Congrats and good luck!

Thanks for the thread, very informative read. I was actually interviewing for freight broking jobs in late 2014 after finishing school (took a niche trading job instead). Thinking of looking again at the industry. What's your 5-10 year outlook for freight brokers? Could Amazon's Uber for trucks and/or other technology platforms hurt profitibility for brokers/eventually eliminate them entirely? How will your role in the industry change(if at all) once a huge majority of the trucks are self driving ? Thanks again man!


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The 5-10 year outlook is that brokers will move more freight for less money per piece... which will cause the average freight brokers pay to increase while the total number of jobs available decreases.

Our role isn't going away, but technology is making us ever more productive. I'm completely fine with this trend as I'm comfortably burrowed into the top 5% of my occupation in terms of technology and operations capability.

I can say that the age of the semi stupid freight broker who made a lot of sales calls and burned through customers on a regular basis because of operational errors is coming to a close. The freight broker of the future will be significantly smarter and significantly less charming.

Could you expand on this, specifically operational errors? Other than a negligible amount, why do you think "customers" will be looking to work with less charming, but smarter brokers? Wouldn't more charismatic/charming brokers be able to develop better relationships with trucking companies/owner operators?

Charming isn't a lot of good when your trucks are late 150% more often than mine are. If I'm at 90% and you're at 70% and I'm doing it for 50 bucks cheaper you are toast. Technology is making it possible for the brokers who make the best decisions to rapidly rise to the top over brokers who screw up a lot or cost a lot.

The larger volume customers are expecting better service for less money, and they give freight brokers so much money that we will pretty much do whatever they want as long as it's physically possible. And if we can't someone else will. It's the way of the world.

Interesting...

What technology do you think you utilize more than the average broker?
Now that you're on your own, how do you go about acquiring new customers?
How many new customers have you acquired since you started?
How do you sell them initially to use you?
What has been the biggest benefit of being on your own?
Hardest part of starting your own business?

Thank you.

What technology do you think you utilize more than the average broker?

I can't answer the first question. Not because I don't have an answer but because the answer is serious as a heart attack proprietary. It's not just one thing either.

Now that you're on your own, how do you go about acquiring new customers?
I research prospects using linkedin and use a decent crm to keep track of my sales data and follow up. It's a drag but it works.

How many new customers have you acquired since you started?

I really have no idea how many accounts I've moved one or two loads with and then stopped. In terms of major customers I landed 7 my first year, 2 my second year (I spent the majority of the year actively not prospecting as I wasn't planning to stay where I was), and 6 since my non-compete ended back in September. I'm considering anyone who I've done 100k in sales with 'major'. I've only had 3 accounts that I've done more than 1M+ in sales with and they were the vast majority of my total sales since I started. I often find almost all of my time being bought during the produce season by major produce shippers. As a result I make over 100k from 5/1- Halloween and am pretty slow the rest of the year. I'm definitely looking to break that cycle this year somewhat.

How do you sell them initially to use you?

I call them and ask what the process is for getting setup. And then I sound like I know exactly what I'm doing. Being confident because you know you're great is a pretty strong sales tactic lol. Being insanely honest to the point of oversharing is great too. I contrast VERY well with random early 20 somethings from TQL who call them all day.

What has been the biggest benefit of being on your own?

I'm no longer looking over my shoulder wondering if I'll have a job the next day. Seriously my first freight brokerage was a very dysfunctional place to work. I've never made anyone so much money while simultaneously being so scared they were going to do something self destructive like fire me right before the produce season started.

Honestly though I think I'm just a lousy employee. I also may be a lousy boss because I just had to fire the second of the two guys I hired for the season the beginning of last week. I'm a ****ing fantastic vendor though.

Hardest part of starting your own business?

I made the conscious choice to do all of the paperwork/regulatory stuff on my own. I got my S Corp setup through legalzoom and did all of the thinking myself. I'm doing my own taxes, and I don't plan to hire a CPA any time soon. I'm sure that this approach will cost me in fees and fines here and there but I have a very difficult time believing that I need ANY 'experts' in my life whose work process I don't know anything about. By the time I get around to hiring a CPA I'll have learned enough about the nuts and bolts of this stuff that I'll be able to cut down their fees drastically for the rest of my career. I see it as an investment in business intelligence. Very unlikely to cost me more than 3 college credit hours would lol.

That being said it sucked so hard you wouldn't believe. Damn near became a Republican dealing with the paperwork nightmare they inflicted on me between federal, state, and local taxes alone. Holy **** does government need some simplification.

Hey bored, you think this business is going into a cyclical decline? Seems this business does best when there is either shortage of trucks or vast oversupply of trucks.

How is this year going so far?

You got any opinion on international logistics business (like between borders)? Is that an attractive business, what are barriers of entry like?

Finally this may have been asked, but what is your view on uberization of your line of business? Seems like there are some things you guys do that an app cannot do?

Anyway, thanks for doing this, learned a thing or two reading this so far .

The trucking business is absurdly good right now. Brokers are getting max money for their time because trucks hard hard to come by and customers NEED them badly. Trucking companies are literally feasting on these rates. Easily possible for a 1 truck owner operator to NET 2-3k a week right now paying max for insurance.

I'm having the best year of my career. If I hadn't blown up about 15k on those employees it would be even better.

International logistics is like any other area of logistics. It's about knowing how things work and being able to provide good service consistently while knowing about how much it will cost you. If you're from a country that isn't the US and you have strong connections to the US this is a great time to get filthy rich.

The app would have to be many many times more complex than uber is currently. Actually uber for freight is already with us and is *confirmed* a joke. What isn't a joke is Convoy. The reality is that big corporate logistics has been automating rapidly for years along the same lines as purchasing departments have. At the end of the day the app needs to be able to find trucks, and this market is basically as decentralized as a market can be... And it's bat**** crazy competitive. Not an easy space for a monopolist as the barriers to entry are pretty low.

IIRC, you were supposed to call me for advice about hiring employees...

Are you familiar with flexport? Any thoughts on them?

I do a lot of business with flexport, I think they are generally good but I'm paying a premium to use them for sure, but virtually everyone I know in e-commerce is using them.

It's not really my area. If you don't mind my asking what do you like about them? What advantages do they have that are causing you and others like you to use them?

They look like they are mega user friendly from the website. Is that the main thing they are offering or is it more?

Thanks for making the thread Bored, it's been an interesting read so far.

I randomly went online and found a job posting for a freight broker for a company named landstar. It's home based, and I'm guessing it's a 100% commission compensation structure. Most people scoff at 100% commission jobs which is kind of why I like them, I'm also a sucker for "unsexy" industries.

For someone who has zero experience in the logistics industry, but who has tons of prospecting and sales experience, motivation etc etc how long would it take for me to start earning a healthy income (>$150,000 USD/year). I know it's a stupid question and you're missing a tremendous amount of variables, but I've worked 100% commission sales jobs and have been able pull in a six figure income within only a few weeks on the job.

I'm not sure if you do any work w/ heavy equipment trucking? Do you have any idea off the top of your head what I should expect to pay to have a 45,000 lb, 9'6" w, 30' l, crane moved 250 miles?

Any idea who best to contact to actually get it moved in Missouri? Is this the sort of thing I can arrange to happen in days or weeks?

thx

The good parts: far less friction than most freight forwarders, a communication system that makes it easy to get quotes, they have solid partners on the ground on the china side that can actually get answers in reasonable timeframes (usually). They also have partner warehouses near the ports to help stage inventory. They are also well versed in the world of amazon.

The bad parts: you pay up for this service. They started off on par with others but as they've become the leader they have raised prices fast.

Every other freight forwarder I've dealt with has been a massive pain in the ass. As you know the whole industry is largely paper based and it shows. The people in this industry just have horrible customer service, set expectations very poorly, and have no ability to understand what is "right" vs what their checklist says to do. It is no wonder flexport is taking tons of marketshare.

If you can provide good service and build relationships overseas and actually have managers who are solely responsible for customer communication, you can take a bite out of their share even if you don't have the technology advantage they have.

1) You can do better than Landstar.

2) I'm pretty sure they want Landstar agents to have a book of business already.

The sales cycle probably averages 90 days... Logistics is pretty similar to other hardcore B2B sales roles. Unlike other sales jobs you will only be prospecting until you have a base of business that keeps you pretty busy.

I didn't make 100k until my third year in the business... But after you make your first 100k the earnings ceiling is MUCH higher. I know multiple people with my job title who make 1M+ a year.

Also I got stuck moving produce for a company that paid half of what the market rate for my role is for the first 2 years... On my current pay plan I was on a 120k pace my first year.

It's definitely possible to make an unholy amount of money if you're truly a gifted salesperson. If you're a VERY good outside sales rep you should be considering linking up with someone who is good at logistics so that you can spend most of your time trying to land new business. There are all kinds of pay structures around the industry and I'm reasonably certain that those 'director of new business development' type jobs pay pretty well.

You're overwidth so the load will need permits. Those can probably be procured in 48 hours or less. If it doesn't cross state lines you'd only need permits for MO. Generally I expect these kinds of things to be 200 bucks a state.

So what you've got is a not particularly heavy flatbed load that needs 200 dollars in permits. Now if only you weren't trying to move something as a one off in the hottest market pretty much ever lol.

Honestly this thing can probably get moved for <3k all in. Possibly it gets moved for waaaay less... But that's if you're very patient about when it ships (if you can be flexible, be flexible as it will reduce costs)

Sorry I missed this. You've very likely already shipped it. If you want me to actually look into it and possibly move it PM me. I'll be reasonable. 3k is intended to be a massively safe bid lol so I suspect it'll be a lot less... I just fear committing to anything without actually knowing the market for the area at all.

Yeah I've done some port stuff for other customs brokers... and they are all idiots. Basically at this point in time most customs brokerages are loss leaders for 4PL's who sell warehousing/shipping/etc. Needless to say nobody smart intentionally goes to work in a cost center that has little to nothing to do with the top line.

Cool, thanks for the answer it's really helpful. I was bidding on it at auction but didn't get it. It's nice to know going fwd..

I assume the market is hot right now due to equipment moving South to hurricane areas?Or other reason?

The other thing I've wondered about is loading. If I pay to have the crane moved will the driver load it or am I required to load it or pay someone to load it?

That's something you want to negotiate with the seller. I'd generally make them agree to at least load it on. Most likely it can roll up ramps onto the deck... But if it requires a crane you definitely do not want to arrange that. I've done it, and it sucks. Actually if it requires a crane I'd see that as a pretty valid reason to buy a different model. Transportation costs will be drastically higher for something that requires a crane to load/unload.

The market is hot because it was absolutely arctic the last two years and a bunch of people went out of business. Now we have a massive supply crunch and prices are literally at all time highs. Good times. I'd never paid anyone 4 dollars a mile to go anywhere further than 200 miles before this summer. Now I do it every goddamn day. My customers are super pleased let me tell you...

Update over the last four months?

What effect have e-logs had? What effect do you foresee them having long term?

So interestingly enough I think the biggest impact elogs have had and will continue to have is on the operations of shippers and receivers. Warehouses since the dawn of trucking have seen it as their god given right to take 2+ hours to unload a truck. Grocery store DC's (which I deliver a lot of loads to) have a well deserved reputation for taking 4+ hours on a pretty regular basis.

The vast majority of the fudging that was going on with paper logs was being done to make it possible for a driver to start his clock AFTER getting loaded or AFTER getting empty. As a result far more of the waited hours are actually going to count against drivers hours of service. This radically changes the underlying cost of that time.

I'm already seeing it. Loading and unloading times are down a lot this last year.

EDIT: And business wise the last 4 months have been very good. Chaos is a ladder friends.

Bump - what's new over the past year?

Still rolling along. The sourcing guy I hired is still with me and doing well. Up roughly 75% YoY for 2019 vs 2018. I'd be more psyched if I wasn't up a ton through the first half of 2018 before business fell off a cliff and finished the year flat. Basically I moved from produce to building materials and October went from my 3rd best month to my absolute worst. September 2018 was pretty bad YoY as well.

My plan for this year is to add back a bit of produce to fill in the gap between the building seasons... And to land more building materials accounts because why not?

I also moved from Louisville to Austin recently for tax/business reasons mostly. Hiring people in Louisville didn't work out so well overall... the brain drain is pretty real in Louisville, meaning everyone with any ambition or talent either went to work for a big local corporation (Yum Brands, UPS, Humana, Kindred, or Brown-Forman) or left town. And if I wanted to hire for freight brokerage I got to compete heavily with TQL and Mercer. It wasn't a good situation for scaling my business so I moved.

Still trying to find a scalable way to grow my companies client list that doesn't involve raising money and hiring a small army of salespeople... mostly because most of the available clients are getting absolutely bombarded with prospecting calls from freight brokerages and aren't super receptive making it a very tough sale. It's one of those problems that would make you rich if you solved it I suspect.

EDIT: And I forgot to add... I was 1000% wrong about elogs. It turns out I was massively underestimating how many trucks were cheating their paper logs. I knew they were all doing it, but I didn't realize the extent to which they were doing it. The resulting supply crunch created the weirdest market behavior I've ever seen (in transportation obv). Prices went straight up through mid August and then slowly tapered off until two weeks ago. I could easily see the market being oversupplied now and rates being quite a bit lower than last year during the high season, but I'm not close to certain about it. This has been a super weird 18 months in the freight market tbh.

Why not just burn and churn thru 100% commissioned sales reps? I've worked for a company with this model. Hire 10 people, likely 1 of them is a stud and sticks around for a while. Rinse/repeat and now you have a perpetually refreshing sales force.

Obv you are just swapping labour costs for training costs but how long does it take to train someone to make 150 phone calls in a day and give them a good sales script?