Force Feeding Customers

In Freight Brokering, Force-feeding works no better with Clients than it does with kids. A prospect seems eager to work with you. But hold on. You feel hesitation, then hear over the phone that dreaded sigh of hesitation. What's the problem? More to the point: what should you do now? Should you backtrack a bit and probe cautiously? Or should you try to force the issue with a clever gimmick or trick closing technique? Play it cool. Don't force. Concentrate on the right questions to ask to nail down what caused the hesitation.

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When a Load Goes Wrong, Tell the Truth, Save the Relationship

As freight brokers, we have been in the business long enough to understand that loads can go wrong. We all dread it, but it is just the nature of the business.  We once had a load where an older driver had a stroke in his truck on the way to a delivery.  When we spoke to him on the phone, he sounded dazed and confused.  He was driving 40 mph on the highway and not feeling well.  We called police to take him to hospital.  When the police talked to him, and he said he was feeling fine, so there was nothing they could do.  However, the driver took six hours to go 120 miles.  He was late, and the load was refused.  Then the driver had a massive stroke and had to go to the hospital, so the carrier flew out another driver.  As the drama unfolded, we communicated with the shipper and told him what the carrier told us, so we could keep him informed and make alternative plans.  Since the shipper knew what was going on as it was happening, and we all wanted to get sick driver off the road and safe, we worked together to adapt and deliver the freight to the juicer, thus solving the problem and preserving the relationship.

In such a case, many inexperienced or dishonest freight agents are tempted to lie to the shipper when the driver is first off schedule, thinking they will save a few dollars and make sure they get paid for the load.  We believe this is very short-sighted, and the most important thing is to be honest and preserve the relationship, even if you lose a little money making things right.  The old excuse carriers use when they are late is to lie and say the driver is stuck in traffic no longer works, because we can now check Google and there is not traffic, so the trust is broken, and we no longer use the carrier. In that case, the carrier could have preserved the relationship by telling the truth if the driver got a ticket or was late being unloaded, and then we could act accordingly to convey the information to the shipper and reschedule the delivery in real time.

At One Horn, we believe honesty is the best policy.  Whenever someone calls me in a panic and cries, “My truck broke down,” or “I can’t find the driver, he just disappeared,” and then, “What should I tell the customer?”  I always say, “Confess, tell them what the carrier is telling you, and give them a good solution.”  We are all about honesty and providing constructive solutions.  We want to build trusting partnerships with our customers.  Things happen in this industry all the time, things that are out of our control.  All we can do is our best to fix the problem and openly communicate with our customers so they can manage the expectations of their customers.

But sometimes you are working with a carrier who you suspect is lying to you.  In this case, we tell the shipper that this is the story we are being given and convey our assessment of its truthfulness, and that we will get to the bottom of it, and keep them informed so we can find a solution.  If the shipper drops you for doing this, there was no relationship in the first place.  But as a general rule, here are the steps we follow at One Horn:

• Step 1:  Call and Confess.  Tell the customer the truth if you believe the carrier or the story the carrier is telling you and that you will dig deeper and keep him or her informed as thing unfold.
• Step 2:  Offer a Proactive Solution.
• Step 3:  Continuously Follow Up Until the Situation is Fixed

As a freight agent, it’s always tough to admit to problems or even to mistakes you, personally, have made to your shippers.  But you want to build a trust-based relationship, so telling the truth, providing proactive solutions, and keeping communications open until the problem is resolved are really the way to go.  In the end, once the dust has settled, your relationship will be stronger, because your shipper will know that you are someone he or she can count on to be honest and have his or her best interest at heart.

- By Cheryl Biron,

FreeReport, "7 Habits of Highly Successful Freight Brokers "

DOD Carriers Unlikely to Recoup All Losses Caused by 16-Day Government Shutdown

Carriers that haul munitions, explosives and other hardware for the U.S. military and saw tonnage evaporate during the partial government shutdown that ended last week said they can’t fully make up their losses.

The carriers had to idle drivers during the 16-day shutdown when the military stopped taking deliveries because civilians who process incoming loads at installations around the country were among the 800,000 federal employees furloughed.

“What you lost during those two weeks, you might get a percentage of it back by increased volume, but you only have so much capacity; once it’s filled, it’s filled,” said Dan Jeffries, owner of Prestera Trucking Inc. in South Point, Ohio, where 70% of the loads are for the military.

“We’ll be back to work but . . . we just hope we don’t face it again come Jan. 15,” Jeffries added.

Under the Oct. 16 measure approved by the U.S. House and Senate and signed by President Obama to end the shutdown, government operations will be financed through Jan. 15 and the debt limit will be raised until mid-February.

During the shutdown, most freight continued to move along highways and rails and was processed at ports by customs inspectors who are exempt from furlough during a shutdown.

The major exception in the trucking industry, though, was for fleets such as Jeffries’ that service the U.S. Department of Defense, which last year spent roughly $1.9 billion hiring private carriers to run in the continental United States.

The shutdown will cause “an unknown amount of loss to the carriers that support the Department of Defense,” said Bill Wanamaker, director of government traffic and security operations for American Trucking Associations.

“It’s very difficult to calculate, but you cannot shut down operations, you cannot have trucks idled without losing some amount of revenue in the long run,” Wanamaker said.

There will be a backlog of freight for the carriers to move for the military, but it may not move as efficiently and some freight may have to be expedited to help the military catch up on deliveries, Wanamaker said.

Jeffries said the military may find itself with shortages for a time because the number of carriers in the munitions-hauling business is limited.

The shutdown also is expected to affect the nation’s gross domestic product, although the economic damage will be contained to the fourth quarter, said Bob Costello, ATA’s chief economist.

“I’m glad we didn’t shoot ourselves in the foot and not raise the debt ceiling, so that’s a positive,” Costello said. “The negative is we could be doing all this again early next year.”

The absence of a long-term agreement on the nation’s fiscal problems is fueling the kind of uncertainty that squashes the risk and investment necessary to economic growth, Costello said.

“So in our industry, you don’t hire more people, you don’t buy more equipment, you just wait to see,” he said. “You only do what you’ve got to do.”

The same uncertainty can be found in households among consumers, he said.

“They’re like, ‘Gosh, what’s going to happen come January? Do we want to go buy that new car?’ I’m not saying they won’t do it, but you certainly think about it more than you might otherwise,” Costello added. “It’s another variable to be concerned about, and we don’t need that.”

Economists differ slightly on how much the GDP will be affected.

Standard & Poor’s Ratings Services estimated the shutdown shaved at least 0.6% off the fourth-quarter GDP, subtracting $24 billion from the economy, Bloomberg News reported.

Costello pointed to a report released last week by Macroeconomic Advisers that he said best summarizes what the recurring political impasses over spending have cost the nation.

Since late 2009, fiscal policy uncertainty has “lowered GDP growth by 0.3 percentage points per year, and raised the unemployment rate in 2013 by 0.6 percentage points, equivalent to 900,000 lost jobs,” the report said.

The Science of Pricing By Joel McGinley

Effective pricing requires strategic thinking and to do that you must have a clear understanding of the many market factors that need to be taken into account when you are determining a price for your services. These factors include supply and demand first and foremost, seasonality, the type of freight you're shipping, the volume of freight a shipper wants transported, your competition and your internal cost structure. So lets talk about Supply and Demand.

It's basic economics -- supply and demand affects pricing. As demand goes up (and I am really talking about relative demand -- how many loads are available for the amount of available trucks) price follows. Conversely, when demand falls off, prices go down as well.

However, there is a natural lag between demand and price and it's usually about three to four weeks on the truck side depending on the severity of the increase in demand. In other words, when demand increases, it usually takes three to four weeks before trucks start hammering you for higher prices. Unfortunately however, it takes the typical shipper about three months to react to the change. Therefore, when volatility in the marketplace causes demand to shoot up, you are probably going to have to pay higher prices within three weeks, but most likely you won't be able to pass those increases on to your shippers for another eight to ten weeks. When this is the case, you'll experience margin compression, something I expect that all of you experience between April and June when the 18%-20% margins you've been enjoying typically drop to somewhere between 12% and 15%.

Tip: The need for strategic thinking applies to both spot and contract rates. Often, spots rates will drive contract rates depending on what the market is doing at the time that you agree to a contract rate. If you agree to a long-term contract rates, you're going to have to experience periods of margin compression as well as periods of margin expansion to get your overall margin where you want it.

Having good intelligence can help you minimize the lag between demand and price. Good data will let you know you when prices are starting to move up so you can begin selling the concept of a price increase to shippers sooner.

Should I Clone My Top Performing Salesperson?

 BY Miranda Toops

Sales managers often wonder if they should attempt to use testing to clone their top performing salespeople.  This can be a very tempting proposition . . . who would not want an entire team that performs just like the top producer?  However before we apply testing for this purpose, we need to keep a few critical caveats in mind . . . 

First, the top performing salesperson on any team is just that . . . the top producer relative to the rest of the team.  However, when compared to the entire universe of high-performing salespeople, that individual may not be as close to the top of the list.  Secondly, several variables may have contributed to the top producer’s standing . . . for example, that individual may be spending most of his time mining an existing book of business which he built much earlier in his career . . . he may not have the degree of intensity you would need in a new recruit with a blank Rolodex.  Additionally, the top producer may be supported by more aggressive cold callers/door openers, allowing him to be a strong closer (not a bad thing at all, but not quite the same as developing new accounts from scratch).  Finally, the brand/marketing may be doing much of the selling, resulting in lots of RFP’s . . . the top producer may be great at responding to them, but, again, is not engaging in personal groundbreaking efforts.

All of these caveats are important to consider before a sales manager tests his or her top performer for the three elements of Drive (Need for Achievement, Competitiveness and Optimism).  Often, managers are tempted to take this person’s overall score and simply look for candidates who meet or exceed that score.  However, for the reasons above, it is not unusual for current, high performers to record low to average Drive results, which could potentially set the benchmark too low for recruiting purposes.  Therefore, although sales managers are free to test and review the scores of their top performers, they need to carefully consider the limitations of using these scores for hiring benchmarks.  Starting fresh by hiring candidates who score high on a sales test and perform well in the interview is often a more effective approach for managers aiming to substantially raise the bar for themselves and their team.

Western Express Says Pilot Flying J Fraud Cost it More Than $73 Mln.

By Eric Miller

A Nashville, Tenn.-based trucking company, the largest carrier yet to file a fraud lawsuit against Pilot Flying J, is seeking more than $73 million in punitive damages for being shortchanged $2.5 million in fuel rebates since 2005.

Western Express Inc., which is ranked No. 59 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers, also claimed in its lawsuit that the resulting cash flow shortage from the alleged fraud caused the carrier to incur more than $73 million in fees and expenses. It filed the lawsuit Aug. 29 in a Louisiana state court.

Western said it purchased more than $1 billion of fuel from Pilot in Louisiana and across the United States from 2005 to 2013. During that period, the company purchased 90% of its fuel from Pilot with an agreed rebate ranging from 5 cents to 7 cents a gallon, the lawsuit said.

Western’s lawsuit was the latest in a string of more than 20 lawsuits that have been filed against Pilot in state and federal courts nationwide since the company’s Knoxville, Tenn., headquarters was raided by the FBI in April.

A Pilot spokeswoman did not comment on the merits of Western’s lawsuit but said the company “will review and defend appropriately.”

6 Ways Freight Brokers/Agents Can 

Increase  Carrier Capacity

 by Dennis Brown

If you are like most freight brokers or freight agents I talk to, finding trucks can be a real challenge these days. The fact is, not all freight is created equally and neither are all brokers. There are times when carriers are tripping over one another to take your loads and other times the silence is deafening.

So what’s the secret to finding and retaining truck capacity?  The fact is there is no secret, there are no magic bullets, there are just basic business principles that successful freight brokers and freight agents use to stand out from the crowd.

1) Be an investor and focus on building relationships with carriers and drivers before you need them, rather than just focusing on only one load at a time.  Ask carriers how you can help them grow their business and always try to think long term while balancing your short term needs.

2) Utilize technology to leverage your time, including advanced freight brokerage software, load boards, email, smart phones, instant messaging, dual monitors and beyond. Let technology do the heavy lifting to make your job easier by allowing you to cast a wider net and communicate your value and needs more efficiently.

3) Tell the truth and be upfront with carriers about the details of your load.  No one likes to be misled, including you, so revert back to the basics, “Do unto to others as you would have them do unto you”.

4) Always, always, always pay your carriers on-time! Even if your shipper slow pays or downright refuses to pay you, make sure you are not hurting the carrier for something outside of their control.

5) When there is a problem, take ownership and always focus on the solution, never on the problem!

6) Network with carriers and more importantly with drivers about other drivers and carriers they know that would be interested in doing business with you.  Use tools like Linkedin.com and Facebook.com and other social media to make industry connections.