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 hard-working truckers and leaders who keep the world moving. Let’s hit the road. Welcome to Freight Nation Episode #5. Joining me today on Freight Nation is one of my dear friends in the industry and one of the most favorite companies I’ve ever dealt with in my entire 25 plus years career inside of transportation is Mercer Transportation out of Louisville, Kentucky. Joining me today is Tyler Johnston, their Head of Operations there. Their Director of Operations, VP of Operations, the guy that keeps the wheels running at Mercer Transportation. And you may have seen Tyler before, he and I’ve been on stage at the Mid-America Trucking Show the last three years running. He’s my guy that comes on, my trusted brother that comes on to communicate to carriers how to negotiate and how to communicate best with brokers. And we’re going to go through his story today and how he got into the industry and a little bit where Mercer sits in the marketplace as one of the leading transportation companies. And then we’ll talk a little bit about how a carrier can negotiate best with brokers. And then for the brokers out there watching the podcast, how you can communicate best with carriers. Without further ado, Tyler, man, thank you so much for joining me today. It’s always good just to be with you and thank you for bringing your knowledge today on Freight Nation.
Tyler – 00:01:33:
Yeah, absolutely. Thanks for having me, heck of an intro. I hope I can live up to half of that. That was great, happy to do it. Love talking with you every time I do and looking forward to it. This is cool. Thanks for doing this.
Brent – 00:01:44:
You’re so welcome. The watchers today, man, Tyler was the first person I called to go to Mid-America and be on stage and communicate to carriers how best to find the most profitable relationship you can with brokers out there. And yes, they own a brokerage and yes, they own their own deal in the marketplace and they want to create great success for Mercer. But in the end, Tyler’s one of these guys in the market that really wants great success for everyone. And so Truckstop.com ‘s happy to be partnered with Mercer and partner with Tyler for this. And so Tyler, go ahead, jump in there.
Tyler – 00:02:11:
It was like sharing the secret sauce. I remember when you first called me and got me on that, it was like the masked magician that shares all the secrets for the magic show. That’s what I felt like. I was like, man, I’m going to go on stage and teach all these people how to do better. And no, it ended up being, I love doing it every year. Anything that we talk about, it’s fun. Anytime we can share information to help people be more successful is what we’re after. So we’re happy to do it here at Mercer.
Brent – 00:02:36:
Thanks, man. And what’s funny for those watching, what I call Tyler, I said, “Tyler, look, man, you’re going to have to share it all. You’re going to have to bring it all, man”. He said he would and he did and it’s been great. It’s been great, a good benefit to everybody. So you know what, everybody, and the one thing I love about trucking, man, is everybody’s got a great backstory on how they got into trucking, why they stay in trucking. And obviously you work for a great successful company, but how in the world did you end up inside the trucking industry?
Tyler – 00:03:07:
Every one of these stories ends the same way and then it grabs you and it doesn’t let you go. And that’s how it happened. So straight out of school, out of college, University of Louisville, started working for, yeah, go cards, huge win over Notre Dame last weekend. It was great. So straight out of school, I get into sales and that was my original goal, business communication really. And I get hired by, actually it was my parents’ neighbor worked for a trucking company and his job, he was a CPA. His job was to help struggling trucking companies and we know that there’s always a few of those out there. His job was help struggling companies get out of debt or restructure or figure out a solution. So he decided he wanted to start his own trucking company and whatever crazy mindset he was in, that he decided that he did. He ventured out and started his own trucking company. And he hired me to do sales, gave me the 2009 MCSA manual and said, “here, read this, learn trucking”. And I thought, what have I done?
Brent – 00:04:15:
What have I done, man?
Tyler – 00:04:17:
Oh man, all that, all the language and verbiage and I didn’t even know. I didn’t even talk to a trucker before.
Brent – 00:04:22:
Right.
Tyler – 00:04:23:
So anyway, we had six trucks. And I started in sales, but soon after our operations person either quit or was let go, one of the two, but he came to me and said, “Hey, I need you to do operations. I need you to do all of it. And I need you to, I need you to fill out carrier packets. I need you to broker loads, dispatch loads, playing guys, hire a guy, log auditor needed to do log audits, billing accounts, payable accounts, receivable. I needed to do it all”. Good news. We only had six trucks. We grew that till we had 12 and we sold the company to a local trucking company here in town and sold our book of business. And then I got onto the brokerage side of things. I partner with a successful brokerage that was kind of a spinoff of a Utah trucking company, a large Utah trucking company. And I’ve worked with a couple major brokerages over the years, being a carrier sales rep in different aspects there. Then randomly I knew a person at Mercer Transportation that was an account manager for us and he did sales and account management here. And I really liked that side of the business. I’d dabbled in the brokerage game and I ran account management there. So I started as an account manager at Mercer 11 years ago, went on to manage that department and got involved in our brokerage department. Then I was managing, we call it the freight department and brokerage managing the freight and brokerage department. That’s before I do what I do now, which is kind of a little bit of everything and talk to a lot of people. So, like I said, once it gets your hooks in you, the industry, it doesn’t let go. It doesn’t let go. It’s talent. So, no, I love it. I love the constant, constantly there’s something new. There’s a new challenge, a new solution to find a new path to try to navigate. And that’s what really intrigues me. It’s fun.
Brent – 00:06:12:
So you started out with a small company right out of college, Louisville, KY, and he came right out of college and he threw you in the deep end. Because you’re a competitor. You said, “I can get this, I can get this”. So you, you learned a bit. Well, he like flips the cards on it and goes, “Hey, now I need you to do everything. Can you just do it all? Can you just manage it from the top to the bottom?” Now I’m assuming he didn’t make you co-owner of the company at the time.
Tyler – 00:06:38:
No, no, no, no, no. He just gave me co-ownership of the word to do within the company at this time. I was in charge of all those.
Brent – 00:06:48:
But it sounds like you got a little bit of the beginning of like a trucking PhD.
Tyler – 00:06:53:
Yeah. Trial by fire.
Brent – 00:06:54:
You dove in, you started learning, you started learning it, and then you went to brokerage, which is, so you learn the asset side. Even though it was small, went to six to 12 trucks. And then he went to the brokerage side. Then he went to a couple of bigger brokerages to kind of learn scale. And then you found where you wanted to land or you landed in the place where you wanted to be, which is at Mercer Transportation. You’ve been there 11 years. Now look, dude, I’m a 56 year old old guy. You’re a younger guy, a much younger guy. You’ve been at Mercer 11 years. When you got started with this other company, were you like 16 or 15? When you started with the other company, your like, “I’m a good kid.”
Tyler – 00:07:29:
You do the math on it. It doesn’t quite work out, right? No, it was while I was in college, really, I was working with that other company and doing that. And exit, it was, it was a trial by fire, but it was great because I got to learn firsthand the struggles of the trucking company and the asset side and the struggles of trying to figure out how to plan and navigate and what they actually have to face prior to my experience in the brokerage side. And that’s out of selling freight and account management and so on. So it was really unintentional, but a very good introduction to the industry and how to learn each important aspect and really learn the relationship building aspect of it all.
Brent – 00:08:13:
Yeah, no doubt. Well, to hear that story is really cool because, one of the struggles that I’ve seen in my 25 plus years in the market is that it is such a cultural phenomenon where people just love to be in trucking because they love trucking. They love the freedom about it. They love the independence of it. They love how it’s unique Americana sort of aspect on, I’m going to be my own leader and that sort of thing. But you had to get in and dig in and learn the most important thing, which is how do we stay in business? So how do we make good margin (be profitable) , right? And so understanding that as a premise is really vital. So it sounds like you kind of all the way through your career was learning how, or an asset base, how to be. How to create good margin to be profitable on a brokerage side, dealing with carriers, how to create margin per load, how to communicate to carriers, how to have their best interest in mind, which is, “Hey, I want a good, good profitable freight on their trucks”. So you’ve kind of learned it all the way around. And now you sit here at it in a wonderful leadership position at Mercer as the head of operations there. So your official title is, I wanted to say chief of operations, but I don’t think that that’s correct.
Tyler – 00:09:28:
I think it’s director. I think they call it the director.
Brent – 00:09:31:
I knew it was something big, man.
Tyler – 00:09:33:
Yeah. Director of Operations. You’re right though, that the aspect of learning the profitability and knowing your numbers, it’s funny you talk about that right now, because right now in a market where people are struggling and it’s hard and it’s difficult and guys are having to learn how to run lean and, and make changes and be malleable in how they run their business. And it really comes down to communication and relationship building and knowing your numbers, knowing what that means. You know, I hear all the time and it is true and drivers hate to hear it. I hear that the market is normalizing in terms of rates and things like that. And whenever drivers say that or things, they bring that up. And I tell them that it’s dangerous to take that content without context. Yes, the market is normalizing, but when you zoom out and you look at it, the cost of doing business is not normal on a truck driver’s side, the inflation is real. Everything is real. And rates are normalizing back to a normal level, but that doesn’t mean guys that you can just run willy nilly out there. You have to be very intentional in how you operate your business because running lean and knowing your numbers and knowing what makes you profitable and what makes a successful business is more important now than it is ever. It’s funny we’re talking about that too.
Brent – 00:10:46:
Yeah, no doubt when costs are things outside of your control as operating the vehicle or operating multiple vehicles, multiple trucks, things outside of your control, inflation is outside of your control, fuel costs is outside of your control. Now, some of it’s you can control a little bit on fuel because that’s up to your, the way in which you maximize your mileage, which we had Henry Albert on, the guy that the only guy, I know there’s other guys in the industry, but I’ve known Henry for a long time ever since he was the overdrive owner operator of the year. He was the first guy I knew that got over 10 miles a gallon.
Tyler – 00:11:17:
You and I had dinner with him. Yeah.
Brent – 00:11:19:
Not your typical owner operator. But because he looks at everything, he looks at everything and everyone should. That’s one of the wonderful unique things about this is you have a variety of types of participants in the market. And before I miss anything now, I know that you have a, how long have you been married? And then how many children do you have? Cause I mean, Chucking is always personal. I want to make sure we cover a little bit of that.
Tyler – 00:11:41:
I’m going to get in a lot of trouble if I get this wrong. You’re going to get me on the spot. I’ve been married 10 years now. So my entire, almost my entire Mercer career, been married. We were actually high school sweethearts. So we’ve been together for 16 years, somewhere around there. I don’t have to know that number. I just need to know the important number. And I’ve got two wonderful children. My boy is about to be seven and my baby girl is about to be four. And they’re wild and crazy and I love them. They’re full of joy and love the world. So I get a good, often this industry leaves you with things that you take home at the end of the day, but I’m happy to report that, that I get to love on some good people when I go home too. So I appreciate you asking that.
Brent – 00:12:26:
Well, no problem, man. The business is not just business. It’s personal as well. And I don’t separate business and personal. I just have one life to live and it’s all wrapped together. And so the one thing I tell people all the time, one thing that’s near and about the transportation, the trucking industry is that relationships matter. People matter. People matter to each other. And so that’s super important.
Tyler – 00:12:47:
Yes.
Brent – 00:12:48:
Here’s one of the cool things, man. Look, I got introduced to Mercer Transportation back in about 2001 or 2002, where I met your general manager, Dale Corum, and we became best of friends and you won’t find a better human on the planet than Dale Corum. And that’s kind of was my introduction to Mercer. Cause I’m like, Mercer must be like the most incredible company in the world. So I get to Louisville, Kentucky and I go, I go see the headquarters and I’m like, “this is trucking right here”. There’s American flags and there’s big, beautiful trucks out there and well organized and it’s well put together. And yet it’s really personal. And you guys were even dedicated to like patriotism and the American way. You were even so dedicated post 9-11, you even hauled some freight out of New York city and you even have a piece of that 9-11 structure in the courtyard where you guys made a beautiful memorial out of it. So when I say all this to say Mercer cares, Mercer cares about the industry. Tell me a little bit about the history of Mercer. So it’s a watchers will get a little bit of taste about, what makes you Mercer unique in the market?
Tyler – 00:13:50:
Yeah. So we were founded in 1977. Y’all you can see, you can almost see, we got, I got a little memorial
Brent -00:13:56:
Nice
Tyler – 00:13:58:
I know, right. I wanted to turn the camera around because I got memorial pictures all over the place of that 9-11. I’m not going to do that and get you all car sick in the deal, but yeah, we were founded in 1977 by a couple of gentlemen, Jim Stone and Bill Howard, right? We were founded as an owner operator company. We were founded with back then, if you recall, you had to buy specific commodity tariffs, right? So we were founded as a water and sewer pipe only hauler. And we were specifically going up to the Dakotas with that in those days. We since then expanded and we’re an agent based company. We have agents across the United States, but we since then expanded, but we were founded with one goal. We wanted to be the safest and the fastest paying company in the nation. And driver centric, truly driver centric. We were working for an owner operator company. I love because the basic principle of it is owner operators are paid a percentage. And this is what they think, but really it’s opposite, but they’re paid a percentage of every load, right? That’s what you know to be true. And the owner operator world actually they’re the labor, they’re the people that carry out the duty. They’re the people that carry out the mission. So when you actually think about it and break down the nuts and bolts of it, we are paid a percentage of what they make. Therefore, and what I like about that is that therefore every single discussion that I have with my operations team has to be centered around what’s going to make the driver more successful. Because if it’s centered around that, if they’re more successful, then we in turn are more successful. So our culture from the very beginning has been what makes the contractor and the driver more successful. So we were founded in 1977. We expanded our headquarters in Louisville, Kentucky. We expanded that, you know, it’s called Mercertown for a reason. Now we have about 31 acres in downtown Louisville and 16 buildings and a nice area for everybody to come and, and be a part of what we have going on here. But currently we sit around 2100 contractors leased on with our company and operate nationwide and have a very large brokerage at well as well. But we haven’t lost the identity to always be focused on what’s going to make the driver more successful. I call it whenever I talk in orientation, I don’t have the words for it. I call it being mercerized. I say, “guys, we do a lot of things the right way, not to stand out, but because it’s the right way to do things”. And I could go on with example after example, but that’s what made me fall in love with this place, the culture and the community and the family-like atmosphere that I akin and have akin to truckstop.com in that. That’s why I think that we’ve developed such a good connection over the years because all those values exist in similar fashion at both places. But yeah, this place is home to me and always will be. And I really love it here.
Brent – 00:16:51:
That’s super cool, man. I love to hear the story. Yeah. Truckstop, I appreciate you saying that about Truckstop. Thank you for the kind compliment. Truckstop founded in a 1400 person town, a little small town in nowhere, Idaho called New Plymouth and an agriculture based town. And Scott Moscrip had a good idea, but that was his hometown. I mean, he was trying to bring life back to his hometown, which was struggling economically. And he did in quite a bit. The school just kind of give you a tiny little backstory. The school system back in the day was one of the worst performing in the State. And now it’s one of the best performing in the State to show you how the effect that truck stops had in its town. So, but, but this isn’t about me. This is in us. This is really about Mercer and what Mercer does in the Marlboro. So thanks for bringing that up. But they are very similar. You see that story so similar all over wherever trucking kind of puts down their tires and sets up shops. So that’s super unique. So 2100, you’d said, your operators that were, were for the S contractors that worked with you guys. And then you have a very thriving brokerage and idea. Like, do you have a, I don’t know if you might, you might want to disclose this. You might not a rough number of loads you guys moved annually sort of last year.
Tyler – 00:17:59:
Yeah. Through the brokerage or just in total?
Brent – 00:18:01:
Just the Brokerage.
Tyler – 00:18:03:
45,000 loads through brokerage. Yeah. In a year. That’s kind of year over year. We partner to go on top of that. We partner with about 12,000 carriers. And I don’t see you get all these things where we partner with 30,000 unique carriers and say, “okay, how many of those people load for you? How many of those people do you have relationships with?” We do about 12,000 annually that load for us consistently, consistent basis. And yeah, it’s grown. It’s about a hundred million dollar operation for the brokerage. And then company wide, it’s about 200,000 loads a year, right around there.
Brent – 00:18:39:
Wow. That’s meaningful.
Tyler – 00:18:41:
You don’t have to say about that though. It remains true. We’ve always stood on the stance that we’re a people company. The numbers are big, but I always say we don’t care as much about the numbers as we do about people. Our job is to invest in individuals and help their businesses be successful. And we think if we do that the right way, the numbers will take care of themselves. So, you know, we’re always focused on that.
Brent – 00:19:04:
Always does. Always does. All right, so at Mid-America, last three years, you and I have had the fun time on stage talking about how to carriers, we call it negotiation basically, back and we negotiate best with brokers, but really is how do you communicate the best to as a carrier get a good result in the communication you’re doing with a broker. So there’s a couple things you and I have talked about. We’ve hit on a couple things, like some of the things you should say, some of the things you shouldn’t say, if you recall some of those things. And then we talk about when you enter the negotiation, if you know the types of freight, so I want you to kind of talk about those two things. So as a broker, I just pretend like I’m the carrier calling you and say, “okay, well, I’d like to haul that load, Mr. Broker, give me your cheapest price”. Let’s talk about what are some of the things carriers say that they shouldn’t say, what are some of the things that they should say?
Tyler – 00:19:59:
Well, I think it’s important how they set up that conversation. There’s two ways that those conversations tend to happen. And the first way, which is incorrect every time, is it starts in a transactional nature. It’s always about this one load, this one time. And I say that by saying they don’t share all the information. Why do you want that load? What is it doing for you? I know I have a load, you have a truck. Let’s try to create a marriage there and make this thing happen. But more importantly, are you in this area often? Do you have repeat business? Is it getting you back home? If so, where’s home? What are the complete details of your equipment? We need to get all of these things on the table because what we’re really looking to do is create a relationship to make repeat business. The faster that we can do that on the front end, and I know that it may take some time and time is precious in our industry, especially the brokerage industry, but the faster that we can get to a relationship, the more time we save on the latter end, the repeat business, and the more relationship based freight we get to. I don’t have to nickel and dime you on my margins. Or if I knew you were a hundred miles away from a load, I might be willing to negotiate with the customer and or I might have a little bit extra margin built in to where you say it is a good price and not just I need $200 more. If you’re a hundred miles away, okay, oh, you are a hundred miles away. I understand why you need an extra hundred dollars or an extra fifty dollars. So really, it’s about setting up the conversation for success from start to finish. So the things that I heard and I used to hear all the time is your freight’s too cheap. All right, man, that puts me on the defensive. Like you just heard my feelings, right? Yeah, yeah, I’m either mad or I’m going, okay, didn’t know you called me, buddy. I didn’t, you know, that’s, I don’t want to say offensive, but it is, it does build barriers. It builds barriers when you say things like that and don’t build barriers when you do things. The other one always got me. Well, so-and-so has it posted for more. Why are you calling me? I don’t, you know, I don’t, and I’ll tell you why they haven’t posted for more here in just a minute when we talk about how freight’s given, but the main thing, like you said, you said it, Matt’s too, was not to build barriers. Let’s try to get everything on the table and share information in order to get to a solution quicker is really what it’s about.
Brent – 00:22:26:
Yeah, one of the things, Tyler, you and I talked about, which I think is, it’s so overlooked by carriers. It’s just so overlooked, which is every minute you spend negotiating is time, and time costs money. So this is why when you were talking about, hey, Tell me your situation. Tell me how often you’re here. Give me information that allows me to bring you opportunities, bring you freight that you can haul not just this time but maybe two weeks from now or three weeks from now or next month or this Tuesday of every month you’re going to haul this load and I can pay you more for it because I don’t have to invest much time into it. I trust you, you’ve done work for me, you’ve responded and performed very well both sides, I’ve performed well for you and so therefore we can get this on your truck very quickly which means I can pay you more of the margin because I didn’t have to. I put half the amount of time or a third of the amount of time into it so talk about time just a second as relationship when you think about it as a broker.
Tyler – 00:23:24:
I knew my job was fast, but in 2019 or 18, maybe when we did our talk at Matt’s, you shared a statistic that truckstop.com had that made me just step back and say, “wow”, I knew it was fast. I didn’t think it moved to that fast. You said that 72% I think if I’m remembering that correctly, you might want to correct me 72% of the freight that has all the information in it, the rate, the weight, origin, destination, commodity, that’s it. That’s all you got. 72% of the freight that’s posted with that information moves within 60 seconds or less.
Brent – 00:23:59:
It moves fast.
Tyler – 00:24:00:
I thought, I knew it was quick. I didn’t know it was that quick. What that does, and that just gives you perspective on how quick the job is on the people that are driving the computer. Their job is to give their customer solution. Their job is to give their customer a trustworthy solution as well in this industry where fraud is more prevalent than ever, we’re combating that every day in different ways. The more that I trust you, the more that I know about your situation and the solution that you may provide and that we can get to a solution quicker that I can bring to the customer, the more valuable you are to me. And we need to get to that as quick as we can because the clock’s ticking. Clock’s ticking. Based on the clock is only ticking based on what the type of freight it is. And we’ll talk about here in a minute how there’s three different kinds of freight that the brokers get, but time is crucial on a broker’s side because they’re up against the wall. They’re pressed to find a solution for their customer and the quicker that we can wade through all this stuff, the quicker the information to get put on the table, both from me as a broker and carrier, the quicker we can come to a solution for the customer.
Brent – 00:25:10:
Yeah, no doubt. So to me, and this is one of the things that I just see, and thank you for saying that, that over and over and over again, which is everyone focuses on the cost, the rate, and yet they don’t pay as much of attention to the time that they’re spending finding that rate that they like. So if you’re on your fourth or fifth load that you’re trying to get on your truck and you spend hours and hours on this, well guess what? Your fixed cost of that truck and your insurance and everything else that’s a fixed cost, fixed cost being something you’re going to pay regardless of if the truck’s moving or not, guess what? It’s still clicking, it’s still running, so you’ve got to pay attention to time. Time is as important as the rate is. So this is why we at Truckstop encourage all carriers to like find those three or four or five brokers that you like to do business with and do repeat business with them because it creates better profitability for you. And that’s the key, man. Mercer wants this, you know Truckstop wants this, wants carriers to stay in the business. We want them to stay operating and enjoying doing what they love. So you said, “look, don’t build barriers”. In other words, don’t build barriers against what you want, which is as a carrier, you want that load at the best price possible, put it in your truck to maximize your return in it. What you’re saying is avoid the things that create conflict up front. Like don’t say that somebody else has got it cheaper or give me your best rate or any things that might compromise trust. And so that’s fantastic. Any other little tidbit in there that you throw in there?
Tyler – 00:26:38:
I think carriers need to know how valuable they are.
Brent – 00:26:40:
Oh, right, yeah, yeah, talk about-
Tyler – 00:26:42:
As far as brokers in this situation, you said something about the cost. Everyone’s so focused on the cost. In a market that’s down like this, and I heard this quote not too long ago, and it remains true, “when a market shifts, customers on the customer side get hyper aware of the cost of everything and the value of nothing”. Their first shift is focused, it’s going to be cost focused until they see the value of what that cost brings starting to slip. Same with carriers, their value, a trustworthy carrier that is able to provide repeat business, that is able to build a relationship and bring value to the table, real value, is worth so much more than a cheap rate on something. And I would venture to say, not being a broker any longer, but I would venture to say, it throws the cost of that carrier out the window. I know that my guy’s going to haul it, he’s a trustworthy carrier, and he’s going to show up to my customer every time. And I guarantee you, my customer is not as concerned, or am I as concerned about the cost any longer. So I think showing value and getting information on the table, not building barriers, providing or bringing the trust to the forefront of the broker carrier relationship has tremendous value, tremendous value.
Brent – 00:27:57:
Fantastic, wait a minute, you’re actually telling me that brokers actually care about the carriers?
Tyler – 00:28:01:
We do, yeah, we do.
Brent – 00:28:03:
Wait a minute.
Tyler – 00:28:04:
It’s hard to believe, yeah, I know, it’s hard to believe.
Brent – 00:28:07:
Well, we say this all the time at Truckstop man, both parties need each other. Brokers need carriers, carriers need brokers in order to get what they truly want, which is just to create a successful business. I mean, that’s really what both sides want. So we’re, Truckstop are here about that, to be creating transparency between both because that’s what makes great relationships work.
Tyler – 00:28:25:
I will say that the brokers that want to be successful care about carriers. The ones that want to develop relationships, the ones that want to have repeat success with the same customers and keep people on board, they’re the ones that you will see caring about carriers and any brokers that are listening or that are wondering why they’re struggling. It’s venture to say it’s because your business is so transactional-based without the relationship involved. That’s where the real time is saved. The trust is added and the value is added.
Brent – 00:28:52:
No doubt. Well said, man. Super well said. All right. Let’s transition into a little bit of the, the secret, the little secret sauce. Okay. So you and I stand on stage at Mid-America and we say, “look, we’re going to give you some information that is super important to you being able to negotiate the best with a broker because you need to understand how in which that freight is acquired by that broker”. So it blew my mind when you closed.
Tyler – 00:28:17:
Really?
Brent – 00:28:19:
Heck, yeah. I did. I say it all the time to our, when we’re training our sales guys and I said, I make sure I sent out the presentation and said, you need to know this. So when you’re talking to carriers, it helps them. All right. So bring the gospel on this. Bring what?
Tyler – 00:29:31:
I don’t even have our slides that I could do a clicker on, but that’s,
Brent – 00:29:34:
I’ll make sure they’re in the podcast. No problem.
Tyler – 00:29:37:
You don’t have to do that. So I don’t care if you’re a big box brokerage, a small brokerage, a transportation company that has a brokerage. I don’t care who you are or a carrier listening is wondering how we do business. There is only three ways that a customer sends a carrier freight and everybody wonders, how do you get this freight? How does that ever happen? Well, it doesn’t matter who you are. There’s only three ways.
Brent – 00:30:03:
Three ways that a carrier or asset based carrier or a broker gets freight.
Tyler – 00:30:07:
Gets freight. Yeah. Either one, either one. It’s the how a customer sends freight to the person that is responsible for pricing it and moving it, whether it’s a broker or a carrier, asset based carrier, an account manager. There’s only three ways. It’s important to know these because it’s important to know the type of freight that you’re dealing with. In my opinion, to run through them real quick. The first way is bid freight or I’m sorry, it’s contract freight. It’s your big companies, your Pepsi, your Walmart, whoever you want to say. Those big companies, they send over a giant Excel spreadsheet to guys like myself and it has all lanes that they’re going to do for the next fiscal year and it has their estimated volumes on there and it says, “and then guys like me, they receive that bid package and we get a notepad out or we get an Excel file” and we say, “okay, they go by one by one down this lane and they bid or they estimate what they can run this freight for trying to get the contract on the freight”. So they might say Louisville to Orlando, Pepsi says they’re going to have 30 of those. I think I can do that for 240 mile plus fuel and then they go down. I’ll take 25 of them. They go down. Middletown PA. I’ll take 30 of those 230 mile plus fuel and they fill it out one by one by one and they submit it back to Pepsi and say, “here you go. Here’s what Mercer Transportation wants to bid and somebody at Pepsi looks at that and awards the freight to the other carriers”. This is important because this is when the broker calls the carrier to do the freight and they’re saying things like, “Hey, I got this load to Bismarck, North Dakota. It’s real pretty there this time of the year”. You know, I, there, I heard they’re building a ton of commercial stuff up there and you could probably get good loads coming out of there. So you should take this one. That’s because their neck is on the line because sometime last year, they told some company that they could take a Bismarck North Dakota load and now here they are holding the bag. This freight is important because usually the margins already set, the contract is already set and there’s not much negotiation power there. I don’t have much I can go back to do. So you’ll hear things like, you’ll hear words that say like, “no, this is a contract load that basically means I’m on the hook to move this load and I would love your truck right now”. So that’s one way. Second way is you remember Rolodex?
Brent – 00:32:26:
Like the little Rolodex is where you.
Tyler – 00:32:28:
Yeah. Like a, like a Rolodex of business cards. I call this the, I call this the Rolodex freight. Some call it spot market freight, but it’s not true spot market freight. It’s Rolodex freight. So it’s where a shipper will say a concrete company, they have a literal Rolodex of all the brokers that have tried to do sales calls on them and all the asset based carriers that try to do sales calls on them. And what they do is they get purchase orders from their people and they say they have three Louisville to Orlando’s. What they do is they send an email to everybody in the Rolodex, everybody and their grandmother and they blind copy, carbon copy everybody. And they say, “here you go. I have three Louisville to Orlando’s bid on my freight and everybody’s competing over it at once”.
Brent – 00:33:13:
So it’s competitive.
Tyler – 00:33:14:
It’s competitive. It’s fast paced and it’s unknown. It’s who can provide the best price at the moment. Then that’s what on the spot pricing. It’s not true spot market freight in my opinion, but it’s an on the spot price for a truck. It’s important to know if it’s a, I call it a bid load. You’ll hear things like this is a bid load when negotiating with the broker. Or I need to ask my customer if we can do that. There’ll be little hints that are said in the conversation with the broker that you can ascertain whether or not it’s a bid load. But that’s important because you know, you don’t have a lot of time. There isn’t much negotiation power because everybody is provided and going to provide a real time truck and a real time solution. And the market tends to be pretty tight in that area. But what I do know is I need to provide an answer fast.
Brent – 00:34:04:
And how’s automation made that more difficult for you as a broker, like automation, like data, data automation.
Tyler – 00:34:10:
Because technology and trucking is doing two things. It’s improving process and it’s improving decision-making. So not only is my job in the process of my job getting faster, literal hitting of the keys getting faster, but data automation, the improved decision-making. I, along with every other broker out there know what the market is doing at real time. We don’t have to rely on farmer’s almanac anymore to predict when market swings are happening, right? We know real time data information and what it’s doing is making this very competitive and very narrow. We are usually, everybody is within a few cents of each other. So they are, if you stumble upon the unicorn load that pays $10,000 when the market says it should pay five. I bet that is a unicorn load. It’s probably too good to be true at that point in time. So that perfect point. And thank you for bringing it up. Data automation and the data mining of the world is making the broker’s job or the account manager’s job super competitive.
Brent – 00:35:11:
Well, I wanted tomake sure I emphasize that because I want to talk, it goes back to that time aspect we just talked about. Look, you got to, you got to have the information to make decisions quickly. If not, you’re costing the broker margin, you’re costing the broker his ability or her ability to negotiate for their best interest and for yours. So you’ve covered contract free, which has a predicted margin in it. And yes, there may be a lot of them, but it’s narrow and it’s margin of movement, it’s negotiation ability. Then you got spot market freight or what you call Rolodex freight and it’s competitive as crap and you got to make decisions super fast on it. All right. So those are two, there’s two pieces of freight inside of the broker world that spot, but there’s the third one. All right.
Tyler – 00:35:53:
Third one. The third one is called, he’s a good guy freight.
Brent – 00:35:56:
He’s a good guy. Well, there’s a good guy freight.
Tyler – 00:35:59:
He’s a good guy freight. That is where, Brent, you own a concrete company and you’ve been dealing with me for 15 years. You know that I’m going to provide you a competitive solution at a fair rate and exceptional customer service every time. And you’re not calling anybody else but me.
Brent – 00:36:15:
Years and years along.
Tyler – 00:36:16:
Yeah. And that’s good because this is the relationship building aspect. I would love to take both of those other two things and turn them into he’s a good guy freight because it gives me time to cover your loads. It gives me best opportunity to provide you a consistent, reliable solution for repeat business over and over and over. And that’s the good stuff for carriers to ask the questions of, do you have these often, what kind of customer is it? Brokers, nine times out of 10, aren’t afraid to answer those types of questions. I would love to say, “yeah, that’s Ted. I’ve been dealing with Ted for 10 years and I get all his loads. Are you here very often?” I would follow that up with a question, you know, so it’s important to, to ask those questions on the front end, but those three ways, that is the only way for anybody to get any freight are those three ways. That’s it. Of course there’s variations and little things that you can break off from that, but those are the three basics right there.
Brent – 00:37:12:
Oh, it’s your recommendation. Don’t build barriers over your first part of your conversation. Be honest about what your situation is. In other words, be transparent about your situation. Share all the information about your present situation. And then ask, how did you acquire the freight? What’s your negotiation ability in this? Because if you think it’s relationship freight, but it’s really contract freight or spot market freight, your negotiation ability, you may be pushing the old chain up the hill, if you know what I’m saying.
Tyler – 00:37:39:
And your time and the time you have to work on it.
Brent – 00:37:41:
You’re spending time and then in the end, you’re not going to come to a solution. That is fantastic advice. We got about two minutes left. And so I know it’s quick, man.
Tyler – 00:37:49:
It was quite quick.
Brent – 00:37:50:
We’re going to have to do Tyler and Brent part two. So that’ll be coming at you pretty soon, man. All right, so you’ve talked a lot about for the carrier. So in all the things that you’ve talked about for the carrier in this, now I want you to take that and just reverse it and say the broker, how in all that you’ve just talked about in the last 30 minutes, 35 minutes, those aspects, what’s your greatest advice to the other broker companies that might be watching this podcast on how do you apply that? What’s the best way to apply that? And then we’ll wrap it up.
Tyler – 00:38:22:
Quit chasing margin and start focusing on volume. The people that chase transactions and just to get one, they’re going to continue to chase transactions.
Brent – 00:38:30:
Right.
Tyler – 00:38:31:
It’s going to be that from start to finish and it’s going to be a grind. If you can focus on developing relationships and putting information out there and getting this repeat business, your job becomes exponentially easier because your time is freed up in order for you to work on the good things of getting new customers and doing that. So I would say just to really focus on developing relationships and not being so afraid to share information and get that out there. That’s the way I would do it.
Brent – 00:39:03:
So be transparent back first, huh?
Tyler – 00:39:05:
Right, right.
Brent – 00:39:07:
Fantastic, man. Well, Tyler, dude, as always, you deliver every single time with such great, honest information. And that’s one reason why I call you my friend. And that’s one reason why I love being on stage with you is because I know that you’re going to have the carrier’s best interest in mind. Certainly, you’re going to protect Mercer’s interest. That’s what you’re there for. But you are protecting Mercer’s interest by keeping the carrier’s best interest in mind, which in the end is super important because nothing gets anywhere without a truck.
Tyler – 00:39:35:
That’s right.
Brent – 00:39:36:
Hey, man, thank you so much for being on today. It means the world to Truckstop that you would be on. And we appreciate you as a friend. We appreciate you as a customer. And just really appreciate you communicating to the audience today.
Tyler – 00:39:46:
Thank you, Brent. I echo those sentiments. You are my friend. And it is always a pleasure to talk with you. And I’ll do it any time. And happy to do it. Just give me a call.
Brent – 00:39:57:
Absolutely, man. Well, man, Freight Nation, that’s episode five, man. It’s in the books. And we hope that it’s of value to you. And it’s our goal at Truckstop to always be able to, and Mercer as well, to be able to bring you information that helps you run your business more profitably and more successfully so you can do what you love to do. And I like to close, I’m starting to close with something new, which is, always remember to work hard, be kind, and stay humble. All right, Freight Nation. Thanks, Tyler.
Tyler – 00:40:22:
Thanks, see y’all.
Brent – 00:40:25:
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.
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