give them a
hundred or 150.
I didn't look at their incomestatement and balance sheet.
I didn't look at their creditreport.
A whole other departmentdecided to lend this company 250

(01:03:23):
grand If that company doesn'tpay me.
That was your poor decisionover there credit department
people, not mine.
You didn't involve me in it.
You made that bet, not me.
I should pay none of that insome of those scenarios, yeah.

Speaker 1 (01:03:36):
It.
Just, it all depends on howlike we've had and I don't want
to go too deep down the rabbithole, but we've like the ones.
We look at them all like as acase by case.
But we've had like situationswhere, yeah, like credit
department approved that we'renot going to hold you
accountable, but we can't pay acommission on it because we
didn't get the money.
But then you have the oneswhere it's like credit said no,

(01:03:56):
you pushed back 10 times, wedecided to bend for you and said
fine, and then it didn't go asexpected, which is exactly what
we expected, but you didn'texpect.
So, yeah, now you're gonna haveownership in that, so like.
But you have to have thoseconversations like I've had, um,
in the past like we'll tell anagent, um, we can approve this,

(01:04:17):
but you're taking full risk onit.
So if it doesn't go as expected, you have to own 100% of it or,
more commonly, you're going toown your percentage of it.
So yeah, anyway, this is the.
We've kind of got a mixed bagof things.

Speaker 2 (01:04:36):
It's a good conversation.
It's a good episode.

Speaker 1 (01:04:38):
But this is, like you know, hopefully learn from the
three of us our situations andour experiences here.
Learn from what we've donewrong and our ideas on how to do
things better and what to doproperly, and don't make you
know those mistakes yourself,Cause they can be very, very
costly.
So, cool man, Good discussionguys.
Uh, Cool man, Good discussionguys, Ben.

Speaker 2 (01:05:00):
Final thoughts Whether you believe you can or
believe you can't, you're right.

Speaker 1 (01:05:08):
And until next time go Bills.