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Transportation Industry Manual
A manual on the transportation industry, freight
brokering, and Industry related opportunity, my knowledge to
you.
“Gain Knowledge, Create Opportunity, Earn
Advancement”
Copyright 2008
Written by: Jameson Saint
Romain
About the
Author
The Author, Jameson Saint Romain, lives in Western Tennessee with his wife and son. He is currently pursuing his Masters Degree in Organizational Development and Social Sciences. He has been in the transportation industry, focusing on development for well over 5 years. He is completely self-taught and has learned from time, trial, and error in all aspects of the industry. He has held and studied the different careers and their inner workings that are available in the industry. Having held positions in dispatching, brokering, sales, load coordinating, and recruiting, he feels he has learned the necessary skills to teach others. He enjoys training, writing, and sharing his experiences with aspiring individuals. He has been working on this manual for most of his career. As he learns new techniques, skills, and ventures in the industry he adds to the writing. He is always honing the skill set needed to be successful in this business. He thrives on helping others become successful in this industry. Below is his contact information.
Websites Designed and/or Operated by Jameson Saint
Romain:
Freighthelp.net
SalesIndustry.net
AutoFreight.net
AboutTransport.com
GetBetterFreight.com
TruckingHelp.net
FreightBrokersWanted.com
FreightBrokerCourse.net
TransportationBrokerSchool.com
Professional
Accomplishments:
Co-Founding a successful business (Freight
Advisors)
Raising Driver Recruiting Rates by 14% for USF Glen
Moore by Developing a Truck Driver School Recruiting
Program
Advising a Nationally Recognized Factoring Company to
Improve Profits by 44% by Adding Promotional Products Such as: Insurances,
Investments, Retirement Accounts, and Other packaged Items for
Clients/Carriers
Turning a 46 Power Unit Trucking Company Around From
Destined Bankruptcy to a Profitable LTL Carrier through Revising Load
Coordination, Sales, and Lane Selection
Training over 100 Freight Broker Agents with a
Success Rate of 30% with Some Agents Placing in the Top 5% of National Freight
Broker Agents/Revenue
Building a Customer Base with a Revenue of over 2
Million Dollars for a Client in Under 6
Months
Landing a Yacht Brokerage Association Account
Offering Over 30 Loads Weekly That Ranged From 3k to 100k in Revenue Shipping
Yachts Overseas
Developed and Optimized over 30 Industry Websites
that Generated Steady Revenue from Search Engine Results, Google Adsense, and
Being Ranked Well Enough to Draw Targeted
Traffic
Index
Chapter 1: The Transportation Industry and Its Inner
Workings
Chapter 2: The Life Cycle of a
Load
Chapter 3: The Role of a Freight
Broker
A:
An Independent Agent and their Responsibilities
B: A Brokerage Company and their
Responsibilities
Chapter 4: The Role of a
Dispatcher
Chapter 5: The 3PL Industry and
Warehousing
Chapter 6: Types of
Freight
A:
Van and Refrigerated
B: Flatbed and Specialized
C: Truckload and Less than
Truckload
D: Auto Hauling and Others
Chapter 7: Rating
Freight
Chapter 8:
Lanes
Chapter 9: Building a Customer
Base
Chapter 10: Building a Carrier
Base
Chapter 11: Selling Freight to a Carrier
Chapter 12: Freight Forwarding
Chapter 13: Authorities, Bonds, and
Insurance
Chapter 14: Being an Independent Agent or Owning a
Brokerage
Chapter 15: Marketing and Advertising
Chapter 16: Assessorial Charges
Chapter 17: Load Boards
Chapter 18: Brokerage Houses
Chapter 19: Paperwork
Chapter 20: Tools Needed for a Broker
Chapter 21: Working From Home
Chapter 22: Trucking Companies
Chapter 23: Other Industry Opportunities
Chapter 24: Using the Internet to Your Advantage
Chapter 1: The Transportation Industry and its Inner
Workings
I will start this chapter by breaking
down the industry. First you have freight that needs to be hauled somewhere by
someone. Whether it is a load of onions or a pallet of magazines, it all needs
to go somewhere. Freight is not just defined as goods that are delivered on a
semi. It also entails air freight, container freight, rail, and more. Freight is
manufactured either in the USA or overseas. It is then shipped in to the USA (or
is already here) and needs to be delivered. At the ports or loading dock of a
factory, it is loaded on to a piece of equipment. This again could be a semi,
rail car, or boat. All of this freight is handled through 2 or more parties.
When this load of freight is manufactured it is destined for a certain customer.
This could be a line of clothes heading to a retailer or a load of refrigerated
food headed for a cold storage warehouse. Either way, there is always a shipper
and a receiver or consignee. Now, sometimes, the freight will go through a third
party being a freight forwarder or freight broker.
A freight broker will act as a middle
man that will handle the booking of the trucking company or other mode of
transport for the shipper. The broker will approach a shipper asking to help
handle their freight. This takes some of the workload off of a manufacturers
shipping department. The shipper and broker will negotiate a rate for each load,
and the broker in turn hires a trucking company at a lower rate to deliver the
shipment.
A freight forwarder is a similar agent but handles more international
shipments. They will handle freight such as, container ship freight, boats going
overseas, and the likes. An example of this would be a yacht broker selling a
boat to someone overseas. The yacht broker will contact a freight forwarder to
quote a rate to ship the boat overseas.
There are also 3PL companies. They
handle all aspects of transportation. They will handle everything a broker and
freight forwarder will, and more. Warehousing, intermodal, rail, container, cold
storage, and air freight are all aspects a 3PL will handle. They are usually
very large companies with many divisions.
In some circumstances a broker and
freight forwarder will work together. A broker can handle a load that needs to
go overseas and will seek the service of a freight forwarder. Now, the same
cannot be said for a broker working with a broker. That is called double
brokering. It is frowned upon in the industry, but it still happens. Double
brokering can cause serious liability issues that are not needed with the
liability already on the shoulders of a broker.
Trucking companies are not likely to
befriend a broker for the simple reason they feel a broker takes money out of
their pocket. In a sense, they do. Though most trucking companies dislike
brokers, they need them. Brokers manage such a large portion of the freight that
it is necessary for a broker to be used on occasion. Trucking companies have
dispatchers and load planners that are responsible for booking freight for the
trucks. They will usually call on their own customers first, and use brokered
freight as a last resort. From my experience, trucking companies that haul too
much brokered freight are already in or going to be in financial trouble. A
trucking company needs to have a strong book of business of their own. I find
that smaller trucking companies tend to ignore the sales side and rely on
brokers. This can quickly spell trouble. If I could recommend one thing to any
trucking company it would be to employ a good sales agent!
As for brokers, you have your large
corporations that own such a large portion of freight that they can bid low on
rates to gain more freight. And since they own such a large portion of the
market, they can accept lower rates from customers and in turn be confident that
they can sell it to a trucking company. The trucking companies have to take this
cheap freight on occasion because that brokerage handles so much freight. These
brokerages are usually disliked in the industry. They are considered to rip off
trucking companies because of their stance in the market and their market share.
When I brokered, I decided to make less on a load and make a trucking company
happy. This would lead to better broker-carrier relationships. You would be
surprised how often you need them to help you out of a tight spot as a broker.
There are also large trucking companies
that operate the same way as the large brokers. These large trucking companies
can underbid the smaller brokers and smaller trucking companies. They can do
this because of the amount of the market they can corner. They usually get great
rates from a customer close to their home terminal and can afford to take lesser
rates on their backhaul. This creates low rates out in the market that smaller
companies cannot afford to accept. The other factors are that these large
companies have paid for equipment and less of an operating cost.
Chapter 2: The Life Cycle of a Load
A load is
defined as product that a shipper needs to move to a consignee. The shipper is
also referred to as a customer (your customer). The consignee is the person
receiving the freight. Once you have obtained the business of a customer, they
will start to offer you certain loads. If you are to accept these loads, you
will in turn sell the load to a carrier at a lower rate than you quoted the
customer. Sound confusing? Just wait. Once you agree to cover the load for this
customer, you start your search for a truck that wants the load. You then
negotiate a rate with that truck. Once you have agreed on terms, you will set
that carrier up. They will send you their set up packet. It usually contains
their MC # (authority), their insurance, W9, and references. In turn you will
send them your set up packet (usually containing the same information). After,
and ONLY after, they have faxed back the signed broker/carrier contract (this is
a contract stating that they will not back solicit your customer for freight),
do you go any further. You never give out any detailed information on who your
customer is until they have signed the contract. Once they have done that, you
then fax them a rate confirmation (explained later). They sign it and fax it
back. You now have that load covered.
A load starts as a product that is
manufactured at a factory or plant. It is then designated for delivery to a
buyer of those goods. The load is then either coordinated for shipment by the
shipping department or is handled by a third party. The load is sold to a
carrier of the product by the shipping department or third party/broker. The
carrier is then responsible for delivering the load to a consignee. The
consignee can be a buyer, retail store, another factory for further processing,
or warehouse.
The load can also be handled on other terms such as a load of cars being transferred to another dealer or a load that was delivered prior to a warehouse. There are many origins and destination combinations that can be had in this business. Products we use every day are put through this cycle for us to obtain them. Think of all of the important items in your home. They are there because of this industry and this cycle.
3. The Role of a Freight Broker
A freight broker is a third party
individual responsible for matching a load with a carrier from the shipper to
the consignee. The reason brokers are in business is the fact that manufacturers
can take a huge workload off of their shipping department by allowing a broker
to manage the shipments. The broker is responsible for quoting a rate to the
shipper for the load, finding a carrier, negotiating a rate with the carrier,
and ensuring the load is successfully delivered. While doing all of this, they
are striving to make a decent profit between the rate they are getting from
their customer and the rate they are paying the carrier.
As an agent you are responsible for setting up new customers, carriers,
handling rate confirmations, and faxing all of this to your brokerage. You must
stay in constant contact with your brokerage, customers, and a driver that is
under one of your loads. You want to stay on the driver to make sure they are on
time, in route, and following all necessary load information. You will also be
on call at all times in case there is a problem with the load. You are
responsible for that load. The customer trusts you as a business partner to
handle a large amount of money in that load.
The broker, as an independent agent,
answers to their brokerage. They must operate in a manner reflecting the ethics
of the company they work for. Brokers are usually 1099 contractors and are
responsible for their own taxes. The brokerage will usually pay you your
commissions weekly and also provide detailed commission reports.
Now there are employee type broker
positions. These brokers are usually handed a book of business to deal with on a
daily basis and are paid salary. These positions are usually rare, and do not
come easy. The real entrepreneurs decide to become independent agents. And I
have seen employee brokers that realize the income potential they could make as
an independent agent only to go out on their own.
If you are an agent, your brokerage also
has responsibilities. They should handle all of the back office work. This would
include billing, collections, payroll, and other normal office duties. They
should provide software for the agents, a commission split, and often provide
load board subscriptions. They are also responsible for credit approvals for the
customers and carriers. They handle paying the carriers also.
A dispatcher is usually an employee of a
trucking company. They are responsible for managing the drivers of the company.
They plan and
coordinate loads for the drivers, they manage the drivers’ schedule, ensure they
are following DOT guidelines, and many other essential duties. The dispatcher is
usually the person that will contact you when you have a load available. They
will be looking for loads that match the needs of a drivers’ route, and contact
the broker about the load. They will usually be very abrupt and straight to the
point. They usually are not rude people, they are very busy and have a hectic
job. Being a dispatcher, in my opinion, is the stress equivalent of an air
traffic controller. Most dispatchers use a software program that that will
coordinate their trucks, loads, and customers’ information. Most companies also
now use tracking software that will check driver’s location, speed, arrivals and
departures. This software has significantly decreased a dispatchers’
workload.
A 3PL company is a jack of all trades,
They usually have divisions in brokering, warehousing, and freight forwarding.
They will handle air, ocean, and land freight. A 3PL will also offer services of
storage, tracking, labeling, and inventory management. They are an all around
logistics provider.
A company would benefit from a 3PL in a
situation where they wanted someone to store their product, manage the inventory
of it, and handle the orders when a buyer wanted some of that product. A 3PL can
offer a great service to reduce the workload and manpower needed at a company
that produces goods.
It is not out of the question for a 3PL
and a broker to work together to handle shipments in and out of their
warehousing facilities. This, in most cases, would not be considered double
brokering.
The different
types of freight you can broker are almost endless. The most common are Flatbed
freight, refrigerated freight (reefer), van freight, and auto hauling. Other
types are; oversized (wide load, extended, maxi, step deck, double drop, Less
than truck load or LTL, and more), boats, household goods, government,
logs/timber, and the list goes on.
Your reefer freight usually consists of
food products, produce, or temperature sensitive material. Dry Van loads can
range from food products to most any material. Flatbeds usually haul metals,
large equipment, and other goods that will not fit in an enclosed trailer.
When it comes to specialized, this can
be boat hauling, car hauling, extended flatbeds, and more. The specialized
market is a good one to get in to. It pays well and is not as flooded as the
other freight types.
You also have your freight forwarding
freight types. They are freight that is shipped on container boats, rail, or
air. It can be any of the goods you would see in the above lists, just destined
for another country.
Whichever
field you decide to get into, I recommend you do research and ask questions on
that topic. I would say that the easiest, but most competitive is van freight.
Your van freight can consist of auto parts, dry foods, papers, plastics and
more. It is the least likely to give you any problems during the transport
process. When dealing with reefer freight, you have to worry about temperature
control. Flatbed freight, you have to worry about straps, chains, tarps, and
more. Once you get into specialized such as oversized, boats, maxi, etc; you
have to worry about permits, escorts, and more.
There is no real place to go to find all
rates, or no book to read that can teach you rates. They are learned through
trial and error. The best method on rating (pricing) a load is to post a generic
load on a load board. Trucking companies will call to inquire about that load.
When they do, ask them how much they would need to haul it. Tell them the load
they called about is gone but you have those all the time. Do that process with
a couple of companies, and you will soon see what freight is moving for in that
lane. Websites do have tools to research recent rates in certain lanes. I will
get into that later.
There are a
couple different ways that people want rates. The most common is per mile. They
want to know what you (or your contracted carrier) will haul it for per
mile.
Ie: A dry load going 1200 miles in a lane where
the average pay is $1.15 per mile. If it is going to cost you $1.15 ($ total of
$1380.00) to get that load moved with a carrier, you would quote the
customer a little higher (maybe tell them it is going to cost $1650 to move it)
to make a profit. So now you are making $1650 from your customer minus the $1380
you pay a carrier for a profit of $270 or 16% for one load).
In the industry, the common rule is that
you want to make at least a 15% profit on each load. That is 15% of the total
rate. You can set that percentage wherever you want, but you need to stay
competitive. Some large brokerages I have dealt with have a minimum of 20% that
their brokers must keep on a load. That, in my opinion, is a bad way of doing
business. Yes, they make more on each load, but they also make a bad name for
themselves with carriers and other industry professionals. Every situation is
different and the rate should reflect that.
The other common way is by weight. Take
a load of potatoes for instance. Your customer might pay you by the
hundredweight. They have a load of potatoes going 1200 miles. The miles only
come into play when you are calculating, for your own good, the rate per mile.
ie: It is 48000 lbs
of potatoes going 1200 miles paying $6.50 per hundredweight; The way you figure
the rate is you take the weight (48000) divided by 100 (hence the “hundredweight
term), and you get 480. So you have 480 “one hundred weights”. Then you multiply
however many hundred weights by what it pays per hundred weight. So: 480 hundred
weights X $6.50 per = $3120 is the total pay. Then when you go to find a carrier
you put it back into a per mile rate. If it is 1200 miles you divide the total
rate of $3120 by 1200 miles, leaving you with it paying $2.60 per mile. You try
to find a carrier for less than that to make a profit.
8. Lanes
A lane is
simply a route between two cities. Say for instance; Chicago to Atlanta, that is
a lane. Whatever the Pickup location is and the destination is, that is your
lane.
There are lanes that are better than
others for a broker or trucking company. Lanes I have tried to avoid are the
Northeast, South Florida, South Texas, and most of the Upper Midwest. The reason
for this is described below.
South Florida (below I-10) – There is not a lot of freight
coming out of this area. This causes freight rates to be lower because of the
amount of trucking companies needing a load out of here. They will underbid each
other to get the loads that are available. Now the flip side to this is that if
you have freight coming out of this area, it will be easy to sell. Also, if you
try to book a truck on a load going to South Florida, they will request that you
pay them deadhead miles back to Atlanta or close to there.
Northeast – This area, in my opinion, is trouble because
there are so many trucks there and not enough freight. The same thing happens
with the underbidding of each other. Also, even if you have freight there, the
customers will not pay enough to broker it out. They know the situation and cut
rates accordingly.
South Texas – The same situation applies as the above
areas.
Upper Midwest (Utah, Montana, Idaho, Wyoming, and similar
States) – These areas have a lack of industry besides cropland goods. Unless you
have established contacts in this area, I suggest staying away. It is hard to
find a truck going to these areas.
9. Building
a Customer Base
Where to start
finding the freight is the most important part of being a broker. The best thing
I can tell you to do is to start surfing! The internet will be your most
powerful tool. There are websites that list manufacturers in the United States.
Thomesnet.com is a great tool for contacting shippers. It allows you to email 30
companies a day per account. It is free to set up an account with thomasnet.com.
You can email or call these companies. It lists any type of manufacturer from
food to metals.
Another great way is to look through the
products at your home or work. See who they are made by, then find them on the
internet. You will always want to contact the shipping or transportation
department. When you do find these companies, you need a game plan. Below is a
script for an email or phone call to a shipper;
“Hi, this is Johnny with ABC Logistics.
I would like to get set up with your company to help move your freight. We are a
logistics company that has been in business for (x) amount of years. I would
appreciate the opportunity to rate your lanes, and see if we could lower your
shipping costs.”
You WILL get shot down. In my years, I
have never had anyone be rude. So don’t be scared of cold calling. They do need
help moving their freight. You just have to strike a chord with them at the
right time. Never throw away a number. Call them back in a month. They might
have just had a load dropped by a carrier, and need help.
The industry has evolved from what it
used to be. Customers were gained by visiting the business in person and landing
an account. This still happens but in a lower number of instances. It is wise to
still do this especially to keep the customer and build a relationship. Most
shipping departments are now ran by a generation that was raised using the
internet. With this happening, more accounts are landed through the internet and
email. I have landed most of my accounts by utilizing my computer skills and
email. I will identify a company’s general email (such as @abcfoodcompany.com),
then find the shipping managers email. You can do this by finding out their name. Try
combinations like their first name followed by a dot then their last name and
then the email address. Try different variations of the example above.
Eventually you will get their email address. I find it easier to land an account
with an email. They are usually pretty busy and will answer an email before
answering a voicemail.
Another trick is handling the
gatekeepers. The gatekeeper is a receptionist. They can spot a sales call a mile
away and will automatically forward you to voicemail. Here is the trick I
use:
I will call the company and immediately ask for the shipping
managers’ voicemail. Once I get their name from the voicemail, I hang up. I will
then call back later and ask for them by name. This makes it sound like you know
them and they might want your call. You can also just ask for their first name.
If they have a common first name that is even better. The receptionist will ask
which “John” you are wanting. You reply with “Oh, I am sorry, John Smith”. It
then sounds like you know him personally and he is expecting your call.
There are many ways for you to find a
carrier to cover your load. The first would be to use load boards after you have
posted a load. Some may call you off of your load or you can search and call
them. Another would be to establish relationships with carriers that will haul
for you on a regular basis.
I suggest establishing a good
relationship with every carrier you use. They will follow you as a broker if you
ever change companies. And, as you get familiar with your lanes, you can call on
your list of carriers that meet the criteria. They will also help you in a
desperate situation. If you take care of them, and are one day stuck with a
load, you will find that most carriers will help you and take a lower rate than
normal.
Keep all of your carrier contact
information in a software program or an excel file. You will find it useful when
you sign up with a brokerage. Instead of waiting to set them up when you use
them, you can have your brokerage go ahead and set them up ahead of time.
11. Selling Freight to a Carrier
Once you hit
the jackpot, and a customer is giving you freight, you have to find a carrier to
haul it. This is the easy part. First, make sure you can cover the load. If you
bid it too low and cannot find a carrier to haul it that cheap, you will have to
give it back to your customer. If that happens, they will usually drop you
unless you have been with them a while. Once you take the load, you want to post
it on load boards. Once posted with the important information (weight, where it
picks up, where it drops, miles, your contact info, and type of trailer needed,
etc;). I suggest not posting the rate that you are paying. That might eliminate
the chance for negotiation. You can also search for the trucks and call them.
Once you have a truck interested, you always want to ask them what they will do the load for. You don’t want to have to make a price. Do not be scared if you have to though. I promise you will not shock them. Quote them a lowball figure, and they will say no. Then is your chance to ask them what they need in a rate to do it. If you can’t meet them at a reasonable rate, go to the next carrier. Once you do meet at a rate, then you will start the paperwork mentioned above. The set up packets, contracts, and rate confirmations will all be exchanged.
12. Freight Forwarding
Freight Forwarding is a broker in a
sense. They handle freight that is international. You will need a freight
forwarder if you are handling container loads that ship overseas or air freight.
This is a very lucrative position, but also requires a lot more experience with
customs and such. If this is a career path you are interested in, I suggest
finding an entry level position within a freight forwarding company. If you can
gain experience in vessel requirements, customs procedures, or are fluent in a
foreign language I would say go for it.
13. Authorities, Bonds, and Insurance
A)
Authorities: An authority or MC number allows you to broker freight. Carriers
and freight brokers both have MC numbers. Your MC number is used for the
government and transportation industry as a number to represent your company as
being legal to perform trucking or brokering duties. MC numbers are a six
digit number that start with a 0-6 depending on the age of the company. You can
tell a company’s age by their MC number. As I am writing this, a company
starting out now would receive a number starting with a 65xxxx.
B) Bonds: If
you open your own brokerage you will have to have a surety bond. It is a $10,000
bond that makes you a bonded broker. This bond, depending on your credit, can be
paid in different ways. It can be paid in a lump sum or with good enough credit,
it can be paid in payments. Now, if you decide to go as an agent from an
established brokerage they carry the authorities, bonds, and insurances, which
is the reason you would have a commission split with them.
C) Insurances:
Most carriers will carry and need to carry a minimum of 1 million dollar
liability insurance and a minimum of $100,000 cargo liability. But now and days,
it is best that they have, and most do, $250,000 in cargo liability. A broker
must carry contingent cargo liability to back up the carrier's cargo insurance
in case they have lapsed. If you open your own brokerage, you will have to carry
this along with the bond, authority, and MC number. There again, the benefit of
being an independent agent for an established brokerage is that they carry
those.
14. Being
an Independent Agent or Owning a Brokerage
As an agent
you have less risk than as an owner of a brokerage. As an agent you are
responsible for building your own customer base. You must obtain your own
freight, cover your loads, and fax necessary paperwork to your brokerage's main
office.
As an owner you are responsible for all
back office operations, authorities, bonds, insurances, collections, payroll,
etc. Also, as an owner of a brokerage you must have an initial line of credit.
This line of credit is to pay carriers for the loads they have hauled. This
happens because most customers do not pay for 30-60 days and to maintain a good
credit rating as a broker you should pay carriers in 25 days or less. This, in
turn, results in you having to come out of pocket to pay carriers before you are
paid by the shipper. This can add up rather quickly. If you move 10 loads a day
at $1000 per load that is $10,000 added up in 25 days to $250,000 that you would
have to pay carriers before you start to receive payments from shippers. That is
why it is beneficial to become an agent for a company rather than open your own
brokerage. Also, having an established name and an older MC number will help you
in gaining new customers. If you open your own brokerage you are going to get a
new MC number that is recognizable to customers and they are hesitant to do
business with an un-established brokerage.
Also, the cost of operating a
brokerage is more than the split they keep if you are an agent. I advise being
an agent. If you want more money, and have a great book of business, they will
likely give you a larger split instead of losing you.
Also take in to consideration the cost
and time involved in managing employees, payroll, and insurances. These are just
a few of the responsibilities in owning your own brokerage. It is a huge step
and should be thought over very well.
15.
Marketing and Advertising
The best way
to advertise is through word of mouth. You want to treat the carrier as good as
your customer. They talk with other carriers on a daily basis about who they are
hauling for and how good/bad the pay might be. Also, they will discuss how they
are treated. So if you have a carrier that you treat like they were your own
family, they are going to tell other carriers "Hey, when you need a load, call
John at ABC Logistics for freight." "He pays well and treats you like a friend."
As for advertising to get customers:
that is almost unnecessary. Most shippers are not looking at advertisements for
broker that will help them out. You will need to seek out those customers.
Advertising online or in papers is a
great way to gain agents that will broker under you. You can have agents under
you, and you be under the umbrella of a brokerage house. The possibilities of
what you can do are limitless. This is your own business and needs to be treated
that way.
I do suggest building a packet with your
company information for customers. Develop a tri-fold flyer, buy some pocket
folders, and put together a packet that you can hand out. This will act as a
company representative when you are not in front of a customer. They can look at
it and learn about you and your services.
16. Assessorial Charges
Assessorial
charges are fees that get charged to the carrier, customer or broker in the
event they occur. These fees can be layover which is a charge for being held
more than 12 hours while loading or unloading. Detention is paid when a driver
is help for a short period of time usually after an allowed 3 hours for
unloading or loading. Extra stops are usually paid at a rate of $50 per stop. A
lumper charge is when a driver must pay a company to load or unload the truck.
All of these charges need to be cleared with the broker and
customer beforehand. Failure to get the o.k. on these charges from the customer
or broker can cause the carrier to be charged for this. As a broker you need to
be sure that the carrier calls you to o.k. these extra charges. Most assessorial
charges are worked out beforehand in the broker/customer contract.
17. Load
Boards
There are many
load boards on the internet today. You have internet truckstop (truckstop.com),
123loadboard.com, getloaded.com, DAT partners, and many more. All you have to do
is search the internet for freight load boards.
I personally recommend truckstop.com and
getloaded.com. DAT has useful tools but is very expensive. If it is provided by
the brokerage you sign on with that is fine. Truckstop.com has carrier profiles
which allow you to check a carrier's credit and performance history, forums that
you can chat with other industry professionals, and other useful tools.
There is also a free load board out
there. Trulos.com is a decent load board that allows posting and searching free
to everyone. New sites like posteverywhere.com are available as a service that
will take your load information and post it on all load boards. And the best
part is you only have to have the one account at posteverywhere.com.
Trulos.com is a free
load board
Pickatruckload.com
truckstop.com
getloaded.com
123loadboard.com
DAT Partners
When it comes
to finding a brokerage to work for you will have to research them. I can
recommend certain ones, but what you want from a company is up to you. They all
have good and bad qualities, but narrow it down to what is important to you. Are
you looking for the best split, the best software, or the best back office
support. The age of a company might be something that is important to you
also.
Some companies will not take new agents.
This is something to consider also. I personally do not understand why they
would not accept a new agent. The cost of having an agent is slim to none. I
would personally hire as many as I could. This way you have a better ratio of
agents that work out. Below is a list of companies. You can also find brokers
that are looking for agents in the classifieds on jobsinlogistics.com and
truckstop.com.
19. Paperwork
Rate
Confirmations (there is an example at the end of the book): This is a
confirmation sheet that will have all the load details such as shipper, pick-up
location, pick up number, bill of lading number, consignee, ship to location,
contact info, weight, product, the rate you are paying a carrier, not the rate
you are receiving from the shipper, necessary details such as temperature if it
is a reefer load, tarps if it is a flat bed load, any dispatch info, etc.
Set up
Packets: A set up packet for a brokerage is going to contain a cover letter,
your credit references, your W-9, insurance, MC number/authority. A carrier set
up packet will contain all of the same but include a broker carrier contract. A
customer set up packet will include all of the same plus an individual contract
that is worked out between you and the customer.
All of your
customers will need to have a credit limit. If you work for a Brokerage, they
will have your customer fill out a credit app to make sure they pay their bills.
This is so they don't accept loads from the customer, and never get payment.
Your brokerage will provide you with all
of these documents when you sign on as an agent.
You will need
a home office or rented space, a computer with high speed internet, preferably
two phone lines, a fax machine, and office supplies. It is basic stuff, and easy
to obtain.
I recommend two phone lines for the
reason that one will be hooked up to a fax and the other for calls. There is
also fax services that are connected to email instead. In that case you will
need a scanner.
I also recommend that you rent an office
outside of home as soon as possible. This aids in professionalism, lower
distractions, and more room.
It is also a good idea to have a broker
software program if it is not provided by the company you work for. Listed are
some software programs for brokers;
Edonna
Loadpilot
ERT
Transportationsoftware.com
There are many
more just do a search for freight broker software. These programs will manage,
maintain, and track all of your loads, customers, and your carrier database.
They will also print on demand invoices and rate confirmation in consecutive
load number order.
It takes discipline, motivation, and
focus to work from home. In turn it is very rewarding to manage your own time
and income. You will find yourself wanting to watch tv, do yard work, do chores,
etc. You must treat it as a regular 9-5 job. My advice would be to get up, take
a shower, drink coffee, set a certain schedule and follow it as if you were
leaving home to go to work.
You need to find yourself spending the
majority of the day seeking new customers if you want to be successful.
Brokering one load should consume no more than 30 minutes of your time. That is
including paperwork, finding a carrier, etc. As a broker you can make anywhere
from $0-as much as $200,000 a year or more. Realistically, a single person as an
independent agent can probably broker 10 loads a day and that will keep you
plenty busy. But always be looking for new business!
Schedule a work day – Be sure to set yourself certain
working hours. You do not want to treat it like you are at home. This will start
to interfere with your work and allow you to start slacking. Act as if you are
leaving the house and going to an office. I highly recommend getting an office
outside the house when it is affordable.
Sticking to it – Times will be tough. You will need to have
a support system to help keep you motivated. Getting started is the hardest
part. Once you have built a book of business, you will find that you stay more
motivated.
Distractions – I recommend having a separate home and work
line. Turn the home phone off during the day. This will aid in eliminating
possible distractions. Let friends and family know that they also need to
respect that this is work. I have found that family tend to disregard that you
are working and expect you do the things you would do on your day off.
Don’t settle for low pay, make more – I have seen it too
many times where an agent starts making 3 to 5 grand a month working from home
and they settle. They think that they are making more than their previous job
and getting to work from home. That is great, but do not settle for that. You
can make a lot more. Keep trying for new customers and more freight.
Separate family time from work time – As a broker you are
always on call when you have loads out. But you still need to be able to
separate family and work time. You might find yourself staying on the computer
real late trying to contact new customers. Set certain work hours and a time to
stop for the day.
22. Trucking Companies
Trucking companies have great
opportunities for people in this industry. Getting experience as a dispatcher,
load planner, or even a recruiter will help you gain necessary skills needed in
the industry.
Most trucking companies now also have a
brokerage of their own. They will load their trucks with their customers and
also broker the freight out to other trucking companies. This adds to revenue
and appeals to the customer by being able to offer other services.
23. Other
Freight Industry Jobs
In my time in the freight industry I
have learned many other ways to make a living besides brokering. I have trained
agents using guides and in person lessons.
There is a new up in coming career
striking the trucking industry. There are people that search out owner operators
and small trucking companies to dispatch for that do not have the time or means
to dispatch themselves. Instead of the owner operator having to find a load at a
truck stop load board, he will pay a small percentage for a dispatch service to
find a load and handle the paperwork for him. He in turn pays a small fee but
gets to keep moving. Most of these dispatch services change 4-8% of the total
load cost. This can add up quickly if you are dispatching 20 trucks at a time.
They each pull one load a day on average paying an average of $1000 and that
pays you, 5% or whatever you charge, equaling $1000 to you.
Another way to make a living in this
industry is to just sell contacts. All trucking companies and brokers are
willing to pay for a good shipper contact. If you find a shipper that is willing
to take on more brokers or trucking companies to haul their freight, you can
sell that contact.
Freight Brokerages are also looking for
independent sales agents. In this role you do not have to broker the freight.
You find a shipper and get them set up with your company. In turn, the company
will have a broker move the freight and you get a smaller cut. This position
allows you to focus more on sales and less on paperwork and brokering.
24. Using The Internet to Your Advantage
The internet can provide a valuable
resource to your business. I designed websites that draw in traffic to my
business. Having more than one website is crucial to success. You can target
different search terms, keywords, and a different audience with separate
websites. Making sure you optimize the websites properly is the key. Not fully
understanding meta tags, content placement, and website design can hurt your
website and its ability to be found by people searching for your service.
A website also creates a more
professional look to your business. When customers can look at your website to
find information on your services, contact information, and credentials, it
helps put them at ease. I have found that it makes for a more professional
stance in the market. Surveys have proven that having a professional website
makes customers feel more at ease when dealing with a company.
Another way to strengthen your business
is to utilize online resources such as:
Directory Listings
Press Release
Backlinks
Advertising on other websites
Communities and Forums
Enrolling in online groups/organizations in the Industry
News
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Up to 70% split -
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