Freight Collections: How to Protect Cash, Enforce Liens, and Survive Slow Pay | Episode 314

Cash flow isn’t just paperwork—it’s survival for a freight business. In this episode, attorney Cristina Belaval (Freight Collection Solutions) and consultant Janie Howerton share the habits, documents, and legal tools that actually get brokers and carriers paid. From weekly AR routines and clean invoicing to lien rights, setoffs, and collection strategies, they outline how to turn booked margin into real cash while avoiding costly delays. If you want stronger AR discipline and fewer payment surprises, this one’s a tactical roadmap.

Cristina Belaval - LinkedIn

Janie Howerton - LinkedIn

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Episode Transcript

SPEAKER_00 (00:19):
Welcome back.
It's another episode of theFreight360 podcast.
We've got some special guestswith us today.
We'll get to in just uh just amoment here.
We're really excited for thisepisode.
Uh, if you're brand new here,you caught us for a fun one, but
make sure to check out all theother hundreds of episodes and
uh shorter form educationalvideos, blogs, etc.

(00:40):
You'll find them atfreight360.net.
You'll find them on YouTube andshared across various social
platforms.
If you're looking for aneducational option for your team
or for yourself, you can alsocheck out the Freight Broker
Basics course, which is on ourwebsite.
And while you're on the websiteor on YouTube, you can leave us
comments, send us a message.
We love to answer thosequestions on our final miles

(01:02):
segment that drops everyTuesday, where all we do is
answer questions from ouraudience.
So uh Ben, how's things going inFlorida today?

SPEAKER_04 (01:11):
Nice, man.
Weather's starting to getcooler.
It's enjoyable outside ofsummer, man.

SPEAKER_00 (01:16):
It was like 48 degrees when I got my son on the
bus this morning.
So but anyway, we got someguests here.
I want to get an intro.
I want to get a quick intro.
Uh, we've got Christina Bellevaland Janie May with us.
So, Christina, real quick, forthose that uh don't know you,
um, quick intro on who you are,and we'll get more into your

(01:37):
backstory in a little bit here.

SPEAKER_05 (01:39):
Yes, thank you, Nate.
My name is Christina Belaval.
I am an attorney in Texas.
I am an animating partner inFreight Collection Solutions Law
Group, and I dedicate myself tocollecting freight for brokers,
carriers, and uh factoringcompanies.

SPEAKER_00 (01:54):
Awesome.
A subject matter expert.
Can't wait to pick your brain.
All right, Janie, quick introfor you.

SPEAKER_02 (02:01):
Hi, Nate.
Uh I'm Janie Howerton.
I am a uh business consultant.
I work with businesses to createfinancial clarity.
I've worked with worked in theuh freight and uh collections
industry for more than 20 years.
Again, helping businesses createfinancial clarity by

(02:22):
understanding their numbers, uhidentifying where there may be
opportunities to um increasetheir cash flow.

SPEAKER_00 (02:30):
Awesome.
Well, we appreciate both of youbeing on here.
When whenever Ben and I have anyguests come on our show, um,
we're very, very particular withthe uh the quality and level of
knowledge and expertise thatfolks have.
And you you both are a great fitfor it.
So we we appreciate you guysjoining us.
Um Ben, it's funny, like a lotof the times the content we talk

(02:53):
about on our show is about likeyou know, how to grow and get
customers and build your carriernetwork.
It's a lot of tactical things umin the trenches of the
day-to-day operations.
Uh, but then if you pan out andyou look at what does the TIA
have in their curriculum forteaching their new brokers, that
we also coach that.
And um, financial management isone of the main lessons that

(03:17):
that is taught in that in thatuh class.
And we typically start thatclass off, and sometimes it's
business owners that are inthere, sometimes it's uh brand
new entrepreneurs.
And we talk about the kind ofthe unseen or unthought of part
of of brokerage is uh the factthat we we operate like a bank,
right?
I mean, we're yes, we're findingcapacity of trucks for our our

(03:39):
shipping customers, and we're umhelping keep continue to load
our partner carriers with ourcustomers' freight.
But beyond all of that, the waythe money flows, and sometimes,
and we'll we'll get into it herewith with you guys, sometimes
when it doesn't flow and youhave to try and go chase it
down, that can really uh tank abusiness if you don't have a

(03:59):
good pulse read on the financialwell-being of your of your
organization.
And you know, if things gowrong, what do you do?
How can you prevent those?
We're gonna break all that downuh today.
Ben, anything you want to add inon the front end here?

SPEAKER_04 (04:12):
Just that I think it's super relevant and most
often overlooked, right?
Everyone always wants to talkabout growth, more business,
more sales, but rarely do Ithink business owners or even
operators spend enough timelooking at not just how the
money flows, when does it flowand when doesn't it flow, right?

(04:33):
And where and what is happeningon that side of things because
it doesn't really help you ifit's like the analogy I use like
isn't it's like fishing.
Okay, you can catch a bunch offish, but if you got a hole in
your boat and the fish you justcaught are swimming out as
you're adding them to it, likeyou're not making a lot of
progress.
And I think why this is also thetiming is relevant is like we've

(04:53):
been in a down market for thelongest period ever.
And I think one of the silverlinings of just all economic
cycles is when they're at thebottom, it forces businesses to
do more of this, which iswhether it's you know,
tightening the belt, looking atyour accounts receivable, but
like we really should be doingthis more, right?
And businesses really willoverlook these things when it's

(05:15):
just as important collecting themoney you earn as it is actually
earning the money.
And again, it's really oftenoverlooked, both the timing and
if you're getting paid on thework you've already done.
So we had a great conversation,all four of us, before the
recording.
So I'm really anxious to kind ofput this all together because I
think it's gonna be a reallyengaging and really valuable

(05:37):
topic to kind of cover today.

SPEAKER_00 (05:39):
Yeah.
So, Christina, I wanna, I wannaru get I want to start off with
uh kind of get into your storyand your company freight
collection solutions.
So um how does one findthemselves in uh in a career
path uh such as freight debtcollections?
And I know you you've got thelaw background, and and by the
way, if you guys are listeningand aren't watching, you've got

(06:00):
to go over to YouTube and checkout the the cowskin on her wall
behind her because she's aTexan.
So Christina, get it kind of getus up to speed.
How do you end up where you are?

SPEAKER_05 (06:10):
Well, it's a funny story.
I I practice law in Puerto Ricouh originally.
I used to represent banks uh inlender liability cases, and I
moved uh to Texas in 2016.
Uh I became licensed to practicelaw and I but I continued to

(06:32):
work with the banks in PuertoRico.
Uh but then Maria came and allthe courts shut down, all the
the banks weren't doinganything.
So I like I gotta find myself ajob in Texas.
And there was a a small firmthat was dedicated to trucking
companies, and they did mostlypersonal injury and they told

(06:57):
me, look, we want to create acollections uh section in our
firm.
Uh, would you like to run it?
I'm like, Yes.
I used to work for banks.
Something that I can do.
And and I looked at the issue,and I'm like, there's multiple
ways that you can collect hereuh those on-paid freight
charges.
That's usually not the case whenyou collect money.

(07:19):
I'm like, yeah, I will do it.
And I since then, that's all Ido.

SPEAKER_04 (07:24):
It's it's so funny because it's like almost, I feel
like Nate, almost everyone we'veever met or even talked to kind
of like inadvertently ends up inour industry.
Like kind of yeah, like I don'treally know of anybody that's
like in high school or incollege.
It's like, this is where I'mgoing.
Like like I started in bankingtoo, and it's like you just kind
of it finds you in this weird,strange way where it's like

(07:47):
everyone's story has that kindof like aspect to it, I guess.

SPEAKER_00 (07:51):
So some of the some of the stats, right, over your
career, and I'm just going offof notes I've got here, so I
feel free and and polish them upand give more some details, but
um over 20 I'm seeing 23 milliondollars recovered.
So can you talk a little bitabout the you know, I guess the

(08:59):
range of what a collection sizecould look like for a factoring
company or for a freight brokeror motor carrier?
Are these one-offs?
Is it usually, hey, we've got adozen uh uncollected invoices?
How do you how do you get up toover$20 million like that?

SPEAKER_05 (09:16):
So it's it's been eight years now that I've been
doing this.
So that's that's my track recordsince I began.
Uh, but obviously the factoringcompanies have more volume.
So when you go after thebrokers, you're going with
multiple carriers.
I also represent uh collectionscompany locally here in Texas,

(09:37):
Baxter Bailey.
So they also come uh withmultiple carriers against one
broker.
Uh so that would increase theamount of liability.
But we also do like individualcollections, smaller claims, uh
if the if it's necessary for ourclients, like we we will go
collect whatever the clientneeds.

SPEAKER_00 (09:58):
Gotcha.
And I I feel like there's a uhI've talked to people in the
past, just other brokerageowners, and I'm curious your
thought on that.
Some of them are like, you know,the you know, this company owes
us 20 grand, but you know, we'regonna end up spending 50 grand
to get 20 grand.
Is there any is there any truthto that or is it actually a
simpler process than to as faras collection goes?

SPEAKER_05 (10:21):
So I I have two modes of operation.
I can do a contingency and wecap our rates at 33% or hourly.
And it depends on the clientbecause my my experience is that
when you're factoring and youhave like larger claims, you're

(10:42):
better off with the hourly ratebecause if not, you're gonna
lose 33%, even if we're doingall the work and all the
expenses, we're carrying them.
You it's not gonna get to thatnumber.

SPEAKER_00 (10:54):
So yeah, so it probably just comes down to what
makes the most business sensewhich way you want to go with
it, right?

SPEAKER_05 (10:59):
Yeah, and I'm for both.

SPEAKER_00 (11:01):
Yeah.
Nice.
All right, Janie.
Um, you've got a background infinance, in uh trucking.
Give us a give us the storyhere.

SPEAKER_02 (11:13):
So I didn't start in banking, um, but I I I've seen
firsthand, and when I sayfirsthand, I'm talking about
myself.
I've seen how a company can bebrought to its knees, one by not
understanding um its numbers,and two, um not collecting and

(11:37):
being able to keep your businessrunning.
And I'm I'm reminded of of andone of my what I call my biggest
failures.
My grandmother would say thatit's not a failure if you
learned from it.
Uh, I definitely did learn.
And for me, it was really notunderstanding my financials,

(11:59):
what they were telling me.
And it took somebody coming intothe company, uh, I never forget,
he asked me to let him take alook at my my PL.
I kept really good records, butdidn't understand it.
And he looked at my PL and hesaid, Well, you're bringing in

(12:20):
money.
He says, But one, you're you'reyou're not getting well, he
didn't see it from my PL.
The first thing he said was, um,your people aren't productive.
And I remember sitting theregoing, How does he know that?
But I didn't ask.
And he looked at my balancesheet and he says, You got all
this money sitting here.

(12:42):
What's the problem?
And again, I wouldn't ask how heknew that, but that sent me on a
journey to understand more aboutwhat's the whole business behind
running a business.
And that's why I do what I dotoday, because we can be very
passionate about what we do.

(13:03):
There are so many businessowners that I've worked with
over the years who are verypassionate about what they do.
They feel like they've beencalled to do it or that's their
purpose.
But when we start talking aboutthe business behind running a
business, it's a whole differentkettle of fish.
And I've learned that that'sreally that weak link,

(13:24):
especially in the truckingindustry.
Um, there are hundreds ofthousands, even millions of
dollars sitting on the balancesheet where there are folks
think, oh, well, we're nevergonna collect that money.
But it's money that they'veearned.
So why not go after it?
And that's what I feel makes mypartnership with Christina just

(13:48):
that much more um awesomebecause you know, I teach that
financial clarity side andunderstanding, you know, what
processes you need to have inplace, uh, how you go after it,
and then having uh uh someonelike Christina that can actually
go after it once you've reachedthat point where you know you

(14:11):
can't go any further.

SPEAKER_00 (14:13):
You brought up a couple of great points there.
And Ben, one of the things thatyou and I have talked about uh
ongoing throughout our contentover the years is that you know
everybody has a blind spot.
Um, we all have strengths andweaknesses, and you might be the
greatest salesman, in youropinion, when it comes to the
freight brokerage industry.
That doesn't mean you're gonnabe the best when it comes to

(14:36):
running a business orunderstanding the financial
aspects of your business.
That's why some of the mostsuccessful companies, if it's a
a great salesperson that startsit, you might find that they
understand their weakness andand their lack of knowledge in
the financial space, and there'sa huge need to hire somebody
that can do that job for thembecause that's not necessarily

(14:58):
their strength.
Um, and also you might find thatsomeone that is really great at
business but struggles at saleshas to hire sales managers and
um, you know, you basically haveto fill in the gaps of of where
your business, you know, youknow where your strengths are,
but you have to fill in the gapsof where you have areas for
improvement.
So um it's great to see the twoof you uh, you know, have that

(15:20):
synergy and it it's reallycollaborative.
So um I wanna I wanna get intothe collections side here.
So, Christina, can you take usthrough um and you know, the
average listener, and you know,myself and Ben, we sit in this
in this job day in and day out,right?
We're we're we come from thebrokerage um background, but

(15:41):
we've you know we've got folksthat are carriers involved with
factoring companies as well inour audience.
So and we all kind of fall intothe same boat of if there's
money due to us, um, thequestions that commonly come up
are how do I call how do I go toa collections person?
When do I go to a collections umorganization?

(16:02):
Um, what requirements do I haveto be able to turn up, like what
kind of documentation do I needto have?
So can you kind of take usthrough like the the high level
on um you know invoice isn't uhpaid?
Um, where do we go from here?
What does that process looklike?

SPEAKER_05 (16:19):
Yeah, uh being a collector is it's like an art.
Uh you have to be sort of like asalesperson, but also be good in
terms of aggressiveness andbeing good with your numbers, uh
accounting type person.
Uh and when you speak with yourcustomer, you have to know uh if

(16:40):
that person is gonna pay.
You have to know your customer.
And if you think that the personis avoiding you, he's promising
payments and they're they're notuh complying with their their
agreed terms.
Uh you have to second guess ifthat person's gonna pay.
Because you want to save thecustomer relation.
Uh but if you're not gonna ifthey're not gonna pay, it's it's

(17:01):
time to send it to someone elsethat's gonna be more aggressive.
I I'm not here to tell you thatI'm I'm going to save that
customer relationship becausewhen you send it out to me, I'm
gonna be very aggressive and I'mgonna get you paid.
So it's it's an issue of knowingyour customer, and if your
customer isn't paying, then it'stime to give it to someone else
that's gonna be more aggressiveand it's gonna get I'm gonna get

(17:24):
you paid.

SPEAKER_04 (17:25):
Well, and I think that's a really good point,
right?
The way I always kind of lookedat it, and when Nate and I talk
about this from like financialeducation standpoint, is like
one, watching your days to pay,right?
Is your customer starting to payslower?
Is there something happening?
Because like in our industry, ifwe're doing business with any
company, right, like they're notin the transportation business,
they are in the producebusiness, or they're in the

(17:47):
sporting goods business, orthey're in the steel business,
right?
So if they're not, if yourcustomer isn't getting paid by
their customers, right?
And their cash flow isdecreasing, right?
And they have to make decisionswith less money than the bills
that are due from their point ofview, right?
Like they're gonna pay to keepthe lights on the building,
they're gonna pay theirsalaries, they're gonna pay to

(18:10):
make sure they have rawmaterials for their employees to
keep producing whatever it isthat they make, right?
And once you go all the way downthe list of every one of those
bills that that shipper has,we're like the last one on the
list, right?
Because usually they havechoices of, okay, well, if I
just don't have enough money andI don't pay this trucking
company or this broker, there'sanother broker or another

(18:32):
carrier that will at least runmy freight today.
So we can at least keepoperating until hopefully our
customers pay us the money we'reowed, right?
And the first is like, are youaware that they're starting to
pay you slower?
Because I think the firstquestion is like, not will they
pay, but can they pay, right?
And are they choosing not to payyou to pay someone else?

(18:53):
And at which point does thatbecome so bad that they cannot
pay you?
And then it's not just will notpay you, but don't have the
ability to, and now you're in abad position where it's much
more difficult, right?
So, like when you're kind oftalking, whether, you know,
Janie, you're looking at atrucking company's books or
brokerage, like, do you guys uselike rules of thumb where it's

(19:15):
like, okay, this invoice is agedbeyond what it's certain what it
typically does where you startthis process or advise the
customers to start like lookingfor these avenues?
How do you kind of draw thatline for like if I'm a trucking
company owner, how do I look atone invoice for certain
customers versus another one andgo, okay, now it's time to start
talking with folks like you?

SPEAKER_02 (19:36):
Right.
That's good.
And as a matter of fact, Ibelieve that what most carry
what what most truckingcompanies should do is make AR a
part of their discussions everyweek.
I remember one company inparticular, true story, um, I
was working with their accountsreceivable, and I noticed that

(20:00):
the young lady was moreconcerned with getting the
invoices together so that shecould send it over to the
factoring company and uh youknow get get those invoices
factored.
But I was looking at the aging,one, she didn't know what that
was.

(20:20):
Once I explained it to her, shesays, Well, we we probably won't
get paid for those.
It was$1.2 million.
Wow.
Right.
And most of them were over 120days old.
I I'd say all of them, right?

(20:41):
Um once I brought it to theowner's attention, then it
became part of a weeklydiscussion.
How are we gonna get this money?
Um, who's gonna help us go afterit?
But to answer your question moredirectly, what they should do is
every single week, when you'rehaving your operations meetings
or your finance meetings, thatneeds to be a part of the

(21:04):
discussion.
Once that invoice hits 30 days,who's making a phone call?
Who's contacting that client touh one make certain they got the
invoice?
That's that's one of the firstthings we do, and it's very
customer friendly.
Did you did you receive it?
Do you have any questions?
Um, no, no questions.
Okay, when can we expectpayment?

(21:27):
Right?
And then you make a note thereshould be some kind of tracking
system in place to ensure thatone, you made the phone call.
If they had questions, youanswered the questions.
If they say they didn't receiveit, then you send them the
invoice again with theexpectation that we're going to
have a payment within X numberof days if you don't give us a

(21:50):
call back with questions.
Um and then there should be somekind of notes so that when we
meet again uh as a team, we cantalk through who we contacted,
what was the outcome, and howmuch have we collected.
So that it really starts thereand identifying one, if it's

(22:10):
going over your threshold,whether it be 30 days, 45 days,
or or or upon receipt.

SPEAKER_04 (22:17):
Yeah, I think that's go ahead, Nate.

SPEAKER_00 (22:19):
I was gonna say there's a lot to unpack there.
And I just want to hit on acouple things of best practices.
So, number one, one of thethings that um we do at my
company is that every every rep,right, that is an account
manager will say, right, um,they get an aging report every
single week.
And oftentimes when someone'snew to the company and they'll

(22:40):
say, Hey, what is an agingreport?
I'm glad they asked me becauseif you've never worked in an
organization where you're partof that uh discussion, you you
might have never heard what theterm aging means.
That just means it's literallythe age of the invoice.
How old is it, right?
Is it 10 days' age, which meansit was sent 10 days ago, or is
it 120?
So it's four months old.
Um, so we get it in front of ourreps every single week.

(23:02):
And then, Janie, to your point,I hope I fully agree with you.
Those weekly meetings whereyou're talking about AR is
extremely important.
And you'll tend to know like thesame customers will pop up as
like your discussion points in alot of these meetings.
Those are your problem children,right?
And you have to kind of decideum which ones you want to focus

(23:23):
on.
And um, hey, is this one givingus the same runaround, you know,
three times in the past wherethey tell us the checks in the
mail and it got lost, or um,they're just waiting out a
vendor payment to them and we'regonna be the first one they're
gonna cut a check to.
You you kind of get to know umwho who you can believe and who
you've got to put pressure on.
Um, and I think to toChristina's point earlier,

(23:46):
knowing your customer, part ofunderstanding and knowing that
relationship is knowing ifsomeone's gonna be a straight
shooter with you or if they'regonna beat around the bush.
And depending on you know whatkind of clarity you get from
that is likely gonna determinewhat direction you go in, right?
Are we gonna keep this internal?
Um, and to Janie's point, makethe calls, put notes down, have

(24:06):
follow-ups, or do we have to gothe external route and have
someone with a big muscle get inthere?
Because um preserving thecustomer relationship is a very
fine line.
And if you go about it the wrongway, you could there could be a
total misunderstanding.
And if you're like this, thisinvoice is 30 days past due, I'm

(24:27):
gonna I'm calling them yellingat them, they're gonna be like,
dude, we never got your invoice.
And you realize that your youraccounting team screwed it up,
right?
And that sent it to the wrongemail address or didn't upload
it into their system or whateverthe case might be.
A lot of times we find that justgood communication can can solve
a lot of the problems andprevent a lot of the headaches.
Absolutely.

SPEAKER_04 (24:48):
I wanted to hit on two or three things too, to
recap.
Because again, like Nate said,there was a lot in what you just
said, meaning, like, the firstthing I do with any client or
any brokerage I've worked withis like, I literally go to the
aging report and that's exactlywhere I start.
And we do the same thing.
Like I look at it every week,right?
And then you got to askquestions, right?
Because if you're a freightbrokerage, a lot of the brokers

(25:09):
that are earning, right, oroperating, and even the owners,
they look at their TMS and go,like, well, this is what we
generated in profit every week.
But then they look at the bankaccount and they're like, but
why don't we have enough money?
And like bridging that gap islike you got to work backwards
all the way through becausemaybe you're running a lot of
freight and you're not gettingthe PODs to invoice when you

(25:30):
should, right?
Maybe it's all the way backthere.
Maybe you're getting them intime and sending them out.
Maybe to your other point, maybeyou're not invoicing your
customers correctly.
Like I've gotten into brokeragesand clients where they're like,
this customer's 60 days pastdue, and then we get on the call
with the customer, they're like,you didn't do three of the
required invoicing procedures.
So like we didn't get them, theyweren't done right, and then the

(25:51):
clock starts again right fromday one.
That can be an issue, right?
And just literally working yourway back through and seeing how
is the money generating?
Like, what is the cash flowconversion cycle?
Not just, hey, we ran a load, wegenerated profit on the books,
but like, how long did you waitto invoice?
How long did it then take thecustomer to pay?
And I think the really importantpoint you made, which is really

(26:14):
overlooked, is like you need asystem to track what you are
saying when you're reaching out,what the response is, because
it's not that you justnecessarily escalate the tone,
but like the first approach, andNate and I always talk about
this, is like it should just belike, hey, just wanted to make
sure you got it.
Do you have any questions?
Right.
Right.
Finding out if that or you didsomething incorrect.

(26:35):
Then the next is like, okay, canwe get an update on this?
Now, if another week or twoweeks passes and you get the
same answer, if you didn't lookand see what the response was
and what you asked about thefirst time, I've seen scenarios
where accounting people on thecollection side are just like,
oh, we just sent another email.
They'll just send the same emailevery week going, here's the

(26:56):
invoice.
And they're like, Yeah, we'vebeen doing this for six months
now, and um, we don't know.
We're like, Well, okay, well,maybe make a phone call, right?
Maybe escalate to do a littlebit more to get some more
information, but nobody'stracking that, nobody's looking
at that.
There is no central system toeven have an idea of what you
are doing versus what you shouldbe doing.
So I think those are really goodbest practices for any business,

(28:10):
but for sure in ours.

SPEAKER_02 (28:13):
That's right.

SPEAKER_05 (28:13):
And everybody's I would also uh like to note that
uh you have to know where you'reservicing because if you have,
for example, uh constructionsites, you have the right to
file mechanics lien as a as acarrier.
Uh and those have very smallwindows to file those pre-lean

(28:34):
notices.
And you can't let the AR justsit there and not send those
pre-lean notices because thenyou you lose your right to file
that that lien.

SPEAKER_04 (28:45):
Well, I think that's a good segue.
And I want you to kind of unpackfor everybody what a mechanics
lien is, or even we can juststart with like what a lien is
and how much of a window youhave, because there's the first
question of can they pay or willthey pay?
But then the other question islike, what leverage do you have
to make them pay you money thatyou're owed, which is typically

(29:05):
a lien or other scenarios.
So, like, can you walk throughthe basics of like what is a
lien for somebody out there?
How do you guys use that to helpthem get paid?

SPEAKER_05 (29:14):
Okay.
So most of your listeners havefactoring companies, they are
secured creditors.
So a lien makes you a securecreditor.
If that debtor files forbankruptcy, you're not going to
be on the unsecured creditorside, which usually gets paid
pennies on the dollar.
You're gonna be on the securedcreditor side and you're likely

(29:37):
going to collect all or most ofwhat it's owed.
Uh so you have a preferentialtreatment as creditor, just
having the right to a lien.
Uh motor carriers have uh alsolien rights over the products
that they haul.
If you if you surrender that tothe consignee, you lose that

(29:57):
lien right.
But that's what gives margin tohaving the right to collect
against the consignee if thebroker doesn't pay, because you
lost that lien right, but thelaw recognizes the right of the
carrier to go for those unpaidfreight charges against the
shipper and the consignee.
So that's even if you lost thatlien, you have the right to

(30:18):
collect.
Uh, it's a matter of equity thatthe force can recognize.

SPEAKER_04 (30:22):
The thing that I kind of want to unpack for some
listeners out there is like ifyou think of a lien, I'm like, I
feel like the easiest, mostrecognizable example is like a
house, right?
So I buy a house with a loanfrom the bank.
The bank is gonna put a lien onthat house, which means if I
sell the house, nobody can getthe deed for my house until the
lien is satisfied, meaning thatbank gets paid the money they

(30:44):
gave me to buy the house beforeNate can take possession of the
house, right?
Like it's paperwork thatbasically gets filed that says,
like, you have a right to thisasset, right?
If or when something goes wrong,right?
And so like a mechanic's lien istypically like on a construction
site, which means like thatproperty can't change hands or

(31:05):
have anything done with it untilthose are satisfied.
For factoring companies, it's aUCC one against all of your
receivables, which is kind ofanother topic, but like that's
how the factoring companiesoperate.
But the other one you pointedout is like if a motor carrier
moves freight for a shipper,right?
Like they have rights becausethat shipper benefited from the

(31:26):
service the carrier provided.
So do you want to kind of justexplain to everybody like how
that why?
Because that one's reallyimportant, right?
Because lots of people think,oh, there was a broker in the
middle, or maybe two brokers inthe middle with a co-brokerage
and a truck move the freight, orthere was fraud and the truck
that was supposed to move itwasn't it.
But at the end of the day,right, the basics is I was

(31:48):
taught was that like there's ashipper, there's a beneficial
cargo owner that owns thosegoods.
Any carrier that moves thosecargo.
Move that cargo, the people thatown the cargo benefited from it
getting moved from point A topoint B.
So regardless of the paperworkor who was in between in the
middle of the transactions, thecompany that actually moved it
and the company that benefited,right?

(32:09):
Like their security basically.
Do you want to kind of likeunpack why that matters for your
clients?

SPEAKER_05 (32:15):
So yes.
So uh as I said, the courtsystem does recognize this
beneficial right to motorcarriers for their unpaid
freight charges.
So it doesn't matter who hiredthe carrier or if there's like
multiple brokers in the middleor double brokered loads.
Uh the bill lading is thecontract between the shipper and

(32:39):
the carrier.
So the carrier that hauled theload has a right to go against
that shipper.
And as I said before, the rightto the consign knee, that's
inequity.
That is because I lost my lienrights for the against that
consign knee.
The courts recognize that theyhave the right to collect
against that consign knee if theintermediary doesn't pay.

(33:00):
And there's also double paymentliability.
Even if that shipper or consignknee paid someone in the middle,
whoever they hired, and thatperson paid the other person
that they hired, but theyweren't the ones that hauled the
load, they still have to pay.
So that is great for me as anattorney for freight collections

(33:21):
because I have multiple avenuesto collect from.
And for my clients, because theyhave multiple areas of recovery.
You don't recover twice.
The amount that you get is isthe unpaid freight charges.
But you can go against multiplepeople.

SPEAKER_04 (33:35):
And this one is really common.
I would say it's probably themost common one we see kind of
in practice, which is okay, acustomer of mine gives me a
load, right?
And I book a carrier, right?
And my customer pays me, but thecarrier I booked didn't actually
haul the freight.
I thought they did.
They hired another motor carrierunlicensed.

(33:57):
Like they either pretended to bea broker or they just gave this
load from one trucking companyto another trucking company,
right?
And that company that moved thefreight, I'm unaware of.
I thought the company I hired isthe one that moved it, right?
My customer pays me.
I pay the carrier that I thoughthauled it because they gave me a
POD.
But then 45 days later, you getan email where this carrier

(34:19):
says, Hey, I'm actually the onethat moved that load for you
last month and I didn't getpaid.
We look at our books and go,well, that's not the trucking
company that we hired or thatsent us the POD or that we paid,
right?
And then this trucking companysays, Well, we moved the
freight.
Here is our POD.
We were never paid, right?

(34:40):
They will often reach back outto the shipper first, actually,
and say, Hey, I moved this loadfor you on this date and didn't
get paid.
My customer then goes and looksat their system and says, I
hired Ben's company to brokerthis, right?
So Ben, you deal with it, right?
We paid you, the freight wasmoved, it was delivered, and we
paid you.

(35:01):
Now we're in this positionwhere, like, okay, well, we got
paid and we paid a company, butclearly the company that
performed the work did not getpaid.
What we typically do is ask forlike ELD records to verify that
the carrier that's saying theymoved the freight did move it
and go, okay, well, this carrierclearly did move it, right?
We've at least crossed thatbridge.

(35:21):
Then the next conversation comesup of like, okay, as a brokerage
owner, right, we're like, we'rein this position of like, well,
we already paid the money out.
We can't get that money back,but now the carrier that
performed the work is telling uswe need to pay them, right?
And to your point, that's Ithink the multiple avenues of
recovery, right?
Because your client is the motorcarrier that didn't get paid.

(35:43):
And now we're basically up witha choice of like, we as the
brokerage can now pay yourclient and then the problem
solved, but we're out the moneythat we paid to the company that
didn't do it.
If we don't pay your client,that trucking company, you have
the right or ability to go atme, the broker, and at the
shipper.
Just the shipper, right?

(36:03):
Just the shipper.
So when you go right at mycustomer and say, Well, you need
to pay this trucking company, mycustomer is basically gonna give
me a choice.
Well, this was your mistake.
You didn't or weren't aware ofwho actually moved the freight.
So you either pay this motorcarrier or we're done doing
business with you.
So in practice, what wetypically see is the brokerage
ends up paying your client eventhough they don't have the, I

(36:26):
would say, the ability to comeafter me, but we're gonna do it
because we were responsible insome in some aspect that this
occurred and there was fraudwith the company we hired, even
though we did our due diligence.
But the choice is hey, do welose this customer or do we make
it right and move forward iskind of what we see, I guess,

(36:48):
most in practice, right?

SPEAKER_05 (36:50):
Exactly.
And it's it's good to mentionalso that that carrier that

(38:14):
double brokered the load,they're in violation of the law.
You if you're a motor carrierand you don't have brokerage
authority, you cannot give thatload to anyone else.
And the law, which is MAP 21,imposes uh civil penalties and
personal liability on the ownerof that company.

(38:35):
So it's it is a very bad slopeto go and double broker loads.
Like carriers have to becareful, and that's that's
something that they should notdo.
Unfortunately, it is rampant inthe industry, but it it it there
are ways to get those people outof business.

SPEAKER_00 (38:56):
So I'm curious.
Um let's let's look at anon-fraudulent scenario, right?
And I've had plenty of theseover the years where we you know
we do our proper credit vetting,customer looks good, and you
know, over time we're buildingup a larger and larger credit

(39:17):
line for them.
And then we start to noticepayments are coming in slower.
There might be a month where weget no payments, and then they
kind of get caught up the nextmonth, and eventually we get to
a point where we've frozen thecredit, they've customers
stopped paying us, we know thatthey're you know having
financial troubles, their creditreport is reflecting that.

(39:38):
Um, I've had them upwards of ofa quarter million dollars of
unpaid invoices that have um youknow end up you know 180 or more
days past due.
What does that situation looklike?
So whether you're a broker or acarrier or factory company for
that matter, when you've gotsomething of that of that size,

(40:00):
what is the um what does theprocess look like?

SPEAKER_05 (40:06):
Well, once you decide that you are not going to
do business with that customerand you're good to go to
collections, then the case comesto me and my paralegals go into
all those invoices and extractall the liable parties.
So it's not only the shipperthat did not pay you, we're
going after the con theconsumes, which are their

(40:27):
customers in turn.
So they're gonna get pressurefrom all their customers as to
why are you not paying a and westart we send out demand letters
to all of their customers andthen we call them.
We have a session of collectioncalls, it'll go uh in about a

(40:47):
month we're calling, and if theydon't pay all of it, we'll go
against against them in courtagainst all of them.

SPEAKER_00 (40:56):
So what can you can you get down to the just out of
curiosity, the legal side of it,like you say go to court, what
does that sound like?
Is there you know what kind ofyou documentation is in are you
filing to go to court, etc.?

SPEAKER_05 (41:12):
You file a petition, you serve process on them, like
a personal process serveragainst all of these people.
Uh and sometimes my complaintshave 20, 50 defendants, and
they're all included there, uhbecause they're all related to
that customer of yours that didnot pay.
So it's that customer and theircustomers.

SPEAKER_04 (41:34):
So I have a question too.
You said something uh when youjust a moment ago, right, of the
decision at which you are goingto reach out to your firm is we
have decided not to do businesswith this customer anymore,
right?
Is that the question that theybasically, as the business
owner, should be thinking about?
Is like, okay, this is now at apoint where we are no longer

(41:56):
gonna do business with them.
And if that is the decision thatis made, right, now they're
gonna reach out to your firm andsay, okay, now we want to start
uh the process to get thesecollected, right?

SPEAKER_05 (42:09):
I would say so.
I would I would think that thethe company has to have internal
collections process that dealwith customer retention.
But I my methods of collectingare very aggressive because we
go against our customers.
So I do have a template letterthat I give my companies, uh my

(42:34):
clients that they send outinternally that tells our
clients, look, I'm going torefer this case to Christina,
and she this is what she's gonnado if you don't pay me.
So that's that's a letter.

SPEAKER_03 (42:46):
Yeah, like the warning's line, right?

SPEAKER_05 (42:48):
To that letter, then it's going to me, and I'm gonna
do what they said though.
I was like, Well, I have aquestion, right?

SPEAKER_04 (42:54):
Is that part of in the retention conversation?
So, like, if I'm looking at mycustomers, right, like, and I I
I hesitate to use the wordthreat, but like we're getting
to a point where my invoiceswith this customer are now
getting well beyond what theynormally are, and I'm I'm really
hesitant, but I'm not reallyready to say I'm done doing
business, right?
Would the last step before youtake over, right, for me to

(43:17):
basically notify my customerthat, hey, if this doesn't get
resolved, next step is we'regoing to send these invoices
over to a firm for collections.

SPEAKER_05 (43:28):
And it has my even before that, it has my web page
address and everything, sothey'll see my statistics and
all of it.
So this is what we're going todo if you don't pay.

SPEAKER_02 (43:38):
So yeah, I I think, but before right before it gets
to Christina, there should besomething that uh uh a process
where you tell your client,okay, clearly we have an issue.
Um, so what we're gonna dorather than continue to create
more debt for you, we're gonnaplace this on hold and we're

(43:58):
gonna give you an opportunity topay.
So let's work out a solution andsee if we can get an ironclad
solution in place.
Because if we're really tryingto preserve the relationship, as
Christina stated, once she getsit, that's the point of no
return.
There is no relationship afterthat.
If I've gone that far with you,now I don't want to do business,

(44:21):
but I'm really, really tryinghere.
So before we get there, we'regonna place things on hold.
We're gonna place the credit onhold.
We're not gonna do any shipping,but now we gotta focus on you
paying.
If at that point we're still notgetting anywhere, now we're
gonna go over to Christina andwe're gonna send that letter
again.
This is what's gonna, this iswhat's gonna happen.

(44:43):
And don't get any response.
Now we gotta release the wegotta release the tiger.
We gotta release the shark.

SPEAKER_00 (44:51):
And Ben, we we've talked about this a lot.
We did an entire con uh entireepisode on like having hard
conversations.
And this is one of those hardconversations with a customer
because the the reality is umthe customer might be in
financial trouble because ofpoor management, right?
They could be in trouble becausethe vendors didn't pay them,

(45:11):
they could be in trouble becauseum a rogue employee internally
um wasn't paying invoices and itjust looks bad on paper, right?
And the way that you approachthe conversation, I think, can
say a lot.
So if you approach it, kind oflike you know, Janie said, try
to work it out internally.
It's like, hey, I I don't Idon't want to stop doing
business with you guys.
I really love servicing um yourshipping needs.

(45:33):
Uh we're, you know, we're justhaving issues with you know the
the invoicing process.
And first of all, try to I Iusually try to start at is our
process working properly or isthat what's causing the issue,
right?
And then it comes down to like,hey, is there something going on
in your end where can we justpress pause on um on the credit

(45:53):
limit for now and and give you achance to get caught up?
And usually what I have found isin those conversations, they
will reveal to you either thatum, hey, just being transparent,
here's what we're dealing withhere.
And a lot of times it's I'mwaiting on somebody to pay me,
right?
And I just can't pay you guysright now.
And sometimes we've hadconversations um with like

(46:15):
executive teams and they're justvery transparent and they're
like, look, we're probably notgonna get paid on this for like
another 90 days.
Uh, we love working with youguys.
We understand wanting to pausefor now.
Um, we don't want thisrelationship to go away.
And we've said okay to some ofthose situations.
And then we've also kickedourselves in the butt and wished
we didn't say yes to thosebecause somebody convinced us
that, oh yeah, the payment'sgonna come.

(46:36):
But um, regardless, trying tohandle it at the at the earliest
and lowest level possible tosave the customer relationship,
I think is an important decisionto make because to both of your
points, as soon as that's in inChristina's hands, that
relationship's done, right?
You are at war at this point,and they you know they are never
gonna give you another load.
And and rightfully so, you youprobably don't want to work with

(46:58):
them at that point.
Anyway, you're happy to turnthem over and and and release
the demons on them.

SPEAKER_02 (47:03):
So what companies need to understand is that the
finance department is not justabout um uh sending invoices,
their job is to track and getpaid.
And when I say track, thatthat's the one that I typically
see people they're not doing.

(47:24):
How how well are we tracking?
Are we making sure that we'restaying behind?
Are we paying attention to umthe way they pay their own
bills?
Are you is your AP followingyour AR?
Are you running out of moneybecause you're paying everybody,
but you're not getting paid?

(47:45):
So it's it's it's really abouttracking the performance in that
department, tracking how wellyou're getting paid, and what
activities, what metrics do youhave in place to ensure that
your people are doing whatthey're supposed to?
Because Christina is is is isawesome.
But like I said before, once itgets to her, that there's no

(48:11):
return.
So, but if you reach that point,then absolutely there's no one
better than this one right here.

SPEAKER_04 (48:18):
What you said made me laugh because I came into a
client the one time and we weregoing through all this and there
were tons of things that wereaging, no notes, didn't know
what was going on.
I was like, okay, like who'sstaffing the accounting side,
right?
Like, oh, I have one person,their title is Accounts
Receivable Manager, right?
And then we had two or threepeople on invoicing.

(48:38):
And I went, okay, like let'sschedule a call and see what the
situation is, right?
And this person literally said,like, yeah, like I keep sending
the invoices out.
I keep sending them out everyweek.
And I remember saying I waslike, I said to the owner of the
company after the call, I waslike, their title is accounts
receivable.
Like it's kind ofself-explanatory.

(48:59):
If your job is accountsreceivable and you don't know if
money is being received, you'reprobably missing something,
right?
And like to me, it kind ofsounded obvious, but like when
you said that, it made me laughbecause I literally pictured
this person's face and it waslike, well, they eventually let
that person go because like thatwas literally what they were
doing was just sending invoicesand not doing anything to make
sure the money was received,which was literally the title of

(49:23):
the position, right?
And it seems obvious, but likethis is so often overlooked, I
think, by owners.
Like just because you havesomeone in that role, like you
should at the very least belooking at this every month, if
not every week, looking at youraging report and asking these
questions, like, what are wedoing to make sure the money's
been received?
Has that been working?

(49:43):
And what else can we do?
Right, is like for sure one ofthe big things that are often
overlooked in like this wholeprocess.

SPEAKER_02 (49:51):
It certainly is.
And so often, um, I hate to sayit, they have people who really
don't understand what that roleis.
Um, you know, understanding howto manage cash, putting in a
system to ensure that you'reyou're getting paid on time.

(50:11):
Um I I it's it's something assimple as having a a task list.
What what are yourresponsibilities?
And oftentimes I've met peoplewho their sole job is to just
send out invoices.
They have absolutely no cluewhat other responsibilities go
with that job.
Um, so by the time you get inthere, the invoices are so old,

(50:36):
you you probably don't have achoice at this point, you know,
um over a year old or over twoyears old, at that point, you
you probably do, you definitelyneed to reach out to Christina
because you don't have anything.
Um, so if there's anything toteach, it's you know,

(50:56):
understanding that that jobisn't just sending invoices.
Their role is to track and getpaid.
If you're not getting paid,probably because you're not
tracking.
And a lot of times, custom uhclients uh that I've run into,
if they have an AR problem, ifthey have a collections problem,
it's usually systemic of otherprocesses and and and systems.

SPEAKER_04 (51:20):
It's the result, not the cause.

SPEAKER_02 (51:21):
Exactly.
Symptom totally.

SPEAKER_04 (51:23):
It's just the symptom of showing what the
underlying cause is.

SPEAKER_00 (51:27):
Right.
I think a big part of it too is,and this just kind of echoes
what you said, is if we're ifyou're not training your staff
properly on what their role isand why it's important, you're
doing them a disservice.
And you think about it, with allthe small businesses out there
that have um an AR function aspart of their business, um,
there's there's millions of themout there, right?

(51:49):
When the average American isliving paycheck to paycheck and
can't manage their own personalfinances, as a business owner,
if you're not properly trainingsomebody on accounting, you
shouldn't assume that they'rejust going to treat your
business any better than theytreat their their personal
finances, right?
So I think that that thateducation and um continuously in

(52:09):
you know having a mentality ofimproving the processes and
improving everyone's level ofskill, um, that it that
internally uh I think isprobably a huge area to improve
on.
Um I'm curious.
So, Jane, you pointed out a lotof mistakes that business owners
make internally or businessesmake internally when it comes to
the error process.
I'm curious, Christina, is therecommon mistakes or issues you

(52:35):
find with factoring companies,motor carriers, brokers when it
comes to the external uhcollections process, either how
they go about doing it or whatthey think their rights are,
anything in in that realm?

SPEAKER_05 (52:47):
Well, for me, uh the documents speak for themselves.
So I I need my carriers and myclients, my factoring companies
to have all their documentsthere for me to be able to
collect.
Uh the bills of lading have tobe there, all the shipping
documents uh that's the consignehopefully signed that they

(53:10):
received the load.
Uh and if you're servicing uhwell sites and I'm going to file
a lien against that well site,I'm gonna need the the
coordinates of where they theyserved uh so I can identify
who's the operator for that wellsite.
That's very important.
Another thing is the statute oflimitations.

(53:31):
Uh there's uh two statute oflimitations issues.
Uh, one is that federal law has18-month statute of limitations,
and then state law has differentstatute of limitations.
In Texas, it's four years.
We file petitions based onbreach of contract, being the
contract ability.

(53:52):
But we've come across caseswhere they are trying to uh
stand by the 18-month statute oflimitations, and I currently
have a case in the court ofappeals uh with respect to that
matter.
I had a case in federal courtwhere I prevailed, uh, and the
court held that it was afour-year statute of
limitations.
Uh, but in state courts, uh I Ihad a court uh decide to the

(54:17):
contrary, so now I'm in thecourt of appeals uh to decide
that.
Uh but that don't let yourinvoices go over the 18-month
statute of limitations becauseyou're gonna make it more
difficult for for the attorneywho's gonna go up.

SPEAKER_04 (54:31):
And that's the question.
The two biggest questions we getare when is too long?
Like when is the deadline?
What you just answered, right?
Is like you want to be doingthese things and reaching out
inside of a year and a half,inside of 18 months.
So 12 to 14 months aftereverything kind of Janie
explained, and like bestpractices to do this that lead
up to there, but that's kind ofwhere you start to get a little

(54:54):
riskier, right?
So can you speak also to likesize, right?
Because the other most commonthing that comes up is like,
okay, it's an$800 invoice, it'sa$2,500 invoice, it's maybe a
$5,000 invoice.
And I think most people'sthoughts are it's not worth the
hassle of finding an attorney,and attorneys are too expensive

(55:17):
to go at something for$5,000 or$1,000, and they just let them
sit there, right?
So what do you advise people todo as like a dollar amount, not
just the timing of like whendoes it make sense to actually,
you know, reach out to you guysto be able to collect on these?
Is there a minimum?

SPEAKER_05 (55:37):
So I I would say uh if you want me to send a demand
letter, uh it's you can you canI would send it for like if it's
I would say fifteen hundreddollars, I will send your demand
letter.
I wouldn't file suit for that.
Um but you can go to your localuh JP court, just as a peace

(55:57):
court, and you can file thatpetition.
I can give you a draft.
And you don't have to have anattorney to go to JP court and
you can collect if you havesomeone that can do that for you
in your company and the ARperson, go go collect.

SPEAKER_04 (56:14):
What does that can you break it as as Nate would
say, like Barney style, like 101level?
How does somebody find wherethat court is locally?
What would they do?
Like what would that look likekind of step by step?

SPEAKER_05 (56:26):
Uh Justice of the Peace court court and you go to
your local justice justice ofthe peace and you file it.

SPEAKER_04 (56:35):
What do they need to take with them?
Like what documents would theytake?

SPEAKER_05 (56:39):
I I do have like a standard petition, at least for
Texas, uh that's just theelements of the cost of action,
and you just put in the amountand sign at the bottom.

SPEAKER_04 (56:51):
You just take it to the the Justice of Peace Court
and you just say, I want to filethis, and somebody there is
gonna help you file it, and thenthat starts the process.

SPEAKER_01 (57:00):
Yes.

SPEAKER_00 (57:01):
So you hit on something before too, Christina,
that I want to elaborate on.
You mentioned having all yourpaperwork in order, and I can't
reiterate enough how importantthis is in our business in
general.
Um, but especially when it comesdown to you know uh a
collections process where we'vegot to prove uh what we're
claiming is owed to us and thatit's passed due.

(57:22):
So one of the things that we asa best practice we usually
recommend is um somewhere withinyour software, your
transportation managementsystem, TMS, um, hopefully you
can image documents assigned toa specific load, right?
So things like your commoncarrier paperwork is gonna be
the carrier's invoice, a signedbill of lading, and maybe a rate

(57:44):
confirmation, right?
Customer documents, you mighthave a contract with them, you
might have a credit applicationthat states their terms, you're
gonna have an invoice per loadthat states the due dates and
all of that.
And the one that I'm curious onyour feedback on is should a I
usually recommend having inwriting the agreed upon rate

(58:06):
that the customer is going topay the broker or whoever the
trucking company, whatever thecase might be, right?
That load tender or an email.
Um, but a lot of times, youknow, folks, you know, we'll
have a customer short pay andthey're like, I never agreed to
that, you know, and then we talkto the broker and they're like,
Yeah, I don't have like anemail.
We talked about it on the phone,but I know that they agreed to
this amount.

(58:26):
Can you talk to the, you know,that the rate being agreed to
ahead of time, does that need tobe in writing for it to go uh to
hold up in a collectionsprocess?

SPEAKER_05 (58:40):
Well, it makes it easier if you have that Raycon
and you have that exchange thatthe Raycon was received and
they're hauling because theydon't have to sign the Raycon.
You send them the Raycon andthey're if they're hauling,
you're assuming that theyapproved that they accepted your
offer, and that's the Raycon.
So you have it there.

(59:01):
Uh, so an additional email therewouldn't be necessary.

SPEAKER_00 (59:06):
Uh how about the shipper directly to a broker,
though?
So a lot of times a shipperdoesn't send a rate confirmation
to a broker.
Okay.
The broker will send it to acarrier.
So you might get a load tenderor an email asking for a quote,
you respond and they agree toit.
But sometimes shipper might justcall Ben's brokerage and say,
Hey, can you get this loadmoved?
And Ben's like, Yeah, I can doit for$1,200.

(59:27):
Okay, cool, send the truck.
And there's no um, I'm notsaying Ben would do that because
Ben would probably email backand say, Hey, just confirming
$1,200, we'll have a truck sentin, blah, blah, blah.
But for a broker that, you know,doesn't get that electronically
or in any kind of um recorded,whether it's a recorded phone

(59:48):
call or an email or an officialload tender that was emailed
over in PDF, is that a um Imean, I would imagine it's a
best practice that I alwaysrecommend, but is it will would
it cause or would it prevent thecollections process if it was
never agreed on in paper?

SPEAKER_05 (01:00:03):
It does not prevent the collections process, but if
you don't have anything inwriting, then the problem is, is
there an offer and anacceptance?
And what was that offer andacceptance?
So it's gonna be an issue ofcredibility and lack of of
having that set number, thecourt's gonna impose what an

(01:00:25):
equity that low would cost.
Like what is what is thestandard of the market for that?

SPEAKER_00 (01:00:31):
Right.
So if you try to, yeah, like ifa broker um tries to say, like,
yeah, this was you owe us twothousand dollars, and they're
like, we never agreed to that,the court could say, like, no,
they don't owe you two thousanddollars.
That's that's not a um that'snot a fair market value.
Fair market value for that, thatyou know.
So that that's who ends upmaking the decision.

(01:00:51):
My uh my advice to everyone isyou don't want that.

SPEAKER_02 (01:00:53):
Exactly.
Put it in right in.

SPEAKER_00 (01:00:56):
It's kind of like if someone doesn't have a will and
the courts decide what happenswith their assets when they die,
right?
Like you you want to be able todecide while you're alive what
happens.
The same thing.
My my guidance all to brokersout there is when you're talking
with a customer, even if youagree over the phone, have that
email exchange afterward whereyou know you're sending, hey,
just confirming this load isgonna go for uh um for$2,000.

(01:01:18):
Here's the motor carrier'sinformation that we're gonna be
sending in there.
You can loop it all into onejust cover your butt email
that's got the rate, the loadinformation, et cetera.
Best case scenario, have a loadtender from your customer,
right?
Where they send you over therate, the load details, and
you're accepting it.
But um, yeah, I I definitely I II can't imagine it's a simple or

(01:01:42):
painless process if you'retrying to go off of verbal
credibility that we agreed tosomething versus here's hard
evidence on paper orelectronically of what was
agreed to, when the invoice wassent, when it was due, and proof
that it hasn't been paid.
Right.
Those that's gonna obviouslyhaving your ducks in a row,
having your your documentationfeels like it's paramount um to

(01:02:02):
making this process uhsuccessful.

SPEAKER_04 (01:02:06):
The other one that I want to make sure we cover,
because I'd say this is probablyone of the other more common
ones for brokers, right?
So in the example, Nate's mycustomer.
Nate, I ran a hundred loads forhim in the past 30 days, and
Nate owes me$100,000.
Each load was call it$1,000,right?
And then today, the loaddelivering for Nate has a claim.

(01:02:28):
And that claim is for$100,000.
So, us as brokers, like we don'thave cargo insurance.
It goes on the trucking company.
We verify that they have cargoinsurance when we hired them.
Their insurance should make Natewhole for the$100,000 in loss to
that product today, right?
It's not, it's I'd say it'spretty common though for that

(01:02:50):
carrier's insurance company tooccasionally deny that claim and
say we or just take six monthsto handle it, right?
Or take six months, and there'slike, hey, we'll just go with
the scenario of like the thecargo claim gets denied.
What is really common forfreight brokers is Nate goes,
Well, I owe you$100,000 rightnow anyway.
So I'm just not going to pay youany of these other invoices

(01:03:13):
until.
Until you figure out a way toget us paid for that claim,
right?
And I'd say like that's the mostcommon one we kind of see as
brokers, where shippers justwithhold unrelated invoices in
the dollar amount of a claimuntil that's paid, right?
But I want you to kind of sharewith anybody with like, let's
say there's no contract in placewith the shipper and the broker,

(01:03:37):
right?
So, like in those scenarios, asa brokerage owner, right?
Like, what would we have theability to do in those?
Because like we've been toldcompanies aren't allowed to
withhold unrelated invoicesbecause one has a claim on it.
But then the next questionalways comes up of like, okay,
well, like how much does it costto go and recoup the money I'm

(01:03:59):
owed on the hundred grand?
How long does it take?
Can you shed some light on likefor brokerages out there?
What should they do or like bestpractice in these scenarios?
Well, the brokerage dideverything they were supposed
to, verified the carrier'sinsurance, right?
Carrier ran the load, carrierwas negligent and related to the
claim, but their insurancedoesn't cover it for a number of

(01:04:19):
reasons, right?
What would a brokerage do inthat scenario?
Or what would you do to helpthem?

SPEAKER_05 (01:04:25):
Okay, so it's important that you mention that
there isn't a contract becauseusually when there's a contract,
the contract does allow you todo that setup.

SPEAKER_04 (01:04:35):
Yes, right.
So because I've seen both.
One of the contracts said wehave the ability to withhold
unrelated invoices due to aclaim.
One did not have a contract,right?
So in the one, it was what itwas because we were on the hook,
right?
So I'm really glad you pointedthat out because the other thing

(01:04:58):
that was important was that thebrokerage has that in their
contract with their carriers ofthe ability to withhold funds
for unrelated invoices due to anunpaid claim.

SPEAKER_05 (01:05:10):
Exactly.
Yes.
Uh, but if there is no contract,you're totally right.
They cannot withhold thatpayment.
And same thing.
Uh, we will go after thecustomers for those unrelated
invoices, and they're gonna say,but I paid you.
No, but I have a cargo claimwith respect to another invoice.
Well, that's not my problem.

(01:05:30):
And you can't withhold thatpayment because that load was
delivered, was delivered by thiscarrier, and that carrier got
paid by the broker, and now thebroker's gonna step into the
shoes of the carrier and we'regonna collect.

SPEAKER_04 (01:05:42):
So, and then again, like in practice, what we see is
the brokerage goes, like, wedon't know what to do.
And as they're figuring it out,all the other carriers start
filing on their bond becausethey're like, hey, we're owed
money.
And the broker's like, Well, Ididn't get paid and I can't pay
them.
So the brokerage is in thisposition of like, our credit is
getting destroyed because ofwhat the shipper's doing with

(01:06:02):
one load, right?
So the question that we getoften is like, but like one, how
much does it cost to recoup thatright?
And I you outlined there's twodifferent ways that you guys can
kind of approach this, right?
So and at what number does thatstart to make sense for a
brokerage to reach out to yourfirm to get assistance with

(01:06:23):
this?

SPEAKER_05 (01:06:25):
If your brokerage authority is is going to take
and be taken away because you'regetting the carriers filing
against your bond, you youbetter get get me to work on
that case really quickly becauseyou're not gonna be able to
operate.
Either that or you have to paythat carrier from your own
pocket and just wait becausethey they're gonna cancel your

(01:06:48):
brokerage authority.
You you're not gonna have abond.
So that's definitely if you'rein that position, you you have
to contact me quickly.

SPEAKER_04 (01:06:57):
And then do you does it this is are these typically
go like contingency based orlike hourly based?

SPEAKER_05 (01:07:03):
Whichever the client prefers.
So it's it's up to the client.
Uh but am I going to spend ifit's a hundred thousand dollar
claim, and I am I gonna spendthat much time on my hourly
basis to get to that three 33%?
I don't think so.
So they're gonna be better offpaying me by the hour.

SPEAKER_04 (01:07:24):
So the question then is is that like a retainer where
the client pays up front or no?

SPEAKER_05 (01:07:30):
Okay, I I do it whatever I collect, I'll take
whatever our hourly wages Ihave.

SPEAKER_04 (01:07:36):
And and I think that's really important for the
audience to understand isbecause like the question we'll
get from the brokerage owner islike, I already can't pay these
carriers, and now you're tellingme to go hire an attorney.
My problem is I don't havemoney.
So how do I how do I go and getsomebody or pay somebody to help
me solve the problem when myproblem is they're not paying

(01:07:56):
me, right?
And I think what you said isreally important is that like as
the brokerage owner, when theyreach out to your firm, they're
not spending the money up frontfor you to get the customer to
pay them what they're owed.
Whether it's an hourly rate orcontingency, you're going to get
the customer to pay thebrokerage and then you're gonna
get paid, which means brokershave the ability to use you as a

(01:08:19):
resource to solve these things,even though the problem
inherently is that they don'thave the money they need in the
first place.

SPEAKER_05 (01:08:25):
Exactly.
Yes, yes, because I'm soconfident, like most of
attorneys do require a retainer,but I'm so confident that I'm
gonna collect for you that Idon't need a retainer because I
am going to collect and I willget my money from whatever I
that's the real muscle rightthere.

SPEAKER_00 (01:08:40):
I love it.

SPEAKER_02 (01:08:41):
Skin in the game, right?

SPEAKER_00 (01:08:43):
Yeah, exactly.
Well, cool.
Um, Ben, you have any otherquestions on this?

SPEAKER_04 (01:08:51):
I know we're gonna be doing a couple more episodes.
I think this is a really goodstarting point to kind of frame
like best practices, what to doto be managing your AR, what to
do when it gets to that point,who to reach out to, and also
like how that business decisioncan be thought through, which I
think is really important thatwe kind of added that in there
because like I think that'swhere I think that's where a lot

(01:09:13):
of companies that could andshould use you as a resource
don't, because they just don'tknow how that process works,
don't know how and who to call,and what and when they're gonna
be paying money or getting moneyback, right?
And all these unknowns basicallyend up with what kind of Janie
said of like they just donothing, right?

(01:09:34):
And then they just kind of letthem age, and then nothing
happens at all instead of beingproactive and actually getting
these things addressed andgetting this money into the
business that it's owed it,right?

SPEAKER_02 (01:09:49):
Yep, that's right.
So if there's anybody that cando it, it's it's that young
lady, Miss Christina.

SPEAKER_00 (01:09:57):
Love it, love it.
So uh Christina, freightcollection solutions, um state
of Texas.
Can you just for for the folkslistening out there, if they
want to learn more, and again,you'll be back on the show again
next month.
We're gonna have a little bit ofa different conversation.
Um how do they reach out to you?
What what is a good obviouslyyou mentioned state of Texas?

(01:10:19):
What if someone's not in Texas?
Can you help refer them out?
Can you kind of talk through ifsomeone wants to learn more what
they what they should do?

SPEAKER_05 (01:10:26):
Uh yes.
So as I mentioned before, I douh collections for uh Baxter
Bailey and associates, so theyare nationwide.
So if I can collect from for youuh without filing suit, then I
would send you over to them andthey have attorneys all over uh

(01:10:49):
the US.
So they would be able to collectfor you on on a particular
state.
But I can handle pre pre-suitfrom Texas.
That's not gonna be an issue.

SPEAKER_00 (01:10:59):
Perfect.
Awesome.
We'll put a uh a link to youryour website and LinkedIn and
all the good stuff in the shownotes.
So please, if you're interested,make sure to to click that link,
get in touch with Christina, andJanie will include your uh your
information in there as well.
Um Janie, any anything you wantto wrap up with or any final

(01:11:21):
thoughts on your end?

SPEAKER_02 (01:11:22):
Um the only thing I would say is if you go to your
balance sheet today and you seethat there is enough money in
that bucket that could get somebills paid, buy another piece of
equipment, get some equipmentrequired.

SPEAKER_01 (01:11:41):
That's work that you have done.
You have earned that money it'stime to get in.
And if you have exhausted all ofyour internal uh uh controls or
processes, then the next stepwould be to reach out for
counseling.

SPEAKER_00 (01:12:01):
That's perfect.
It's opportunity.
This is this is literally it'syour money, right?
Go get it.
So Christina anything you wantto close up with here.

SPEAKER_05 (01:12:12):
Uh just what you're right.
You if the beauty of being ableto collect freight charges is
that you can you have multipleareas of recovery.
Don't sit on that and let yourbills not get paid.
You you don't need to go afterthe person that directly hired
you.
You can go against the personthat you left the love with and

(01:12:34):
the one that you picked up.
So know your rights and enforcethem and get paid.

SPEAKER_00 (01:12:40):
Absolutely.
Well, good stuff.
Thanks both of you for being onhere.
We definitely look forward to umnext month having another
conversation and and uhcontinuing this.
So, Ben, final thoughts on yourend.

SPEAKER_04 (01:12:54):
Whether you believe you can or believe you can't,
you're right.

SPEAKER_00 (01:12:58):
And until next time, I know we skipped our sports
segment, but go, Bills.
That's right.