June 20, 2025 • 53 mins
Military logistics is one of the most complex and overlooked areas in transportation. In this episode, we break down how moving freight for the Department of Defense really works—from navigating organizations like SDDC, to managing tight timelines, limited carrier capacity, and high-stakes coordination. You'll also hear firsthand stories and relationship-building tips that can help brokers succeed in this specialized niche.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome back.
Episode 299 of the Freight360podcast, ben.
We're almost at 300.
We'll do that one next week,yeah, but if you're brand new,
you got 298 other episodes plusall the Q&A sessions.
And, as a caveat, I'm prettysure the first like 20 or 30
episodes are not publiclyavailable, just because I
(00:20):
recorded them under a slightlydifferent brand and company.
So, but anyway, for all intentsand purposes, episode two,
ninety nine, share us with yourfriends.
Check out the website Freight360 dot net and check out the
Freight Broker Basics course ifyou're looking for some
educational options.
So do you ever have anybody askyou about that?
Ben, that we're like where'sthe first 30 episodes is when I
(00:40):
worked at LDI and like it.
Like their name was like partof the branding of it very early
on.
It was like produced by them.
So I remember, yeah, I justkind of like got rid of those
and I'll be honest, like all thecontent that was in them is
definitely regurgitated andimproved upon in our other
content.
So you're not missing anything.
Well, let's go.
What's what's going on inFlorida, man?
(01:02):
Nice to have you back, brotherin Florida, man, nice to have
you back, brother.
Speaker 2 (01:07):
Yeah, a couple of weeks of army stuff, but we're
back.
It is now very hot, I mean, andit's it's funny I was talking to
my cousin about this like justlike working out, exercise,
sports and stuff, and it's likeI measure a lot of this stuff,
like either with a Fitbit orwhatever, just like you know,
all different types of things.
And I've been playing tennis nowsince, like I don't know, like
(01:29):
October, and up until like May Iwas able to get my cardio up to
right Like I could play forlike two hours like pretty solid
without being like super winded.
When I first started, did 15minutes in, I felt like I was
going through like hell week inhigh school, like sports, like
wanted to throw up, couldn'tbreathe, and it's so crazy
(01:52):
because, like as soon as itstarted to get hot and also like
the humidity, which also makesit way harder to breathe, I am
so tired after an hour that Ijust stopped.
I just moved my lesson fromSaturday morning to like one of
the nights during the week,cause I'm like my whole day shot
, like I am so tired afterplaying out in that heat for an
(02:12):
hour, hour and a half that likeI can't, I don't even want to
eat for four hours.
I can't get anything donearound the house and I'm just
like I'm either getting reallyold or it is really hot, or
maybe a little bit Both.
Speaker 1 (02:26):
I used to love playing.
I was on a nighttime volleyballleague on Thursdays and I used
to love like the nighttime.
Like summer yeah, like it coolsoff a little bit Big heat wave
coming across most of the US inthe coming week, so it's going
to be hot.
It was actually interesting.
So like I'm talking about, likefitness, like I, so I have a a
(02:47):
slight.
Did I give you an update on myleg.
Yeah, I know, I tore my meniscuslike almost a month ago, but
it's a minor tear, so like, Iwent to the orthopedics office
and they're like, they did anx-ray which they knew nothing
was going to show up, but it'sall you know.
You got to do everything inorder and they basically said,
like, based on mobility testsand things like that, like it's
(03:08):
probably a slight tear, self-ptis going to be the answer for no
need for an mri or any likesurgery or anything like that.
So I actually just this weekyesterday or monday got on the
uh treadmill, which is where I,which is where I tore it was on
the treadmill.
So I got back on the treadmillfor the first time in almost a
month to do like just some likewalk and jog intervals and, um,
(03:30):
I was out.
You know it's my, I'm like man,I was like it.
It's crazy what a month of notregularly running will do to
your your like cardio levels oryour fitness levels.
And I was like, is it just myinjury or not working out, or am
I just getting old and I waslike, or is it all of the above?
Speaker 2 (03:45):
so, dude, I'll have to send you this later, remind
me, because, like, I pulled atendon in my elbow.
It was similar to like a tenniselbow injury, but this was like
working out like two years ago.
This thing took like 11 monthsto heal and I got I have
tendonitis in my shoulder and Iwent through the MRI and stuff
just to make sure I wasn't goingto damage something.
(04:07):
And same scenario, self-pt.
I went to a physical therapistonce.
They gave me a list of exercise.
I do them every morning.
But I found this guy who was ona Tim Ferriss episode where they
interview him and this is likea Stanford I can't remember
physiologist.
He's a PhD right and studieswhatever like biomechanics, but
(04:28):
he only studies how to healtendons and things like that,
like meniscuses, injuries andlike the whole interview is
awesome because he explains like, especially as you get older,
most people do big muscle groupsbut don't really strengthen
like very small muscles that areall necessary to do anything.
Those go first and like onefixing it.
(04:50):
Like I was able to improve bothmy elbow and my shoulder in
like three weeks doing like whathe said, and it was basically
like you just hold tension on itfor 30 to 45 seconds.
You do that like a couple oftimes every morning and there's
like at that amount of time yourbody basically sends everything
it needs to it to help repairit, but it doesn't stress it to
(05:11):
the point where it injures theinjured part, like it
strengthens the rest of it.
And then there's a peptide Iordered that, I take with it.
You take that and vitamin C.
You put it in like a drink.
It almost tastes like nothing,but it's specifically the thing
that your body needs to repairtendons, which is different than
(05:32):
protein for your muscles.
And taking that every morning,doing those for like five, ten
minutes, helped so much and likeI went to physical therapist
for like nine months and itdidn't help you.
Speaker 1 (05:38):
You remember in uh, when we were in florida, I was
showing you I'm pouring my hydrowater right now.
Speaker 2 (05:43):
My little, I got the tabs I didn't get the bottle yet
but I bought the thing about.
Speaker 1 (05:46):
I was like ah, I got my hydro water here.
It helps with inflammationanyway.
Yeah, so with it, with a kneeinjury, and I was gone the last
like two and a half three weeksfor army national guard.
We're up at fort drum and thetiming couldn't have been worse
because, like, we're out in thefield and it's uneven terrain,
like austere environment for themost part, and my paperwork
hadn't gone through yet to likeofficially limit what I could
(06:08):
and couldn't do in an armysetting.
So I'm like wearing combatboots, walking in the mid, like
in the woods, and dude thelimping, like it was bad.
I I literally took what wasjust a, an injury to my right
side of my right knee and nextthing you know from the limping
and like the, you know thecounter act, like how I would
basically um, how I wouldbasically like uh, adjust my
(06:29):
movement and limp, like then theleft side of my knee started
hurting, then my left kneestarted hurting, then my lower
back started hurting and I waslike finally like getting
getting home and sleeping on anormal bed, like uh definitely
has has helped out with, youknow, just feeling better.
But they're all connected.
To tie this all in, we're goingto have a good discussion today
(06:50):
about military freight becauseI had a pretty interesting thing
that I was dealing with as wellwhile I was gone, which we'll
kind of tie that in in today'sepisode.
Other stuff Florida dude, theFlorida Panthers just won the
Stanley Cup this week.
So South Florida, I'm sure, ishappy.
I'm sure there's a lot of NHLfans that aren't happy.
(07:10):
They're sick of Floridadominating, but it is what it is
.
I think NBA is coming up on the, did you?
Speaker 2 (07:16):
watch the end of the Open.
Did you get to watch any of it?
Speaker 1 (07:21):
So it was on Father's Day, right, so my brothers had
it on inside my house.
I was hosting so I was prettybusy, but I I checked out a
little bit of it.
I had it on.
I was just shocked at like thescores dude, like these guys I
think the winner was like oneunder one guy under par finished
yeah, and it was in.
Was it in pittsburgh right?
Speaker 2 (07:39):
yeah, it was oakmont.
That was like one of thecoolest things was like I got to
play that course and like Ihave friends of play it.
My cousin gets to play itpretty often as good friends
with I think his name's Devin G.
He's the pro up there, darren,who I was.
Oh, you were out.
My cousin won the tri-stateopen too as an amateur.
Like two weeks ago he was goingto walk with I think it was
Terrell Hatley.
(07:59):
One of the pros wanted somebodylocal to walk the course during
the practice round and mycousin didn't end up being able
to go because he had to work.
But it was pretty cool watchinga huge tournament and being
familiar with the course andlike having been able to walk it
, play it, and it was reallypretty interesting.
A big comment was like whatwould a 18 handicapped or 10
(08:21):
handicapped player shoot underthose conditions, right?
Or 10 handicap players shootunder those conditions, right?
And Bryson said he's like Iwouldn't be surprised if an 18
handicap shot a 200 there, right, and that level of rough.
Speaker 1 (08:33):
I'm like a 20 handicap Like a bogey golf is
good for me.
And that's when I was like,yeah, I'd probably my brother
was joking.
He's like, yeah, the one guymissed the cut and was at like
shot like some wild score likehigh, and I was like, yeah,
that's the kind of guy I couldgolf with.
He's like no, he's likeliterally like you'd probably be
like three times that.
Speaker 2 (08:51):
So yeah, I mean somebody asked me.
They were like well, what didyou shoot when you played there?
And first off, like I wasn't USopen conditions when I played
there, like the rough wasn'tthat high.
Second of all, like there is asaying or a piece of advice my
cousin gave me when I firstplayed there and I think I was
an eight handicap when I playedthere.
That was when I was playinglike every day and I think I I
(09:13):
think I broke a hundred, I thinkI showed a 99 or a hundred of
the card around here.
But like there's a big asterisknext to that because the saying
was and he told me this beforeI went because I was like
nervous to play this course he'slike the saying is like play
fast and if you're playingpoorly, play faster.
Right, because there's a caddyand you're playing with other
(09:33):
people.
And I was playing with, like Ithink they matched me it was the
senior legal counsel forCallaway Golf.
This guy played with VijaySingh, like the day before and
like this other CEO of a companythat were like really good.
So like I shot a 99 or ahundred, but I definitely didn't
play every ball all the way tothe hole because like you hit a
shot and sometimes you're at aneight or a nine and like you're
(09:56):
just going to pick your ball togo to the next hole to not hold
the group up, so like Idefinitely probably would have
shot playing like true golfrules, probably like 115, 120 as
like a seven handicapper.
Speaker 1 (10:08):
I did one of the Pinehurst courses a few years
ago.
I shot like a 98 at.
Speaker 2 (10:12):
We're actually, I'm going next week.
Speaker 1 (10:14):
I'm going to Kiowa next week for a buddy of mine's
getting married and he wants todo a golf trip.
So we're we're going down toCharleston, and what is it Like
the ocean course there that thePGA has a event at every few
years?
So that'll be a good one, butyeah anyway.
Speaker 2 (10:28):
But really cool to see JJ spawn win.
I mean like he's definitelylike an everyday golfer and
there was a post I saw that likeand he had, I think, his two
daughters and he's like, yeah,he was at CVS at three o'clock
in the morning on Sunday Causehis daughter was throwing up,
and then came back and then likewon the open.
They're like Absolutely greatFather's Day.
Speaker 1 (10:49):
So news here.
There's two things.
I wanted to highlight one ofthem and this came out in our
newsletter on Tuesday.
So if you guys aren'tsubscribed, make sure you go to
the website Freight360.net.
There's a box to put your emailaddress in.
You'll get our news updateevery Tuesday and then our news
and market update every Thursday.
Just some quick highlights fromvarious sources around the
(11:10):
freight community, but the onethat I found interesting was
there was an article from whodid this.
This was G Captain, which theydo a lot with maritime trends
and whatnot, but this theylooked at the amount of empty
containers and where they'removing and what that could
indicate for freight.
(11:30):
So I'll try and read a littlesnippet here.
Basically, let's see.
So after optimism spikedfollowing the US-China talks in
Geneva, many in the industryanticipated a surge in peak
season imports.
But the data tells a differentstory.
One of the most telling signsis a steep decline in empty
container exports out of majorUS ports like LA and Long Beach.
When there's demand, emptycontainers are hustled back to
(11:52):
Asia for refilling.
That rush simply isn'thappening.
So that's kind of the long andshort of it.
But basically what they'resaying is you know, you know, we
think because there's thispause in tariffs and we don't
know what's going to happen,that you know.
We hey stuff's going to boom,but the reality is like the
containers aren't moving therebecause the demand is not there,
(12:15):
just truly isn't there.
Speaker 2 (12:16):
So yeah, two things on the back that Ryan Peterson,
ceo of Flexport, has done a lotof really good content on what's
happening.
Flexport has done a lot ofreally good content on what's
happening and he said this,probably like a month ago, is
exactly that, like most of whatships from the US to China are
is air is the joke, becausethey're empty containers that
get refilled to come back in.
(12:37):
That was already not happeningand he said they were.
The shipping lines were alreadysailing blank, meaning empty
ships because the demand wasn'tthere.
They were rerouting ships toother countries.
So he had said back then thateven if there is a pause,
there's going to be a giant timelag for the shipping lines to
(12:57):
either get empty containerswhere they're needed and to get
the ships there, which takestime, he's like.
So that's already going to be awhiplash.
Even if the demand comes back,you're going to see something
like that.
And he said the other thing wasnot only that, but like trade
was already being rerouted andnow, even when you saw some of
the increases, like the rateswent way up.
(13:20):
They jumped like 50% as soon asthere was a pause because it
costs more money to get theempties over there.
So even though there's thepause in tariffs, there's also
an increase in the cost to nowship a container, which people
are going to pay in inflation,right, yep.
And then there was something inFreight Caviar this morning that
said Gene Sirocco, I think islike the head of the unions over
(13:40):
at the ports over on the WestCoast and he's like imports and
exports are down like nine andfive or six percent.
You're starting to see carriersreally starting to feel the
pain because there's just not asmuch cargo to be moving out of
there right now and everybody isseeing the impact in our
industry one way or another.
Yep, anything.
Speaker 1 (14:01):
So yeah, interesting Not super positive.
Yeah, the other one, which issomewhat timely, because we just
recently had an episode withDAT where we talked about the
outgo yes acquisition.
I wish we had Ken like readilyavailable to like bring him on
here and get his, get his take,but like it was settled
yesterday it was yeah, thismorning there was in Freight
(14:24):
Caviar.
Speaker 2 (14:25):
There was an emergency hearing yesterday.
Speaker 1 (14:27):
I know it was yesterday yeah, but I didn't
even know.
This was like a thing and Ithought about it too At first.
I was like, didn't they used tohave like an OTR relationship
or like a referral thing?
But OTR was basically trying tofile suit, saying that, like
you're violating a non-compete,like a non-competition that we
had from our RevShare program inthe past.
So what was the outcome then?
Speaker 2 (14:45):
An emergency hearing in the OTR DAT lawsuit took
place yesterday, June 17th,following a court order
temporarily halting DAT's ALCOplatform over a non-compete
dispute.
According to legal commentatorMatt Leffler, the case has now
been settled.
Dat confirmed that ALCO remainslive with loads marked by a
black dollar sign indicatingbroker eligibility.
(15:08):
Dat says it remains focused onminimizing disruptions and
scaling its carrier payment.
Speaker 1 (15:13):
It was like a blue checkmark is what they were
saying?
Yes, because that was like theOTR thing was the blue checkmark
.
Speaker 2 (15:19):
And isn't that what Alco originally?
Speaker 1 (15:20):
had was a blue checkmark, so they changed it to
a black dollar sign.
Speaker 2 (15:23):
Yeah, so they changed it to a black dollar sign, yeah
, like it was that.
Basically, I think when Alco,if you were as a carrier looking
at a broker or I think, abroker looking at a carrier, I
can't remember which one itshowed you the credit worthiness
with the same indication thatwas under the OTR relationship.
So they were arguing that thatwas part of it.
And then they argued somethingabout the non-compete.
Speaker 1 (15:52):
And I didn't get into the like the legal details of
it, but it's interesting.
Well, I'm glad that's takencare of.
So let's, let's get into ittoday.
So we're going to talk somegeneral, uh, information about
government freight, dod, sddc.
What does it all mean?
What does it all stand for?
We'll dig into that.
And what's what's interestingis I have never personally moved
DoD freight on the freightbrokerage side my company, we
have brokers that do it, so I'mfamiliar with the process.
But I have worked on themilitary side of it once
(16:16):
historically for a deploymentand I'm working on it again
right now, which we can kind ofdig into.
And you have worked on the DoDside with Crowley business, I
believe, and some other things,so you're well-versed in that
Crowley, XPO through TQL.
Speaker 2 (16:30):
Like I ran it and managed Bruce, who was on our
show years ago.
He ran the Mississippi to.
I think he had the East Coast,yeah, and I had the West Coast.
We split the country in half somy team ran anything military
on the West side and at firstXPO had the contract, Then
Crowley took the contract.
So I manage it directly withthe SDDC and also through both
(16:51):
Crowley and XPO when they manageall of it, like the entire
contract.
Speaker 1 (16:56):
Yep.
So let's I want to start offjust kind of basic, like define
what some of these things areright.
So when we say DOD, we'retalking Department of Defense.
All right, now the SDDC, whichpeople will often hear, that's
the Surface Distribution andDeployment Command.
When you look at the UnitedStates military, you have United
(17:18):
States Transportation Commandwhich is like the overarching
transportation organization thathandles all stuff moving air,
ocean and on the ground.
Okay, the air force has airmobility command, that's what
flies things around.
The navy has a military sealift command which moves things
(17:39):
on boats and whereas where wecome in domestically as freight
brokers and have opportunitiesis with the ground side of
things, the SDDC, the ServiceDistribution Deployment Command.
It's the Army's leg of that.
Speaker 2 (17:51):
And go ahead.
It's not just the Army At thevery least, I don't think,
because we used to work a lot.
Speaker 1 (17:57):
It's not it's not just the Army, but it's
primarily the Army, but it's allthe ground things so yeah, so
we did a lot with marine bases.
Speaker 2 (18:09):
I remember like 29 palms and things.
So we did like the troopmovements and things for mostly
the marines and the army whenthey would either move for
deployments or re or move tolike rearrange things from one
base to another, like so nottotally nerd out all this is a
military logistic logistician,not to totally nerd out.
Speaker 1 (18:25):
But sdc is an army component, all right, the same
way that Air Mobility Command isan Air Force component.
But they don't move only theirown services stuff, they're just
the one responsible for it.
So like Air Mobility Command,for the Air Force will move army
assets will move Navy assets,et cetera, military Sealift
Command has the ships.
They will move, you know, aMarine Corps unit or an army
(18:48):
overseas ships.
Speaker 2 (18:48):
They will move a Marine Corps unit or an.
Speaker 1 (18:49):
Army unit overseas, they'll move their equipment,
the same way that SDDC for theArmy will move Army equipment on
the ground.
They'll move Navy equipment onthe ground, they'll move Marine
equipment on the ground.
It's just that the Departmentof Defense assigns each of those
three to a specificorganization to take command and
control of it.
So when we say SDDC and we sayit's an Army component, it does
(19:09):
not mean it's just moving Armyequipment.
Speaker 2 (19:12):
It just means it sits under that branch.
Speaker 1 (19:15):
Yep.
It's considered an Army servicecomponent command, so Army owns
and manages it.
But the customer is all theDepartment of Defense assets.
So when you hear SDDC, that isoftentimes who the actual
customer is Like.
If you look at who you'reinvoicing and who you're billing
, it's SDDC because that's who'sactually I think what's that?
Speaker 2 (19:37):
SDDC is the organization you're working with
and, if I remember, the billinggoes through CAS.
At least it used to Sincada.
Speaker 1 (19:44):
Oh Sincada.
Speaker 2 (19:46):
Oh, sincada, yeah, that's right.
Speaker 1 (19:48):
So yeah, like we won't get into the super
fine-tuned details, but like youhave to have a US bank account.
Sincada is like how paymentsare processed and whatnot, but
basically we'll talk about thebig picture of how this stuff
all works, okay.
Speaker 2 (20:05):
I do want to put one little point out there, right,
because we've gotten plenty ofquestions over the years.
Like I want to get set up, howdoes this look?
Where do I go through?
Right, like you really do wantto understand how these things
work, because there's a lot ofadmin work for each of these
loads and there's not often asmuch profit, but there's a ton
(20:28):
of volume, right, so there'sdifferent things you want to
kind of understand if you'regoing to start moving this type
of freight.
Honestly, like I would spend thetime to at least do some high
level research to understand howand what organizations you need
to do, what hoops you need tojump through to get onboarded.
Like I remember when we did this, we literally whiteboarded it
out to see exactly what we'reexplaining.
Like, ok, this organization isfor this part of the military,
(20:50):
they move things for these.
This one does this.
So we could literally visualizeit and kind of see it, so you
could understand who you'reworking with, what you're moving
where and the invoicing partsof it and each step you need to
take to get involved in actuallyparticipating in these bids and
things.
So, through it, though, likeyou kind of don't have to keep
(21:12):
doing it.
It's really like a one and donething, but really understanding
that, like the adminrequirement was not small, like
for the volume of freight wemoved, we had way more staff
doing invoicing and billing thanprobably almost any other
account, probably a TQL, becausethe steps to make sure you get
paid if they're not done right,you just don't get paid.
It's not like you just callsomebody and they're like oh
yeah, let me process this foryou.
(21:33):
Like it's got to go throughevery one of the bureaucratic
steps to make sure you get paidfor the work.
Speaker 1 (21:39):
Do you ever work with GFM?
That's like the TMS, globalglobal freight management, so
like that's another piece of ittoo, when you start to hear this
stuff, if you go through theprocess of setting your company
up whether it's an asset-basedcompany or a 3PL to bid on and
move military freight, you'regonna see these terms brought up
.
So GFM is the system where thebidding and everything happens.
(22:02):
Sincada, which I believe theparent organization is US Bank
Corp, that's, that's the paymentprocessing system.
Speaker 2 (22:10):
And then SCDC is the actual organization in which
these awards are given andthere's three, right, if you
want to outline it, because Iremember like we had two people
staff just doing Sincada andbilling.
We had one person that just satin that TMS all day as bids
came up to put in numbers, tosubmit them, to get awarded
freight.
(22:30):
And then there was another bidsystem that was sent out at
least it was by like Excelsheets that was through the SDDC
.
They would send out like one ortwo a day, sometimes sometimes
seven, anywhere from like fiveto 20 bids would go out every
day or during a week, and thenit had what was the movement,
what was the truck codes thatthey were requesting, and then
(22:52):
what the volume was, what thetimeframe was, and then you
would put in your number foreach one of them, submit it, and
then usually the top five toseven brokers and carriers would
get chosen and like they wereanywhere from like hey, we've
got a 20 truck movement or afive truck movement, up to 150
or 200 truck movements, 250.
(23:13):
But also, like I remember one ofthe longest bids that was the
smallest number was like Iworked on moving a rocket engine
from like the base in like Utahthat had to go to California
then over to Cape Canaveral andthis thing was like.
I remember it was like 80 or90,000 pounds.
It had to go on like a 13 axletrailer.
(23:35):
It was the most expensive moveI've ever looked at Like.
I think the bid on that wassomething like $75,000.
Speaker 1 (23:42):
Oh yeah, you think, between, like insurance and
specialized equipment.
So let's, let's start with like, yeah, what are, what are some
of the reasons that you know?
What are the use cases?
If we consider the, themilitary, as the customer here,
why are they moving things?
What are these scenarios?
So you just, you know, you gavean example of one which is, hey
, we need to move somethingunique from one place to another
(24:05):
for some specific reason.
Right, that's, that's one, andthose are kind of one offs.
Then you have, if a unit ismobilizing or deploying and they
didn't move all their stufffrom their base maybe to a port
where it's going to go on a ship, ok, so you got to do all that
ground transport to get it fromwhatever fort or camp it's at to
(24:26):
wherever it's going to load outof, and that's going to be a
big project a lot of times witha lot of different equipment
involved there.
Another example it's one thatI'm dealing with right now is
what's that?
Speaker 2 (24:39):
So I remember it was like equipment stuff and then
you also had like rolling stocklike a bunch of RGNs, because
you're loading trucks onto thatlike military trucks onto it, to
get on a boat or off of it.
Speaker 1 (24:50):
So that's the example I want to talk through today.
Base-to-base move is anotherone.
Right where we're movingequipment from one base to
another base and this couldhappen for a variety of reasons
is going to a big culminatingtraining exercise, and it's at a
place like the NationalTraining Center out in 29,.
(25:10):
Is it 29 Palms or somewhere?
Speaker 2 (25:12):
No, it's in California, Most of them for
some reason.
Yeah, the trainings, if Iremember, are like, I remember
doing a lot with the base inSouth Carolina, going to 29
Palms and those were like bigmoves 29 Palms is a Marine Corps
base, but the National TrainingCenter at Camp I think it's
Camp Irvine or Irwing, or Ishould know this in the Army.
Speaker 1 (25:30):
Let's see Where's NTC .
Camp Irwin, california, andthen you've got Fort Polk in
Louisiana, is another bigtraining area for the Army.
You've got a bunch of themright.
But this is again.
You're going to move a wholeunit out from one base to
another and then on the back endyou're going to Other bucket,
(25:51):
another one that we used to do alot of support with, was the
base that's up by San Francisco.
Speaker 2 (25:56):
They support the wildfires and the firemen that
go out and, like you know, hugeforest fires.
When there were fires a tonthat year I remember like all
the equipment that went outthere came from that military
base.
So we would get like spot loadswhere we'd actually like talk
to them.
They would call us and be like,hey, we got to get eight trucks
(26:17):
up there in the next hour and ahalf.
Like we did a lot of thatsupporting the wildfires during
that year when they were reallyprevalent off that base.
Speaker 1 (26:25):
Yep.
So the one that I'm dealingwith right now is it's a base to
base move.
So we've got in New York Stateand the National Guard, we've
got a logistics unit that's inwestern New York, south of
Buffalo, and they're gettingrestationed.
So it's not temporary, it's apermanent move.
So all their stuff, everythingfrom trucks to generators and
(26:46):
you name it is all going to NewYork City permanently.
It's going to be their new home, their new station, going to be
their new home, their newstation.
So what we have to do is wehave to figure out how are we
going to move all this stufffrom one side of the state
literally all the way across theother side of the state, and so
we'll kind of unpack that alittle bit here.
(27:09):
But you go back about a dozenyears ago.
The last time I dealt with oneof these was for a mobilization
or deployment.
So actually that same unitthat's repositioning now I used
to be a part of, and when wedeployed the last time we had to
get all of our stuff down toTexas where we trained up for
two months before going overseas.
(27:29):
So I was the unit movement guy,so we I was the unit movement
guy, so I actually legitimatelywas there when flatbed drivers
rolled up and we're loading ourcontainers and our equipment up
on flatbeds and I'm driving itdown there.
But it's interesting the way itworks.
National Guard and active dutymilitary are a little bit
(27:49):
different, but there's a,there's a head officer, it's a
TO that you're probably familiarwith, the transportation
officer for the base and theactive duty.
And in the National Guard it'sa.
It's a state transportationofficer for the base, in the
active duty and in the NationalGuard it's a state
transportation officer, so theyhandle not just a base but all
the units within the state.
So that's the actual person whoyou're likely going to have a
relationship with, who willtender, or they might be
requesting information or quotesfrom you or tendering things
(28:09):
out to you or getting youapproved on their end.
There's all kinds of ways thiscan happen.
Speaker 2 (28:13):
Here's something really important about this,
right.
People think and this isapplicable in any freight you
move and this is why I probablysay this more than any other
piece of advice in our industryis, you need to speak with the
people you're doing businesswith and you need to have a
relationship.
It changes one the amount ofbusiness.
You'll get the likelihood,you'll get the business knowing
(28:36):
what's going on, beyond just thedetails that get emailed to you
, because, like in the instanceof TOs, right, quickly is okay.
So we get an Excel sheet withbids.
They're very similar to any bidyou're going to do for any
company, except they're going tohappen all together over one
period of time, and here's whythat matters.
(28:56):
If you are moving, say, 10 or 15flatbeds a day for 10 days,
right, there's only so manyflatbeds within 50 or 150 miles
of a base.
So when you've got to move 15to 20 a day you almost always
suck up all of the availablespot capacity before you hit the
number that's needed.
So then you've got to go tosurrounding areas and pay to
(29:23):
deadhead trucks to come in andload, to then move, because
there's usually just not thatmany available for that period
of time, right?
So what happens in a practicalstandpoint when you're moving,
this is okay.
Say, the average rate on thatlane is just like I don't know
3,500 bucks.
Your first one or two trucks,you might pay 34 to 36 because a
guy needs to go there, he'lltake it a little less.
(29:43):
Somebody kind of doesn't wantto.
You pay a little more.
When you get to like yourfourth or fifth truck, you book
that day like you are alwayspaying way above the average
because they're usually not asclose and you got to pay to
deadhead them.
That's the first thing you gotto understand when you're
bidding these.
The second thing you got tounderstand is there are multiple
brokers always working on thesemovements.
(30:05):
So if you got, say, there's 15loads a day and you get
allocated five, I get allocatedfive and two other brokers each
get allocated five.
I get allocated five and twoother brokers each get allocated
five.
If I bid, say, $3,700 on thatlane because I feel like I'm
going to pay $35,000, but youbid $4,000 and you expect to pay
$38,000, you're fourth on thatlist, so I get the first five
(30:27):
because I am the cheapest guy.
If you are number four on thatlist, you bid more money, so you
have more money to pay carriers.
So what happens is is wheneverybody posts their loads on
DAT example, for that day I needto cover mine for the average,
call it 3,500.
You want to get your trucksbooked up before they're all
gone, so you start offeringevery truck 38 because you got
(30:50):
$4,000 into it.
So what happens is is you buyall the capacity for the higher
rate and I don't get any covered.
And this is an instance where,like you really end up competing
with each other to get the sametrucks to go run the same
freight, which pushes all therates up.
This is important because youneed to understand the
relationship of how you'rebidding these.
Your rates versus volume on agiven day change.
(31:13):
It's not the same thing asbooking one or two trucks.
You end up paying differentmoney because there's more need,
right, higher demand pushesprices up.
Well, the same thing happenswith shippers.
This is why shippers don't wantto give a whole bunch of the
same loads to four or fivebrokers, because if everybody
starts posting the same load,sometimes all it does is inflate
(31:33):
the cost.
The shipper pays and the truckswin.
This is one of these scenarioswhere carriers always complain
that brokers drive rates down,but in a lot of cases a lot of
brokers competing for the sametruck actually benefits carriers
and it pushes their rates upbecause the carriers are able to
play the brokers against eachother for a better rate.
Speaker 1 (31:51):
So that's a really, really good point, and this is
applicable not just to militaryfreight.
So, and that goes right to theexample that I'm talking through
here.
So the scenario that we've gotis this is a logistics unit, so
they have a lot of big trucks,big equipment and they have some
smaller things as well.
But this unit is actuallydesigned by its structure to be
(32:13):
able to move, to self self-movethe unit wherever it has to go.
So it has the trucks and it hasthe flatbeds and it has the van
, the van trailers, to be ableto move stuff.
So the question is, you know,do does this unit self-move all
of its stuff?
And the reality is you're takingyoung, somewhat inexperienced
drivers and ask them to drive avery, very large military truck
(32:35):
into New York City.
Not a good idea, right?
So that's where we look at okay, why don't we have the experts
that do this every single dayand not some 20-year-old
National Guard soldier who's,you know, driven it for three
hours?
Right?
Why don't we hire theprofessionals to move the more
intricate stuff?
But now we're looking at whatyou just said.
If we've got, let's say, 30trucks that got to move, right,
(32:58):
and we've got to load them onspecialized low boys or RGNs, or
in some cases it's Humveesgoing on flatbeds.
You're going to suck thatcapacity up quick, which will
drive your prices up.
So the consideration we had iswell, what is important here?
Is it about getting it donerealistically, with a cost
estimate that makes sense, ordoes it have to get there by a
(33:19):
certain time and which we alwaystalk about right In freight?
In general, it's like it's notblack or white either.
Speaker 2 (33:25):
It's not binary, meaning like we're all price or
we're all service.
The reality is is most shippershave to weigh both of these and
come up with some gray area inthe middle where service is
important to a point and thenit's like okay, we're going to
give up a little bit of serviceto save a little bit of money,
because most companies, even themilitary, doesn't have an
(33:47):
unlimited budget to just go, andin certain scenarios that
budget goes out the window andservice matters.
Everybody thinks that, but it'slike there are very few
scenarios where budget goescompletely out the window and
it's all service.
That's usually when thingscan't move COVID and things
right, very extreme, but almostevery shipper is weighing the
same thing you're talking about,like we need to get all these
(34:08):
moved by this deadline, so likewe have a hard stop to get them
there.
But how do we do this withoutgoing unlimited budget and
giving up all of our service bytrying to be too cheap, like how
do you really gauge that line?
This is how you work back withyour shippers, by the way, as a
broker, to get them tounderstand it's not black or
white.
And if somebody is just likeI'm all cheap and I want all
(34:29):
service, like they're, I alwayslaugh because it's like they're
digging their own grave.
Speaker 1 (34:32):
You're just going to give up service if you're
leaning that far.
In that way, these are theconversations that happen on the
military side.
So, to give you context on it,we were talking about it about a
week or so ago and they knowthat I work in freight brokerage
.
So they're asking me what doesthis look like from your side of
it, on the commercial truckingside?
And I explained the same thinghey, I can give you ballpark
(34:56):
what a going rate is for aflatbed?
I said but there are otherthings that impact that.
So as you try to suck up thiscapacity and do it all at once,
that rate is going to get drivenup.
I said.
Furthermore, you're sending,you're trying to get into New
York City.
I said there are plenty ofdrivers who will refuse to ever
deliver within the five boroughsbecause they don't want to deal
with.
Speaker 2 (35:15):
The same reason we don't want to send drivers.
Exactly the same reason wedon't want to send them is the
same point of view some folksare going to have.
Speaker 1 (35:23):
So they said well, what are some things that we can
do to kind of like outline this?
So you know, we have theselittle think tanks and whatnot,
and then the output of all thisis all right, here's the deal.
We wanna move 50% of theequipment by this date, 75 by
this date and 100% by this date.
The rest is flexible, right.
So we have kind of likebenchmarks.
(35:44):
Like you said, there's thatgray area there.
That's exactly what we'redealing with here is okay, we
wanna have the cost realisticand we understand it's gonna be
within this general window.
But we, you know, we're alsogoing to have requirements on
when we have certain percentages.
Then you have to find thebalancing act and once this you
know, we have to put togetherideas of like okay, we have
(36:05):
equipment.
It's not all in western new york.
Some of it's up in fort drumand then in the adirondacks area
, some of it's in western newyork near buffalo, some of it's
in the middle of the state at amaintenance facility.
So the question is, do we tryto consolidate it all into one
area, make it easy and try toget it awarded as some sort of a
project for a motor carrier?
We put it out for bid througheverybody.
(36:27):
You know all the brokers andcarriers that are in there
bidding on it.
So we're looking at ways to,you know, try and make it
interesting and make it as costeffective as possible and make
it as cost effective as possibleFor us to be able to get the
green light to go ahead and hirecommercial and run this through
STDC.
We have to show that the cost,the estimated cost to do this,
is worth it compared to.
You know, the limitations andthe safety risks of doing it as
(36:50):
a self-move, with inexperiencedyoung soldiers that haven't
driven the equipment a whole lot.
So it'll be interesting to seehow it all pans out and plays
out.
But those are the kinds ofthings that happen on the other
side of these conversations.
It's not always just hey, thisunit has to get there for
training in two weeks, get itmoved.
Sometimes you have more ofthese like okay, well, there's
(37:12):
more considerations here, it'snot just about the timeline,
it's also about service etcetera.
Speaker 2 (37:17):
So so there's that reminds me of this really funny
story and I'll never forget thisjust because of just how it
played out.
I was having a conversationwith a TO I think it was in
South Carolina, and they wentwith like and again, when you
get to know some of them, youcan understand the ones that are
in situations that are likeyours and some that are kind of
(37:39):
just like you got to get thisdone and you got to get it done
for this number and that's itRight.
And I remember this one movelike we bid everything out.
It was going like as planned,but then, like the number of
trucks they needed increasedunexpectedly, Like they needed
like an extra 20 percent of thetrucks for.
Like the number of trucks theyneeded increased unexpectedly,
Like they needed like an extra20% of the trucks for like the
last couple of days.
(37:59):
So if they needed 10 a day, allof a sudden it was 15 a day.
And I was talking to the TO,cause that's who you're working
with all day on this, makingsure everything's getting loaded
, getting there on time, andyou're working back and forth.
He's like well, hey, like weneed an extra five trucks a day.
And I remember telling him Iwas like, well, hey, like we
need an extra five trucks a day.
And I remember telling him Iwas like, listen, I was like I'm
just being honest with you,Like, and when you do these a
lot, you get to know the otherbrokers you're working with and
(38:19):
oftentimes we would talk witheach other because we're all
working for the same goal to getthe move.
Get a move effectively.
Not every broker is just tryingto undercut, to just make money
Like.
These are long-termrelationships, you care about
doing them well.
Also, if you have a failure,you get blocked from all SDD
freight sometimes for, like Ithink, 45 days Can.
Speaker 1 (38:41):
it depends on the TO.
I'll tell you from the insideit's not actually that black and
white.
Speaker 2 (38:46):
So this is the fear from like our point of view.
We have teams staffed.
I think at the time we had like15 or 20 people with the teams
we ran.
So like if you don't havefreight for 45 days, you are
paying salaries for a month anda half with no loads.
Like that is a very, very bigrisk you're trying to avoid.
Again, how practical that wasdidn't happen that often, but
we'd heard it happened and hegoes definitely can yeah.
(39:09):
And he goes, yeah, and he's likewe need, you know, five more
trucks a day.
And I remember telling him Isaid, listen, like can you get
me an extra?
And it wasn't a big number,like I need like an extra 350
per truck, because I think theywere coast to coast, which
wasn't a huge number.
But I'm like, and I told him,I'm like we've been doing this
for six days.
We are sucking up all thecapacity at whatever.
It was 15 trucks a day Ifyou're going, 30% more trucks.
(39:37):
Like we've got to bring themfrom an area farther away to get
them there on time.
Like we've got to pay theseguys deadhead.
It's not like we're keepingthis money, we're literally
going to give it to the carriersto get you what you need.
They're farther away.
And he was like, well, I can'tdo that, we're not, I'm not able
to go above this budget.
Like you got to move it forwhat you bid it for.
And I said, listen, like I willbe happy to hold the number,
but you're telling me they allgot to be moved by Tuesday.
There aren't enough trucks thisclose to your base to get it
(39:59):
done by Tuesday.
At your rate, it will be doneThursday.
He goes well, it can't.
They all got to be out byTuesday.
And I go well, you've got twochoices to make.
Like you, either get a move byTuesday at a higher number or
you're just going to have towait, because nobody's just
going to lose, and work allafternoon to get this moved
because you changed theparameters.
(40:21):
And I'll never forget how hesaid this to me.
He said it's super serious,like almost in a movie.
He goes well, son, failureisn't an option.
And I remember I paused for aminute and I was like and all do
respect, sir, I was likefailure is your most likely
outcome.
If you don't pick which one ofthese because these aren't my
opinions, these are just theeconomics of the situation
(40:42):
you're in.
So, like you can either lookreally bad to who you report to
by missing your deadline or youcan find a way to get and it
wasn't just us, it was like anyof the brokers you work with.
I'm like I don't even care ifyou give me the loads, give them
to the other broker I think Iwas moving to.
Like Landstar mostly.
I'm like give them to Marioover there.
I was like.
But at the end of the day, likenobody's got the ability to get
(41:02):
a driver to drive 250 milesempty for free, so somebody has
got to find a way to pay theseguys.
Speaker 1 (41:08):
Yep.
So I'll tell you, like the umand very similar to like um, you
know private companies and andcustomers that are not
government or military.
The to um is just like anyother customer.
So, like you mentioned, youcould get blacklisted for 45
days.
So, like our guy in new yorkstate, um I had this
(41:29):
conversation with him a coupleyears ago and he's like.
He's like yeah, that's, that'snot how it works.
He goes, he goes.
We have leeway, he goes.
I can pick and choose who Iwant to work with based on if I
like them or not he goes.
I have some wiggle room onrates If I need to.
I can tell someone that I can'twork with them for X amount of
time because they screwed up, orI can give them a pass.
So it's the same way that likecustomers are, like they have
(41:50):
that.
They have that ability.
Speaker 2 (41:52):
I'm so glad you brought that up.
That's what I wanted to circleback to right, which was what we
learned.
After you do this for like afew months or years, like you
realize, like it's not just thelowest number, it's the lowest
reasonable number compared toyour track record.
Right, If you get them, everytruck they've ever asked for for
, every time you've bid thatlike you get priority.
(42:14):
Why?
Because there's less risk forthe guy doing business with you,
right?
Yep, Just like you said, whenyou get to know them and you get
a relationship like, they'lltell you this.
They're like look, man, I'vedone the last three movements
with you guys.
You have not missed a beat.
Every truck's been on time.
So when you go, hey, look, Ineed a little bit more to help
you get this thing done, they'reway more inclined to help you.
(42:36):
This is also why, when you startworking with a new customer,
your first couple loads there'sno leeway on rate and to go back
and ask for more money makesyou look worse.
Why?
Because you haven't establisheda track record of trust, of
service, of you doing what yousay you're going to do.
Once you have that, then youget a little more flexibility
because they know what they'repaying for.
(42:57):
It's not.
Oh, this is a bait and switch.
This guy told me he can movethe load for 1500 bucks.
Took the load, called me anhour later, told me he needs
2200 bucks.
Like nobody wants to dobusiness with that person.
If that's the way you'restarting your relationship.
Speaker 1 (43:11):
Absolutely.
So those are kind of the basics.
We got anything else on the dodside here.
That was really my.
My whole thing is like I guessthe big takeaway here and then
I'll throw it back to you it'slike whether it's dod or
anything else, you'll seesimilarities, you know, across
the board with all thesedifferent situations.
So there's the relationshippiece of it.
(43:33):
You have unique situations.
You have repeat business versusone-offs, the ability to lose a
customer because you screwed upor whatnot, and how to have
that hard conversation with acustomer when you can't give
them everything that they'reasking for.
And we actually have a good Q&Afor our Final Mile segment
that'll come out on Tuesdaywhere someone asked like how do
(43:55):
I deal with the situation wherethe rate's not going to work and
all that stuff?
So that's the big takeaway hereis you treat these situations
just like any others.
I would say the added layerhere is that understand that
when it comes to militaryfreight, the setup process and
the requirements, like wementioned early on in the show,
they are a little bit morerobust and, you know, stringent
(44:18):
than just setting up with someold produce broker out in Idaho.
Speaker 2 (44:24):
Here's what I would say and this is from some
takeaways that I really learnedthat you can't learn unless you
do it.
Ways that I really learned thatyou can't learn unless you do
it Like I mean you can learn itby listening to us, but like
you're still going to probablyhave to do this to experience it
, to really understand how to doit better.
And it's the first biggestlearning curve was what I kept
(44:44):
saying is like when you movemultiple trucks on the same lane
every day for a certain periodof time, the pricing is very
different because there's not aninfinite number of trucks there
all day.
Most people only move one ortwo loads on a lane a day, maybe
an off day where it's three,but they're also not doing that
(45:06):
consecutive days with a deadline.
It is very different whenyou're like all this stuff's got
to be moved in 10 calendar dayswith no failure.
This is how many trucks youneed every day.
You lose the ability to reallynegotiate price and a lot of it.
The carriers are going to beable to get whatever they ask
for, and you know, rightfully so.
(45:27):
Some of them are farther away.
They need to get paid deadheadmoney.
So, like your, averages do nothold up.
So if you're used to pricingthings based on what the debt
average is, plus or minuswhatever you think, like that
kind of goes out the window themore trucks you need per day.
For sure there's a correlationwe always talk about between
service and price.
(45:48):
But when you've got a projectwith a start and a deadline,
that has a very bad outcome ifit's not met, it really
amplifies the relationshipbetween service and price.
Because normally you move oneload a day or two in advance,
like that's not that big of adeal.
But if you bid a whole project,say you're the only broker and
you're working even just withany shipper and it's five loads
(46:10):
a day, everything's got to bemoved in five days.
Right, you take everything thatyou think you pay on one truck,
you post up a couple of trucks,write a number down, multiply
that by five times five days andyou go here's what your project
costs.
You're going to be way off,like you're just nowhere near
going to be able to cover thatvolume in that timeframe.
And then you have two optionsit either gets longer or you
(46:31):
need more money.
So like that's the biggestlearning.
The second biggest learning welearned from doing military
freight and I had theopportunity to move it under
different organizations, sodifferent perspectives, because
they had different pricing whenwe moved those bids that were
emailed through the SDDC.
There's so many carriers andbrokers bidding on it that the
(46:51):
time it took to bid enough ofthem to get loads did not make
sense financially.
Like we're spending hours a daybidding and quoting freight to
get a few loads a couple ofweeks from then.
So really pretty quickly westarted to realize we're paying
extra people to invoice it,extra people to sit in this TMS
system, extra people to runquotes all day.
(47:13):
When you pay all those people,all of a sudden you realize like
you need to move a lot of loadsto cover those salaries and
honestly like it wasn't thatprofitable for that area of the
DOD.
Now, other areas, like you say,where it's extreme, like
hurricanes, fema, right, thatstuff goes open checkbook.
Why?
Because if it doesn't get there, people die, yeah, so all of a
(47:34):
sudden you can get the resourcesyou need to do the work and I'm
not suggesting price gouging oranything like that, but like
when you've got to charge whatit takes to perform that work,
that can be worthwhile becausethe repercussions of it not
getting done are catastrophic.
Those scenarios can beprofitable and are worth the
energy and it's not a smallamount of work Like when we
(47:56):
would support hurricanes you'vegot.
We would have sometimes five to10 people in certain areas,
like you would work.
Speaker 1 (48:02):
12 hours a day.
It's supply and demand when itcomes down to like you really
can't even gouge, because if youtry to gouge, someone's going
to undercut you and still have agood margin on it.
Speaker 2 (48:11):
So it's just it's it's going to undercut you and
still have a good margin on it.
So it's just it's economicsoverall.
It's just what it comes down to.
And these accounts were muchmore profitable when XPO had the
contracts because they werecost plus, which meant like you
could perform the work and youput a reasonable margin on it.
They had very good service buta much bigger budget that was
profitable to run when theyswitched and then Crowley
(48:32):
started managing it and more ofit went through the SCDC.
In some ways, like it becameless profitable.
Crowley was able to manage itvery well.
But how Crowley was able toachieve that is.
Crowley built out an entirebrokerage division to support
the whole military contract, wasable to do that in-house and
prioritize smaller carriers tokeep their costs down.
Like they did a very effectivejob at keeping the service up
(48:54):
and the cost down when they keptit all in-house.
To your point of when you giveit to lots of brokers, it is
going to inflate rates in someways.
So like there's lots of thingsto consider when you think about
the business side of this.
Is what you're doing worth theeffort that goes into it?
And sometimes it is yes andsometimes it isn't.
And I mean there's lots ofthings to kind of understand as
(49:16):
you're doing this, to determinelike hey, like this is great,
that's to lots of volume, buthow much of this are we getting
for the work we put in to getawarded it Right?
Those are always things youwant to consider as you're
moving with anybody 100 percent.
Speaker 1 (49:30):
Well, good discussion , good takeaways on all this
stuff.
Let us know what you guys thinkand if you're working on any
military stuff or have anyquestions about it, share it in
the comments or send us amessage.
Any final thoughts, ben?
Speaker 2 (49:44):
Do you believe you can or believe you can't?
You're right.
Speaker 1 (49:49):
And until next time go Bills.
Welcome back.
Episode 299 of the Freight360podcast, ben.
We're almost at 300.
We'll do that one next week,yeah, but if you're brand new,
you got 298 other episodes plusall the Q&A sessions.
And, as a caveat, I'm prettysure the first like 20 or 30
episodes are not publiclyavailable, just because I
(00:20):
recorded them under a slightlydifferent brand and company.
So, but anyway, for all intentsand purposes, episode two,
ninety nine, share us with yourfriends.
Check out the website Freight360 dot net and check out the
Freight Broker Basics course ifyou're looking for some
educational options.
So do you ever have anybody askyou about that?
Ben, that we're like where'sthe first 30 episodes is when I
(00:40):
worked at LDI and like it.
Like their name was like partof the branding of it very early
on.
It was like produced by them.
So I remember, yeah, I justkind of like got rid of those
and I'll be honest, like all thecontent that was in them is
definitely regurgitated andimproved upon in our other
content.
So you're not missing anything.
Well, let's go.
What's what's going on inFlorida, man?
(01:02):
Nice to have you back, brotherin Florida, man, nice to have
you back, brother.
Speaker 2 (01:07):
Yeah, a couple of weeks of army stuff, but we're
back.
It is now very hot, I mean, andit's it's funny I was talking to
my cousin about this like justlike working out, exercise,
sports and stuff, and it's likeI measure a lot of this stuff,
like either with a Fitbit orwhatever, just like you know,
all different types of things.
And I've been playing tennis nowsince, like I don't know, like
(01:29):
October, and up until like May Iwas able to get my cardio up to
right Like I could play forlike two hours like pretty solid
without being like super winded.
When I first started, did 15minutes in, I felt like I was
going through like hell week inhigh school, like sports, like
wanted to throw up, couldn'tbreathe, and it's so crazy
(01:52):
because, like as soon as itstarted to get hot and also like
the humidity, which also makesit way harder to breathe, I am
so tired after an hour that Ijust stopped.
I just moved my lesson fromSaturday morning to like one of
the nights during the week,cause I'm like my whole day shot
, like I am so tired afterplaying out in that heat for an
(02:12):
hour, hour and a half that likeI can't, I don't even want to
eat for four hours.
I can't get anything donearound the house and I'm just
like I'm either getting reallyold or it is really hot, or
maybe a little bit Both.
Speaker 1 (02:26):
I used to love playing.
I was on a nighttime volleyballleague on Thursdays and I used
to love like the nighttime.
Like summer yeah, like it coolsoff a little bit Big heat wave
coming across most of the US inthe coming week, so it's going
to be hot.
It was actually interesting.
So like I'm talking about, likefitness, like I, so I have a a
(02:47):
slight.
Did I give you an update on myleg.
Yeah, I know, I tore my meniscuslike almost a month ago, but
it's a minor tear, so like, Iwent to the orthopedics office
and they're like, they did anx-ray which they knew nothing
was going to show up, but it'sall you know.
You got to do everything inorder and they basically said,
like, based on mobility testsand things like that, like it's
(03:08):
probably a slight tear, self-ptis going to be the answer for no
need for an mri or any likesurgery or anything like that.
So I actually just this weekyesterday or monday got on the
uh treadmill, which is where I,which is where I tore it was on
the treadmill.
So I got back on the treadmillfor the first time in almost a
month to do like just some likewalk and jog intervals and, um,
(03:30):
I was out.
You know it's my, I'm like man,I was like it.
It's crazy what a month of notregularly running will do to
your your like cardio levels oryour fitness levels.
And I was like, is it just myinjury or not working out, or am
I just getting old and I waslike, or is it all of the above?
Speaker 2 (03:45):
so, dude, I'll have to send you this later, remind
me, because, like, I pulled atendon in my elbow.
It was similar to like a tenniselbow injury, but this was like
working out like two years ago.
This thing took like 11 monthsto heal and I got I have
tendonitis in my shoulder and Iwent through the MRI and stuff
just to make sure I wasn't goingto damage something.
(04:07):
And same scenario, self-pt.
I went to a physical therapistonce.
They gave me a list of exercise.
I do them every morning.
But I found this guy who was ona Tim Ferriss episode where they
interview him and this is likea Stanford I can't remember
physiologist.
He's a PhD right and studieswhatever like biomechanics, but
(04:28):
he only studies how to healtendons and things like that,
like meniscuses, injuries andlike the whole interview is
awesome because he explains like, especially as you get older,
most people do big muscle groupsbut don't really strengthen
like very small muscles that areall necessary to do anything.
Those go first and like onefixing it.
(04:50):
Like I was able to improve bothmy elbow and my shoulder in
like three weeks doing like whathe said, and it was basically
like you just hold tension on itfor 30 to 45 seconds.
You do that like a couple oftimes every morning and there's
like at that amount of time yourbody basically sends everything
it needs to it to help repairit, but it doesn't stress it to
(05:11):
the point where it injures theinjured part, like it
strengthens the rest of it.
And then there's a peptide Iordered that, I take with it.
You take that and vitamin C.
You put it in like a drink.
It almost tastes like nothing,but it's specifically the thing
that your body needs to repairtendons, which is different than
(05:32):
protein for your muscles.
And taking that every morning,doing those for like five, ten
minutes, helped so much and likeI went to physical therapist
for like nine months and itdidn't help you.
Speaker 1 (05:38):
You remember in uh, when we were in florida, I was
showing you I'm pouring my hydrowater right now.
Speaker 2 (05:43):
My little, I got the tabs I didn't get the bottle yet
but I bought the thing about.
Speaker 1 (05:46):
I was like ah, I got my hydro water here.
It helps with inflammationanyway.
Yeah, so with it, with a kneeinjury, and I was gone the last
like two and a half three weeksfor army national guard.
We're up at fort drum and thetiming couldn't have been worse
because, like, we're out in thefield and it's uneven terrain,
like austere environment for themost part, and my paperwork
hadn't gone through yet to likeofficially limit what I could
(06:08):
and couldn't do in an armysetting.
So I'm like wearing combatboots, walking in the mid, like
in the woods, and dude thelimping, like it was bad.
I I literally took what wasjust a, an injury to my right
side of my right knee and nextthing you know from the limping
and like the, you know thecounter act, like how I would
basically um, how I wouldbasically like uh, adjust my
(06:29):
movement and limp, like then theleft side of my knee started
hurting, then my left kneestarted hurting, then my lower
back started hurting and I waslike finally like getting
getting home and sleeping on anormal bed, like uh definitely
has has helped out with, youknow, just feeling better.
But they're all connected.
To tie this all in, we're goingto have a good discussion today
(06:50):
about military freight becauseI had a pretty interesting thing
that I was dealing with as wellwhile I was gone, which we'll
kind of tie that in in today'sepisode.
Other stuff Florida dude, theFlorida Panthers just won the
Stanley Cup this week.
So South Florida, I'm sure, ishappy.
I'm sure there's a lot of NHLfans that aren't happy.
(07:10):
They're sick of Floridadominating, but it is what it is
.
I think NBA is coming up on the, did you?
Speaker 2 (07:16):
watch the end of the Open.
Did you get to watch any of it?
Speaker 1 (07:21):
So it was on Father's Day, right, so my brothers had
it on inside my house.
I was hosting so I was prettybusy, but I I checked out a
little bit of it.
I had it on.
I was just shocked at like thescores dude, like these guys I
think the winner was like oneunder one guy under par finished
yeah, and it was in.
Was it in pittsburgh right?
Speaker 2 (07:39):
yeah, it was oakmont.
That was like one of thecoolest things was like I got to
play that course and like Ihave friends of play it.
My cousin gets to play itpretty often as good friends
with I think his name's Devin G.
He's the pro up there, darren,who I was.
Oh, you were out.
My cousin won the tri-stateopen too as an amateur.
Like two weeks ago he was goingto walk with I think it was
Terrell Hatley.
(07:59):
One of the pros wanted somebodylocal to walk the course during
the practice round and mycousin didn't end up being able
to go because he had to work.
But it was pretty cool watchinga huge tournament and being
familiar with the course andlike having been able to walk it
, play it, and it was reallypretty interesting.
A big comment was like whatwould a 18 handicapped or 10
(08:21):
handicapped player shoot underthose conditions, right?
Or 10 handicap players shootunder those conditions, right?
And Bryson said he's like Iwouldn't be surprised if an 18
handicap shot a 200 there, right, and that level of rough.
Speaker 1 (08:33):
I'm like a 20 handicap Like a bogey golf is
good for me.
And that's when I was like,yeah, I'd probably my brother
was joking.
He's like, yeah, the one guymissed the cut and was at like
shot like some wild score likehigh, and I was like, yeah,
that's the kind of guy I couldgolf with.
He's like no, he's likeliterally like you'd probably be
like three times that.
Speaker 2 (08:51):
So yeah, I mean somebody asked me.
They were like well, what didyou shoot when you played there?
And first off, like I wasn't USopen conditions when I played
there, like the rough wasn'tthat high.
Second of all, like there is asaying or a piece of advice my
cousin gave me when I firstplayed there and I think I was
an eight handicap when I playedthere.
That was when I was playinglike every day and I think I I
(09:13):
think I broke a hundred, I thinkI showed a 99 or a hundred of
the card around here.
But like there's a big asterisknext to that because the saying
was and he told me this beforeI went because I was like
nervous to play this course he'slike the saying is like play
fast and if you're playingpoorly, play faster.
Right, because there's a caddyand you're playing with other
(09:33):
people.
And I was playing with, like Ithink they matched me it was the
senior legal counsel forCallaway Golf.
This guy played with VijaySingh, like the day before and
like this other CEO of a companythat were like really good.
So like I shot a 99 or ahundred, but I definitely didn't
play every ball all the way tothe hole because like you hit a
shot and sometimes you're at aneight or a nine and like you're
(09:56):
just going to pick your ball togo to the next hole to not hold
the group up, so like Idefinitely probably would have
shot playing like true golfrules, probably like 115, 120 as
like a seven handicapper.
Speaker 1 (10:08):
I did one of the Pinehurst courses a few years
ago.
I shot like a 98 at.
Speaker 2 (10:12):
We're actually, I'm going next week.
Speaker 1 (10:14):
I'm going to Kiowa next week for a buddy of mine's
getting married and he wants todo a golf trip.
So we're we're going down toCharleston, and what is it Like
the ocean course there that thePGA has a event at every few
years?
So that'll be a good one, butyeah anyway.
Speaker 2 (10:28):
But really cool to see JJ spawn win.
I mean like he's definitelylike an everyday golfer and
there was a post I saw that likeand he had, I think, his two
daughters and he's like, yeah,he was at CVS at three o'clock
in the morning on Sunday Causehis daughter was throwing up,
and then came back and then likewon the open.
They're like Absolutely greatFather's Day.
Speaker 1 (10:49):
So news here.
There's two things.
I wanted to highlight one ofthem and this came out in our
newsletter on Tuesday.
So if you guys aren'tsubscribed, make sure you go to
the website Freight360.net.
There's a box to put your emailaddress in.
You'll get our news updateevery Tuesday and then our news
and market update every Thursday.
Just some quick highlights fromvarious sources around the
(11:10):
freight community, but the onethat I found interesting was
there was an article from whodid this.
This was G Captain, which theydo a lot with maritime trends
and whatnot, but this theylooked at the amount of empty
containers and where they'removing and what that could
indicate for freight.
(11:30):
So I'll try and read a littlesnippet here.
Basically, let's see.
So after optimism spikedfollowing the US-China talks in
Geneva, many in the industryanticipated a surge in peak
season imports.
But the data tells a differentstory.
One of the most telling signsis a steep decline in empty
container exports out of majorUS ports like LA and Long Beach.
When there's demand, emptycontainers are hustled back to
(11:52):
Asia for refilling.
That rush simply isn'thappening.
So that's kind of the long andshort of it.
But basically what they'resaying is you know, you know, we
think because there's thispause in tariffs and we don't
know what's going to happen,that you know.
We hey stuff's going to boom,but the reality is like the
containers aren't moving therebecause the demand is not there,
(12:15):
just truly isn't there.
Speaker 2 (12:16):
So yeah, two things on the back that Ryan Peterson,
ceo of Flexport, has done a lotof really good content on what's
happening.
Flexport has done a lot ofreally good content on what's
happening and he said this,probably like a month ago, is
exactly that, like most of whatships from the US to China are
is air is the joke, becausethey're empty containers that
get refilled to come back in.
(12:37):
That was already not happeningand he said they were.
The shipping lines were alreadysailing blank, meaning empty
ships because the demand wasn'tthere.
They were rerouting ships toother countries.
So he had said back then thateven if there is a pause,
there's going to be a giant timelag for the shipping lines to
(12:57):
either get empty containerswhere they're needed and to get
the ships there, which takestime, he's like.
So that's already going to be awhiplash.
Even if the demand comes back,you're going to see something
like that.
And he said the other thing wasnot only that, but like trade
was already being rerouted andnow, even when you saw some of
the increases, like the rateswent way up.
(13:20):
They jumped like 50% as soon asthere was a pause because it
costs more money to get theempties over there.
So even though there's thepause in tariffs, there's also
an increase in the cost to nowship a container, which people
are going to pay in inflation,right, yep.
And then there was something inFreight Caviar this morning that
said Gene Sirocco, I think islike the head of the unions over
(13:40):
at the ports over on the WestCoast and he's like imports and
exports are down like nine andfive or six percent.
You're starting to see carriersreally starting to feel the
pain because there's just not asmuch cargo to be moving out of
there right now and everybody isseeing the impact in our
industry one way or another.
Yep, anything.
Speaker 1 (14:01):
So yeah, interesting Not super positive.
Yeah, the other one, which issomewhat timely, because we just
recently had an episode withDAT where we talked about the
outgo yes acquisition.
I wish we had Ken like readilyavailable to like bring him on
here and get his, get his take,but like it was settled
yesterday it was yeah, thismorning there was in Freight
(14:24):
Caviar.
Speaker 2 (14:25):
There was an emergency hearing yesterday.
Speaker 1 (14:27):
I know it was yesterday yeah, but I didn't
even know.
This was like a thing and Ithought about it too At first.
I was like, didn't they used tohave like an OTR relationship
or like a referral thing?
But OTR was basically trying tofile suit, saying that, like
you're violating a non-compete,like a non-competition that we
had from our RevShare program inthe past.
So what was the outcome then?
Speaker 2 (14:45):
An emergency hearing in the OTR DAT lawsuit took
place yesterday, June 17th,following a court order
temporarily halting DAT's ALCOplatform over a non-compete
dispute.
According to legal commentatorMatt Leffler, the case has now
been settled.
Dat confirmed that ALCO remainslive with loads marked by a
black dollar sign indicatingbroker eligibility.
(15:08):
Dat says it remains focused onminimizing disruptions and
scaling its carrier payment.
Speaker 1 (15:13):
It was like a blue checkmark is what they were
saying?
Yes, because that was like theOTR thing was the blue checkmark
.
Speaker 2 (15:19):
And isn't that what Alco originally?
Speaker 1 (15:20):
had was a blue checkmark, so they changed it to
a black dollar sign.
Speaker 2 (15:23):
Yeah, so they changed it to a black dollar sign, yeah
, like it was that.
Basically, I think when Alco,if you were as a carrier looking
at a broker or I think, abroker looking at a carrier, I
can't remember which one itshowed you the credit worthiness
with the same indication thatwas under the OTR relationship.
So they were arguing that thatwas part of it.
And then they argued somethingabout the non-compete.
Speaker 1 (15:52):
And I didn't get into the like the legal details of
it, but it's interesting.
Well, I'm glad that's takencare of.
So let's, let's get into ittoday.
So we're going to talk somegeneral, uh, information about
government freight, dod, sddc.
What does it all mean?
What does it all stand for?
We'll dig into that.
And what's what's interestingis I have never personally moved
DoD freight on the freightbrokerage side my company, we
have brokers that do it, so I'mfamiliar with the process.
But I have worked on themilitary side of it once
(16:16):
historically for a deploymentand I'm working on it again
right now, which we can kind ofdig into.
And you have worked on the DoDside with Crowley business, I
believe, and some other things,so you're well-versed in that
Crowley, XPO through TQL.
Speaker 2 (16:30):
Like I ran it and managed Bruce, who was on our
show years ago.
He ran the Mississippi to.
I think he had the East Coast,yeah, and I had the West Coast.
We split the country in half somy team ran anything military
on the West side and at firstXPO had the contract, Then
Crowley took the contract.
So I manage it directly withthe SDDC and also through both
(16:51):
Crowley and XPO when they manageall of it, like the entire
contract.
Speaker 1 (16:56):
Yep.
So let's I want to start offjust kind of basic, like define
what some of these things areright.
So when we say DOD, we'retalking Department of Defense.
All right, now the SDDC, whichpeople will often hear, that's
the Surface Distribution andDeployment Command.
When you look at the UnitedStates military, you have United
(17:18):
States Transportation Commandwhich is like the overarching
transportation organization thathandles all stuff moving air,
ocean and on the ground.
Okay, the air force has airmobility command, that's what
flies things around.
The navy has a military sealift command which moves things
(17:39):
on boats and whereas where wecome in domestically as freight
brokers and have opportunitiesis with the ground side of
things, the SDDC, the ServiceDistribution Deployment Command.
It's the Army's leg of that.
Speaker 2 (17:51):
And go ahead.
It's not just the Army At thevery least, I don't think,
because we used to work a lot.
Speaker 1 (17:57):
It's not it's not just the Army, but it's
primarily the Army, but it's allthe ground things so yeah, so
we did a lot with marine bases.
Speaker 2 (18:09):
I remember like 29 palms and things.
So we did like the troopmovements and things for mostly
the marines and the army whenthey would either move for
deployments or re or move tolike rearrange things from one
base to another, like so nottotally nerd out all this is a
military logistic logistician,not to totally nerd out.
Speaker 1 (18:25):
But sdc is an army component, all right, the same
way that Air Mobility Command isan Air Force component.
But they don't move only theirown services stuff, they're just
the one responsible for it.
So like Air Mobility Command,for the Air Force will move army
assets will move Navy assets,et cetera, military Sealift
Command has the ships.
They will move, you know, aMarine Corps unit or an army
(18:48):
overseas ships.
Speaker 2 (18:48):
They will move a Marine Corps unit or an.
Speaker 1 (18:49):
Army unit overseas, they'll move their equipment,
the same way that SDDC for theArmy will move Army equipment on
the ground.
They'll move Navy equipment onthe ground, they'll move Marine
equipment on the ground.
It's just that the Departmentof Defense assigns each of those
three to a specificorganization to take command and
control of it.
So when we say SDDC and we sayit's an Army component, it does
(19:09):
not mean it's just moving Armyequipment.
Speaker 2 (19:12):
It just means it sits under that branch.
Speaker 1 (19:15):
Yep.
It's considered an Army servicecomponent command, so Army owns
and manages it.
But the customer is all theDepartment of Defense assets.
So when you hear SDDC, that isoftentimes who the actual
customer is Like.
If you look at who you'reinvoicing and who you're billing
, it's SDDC because that's who'sactually I think what's that?
Speaker 2 (19:37):
SDDC is the organization you're working with
and, if I remember, the billinggoes through CAS.
At least it used to Sincada.
Speaker 1 (19:44):
Oh Sincada.
Speaker 2 (19:46):
Oh, sincada, yeah, that's right.
Speaker 1 (19:48):
So yeah, like we won't get into the super
fine-tuned details, but like youhave to have a US bank account.
Sincada is like how paymentsare processed and whatnot, but
basically we'll talk about thebig picture of how this stuff
all works, okay.
Speaker 2 (20:05):
I do want to put one little point out there, right,
because we've gotten plenty ofquestions over the years.
Like I want to get set up, howdoes this look?
Where do I go through?
Right, like you really do wantto understand how these things
work, because there's a lot ofadmin work for each of these
loads and there's not often asmuch profit, but there's a ton
(20:28):
of volume, right, so there'sdifferent things you want to
kind of understand if you'regoing to start moving this type
of freight.
Honestly, like I would spend thetime to at least do some high
level research to understand howand what organizations you need
to do, what hoops you need tojump through to get onboarded.
Like I remember when we did this, we literally whiteboarded it
out to see exactly what we'reexplaining.
Like, ok, this organization isfor this part of the military,
(20:50):
they move things for these.
This one does this.
So we could literally visualizeit and kind of see it, so you
could understand who you'reworking with, what you're moving
where and the invoicing partsof it and each step you need to
take to get involved in actuallyparticipating in these bids and
things.
So, through it, though, likeyou kind of don't have to keep
(21:12):
doing it.
It's really like a one and donething, but really understanding
that, like the adminrequirement was not small, like
for the volume of freight wemoved, we had way more staff
doing invoicing and billing thanprobably almost any other
account, probably a TQL, becausethe steps to make sure you get
paid if they're not done right,you just don't get paid.
It's not like you just callsomebody and they're like oh
yeah, let me process this foryou.
(21:33):
Like it's got to go throughevery one of the bureaucratic
steps to make sure you get paidfor the work.
Speaker 1 (21:39):
Do you ever work with GFM?
That's like the TMS, globalglobal freight management, so
like that's another piece of ittoo, when you start to hear this
stuff, if you go through theprocess of setting your company
up whether it's an asset-basedcompany or a 3PL to bid on and
move military freight, you'regonna see these terms brought up
.
So GFM is the system where thebidding and everything happens.
(22:02):
Sincada, which I believe theparent organization is US Bank
Corp, that's, that's the paymentprocessing system.
Speaker 2 (22:10):
And then SCDC is the actual organization in which
these awards are given andthere's three, right, if you
want to outline it, because Iremember like we had two people
staff just doing Sincada andbilling.
We had one person that just satin that TMS all day as bids
came up to put in numbers, tosubmit them, to get awarded
freight.
(22:30):
And then there was another bidsystem that was sent out at
least it was by like Excelsheets that was through the SDDC
.
They would send out like one ortwo a day, sometimes sometimes
seven, anywhere from like fiveto 20 bids would go out every
day or during a week, and thenit had what was the movement,
what was the truck codes thatthey were requesting, and then
(22:52):
what the volume was, what thetimeframe was, and then you
would put in your number foreach one of them, submit it, and
then usually the top five toseven brokers and carriers would
get chosen and like they wereanywhere from like hey, we've
got a 20 truck movement or afive truck movement, up to 150
or 200 truck movements, 250.
(23:13):
But also, like I remember one ofthe longest bids that was the
smallest number was like Iworked on moving a rocket engine
from like the base in like Utahthat had to go to California
then over to Cape Canaveral andthis thing was like.
I remember it was like 80 or90,000 pounds.
It had to go on like a 13 axletrailer.
(23:35):
It was the most expensive moveI've ever looked at Like.
I think the bid on that wassomething like $75,000.
Speaker 1 (23:42):
Oh yeah, you think, between, like insurance and
specialized equipment.
So let's, let's start with like, yeah, what are, what are some
of the reasons that you know?
What are the use cases?
If we consider the, themilitary, as the customer here,
why are they moving things?
What are these scenarios?
So you just, you know, you gavean example of one which is, hey
, we need to move somethingunique from one place to another
(24:05):
for some specific reason.
Right, that's, that's one, andthose are kind of one offs.
Then you have, if a unit ismobilizing or deploying and they
didn't move all their stufffrom their base maybe to a port
where it's going to go on a ship, ok, so you got to do all that
ground transport to get it fromwhatever fort or camp it's at to
(24:26):
wherever it's going to load outof, and that's going to be a
big project a lot of times witha lot of different equipment
involved there.
Another example it's one thatI'm dealing with right now is
what's that?
Speaker 2 (24:39):
So I remember it was like equipment stuff and then
you also had like rolling stocklike a bunch of RGNs, because
you're loading trucks onto thatlike military trucks onto it, to
get on a boat or off of it.
Speaker 1 (24:50):
So that's the example I want to talk through today.
Base-to-base move is anotherone.
Right where we're movingequipment from one base to
another base and this couldhappen for a variety of reasons
is going to a big culminatingtraining exercise, and it's at a
place like the NationalTraining Center out in 29,.
(25:10):
Is it 29 Palms or somewhere?
Speaker 2 (25:12):
No, it's in California, Most of them for
some reason.
Yeah, the trainings, if Iremember, are like, I remember
doing a lot with the base inSouth Carolina, going to 29
Palms and those were like bigmoves 29 Palms is a Marine Corps
base, but the National TrainingCenter at Camp I think it's
Camp Irvine or Irwing, or Ishould know this in the Army.
Speaker 1 (25:30):
Let's see Where's NTC .
Camp Irwin, california, andthen you've got Fort Polk in
Louisiana, is another bigtraining area for the Army.
You've got a bunch of themright.
But this is again.
You're going to move a wholeunit out from one base to
another and then on the back endyou're going to Other bucket,
(25:51):
another one that we used to do alot of support with, was the
base that's up by San Francisco.
Speaker 2 (25:56):
They support the wildfires and the firemen that
go out and, like you know, hugeforest fires.
When there were fires a tonthat year I remember like all
the equipment that went outthere came from that military
base.
So we would get like spot loadswhere we'd actually like talk
to them.
They would call us and be like,hey, we got to get eight trucks
(26:17):
up there in the next hour and ahalf.
Like we did a lot of thatsupporting the wildfires during
that year when they were reallyprevalent off that base.
Speaker 1 (26:25):
Yep.
So the one that I'm dealingwith right now is it's a base to
base move.
So we've got in New York Stateand the National Guard, we've
got a logistics unit that's inwestern New York, south of
Buffalo, and they're gettingrestationed.
So it's not temporary, it's apermanent move.
So all their stuff, everythingfrom trucks to generators and
(26:46):
you name it is all going to NewYork City permanently.
It's going to be their new home, their new station, going to be
their new home, their newstation.
So what we have to do is wehave to figure out how are we
going to move all this stufffrom one side of the state
literally all the way across theother side of the state, and so
we'll kind of unpack that alittle bit here.
(27:09):
But you go back about a dozenyears ago.
The last time I dealt with oneof these was for a mobilization
or deployment.
So actually that same unitthat's repositioning now I used
to be a part of, and when wedeployed the last time we had to
get all of our stuff down toTexas where we trained up for
two months before going overseas.
(27:29):
So I was the unit movement guy,so we I was the unit movement
guy, so I actually legitimatelywas there when flatbed drivers
rolled up and we're loading ourcontainers and our equipment up
on flatbeds and I'm driving itdown there.
But it's interesting the way itworks.
National Guard and active dutymilitary are a little bit
(27:49):
different, but there's a,there's a head officer, it's a
TO that you're probably familiarwith, the transportation
officer for the base and theactive duty.
And in the National Guard it'sa.
It's a state transportationofficer for the base, in the
active duty and in the NationalGuard it's a state
transportation officer, so theyhandle not just a base but all
the units within the state.
So that's the actual person whoyou're likely going to have a
relationship with, who willtender, or they might be
requesting information or quotesfrom you or tendering things
(28:09):
out to you or getting youapproved on their end.
There's all kinds of ways thiscan happen.
Speaker 2 (28:13):
Here's something really important about this,
right.
People think and this isapplicable in any freight you
move and this is why I probablysay this more than any other
piece of advice in our industryis, you need to speak with the
people you're doing businesswith and you need to have a
relationship.
It changes one the amount ofbusiness.
You'll get the likelihood,you'll get the business knowing
(28:36):
what's going on, beyond just thedetails that get emailed to you
, because, like in the instanceof TOs, right, quickly is okay.
So we get an Excel sheet withbids.
They're very similar to any bidyou're going to do for any
company, except they're going tohappen all together over one
period of time, and here's whythat matters.
(28:56):
If you are moving, say, 10 or 15flatbeds a day for 10 days,
right, there's only so manyflatbeds within 50 or 150 miles
of a base.
So when you've got to move 15to 20 a day you almost always
suck up all of the availablespot capacity before you hit the
number that's needed.
So then you've got to go tosurrounding areas and pay to
(29:23):
deadhead trucks to come in andload, to then move, because
there's usually just not thatmany available for that period
of time, right?
So what happens in a practicalstandpoint when you're moving,
this is okay.
Say, the average rate on thatlane is just like I don't know
3,500 bucks.
Your first one or two trucks,you might pay 34 to 36 because a
guy needs to go there, he'lltake it a little less.
(29:43):
Somebody kind of doesn't wantto.
You pay a little more.
When you get to like yourfourth or fifth truck, you book
that day like you are alwayspaying way above the average
because they're usually not asclose and you got to pay to
deadhead them.
That's the first thing you gotto understand when you're
bidding these.
The second thing you got tounderstand is there are multiple
brokers always working on thesemovements.
(30:05):
So if you got, say, there's 15loads a day and you get
allocated five, I get allocatedfive and two other brokers each
get allocated five.
I get allocated five and twoother brokers each get allocated
five.
If I bid, say, $3,700 on thatlane because I feel like I'm
going to pay $35,000, but youbid $4,000 and you expect to pay
$38,000, you're fourth on thatlist, so I get the first five
(30:27):
because I am the cheapest guy.
If you are number four on thatlist, you bid more money, so you
have more money to pay carriers.
So what happens is is wheneverybody posts their loads on
DAT example, for that day I needto cover mine for the average,
call it 3,500.
You want to get your trucksbooked up before they're all
gone, so you start offeringevery truck 38 because you got
(30:50):
$4,000 into it.
So what happens is is you buyall the capacity for the higher
rate and I don't get any covered.
And this is an instance where,like you really end up competing
with each other to get the sametrucks to go run the same
freight, which pushes all therates up.
This is important because youneed to understand the
relationship of how you'rebidding these.
Your rates versus volume on agiven day change.
(31:13):
It's not the same thing asbooking one or two trucks.
You end up paying differentmoney because there's more need,
right, higher demand pushesprices up.
Well, the same thing happenswith shippers.
This is why shippers don't wantto give a whole bunch of the
same loads to four or fivebrokers, because if everybody
starts posting the same load,sometimes all it does is inflate
(31:33):
the cost.
The shipper pays and the truckswin.
This is one of these scenarioswhere carriers always complain
that brokers drive rates down,but in a lot of cases a lot of
brokers competing for the sametruck actually benefits carriers
and it pushes their rates upbecause the carriers are able to
play the brokers against eachother for a better rate.
Speaker 1 (31:51):
So that's a really, really good point, and this is
applicable not just to militaryfreight.
So, and that goes right to theexample that I'm talking through
here.
So the scenario that we've gotis this is a logistics unit, so
they have a lot of big trucks,big equipment and they have some
smaller things as well.
But this unit is actuallydesigned by its structure to be
(32:13):
able to move, to self self-movethe unit wherever it has to go.
So it has the trucks and it hasthe flatbeds and it has the van
, the van trailers, to be ableto move stuff.
So the question is, you know,do does this unit self-move all
of its stuff?
And the reality is you're takingyoung, somewhat inexperienced
drivers and ask them to drive avery, very large military truck
(32:35):
into New York City.
Not a good idea, right?
So that's where we look at okay, why don't we have the experts
that do this every single dayand not some 20-year-old
National Guard soldier who's,you know, driven it for three
hours?
Right?
Why don't we hire theprofessionals to move the more
intricate stuff?
But now we're looking at whatyou just said.
If we've got, let's say, 30trucks that got to move, right,
(32:58):
and we've got to load them onspecialized low boys or RGNs, or
in some cases it's Humveesgoing on flatbeds.
You're going to suck thatcapacity up quick, which will
drive your prices up.
So the consideration we had iswell, what is important here?
Is it about getting it donerealistically, with a cost
estimate that makes sense, ordoes it have to get there by a
(33:19):
certain time and which we alwaystalk about right In freight?
In general, it's like it's notblack or white either.
Speaker 2 (33:25):
It's not binary, meaning like we're all price or
we're all service.
The reality is is most shippershave to weigh both of these and
come up with some gray area inthe middle where service is
important to a point and thenit's like okay, we're going to
give up a little bit of serviceto save a little bit of money,
because most companies, even themilitary, doesn't have an
(33:47):
unlimited budget to just go, andin certain scenarios that
budget goes out the window andservice matters.
Everybody thinks that, but it'slike there are very few
scenarios where budget goescompletely out the window and
it's all service.
That's usually when thingscan't move COVID and things
right, very extreme, but almostevery shipper is weighing the
same thing you're talking about,like we need to get all these
(34:08):
moved by this deadline, so likewe have a hard stop to get them
there.
But how do we do this withoutgoing unlimited budget and
giving up all of our service bytrying to be too cheap, like how
do you really gauge that line?
This is how you work back withyour shippers, by the way, as a
broker, to get them tounderstand it's not black or
white.
And if somebody is just likeI'm all cheap and I want all
(34:29):
service, like they're, I alwayslaugh because it's like they're
digging their own grave.
Speaker 1 (34:32):
You're just going to give up service if you're
leaning that far.
In that way, these are theconversations that happen on the
military side.
So, to give you context on it,we were talking about it about a
week or so ago and they knowthat I work in freight brokerage
.
So they're asking me what doesthis look like from your side of
it, on the commercial truckingside?
And I explained the same thinghey, I can give you ballpark
(34:56):
what a going rate is for aflatbed?
I said but there are otherthings that impact that.
So as you try to suck up thiscapacity and do it all at once,
that rate is going to get drivenup.
I said.
Furthermore, you're sending,you're trying to get into New
York City.
I said there are plenty ofdrivers who will refuse to ever
deliver within the five boroughsbecause they don't want to deal
with.
Speaker 2 (35:15):
The same reason we don't want to send drivers.
Exactly the same reason wedon't want to send them is the
same point of view some folksare going to have.
Speaker 1 (35:23):
So they said well, what are some things that we can
do to kind of like outline this?
So you know, we have theselittle think tanks and whatnot,
and then the output of all thisis all right, here's the deal.
We wanna move 50% of theequipment by this date, 75 by
this date and 100% by this date.
The rest is flexible, right.
So we have kind of likebenchmarks.
(35:44):
Like you said, there's thatgray area there.
That's exactly what we'redealing with here is okay, we
wanna have the cost realisticand we understand it's gonna be
within this general window.
But we, you know, we're alsogoing to have requirements on
when we have certain percentages.
Then you have to find thebalancing act and once this you
know, we have to put togetherideas of like okay, we have
(36:05):
equipment.
It's not all in western new york.
Some of it's up in fort drumand then in the adirondacks area
, some of it's in western newyork near buffalo, some of it's
in the middle of the state at amaintenance facility.
So the question is, do we tryto consolidate it all into one
area, make it easy and try toget it awarded as some sort of a
project for a motor carrier?
We put it out for bid througheverybody.
(36:27):
You know all the brokers andcarriers that are in there
bidding on it.
So we're looking at ways to,you know, try and make it
interesting and make it as costeffective as possible and make
it as cost effective as possibleFor us to be able to get the
green light to go ahead and hirecommercial and run this through
STDC.
We have to show that the cost,the estimated cost to do this,
is worth it compared to.
You know, the limitations andthe safety risks of doing it as
(36:50):
a self-move, with inexperiencedyoung soldiers that haven't
driven the equipment a whole lot.
So it'll be interesting to seehow it all pans out and plays
out.
But those are the kinds ofthings that happen on the other
side of these conversations.
It's not always just hey, thisunit has to get there for
training in two weeks, get itmoved.
Sometimes you have more ofthese like okay, well, there's
(37:12):
more considerations here, it'snot just about the timeline,
it's also about service etcetera.
Speaker 2 (37:17):
So so there's that reminds me of this really funny
story and I'll never forget thisjust because of just how it
played out.
I was having a conversationwith a TO I think it was in
South Carolina, and they wentwith like and again, when you
get to know some of them, youcan understand the ones that are
in situations that are likeyours and some that are kind of
(37:39):
just like you got to get thisdone and you got to get it done
for this number and that's itRight.
And I remember this one movelike we bid everything out.
It was going like as planned,but then, like the number of
trucks they needed increasedunexpectedly, Like they needed
like an extra 20 percent of thetrucks for.
Like the number of trucks theyneeded increased unexpectedly,
Like they needed like an extra20% of the trucks for like the
last couple of days.
(37:59):
So if they needed 10 a day, allof a sudden it was 15 a day.
And I was talking to the TO,cause that's who you're working
with all day on this, makingsure everything's getting loaded
, getting there on time, andyou're working back and forth.
He's like well, hey, like weneed an extra five trucks a day.
And I remember telling him Iwas like, well, hey, like we
need an extra five trucks a day.
And I remember telling him Iwas like, listen, I was like I'm
just being honest with you,Like, and when you do these a
lot, you get to know the otherbrokers you're working with and
(38:19):
oftentimes we would talk witheach other because we're all
working for the same goal to getthe move.
Get a move effectively.
Not every broker is just tryingto undercut, to just make money
Like.
These are long-termrelationships, you care about
doing them well.
Also, if you have a failure,you get blocked from all SDD
freight sometimes for, like Ithink, 45 days Can.
Speaker 1 (38:41):
it depends on the TO.
I'll tell you from the insideit's not actually that black and
white.
Speaker 2 (38:46):
So this is the fear from like our point of view.
We have teams staffed.
I think at the time we had like15 or 20 people with the teams
we ran.
So like if you don't havefreight for 45 days, you are
paying salaries for a month anda half with no loads.
Like that is a very, very bigrisk you're trying to avoid.
Again, how practical that wasdidn't happen that often, but
we'd heard it happened and hegoes definitely can yeah.
(39:09):
And he goes, yeah, and he's likewe need, you know, five more
trucks a day.
And I remember telling him Isaid, listen, like can you get
me an extra?
And it wasn't a big number,like I need like an extra 350
per truck, because I think theywere coast to coast, which
wasn't a huge number.
But I'm like, and I told him,I'm like we've been doing this
for six days.
We are sucking up all thecapacity at whatever.
It was 15 trucks a day Ifyou're going, 30% more trucks.
(39:37):
Like we've got to bring themfrom an area farther away to get
them there on time.
Like we've got to pay theseguys deadhead.
It's not like we're keepingthis money, we're literally
going to give it to the carriersto get you what you need.
They're farther away.
And he was like, well, I can'tdo that, we're not, I'm not able
to go above this budget.
Like you got to move it forwhat you bid it for.
And I said, listen, like I willbe happy to hold the number,
but you're telling me they allgot to be moved by Tuesday.
There aren't enough trucks thisclose to your base to get it
(39:59):
done by Tuesday.
At your rate, it will be doneThursday.
He goes well, it can't.
They all got to be out byTuesday.
And I go well, you've got twochoices to make.
Like you, either get a move byTuesday at a higher number or
you're just going to have towait, because nobody's just
going to lose, and work allafternoon to get this moved
because you changed theparameters.
(40:21):
And I'll never forget how hesaid this to me.
He said it's super serious,like almost in a movie.
He goes well, son, failureisn't an option.
And I remember I paused for aminute and I was like and all do
respect, sir, I was likefailure is your most likely
outcome.
If you don't pick which one ofthese because these aren't my
opinions, these are just theeconomics of the situation
(40:42):
you're in.
So, like you can either lookreally bad to who you report to
by missing your deadline or youcan find a way to get and it
wasn't just us, it was like anyof the brokers you work with.
I'm like I don't even care ifyou give me the loads, give them
to the other broker I think Iwas moving to.
Like Landstar mostly.
I'm like give them to Marioover there.
I was like.
But at the end of the day, likenobody's got the ability to get
(41:02):
a driver to drive 250 milesempty for free, so somebody has
got to find a way to pay theseguys.
Speaker 1 (41:08):
Yep.
So I'll tell you, like the umand very similar to like um, you
know private companies and andcustomers that are not
government or military.
The to um is just like anyother customer.
So, like you mentioned, youcould get blacklisted for 45
days.
So, like our guy in new yorkstate, um I had this
(41:29):
conversation with him a coupleyears ago and he's like.
He's like yeah, that's, that'snot how it works.
He goes, he goes.
We have leeway, he goes.
I can pick and choose who Iwant to work with based on if I
like them or not he goes.
I have some wiggle room onrates If I need to.
I can tell someone that I can'twork with them for X amount of
time because they screwed up, orI can give them a pass.
So it's the same way that likecustomers are, like they have
(41:50):
that.
They have that ability.
Speaker 2 (41:52):
I'm so glad you brought that up.
That's what I wanted to circleback to right, which was what we
learned.
After you do this for like afew months or years, like you
realize, like it's not just thelowest number, it's the lowest
reasonable number compared toyour track record.
Right, If you get them, everytruck they've ever asked for for
, every time you've bid thatlike you get priority.
(42:14):
Why?
Because there's less risk forthe guy doing business with you,
right?
Yep, Just like you said, whenyou get to know them and you get
a relationship like, they'lltell you this.
They're like look, man, I'vedone the last three movements
with you guys.
You have not missed a beat.
Every truck's been on time.
So when you go, hey, look, Ineed a little bit more to help
you get this thing done, they'reway more inclined to help you.
(42:36):
This is also why, when you startworking with a new customer,
your first couple loads there'sno leeway on rate and to go back
and ask for more money makesyou look worse.
Why?
Because you haven't establisheda track record of trust, of
service, of you doing what yousay you're going to do.
Once you have that, then youget a little more flexibility
because they know what they'repaying for.
(42:57):
It's not.
Oh, this is a bait and switch.
This guy told me he can movethe load for 1500 bucks.
Took the load, called me anhour later, told me he needs
2200 bucks.
Like nobody wants to dobusiness with that person.
If that's the way you'restarting your relationship.
Speaker 1 (43:11):
Absolutely.
So those are kind of the basics.
We got anything else on the dodside here.
That was really my.
My whole thing is like I guessthe big takeaway here and then
I'll throw it back to you it'slike whether it's dod or
anything else, you'll seesimilarities, you know, across
the board with all thesedifferent situations.
So there's the relationshippiece of it.
(43:33):
You have unique situations.
You have repeat business versusone-offs, the ability to lose a
customer because you screwed upor whatnot, and how to have
that hard conversation with acustomer when you can't give
them everything that they'reasking for.
And we actually have a good Q&Afor our Final Mile segment
that'll come out on Tuesdaywhere someone asked like how do
(43:55):
I deal with the situation wherethe rate's not going to work and
all that stuff?
So that's the big takeaway hereis you treat these situations
just like any others.
I would say the added layerhere is that understand that
when it comes to militaryfreight, the setup process and
the requirements, like wementioned early on in the show,
they are a little bit morerobust and, you know, stringent
(44:18):
than just setting up with someold produce broker out in Idaho.
Speaker 2 (44:24):
Here's what I would say and this is from some
takeaways that I really learnedthat you can't learn unless you
do it.
Ways that I really learned thatyou can't learn unless you do
it Like I mean you can learn itby listening to us, but like
you're still going to probablyhave to do this to experience it
, to really understand how to doit better.
And it's the first biggestlearning curve was what I kept
(44:44):
saying is like when you movemultiple trucks on the same lane
every day for a certain periodof time, the pricing is very
different because there's not aninfinite number of trucks there
all day.
Most people only move one ortwo loads on a lane a day, maybe
an off day where it's three,but they're also not doing that
(45:06):
consecutive days with a deadline.
It is very different whenyou're like all this stuff's got
to be moved in 10 calendar dayswith no failure.
This is how many trucks youneed every day.
You lose the ability to reallynegotiate price and a lot of it.
The carriers are going to beable to get whatever they ask
for, and you know, rightfully so.
(45:27):
Some of them are farther away.
They need to get paid deadheadmoney.
So, like your, averages do nothold up.
So if you're used to pricingthings based on what the debt
average is, plus or minuswhatever you think, like that
kind of goes out the window themore trucks you need per day.
For sure there's a correlationwe always talk about between
service and price.
(45:48):
But when you've got a projectwith a start and a deadline,
that has a very bad outcome ifit's not met, it really
amplifies the relationshipbetween service and price.
Because normally you move oneload a day or two in advance,
like that's not that big of adeal.
But if you bid a whole project,say you're the only broker and
you're working even just withany shipper and it's five loads
(46:10):
a day, everything's got to bemoved in five days.
Right, you take everything thatyou think you pay on one truck,
you post up a couple of trucks,write a number down, multiply
that by five times five days andyou go here's what your project
costs.
You're going to be way off,like you're just nowhere near
going to be able to cover thatvolume in that timeframe.
And then you have two optionsit either gets longer or you
(46:31):
need more money.
So like that's the biggestlearning.
The second biggest learning welearned from doing military
freight and I had theopportunity to move it under
different organizations, sodifferent perspectives, because
they had different pricing whenwe moved those bids that were
emailed through the SDDC.
There's so many carriers andbrokers bidding on it that the
(46:51):
time it took to bid enough ofthem to get loads did not make
sense financially.
Like we're spending hours a daybidding and quoting freight to
get a few loads a couple ofweeks from then.
So really pretty quickly westarted to realize we're paying
extra people to invoice it,extra people to sit in this TMS
system, extra people to runquotes all day.
(47:13):
When you pay all those people,all of a sudden you realize like
you need to move a lot of loadsto cover those salaries and
honestly like it wasn't thatprofitable for that area of the
DOD.
Now, other areas, like you say,where it's extreme, like
hurricanes, fema, right, thatstuff goes open checkbook.
Why?
Because if it doesn't get there, people die, yeah, so all of a
(47:34):
sudden you can get the resourcesyou need to do the work and I'm
not suggesting price gouging oranything like that, but like
when you've got to charge whatit takes to perform that work,
that can be worthwhile becausethe repercussions of it not
getting done are catastrophic.
Those scenarios can beprofitable and are worth the
energy and it's not a smallamount of work Like when we
(47:56):
would support hurricanes you'vegot.
We would have sometimes five to10 people in certain areas,
like you would work.
Speaker 1 (48:02):
12 hours a day.
It's supply and demand when itcomes down to like you really
can't even gouge, because if youtry to gouge, someone's going
to undercut you and still have agood margin on it.
Speaker 2 (48:11):
So it's just it's it's going to undercut you and
still have a good margin on it.
So it's just it's economicsoverall.
It's just what it comes down to.
And these accounts were muchmore profitable when XPO had the
contracts because they werecost plus, which meant like you
could perform the work and youput a reasonable margin on it.
They had very good service buta much bigger budget that was
profitable to run when theyswitched and then Crowley
(48:32):
started managing it and more ofit went through the SCDC.
In some ways, like it becameless profitable.
Crowley was able to manage itvery well.
But how Crowley was able toachieve that is.
Crowley built out an entirebrokerage division to support
the whole military contract, wasable to do that in-house and
prioritize smaller carriers tokeep their costs down.
Like they did a very effectivejob at keeping the service up
(48:54):
and the cost down when they keptit all in-house.
To your point of when you giveit to lots of brokers, it is
going to inflate rates in someways.
So like there's lots of thingsto consider when you think about
the business side of this.
Is what you're doing worth theeffort that goes into it?
And sometimes it is yes andsometimes it isn't.
And I mean there's lots ofthings to kind of understand as
(49:16):
you're doing this, to determinelike hey, like this is great,
that's to lots of volume, buthow much of this are we getting
for the work we put in to getawarded it Right?
Those are always things youwant to consider as you're
moving with anybody 100 percent.
Speaker 1 (49:30):
Well, good discussion , good takeaways on all this
stuff.
Let us know what you guys thinkand if you're working on any
military stuff or have anyquestions about it, share it in
the comments or send us amessage.
Any final thoughts, ben?
Speaker 2 (49:44):
Do you believe you can or believe you can't?
You're right.
Speaker 1 (49:49):
And until next time go Bills.
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