Episode 32: Maximizing Profits and Efficiency

Brent – 00:00:01:

Welcome to Freight Nation: A Trucking Podcast, where we explore the fascinating world of trucking and freight management. We dive deep into the freight industry and uncover why the trucking industry is more crucial to our country now than ever before. Stay tuned to uncover the driving forces behind successful trucking businesses and hear from the hardworking truckers and leaders who keep the world moving. Let’s hit the road. Well, hello, Freight Nation. I hope you’re doing great out there today. Today is a special edition of Freight Nation. Today is a day where we at Truckstop hope you get a little bit smarter in running your business. Today is a special edition because we’ve got a special guest on today, and we’re going to give a lot of inside information on how to deal with brokers, how to maximize your broker relationships. And this is something that we firmly believe in at Truckstop, that as a carrier, you should be very focused on maximizing your broker relationships, because if you work in the spot market, it’s the predominant way in which you receive your freight, because the broker in this industry, and there’s lots and lots of them, thousands and thousands of them that have the freight out there, that have negotiated the shippers and done a tremendous amount of the work, and they’ve placed it out there available for you to move on your vehicle. So today’s a fun day, and it’s kind of a recap of something that we’ve done before at the Mid-America Truck Show. So joining me today is one of my dearest friends in the industry, somebody that I call a close personal friend, and his name is Tyler Johnston with Mercer Transportation. Tyler, thanks for joining us, man.

Tyler – 00:01:32:

Thank you for having me on. I echo those sentiments. I love doing this. I love doing it at Mid. I love doing it with a live crowd. This is new. Forgive me for standing up. I get handsy when I do this, and I get excited about the topic, but I’m excited to do the presentation again.

Brent – 00:01:48:

Yeah, well, me too, man, so much. I appreciate it. And each year, Freight Nation, Tyler and I stand on the stage live, and in person at the Mid-America Truck Show in Louisville, Kentucky, home of the truck show and Mercer Transportation. And we just talk to the audience about how to work with the broker the best way you can to run your business. Look, when I started this thing, I said, I’d love to get a broker on stage that would be just transparent about how they run their brokerage, how they love to work with carriers, and how they want to work with carriers, and how they find that sometimes I’m challenging to work with carriers. So the first person I called is one Mr. Tyler Johnston, and I said, Tyler, look, I really need for you to come on stage. Are you willing to do it? And he didn’t even hesitate. He just jumped right in. You remember the day that we talked, when I called you and asked you to come on stage?

Tyler – 00:02:35:

I do. I was more nervous than let on. That was some six years ago, and I was kind of, it’s like the, do you remember the Masked Magician show, where you kind of let in the secrets? I thought, he’s asking me to share the secret sauce. How do we do it? I was nervous, but I was excited. I live for this kind of stuff, and I love trucking. I love owner-operators. I love the industry in general. So why not jump at the chance to be on stage with you?

Brent – 00:02:59:

Well, thank you so much. I appreciate that. I feel the same way about you. To me, the most important thing that I took away from you saying yes to this on behalf of yourself and Mercer Transportation is something that I discussed with you and with lots of brokers is that you guys really value your carriers. You value the carriers that haul freight for you. And yes, you guys are sort of their customer. But in general, you work more like a little bit like a partnership because you both need each other, right?

Tyler – 00:03:22:

Yeah, exactly. We believe, and it’s been true since the beginning, the relationships that we build are priceless. It’s priceless to our business. It’s priceless to their business. We see ourselves as a company that’s just there to help come side by side with individuals to help facilitate their success. That’s what we are in the industry. So we really see them as true partners in a sense. And we’re trying to work towards the same goal. We’re trying to build bridges, not barriers. And it’s always a pleasure to even talk about it.

Brent – 00:03:52:

Oh, man. Fantastic. All right, Freight Nation, this one’s for you. If you’re a carrier out there, I hope you take the time to get all the way through this. And I promise you that if you’ll wait till the very end, Tyler’s going to talk about something that he, as a broker, wishes every carrier knew in order to move freight for their brokerage. And it would allow that carrier to get the best freight on their truck at the best prices. So, all right, Freight Nation, we’re going to jump in. I’m going to have a few slides at first. It’s a little different. You’ll notice it’s not just two people talking like we normally have on Freight Nation, but this is actually a little bit of a tutorial on how to work with a broker, all right. So, Freight Nation. Let’s just jump in. All right. So, you got Tyler. I already introduced Tyler. He’s right there on the screen at Louisville, Kentucky.

Tyler – 00:04:34:

Hey, there’s Mercer Town.

Brent – 00:04:35:

Yeah, at Mercer Town. There we go. All right. So, let’s go. First slide. Okay. So, believe it or not, Freight Nation, if you’re a carrier out there, the broker’s biggest obstacle in working with you is communication as well. And I know that by research we’ve done at Truckstop that your biggest challenge is negotiating with brokers. So, guess what? It’s the same thing. And this is kind of what Tyler and I were talking about in the beginning. You guys are both trying to solve the same problem. How can the broker move freight on behalf of their customer, the shipper, and how can you move freight on behalf of the broker, your customer? So, it’s a triangle that you guys all need each other. But communication is the most important thing. I know you’ll see there that negotiating a fair rate is the second one, but the communication is what it’s all about. And so, why do you want to communicate? Well, what’s the power of negotiation? Well, let’s just take some simple math. Base it on freight that moves 1,400 miles one way on a trip, on an average 100,000 miles a year, which is about an average length of number of miles a year that a carrier hauls inside the spot market. So, if you just negotiate 10 cents more per load, it’s about 140 bucks or almost $10,000 that you would put in your pocket. Now, last time I checked, that’s 10,000 profit dollars, not necessarily cost dollars. Because you’re trying to cover your cost no matter what. You want to make a profit on top of that. But you could negotiate just a little bit more. Boy does it pay off to your bottom line? So, I say this to make it simple because a lot of times you just try to negotiate for a few dollars, but just look at the cents per mile and try to negotiate that because we’re all paid presently on a per mile basis. All right. So, Tyler, jump in here anytime you want to. By the way, we’re wide open to Freight Nation, man. Just jump in.

Tyler – 00:06:16:

I love that because I was just thinking to myself, I could use an extra 10 grand in my pocket, especially right to the bottom line. That communication and just the fact that that little tweak and the how we do things or how we talk to people could provide that benefit. It’s priceless.

Brent – 00:06:31:

Yeah, fantastic. So, I know this is a case for you and the brokerage. I know this is a case for you and the brokerage, Tyler, but it’s important for carriers too. So, this next slide, Freight Nation, when you look at it, why do you want to have good communication with your broker out there, whoever you’re doing business with, whether it be a shipper or a broker, but why do you want to have very good efficient communication? It’s because the best freight in the spot market moves FAST. It moves super fast. And this is just the average, by the way. So, it’s up a little bit. So, more than 50% of it moves in less than an hour. By the way, the super best freight moves in minutes off a load board. So, Tyler, why is it important for you as a broker to move the freight quickly?

Tyler – 00:07:11:

Flat out, time is money. And we’ll get into it in a minute about what my customers’ expectations are and how the freight is given or tendered out to us as brokers. But flat out, the more time that I can save in negotiating or building relationships, it provides value for my customers, it helps me win more business. And we’ll get into that here in a minute. But that just shows you right there, time equals money. Time equals efficiency. And that’s what we’re all about. We’re trying to become as efficient as we can.

Brent – 00:07:39:

Yeah, for sure. For sure. And you’ll see on the bottom of this Freight Nation, you’ll see that the average loads move per broker. They move a lot of freight. 65% move in more than 50 a month. So, you can see that they’re professionals at this. All right. So, where are they delivered? Well, most people think that in the spot market, most of the freight is just long haul freight. And yes, that’s a lot of it, 40, 50% of it is long haul freight, but national. So, it goes all the way up that long 1,000, 1,400 mile haul. But you’ll look at this, 18%, 33%, local and regional. So, there’s opportunity across the board. If you have a need to be more close to home, there’s plenty of local freight that you can haul. It comes with a different price and then regional freight as well. But a point in showing you this is just that it’s not just a long haul market. It’s a full truckload market, but it goes all over the nation, especially as deliveries are beginning to change a lot. It’s in different marketplaces.

Tyler – 00:08:28:

I think that also shows that the broker’s not just out there chasing the golden goose, the high margin, long miles, dollars. We’re trying to provide value to the customer. And that could mean local business. It could mean regional. It could mean national. The fact that all of it exists on the spot market, that’s where the relationships are built.

Brent – 00:08:46:

Yeah, no doubt. When you think about the availability to a carrier that has access to hundreds of thousands of loads every day. Now, you’re not going to find that everywhere. You’re only going to find that a couple of places inside of the US Freight marketplace. So, we’re happy at Truckstop to be able to provide those to carriers every single day on behalf of brokers. So we’re jumping into Tyler’s part of this. He’s going to have a bunch of slides and I’m going to be the color commentary. So jump into it, Tyler.

Tyler – 00:09:11:

Thanks, Brent. When we started talking about this, we started to talk about the importance of the transparency aspect of letting the carrier know and the owner operator know how it is for the people that drive the desks. What’s happening behind the scenes, behind the curtain? If we could all look behind the curtain. What’s happening? So how does the broker do his job? The first thing that comes to my mind when I think about the broker of today year is the fact that technology is flooding our industry, flooding the industry, the people that drive the desk. And here’s the deal. And this quote comes from a Netflix show that I love. It’s not about trucking, but it can be applied to brokering and trucking very well. A broker’s job is to sell certainty to the customer that I can cover your load at a fair rate and do it every time. So. In order to sell certainty, you must have great predictions. I don’t have trucks of my own. I’m a broker. I’m trying to find carriers. I got to predict what I can sell it to my customer for. In order to have great predictions, you must have a lot of data. So that introduces what technology is doing into the trucking industry. So next slide. And we’ll talk a little bit about that because it’s actually doing two different things. Here’s what technology is doing. On one side of the fence, it’s improving our process, the TMS improvements, artificial intelligence, integrations, API Integrations. All these big words that I don’t know a lot about but my IT team does, is making the clicks and the mouse clicks and the process of being a broker simpler. It’s doing that in order to become more efficient in order to save time. So on one side of the fence, we’re improving process in order to save time. On the other side, we’re improving decision-making. You got all these companies and Truckstop does this as well. And every company does this. They collect data in order to provide tools for both the carriers and the brokers to use in order to make the right and accurate decisions. Rating tools, smart capacity sourcing, what loads are going to be good for me, when and where. So those two things are really happening. And they’re happening, honestly, at the same time, almost at the same speed. When I go and I meet you at a lot of these things to different conventions and things, I see these technology companies that are doing both of these things. They’re improving process. And then in the next booth, you can find someone that’s trying to improve your decision-making and you’re data mining. So what effect does that have? What is it doing to us as an industry?

Brent – 00:11:32:

Yeah, right. Tyler, one quick comment on that. I know that in the brokers that I’ve spent time with, Freight Nation out there, just to kind of give you an idea. In a broker’s mind, they think workflow. In other words, how fast can that information get from point A to point B to point C to point D, which means it’s delivered. All right. So by the way, I just made that up. A, B, C, D.

Tyler – 00:11:51:

I like that.

Brent – 00:11:52:

Yeah. But my point, though, is that how fast that information can get moved. So, this is why technology is so important to the brokerage company. It’s important in trucking in general. It’s important to the broker because their entire commitment to the shipper is to move that freight efficiently to its final destination. So this is why technology is so important among the brokerage marketplace.

Tyler – 00:12:13:

Yeah. We need to make a fast and accurate decision, not only in the world of hearing capacity, but also in providing value and a solution to our customer. So it’s doing these things. It’s making my job fast-paced, more automation, less touch. Computer’s doing a lot of the work on that. Less interaction and more transactional. That’s by nature. That is society in general. There’s less human-to-human interaction, and it’s becoming very competitive and accurate. There aren’t these big giant swings anymore in how we’re predicting freight. I equate this to a lot of my owner operators is this. We don’t use the farmer’s almanac to predict freight swings anymore. We have sonar now, quite literally. So some of these things that is happening to the industry, our double-edged swords, if you will, they’re necessary evils. There’s things that we do have to live with, but we can fully utilize those things as leverage as well, especially when building relationships and interacting with the customer and providing that value.

Brent – 00:13:10:

Right. And I know Tyler at Mercer, because you guys have talked about this, and many brokers talk about this. They’re not pushing towards personless interaction with the carrier. They’re just trying to be more efficient. That’s why when it says less interaction, more transactional, the broker still has a high desire to have. A more relational aspect association to the carrier.

Tyler – 00:13:29:

If they’re a smart broker, they are. We do have to live within the world that we exist. And unfortunately, that is all around us, less interaction and more transactional. However, there are ways to use that benefit in a sense and still be interactional and build the relationship if you’re smart about it. And that’s what we need to be. So how do we go about combating this tendency or nature as a carrier? What do we do? This is the first thing that I encourage all carriers to have and all owner operators to have a knowledge of. You need to have knowledge of your market, your industry, your business. You need to know current market conditions overall. You need to know current freight rate lanes. You need to be prepared for the interaction so that it doesn’t become transactional, so that we can have something to build on. In order to build a relationship of any kind, you have to have a good foundation. A good foundation begins with these things. The current market conditions, current freight rates and current trucks and lane. I cannot tell you how pivotal that is. And Truckstop provides a great resource for this that my team uses on our side of the fence as a tool. And I’m going to steal a quote from you. It just popped in my head because we used it this year on stage. You said that for so long, the brokers had these tools as their leverage. It was their leverage. And then you said that now the carriers have those same tools to use as your leverage and to know your markets, know your data. And then we kind of agreed that we need both of those things to become our leverage in providing a right solution for the customer. That’s what we’re trying to ultimately accomplish.

Brent – 00:15:10:

Right. If you can get to the decision faster because you both have the information, then both parties, both the carrier and the broker should benefit from being able to get more freight on a truck and the carrier manager can close more loads in a day so they can help out the broker they work for. So this is why this is super important, because if the carrier doesn’t know the information, then they may feel they’re getting screwed. But if they knew the information, the current marketing conditions and know 250 is a great per mile rate in that lane on that day, then you can agree to be able close the freight. So super important to know your data.

Tyler – 00:15:43:

We at least have a starting point at that point and we know where we’re going.

Brent – 00:15:46:

So how to start well?

Tyler – 00:15:48:

This is one of my favorite slides. We added this last year and I love it. Look, coming from the brokerage side, you can lead a horse to water, but you can’t force them to drink. Everybody asks me, and often when we get done presenting, I get asked, how come they didn’t ask me more questions? All they wanted to do was make the transaction. And I agree, and that’s unfortunate. Sometimes you can lead a horse to water, but you can’t force them to drink. So I encourage carriers and owner operators to provide that stuff up front, provide the things that I want to know as a broker up front, because I’m just not smart enough to ask you sometimes on some of it. So tell me your equipment. Tell me the complete details about your equipment. Do you have a flatbed? Do you have a step deck? Why? Maybe I have something that I can work out with one of those things. Your actual location. If I know how far you have to deadhead in order to get a load, I might have something better for you. I might have something that I didn’t know to ask. How often are you there? Is it something that’s a repeat business? I equate this to all of my new orientation class whenever they come on our asset side. What better opportunity do I have as a salesman if I knew I had a fleet of trucks supporting my every move about repeat lanes and repeat business? I could go to my customer and say, hey, I’ll take three of those a week because I have a guy that’ll do it for me three days a week. Tell them what works best for you and why it works best for you. Again, we’re looking to build relationships, not barriers and bridges. We’re looking to build bridges to come up to the best solution for the customer. But again, sometimes you just got to lead the horse to water.

Brent – 00:17:20:

Yeah, so I’m trying to, is that you drinking the water or is it you?

Tyler – 00:17:23:

I couldn’t figure out. We talked about that. I couldn’t figure out which one I was. No, I think I’m the horse standing there going, what do I do next? Somebody tell me what I do next. I think that’s right. I think that’s a good one.

Brent – 00:17:33:

Yeah. So how do you continue to start well? There’s some phrases that I know a lot of truckers can use that kind of put a barrier up. So how else do you start well in the communication aspect?

Tyler – 00:17:42:

Icebreakers, the good old icebreakers. Let me tell you something. One of my favorite after grinding all day long and trying to land this new customer and get this new freight that I haven’t had an opportunity yet. The one phrase that I love hearing the most is, boy, that rate’s cheap. First thing I hear, what’s the best rate you got? Or other brokers have it posted for more. I always say, don’t define the problem. I know that it’s not the best rate. It’s the best I can get right now. The customers in the business of making pipe, they’re not in the business of freight. I’ve got to convince him to let him know that I can provide him a solution to his freight needs at a competitive price. Again, we’re in competition most of the time. So don’t define the problem. Define the solution. Tell them those things that we said on the previous slides. Tell them where you’re at. How often you’re there. Talk to them about the market in general. If you’re in the middle of Utah or Colorado where there’s not a lot of manufacturing going on, now we might have some common ground. I don’t get out here very often, or I do get out here often, and I would love a back haul to X, Y, Z place. I always encourage, don’t start conversations like this because all this leads to is that transactional nature that we’re trying to avoid, ultimately.

Brent – 00:18:53:

I love that when you say don’t define the problem, define the solution, because we all want to be problem solvers. When you define the solution, you become a problem solver.

Tyler – 00:19:00:

Yeah. I often want to be a problem solver too much because my wife accuses me of consulting when I’m supposed to console a lot of the time.

Brent – 00:19:08:

That’s a different relationship, Tyler.

Tyler – 00:19:10:

Yeah, that’s true. Very true. Very true. Very true. I’ll give you that one. This is one of my favorite slides, man. The best part about this is it’s funny how I’ll talk to new brokers or brokers that are looking to get in the industry even. And I’ll talk to carriers that are doing the same thing. And everybody points the finger at each other and say, there’s a problem. I want consistency. I want profitability. I want trust. It’s them that doesn’t want it. Everybody’s pointing at everybody saying that they don’t want the same thing as the other person. And we do. We just have to get past that icebreaker moment and the transactional moment where we can say consistency is good. Comfortability with each other is good. It equates to profitability and trust. And those two things are priceless in our industry, especially in the fast-paced nature of it.

Brent – 00:19:56:

Yeah, no doubt. No doubt. We all want to move from transactional to relational. So what’s the value of these relationships across the board?

Tyler – 00:20:03:

When you had it in the slides in the beginning and you said most freight moves within an hour of being loaded and we were talking about time is money. I will say the same thing about predictability. If I know that I’m going into a market where I have three brokers that have consistent freight, I know the rates that I’m getting. I know that I can rely on them. The rest of the freight in the world becomes still in freight at that point. Predictability breeds efficiency. I know what I’m getting into. I know what to expect. I know how to get out of there. If you can get to the efficiency part, the efficiency creates profitability. And that’s the ultimate goal. That’s when we’re talking about maybe it’s not likely that I can negotiate every time on a load that I do every week. But that’s the consistent point. That’s the concrete point. I can negotiate 10 cents on the load that gets me there, that I know that I have the backbone to keep me rolling. And that’s where we were talking about an extra 10 cents saves you nine grand in your pocket. If I know I have a good foundation, the predictability of what I’m expecting and what I can get into creates this profitability through efficiency. So that’s what I kind of want to teach.

Brent – 00:21:14:

Yeah, no doubt. No doubt. And I know Freight Nation, I talk about this a lot whenever I’m talking about carriers moving freight about the desire to be efficient with your operation. And a lot of that comes with miles per gallon that you’re getting in your fuel because it’s your largest cost. But also, it’s also a measurement of time. The more time you can maximize, in other words, the faster you can get to getting a load on your truck, the more loads you can haul per year. If you haul two extra loads a year, for the most part, you’ll have covered all of your base costs of running your operation, except for just the fuel on that trip. It’s all profitability. So one or two more loads, maybe one more a month, maybe two more a month. Maybe it’s just one or two a year. Either way, the efficiency creates the profitability for you.

Tyler – 00:21:56:

Yeah, it’s like getting an extra paycheck.

Brent – 00:21:58:

Hey, that’s a good way to put it. Absolutely. Who doesn’t want one of those? All right. So in the end, Tyler, we all know brokers don’t care about relationships. They just don’t care. Now, wait a minute. That’s not necessarily true. Brokers are humans, too, and they like relationships. I know that. They also like to create success. So why would the carrier and the broker want to create the relationship together?

Tyler – 00:22:17:

Or they should want to create the relationship. Sometimes they build blocks that inhibits that from happening. But this is exactly why. They create opportunity for themselves. Steady lanes. Steady routes for the carrier. That talks about what we just talked about. The efficiencies that we can have from steady lanes and routes. Familiarity, trust, equals higher rates. I can’t stress this enough. If I know a carrier and I have a relationship with the carrier, especially in today’s world, when we decided not to talk about it, but the other F-word fraud, is going on so much in today’s world, that familiarity and trust is equal to a higher rate on my portion. And quite frankly, on my customer’s portion too, he is willing to pay for the security that their freight’s going to get from point A to point B in a timely, good, efficient manner. And you get to move more loads. Brent, you just said it. What’s an extra two loads a year or even a month on a carrier? It hits your bottom line differently. So that familiarity, the building relationship allows you to save that time that we talked about. And it’s just time equals money on that. On the broker side of things, if I can have one phone call and answer one phone call that says, hey, do you have any more of those Louisville to Orlando, Florida loads? And I can tender that load to you in five seconds. My day just got more efficient. I’ll take a hundred of those, please, because it allows me to work on something else on the other side of things. So yeah, it’s imperative that we try to build these relationships.

Brent – 00:23:46:

All right. So Freight Nation, I hope that you stuck around to the end. Because when I asked Tyler to come be on stage with me and talk to the carrier audience at Mid-America, I said, Tyler, you can’t just come with the normal stuff, and just say, hey, this is how brokers operate. This is how we want to operate with carriers and the normal things. And those things are fine. And those things are good. But I said, you’ve got to give them a little bit of the special sauce. You got to give them a little bit of some of it. Maybe what’s something you wish that every carrier knew when they were working with you that would benefit you as a broker so you could benefit them as a carrier? And he said,

Tyler – 00:24:21:

Tyler, how the broker gets the freight. I wish more people knew how we did our job.

Brent – 00:24:26:

Well, and so let’s go to the next slide. So you can talk about why that is important.

Tyler – 00:24:31:

You know what’s funny about this? When did we start doing it? We started doing this in 2018, maybe.

Brent – 00:24:37:

Yeah, I think 2018. Yep.

Tyler – 00:24:39:

The best part about this is none of this has changed since then. And I don’t think it will. Not with the onset of technology and other forms or fashion. This may be surprising. And hopefully it doesn’t fall lackluster to a lot of you. But the broker gets his freight three ways. That’s it. There’s only three ways. No real magic to it. It’s three ways. The first of which is contract freight. Contract freights when a big manufacturer, they send out a bid package, what they call a bid package. And it’s usually an Excel form or some other form. Sometimes it’s done through the computer. And it has everything that they’re going to ship for 2025. And it says that it’s going to have 50 Louisville to Orlando’s. And a guy like me sits back and bids on each individual lane one by one by one. Mercer can take 25 of them and we’ll do it for this rate. We send it back. And an analyst analyzes that and says, okay, we’ll award you this. We’ll award you that. We’ll award you this. The reason it’s important for you to know this type of freight is A, the rate is firm. It’s usually called direct tender, tender load, booked load. They say, what do you mean the rates firm? The weight rates are never firm. Well, the rates firm on my end. I told some guy back in 2023 that I could take 50 of these loads for this rate. So the point I’m making that is there’s really probably a little bit less negotiating room in that. Because I’ve already set my rates. And I can’t go back to the customer on any of that stuff. It’s also when you hear, and I’m sure a lot of you have heard this. The broker call you up and say, I got this load to Bismarck, North Dakota. It’s sure pretty this time of year up there. You want to haul something like that. My neck’s on the line to get that load covered and to provide value for the customer. So that’s contract freight. The second is spot market freight. And that’s what Brent deals in. And what we talk so much about spot market. What is spot market freight? It really literally stands for on the spot pricing for an on the spot truck, okay? It’s spot market freight. If you all remember Rolodex, I hope we all remember Rolodex. Spot market freight is when the customer literally has a Rolodex of brokers and carriers on their desk. And they do this not in Rolodex form anymore, obviously. But they send an email or different forms of that to everybody and says, here’s my freight, bid on it. Find me a truck right now. It’s this type of freight. You’ll see lots of competition from both sides. You’ll see lots of loads posted on stuff. And that’s because they’re legitimate and someone is trying to win that freight. Speed wins. This is where that efficient truck, you bringing me a bird in hand solution to provide to my customer is all that I want. At this point, I haven’t even given my customer a rate yet. I might have in some instances, if I’m willing to gamble and if I’m willing to bet on certainty that I can give them a truck, but on this case, there is negotiating power. I need a truck and I need a truck now. And I’m going to commit it to my customer. So that’s spot market freight. Relationship freight is the third kind. You’ll see this often posted by one broker. It’s relationship driven. It’s where me and Ted from the Concrete company have done business for 20 years and he’s only going to call me. He knows that I’m going to provide him a reliable solution that’s going to get his freight to point A to point B at a competitive price. At this one, I would say there’s good room for negotiation as well. And this is one that we can build relationships on because I can tell you more about the customer, how often they ship, where they ship to, and you can really create your efficiencies through that. So I hope it was as good of a surprise as it always is. But three ways, that’s it. That’s all. That’s the only way we get our freight. And there’s lots of variations in between those ways. But that allows, hopefully, the carrier to go away with some knowledge of saying, okay, I know what I’m dealing with when they say direct tendered or it’s a spot load or this is my guy. I used to call that relationship freight. He’s a good guy freight.

Brent – 00:28:35:

So when a carrier calls you and if they knew the category that it was in, how is that a benefit to you?

Tyler – 00:28:42:

As a broker?

Brent – 00:28:43:

Yes, sir.

Tyler – 00:28:43:

If it’s a spot market load, they know and I know that we need to get to a solution fast and I’m competing over this. So this, I’ll call you back in five minutes. I’m sorry, I don’t have five minutes. I need to do this. Now, if it’s a contract freight, the broker knows and the carrier will know at this point, I may have more of these. I’m going to have 50 of these loads over the course of the next year. How often are you in this area? Again, I’ll go back to that leads the horse to water slide. If I knew the right questions to ask half the times, I can get out of my own way. But sometimes I need the carrier to do that too. And the same with the relationship freight. I know everything about their business. I’ve been brokering their freight for years. If I knew the right questions to ask you, the carrier, we could really make this a repeat business thing and create some efficiencies through it.

Brent – 00:29:31:

Right. So I know sometimes when you’re negotiating with freight with some of the carrier out there, there are times in which you don’t make a profit on the freight, because like a contract freight. If you bid it in January at a certain price and we’re in July and the price is tremendously different. There’s times in which the broker takes no profit on a load. Correct?

Tyler – 00:29:55:

Absolutely. We still want to save that market share of the customer that we have won the freight with. And we put our neck on the line. We bid that freight based on what we thought predicting what the market would be like. We’ve already put our neck on the line, but we’re unwilling to sacrifice the relationship with the customer. We still need to move his freight and we don’t make profit on the load. And to second that, and this goes into the fraud talk. If everyone’s out there thinking the margins on these loads are 50% or higher. They’re just dead wrong. I’m sorry. The industry in general has gotten too competitive and too accurate. Like I said, we don’t operate by farmer’s almanac anymore. We are all very competitive with each other and we don’t have just insane margins built into everything. So it has gotten very much about volume consistency and doing it again and again and again.

Brent – 00:30:47:

Yeah. Well, Freight Nation, that’s the reason why I asked Tyler to disclose this is because it’s our heart and it’s Mercer’s heart too, for you to be able to get freight on your truck as fast as possible at the best rate possible. And if you know that it’s contract freight and the marketplace is depressed, and so it’s 10% below what it was in January, then you know that you’re going to have to negotiate at a lower rate for something. If you know that it’s something that you’ve hauled before and it’s a piece of relationship freight that Tyler’s gotten from somebody who’s done business with him, he might have a little more functionality in there. Or if there’s certainty that you can build into it, I really appreciate you saying that, Tyler. There’s certainty you can build into it that you know that you’re going to deliver on time, in full, all the different pieces that give that shipper an opportunity to say yes to maybe a little bit better rate for you. So Tyler, this is fantastic. So thank you so much to Freight Nation. I hope you stuck around to the end because this was a big one. And I’m going to close with this because I’m going to close a little bit of hope on this, Know Your Broker 101 and Know Your Market 101. So carriers, here’s another thing that’s super important that Truckstop and Mercer want to bring to you is that you work in a marketplace that has hundreds of millions of load movements in it. So this is just the economic chart. It’s put out by our Chief Economist, Noel Perry. He’s been tracking and trending it for about 40 years. The gold line is the trend of freight availability in the United States. And this one goes all the way back to 2000. So that’s a pretty good time period, 24 years. You’ll notice it’s going up into the right, which means it’s getting bigger and bigger and bigger. So there’s more and more freight in the marketplace. This is why inside the spot market or brokerage marketplace. Broker freight has grown from 5% of the freight in America to over 30% of the freight in America. So you’ve got a big audience that brings you freight all the time for brokers wanting to find small carriers to be able to move freight because for the most part, brokers by nature don’t necessarily have assets to move that freight. So on this slide, the golden line is the trend. In other words, what’s it predicted to do? If you’ll notice the little nice flashes on there, the lightning bolts on there, you’ll look at 2000, you’ll notice it’s a little bit of a above trend. You’ll go to 2008, 2009. Who doesn’t remember the great recession in the United States? Because I know I do at 56 years old. The volumes were way below the trend, but notice that they came over the next number of years, all the way to 2016, 2017, 2018. They started trending right at trend. And then they dipped when we went into the two-week member, we were going to stay safe at home for a couple of weeks. It went way down, then shot back up and had the best market we’ve ever had in transportation. But here’s the crazy thing. Even though the market has come back down to normal through the last 14 months, the freight volumes are still above the predicted trend. And why is that important for you, Freight Nation? If you’re a carrier or a broker as well, why is it important to you? It’s important to you because when you’re in an expanding marketplace, there will always be opportunity for you to find success. So super important, Freight Nation, to pay attention to that. So take that home with you today. This was a nice Freight Nation 101 today on how to work with your broker and how to be more beneficial with your broker. So thank you, Freight Nation, for paying attention. Thanks for being a part of this. Tyler, again, man, thank you so much for being so transparent to carriers.

Tyler – 00:33:52:

Thank you. I love doing this. I was going to answer the question, but you answered it before, but I was going to say that there’s opportunity still out there. So that was good that we did that. But thanks, Brent. I love doing it. I love being on with you. You’re a great friend of mine and Mercer’s in general. I hope to do this more often.

Brent – 00:34:08:

Well, fantastic, man. Me too. We’ll keep bringing it to the audience and keep helping them be more profitable. All right, Freight Nation, that’s a wrap for the first special edition of Freight Nation out there. Freight Nation, know your broker 101. So we’ll bring more of them to you down the road. And thanks again for being with us. And as we like to say at Freight Nation, don’t forget to work hard, to be kind and to stay humble. We’ll see you next time, Freight Nation. On behalf of the Truckstop team, thanks for listening to this episode of Freight Nation. To find out more about the show, head to truckstop.com/podcast. If you enjoyed this episode, make sure you hit subscribe so you don’t miss any future episodes. Until then, keep on trucking and exploring the open roads with Freight Nation: A Trucking Podcast.