July 8, 2025 • 19 mins
Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:
- Expedite freight for aerospace industry
- Flat rates vs. CWT – how to switch
- Quoting linehaul-only rates without fuel
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All right, welcome back for another edition of the
Final Mile.
This is our Q&A session, allfor you guys.
So you guys ask us questions,we answer them.
We actually got a ton onYouTube in the last week.
I've ignored all of the spamcrypto discussions on there.
Have you seen all that?
And these are like robotstalking to each other.
Speaker 2 (00:20):
Talking to each other .
Speaker 1 (00:21):
Yeah, like our most engaged content is just crypto
bros or, you know, ai bots, butanyway, we've got some good
questions.
Um, make sure to like us,subscribe, share with your
friends and colleagues.
Check out the freight brokerbasics course if you're looking
for an educational option on howto start a brokerage or grow
(00:41):
your, your team size and um,train new folks.
And please check out thesponsors in the description to
help support this channel.
All right, ben, our firstquestion.
This one was like kind of offthe wall, but there's a reason I
picked it because I can kind ofbroaden the response on it.
So the specific question washow are the airport's
transportation departmentskeeping up with the engines and
(01:03):
maintenance parts needed for therecent airplane crash events
happening in the US?
So very narrow question, but Iwanted to talk about how, like
forecasting and expediteshipments work because I so
literally one of the things Idid in the army was we had a
parts expediting role at anairfield where, like if we
(01:26):
needed to get an engine part fora you know Blackhawk helicopter
and Apache from one airbase toanother, like that they call
that like AOG aircraft on ground, where it becomes like priority
number one.
You need to get this part tothis location because that thing
can't fly.
When that thing can't fly, wecan't move whatever it has to
(01:46):
move Right.
The same happens withcommercial airlines, like, in
this case, maintenance engineparts.
If there's a recall, like, ifyou remember, the Boeing 737 Max
8 or whatever it was, they gotall grounded a few years ago and
it was like a rush to get allnew parts and whatnot.
But this will happen in otherindustries too, which is why I
picked this question.
(02:07):
If a customer has, likeproduction line down or a crane
needs to be there to replaceanother crane that's getting
moved, or you name it Right, theopportunity costs can be in the
millions of dollars per day ifthis shipment is not delivered
on time.
Millions of dollars per day ifthis shipment is not delivered
on time.
The other part is forecasting,which I'll just hit on real
(02:27):
quick is like understanding.
Like this is where you can kindof talk to your customer.
If you see repeated issueswhere they're like we need this
there ASAP, like futureconversations, you may want to
talk with them like hey, are youguys able to forecast this need
(02:48):
in advance or try to source itfrom an alternative vendor to
make this a little bit easier ontime, because obviously, if I
have like literally has to getthere yesterday, it's going to
cost me and you to get this doneRight.
But the expedite thing is ait's a huge market where it
comes down to like you're notgoing to send an LTL carrier
through their network to getsomething in three days.
It's like, no, I'm going tofind a dude in an F-150 or a guy
in a Sprinter van or someone ina box truck and we're going to
get this thing moved point topoint, nothing else on that, you
(03:11):
know, on that trailer or inthat vehicle.
This is that's your expediteindustry.
That can be very, verylucrative and there's, like you
know, there's a whole entireniche market for it.
But I at least wanted tohighlight that part of it that,
like there's an entire industrythat's designed for those
critical needs to happenovernight.
(03:34):
You know a team of two peopledriving a Sprinter van like
it'll, it'll get there.
It's going to cost money andthey know they're worth it, but
they'll get it done.
So you got anything to add on?
Speaker 2 (03:44):
We used to do those.
One of my closest buddies,who's a broker with me at TQL,
had one of those customers and Imoved a lot of his freight with
them.
I mean, here's how it would gotheir warehouse was in Miami.
You'd get a kid, call a cellphone and be like, hey, I need
this part at O'Hare Airport inChicago, right, and every single
load was open checkbook,meaning like he's like you just
(04:07):
tell me what it costs and sendthe bill.
Like literally was never abudget and everything was
flatbed or dry.
Van teams had to run 24 sevenuntil it got there as fast as
possible Right, and we met withhim once later and we just
wanted to understand thebusiness a little more.
We ended up becoming goodfriends with the guy and we were
like, hey, just out ofcuriosity, like you know, every
(04:30):
load you've ever sent to us hasbeen open checkbook.
And I mean like to give you anidea like I don't know, maybe a
flatbed from Miami to Chicago atthe time was four grand.
We're charging nine and we'reprobably paying five and a half.
So we're overpaying andoverbilling.
But it was also because youneeded to get this done in like
15, 20 minutes, so you had todrop what you're doing.
Speaker 1 (04:49):
You're not getting your median rate or below median
, You're paying.
You're paying on the higher end.
Speaker 2 (04:53):
Best truck, newest equipment, two really good
drivers, great record in yoursystem.
Like you're looking for yourbest drivers, best capacity, and
they've got to be close andthey've got to be empty and
they've got to be able to pickup inside of an hour 45 minutes.
Speaker 1 (05:06):
And you, as the broker, are babysitting that
load the whole time.
Speaker 2 (05:09):
Yeah, like on your cell phone we're talking to the
driver, he's on tracking, butlike you, I mean it is the, I
would say like one of thehighest levels of service of any
website.
I've kind of run Right Yep and,and it was never like a
complaint back and forth aboutrates or anything and we never
really gouged them.
Like we kind of gave him anidea on what we would charge an
extra and he's like dude, likeit doesn't matter, like I'm good
(05:29):
with it, Just make sure it getsthere.
I can't deal with any issues.
And he also knew that even ifsomething happened, we could
recover that load and get itthere.
So, like trust, all those thingsbaked into that.
And what I remember what hetold us was like he's like, look
at, he showed us the airinvoices for some of those parts
because they weren't made inMiami, that's where their
(05:50):
warehouse was and, to your point, they had enough predictive
maintenance in their system toknow they had enough in stock,
(06:10):
whether were like 50, $60,000,because, like sometimes they're
flying that part overnight fromsome manufacturer into Miami and
then throwing it on a truck toget to that airport as fast as
you can.
And he's like, listen, like Imake my margin on like the whole
thing and he's like if wecharge 15%, my bill to this
customer is like $95,000 forthis part.
Like your, over the roadtransport is minuscule, it's not
(06:31):
even it's not even material andthe whole cost of getting this
part there as fast as cause toyour point.
Like if a plane is grounded,like it is a lot of money per 15
minutes, so every 15 minutes toa half an hour it's not there
and getting put on that plane toget it back in the air to earn
money Like they're losing waymore money than it costs to ship
it there.
So those are like really goodextreme examples where price
(06:55):
becomes absolutely irrelevantand service is everything.
Speaker 1 (06:58):
All right.
Next question, as my daughteris staring at me through my door
here.
Next question I'm currentlyserving my customer using flat
rates on inbound lanes, but aswe move into the next quarter
I'm thinking about switching toquoting them on a hundred weight
basis instead.
Do you have any advice on howto approach that conversation
with the customer?
Should I discuss the changebefore sending new quotes, and
(07:20):
how do I make sure I'mcalculating hundred weight rates
correctly from my current flatrates?
All right, so there's a littlebit to unpack here.
Speaker 2 (07:30):
So Explain to everybody what a hundred weight
is.
Speaker 1 (07:33):
Yeah, a hundred weight is where it's going to be
a rate per hundred pounds,right?
So an example of where this isoftentimes used is potatoes and
onions.
For produce they have, or theymight do, a bag weight which is
a 50 pound bag.
So it'd basically be double thehundred weight.
But let's say it's, let's sayit's a commodity like lumber and
(08:00):
you say, well, I can do, um,you know, it's 40,000 pounds
that you're going to load on aflatbed, but 100 and so instead
of doing a single rate for that,your hundred weight would be
per hundred pounds.
That's on there.
So that would be basically, uh,four, what's the math on it?
40, 400 total units max.
Um, but basically like, yeah,cause, like in in the potato
(08:22):
world, I remember it'd be like50 pound bags, which is the same
concept as hunter weight, butit would be like we might have
780, 50 pound bags gettingloaded into, um, a reefer or
something like that.
But so what you might do is,instead of being like, hey, it's
six thousand dollars, all in,you might say it's four dollars
(08:46):
and thirty two cents per bag orper hundred weight or whatever
the commodity is.
So what you're doing is you'regiving the customer flexibility
and encouraging them to or I'msorry, and encouraging them to,
or I'm sorry, you're encouragingthe driver really to load as
full as possible.
Where the customer hasflexibility, where if they don't
load more they're not going tooverpay or underpay for their
shipping, they're going to paythe exact same rate.
And why the customers like itis when they know what their
(09:07):
fixed cost is to ship a bag ofonions, for example, or 100
pounds of lumber from A to B.
they can factor that into theirsale price because they know
transportation is fixed at thisrate, regardless of how much
gets loaded on a single truck.
So, to answer the question, Iwouldn't switch it before
(09:28):
talking to the customer orunless the customer wants to do
it.
Because I find 100 weight orbag rate to be very frustrating
when it gets messy and there'sconfusion and somebody doesn't
get the weight written down orscaled properly.
I've had situations where thecarrier doesn't know it's a 100
weight payment because thecustomer's quoted in 100 weight
(09:51):
but the carrier says like hey,what's the?
all on rate and then they justcalculate you know, oh, it's
four dollars times you know Xamount of pounds.
Here's your, here's your rate.
Then they end up not loadingall the way, or they know it's
hundredweight.
But what they don't know is thecustomers only has enough to
fill up three quarters of thetrailer.
So like stuff like that willhappen because the shipper knows
(10:18):
like, oh, if it's 100 weight,yeah, like I'm only paying for
as much as I load.
Um, this is gonna be, I've gotenough to go out.
That's too much for ltl butit's not enough for full
truckload, but it's still gonnabe.
You know, I'm getting.
Speaker 2 (10:25):
Here's the deal, so the upside is all messy stuff
there the the important thing is, if you're going to bill your
customer 100 weight, you need tomake sure your rate cons are
100 weight as well, and theyneed a line item and
specifically be the same on eachside, otherwise you have a
nightmare.
The second is like it does helpthe drivers in some ways, and
(10:45):
here's why, because if acustomer is paying a flat rate
call it $4,000 for a load,they're incentivized to put as
much on that truck as possible.
And then you got the conflictof the driver going.
You told me this is $43,500.
They put $44,500 in my truckand now I might be overweight, I
won't scale.
So it helps align the driverwith the shipper in a sense that
(11:08):
the shipper doesn't try to takeadvantage of getting the most
out of that four grand right.
So that is another benefit.
The thing that I would say islike, if you're considering this
, what I would do is you'relikely considering this because
somehow you're having some issuebetween flat and what they're
loading, right, but I would, toyour point, first talk to the
customer and be like I wouldpropose this as an option to see
(11:29):
what kind of feedback you get.
The second thing I would do is,if I'm going to quote this new
customer that you used to flatand hundredweight, I would give
them a few examples underneathit so they can start referencing
that in the way they see it,meaning like, if I'm used to
quoting you, four grand and it'sa 40,000 pound shipment, right,
I might say, hey, this is yourprice per hundredweight, and
(11:49):
then underneath it I would writelike 42.5.
Here's what the total would be.
A 40,000 pound truck.
Here's what it would be 44,000.
Here's what it would be.
So you can start to train yourcustomer on understanding what
is that hundredweight equivalentto in a full truck.
Because, to your point, likethe BOL should have an accurate
(12:10):
weight, but like that mightchange a little bit, what they
have in stock might be a little.
So at the very least yourcustomer can't come back and say
they're confused, like to me,like that is one of the ways you
can service your customer aboveother brokers and have an
advantage is by giving themexamples underneath it hey, this
is your per hundred weight.
These are usually where yourtruck loads range 38 to 44.
(12:31):
Here's what it would be at38,000.
Here's what it would be at 44.
And here's what it would be inthe middle.
So they can start to visualizewhat that hundred weight is
according to what they'd used tobeen seeing, and little by
little you could probably getthem into that habit.
But, to your point, like youwould need a really good reason
to want to go through theadditional work.
Speaker 1 (12:48):
I think it's usually the.
It's usually coming from thecustomer because somebody
somewhere in that organizationis like hey, this will help us
save money.
Um, because we're notoverpaying for a truck if we're
not loading it all the way.
That's usually where I've seenit come from, but all right, uh,
last question how do I quote ashipper if they just want the
(13:09):
line haul rate only?
So I want to differentiate here.
If they want an all inrateipper, if they just want the
line haul rate only, so I wantto differentiate here.
If they want an all-in rate orif they just like an all-in rate
is like a today rate, which iswhat am I going to pay you to
get a truck today?
Um, what it could also mean andI'm guessing that's what
they're asking is if it's afuture like if it's for a bid
and they're saying just give usyour, your line haul rates,
(13:30):
because we're going to add afuel surcharge on top of it and
we don't know what that fuelsurcharge is yet, because we
don't know what diesel priceswill cost three months from now.
If that's the case, when you'redoing your rating and you're
looking at historical data, justlook at line haul only.
That's a very, very common way.
Anytime you've done a bid, ben,and anytime I've done a bid, we
(13:53):
don't know what gas is going tocost in the future.
Right, we're, we're quoting, um, most of the time we're quoting
just line all.
I had one lady who she's not inthe industry anymore for
probably for this reason, butshe told a customer she could
give them all in rates for afuture bid.
And they're like okay, I'm goodon the butt because, uh, fuel
(14:14):
went up and she, you know, likeshe couldn't, obviously didn't
have enough margin to handle it.
So, um, but yeah, what, what'syour take on?
Like what?
What?
I mean, I simply look atanalytics and historical data
and I go off that line haul rateand then I do my little magic
from there on figuring out howto price it.
But what's your take on it?
Do you do anything different?
Speaker 2 (14:35):
So two things is one you always want to ask your
customer how they calculate fuel, because every company is a
little different.
They're all pretty close butthey usually benchmark them on,
like the Department of Energything.
That goes out DOE, it's like aweekly thing that gets published
you always want to ask how thatcalculates, because some
companies do it as a percentage,some will do it as a function
(14:56):
of that, some have like weirdmath that they figure out.
So, like I always ask how theycome up with it, because we've
had bids where a customercalculated it very differently
than like that when I did onelast week that had van fuel at
39 cents and reefer at 42 centsa mile.
But, to your point, diesel goesup and down all year and it
allows you to at least break outtwo of the variables in
(15:16):
shipping.
One is what is the supply anddemand of a truck to drive it
there and what is the cost offuel that goes up and down.
So it allows you to at leasttake part of that risk out.
And the thing I think I I thinkI commented on the YouTube
question that says, like if youuse data IQ, there's a little
box there now that will show youeven the spot rate minus fuel.
(15:37):
In fact, even in rate of view,you can see that minus fuel.
So you can see what is the linehaul portion and what is the
fuel portion.
But at the end of the day, likeit, really you shouldn't
overthink it or overcomplicateit.
Right, like you're.
Really it's just the gas moneyto move your truck there and gas
goes up and down, just like ifyou drove your car to Florida at
different times of the yearfrom wherever you're at.
(15:57):
Like it's going to be a littlebit of a different price.
It just allows you to get moremoney when fuel goes up and you
get a little less when fuel goesdown.
Speaker 1 (16:04):
It's like you brought up.
A good point, though, is askinghow they do it when you're if
you're going through a bid witha customer.
If you don't see a fuelsurcharge schedule in there to
your point, ask for it.
But also, how do they handleaccessorials too?
It's a great way to look atthat, like what's your detention
policy, layover policy?
Speaker 2 (16:25):
Layover policy.
How do you?
Speaker 1 (16:26):
guys handle toe news?
How do you handle Lumpers?
Yeah, lumper fees, what do youdo?
Or is there a chance to adjustrates periodically?
Or is there a percentage ofloads that we can deviate on by
a certain percentage?
Those are great questions toask.
(16:50):
And on top of that, um, thebrokers that ask those questions
and have those conversationsclearly are communicating to the
shipper that they are veryservice oriented and focused on
that customer's business, versussomeone just like all right, I
got a bid, let me just go havemy margin on it and submit it
back like it's.
It's just very, very differentway of doing things.
So, good stuff, keep sendingyour questions our way and we
will continue to answer them.
Anything fun and excitingcoming up later this year we're
(17:12):
going to have some guests we gotto bring on.
Speaker 2 (17:14):
Yeah, I got some TIA coming up and I'll be in DC in
September.
Speaker 1 (17:20):
I got to book that still, yeah.
Speaker 2 (17:22):
All right, dude, I did see something funny on
LinkedIn this week.
You'll get a kick of thisbecause you always laugh about
how I bring up my cold plungeall the time.
But there's this other brokerout there that took a picture of
his cold plunge and put it onLinkedIn and I guess everybody
jumped on the fact that he hadthe temperature setting there
that said 50 on it, right, andall these people do like 30
something.
(17:42):
Like most people are probablylike 42, maybe like low forties,
but like they'll go down to 38,.
Probably like 42, maybe likelow forties, but like they'll go
down to 38, 37.
Speaker 1 (17:53):
And, like his said, 50 and everybody like was going
there, like that's a bath,that's not a cold punch, that's
hot tub bro.
Speaker 2 (17:56):
Well, what made me laugh was like I commented on it
and like I just got a new um, anew chiller for mine, cause it
was having a hard time keepingup with like the hot weather and
I didn't notice, but like minewas creeping up to like 43.
And like I switched it out,like the day I was commenting on
that post and mine went down to38 from 42 or 43.
(18:19):
And I'm like I didn't think itwas going to be that much of a
difference.
It is significantly different.
Like I can tell you that threedegrees feels like 15 or 20.
And then all I could think ofthe guy posted at the end of it.
He's like oh, I'll turn it downtomorrow and see how I do.
And when I noticed the threedegree difference I was like man
, if he changed his from 50 to38 the next day, he's going to
(18:40):
have a rough morning.
Speaker 1 (18:40):
It's going to feel like he's on the Titanic man.
Yeah, yeah, wow, all right,good Q&A session.
Any final thoughts, ben?
Speaker 2 (18:49):
Whether you believe you can or believe you can't,
you're right.
Speaker 1 (18:53):
And until next time go Bills.
All right, welcome back for another edition of the
Final Mile.
This is our Q&A session, allfor you guys.
So you guys ask us questions,we answer them.
We actually got a ton onYouTube in the last week.
I've ignored all of the spamcrypto discussions on there.
Have you seen all that?
And these are like robotstalking to each other.
Speaker 2 (00:20):
Talking to each other .
Speaker 1 (00:21):
Yeah, like our most engaged content is just crypto
bros or, you know, ai bots, butanyway, we've got some good
questions.
Um, make sure to like us,subscribe, share with your
friends and colleagues.
Check out the freight brokerbasics course if you're looking
for an educational option on howto start a brokerage or grow
(00:41):
your, your team size and um,train new folks.
And please check out thesponsors in the description to
help support this channel.
All right, ben, our firstquestion.
This one was like kind of offthe wall, but there's a reason I
picked it because I can kind ofbroaden the response on it.
So the specific question washow are the airport's
transportation departmentskeeping up with the engines and
(01:03):
maintenance parts needed for therecent airplane crash events
happening in the US?
So very narrow question, but Iwanted to talk about how, like
forecasting and expediteshipments work because I so
literally one of the things Idid in the army was we had a
parts expediting role at anairfield where, like if we
(01:26):
needed to get an engine part fora you know Blackhawk helicopter
and Apache from one airbase toanother, like that they call
that like AOG aircraft on ground, where it becomes like priority
number one.
You need to get this part tothis location because that thing
can't fly.
When that thing can't fly, wecan't move whatever it has to
(01:46):
move Right.
The same happens withcommercial airlines, like, in
this case, maintenance engineparts.
If there's a recall, like, ifyou remember, the Boeing 737 Max
8 or whatever it was, they gotall grounded a few years ago and
it was like a rush to get allnew parts and whatnot.
But this will happen in otherindustries too, which is why I
picked this question.
(02:07):
If a customer has, likeproduction line down or a crane
needs to be there to replaceanother crane that's getting
moved, or you name it Right, theopportunity costs can be in the
millions of dollars per day ifthis shipment is not delivered
on time.
Millions of dollars per day ifthis shipment is not delivered
on time.
The other part is forecasting,which I'll just hit on real
(02:27):
quick is like understanding.
Like this is where you can kindof talk to your customer.
If you see repeated issueswhere they're like we need this
there ASAP, like futureconversations, you may want to
talk with them like hey, are youguys able to forecast this need
(02:48):
in advance or try to source itfrom an alternative vendor to
make this a little bit easier ontime, because obviously, if I
have like literally has to getthere yesterday, it's going to
cost me and you to get this doneRight.
But the expedite thing is ait's a huge market where it
comes down to like you're notgoing to send an LTL carrier
through their network to getsomething in three days.
It's like, no, I'm going tofind a dude in an F-150 or a guy
in a Sprinter van or someone ina box truck and we're going to
get this thing moved point topoint, nothing else on that, you
(03:11):
know, on that trailer or inthat vehicle.
This is that's your expediteindustry.
That can be very, verylucrative and there's, like you
know, there's a whole entireniche market for it.
But I at least wanted tohighlight that part of it that,
like there's an entire industrythat's designed for those
critical needs to happenovernight.
(03:34):
You know a team of two peopledriving a Sprinter van like
it'll, it'll get there.
It's going to cost money andthey know they're worth it, but
they'll get it done.
So you got anything to add on?
Speaker 2 (03:44):
We used to do those.
One of my closest buddies,who's a broker with me at TQL,
had one of those customers and Imoved a lot of his freight with
them.
I mean, here's how it would gotheir warehouse was in Miami.
You'd get a kid, call a cellphone and be like, hey, I need
this part at O'Hare Airport inChicago, right, and every single
load was open checkbook,meaning like he's like you just
(04:07):
tell me what it costs and sendthe bill.
Like literally was never abudget and everything was
flatbed or dry.
Van teams had to run 24 sevenuntil it got there as fast as
possible Right, and we met withhim once later and we just
wanted to understand thebusiness a little more.
We ended up becoming goodfriends with the guy and we were
like, hey, just out ofcuriosity, like you know, every
(04:30):
load you've ever sent to us hasbeen open checkbook.
And I mean like to give you anidea like I don't know, maybe a
flatbed from Miami to Chicago atthe time was four grand.
We're charging nine and we'reprobably paying five and a half.
So we're overpaying andoverbilling.
But it was also because youneeded to get this done in like
15, 20 minutes, so you had todrop what you're doing.
Speaker 1 (04:49):
You're not getting your median rate or below median
, You're paying.
You're paying on the higher end.
Speaker 2 (04:53):
Best truck, newest equipment, two really good
drivers, great record in yoursystem.
Like you're looking for yourbest drivers, best capacity, and
they've got to be close andthey've got to be empty and
they've got to be able to pickup inside of an hour 45 minutes.
Speaker 1 (05:06):
And you, as the broker, are babysitting that
load the whole time.
Speaker 2 (05:09):
Yeah, like on your cell phone we're talking to the
driver, he's on tracking, butlike you, I mean it is the, I
would say like one of thehighest levels of service of any
website.
I've kind of run Right Yep and,and it was never like a
complaint back and forth aboutrates or anything and we never
really gouged them.
Like we kind of gave him anidea on what we would charge an
extra and he's like dude, likeit doesn't matter, like I'm good
(05:29):
with it, Just make sure it getsthere.
I can't deal with any issues.
And he also knew that even ifsomething happened, we could
recover that load and get itthere.
So, like trust, all those thingsbaked into that.
And what I remember what hetold us was like he's like, look
at, he showed us the airinvoices for some of those parts
because they weren't made inMiami, that's where their
(05:50):
warehouse was and, to your point, they had enough predictive
maintenance in their system toknow they had enough in stock,
(06:10):
whether were like 50, $60,000,because, like sometimes they're
flying that part overnight fromsome manufacturer into Miami and
then throwing it on a truck toget to that airport as fast as
you can.
And he's like, listen, like Imake my margin on like the whole
thing and he's like if wecharge 15%, my bill to this
customer is like $95,000 forthis part.
Like your, over the roadtransport is minuscule, it's not
(06:31):
even it's not even material andthe whole cost of getting this
part there as fast as cause toyour point.
Like if a plane is grounded,like it is a lot of money per 15
minutes, so every 15 minutes toa half an hour it's not there
and getting put on that plane toget it back in the air to earn
money Like they're losing waymore money than it costs to ship
it there.
So those are like really goodextreme examples where price
(06:55):
becomes absolutely irrelevantand service is everything.
Speaker 1 (06:58):
All right.
Next question, as my daughteris staring at me through my door
here.
Next question I'm currentlyserving my customer using flat
rates on inbound lanes, but aswe move into the next quarter
I'm thinking about switching toquoting them on a hundred weight
basis instead.
Do you have any advice on howto approach that conversation
with the customer?
Should I discuss the changebefore sending new quotes, and
(07:20):
how do I make sure I'mcalculating hundred weight rates
correctly from my current flatrates?
All right, so there's a littlebit to unpack here.
Speaker 2 (07:30):
So Explain to everybody what a hundred weight
is.
Speaker 1 (07:33):
Yeah, a hundred weight is where it's going to be
a rate per hundred pounds,right?
So an example of where this isoftentimes used is potatoes and
onions.
For produce they have, or theymight do, a bag weight which is
a 50 pound bag.
So it'd basically be double thehundred weight.
But let's say it's, let's sayit's a commodity like lumber and
(08:00):
you say, well, I can do, um,you know, it's 40,000 pounds
that you're going to load on aflatbed, but 100 and so instead
of doing a single rate for that,your hundred weight would be
per hundred pounds.
That's on there.
So that would be basically, uh,four, what's the math on it?
40, 400 total units max.
Um, but basically like, yeah,cause, like in in the potato
(08:22):
world, I remember it'd be like50 pound bags, which is the same
concept as hunter weight, butit would be like we might have
780, 50 pound bags gettingloaded into, um, a reefer or
something like that.
But so what you might do is,instead of being like, hey, it's
six thousand dollars, all in,you might say it's four dollars
(08:46):
and thirty two cents per bag orper hundred weight or whatever
the commodity is.
So what you're doing is you'regiving the customer flexibility
and encouraging them to or I'msorry, and encouraging them to,
or I'm sorry, you're encouragingthe driver really to load as
full as possible.
Where the customer hasflexibility, where if they don't
load more they're not going tooverpay or underpay for their
shipping, they're going to paythe exact same rate.
And why the customers like itis when they know what their
(09:07):
fixed cost is to ship a bag ofonions, for example, or 100
pounds of lumber from A to B.
they can factor that into theirsale price because they know
transportation is fixed at thisrate, regardless of how much
gets loaded on a single truck.
So, to answer the question, Iwouldn't switch it before
(09:28):
talking to the customer orunless the customer wants to do
it.
Because I find 100 weight orbag rate to be very frustrating
when it gets messy and there'sconfusion and somebody doesn't
get the weight written down orscaled properly.
I've had situations where thecarrier doesn't know it's a 100
weight payment because thecustomer's quoted in 100 weight
(09:51):
but the carrier says like hey,what's the?
all on rate and then they justcalculate you know, oh, it's
four dollars times you know Xamount of pounds.
Here's your, here's your rate.
Then they end up not loadingall the way, or they know it's
hundredweight.
But what they don't know is thecustomers only has enough to
fill up three quarters of thetrailer.
So like stuff like that willhappen because the shipper knows
(10:18):
like, oh, if it's 100 weight,yeah, like I'm only paying for
as much as I load.
Um, this is gonna be, I've gotenough to go out.
That's too much for ltl butit's not enough for full
truckload, but it's still gonnabe.
You know, I'm getting.
Speaker 2 (10:25):
Here's the deal, so the upside is all messy stuff
there the the important thing is, if you're going to bill your
customer 100 weight, you need tomake sure your rate cons are
100 weight as well, and theyneed a line item and
specifically be the same on eachside, otherwise you have a
nightmare.
The second is like it does helpthe drivers in some ways, and
(10:45):
here's why, because if acustomer is paying a flat rate
call it $4,000 for a load,they're incentivized to put as
much on that truck as possible.
And then you got the conflictof the driver going.
You told me this is $43,500.
They put $44,500 in my truckand now I might be overweight, I
won't scale.
So it helps align the driverwith the shipper in a sense that
(11:08):
the shipper doesn't try to takeadvantage of getting the most
out of that four grand right.
So that is another benefit.
The thing that I would say islike, if you're considering this
, what I would do is you'relikely considering this because
somehow you're having some issuebetween flat and what they're
loading, right, but I would, toyour point, first talk to the
customer and be like I wouldpropose this as an option to see
(11:29):
what kind of feedback you get.
The second thing I would do is,if I'm going to quote this new
customer that you used to flatand hundredweight, I would give
them a few examples underneathit so they can start referencing
that in the way they see it,meaning like, if I'm used to
quoting you, four grand and it'sa 40,000 pound shipment, right,
I might say, hey, this is yourprice per hundredweight, and
(11:49):
then underneath it I would writelike 42.5.
Here's what the total would be.
A 40,000 pound truck.
Here's what it would be 44,000.
Here's what it would be.
So you can start to train yourcustomer on understanding what
is that hundredweight equivalentto in a full truck.
Because, to your point, likethe BOL should have an accurate
(12:10):
weight, but like that mightchange a little bit, what they
have in stock might be a little.
So at the very least yourcustomer can't come back and say
they're confused, like to me,like that is one of the ways you
can service your customer aboveother brokers and have an
advantage is by giving themexamples underneath it hey, this
is your per hundred weight.
These are usually where yourtruck loads range 38 to 44.
(12:31):
Here's what it would be at38,000.
Here's what it would be at 44.
And here's what it would be inthe middle.
So they can start to visualizewhat that hundred weight is
according to what they'd used tobeen seeing, and little by
little you could probably getthem into that habit.
But, to your point, like youwould need a really good reason
to want to go through theadditional work.
Speaker 1 (12:48):
I think it's usually the.
It's usually coming from thecustomer because somebody
somewhere in that organizationis like hey, this will help us
save money.
Um, because we're notoverpaying for a truck if we're
not loading it all the way.
That's usually where I've seenit come from, but all right, uh,
last question how do I quote ashipper if they just want the
(13:09):
line haul rate only?
So I want to differentiate here.
If they want an all inrateipper, if they just want the
line haul rate only, so I wantto differentiate here.
If they want an all-in rate orif they just like an all-in rate
is like a today rate, which iswhat am I going to pay you to
get a truck today?
Um, what it could also mean andI'm guessing that's what
they're asking is if it's afuture like if it's for a bid
and they're saying just give usyour, your line haul rates,
(13:30):
because we're going to add afuel surcharge on top of it and
we don't know what that fuelsurcharge is yet, because we
don't know what diesel priceswill cost three months from now.
If that's the case, when you'redoing your rating and you're
looking at historical data, justlook at line haul only.
That's a very, very common way.
Anytime you've done a bid, ben,and anytime I've done a bid, we
(13:53):
don't know what gas is going tocost in the future.
Right, we're, we're quoting, um, most of the time we're quoting
just line all.
I had one lady who she's not inthe industry anymore for
probably for this reason, butshe told a customer she could
give them all in rates for afuture bid.
And they're like okay, I'm goodon the butt because, uh, fuel
(14:14):
went up and she, you know, likeshe couldn't, obviously didn't
have enough margin to handle it.
So, um, but yeah, what, what'syour take on?
Like what?
What?
I mean, I simply look atanalytics and historical data
and I go off that line haul rateand then I do my little magic
from there on figuring out howto price it.
But what's your take on it?
Do you do anything different?
Speaker 2 (14:35):
So two things is one you always want to ask your
customer how they calculate fuel, because every company is a
little different.
They're all pretty close butthey usually benchmark them on,
like the Department of Energything.
That goes out DOE, it's like aweekly thing that gets published
you always want to ask how thatcalculates, because some
companies do it as a percentage,some will do it as a function
(14:56):
of that, some have like weirdmath that they figure out.
So, like I always ask how theycome up with it, because we've
had bids where a customercalculated it very differently
than like that when I did onelast week that had van fuel at
39 cents and reefer at 42 centsa mile.
But, to your point, diesel goesup and down all year and it
allows you to at least break outtwo of the variables in
(15:16):
shipping.
One is what is the supply anddemand of a truck to drive it
there and what is the cost offuel that goes up and down.
So it allows you to at leasttake part of that risk out.
And the thing I think I I thinkI commented on the YouTube
question that says, like if youuse data IQ, there's a little
box there now that will show youeven the spot rate minus fuel.
(15:37):
In fact, even in rate of view,you can see that minus fuel.
So you can see what is the linehaul portion and what is the
fuel portion.
But at the end of the day, likeit, really you shouldn't
overthink it or overcomplicateit.
Right, like you're.
Really it's just the gas moneyto move your truck there and gas
goes up and down, just like ifyou drove your car to Florida at
different times of the yearfrom wherever you're at.
(15:57):
Like it's going to be a littlebit of a different price.
It just allows you to get moremoney when fuel goes up and you
get a little less when fuel goesdown.
Speaker 1 (16:04):
It's like you brought up.
A good point, though, is askinghow they do it when you're if
you're going through a bid witha customer.
If you don't see a fuelsurcharge schedule in there to
your point, ask for it.
But also, how do they handleaccessorials too?
It's a great way to look atthat, like what's your detention
policy, layover policy?
Speaker 2 (16:25):
Layover policy.
How do you?
Speaker 1 (16:26):
guys handle toe news?
How do you handle Lumpers?
Yeah, lumper fees, what do youdo?
Or is there a chance to adjustrates periodically?
Or is there a percentage ofloads that we can deviate on by
a certain percentage?
Those are great questions toask.
(16:50):
And on top of that, um, thebrokers that ask those questions
and have those conversationsclearly are communicating to the
shipper that they are veryservice oriented and focused on
that customer's business, versussomeone just like all right, I
got a bid, let me just go havemy margin on it and submit it
back like it's.
It's just very, very differentway of doing things.
So, good stuff, keep sendingyour questions our way and we
will continue to answer them.
Anything fun and excitingcoming up later this year we're
(17:12):
going to have some guests we gotto bring on.
Speaker 2 (17:14):
Yeah, I got some TIA coming up and I'll be in DC in
September.
Speaker 1 (17:20):
I got to book that still, yeah.
Speaker 2 (17:22):
All right, dude, I did see something funny on
LinkedIn this week.
You'll get a kick of thisbecause you always laugh about
how I bring up my cold plungeall the time.
But there's this other brokerout there that took a picture of
his cold plunge and put it onLinkedIn and I guess everybody
jumped on the fact that he hadthe temperature setting there
that said 50 on it, right, andall these people do like 30
something.
(17:42):
Like most people are probablylike 42, maybe like low forties,
but like they'll go down to 38,.
Probably like 42, maybe likelow forties, but like they'll go
down to 38, 37.
Speaker 1 (17:53):
And, like his said, 50 and everybody like was going
there, like that's a bath,that's not a cold punch, that's
hot tub bro.
Speaker 2 (17:56):
Well, what made me laugh was like I commented on it
and like I just got a new um, anew chiller for mine, cause it
was having a hard time keepingup with like the hot weather and
I didn't notice, but like minewas creeping up to like 43.
And like I switched it out,like the day I was commenting on
that post and mine went down to38 from 42 or 43.
(18:19):
And I'm like I didn't think itwas going to be that much of a
difference.
It is significantly different.
Like I can tell you that threedegrees feels like 15 or 20.
And then all I could think ofthe guy posted at the end of it.
He's like oh, I'll turn it downtomorrow and see how I do.
And when I noticed the threedegree difference I was like man
, if he changed his from 50 to38 the next day, he's going to
(18:40):
have a rough morning.
Speaker 1 (18:40):
It's going to feel like he's on the Titanic man.
Yeah, yeah, wow, all right,good Q&A session.
Any final thoughts, ben?
Speaker 2 (18:49):
Whether you believe you can or believe you can't,
you're right.
Speaker 1 (18:53):
And until next time go Bills.
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